NEW ZEALAND LOANS

Wairarapa Age, Volume XXV, Issue 10713, 7 March 1913, Page 7

NEW ZEALAND LOANS

A STATEMENT OX FINANCE. MR MACKENZIE'S EXPLANATION. (From A Correspondent,) LONDON, 24 th Jonuarv. The High Commissioner lias addressed a letter to the Times, in which lie makes tho following reference to lSew Zealand's loan obligations, which are enlarged upon in tho Timer's "annual summary." "For tho year on which we have just entered —namely, from Ist January to 31st Decern ber, If) Ui, the [cuns falling due are not heavy, nor need they disturb tho public mind in the least. Their total amount is £250,000, £200,000 of which, is not due until tho middle of .November; that is, for loans falling duo in London. In Australia £lti(i,ooo fall due, while in New Zealand there are sums due to the Post Office Savings Bank amounting to about- £400,000. This' ! latter amount, however, can ho renewed without the slightest, tro'ible. "Tho financial position of New Zealand at the present time is so excellent that all these sums could be provided for from the surplus which stood to our credit for tho first six months of the current financial year—-an amount equal to £939,000. "Speaking of the total of our l\ms, your correspondent has pointed out that fifty millions of it aro reproductive, the great bulk of which produces . income of a greater amount than is paid out by way of interest, and there is one sum which brings in double the amount paid by New Zealand in respect of interest on the loan. It would be well to mention also that on .some of the services referred to, ..such as railways, two millions and a-half of money have been spent from revenue, on which sum we pay no interest, but on which, as an investment, we receive 4 per cent. Altogether about nine millions of money have during tho past fifteen or twenty years been transferred from revenue to public works expenditure, upon wliich no interest is paid by the Srate. Few countries can show a record such as this. ( "The amount given as the increase in debt for the last year £3,5,000) should scarcely be regarded as an increase of debt at all; rather it is moncj" employed in reproductive investments which bring in a return of interest equal to and above- the sum we require to pay to tho British money lender on the money so borrowed. To enlarge on that point we will take the £3,275,000 and .show what) the bulk of it is earning. That liioliCy lint; .raised at- from 3-A to 3if per cCiit.-j and WO ai'f! Pbtninmg a return of 4, 4}, and 5 per &ef,£. .Itis invested in lands for settlement, advances to settlers, local authei itje-s. railways, etc., and it may safely be said that at least £2,750,000 a* the £3,2/5,000 are not only profit-yield-ing investments, but are developing the country as well and of the balancethat is not profit-yielding, £250,T00 has been spent in naval defence. Then tho statement that, in addition to the £3,275,000 increase of debt for last year, the Mackenzie Government had to go to the London market for another loan of 4i millions, also requires enlargement. In round figures one and a-half millions of that sum was for loans falling due, and of the balance (three millions) half a million was applied towards the cost, of the Dreadnought cruiser, and the -emainder was for investment in public wodks. advances to settlers, purchase of native and private lands, etc., nearly all of which latter amou.it brings !to the State a cash return equal to and above the interest we are paying on the monov."