Cromwell Argus AND NORTHERN GOLDFIELDS GAZETTE. Cromwell: Tuesday, May, 21, '95. NOTES.

Cromwell Argus, Volume XXVII, Issue 1361, 21 May 1895, Page 4

Cromwell Argus AND NORTHERN GOLDFIELDS GAZETTE. Cromwell: Tuesday, May, 21, '95. NOTES.

There is great jubilation over the floating of the three per cent, loan, among the Government ranks and their press supporters. The Colonial Treasurer is deified, and the laurel crown of financial fame now rests upon his head. The Colony is congratulated at raising a million and a half at three per cent., regardless of the fact that the real rate is within a fraction of £3 3s 6d per cent,, with a discount on the capital value of the loan of £82,500. These facts, however, wo have pointed out already in a former issue, and reference to them here is only necessary to remind our readers of the expense, at which our so-called three per cent, loan has been raised. In this connection, two facts have to be borne in mind, viz., that the Colony is paying not three per cent., but £3 3s Gd per cent, for the loan ; and that for every £IOO debenture, which this Colony gives to the British investor, only £94 8s 9d will be received. If our readers will study these figures, and keep them steadily in view, wo think that all this jubiliation will bo considerably discounted. Then there is the proposed scheme of converting all the New Zealand debt to three per cents., under the thin disguise of having to pay only that rate, instead of three and a half to five per cent., as we are now doing. The real reason of this desire to convert our present stocks is to be found in the Sinking Funds which belong to those stocks, which carry a 4 per cent, rate or over, amounting, in round figures, to nearly a million sterling. This is the Colonial Treasurer’s ambition. These stocks once converted, and the Sinking Funds released, he would have the manipulation of that million. With what pride would he, in such case, point to a surplus of a million —which with judicious repitition could be made to do duty for an indefinite number of budget surpluses, while the old old story would be repeated of ano borrowing Government. But, at what cost to the country could these conversions be made ? It has been stated on fairly good authority that to convert the thirty odd million of four per cents, into three per cents, would necessitate the issuing of £40,000,000, so that to obtain a conversion to three per cents, and the £582,400 Sinking Fund now accumulated on these stocks—that is on the L 30,000,000 four per cents. the colony would have to increase its debt by L 10,000,000. This seems a high estimate, yet, if a basis of probable value be computed on the relative current market prices of New Zealand stocks now ruling, that is to say four percents, at 112 and three per cents, at 94|, the increase would be something very like the amount stated. The conversion of the loans carrying higher interest than four per cent, would release some £370,000 Sinking Fund, and the cost of conversion would mean a proportionately larger increase to the National debt. Of the three and a-half per cents, the converse would be of course the case, but as these have only recently been converted, the object in again tampering with them, is not apparent, the more especially as they carry no inducement to do so in the shape of Sinking Funds to be released. We think, the few brief remarks, which we have offered for public information on the subject of loans’ conversions will prove of some service in placing the disadvantages of the process alongside the advantages claimed for it by those in favor of the operation. We will close this article by saying that in addition to the ruinous policy of adding so materially to the National indebtedness for present gain, it is a leading principle in finance that it is a mistake to pledge the payment of a fixed rate of interest over a period greater than is absolutely necessary. The reason of this will be obvious when it is remembered that the market value of money is yearly decreasing, and that 20 years hence, what can now be got for three per cent., may then be obtained for one, or one and a half per cent. And yet, were the proposed conversions to take place, the present four per cents., with some thirty years to run, would give place to three per cents., with a currency of something like 00 years. We will take occasion to resume this subject in a future issue, should circumstances point to the occasion for so doing ; meantime, we hope we have made our explanation sufficiently clear to be understood by all our readers.

There is a matter which Mr Fraser did not touch upon in his address to the Cromwell division of his constituents, but which, we are pleased to notice, he included in his address at Queenstown. We refer to the Local Government question of Crown Lands Rating. This Bill, Mr Fraser says, “is almost identical with the Crown and Native Lands Rating Act, which was repealed in 1890, chiefly owing to the grossly inequitable allocation of funds under it. During the eight years this Act was in operation—viz., from 1883 to 1890 —the sum total received by the counties in Otago was £17,238 and by Wallace and Southland Counties £15,300 or, in all, £32,538 ; whereas the four counties on the West Coast received during the same period £93,599 ! In the year 1887 there was allotted to the whole of the Counties in Otago the sum of £1,483 whereas the West Coast counties received in that year £15,804. Where was the equity in all this,? (Bear, hear.) Under the BUI introduced last session the Otago Counties would have received about £9OO. Southland and Wallace Counties in all £3OO, and the West Coast Counties £3,095. That Bill, fortunately, never got beyond the second reading.” This measure, we may explain for the information of our readers, is one of three alternative proposals which are being forced upon the consideration

of Government through the impecunious condition of local bodies’ finances. The other two proposes are: Ist, a straight out vote from the Consolidated Fund; and 2nd, the enlargement of Local Government control. The pressure, which is being brought to bear upon the Government to assist the finances of local authorities, comes more immediately from the Westland group of those bodies, and these are prepared, so pressing are their needs, to accept any compromise which will satisfy their creditors. Of the three proposals, one, — viz , the grant from the Consolidated Fund—may be dismissed summarily as being out of the question. This leaves Government two alternatives. By merging certain boroughs and counties in one larger body to be called a Provincial Council, whereby a large saving is expected to be effected in administration. And this way out of the difficulty finds favor with the Government so far that a Local Government Bill is being contemplated, to which, however, there appears to be considerable objection on the part of local authorities throughout the colony, not alone on the ground that the estimated saving in administration is more imaginary than real, but because the element of manhood suffrage —representation without qualification—is sought to be introduced. There then remains the Rating. Bill first referred to. This is clearly so inequitable as shown by Mr Fiu.su u as to bo the second horn to the dilemma. Between the two proposals now discussed, the Government will, in all likelihood, slide gently to the ground, and the local bodies will require to remain for a time at least, as they are, very hard up. Some little time ago, an item of intelligence, taken from one of our northern exchanges, appeared in the Argus columns, announcing the determination of certain station holders to discontinue putting up sundowners and swaggers. In our to-day’s issue, one of our local station owners takes up a similar position, intimating that, in future, “swaggers need not call for work at Wanaka Station; neither will they be accommodated.” We have thus brought home to our own doors, very forcibly, a sign of the times, which is anything but encouraging. Not--only will the professional sundowner find himself cut off at Wanaka from free hotel quarters, but possibly, many honest men, who would be quite willing to work if a chance of doing so offered itself. Of the former it may be said that it is high time, though not so of the latter. Still, however, no blame can be laid at the door of the station owners. They cannot be expected to give away what they are not making, and it is not very far beyond the mark, if beyond it at all, to say that they are losing money every year now. Low prices in wool, bad seasons and class legislation have contributed entirely to this result. From all appearances it is only the question of a very short time till stations all over the country will follow in the same direction, when the increased burden on our charitable aid, which is certain to result, will illustrate one good point which has been overlooked in the character of this particular section of the “ Social Pests,” -by the so called labor Government. It might be interesting to Government supporters to analyse the question of cause and effect in respect to the relationship between the stringent class legislation recently passed, and this rapidly growing determination, on the part of station owners, not to be made use of by the very people who have helped to place in power a body of men, who have left no stone unturned to harass and restrict them as employers of labor. We do not for a moment suppose that those station owners who have made the change in this old established custom, are doing so from motives of revenge or retaliation; we do think, however, that they are forced by necessity to do so.