Wairarapa Age MORNING DAILY. THURSDAY, DECEMBER 8, 1910. NEW ZEALAND'S LOAN.

Wairarapa Age, Volume XXXII, Issue 10135, 8 December 1910, Page 4

Wairarapa Age MORNING DAILY. THURSDAY, DECEMBER 8, 1910. NEW ZEALAND'S LOAN.

Very few people are aware of the actual cost of raising a loan for the Dominion. Fewer still arc concerned as to how the money is expended. Tlie affairs of this country have been run for the last thirty or forty years practically on borrowed money, and all the people have had to do has boon to find the interest. The time will come when borrowing will cease, and the principal will have to be paid back. Then there will be an awakening. Meanwhile, it is interesting to know what our oorrowing operations cost us. Tlio Mercantile Gazette, in an article on the subject, says:—" . . . . It is interesting to note tho number of charges and concessions borrowers are obliged to pay and make when floating a loan in the London market. Take the five-million New Zeaj land loan that we are now dealing with. There is the difference between the price of issue and the par value, that is 30s per cent, to those who convert the bonds into inscribed stock before the Ist proximo. Then comes the underwriting charge of 1 per cent., and the brokerage of ' per- cent. Then there is the stamp duty to bo paid to the Imperial Gov.'"Kl the inscription fep to

be paid to the Bank of England. 1 Then we have to take account of tho bill for printing and advertising the prospectus. .Having made all. the above concessions and paid the charges one would suppose that A\e had discharged an obligations in connection with the loan, but this is not so. The proceeds of the loan will not be sent to New Zealand in gold —in any case we have no use for the gold. We are exporters of gold, and the banks see to the importation of sovereigns and half-sovereigns necessary to meet the currency demands of the country, and our requirements in this respect run into a few thousands a year. The proceeds of the loan will be sent out to us in goods, and a part of it will be used in paying for services, etc. Ihus I'd'), 000 will come out to us in the shape of a "Dreadnought" battleship, and th» rest of it in various commodities on which the British will make a profit. Then there will be the freight on the goods and the insurance and the middlemen's profits and charges. It will thus be seen that in lending to New Zealand or to any other selfgoverning country or dependency the British take a very heavy toll."