SOURCES OF LOANS.

Auckland Star, Volume LIV, Issue 174, 24 July 1923, Page 4

SOURCES OF LOANS.

In view of the discussion at the meet, ing of the Auckland Power Board yesterday on the question of local versus oversea borrowing, we way draw attention to come interesting figures bearing on the subject that appear in the recently iseued "Statistical Report on Local Government in New Zealand." The war produced a great change in Government I borrowing. We used to get nearly all our loan money from England, but to-1 day a large portion of our national debt' jis hold in this country. Local borrowing ! ehowe a similar trend. In the year i 1913-14, out of a total local body indebt- ! edness of £19,000,000 (exclusive of loans from the Government) £10,106,000 had j been raised in New Zealand, and! £8,817,000 abroad. In 1021-22 the I amount owed to investors abroad was i £9,070,000—a slight increase—but the i I total borrowed from New Zealand inves. } tors had more than doubled—£2l,l96,ooo The policy of borrowing locally is sound up to a point. Interest on the loans is kept in the country, and has not to be j paid for in exports. But in a young undeveloped country like this, where capital is constantly required for develop, ment purposes, there is a limit to the supply of local capital. If the national Government and the local bodies take too much for their purposes, serious restriction will be placed on the natural employment of capital in mortgages and industrial development. The State and local body borrowings of the last few years have taken more than a hundred millions from the local reservoirs of capital, and the time has come to consider whether it would not be better to | call more freely on the immense supplies ' awaiting investment in England. The Government has already cased off in the matter of local loans, and local bodies -would be wise not to ask for too much from the local investor. There is pro-: vision to be made for the lifting of the ' mortgage moratorium in the near future.