A BOAST AND A BOOMERANG

Dominion, Volume 4, Issue 1027, 17 January 1911, Page 4

A BOAST AND A BOOMERANG

4 . No doubt wo. shall havo a speech from the Prime Minister at the end of this month,-v in which-the public will be asked to believe that the Government; is managing the country magnificently. /We trust that ho will-have had sufficient time by that date to decide what lie will say upon the failure of the big loan. There are many things about the loan that require soma explanation, but we are specially, curious .to know >how Sir Joseph Ward will reconcile his present theory as to what "successful flotation" means with his earlier views on the point. In his last Financial Statement, presented to the House on July. 19 of last year, he made reference to what he called the "successful" flotation (in April) of a loan of £1,850,000. Here are his exact words, as recorded in Hansard (Vol. 149, Page 661): ' ' The results' of the flotation of a 3i per cent, loan of ,£1,850,000 were most satisfactory. Tho money was raised at JMB! under five years' convertible, debentures', holders to havo tho option of converting their holdings into 35 per cent, stock at the rate of .£lO2 of stock for every ,£IOO of scrip aud debentures. Tho loan was underwritten, but the underwriters had only to retain 17 per cent, of the loan. Even this, in comparison with other loans raised about the samo time, was most gratifying: Ceylon ■ issued n 31 per cent, loan at 981, and the underwriters had to take 90 per cent, of it; while of an Indian 3J per oent. loan, issued at 90, tho underwriters had to retain 50 per cent. In financial circles the result of our loan was considered very good indeed. Last July, that is to say, the Pbimr Minister gleefully pointed to the wrctched case, of poor Ceylon, whoso credit was so poor that tho underwriters were saddled with 90 per cent of tho loan. New Zealand ,was in the proud position of getting the

public to take 83 per cent of its loan, only 17 per cent being left for the underwriters to carry. To-day, in the coolest manner in the world, he calls "successful" a New Zealand loan which, so far as the public was concerned, fell even flatter than the despised loan of poor Ceylon, ior, although the bait to the investor was far more tempting in . connection with the £5,000,000 loan than in connection with the loan floated last April, the underwriters were left with 9;; per cent of the loan on their hands, the public having only taken up 7 per cent oi it. Sin Joseph's incurable habit of boasting has got him into many a_ similar difficulty, but rarely, we think, has any boast of his become such a boomerang as this one. What, the public may well ask, would have to happen before our financial wizard would admit failure? What, the public will certainly ask, is the value of any statement 1 the Prime Minister may make on the national finances when he can call successful a flotation that, by his own standard of measurement, was a greater failure than a flotation that he cited last- July as a horrible example of what happens to little countries that havo.no financial wizards to steer them into the haven of a- sublime and unapproached condition of indebtedness?