COLONIAL FINANCE. MR WESTGARTH'S SCHEME.

Te Aroha News, Volume VI, Issue 303, 29 September 1888, Page 6

CO LONIAL FINANCE. MR WESTG ARTH'S SCHEME.

Mr Westgaktji paid a ilying vi&it to Dunedin before his departure by the Wairarapa for Victoria. ."A rcpi-eaonbabive of the "Obago Daily Times" obtained an inter - viow with Mr Westgarlh at fcho Grand Hobcl, and obtained fiom him a general outline of his financial scheme. Upon the question of

NEW ZEALAND FINANCE Mr Wcstgarth said : I have recommended the Premier to issue no longer 4 per cent, stock, but to issue 3 per cents, for any further requirement of money, and also to effect a conversion of the various outstandings into 3 per cents. In order to issue the 3 per cents to the best advantago to the issuer,' New Zealand should aim at Australasian federation, so as to issue one uniform 3 per cent stock, like that of the Canadian Dominion, having thus tho ready marketability of a large stock. But if the confederation cannot at present be brought about, tho next best step would be to make a financial federation ; and it even thio must be deferred, then to bring oui, along with the other colonies, 3 per cent, as identical in form as possible, although each colony acted for itself only. I r gave the Piemiera table .showing die value or uiice in tho London market ot 3 per cents, brought out in oath ot these ways, beginning with a 3 yar cent, brought out by each colony without any concei.t as to uniformity. This latter would result in the minimuir price, and the price would rise in proportion as perfect union or federation advanced. This table, as fur as I recollect, was as under, the lettero ABODE representing the different pr.cos. A, the wholly unconverted ; B, the converted so far as mere uniformity of the stock went ; C, tho further stop of financial federation ; D, the complete political unity ; and E, tho further riso after t\\ o or three years, when the public knew and had confidence in the stock : —

Having established a 3 per cenr. &tock, you would AviUi advantage effect a conversion of your large outstanding higher interest stocks by oflering an exchange into the 3's. The advantage to New Zealand in this exchange is that you will reduce the interest you have to pay. The advantage to the holder is that you will mci ease his capital value, which would be acceptable to him mostly, evpn at the oxpense of some sacrifice of interest — that is to say ho gets a very maketable stock, fetching a high price, which he will profer to a compaiatively unmarketable stock yielding him higher intei-est. Next comes the question of dealing with the many small and unmarketable stocks of the municipalities and harbours. I strongly recommend the Colonial Government to buy up these stocks by exchange on fair terms for its 3 per cents. Evon if the Government were in no way liable, morally or legally, this would bo advisable, both as giving a profit to the colony, and as placing these matters on a better footing. The plan adopted by Queensland seems the best. There the towns or harbours are not allowed to borrow directly from the public, but only through tho Government, which issues its own stock for the money required, thus getting tho money so much the cheaper. Indoed, the Government might charge tho harbour or town say 1 per cent, moro than cost, in order to form a guarantee or sinking fund.

COMPLETE FEDERATION. Ho could not see why complete politica federation of the Australasian Colonies should not be effected at once. To his mind the differences in the tariffs made little or no difficulty ; and as to the greater question of Imperial Federation tho tariffs presented no difficulty at all. What was wanted was thai the whole force of the Empire should be concentrated in one body, in which each ot tho colonies should be represented by ono or two men, as might be agroed upon. In this body, of course, Canada, the Chinese Colonies, and India should be represented. Some of the great princes of tho last named country might even be allowed to sit in tho House of Lords.

WHAT OTHER PREMIERS THINK.. Sir Honry Parkes, of New South Wales, had listened to his proposals, but had shrugged his .shoulders, and said that the irritation caused by tho system of levying duties at the borders of the colony prevented any likelihood of the required federation taking place. Mr M'Hwraith, of Queensland, has coincided with his (Mr Westgarth's) views,and said that all that was needed was to get Sir Henry Parkes to agree, when the colonies would federate and follow the example of the Dominion. The , next best thing to this, as suggested byMr M'llwraithwouldbetoes- i tablish a financial federation of tho Australian colonies, and under, that to issue debentures for one uniform loan, for the payment, of which they would all bo liable. Mr Westgarth considered this to be a very good idea, and . had repeated it to Sir Henry Parkes, whom ho had twice interviewed. In case- that there should be found difficulty or delay in* carrying out this plan, then another way bo for- all the colonies; to tissue, stock, as much' as possible of i the game, kind, each colony, however, . "beings responsible, for its own debentures.^ Ib/ would* not matter whether there was only, one agent in Engjlandor more* ; than l.one.: vl The fact that some negotiated through jthe Bank of England and others through the {.Westminster Bank would nqt affect the stocks.., , " ' > ' t " - !..<•? p* „» -I „ ■> " - \

, For the'excellent'map of- Poverty Bay aocorapanying this-pap*or, showing the voriou^ 1 "positions', of', the "events in" the ' Archdeacon was indebted to Mr, W. O'Ryan, of qiSbdrne. J ':/-»' ' • 1 ?

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