ECONOMY EXTRAORDINARY.

Hawke's Bay Herald, Volume XXVI, Issue 8962, 2 May 1891, Page 2

ECONOMY EXTRAORDINARY.

According to a Cbristcburch tolegram published tbe other day, Mr (founders, M.n.K., in addressing his constituents "submitted reasons for tbe Assumption that half a million a yenr could he saved in the annual expenditure of the colony." Mr Saunders h a curious man. He is, par excellence, tbe " candid friend '" of the party he for the time being supports -and in his lime be has supported every pirty, or fraction of a parly, ever formed iv New Zealand. He nays eminently disagreeable things of his opponents, though ho never descends to Billingsgate, and before tlio applause of his party has ceased ho says almost aa disagreeable things of thorn, to the delipht of the other side. On turning to the report of his speech, thorefore, wo were not surprised to iiud that, after sayiog many hard things of tho so-called " Continuous Ministry," he declared that " he did not protend to put any unlimited confidence in the Government," that "he had little doubt Ministers would make many mistakes," and that; bo supported them because " they could hardly be worse llmu their predecessors," and bosause " the new Cabinot was nob one of thoso frequent oscillations between Vogelitcs, Vogol himself, anil the apprentices or pupils of Yogel." This is about what one expected from Mr Saunders. But if he has the fiif b of making himself ominently disagreeable, he generally talks a good deal of common seuso, and is consequently listened to with attention. Knowing that, wo looked for Iho report of his speech, hoping to find in it some justification for tho telegraphic announcement which beads this paragraph. We wero never moro disappointed iv our life. Tbe way to cave £400,000 a year (not £800,000, as put in the telogram) is, ho tolls us, to federate with Australia, This is tho whole of bin fjrand plan, as reported in tho Li/tlclton Times'.— " Besides tho beneiit to the

- 11 1 *- ' ~' igriculturist, he might point out that t'ederatloD Would have au immediate effect in lightening the burdens oi taxation. New South Wales could borrow money at 3§ per cent ; we lud to pay £4 15s 9d. By joining in the Federation we could borrow money at least as cheaply as the former rate, and the saving thus effected would amount to more thau £400,000 a year. The payment of 1 per cent less on the national debt would mean a saving to the colony of £380,000 per annum." Now Mr Saunders is not so ignorant ob to believe that New Zealand pays £4 15s 9d per cont for its loans and New South Wales only 3J per cent, and if he is correctly reported ho talked nonsense utterly unworthy of a man of his standing and reputation. As a matter ot fact, the two colonies are nearly on a par in that respect, Both have current loans bearing rates of interest varying from 3J to 6 per cent, and both have "converted" most of their high-priced loans. Our last borrowing operations were on a nominal 34 per cent basis, and after allowing for the discount at which the loa^s were floated, and the cost of floating, the actual interest payable is £3 12s Gd per cent. According to Hayter's Yearbook, the New South Walea nominal 3J per cent loans coat that colony nearly 4 per cent after allowing for discount and cost of floating. The bulk o£ both the New South Wales and New Zealand loans bear interest at the nominal rate of 4 per cent. But both colonies had old loans bearing 5 ami 0 per cent interest, and those were "converted" into 4 per cents. They could not bo paid-oiT until a certain date, and to induce the holders to give them up they were offered iv exchange 4 per cent bonds of long dates. It was not to be expected that they would give up a £100 bond at 5 or 6 per cent for one at 4 per cent, so the best terms possible had to bo made, The holders got an average of something under £120 of 4 per cent bonds iv exchange for each £100 of the higher priced bonds, and the loans so converted do no doubt cost the colony £4 15* 9d per cent on the monsy oiiginally received. But those bonds constitute only a portion of our debt. About half was floated at 4 and 3J per cent, an«l some of ttie lows brought high premiums, to bo set against the discounts ou others, and that will hi ing the average much under the amount named by Mr Saunders. Mr liayter tells us that the actual interest paid by Victoria on the money received is £4 ?3 per cent, while Now South Wales pays slightly ; more. We have not Iho exact amount paid by New Zealand before us, but it cannot be much more than that.