OUR LONDON LETTER.

Lyttelton Times, Volume LXVI, Issue 8034, 6 December 1886, Page 6

OUR LONDON LETTER.

[from our own correspondent.] London, Oct. 22. THE NEW ZEALAND LOAN. The cable will already have informed you that, as compared with the loan ot 1885, the latest New Zealand venture on the English money market proved a failure. This regrettable state of things is to be attributed to a combination of unfortunate, and almost to the last unexpected, circumstances. Up to within a day or two of the opening of the tenders, the prospects of the loan were very favourable, and a premium cf £1 and upwards over and above the advertised minimum was currently anticipated. Indeed, large transactions at 97} to 975 took place immediately after the announcement of the loan. The situation, however, altered for the worse a day or two before the expiration of the time for tendering. The period fixed for the floating of the loan was favourable, being throe days after settlement on the Stock Exchange, an operation which prevented an earlier date being chosen. The market was showing signs of hardening, as was evidenced by the enormous pressure there had been for money on tbe previous Stock Exchange accounts when the market had to borrow three and a half millions from the Government to pay for American speculations. 13ut though this circumstance had rendered speculators averse to large operations, no one had any doubt but that the New Zealand loan would fetch at least 98. A scare, however, was created in. Colonial stocks by th© intelligence flashed from Sydney of the large deficit in the New South Wales revenue. Mcst persons seemed to have forgotten that the greater part of this deficit was of old standing, and to have looked upon it as a matter of recent occurrence. Hence the argument was put forward that if a rich Colony like New South Wales, with its enormous resources, had fallen upon a deficit of this extent, a financial crash might be impending in New Zealand on even a larger scale than that which has just" disturbed the credit of South Australia, and _in the excited state of people’s minds, little regard was naid to tire fact that, so far from your Colony being likely to experience a deficit in its revenue, it had, for the last two sessions, been able to announce to Parliament the existence of a small surplus. But the most disturbing factor in the situation was the news from the East of Europe. It is a far cry from the Balkans to New Zealand, and it may seem Btrange that the bullying and hectoring of a Russian Agent Provocateur in Bulgaria should affect the finances of a community on the other side of the globe, but as a matter of fact, the indiscreet and unmannerly conduct of General Kaulbars haf brought about a condition of things in th< Balkans from which there appears to be n( escape but war, and the apprehension tha' a Russian occupation of Bulgaria wai imminent, greatly disturbed the serenity of the Stock Exchange. The result wa; that the Syndicates which, under ordinary circumstances, would have tendered for i greater pait, or perhaps the whole, of th< loan, took only a very small proportion o the same. In point of fact, they appliec for no more than £550,000 out of th( £1,567,800 loan, and that not at £9B, a: they would have done had the tenders beei opened a day or two earlier, but at £9’ Is Od, which was only Is 6d above thi minimum. When the lenders came to hi opened, it was found that the price offered varied from the minimum, £97, t £IOO, the average price being £97 5= There were two tenders for £200,000 eacl ht £97, one for £165,000, one for £140,006 one for £IOO,OOO, one for £70,000, and on for £25,000 at £97 Is Od ; one for £60,00i at £97; three for £50,000, each at £9' Is fid, £97 2s, and £97 5s respectively; on for £30,000 at £97 2s ; one for £21,000 a

H£97 2s Cd; four for £20,000, each at £97, 8g97 7 s, and £97 8a; two for £15,000, each Hat .£97 7s Gd and .£97 11s; and twenty-one Bor £IO,OOO, each at £97 2s to £97 11s Gd. ■Tenders at £O7 will receive one per cent of amount applied for, and all above that will receive in full. The total amount for was £2,091,000. It may be Bnentioned that, 'under the system by the payments are to be made up, the la reduced to £9G 10s. Most of the London papers contented with chronicling the floating of loan, and abstained from comment The Standard, however, as might expected. is unable to resist the temptato decry the credit of New Zealand That paper declares that the scarcely looked at the sfccck, and that the loan was only saved disastrous failure by the Bmk oi tendering for a large amount a 1 price of sixpence over the minimum on the basis that this assumpis correct, the Standard dogmatically it down that New Zealand stock is om the Bank ought never to have beer to touch, for it is contrary to al finance wh en the Bank of England takes propping up spendthrift communities insinuation of the Standard is, how. a groundless one, for as a matter o: the number of tenders at £97 0s Gc B^ s very small, and the tenders themselves for insignificant amounts. moral to he deduced from the limited of this List loan is that feeling ir country is growing more and more adto the repeated borrowings of Colo Governments for new railway service: public works, when they are unable t( either an addition to their revenm an increase in their population e i? being made with mors d more frequency, that such con ct oiust one day end in disaster disappointment Las been expresses: side that the expectations founder Sir Robert Stout’s recent speech tha' borrowings of your Government wouk exceed a million a year have not beei and that there are no signs of any in the demands of New Zealam the English money market. Utter has also been given to sentiments o at the sudden creation of ; of a million sterling to buy up thi railways. People over here win the finances of the Colonies, knov this policy must sooner or later lea: acquisition by the State of thi 11 and other privately-constructe: which will absorb a good deal of Go money, and thus there i likely to he any speedy end t Zealand borrowings. It ought, how mentioned that one very fruit cause of the uncomfortable feelinj prevails in regard to the securitie credit of your Colony is the persisten down of New Zealand which, eve the publication of Mr Fronde’ :es/na '” bas ef ' n indulged in even b; largely interested in your Colony some of the most notable offender respect are men who have a con pecuniary stake in New Zealand in the financial world, whi least a quarter of a million sterlin: in New Zealand securities, appear taken quite a fancy t the approaching ruin o Colony. The financial stand and Colonial experience of thi Lave undoubtedly caused hi to materially influence the mmd investors. What can be m for depreciating the credit or tfc in which he has so large a stake,: easy to understand. JUBILEE ISIPEEIAL INSTITUTE. as the public at present know M of Wales’ proposals, for celebratin

