THE New Zealand Herald AND DAILY SOUTHERN CROSS. TUESDAY, MAY 28, 1895.

New Zealand Herald, Volume XXXII, Issue 9831, 28 May 1895, Page 4

THE New Zealand Herald AND DAILY SOUTHERN CROSS. TUESDAY, MAY 28, 1895.

o The power of the colonies to borrow in London received for some time a check, which was rather agreeable to the careful section of the colonists, who looked with grave apprehension upon the easy process of piling up debt But there have been distinct signs lately that the London market has again begun to look upon the colonies with complacency, a.nd was willing to encourage them to apply for money. The colonies may take advantage of this spirit to consolidate and simplify their Joans, but they will have to be very careful if they entertain the notion to resume borrowing for public works. And yet a great temptation is held out to them. In every colony, Ministers are eager to have money in hand to spend. They want to have it, leaving to posterity the task of re-paying. Any Ministry having money can easily maintain itself in office. They can create prosperity temporarily with borrowed money, and can obtain as much credit for doing so as if they had achieved the object by wise and far - seeing measures. The temptation to them, therefore, to borrow is great, perhaps irresistible. It would be observed that it was stated yesterday, from Wellington, that the Government propose, in taking possession of the Midland Railway, to complete the connection between the West and East Coast. This would involve the construction of about sixty miles of costly railway, and could not be undertaken without a loan. To commence a new borrowing era would be contrary to all the early declarations of Mr. Ballance and Mr. Seddon, who affirmed that their administration was, above all things, to be self-reliant ; but then, as we have already said, the temptation is very great. The last issue of the Australasian Insurance and Banking Record has an article on Colonial borrowing, in which it sets forth the causes which have led to such an accumulation of money in London that it must find vent somewhere. Since the Baring crisis the field of investment has been much narrowed, and the Colonial Governments have all punctually met their engagements, notwithstanding the severe mercantile and financial crisis which has affected these communities. Queensland has just raised a loan of £2,000,000 for these purposes: To redeem six per cent debentures, due on the Ist January, 1896, £765,600; to retire treasury bills, due at different periods in 1896, £1,128,400; to provide for deficits on various loans and expenses of the new loan, £106,000. Of the total of £2,000,000, the sum of £750,000 is to be placed locally. The remainder was issued in London, the rate of interest being fixed at 3i per cent. The amount asked was £1,250,000, and the amount offered £6,633,600, the allotment being made at an average of £101 12s 7d. No objection can be taken to the purposes of this loan, as the obligations falling due could only be redeemed by raising money ; but apparently the London market would have been as complacent had the purpose been further railway construction. The financial position of Queensland is not by any means good ; and its success in raising the money is a clear proof of the condition of the London market. Western Australia has just floated a half of the total of £1,500,000 authorised in the last session of Parliament, for railway, harbour, and other public works. The total amount of the tenders was £2,860,000, the rate of interest was 3|, and the allotment was made at an average of £103 Is 4d. If our Ministers have any idea of again going on the London market they must lay their proposals before the next session of Parliament. The case for borrowing is, we admit, a somewhat strong one. Ministers will be able to show that the failure of the Midland Railway Company has left them with several unfinished pieces of railway on hand. The line connecting Nelson with the West Coast has not been made, and the prime object of the whole enterprise, namely, the communication between the West Coast and the Canterbury Plains, has not been carried out. Then there is the Otago Central, creeping along slowly, with a little bit added every year to small purpose. Lastly, there is the North Island Trunk Railway hopelessly stranded, while settlement is being carried on in the districts which it would serve, both North and South. And while all these works are awaiting completion, the London market is in an exceptionally favourable position. The inducement is indeed great. There is very much, however, to be said on the other side. We have learned by experience with what

facility borrowed k moneyjL ay be c wasted. We have learned r&{t m ay t be diverted from tbe purpose finally i intended. It is most'dedrableßj.t ie projects -which we have reftlp to t should be completed. They tt&foed £ much more important than manj|ter- i prises which have been carried t«ngh ] at much cost Bat if the Goveraont « have any proposals to make, se i ought to be very carefully scratifjgd . by the House and the country. 1 1