“The Press” In 1864

Press, Volume CIII, Issue 30528, 25 August 1964, Page 14

“The Press” In 1864

August 25 HOW TO RAISE THE WIND The mistake we believe this province has made is in attempting to raise what is called a Government loan, that is, a loan the interest of which is to be paid out of the public revenues of the province, having the objects on which the loan is to be spent out of the question; so that it may be expended in lollipops or nutcrackers, or in any other manner which may suit the taste of the Government of the day. In short, we have two securities to offer for our debt, —so we offer the worst of the two, and say nothing whatever about the other. Hence, inevitable failure. Now, we are well per-

suaded that the funds necessary for these railways can be produced if we set about it in the right way. And by the right way we mean the ordinary businesslike way by which hundreds of railway companies have succeeded. We want to make a railway to the Rakaia and one to Kaiapoi They will cost in all say £500.000 The first step should be to repeal the existing Loan Ordinance, except so far as it relates to debentures already sold. Let a Bill then be past for making this specific railway, and for borrowing the money to make it, the line when made being the first security of the bondholder. But in order to overcome that diffidence

oh the part of the money market which arises solely from distance and want of information, a collateral security should be provided; this we are able to do by our lands. We say to the bond holder—“ Here are. 5,000,000 acres of land which’ will probably be sold at the rate of £2 an acre during the next thirty years. Of that 5,000,000 acres we will offer you 1,000,000 worth £2,000,000 as a collateral security for your debt. In other words, of all the land we sell, one-fifth of the price shall be set aside for you, paid over to a separate receiver oyer whom we want no control, who shall invest it, so as to accumulate as a sinking fund for your debt.”