The Hastings Standard Published Daily. TUESDAY, NOV. 3, 1896. KEEP THE MONEY IN THE COUNTRY.

Hastings Standard, Issue 162, 3 November 1896, Page 2

The Hastings Standard Published Daily.

TUESDAY, NOV. 3, 1896. KEEP THE MONEY IN THE COUNTRY.

For tli"' can -e thru lurks a*'-. Stance, For the v.n>siK< that need resistance, Fit the future hi the di-tancf, And the «o<sd that we can do.

Ai'iwkknti.y an effort is to l>o made to place in the colony the million loan authorise! last session, for we find the leading Ministerial journal advocating such a scheme. One fourth of the million lias already been raised within the colony, at par no doubt and at per cent. This fact, however, does not furnish any strong argument for placing thf balance of the loan in the colony. The expenditure of the million loan was anticipated to a very lar<re extent before Parliament passed the Loan Jlill, and the Government lias been obliged to borrow locally to meet that expenditure. The money was probably obtained from the lending departments of the State. When these departments find it necessary to convert the stock or debentures into cash they wilt be sent to London and scld at an immense profit. !>ut the question to be answered is will the public absorb the loan at par on a -i.l per cent, rate ? This is hardly likely in the face of the fact that almost a similar percentage for money at call can be obtained from the Post-office Savings Hank. Furthermore the Consols Act of last year, which was to afford a safe investment for thrift, has not been successful. Most of the money invested in Consols has been invested by banks and the State Departments, the thrifty amongst the public absorbing very little. We have no doubt every encouragement will be given the Government to issue the million loan locally at par, for to those likely to subscribe for it there is a very large margin of profit. Our per cent, stocks ou the Loudon

market arc quoted at £lO5, and to issue the loan locally at pafis to make a present of 5 per cent, to those who tender the money. For it must be patent to the ordinary individual that the stock as issued would be sent away to London and converted into cash, and for every £IOO advauced to the Government here the syndicate, bank or individual advancing the money would at present prices be able to obtain in London £10.3. Of course it may be urged that interest on the loan can be made payable only in New Zealand and so keep the money in the colony, but if this were done there would be no tendering for the loan, and the attempt to obtain the money locally would be a failure. The chief reason for advocating the local market lies in the fact that the non-interest bearing deposits in the banks for last quarter show an excess of about one million as compared with the corresponding quarter of last year ; but it must be remembered that much of this is money sent out for the development of our goldfields. At present it lies to the credit of the various English companies, and later on it must flow back to England to pay for the machinery and plant that is necessary for the work of developing the goldflelds. New Zealand is not ripe yet for loan absorption on a large scale. Treasury bills serve all the purposes of the lending departments of the State, and the I'ost-oltice does wonderfully well for the thrifty. For the rest the banks are good enough. liut it is wrong, having regard to the present quotations of our stock in London, to attempt to lioat the loan locally. If our viA's are selling at 100 at .lome, surely a loan carrying' the same rate of interest would net us 102, and that, compared with what could be obtained locally, on three-quarters of a million means a loss of l'l-"i.OUO to the colony and to those who may subscribe for the loan locally a profit of about i";!7.")(!0. At the present time London is our best market, and let us be honest enough to take advantage of the best market. The theory aboutkeeping the money in the country by tloating the loan in the colony is simply absurd, for the interest on the borrowed money, or the bulk of it at am rate, will have to be paid in London, and we shall have to send our produce Home to find the money for the interest payment. We fail to see how we are to " enrich ourselves by borrowing from ourselves under present conditions.