The Timaru Herald SATURDAY, MARCH 27, 1926. THIRD LOAN FAILURE.

Timaru Herald, Volume CXXIII, 27 March 1926, Page 8

The Timaru Herald SATURDAY, MARCH 27, 1926. THIRD LOAN FAILURE.

Two years ttf><>, ■ the State Tn'asurer (Sir Arllntr (Jocks) warned the ju'ople: of Now South Wales that: the State .was jiea'rthe limit ot its fioviov. nij; se.ciu'iiy, and they could not keep on without seoinw the spectre in front of (limn of heine; unable to meet their ohliga lions. Sir Arthur was replying’ to a deputation which'sought the expenditure' of more money to prevent the dismissal of a, number of Harbour Trust employees. This outspoken Treasurer condemned tin'' policy of the Government employing; too' large' a section of I lie cniiUiiuiiity, thereby 'in,sufficiently 'encouraging; private enterprise. Such a policy,. Sir Arthur Cocks . insisted,- would lead to disaster. Hut Mr Lung's reckless: election promises .must be honoured. lienee .bis quest for millions. In 1924 :in order to honour its obligations, “the State of New South, -Wales had to borrow at the rate l of To,01)0,009 monthly, and this was in' addition to the • Commonwealfli loan raising operations requiring the borrowing ot £20,()()(),(HR). 'hi 1924 the gross public debt.of the Commonwealth was £410,990,41!) and that ot •, the .States £524,489,489 ; in other wol d-, the national debt pf Australi i now- exceeds £1,000,000,000 —one thousand million .-sovereigns! from the beginning of"the war lo June 150, 1922, the increase in Australia's public indebtedness' was £197,944,000. 'The.following' tigures .show the increase over the tigures presented in |h.o pievious year’s Budget.;

New Soutli Wales easily leads her sister Shift 1 * in (’lie frequency of visits to (Ih 1 ' .London market. The British investor, invariably looks ivith. favour on overseas requests for capital, but it is becoming: clearer every-day that future loan issues will require to l;o backed by a cbinprehcinsive statement as to the- emulation of the timiueos' of the borrowing State,*.anil fuller details of the 'security offering. Facing the unenviable position cieafod by the “third successive loan- failure,” the (I ('Comment, of New South Wnle-s will he forced to look more carefillly into the finances of the State. ...Doubtless Mr Jiang';-; extravagant, and almost reckless electioneering promises are- coming home. to.‘roost, and without, ample, funds "the Labour Cabinet of New South Wales will find it increasingly difficult to purchase popular, favour by the .squander of public funds. - JJuf national exj.-e-udit.ure in New South Wales is increasing by leaps and hounds. In .1019 the expenditure out. of revenue- amounted to £00,212.01d, lmt- although in five years, the- population showed an in crease of 0.5-‘> per cent-., the national expenditure swelled to £■17,05.1,419, an increase <,t £7,041,400, or 21.1 per cent. In other words the annual increase per capita was £8 Is- Id. During the same period there was a 10 per cent-. increase- in New Zealand, •or 3 ',£l 18s 9d pea’ head, and a population- increase- of 8.8 per cent.. Under the circumstances the loan issue Mr Lang placed so confidently on the London market, did not appeal to. (he British investor, and 70 per emit, was left, with the underwriters. Strangely enough 4! r Lang rather ]>reniufurelv assume i that: his first- essay at. borrowing, on the London market, had been whojo-henrtedly welcomed by British investors-. .Apparently, the- Labour Premier, of Now iSoutli Wales confused the, issueof flio piospeefup, and v.he flotation of the- loan. It may be expected; however, that Mr Lang y ill attempt, (o lake consolation in the- fact that. 80 per cent., ct (he, last New Zealand loan was left. in the hands of the- undeiwrihers. But, it should suffice, to explain that that issue was put on the- London market in face of t lie- embargo on Colonial loan --, which meant- Unit trustee i lives I - men Is were not available. When B is pointed out, however, llinf New Zealand al. the Line got as good leiias as (he J.oudon (.emitv ( ouiieil. obtained for its £0.000,000 at the same rate ( pel cent.), ami did infinitely better, than New Smith Wales with its loan raised about, the same time of £0,500,000 for which 5 per cent, was given, it must be ji-ateuf to the disinterested observer (lint. New Zealand s credit stands with, I lie best mi (lie, London market-. Moreover, the actual yield p, investors. <1 rather the- cost to (he bon owe-; of these three loan issues is: New- Zealand's ,£7,000,000, £4 los -id; London CounZ/ (.'ouneiTs £0,000,000. £4 15s -'id : Now South Wales's £0,500,000, £5 .! s (>d.. .But New Zealand invariably tells the whole truth about her financial position in such a. reas ■aning- way that, a film tie'.'! I aiitho-rily of sin h liig'h eo-nsidei-afion in the financial centre of (lie Uni|;ire, “The Leononi isl,' ’ has not hesitated to p; nominee, an exceedingly fa vein a hie opinion on the Dominion's financial position. In this respect, at-leal, the untried, tin eel v a n t-i-t 'hjiii al ist I iovevninciif of New South Wales Imv milch to learn from saner and steadier Ad in in isl rat ions.

Debt. Increnso. .0 t X.S.'NV. . . . 190.857.5:15 15.772,b')8 Victoria • • . '109,099,199 11.781 ,:i09 OiUH’nsiaml . 80,091.228 5 9<10,907 S. Australia (i().9:ib,2:lS (OH 7,55:! W. Australia 5<l,959,778 5,950,’l 10 Tasmania 21.945,J11 .■1,17:5;:;!):’.