NEW SOUTH WALES BORROWING.

Waikato Times, Volume XXXIX, Issue 3190, 3 December 1892, Page 6 (Supplement)

NEW SOUTH WALES BORROWING.

A writer in New South Walea_ thus comments on the proposed borrowing in the colony :—There is a good deal of misgiving as to the effect of Mr See's internal loan. That a lot of money will be offered is certain, so it is not Mr See nor his worthy colleagues who are troubled with any qualms of appmhensiou. The money will come in, and they will have—or hope to have—the handling of it. Apres moi Iα deluge. It is bankei-3 and men of business who aredependent on the bankers for the sinews of war, who don't see the benefits of the scheme quite so clearly as the Ministry and the noble army of logrollers appear to do, who are troubled with apprehensions, though for the most -par I they keep them to themselves. If the Government got this money locally, they will get it as competitors with the banks. What they get in the way of loan will be money which otherwise for the most part would have gone to the banks in the way of fixed deposits, and which the banks, in the ordinary course of business, would have advanced to the mercantile public. The more money that is tendered to the Treasury the less will be tendered to the banks, and the " tighter" will become the local market for monetary accommodation. It is tight enough already for most people, and the prospect, therefore, is not particularly cheerful. It is no reply to say that the money will be re-deposited by the Government. In a very short time it will be flittered away to the four winds of heaven in payment for the costly and for the most part unremunerative works which the Government have determined to construct. They have sucked up and spent all the money which they cnuld raise with any show of decency in London. What will happen after they have sucked up and spent all the loose money that is available here ? It is possible that this new departure, which is being entered upon with such a light heart, may prove the precursor of a period of monetary stringency such as the mother colony has not experienced for many years. It may be said there Uno danger of such an adverse development, becaupe tho greater part of the money will in reality come from London. This remains to bo seen. Experienced financers might urge that comparatively little money will come from London unlefl the interest is made payable there, and ihe Treasurer at present refuaea to grant this facility. But supposo the money does come from London. Will not this be equivalent to sarreptiously putting a four per cent, loan on the LondoD money market at par, whereas the present prico of four per cent, bonds is about 109? Surely this would be moat improvident and reckless finance, even considered in relation to tidina' over a present difficulty. But the effect in the future would be even woi-se. Ho^ , -would the market regard a 31 per cent, issue at anything near par, after they had been liberally fed (even though somewhat sub rosa) on 4 per cent, at about the same m'ice ? Viewed iu one asnect the Treasurer's action threatens to oripple trade. Viewed in another it is a retrograde step of the utmost gravity, which must in the long run tend to depress the value of our stocks in London and thereby depreciate the property of persons who have already lent us fifty odd millions. From one standpoint this internal loan is not without its compensations. It will bring all the more quickly the day when everybody will be compelled to sre the folly of maintaining an enormous loan expenditure in order to employ a largo pro portion of the people in the construction works which are not really needed, loft to themselves, with ordinary fairplay to prevent land grabbing, thoy would find occupation and pursuits which would add to the wealth of the country without involving any drain of interest or burden of debt. The borrowing fever once OTer, legitimate enterprise begins.