LENDING AND BORROWING.

Evening Post, Volume XXIX, Issue 110, 2 June 1885, Page 2

LENDING AND BORROWING.

At the late meeting of the Government Insuranoo Association, Sir Julius Vogel incidentally made a very singular statement to the effect that as Colonial Treasurer he had, a few days beforo, been obliged to oable Home to the A pent- General to invest in England a sum of £120,000 of trust funds, for which Government had no investment open in tbe colony. This statement must strike anyono as singular when it is considered side by ride with the fact that, as Colonial Trea9nrer, Sir Julius Vogal is now trying to borrow a million and a half in England, and that a large number of our Harbour Boards and Borough Councils are also trying to raise Irana there. We do not suppose that the Agent-General would be able to invest the money in any securities which would yield more than say 3 or 3\ per cent., while the oolony itself is ready to pay upwards of 4, and the local bodies have to pay at least 6 per cent. It is surely bad financing to lend money at low interest on the one hand, while having to borrow at a muoh higher rate on the other hand. We do not by this mean to accuse Sir Julius Vogel of having made any blunder, for we assume that the transaction in question was in some manner forced npon him; but it doe 3 not require much acquaintance with the mysteries of finanae to Bee that such transactions aredecidedly bad ones for the oolony, and_ that if the law compels them it would be desirable to amend the law as speedily as posBible. It is burning the candle at both endß to eond money out of the colony for investment at a low interest, when we are borrowing money onrselves at a high one. If the seourity whioh the Colony and the local bodies can offer to lenders is sufficient to induce foreign capitalists to invest in our loans, surely it ought to be good enough for the safe investment of suoh funds as those Sir Julius Vogel alluded to. Of course this particular transaction may bo susceptible of satisfactory explanation, but the fact as stated by Sir Julius Vogel deserves notice.