OBSTACLE TO BORROWING.

New Zealand Herald, Volume LXV, Issue 20131, 17 December 1928, Page 12

OBSTACLE TO BORROWING.

INTERPRETATION IN LONDON.

MATURING DEBT OVERLOOKED

Australian and N.Z. Press Association. LONDON, Dec. 14

Financial circles do not-comprehend Sir Joseph Ward's reference to "a very important London transaction." It is surmised that when he outlined his scheme for borrowing £70,000,000 he overlooked the fact that £24,000,000 of 4 per cent, consols fall due for repayment on November 1, 1929.

During the debate on tlio Apprppriation Bill last week Sir Joseph Ward said that when he assumed office as Minister of Finance ho found a very difficult question had been left to his decision. He declined to explain the nature of this "very important London transaction" beyond stating that "some of the money required will have to be raised in New Zealand." Mr. Downie Stewart, ex-Minister of Finance, explained that the question arose .during the election .campaign, and he had postponed it as his successor might take a different view from his own. Ho agreed that it might be desirable to securo loans locally at present. "Ridiculous," said the Hon. A. J. Stallworthy, Minister of Health, when the cabled interpretation was referred to him prior to his departure for Wellington last evening. "Sir Joseph Ward had certainly not forgotten what money was failing duo." Whatever the nature of the position in Loudon guardedly referred to by the. Primo Minister, the falling duo of £24,000,000 of New Zealand loan money had nothing to do with it. More than that lie could not say. The Hon. J. B. Donald refused to discuss the matter, saying it was puroly a question for Sir Joseph himself. The reference is to £24,471,029 of 4 per cent consolidated stock falling due for repayment in London on November 1, 1929. The amount stated was outstanding on March 31, 1928, and may have been slightly reduced since then by the application of debt funds. In preparation for the maturity of this debt, Mr Downie Stewart arranged last May for the conversion of £5,000,000 of the consols into 4£ per cent, stock to mature in 1947 at the rate of £lO4 10s of tho new stock for £IOO of the old. Though by this operation, tho amount of debt tb ho renewed was reduced from £29.490,852 at March 31. 1927. to £24,471 029 at March 31, 1928, its conversion still remains a "transaction of magnitude," as it was described in the last Budget. It wa.« there stated that the interest charge in respect of the converted £5.000,000 of Stock had been increased by £45.625 per annum. If the whole of the remainder is converted on the same terms, the whole interest charge will have been increased by £269.000 a year.