The Lyttelton Times. TUESDAY, FEB. 18, 1879.

Lyttelton Times, Volume LI, Issue 5611, 18 February 1879, Page 4

The Lyttelton Times. TUESDAY, FEB. 18, 1879.

The papers presented last session to the House of Representatives, relative to the raising of the Loan of £8,500,000 of 1876 and 1877, show the critical nature of that operation. The Loans were raised, and success disarms doubt ,* but when we read in detail how it was done, and what a slight turn in European affairs would have made it a failure, we must naturally feel nervous even after the event. We take to our hearts, as all in all, the assurance that the Loan is a fact, and we peruse the account of its raising with the pleasing interest that we derive from a thrilling tale which we know beforehand will end in the triumph of virtue, and the happy marriage of the hero and heroine. We

cannot make up our mind to conjecture the calamities which our failure would have entailed; wC are only too thankful to think that experience has not shown them to us. There is one fact which we cannot too carefully bear m mind, and that is the close intertexture of our fortunes with those of the civilised world. Our prospects' hung from day to day on the policy of Sovereigns and statesmen who never once thought of Slew Zealand. Tm tide of our affairs ebbed and flowed under influences which, we could not control, and with which we seemed to have no direct relation, After the close of the session of 1877, Ministers lost no time in taking steps for negotiating the loan. The General Assembly Was prorogued on .Dec.;' 10, .1877, and four dajrs afterwards .Me. Litfti&cV the , Colonial Treasurer, wrote to the Agents General and to the Crown Agents, announcing the immediate intention of the* Government- to” raiso"~theLoana7 £1,000,000 and £3,500,000', 'authorised by the New Zealand Lohn; Acts of 1876 and 1877. respectively. ’ As a sthptilus;’to the ;efi;Grts • of. the Loan; Agents, -Mr Larnach,• in December 1877, ' .-inade.; to those , gentlemen; the pleasing announcement that “ itrs proposed to draw-pnyou in January for sums amounting-••in- the ■ -whole ■ to £400,000# the hills foronehiilf of that ' to fall due, say,. the other; half, say, ; June 20 ; . and in feacji month, say, from March to' Dec., it m ,proposed.to draw on .you. at sixty days', sight for £150,000,' subject to such deductions as may represent payments which the Colony may; require tobe made in London during that period-”. This is backing up with’a vengeance an authority to raise a Loan. £400,000 drawn before the. agents ’.have scarcely time to*read' the one iettejif 'of, anthprity ;and r - advice, and - the prospect jof £l^soo,^)oo,.in ten months! fifterwar4s, limiflonthly drawingsof £15 , 0’,000. ! J The telegraph was alto set to work. The two telegrams in December, 1877, signed respectively “ Larnach” and"*’Vogel,” are characteristic of . the men.. Mr Larnach plainly ;states what he'means.' Sir Julius Vogel commences, ‘{.Loan instructions important keep." quite secret.” . Sir Julius Vogel dearly likes to: shroud himself in : mysfceyy; .till the critical moment of transformation reveals him on his triumphal car, followed by an obsequious procession; and surrounded with all the proper stage accompaniments. His next sentence runs into' a groove on which his mind was at .that moment particularly bent. . “ Hope you have authorised inscribed stock and sent necessary documents. Reply.” This allusion Is probably accounted for by the contemplated arrangement of the Atkinson Ministry tomake Mr Stafford Agent-General, and Sir Julius Vogel a Presiding Inscriber of; New Zealand Stock. Otherwise, we cannot explain why he should, refer, with such interest to a subject foreign to the question of raising a new Loan. That tho two subjects should be kept apart We have the authority of the Agents-for the inscription; who were also, with the exception of Sir Julius Vogel—an exception, we think, improperly made —Loan Agents. In the printed correspondence relative to the New. Zealand Consolidated Stock, the Agents, writing on' June 8, 1878, state that they had, in their capacity as Loan .Agents, been much engaged >in loan business, and . that, , although that business had brought them into close contact with the Bank of England, through which the Inscription of Stock was to be effected, they had confined themselves strictly to the loan, as they say, “we deemed it prudent not to mix up, in any way, the consolidation and subscription of old stock with the issue of the now loan, as we felt assured that the one scheme would, in a maimer, complicate the other.” Mr Larnach, in New Zealand, : took the same view, as his telegraphic reply —“ Have not authorised Inscribed Stock. Think necessary, yet premature,”—must have damped Sir Julius Vogel’s ardour to know when the inscription would commence. The successive replies to the anxious enquiries from the Colonial Treasurer on this side of the world, fully show how much the process of putting money into his London purse depended on international relations in Europe. In December he is told—“ War rumours last few days reduced price stocks, including New Zealand.” In January—- “ Loan operations depend materially on peace or war.” In February—“ Cannot operate until war fever subsides.” In March—" Political condition still prevents negotiation.” In April, the same discouraging cry. In May, still the necessity of abstaining from any attempt to place the New Zealand, Loan on the market “ until political affairs assume a more peaceful aspect than they do at present.” We have here a forcible illustration of the old adage that, when kings rage the innocent suffer. : It is now easy to . understand why, in the months of April and May, 1878, the Minister of Public Works was forced to close his constructive hand, and to carry on little more than administrative routine. Fortunately June brought better tidings, and during that mouth Mr Macandrew, with almost prodigal liberality, after unnatural restriction, sighed contracts representing at the end of the financial year about - a million’s worth of liabilities.

It must be evident to anyone who carefully and impartially reads the, correspondence, that a material factor in the success of the loan was the agency of the Bank of England in negotiating it. A letter, dated June 7, 1878, and signed by the ;Loan Agents, including Sir Julius Vogel, puts this point in rather a weak way. It states, among a variety' of favourable circumstances, that “ the fact that the Bank of England, for the first time in its history, had called for tenders for a Colonial loan was not without its influence- upon investors.” 1 It is remarkable that when the Loan Agents became, .with the exception of Sir Julius Vogel, agents . for the inscription of New Zealand stock, they wrote with much more freedom and strength in the correspondence on that subject respecting the importance of the activeco-operation of the Bank of England in? raising Our Loan. In a letter dated the day before

the writing of the letter which we have quoted, they wrote as follows “ The arrangement made by the Loan Agents with the Blank of England for the negotiation of ypur loans last Monday was a most fortunate one, for, as a rule, very great distaste exists here for investing in New ..Zealand securities- — the total debt of tbo Colony being considered far too „ large r— and it wds only the alliance of the Bank of England that made the negotiation of your Loans such a success —the total amount subscribed for being nearly eight and three quarter millions.” We have italicised' the words to which we wish to direct special attention. From what was said on the subject in the last Financial Statement,, and from the Treasury Bench last session,- and from a-perusal of the correspondence presented., to Parliament, we have no doubt that Mr Larnaeh proposed the application to the Bank of England,- and sarriedj; with the aid’. of ’ the Crown Agents, his proposal against the, opposition of Sir Julius Vogel, who preferred the agency of the RothschUds, If so, the Colony is much indebted to the sound financial judgment of Mr •Larnaeh and the Crown Agents.