The Hastings Standard Published Daily. TUESDAY, SEPTEMBER 1, 1896. THE LOAN BILL.

Hastings Standard, Issue 109, 1 September 1896, Page 2

The Hastings Standard Published Daily.

TUESDAY, SEPTEMBER 1, 1896. THE LOAN BILL.

The only important alteration to the Loan Bill made in Committee was that limiting the currency of the debentures or stock to twenty-five years. It is true that for short-dated debentures the colony will have to pay a higher rate of interest, that is to say that while under the present easy conditions of the money market for a loan with forty or fifty years currency it is highly probable that the stock could be issued at a heavy premium, it is extremely doubtful whether par would be realised for stock limited to 25 years currency. As against this we must bear in mind that the tendency of interest is downwards, and the longer the currency of -stock the more difficult and expensive it is to take advantage of any appreciable fall in interest fates. The bulk of our present debt is held in 4 per cent stocks which have still 83 years to run before they mature, and although it is desirable to convert this into 8 per cent stock, the heavy premium required by the bondholders makes conversion practically impossible. The advantage therefore of short-dated debentures is easily seen and will be appreciated should the chance of conversion ever occur. We are somewhat in sympathy with the new clause moved by Mr Bell providing for the redemption of the loan, and if this clause is added to the Bill the term of the loan will cease to have any significance. Mr fell's proposal is to set up a sinking fund which shall not be available in aid of revenue, and for this purpose an amount equal to 1 per cent of the loan is to be paid out of the Consolidated Fund in each year until the loan is fully redeemed. Any premium obtained at flotation of the loan is to be treated as part of the proposed sinking fund. We are accumulating a public debt that bids fair to become too unwieldy for the general taxpayer to bear, and to this we are adding the Loans to Local Bodies as a second debt. It is time therefore that some attempt was made to provide for the redemption of some of the debt. It is quite right that posterity should bear its share, but we are building up a debt that will make posterity the bond slave of Lombard

Street. It would be a wholesome departure from the ruling principle to attach a sinking fund to the million loan of 1896 ; the additional burden imposed upon the people by adopting such a course would scarcely be felt; £IO,OOO a year should not be an impossible task for progressive New Zealand. We waste more than that annually in " political sops."