The Grey River Argus THURSDAY, October 15th, 1936. GOVERNMENT LOAN ISSUE.

Grey River Argus, 15 October 1936, Page 4

The Grey River Argus THURSDAY, October 15th, 1936. GOVERNMENT LOAN ISSUE.

Clifiinbcrs ot Coiiiniercc as well as Opposition Members ol l.’arliamcnt have been asking’ epicslions regarding the authority taken by the Government to borrow money. To some at least of their queries the answer is tori,‘.ty available. There is a loan issue of almost fourteen millions announced, on behalf of the Government by the Reserve Bank. It may be predicted that there will be very few fault-tinders indeed with this development. lit is one calculated to save money for the .Dominion, for its counterpart is an extensive loan conversion. In January next, some twelve millions of Government stock and debentures is being redeemed, and holders are to receive preference to convert into the new issues either of stock oi debentures. For the longer term issue of the two being made, the interest rate is to be three and a-half per cent., and for the shorter term the rate will be three per cent. It is the policy of the Government to replace the high rates which former Governments have paid for money by ones, more in accord with the financial situation now prevailing throughout the world. It has been very obvious for years past that interest rates generally have fallen in a wav that is permanent. The banks in all of the leading countries have, in fact, found the greatest difficulty in placing the funds at their disposal, and Government loans have been the channels into which untold mil' lions have gone. The British Government has been borrowing vast sums at/ almost any rate it has chosen to offer, there having been time after time a, very extensive over subscription. Security is something well worth having. whatever the return in interest. and it is safe to predict that the holders of the Nov Zealand Government scrip which is about to be redeemed will be glaa of the opportunity to take up the new issue. There is bound to be a deal of cash competition, but the proviso to give preference to those wishing to convert will prevent their being squeezed out by large financial houses. On the other hand, the cash issue will give an opportunity for . those seeking a saf e and certain investment.. It is obvious that equpl opportunities are hard to find in. other directions. Reliable stocks

outside those of the State havej had such a value placed on them' by the market that- their return is to-day on a par with what the Government is offering for its new issues. One reason why the issue is timely, is that there is so much money seeking investment. The Government will be able to put this capital to the best use in promoting national prosperity. It is incidentally demonstrating its faith not only in the credit of th? Stale, but in the public recognition. oil the wisdom ol its ov, n policy. The Finaiie- Minister on his visit to Britain will negotiate for a conversion also of New Zealand loans held in that country. It is thus clearly evident (hat the rates now offered are destined to remain, and that those who had an expectation of an upward tendency must reconcile themselves to the inevitable. The capital js available so plentifully tlmt il is simply common sense for the Government 1o anticipate by three years or so, the date whim the twelve millions to be redeemed next .January would otherwise have fallen due. Thus the wouldbe fault-finders, who have suggested the Government would not finance economically and safely, must acknowledge that they reckoned without their host.