NEW ZEALAND LOAN GUARANTEE.

Southland Times, Volume I, Issue 47, 17 September 1864, Page 2

NEW ZEALAND LOAN GUARANTEE.

From the Southland Times, August 30.) Previously to the arrival of the last English mail it; was very generally taken for granted that there would be no difficulty in obtaining the Imperial guarantee for a portion of the Three Million Loan sanctioned last year by the General Assembly. Mr. Cardwell stated in his despatch to Sir George Grey that the Home G-overnment were prepared to bring a bill before Parliament to guarantee one million of the loan, leaving the remaining two millions to be raised on the security of the Colony alone. We have now before us a copy of the bill as submitted to Parliament, but although, in accordance with Mr. Cardwell's promise, it asks Parliament to guarantee one million, the conditions affixed are of such a nature that the boon if accepted would be of little or no value to the Colony. Firstly, the bill stipulates that the principal shall be repayable and repaid at the expiration of thirty years from the day on which it shall have been borrowed and raised. Secondly, that a sum equal to two per cent, of the principal shall be yearly set apart as a sinking fund. Thirdly, 'that both principal and interest shall be a charge on the general revenue of New Zealand, " having " priority over all other charges upon the " said revenue, except charges created in " virtue of an Act passed by the said " General Assembly, intituled The New " Zealand Loan Act, 1856,' and of an Act " of Parliament passed in the twenty- " first year of Her Majesty, intituled, " ' An Act to guarantee a Loan for the " service of New Zealand." It is also stipulated that for the purposes of the Act, the receipts arising from the disposal of waste lands of the Crown shall be deemed part of such general revenue. When we compare the clauses of this Bill with those of the Three Million Loan Act of the General Assembly, we shallat once see^that'the two measures clash in several material points. To begin with the time of re-payment. The Colonial Act provides for the re-payment of the principal at the expiration of fifty years, the Imperial Act, for that part of the loan . the Home ; Government proposes to guarantee, names thirty years as the limit.- The Colonial Act specifies' a sum equal to one per cent, of the principal to : be set aside as a sinking fund ; the Imperial Act says two per cent.. The General Assembly had no intention of this loan having priority over other loans which had previously ; obtained its sanction, but- by the Imperial Act it is made a first charge,; on the .-revenue,' with the exception of a loan, for £500,000, authorised by \th6 General Assembly in 1856, and /\vhich'^alio'^b^mfed;:;the;-.lin-perial guarantee. ; !;.!s&£ th&jnoji^ important point on whicn theseut^o-imeasures differ is as to therevenue^oniwhicbcboth princlpalianid'i^^ chargeable. The* Imperial &cti clearly

■the receipts arising from the' sale of waste lands*;of < the Crown shall be considered part pf , the. security. The Colonial Act contemplates nothing of the land;, but confines the* security to -what is' known as the v Ordinary Revenue " of the Colony. When the General Assembly, in passing -the Three- Million Loan Act, fixed the date for re-payment at fifty years, it did so because that time seemed to be, all things considered, the shortest date at which the Colony would be in a position to' meet so heavy a liability without seriously interfering with its prospects of advancement. To cut off twenty years from that time and make tne , loan ..repayable, in Vtnirty "years, is' to^-ldyv a Heavier burden on the Colony than there appears to be any necessity for doing. Certainly it is demanding greater,- things— from.- JNew i Zealand than the Assembly was disposed j/t.6. ask,;when it passed r --the.;Tl^e^MiUion Loan Act; and we have' no reason: for supposing that next . Session- will see a j change in its temper iir-thia i respect. The Kbenefit - the: Colony would derive from-the Imperial guarantee is - nullified by curtailing , the period of . the loan, " and doubling .fthe amount to, be set apart as a sinking fund; but whenjwe come to the stipulation that the revenue "derived from the sale of "the- waste lands is to form a part of the security to the Imperial Grovernment before the guarantee is granted, we can arrive at but one conclusion as to what the action sof5 of the Greneral Assembly will be; /iTo^xybtaia the guarantee, a new bill would nave to be introduced embodying the. terms of the Imperial Grovernment, and it is not difficult to foresee that no such- bill would meet with the assent of the 'majority of the House of Representatives. The method of dealing with the waste lands of the Crown would have to be placed on an entirely new basis. [Existing Acts would have to be repealed, and the Provinces deprived of what each at the present timeregards as its chief source of wealth. These matters are, however, -only questions of policy, and it is possible that a Ministry might be found 'willing to risk the introduction of the necessary measures, though with but small chance of their acceptance* , either, by the country or the Assembly. Not so with the stipulation pf priority for this one million. To give precedence to this loan is to , be guilty of gross dishonesty to the debenture holders of the loan of 1860, for £150,000. Erom the tone of the various speakers in both Houses of Parliament, it seems pretty certain that on other, terms than the ones we have mentioned, wilL- the Imperial guarantee be given. Earl GrBEY objected to the guarantee being given at all to a debt which " was contracted for the exclu- " sive benefit of the Northern part of the " Colony. The Middle Island was already " demanding that the interest of the loan " should be charged upon the Pro- " vince of Auckland alone ; but the re- " venues of that Province were utterly " unequal to bear such a burden, and it " would, therefore, be quite unsafe and " inexpedient for us to guarantee the in- " terest." „ The Session of the GJ-eneral Assembly in 1865 will surely be a memorable one in the annals of New Zealand Legislation. The Three Million Loan will again become the subject of discussion, and it will be impossible to bring it nnde.r notice without at the same time opening the whole question of loans, both Colonial and Provincial. It would be impolitic, if it were not impossible, that such an examination into the financial state of the Colony should be longer delayed. There is not a Province which is not anxious at the present moment to borrow, and from the manner in which Provincial Debentures are viewed in the market, it ia evident that some general scheme, which will meet the requirements of all, will require to be set on foot. In devising this scheme, in solving the problem of the loans, may not the conclusion be arrived at that the Provinces and Provincial Councils have nearly completed the work for which they were first inaugurated, and. that the time is drawing near when under a more comprehensive form of Grovernment, New Zealand would advance more rapidly than under her present multiplicity of laws and law-givers?