the jubilee year of the Queen’s reign by the creation of an Imperial Institute, have not yet assumed any definite and concrete form, and, in the absence of any authoritative decision on this point, all sorts of suggestions are being thrown out as to what the Imperial Institute shall be like and where it shall be located. Judging by the conflict of voices upon these matters, it would appear as though there were anything but harmony amongst the British public on the subject of the celebration of the Queen’s Jubilee. But, as a matter of fact, there is no disapproval of the method by which the Prince proposes to celebrate the jubilee year of the Queen’s reign, but there is a good deal of irritation felt at the mystery which surrounds the whole matter. People cannot understand how it is that a distinct and well-digested modus operandi is not drawn up, so as to enable definite conclusions to be arrived at. It was hoped that the meeting held on Oct. 13, at the invitation of the Lord Mayor, might have resulted in some definite announcement being made to the public. A week last Wednesday some fifteen or twenty gentlemen attended at the Mansion House, at the invitation of Lord Mayor Staples, to privately discuss the proposed Jubilee Imperial Institute. Amongst those present were the AgentsGeneral for the different Colonies, Lord Ashburton, Mr Tritton, of the London Chamber of Commerce, Mr Birch, Governor of the Bank of England, and other representatives of the great city establishments. But it soon became apparent that their deliberations would not result in the formulation of any distinct expression of opinicp. In fact, the meeting was hopelessly divided against itself from the very first. The city gentlemen took strong exception to the idea of anything in the nature of a permanent Colonial Cremorne being created as a method of celebrating the Jubilee year of the Queen’s reign. Remarks anything but complimentary were made about the present Exhibition as a means of promoting morality,and, generally speaking,the severely goody-goody element which generally stamps the successful city man, made itself very conspicuous. Tne city magnates seemed to be strongly set against the idea of creating a Jubilee Imperial Institute of such a character as would tend to afford facilities to the people for enjoying themselves. Other members of the meeting dwelt upon the injury which was being done to the regular London places of amusement by the exhibitions at South Kensington, while the representatives of the Chamber of Commerce were, of course, strongly opposed to any form of the Imperial Institute other than one which should be a means of encouraging trade and opening up fresh avenues of commerce. Added to these elements of discord, there was_ a want of unanimity amongst the Colonial representatives, though on this point the Agents-General endeavour to maintain complete secrecy. It has, however, leaked out that Sir Charles Tupper, the High Commissioner for Canada, Sir James Garrick and Sir Dillon Bell are all acting together on this point, and support the views of the South Kensington people, while the other Agents-General are supposed to he more or less inimical to the Prince of Wales’ wishes, and to prefer the establishment of a Commercial Museum. The upshot of the discussion at this meeting was that the Lord Mayor was requested to put himself in communication with the Prince [of Wales, and, if possible, ascertain ! what were the particular points of the scheme to which his Royal Highness attached primary importance. There is so great a conflict of views amongst those who oppose the South Kensington scheme, that it may be taken for granted that the Prince of Wales will carry the day, on account of the want of cohesiveness amongst those who disagree with him. In fact, some of those present at the Lord Mayor’s meeting did not hesitate to say that the disagreement amongst the opponents of the South Kensingtonians had reached such a pitch that unless the Prince of Wales took the wnole matter into his own hands, and acted with despotic authority, there would be grave risk of the entire affair coming to the ground. It is not likely that the proposed Jubilee Institute scheme will collapse, but it is very likely indeed that the Prince will have matters all his own way. Having failed when he first mooted his Imperial Institute scheme in 1878, the Prince of Wales cannot afford to make a second failure. Moreover, both he and the Queen are determined that the Jubilee Imperial Institute shall be a success.

