NORTHERN ADVOCATE DAILY. THURSDAY, JUNE 11, 1931. THE LOAN ISSUE

Northern Advocate, 11 June 1931, Page 4

NORTHERN ADVOCATE DAILY.

THURSDAY, JUNE 11, 1931. THE LOAN ISSUE

Registered for Transmission Through the Post as a Newspaper.

The New Zealand Government’s attempt to float a loan of £5,000,000 on the London money market lias fallen far short of the measure of success predicted for it a few days ago. The loan was of a nature calculated to attract investors. The interest offered was 5 per cent, and the period three years. Despite these inducements, the underwriters have been left with 68 per cent, of the issue. This is an unusual experience, as New Zealand loan issues almost invariably have been, over-sub-scribed by the public. The only exceptions were in 1921, when the underwriters were obliged to take 58-J per cent., and in 1925, when the proportion not subscribed was 85 per cent. The partial failure of the £5,000,000 loan is not entirely surprising, for it must be remembered that nature and politicians, assisted by injudicious storytellers, have conspired, during the past few months, to create suspicion regarding the stability of the Dominion. Added to this has been the chaotic state of affairs in Australia. Though financial institutions in Britain are fully aware of the different conditions existing in Australia and New Zealand respectively, wholly to the advantage of the latter, there is nevertheless reason to believe that the credit of the Dominion has been affected by the. recent history of our big relative across the Tasman. The “Financial News” virtually admits this, for it says, in the course of a reference to the failure of the issue, that “it is not so much due to dissatisfaction with the yield (of the investment) as to general-dis-inclination to shoulder new demands overseas.” Whatever the reasons may be, the fact remains that the cost of the loan will work out at approximately £6 Is 3d per cent. This is a burden which cannot fail still further to hamper the Dominion in its efforts to emerge from the worldwide depression.