THE LOAN ACT ERROR.

New Zealand Herald, Volume XXV, Issue 8962, 28 January 1888, Page 5

THE LOAN ACT ERROR.

NOTHING SERIOUS.

STATEMENT OF A MINISTER.

EASILY RECTIFIED.

BORROWING IN THE COLONS.

PROS AND CONS.

[BY TELEGRAPH. —OWN CORRESPONDENT.] Wellington, Friday. I learned from a Cabinet Minister to-day that no inconveuieuco would arise from the discovered error in the 19th clause in the Loan Act, and that it would not in the least affect the policy or financial arrangements of the Government. It is merely a " clerical error." It is not correct to say that no loan of any kind can be raised, for the error will iu no way interfere with the North Island Trunk Railway loan. I have also authority for stating thai tho Government had not contemplated raising the new million loan before the next session of Parliament, and that being the case, the error will not have the effect assigned to it, aud can without difficulty or prejudice be repaired when Parliament meets. It is said, however, that the incident will help the proposal made lately to raise tho million loan in the colony. The suggestion was that a million loan at fivo per cout. could ba.iily be obtained without going beyond New Zealand. The Times this morning puts tho objection to.this undertaking in a very forcible manner, by saying that raising the loan in New Zealand at five per cent, would almost certainly draw out of the Post Office Savings B*nk £20.000 now laying there at 4 per ceut., which would bo transferred to the colonial stock for the saku of the higher interest. In this way the colony would lose £2000 a year. But the new tiuancial operation, id 13 said, would have the effect of withdrawing a million of money from the ordinary channels of circulation. The result would possibly be attended with some risk in hampering trade. On the other hand, if the loan were raised in the colony, the charges and commission on raising it in England would be saved. The principal sum would bo liable to property tax, and the loan would be issued at par in New Zealand, instead of %t 90 or 07 in Great Britain.

There are thoee who say that the mistake is so obvious, and its effect; so contrary to the purpoee and intention of the Act itself, that uo difficulty would be put in the way of doing mat which it was olearly the object of the Act to authorise. It appears to me, however, that the Government, would hardly enter upon so large an undertaking without tirat submitting tne various proposals made to Parliament.