"FINANCIAL REBUFF."

Dominion, Volume 4, Issue 1031, 21 January 1911, Page 7

"FINANCIAL REBUFF."

- THE FIVE MILLION LOAN. SOittE PLAIN FACTS. MR. MASSEY REPLIES TO THE , ' PREMIER. (By Telegraph.—Spccia! Correspondent.) Auckland, January 20. Interviewed at Auckland to-day regarding Sir Joseph "Ward's recent statements regarding tho five million loan, the Leader of the Opposition (Mr. W. F. Masscy) said:— ' "Sir Joseph Ward in his capacity as Minister for Finance evidently resents any criticism of his transactions, or any desiro for the details thereof.on the part of the public or their Parliamentary representatives, and by so doing very considerably weakens his own position. Tako tho £5,000,000 loan to which 110 has referred on several occasions during tho last few days. The criticisms wliich have been indulged in are, according to the Minister, 'absolute, rubbish,' but ho makes no attempt to show where his critics are in error, or to give tho information which is asked for, and to which the taxpayers are entitled. "As far as mombers of Parliament aro concerned, most of tho information on tho subject which they have picked up. has been obtained, from English newspapers, and hero let me point out that tho Minister in his most recent utterance says that' Nearly every financial journal of consequeiico had referred to it.(tho loan) as a satisfactory tranSuch, however, is not tho',case. The 'Financial Times' referred to the reception our loan met with as 'a fiasco.' 'The Times' and "The Morning Post .both said that the loan had 'met with a poor response.' Tho 'Manchester Guardian' said that tho new issue - 'had iiot gone off 'Well.* Tho 'Westminster Gazetto' 1 said it was' 'hot a public success.' The 'Daily Nows',:.. said . 'its reception was chilling,' and so on But, perhaps, Sir Joseph Ward will say the journals from which I have quoted aro of no consequence, and on that point leave tho public to judge. ' "Now as to tho loan itself. It was placed on tho market last November, underwritten, as we were informed, at a cost of one per cent. Tho nominal prico was £98 10s., and the rat* of interest 3J- per cent.: The terms were supposed to bo four years, .but there were sojno Very" important ' conditions connected with the price. For instance, the following: 'Holders of the scrip or debentures may convert their holdings into New Zealand Government per cent, inscribed stock at the rate of £102 of stock for every £100 of scrip or debentures at any time - prior . to December 31, 1913.' And also this: Those who pay up in full and'convert i in on or beforo December I, 1910, will receive a full six months' tat on the stock on January 1, 1911. Now there aro two very important concessions—a bonus of £2. of stock on eyery £100 of scrip, and five months' interest at 3J per cent-.; and .vet wo aro informed that 93 per cent, in stock was left in tlio hands of tho underwriters. I think the facts that have come out' since this justify the opinion I expressed in Parliament to tho eftect that with tho inducements'! ottered.tho reception met with by tho last loan was the-most serious financial unii 5 9 0111l try has ever expeijienced. Ih'ere is one question which will occur to most people: How much will tho £'0,000,0.00 loan cost us? But to' this no ono .outside -. of tho "Treasury! is up to tho present able to .given an accurato reply. Wo can only get at the cost approximately, but I intend to gn'o the Government an opportunity next session of supplying us with' detailed information, and I can only, hope it'will bo fort-hepming without anv pressure being brought, to hear. But'first of all there is discount of li per cent, then underwriting. 10 per' .'cent, then five' months' interest and £2 of stock to thoso who convert—aiid I should think every investor would take -advantage of such favourable conditions. Then there aro smaller items such as. Imperial _ stamp duty, negotiations and inscription fees, advertising, and so on. I ani of opinion that tho £5,000,000 loan, when it takes the form of ihscribcd stock, will have increased our indebtedness on account of discounts and expenses' by not less than £250,000 and perhaps a great deal more than that. If I am wrong I ask Sir Joseph. Ward to give us tlio details without waiting for next session. If I am right even approximately, then our ' loan money is costing us too much and our credit ia not so satisfactory as in a good country like this it ought to be. "There-is not the. slightest doubt that issue of tho loan has affected our credit. Tako tho most receiit quotations of Government securities last Saturday—Now Zealand - 3i, .£95 12s. 6d.; West Australia 3}, £9*7; Tasmania 3J, £97 10s.; Queensland, £96 10s.; South Australia, £96. 10s.; Victoria, £97; New South Wales,' £99. I say the credit of New Zealand should be equal to that of Canada, but what has placed it lower than any of tho Australian States? There can bo only ohe'answer. The fault is' not with the country or its peoploj'hut on" account-of tlio unwiso and reckless financial'methods of tho Government-. "Filially, ..is to tho, reception of the loan in London. Hero is ail extract from a letter just received . from a well-known New Zealandeiy ono of our most reliable colonists now on a visit to England: • ".'I met a man in a good nosition in the Stock Exchange .who told me they simply laughed when tho last New 'Zealand loan was announced and said tlio universal opinion, is that wo are mad in methods.l tried to explain our railways, our advances -to settlers, lour.-'land'purchase, and so on in mitigation; but the amount per head of our debt, they said, was unexampled and I fear - the business men are disj content with our position.' "