The Lyttelton Times. THURSDAY, JANUARY 16, 1868.

Lyttelton Times, Volume XXIX, Issue 2206, 16 January 1868, Page 2

The Lyttelton Times. THURSDAY, JANUARY 16, 1868.

We have asserted that the true poaition and character of the Provincial loans were already settled for U9 by an authority wbch we were bound to SHv that this was too much to demand of the Government of the colony. But we must recollect that even the ambiious kings and proud emperor ß of Europe have often to take ciuu,el of those whose financial aid they need net Minsters or abunlnfa . • SJ* \ deClßlOll 0t " the ut onit t Dg -',i and t0 hwe "W----upon it. We will go even far-then an A atateourbeliefthaf it was to a"reat xtent the. want ot consideration and tions of that body which inL3fc Ministry to withdraw their ow

scheme, and the majority of the House . of Representatives to nccept the dictation of an interested pnrty. Our readers will not have forgotton that the committee of the London Stock Exchange refused to allow tho debentures of the several provinces of New Zealand to appear upon the sharo list alone with other , colonial securities. The well-known objection which led to this oxclusion was, that these Provincial debentures possessed little more than tho claims of a second mortgage, and that it was quite a possible contingency that the securities of the Provinces might be seized upon to satisfy tho debts of the General Government, leaving only the balauco to the holders of the Provincial debentures in liquidation of their claims. Now it was an act of folly on the part of the Legislature to ignore the plain facts of the case as thus set before them. Without any discussion about the soundness of the decision, or the uncertainty of the grounds on which it rested, it stood forth as a patent fact which could neither be altered nor remedied. In consequence of this decision, and the exclusion of our debentures from the share list, tho Provinces of New Zealand had to dispose of their securities at greatly, reduced figures. Those who invested in these securities did so with a perfect knowledge of the position in which they stood, and of the risk which, at least according to high authority, they were running. They formed their own opinion of the risk, took advantage of the depreciation, and bought the debentures. The policy of the Geaeral Government in these circumstances was surely very clear. It was proposed that the Colony should take up these debentures, and 1 exchange them for those of the General Government itself. We repeat the opinion which we gave at the time : " We are perfectly convinced that if "the Government had adopted the ''simple plan of announcing in the " Times and Money Market Meview " that such and Buch Provincial de- " bentures would be, during a period "of six or nine months, purchased at " fixed prices, or exchanged for Colo- " nial stock by paying a certain pre"mium, at least nine-tenths of the "holders would have jumped at the "offer, and New Zealand securities "would have been virtually consoli- " dated to the mutual satisfaction^

" profit of the holders and the colony." There are good and substantial reasons to shew that this was indeed the only consistent course, and the only one which in justice to the colony ought to hare been pursued. The Colonial securities are something yery different from the Provincial securities, in regard to their extent as well as their character. Had the General Government merely endorsed the Provincial debentures, so far as to recognise them as a first claim againstthe lands and revenue of each particular Province, a considerable value would have been added to the debentures in virtue of the advanced character of the security. But when the General Government comes forward and offers debentures of its own, it pledges new securities in every case. It pledges the lands and re-' venues of all the Provinces for all the debts, and adds the weight of its own controlling power and public credit. There is not even the shadow of justice in asserting that these new securities ought to be of the same nominal value in figures as those which they to replace. It is in fact impossible to keep them at that value.

The Colonial debentures, with the increased securities on which they rest, and the increased facilities for dealing in them consequent upon their being quoted in the Exchange share list, do not stand at par but rise to one hundred and four or one hundred and five, and may yet rise even higher. Now this is of itself a clear, practical confutation of the fancy upon which the Public Revenues Act is based. It is impossible to keep the debentures at one fixed figure. The facts of the case, as they have already resulted from the action of the Government, are a complete exposure of the fallacy which dictated that action. Provincial debentures hare one market price, and Colonial debentures have another. This has been, to a great extent, the case, because the authorities oi the Stock Exchange declared long ago that Provincial debentures were of a different character from Colonial debentures, and much intenor to them. ToiDßißt > then, upon treating them as of equal value was an absurdity and an injustice. That ao many of the members of our two Houses of Legislature should have assumed for a moment that this equality of value really ousted, will, for a long time, shake confidence in their ability to handle financial questions, and occasion some susp.c.onoftheirgeneralindepeQdence. Mr Jolhe, towards the conclusion of his letter, betrays his knowledge of the inequality of the values, and surrenders his whole argument by asserting that in consideration of the increased facilities and improved securities, "a small premium might fairly be asked." Ihe only difference in theory, therefore, betweea himself and us, lies in this that instead of "asking "for a large or a small premium, we should have made such a public offer in the open market as would have induced nineenths, if not all the bond-holders to accept it The practical difference in favour of our scheme is, that it would have saved more than two hundred thousand pounds to the colony.