AMERICAN MONEY.

Taranaki Daily News, 25 October 1921, Page 7

AMERICAN MONEY.

AN OFFER TO NEW ZEALAND. ON ADVANTAGEOUS TERMS. The successful recent flotation of the Queensland Government’s loan in New York has naturally prompted the question: Why not New Zealand? All the world seemed to be going to America for loan moneys when it was reported that the State of Victoria had had an offer of a loan, and that the City of Johannesburg was likely to obtain similar accommodation in New York. The British Dominions are attracting more than usual interest, it seems, on the part of American investors. Why not New Zealand? This Dominion has already had an offer of a loan from America. Mr. Massey indicated the fact in his speech to citizens at the Auckland Town Hall on the occasion of his recent welcome home. He then alluded to the fact that an influential financial group in New York had expressed its willingness to make a quite large loan to New Zealand. Mr. Massey added that the unofficial vehicle through whom the offer was made was then present—at the Auckland welcome home meeting. From inquiries made from that gentleman the Wellington Post learns that he had met in London, and subsequently in Montreal, a very prominent man’ in finance in London, who was also associated with one of the moat, powerful financial groups in New York. The meetings were of an absolutely private and certainly unofficial character. But it was surprising and gratifying to learn from this authority how well the credit of New Zealand stood in America. As evidence of that full inquiries had been made by financial experts there into this country’s position. Memoranda were produced in course of conversation showing that New York financiers had been closely examining New Zealand’s loans and its resources, with most satisfactory results. The financiers were much impressed with the future and credit of New Zealand.

The gentleman interviewed said he was informed that there was no doubt New Zealand could obtain in New York a large amount of money as loan on most satisfactory terms. If it was thought desirable, definite particulars would be ascertained and telegraphed. This conversation took place in London, and the gentleman interviewed by the Post was then about to leave for Canada cn his way to New Zealand. The particulars referred to were duly obtained from New York, with the result that a definite offer of a loan, running into several million-, was made available for conveyance, to and consideration by the Dominion Government. The terms appeared to be exceedingly satisfactory, probably the best offered to any overseas country with the Exception of Canada, which, of course, the Americans know much better than any other British dominion. In fact, they were rather better than the yield on even British Government bonds at that time. The telegram conveying this offer was dated September 7, over five weeks ago. Details of the loan offered were not disclosed during the interview. This offer was made, one is entitled to assume, before the other recently arranged loan to a British overseas dominion was concluded. "The great advantage of si*»h a loan for New Zealand,” added the gentleman—who may -for convenience be described as “the vehicle,.’ —"lay in the fact that the value of the dollar in America was then worth* about 5s Id. Therefore, every dollar lent and debited against us by way of loan was equivalent to 4s 2d; but its purchasing power in the States would have been 5s Id. On redemption we should have paid only 4.86 2-3 d, say 4s-2d, for every £1 of the debt. In th'S way we should have saved a very large sum in the aggregate on redemption. "It was explained to me that the contraction of industrial business and the arresting of development in the United States had enormously reduced the demand for capital for those purposes there, consequently there were large ae-l cumulations of capital rendered available for loans in Government securities overseas. This New Zealand loan offer, it was suggested, could be regarded as only the beginning of a series of loans which might be made, if further loan money were required by the Dominions. •The observation made by the London financier -above referred to as to the esteem in which New Zealand credit was held in America was most gratifying, and could—if these observations could be made public—materially assist in heartening the people of New Zealand and strengthening the faith they are justified in holding as to the future of , their country. "The loan proposals were conveyed to Mr. Massey, and by him to the Cabinet, by whom they were fully considered. The offer, however, was declined.” The reasons for this were not disclosed. In conclusion, the gentleman interviewed said he had reason to believe that the development of the hydro-electric resources of New Zealand were attracting considerable attention in America on the part of financiers. Money for that purpose, he was confident, could there be obtained on reasonable terms, should it not be obtainable in London.