THE LOAN AND THE MONEY MARKET.

Auckland Star, Volume XLIII, Issue 142, 14 June 1912, Page 4

THE LOAN AND THE MONEY MARKET.

The issue of a New Zealand £4,000,000 loan has naturally caused a certain amount of criticism in financial circles at Home, the comments ibeing generally to the effect that we could not expect to get money on good terms just now. This is fair and reasonable enough, but it is certainly not New Zealand's fault that money is "tight" in London. It is "tight" everywhere in the world at present, and if we want money just noTv we must ■be prepared to pay for it. We can hardly expect that Government will get anything like fair treatment from the Opposition Press on this question; and we are not surprised to hear the "Dominion" declaring that "Wardist finance has forced New Zealand into such a dependence upon the London market that it finds it difficult to exercise complete freedom to choose its timr for going there. -. Does the "Dominion" really mean that if, in any given year, money is exceptionally hard to get, Government must drop its expenditure on public works for that year, and hang up road and railway construction till t>"» clouds roJl by? Our (Public Works policy, as-every-body-kno-ws, cannot "be carried'-onvrffch-oufc loans, and nobody- has ever professed to believe that it could be selfsupporting. One thing is certain, that as-saon. a≤ ever t&e-JEuilift Wetks Fund

fails to meet the demands' continually raised on all sides for more - roads and railways and other fatiEties for settlement, Opposition members" are foremost in denouncing Government for its apathy and lack of enterprise. But criticism of the "Dominion" type is too palpably partisan to do any serious harm. The terms on which the money is heing raised are -certainly not as satisfactory as we might have hoped and desired. Bat there is a great deal of evideirce available to show that the British investor is not likely to be content in the future with the low rates of interest that have satisfied him in the past. The steady decline of Consols in popular favour in recent years shows that even the beet possible security is not enough nowadays to compensate the investor for low interest. In this respect New Zealand has no more right to complain than England if our loans are more (Difficult to raise than once they were. As to the state of the London money market, anybody who looks up the financial records for March and April can see for himself that gold has been withdrawn to foreign centres, that there has been a strong demand for money at short dates, and that especially after Easter discount rates were hardening fast. No doubt our financial advisers were in a position to estimate the chances of improvement or otherwise, and there, is certainly nothing abnormal in the charges that we are being called upon to pay. As to the currency of the loan, the Reformers have made a great deal of the alleged extravagance and recklessness of such a .proceeding. However, it is quite possible that there may be reasons for the issue of a short-dated loan that are not strictly financial, and the "Reform" party may possibly come to understand more than it knows now about the political aspects of the question before the coming session is over.