THE COLONY'S FINANCES

Lyttelton Times, Volume CXII, Issue 13574, 21 October 1904, Page 7

THE COLONY'S FINANCES

■ 'GOVERNMENT LOANS IN THE COLONY. A resident of Christchurch, who gives It good deal of attention to tho public finance*, is strongly convinced that much good could be dons if the Government inaugurated a scheme of raising internal loans, and at the same time ridding tho colony of the burden of intorcei; that is sent each year to the English money-lenders. He points out that the banking return:, published this week, show that the free deposits are about £9,000,000. A large proportion of that sum, ha' is convinced, might be used in a very practical way ta enable the colony to become more self-reliant-than at present, if, indeed, it could Dot aspire to actual independence. He suggests that, as Government loans become due at Home, they should not, bj The Government should issue bonds in the colony for various sums, ssv £25, £SO, £IOO and so on. The money derived from the bonds should go to ray the English loan falling due. The bonds could bear a rate of 4 per cent, and. could have a currency of a certain number of years. People with small capital, up to £2OO, £3OO or £SOO, would gladly aooepfc a chance of investing their money safely at 4 tier cent. The Post Office S-vings Bank ; gave only a-low- rate of interest, and aothing at all on sums over £2OO, so that depositors in that institution would readily t*ke up the bonds. Fanners, also, would buy them, and they would in time fceeonw a popular form" of invested eat, especially among certain classes of the commimity, who have.saved; a few hundreds, and' who like to place the sum by as a sheet-aiie.hGT in case of bad' timos coming. For instance, when a nuQinn loan wao falling due, the Government might announce that it would issue bonds. Even if the response represented only part of the loan, it could be reduced, and the same operation could bo performed'wife another loan. In the. couiv-s of yeans, the sum of over £2,000,000 sent cut of"the colony in the shape of interest every year would be reduced, the colony would be quite independent. o; tha,moneylender in the Old Country. He recognised that the scheme could not be carried out hurriedly, and that several years would elapse before a marked impression could be made on the present position ; but, after devoting «, "rest deal of thought to the subject, he feels sure that a system of internal borrowing would be beneficial to the colony, and ' would place it in a better ■position than, it can,hope to reach while it is carrying its' present burdens. NO REASON FOR, DISQUIETUDE. [Fbosi Our Coehespondekt.] i LONDON, Septerobsr 9. A good many eriticissna have been.- made during the. past few- months regarding the difficulties the New Zealand Government was supposed to ba encountering in the Jnatter of finance, on account cf the- prevailing shortness of mencr. When, however, I saw the Agent-General to-day with reference to these criticisms, Mr Reeves as(rured me that the financdai position of the colony had seldom been easier, and that he saw no reason why, with economy and prudence, it should not.remain so. It is undeniable tfoat. money,' for investment is Jioaxoe. The calamitous; wax in the East is making a heavy' and continual drain, upon the money market commerce is depressed, South Africa remains a. disquieting factor, E<nd these and other causea cornhir.e to shorten materially the amount available for investment. But so far as New Zealand'sfinancial seeds and obligations are concerned I am assured that, while prudence is vary necessary, there is no reason for disquietude. The financial position of the colony ia dealt witih by the "Times" this week In a Leading article upon Mr Seddon's latrst Budget. That journal says: " Tho domestic policy upon which New Zealand iras. entered under Mr Seddon's Administration is still in the experimental stage, and it is even now too early to predict its ultimate results. AH that' cari be said of it with certainty is that it has involved very considerable expenditure on the pait of the. State, and lhas burdened the population with a heavy public debt, which amounts now to £32 7s, 9dl per head. In a country whidh- possesses such admirable natural resoiirc&s apd such an enterprising- population as New Zealand, there is nothing even in this indebtedness that need cause serious alarm, if the policy responsible for it fiilfUa the hopes of its authors. But it certainly requires the utmost exercise of financial prudence. Retrenchment i?, , therefore, the order of tho day, and as, in spite of the prop seed economies. New Zealand' will again be obliged to liave recourse to the London'money market for a loam of three-quarters of a miliico. during tiho COUXS9 of the year, the economies proposed ' are 1 clearly none too drastic, even when tho transfer of ai considerable stun to the Publio fPocks Fund; is taken into account."