DOMINION LOANS.

Gisborne Times, Volume LV, Issue 6204, 8 October 1921, Page 6

DOMINION LOANS.

SOUTHLAND EFFORT A TREMENDOUS SUCCESS.

NEW SMALL LOAN RAISED BY , . GOVERNMENT.

NEW ZEALAND’S CREDIT PARTICULARLY GOOD.

"WELLINGTON, October G

The Prime Minister was asked by Mr Hamilton (Awarua), for information regarding the Southland Power Board’s loan. Mr Hamilton said that it had been reported that this loan had been raised on' better terms than the Government loan. He would like to know if it was possible for a local body to get money in London on better terms than were given to the N.Z. Government. ,

The Prime Minister replied that it was almost impossible to make the Southland loan a success unless it had the guarantee of the N.Z. Government behind it. He. therefore, agreed that the guarantee should be given, one of the conditions being that the Southland loan should not be placed on the market at the same time ac the New Zealand loan.

"The New Zealand loan wos placed on the market first,” added Mr Massey. “The interest was G per cent, and the minimum price was £96. > It: weiTt off within a few days, although the whole of the money was not subscribed the first day. I understand a,t the time that some people had attempted to bear the loan on the first day, with the object of sharing in the underwriting. The attempt did not succeed, and the next day the loan went ud in price, and is almost at i>ar now.” “Then came the turn of the Southland loan,. They advertised their loan as a N.Z. Government loan. I do not object to that, because the Government guarantee had been placed behind the loan, and it had really become a Government loan. The terms were the same as the terms of the other loan. 6 per cent, at £96.. The whole of the Southland loan was taken up in the first forenoon. It was a tremendous success, but the success was a compliment to New Zealand. The terms of the two loans were exactly the same and the results were as nearly as possible the same.

"We cannot go on giving guarantees of that kind,” said the Prime Minister. "To place the Government in the hands of all local authorities would very seriously affect the credit of the country as a whole.”

The Prime Minister ■ proceeded to inform the House that there was provision in one of the statutes that, if the Government was authorised to borrow a certain sum in London and had to issue the debentures at a discount, it might raise an additional loan, in order to bring the amount of money actually received up to the full amount of the authority. The discounts and other costs in connection with the £5, 000.000 loan had amounted to £380,000Money was now becoming cheaper in the London market and he had given instructions to New Zealand’s financial agents in London to place a supplementary loan in order to bring the total, received up to £5,000,000. He had since been informed that the loan had been raised at £99 ss. That was a highly satisfatcory transaction. Although the amount was only a small one, it proved again that the credit of the Dominion was particularly good, since the transaction was one of the most favorable that had taken place in London for a long time past.- Special.