NEW ZEALAND LOAN.

Auckland Star, Volume LIII, Issue 95, 22 April 1922, Page 7

NEW ZEALAND LOAN.

! GOOD RESPONSE PREDICTED.

FINAL PAYMENT IN JULY,

(By Cable.—Press Association.—Copyright) (Received 10 aJm.i : LONDON, April -2.1. The final instalment of 30 per cent of the New Zealand loan is payable, on July 6, and 20/ interest is payable oil July i. The financial newspapers anticipate a good public subscription.— (A. and.N.Z.)

A CONSIDERABLE GAIN. REDUCED ANNUAL CHARGES. STATEMENT BY THE PREMIER. (By Telegraph—Press Association.* WELLINGTON, Friday. Commenting on the- underwriting of the new loan, the Prime Minister said: "Naturally 1 am gratified at ihe result so far as it has gone. The fact that a New Zealand 5 per cent loan of £5,000,000-has been underwritten at par. is a splendid testimony to the high financial standing of this' Dominion, and, I think I am entitled to add, an appreciation of the steps taken by the New Zealand Government to cope with the post-war financial stringency through which the whole world is passing. "The result of the arrangements for the loan is a considerable gain both in regard to the amount of the actual cash receipts and in reduced annual charges. For instance, three weeks ago a Commonwealth loan, also for £5,000,000, was announced at 5 per cent at 96, which means that our loan for the same amount at the same rate of interest will return us £200,000 more in cash than will the Commonwealth loan to the people of Australia. A Commonwealth C per cent loan was issued in January at 97. It is reasonable to assume, according to a comparison with that loan, that the actual gain in cash will be' £150,000, while the annual charge has' been reduced by £90,000, which, if multiplied by the number of years of the loan's currency, represents a very large saving.

"The loan is made repayable in 1935 or 1945, roughly a currency of 13 years if redemption is made at the earlier date. The authority for the Idan is the Aid to Public Works and Settlement Act of last session. No definite allocation of the money can yet be given, but roughly the money will be devoted mainly to public works (roads, bridges, and railways), electric power works, land settlement and general development purposes.

"I am not keen On borrowing even at 5 per cent," added Mr. Massey, "for the simple reason that it is almost impossible for the Government to use the money for any purpose which will return anything like that rate of interest. In such cases there is only one way to make up the deficiency, that is by increasing taxation, to which most people strongly object under the existing circumstances. However, the loan is justi-> fied, but it will be the business! and the duty of the Government to see that the money is used to the best advantage,! so ! - that in years to come there may be something left to show for it. "I know there are many people who •will not agree with nic, but I believe' the next year or two will see- money much cheaper than it is at present."