The Ensign MONDAY, JANUARY 26, 1914. THE VICTORIAN LOAN.

Mataura Ensign, 26 January 1914, Page 4

The Ensign MONDAY, JANUARY 26, 1914. THE VICTORIAN LOAN.

The success which attended the recent flotation of the Victorian loan will be welcome news to the New Zealand Government. It has to prepare to renew a very large sum of loan money this year. It was advised to raise something over three millions last spring for this purpose, as the Government's brokers were under the belief that to attempt to float 12 millions in one year would be too gTeat a task. The j: sum of nine millions has to be found 1 this year to redeem short-dated loans which mature either this or the beginning of next year. But in addition to this huge sum -there will be thei usual Public Works and Advances , loans to raise. This will bring the ' total sum required during 1914 to well over £12,000,000. If money is plentiful in London there should be no difficulty -in, _ obtaining it for such a sound proposition as the repayment of old New Zealand loans and for the fur-1 ther development of the country. In an interview Sir Joseph Ward has told' a pressman that he expects the money 1 ' market to still further relax, and that there will be no difficulty in obtaining all the money required by the Dominion at a lower rate of interest than has been ruling and at even less than our last loan for development purposes. Sir Joseph naturally considers that the last Financial Treasurer acted wisely in issuing a short-dated loan to fill his requirements. Everyone, including Hon. J. Allen will cordially join with Sir Joseph Ward in the hope that these optimistic views regarding the money market will be fulfilled. It will save taxpayers of the Dominion a considerable sum in annual interest charges and relieve the local money market from its present tension. Recently received London newspapers were not so sanguine of the prospects for cheap money. . The trade conditions prevailing throughout the world had not changed very greatly during the past three months. There was still a large demand for money for industrial purposes, and the requirements of the various European nations for warlike preparations were as great as ever. But if the accumulations from the trade boom, spoken of in last week's cables, are coming on the market largely the money must be invested, and it is possible that better conditions now prevail. Writing on the success of the Victorian loan thß London dailies say that the brokers' books are full of unsatisfied investment orders, an<l that colonial loans will afford a suitable means of placing some of the accumulated wealth. 'The Times,' according to the cablegrams, considers that the recovery in the price of consols argues 'well for the success of colonial loans offered in the immediate future and that the pent up forces of investment need very 'little encouragement to break forth into a flood of buying. The same paper thinks it probable that the insurance companies were largely responsible for the success of the recent Victorian loan, as they have been afraid to invest largely of late owing to the unsettled state of the world. What effect the pugnacious attitude Ulster has taken up regarding Home Rule will have upon the money market cannot at present be foreseen, but if the expressed intention of the people of that country, backed up by the Unionist party, is carried into effect, the prospect of a civil war, even if it were of very short duration would cause investors to pause. We understand that it b the Financial Treasurer's intention to place his Public Works Joan on the market next month. The treatment is receives in comparison with the recent Victorian loan will be interesting. It will give an indication of the British investor's opinion of New i Zealand securities as an investment compared with those of Victoria and it ■ Tvi'! a' c o i«<VVat» wVfliw Mr A. M.' ! .V yesotfd wisoly in Hunting n shortdated loan two years ago on the offchance that the money market would be easier in 1914. Victoria has a much smaller public debt than New Zealand, both in the total amount and the rate per head. A larger proportion of the money has likewise been invested in i reproductive works. These facts may influence the London investor to some, extent, and lead him to favor the Australian State. But Victoria did not: have to expend money upon war as j New Zealand was forced to do. For many years our public loans have been ] spent upon necessary works and in as- 1 1

sisting tho profitable occupation of the land. This policy will be continued in the future. It will be toany years before these new countries can hope to relinquish borrowing. If they invest the money wisely the development which will follow will amply justfiy tiie policy pursued, and the Homo lenders will have a splendid margin of .secni-ity. Every friend of New Zealand ill therefore join in wishing success to Mr Allen's second venture upon tho Loiiuon money market next month.