NEW ZEALAND LOAN.

Timaru Herald, Volume XCVIII, 16 May 1925, Page 9

NEW ZEALAND LOAN.

REASON FOR FAILURE. STATEMENT BY PRIME MINISTER By Telegraph—Paeas Association. WELLINGTON, May 15. The Prime Minister (Sir Francis Bell), Ayho Avas acting', for The late Finance Minister (Rb. Hon. W. F. Massey) Avhen the New Zealand 4J per cent. loan was put on jsie London market, was interviewed by a “Times” representative to-day, and. asked liis opinion Avith regard to the comparative failure of the loan as indicated by London cable messages.

“We have no further information, no further figures,” stated Sir Francis Bell, “than those Avhich appear in the cables. They slioav that tho underAvriters have to shoulder some 85 per cent. of. the loan. I think, hoAvever, it is quite possible that if Mr Massey, whose financial ability Avas recognised, had lived, it might have made a difference. I don’t think that the reintroduction of the gold standard in itself Avould affect the position at all, but the Bank of England lias raised the bank rato to prevent the output of gold from the Old Country. The effect of that is that money can only be borroAved to go into tho Colonial loan at 5 per cent., and as our lean is only at 4J per cent., though issued at £94 10s, the raising of the bank rate has affected the amount of mcney available to put into the Neiv Zealand loan. The bank having raised to 5 per cent., the rate for money to jmt into such loans lias made it extremely difficult to raise money to put into the Joan at 4\ per cent, even at £94 10s. There is absolutely no reason, however to suppose that New Zealand’s credit stands any lower than before.”

Asked Avliy tho loan had been placed on the market at the present time, Sir Francis Bell said: “I don’t know. You must form your own conclusions. It would apnear to be fortunate for New Zealand,” he added, “that Are got in first.”