The Lord Mayor carried out the wish of the Mansion House meeting by requesting and obtaining an interview with the Prince of Wales last Wednesday. What took place thereat is not definitely known, but the Lord Mayor has just reported the upshot of the conversation with His Royal Highness to the adjourned meeting of the City representatives. The whole proceedings are surrounded with a most unnecessary air of mystery, and those who took part in them profess themselves pledged to the utmost secrecy. As far as can be ascertained, however, the Prince was firm in his determination that the Imperial Institute should be erected at South Kensington, on the site of the present Exhibition, and that it should partake largely of the character of the existing show, and the Lord Mayor had nothing very material to urge against this decision. The City men are very wroth that the South Kensington site should have carried the day, and it is said that there will be a great falling off in the subscriptions from the City inconsequence. But the Court influence will be sufficient to make up for this sulkiness on the part of the City, and probably the only result will be that the City men will contribute towards the funds of the Institute in a private, instead of in a corporate, capacity. One reason alleged for the selection of the South Kensington site is that all the Colonies will have to be placed upon an equal footing, so that a building cover; ug a wide area will be necessary in ■ k-r ‘ . effect this equality, and South 1U , ; vi offers the only available site, h a ;h, narrow building wore approp ■ .'cd V 1 he Imperial Institute, those : ,01--r.k-> ■'-ho were placed at the top r . glittl.irk that full justice was not bein', done to t f i. -i.

The later indications of what the Colo nies prop...--. 1-1 ■],. Qiv.o v " e lu> perial Instil":■ -i. jo' :. ivl’V.i-

more satisfy m : o far, there has '■••• -n ■ • ■ m 1V •ceucd in this cc utr ‘ M U >‘.nd Snelgrovc, ■ h-cn . donation of . :. ■ ~t , . the Lord • i tions for - -my -a London, •. • vnuef Rah' i, L: ■ ■ . V:' ion of warmly s’ y ' . i, m , The sehf i- : , ■ 1 ■ ..cross the Pacific, 1 ’ ;> .stand and some pou: . o Continent, has once m ..•miacnco, and the prom c • -mo ..esoi u that they are prepaid. ■. k-.-. ; Company on the m.vrkot as 1 . x r.- c.rj iiavc received saWctorv assn, voi-es iroui the Canadian and Australia;; Oovernaaeuts with respect to n. sui, Cdy • The cable, when laid, will iour-ii ni Hawaii, B’.moi, and Fiji, and the .Hawaiian Government have set the oxana-i« o! c-v* ,3 ‘d!.-ing the concern by voting bu.-u of 20,000d01 for this purpoce. Tt. e pro ;p ”;tu, of proposed Pacific Cant: Compauy • •: rtainly looks very well on p aper. Tb capital is to be £2,000,000. ■>. -v/bieii. mie million will be raised by tue i. Oiuc of jOO,OOO £lO shares, and tb e Temainiu'g mi - lion-by means of 4 percent dobeaturcO, sjceved upon an Imperial and Colonial su-bsidy of £IOO,OOO per annum for 25 yearn. The promoters are awaitin ; romiscs on" the score of this subsidy before gisterin g the Company, and placin;- it upon fc : he market. The Canadian Gov-.mment Jvrc said to bo very favourably inofined tow tne souerre, audit ishoi’etl that thfey 003t r lbi.te

something like £12,000 a-year of the subsidy. The Australian Governments are looked to in order to bring up the Colonial subsidy to £50,000, and the Imperial Government will, it is hoped, raise this amount to £IOO,OOO. The promoters have concluded arrangements with one of the Atlantic Cable Companies for practically nominal rates over their line, which enables them to transmit a message from London to Vancouver s Island at BJ-d a word. The charge from London to America will be 6d per word, and the 2-J-d will be the cost of transmission across the Continent. The distance from England to Vancouver s Island is equivalent to the distance from England to India. The Eastern Company charge 4s a word for a cable message from England to India, so that the new Pacific Cable Company will convey for Bid a message over a distance for which the Eastern Company would charge 4s. For 2s a word, they propose to bridge the distance between Vancouver’s Island and Australia, so that the tariff for the whole distance between England and the Antipodes would be 2s BJd per word, which would form a favourable contrast with the rate of 9s 4d per word now imposed by the Eastern Company. At first, however, in order to provide for the retirement of the debentures and the creation of a reserve fund, and a fund for the renewal of the cable, it would be necessary to charge a rate of 4s per word to the public, and Is a word to the Press. The promoters of the Company hope that their undertaking would commence by attracting at least half of the telegraphic business between England and Australia. This amount they estimate at a value of £150,000 per annum, which, to-o-ether with the annual subsidy of £IOO,OOO, would place them in possession of an annual income of a quarter of a million sterling. The cost of mamtamincr the cable is put down at £150,000 per annum, and the interest on debentures at £40,000, leaving a margin of profit of £160,000. This sum the promoters propose to segregate in the following way;—He serve fund for renewing the cable, £20,000; retirement of debentures, £2O 000 ■ general reserve fund and repayment of subsidy, £20,000. This division would leave £IOO.OOO to pay ten per cent interest on the share capital.

It is asserted that the bottom of the Pacific affords a good bed for a cable, and that the cable being in deep water will be an advantage rather than otherwise, inasmuch as it will tend to prevent its injury by hostile vessels in the event of war between England and any other Power. This is a danger by no means imaginary, for in a memorandum drawn up by Lord Charles Beresford on the state of the Navy for consideration by the Admiralty, and which —some say by tbe action of_ tbe Government—has found its way into the newspapers, it is deliberately stated that during the Russian war scare of last year the Russian Government had cruisers stationed at every one of our important cable centres, ready to cut the cable immediately on the declaration of war.