The Press. MONDAY, FEBRUARY 9, 1891.

Press, Volume XLVIII, Issue 7782, 9 February 1891, Page 4

The Press. MONDAY, FEBRUARY 9, 1891.

It may be news to our readers to learn that the colony may find itself borrowing again in the course of a few months, and this notwithstanding the fact that, at the general election, the people pronounced definitely against further indebtedness, and the sanction of Parliament has not been obtained. During the late election no candidate ventured to say one word in favor of a loan. It was felt that the electors as a body were strongly opposed to such a policy, and that non-borrowing bhould be an accpted policy of the country. We are far from saying that the principle has really been accepted by every member of the House. But we do say that the advocates of borrowing and squandering were so thoroughly convinced that the great majority of the electors were opposed to loans that they maintained a discreet silence on the subject. It remains to be seen what attitude these gentlemen will assume should the temptation of log-rolling for the proceeds of a new loan come before them.

As the public are aware, till comparatively lately, this colony has provided a sinking fund for each loan, calculated to yield a sum equal to the capital of the loan by the date of its maturity. With respect to some of the earlier loans large sums have now accumulated for their repayment, and in two instances at least the unking funds are actually larger than the. amount of the loans themselves. There are certain loans falling due at an early date for the payment of which, sufficient sinking funds will have accumulated! and in the ordinary course of events the public debt would be correspondingly reduced. Under the Consolidated Stock Act power is given to the Government to inscribe existing loans. By this process of conversion the capital of the debt is increased, but the annual charge is lowered, and the accrued sinking funds of such loans are set free. If the loans to which we have referred are dealt with in this manner, the funds which have been provided to pay them off as they fall due will not be required for the purpose. In plain terms the colony will give a fresh bill for its debt and set free the money lit has accumulated to pay that debt, a process which has every practical effect of new borrowing. It that the whole of the funds thus set ! free will not be available for Parliament to play with, for the reason that since 1884, although we have been paying the sinking fund* regularly, we have been restoring to revenue the annual provision by creating, from time to time, debentures for the amount. The Act of 1884 makes the amount of debentures so created a first charge on the released sinking fund of the loan. The operation, however, means the placing at the disposal of Parliament of a large sum which would otherwise have been applied to the redaction of the public debt. The question for the people to deoide is, Is such a transaction consistent with publio professions and pledges ? Iβ it right that by a side wind the debt of the oolony should be inoreased when within the last few years the electors have twice pronounced strongly against further borrowing. Although very little has so far been aald publicly on the question, there are signs of preparation in some quarters to seize the unexpected plunder,. The extension of the Wellington line from its present terminus to Te Aro is being strongly urged as a necessary work. This is part of a scheme concocted in Wellington for extending the line eventually to Island Bay at the colony's expense —a work which is no more a colonial one than would be the extension of our Southern line from the Chrietohurob station to New Brighton or Sumaer. In the same spirit it is urged that the Wellington line should be at once extended from Ekatauuna to Woodville. The question, of the conversion operation is one of very great importance to the colony, and ought to be brought prominently under the notice of the electors. The matter was referred to in Parliament in the course of the debate on the address in reply, and we have ourselves already briefly directed the attention of our readers; to it Wβ have no hesitation in saying that it is not likely to conduce to the public interest in any way to hurry on this very partial operation, and we venture %o hope that Ministers wil) not be tempted by the chance of getting more money to spend to under* take the suggested conversion; More especially is this the case when it i$ remembered that Parliament nevdr intended the inscription system to be used as a means of increasing the publio indebtedness, but sispply for the purpose or reducing the rate of interest oa the loans of the colony.'