THE NEW ZEALAND LOAN.

Te Aroha News, Volume VI, Issue 283, 21 July 1888, Page 5

THE NEW ZEALAND LOAN.

The R.M.s Arcadia brings the following details of the floating of the New Zealand i'oui per cent, loan of X' 2,000,000 :— Loxdox, June 8. The success of the New Zealand loan yesterday was a surprise to everybody, and especially tor those who for days previously had been decrying the issue and doing everything in their power to damage its prospects. By some of the financial organs, the heavy indebtedness of the colony had been paraded day by day with the evident intent'on of deterring the public from subscribing, while in Stock Exchange circles the coining issue had been persistently "beared." In spite of these tactics, however, there was quite an unexpected rush for the loan, as is evident from the fact that tenders were sent in to the Bank of England amounting to a total of £S, 024, 300, or more than four times the sum asked for. The "Financial News " of June 2 remarked: "It is evident that the present lSc-ue has a much weaker backing than its piedecessois. Several strong linanciers who used to be in the New Zealand syndicate are holding aloof from the present one. They objected, and with good reason, to the high minimum fixed, •\\hich, instead of being under the market, is, taking the premium into account, decidedly above it. The supposed explanation of this paradox is that the contracts had been made two or three months ago, when all colonial stocks were two or three points higher than now. At the last moment a flaw was discovered in the Act, which had to be remedied by fresh legislation. V/hen this had been put right the syndicate were in such a hurry to get out of the loehi, in the face of a tailing market, that they had apparently not taken time to recast the piospectu^. "' The "Financial News" leturned to the subject of the loan in two severe leading articles of June 4 and 5. The fiv3t leader deals with the heavy indebtedness of the colony, and the probability of a financial crash. It declares that it is no longer a secret, even to the most purblind of British investors, that New Zealand has aoout reached her financial tether, and it sums up the situation as follows :—": — " A sharp pull up has to happen sooner or later, and the stavipg it oft' by new loans can only make it &o much the worse for New Zealand herself and her creditors. The plain and palpable fact i 3 that the colony has already more debt than she can stagerer under, and adding to it can only aggravate the inevitable crash." In the second leading article, the " .Financial News "'animadverts upon the right reserved by the New Zealand Government to raise money for the redemption of securities already in existence, and of cairying on the conversion of any outstanding loan, while promising not to come upon the London market for a period of three years. Interpreted in the light of Treasury bills, it means that a colonial Government giving such a pledge simply undertakes not to borrow publicly, but retains freedom to borrow privately."