THE NEW LOAN.

Hawke's Bay Tribune, Volume II, Issue 182, 17 July 1912, Page 5

THE NEW LOAN.

INTERESTING PARTICULARS. [by telegraph-special.] Wellington, July 17. The following interesting article appeared in last night’s Wellington “Post.” “By the mail which arrived last night the ‘Post’s’ London correspondent supplies information about the flotation of the £-1.500,000 loan for which critics of the late Government asked in the House a fortnight ago. The late Minister of Finance (Mr. A. M. Myers) said on 2Sth June, during the debate on the Imprest Supply Bill, that a sum r.f £2,285,000 was for loans maturing on 2nad July, when Mr. Myers had read a list of the authorities for amounts totalling approximately £4,450,000 Sir Joseph Ward asked what amount of these allocations was for renewal of loans, and Mr Myers replied “none.” In our comment at the time, we gave an opinion that Mr. Myers was drawing distinction between six and half a dozen, and the letter from London does to-day show that he was word-splitting. The propectus issued from the High Commissioner’s Office, under date 7th June, over the signature of Mr. C. Wray Palliser (who has been acting in the place of Sir William HallJones) states: ‘Of the proceeds of this loan the sum of £2,840,500 will be utilised for the repayment of debentures issued under the previously specified Acts, and the balance for the building of the new Dreadnought cruiser, construction and improvements of railways, roads and bridges, goldfields development, for other public works required for the development of land settlemnpt. in respect to purchase of native lands, and for advances to settlers and workers? A leaflet issued on the same dav 1 y the Bank of England states: ‘Of the proceeds of this issue the sum if £2.840.500 will be utlised for the repayment cf sums temporarily borrowed to provide for the redemption of debentures previously issued under the above mentioned Acts and £-159,500 under the Naval Defence Act. 1909. to meet the payments in respect of the New Zealand Dreadnought cruiser now under construction.’ A comparison of these statements shows up the six and a ha’f dozen aspect or Mr. Myers’ two statements to which we have referred. In the list of authorisations given by Mr. Myers on 2nd July, the Naval Defence Act figures for only £lOO,OOO, but it is now apparent that the sum obtained under that heading is £459,500. The late Minister declared a fortnight ago when our London correspondents letters had travelled three-quarters of its journey, that he was not in a position to indicate what proportion of the loan would be for actual expenditure cn public roads in New Zealand. It now seems that the maximum for purposes not connected with repayments and the Dreadnought cannot exceed £1,200,000. ‘ Some of the papers,’ remarks the ‘Post’s’ correspondent, ‘are pointing out that, with underwriting charges included, the monev is costing 4) per cent. The probability as we have already explained is that these ‘New Zealand Government £3 10 - per cent, debentures price of issue £99 per cent.’ as the Bank of England leaflet has it, w ill co<t at least 4.[ per cent when all the charges are included. It may be that the money ring which Sir Joseph Wind guai’dedly referred to, would not permit the late Government to make any better terms, but the fact remains that this expensive deal in short-dated debentures is a sharp reminder of the costly Shortdated practice of recent years. 'For some years past,’ commented the ‘Daily Mail’ when the prospectus was published, ‘the Dominion’s issues in this country have consisted of short-dated term securities, though not so short as those now to be offered.’ Members of the new Government roundly condemned this hand to mouth system of finance, and they offered sound argument for a change. The public will now naturally look for an amendment”