FEDERAL CONVERSION OF COLONIAL LOANS.

New Zealand Herald, Volume XXVII, Issue 8289, 23 June 1890, Page 3

FEDERAL CONVERSION OF COLONIAL LOANS.

TO THE EDITOR. Sir,—The suggestion of the Australian trading world, published in your Saturday's cable news, has not escaped notice on this side of the globe. Several speakers have already set forward this scheme of federal conversion of colonial loans as a strong inducement to join in Australasian Federation. In a series of letters privately circulated—in manuscript still incomplete—by me, entitled " Australasian Federal Issues " occurs the following:—" To economies arising from the pursuit of a common system of defence might be added the economic relief to be obtained from the consolidation of colonial indebtedness. The debts of the several colonies are nob great in comparison with their resources, bub unduly burdensome as regards the interest charged upon them. The holder of British bonds has to content himself with 2i per cent. ; the Dutch people are satisfied with a smaller percentage. Federated Australasia, richly endowed by nature, may hope to attain in the near future a degree of financial stability falling little short of the proud pre-eminence of the parent country. The interest on some colonial loans is as high ad 4 and 4| per cent. ; in some few cases it is five. It should be possible at no distant date, by federal guarantee, to secure relief against such, comparatively speaking, exorbitant burdens, by means of a general scheme of debt conversion. The federation should be able to borrow at 3 per cent. The saving which would be made in consequence would in the case of New Zealand be very nearly £600,000 per year. The remaining colonies would profit in much the same proportions." Study of the federal problem leads me to think that the onerous burdens ot separate defence would likewise be greatly curtailed by federation.—lam, &c, E. W. Burton. Burleigh, Epsom, June 21, 1890.