N.Z. LOAN.

Auckland Star, Volume LXI, Issue 102, 2 May 1930, Page 7

N.Z. LOAN.

ISSUE IN LONDON. £5,500,000, 5 Per Cent at 99, For Debt Reduction. DOMINION'S HIGH CREDIT. (United P.A.-Electric Telegraph-Copyright) LONDON, May 1. The financial correspondent of the "Daily Telegraph" states that arrangements are being made for the underwriting of a New Zealand Loan of £5,500,000 on 5 per cent stock, redeemable in 1949, the issue price of which will be 99. Part of the loan is required to meet maturing short-term debt. The writer remarks that New' Zealand 5s always a popular borrower in London. White depression of the pastoral industry has affected the exchange, the- high standard of New Zealand's credit is evidenced by the. quotations of its outstanding loans.

"SOUND FINANCE." "We Could Have Obtained More," Says Premier. CHEAPEST TERMS AVAILABLE. "It is ridiculous "to suggest, as the 'Herald , has done, that thie loan is too modest," was the statement made by tho Prime Minister, the Rt. Hon. Sir Joseph Ward, in an interview by telephono with a representative of the "Star" to-day. "As a matter of fact, we could have obtained a. very much larger sum had we required it," added Sir. Joseph. "The amount we required was, of course, regulated by the sum available in New Zealand. * Having raised this loan of £5,500,000, we now have all the money we require for the twelve months, since we have a large euni ready for use in New Zealand. The amount in the Treasury is £3,000,000, and there are other funde in excess of. that sum whidl we can use should occasion arise. I am fraid that if I were to accept the ideas of the 'Herald' as sound I should have to adopt an altogether different mode 6f finance, and that does not suit me.

"Subscribed Immediately." "To say that the money is not cheap money is misrepresenting the case. I eay the loan was obtained ae cheaply as anyone could get it at the present moment. The last loan was raised by South Africa. That country obtained £6,000,000 at 88, and 5 per cent was paid for it. The important fact to remember, however, is that the bulk of the South African loan was thrown on to the brokers, whereas our New Zealand loan was subscribed immediately. With the loan money I have obtained, and with the money available here, we have ample for requirements." Sir Joseph said it was true that part of the cash proceeds would probably bo used temporarily to pay off Treasury bills issued in London on account of exchange diiflcultics hindering the remittance of cash from New Zealand. That cash was now invested here on fixed deposit. Issue of Bills Not Strange. "We have frequently had money falling due in London, and there is iiothing extraordinary about issuing bills to meet tho position," continued the Prime Minister. "It is quite good practice and eound finance. When we have a loan of £5,500,000 underwritten, it would be very foolish to keep the proceeds of tho Treasury bills standing. What we have done has frequently been done by financiers of other countries who knew their business. I do not understand the 'Herald's' point of view in making statements such as they have published."

Sir. Joseph told hie interviewer that he was in a. much-improved, state of health, and was looking, forward to going to Wellington within the next few weeks. He asked several questions concerning the Pa'rneli by-election, seeking an assurance that the campaign was boing conducted on right lines. 7 'l have the utmost confidence in Mr. Alan Donald," he said, "and I believe he will win."