LONDON LOAN OPERATIONS

New Zealand Herald, Volume LXXV, Issue 23078, 1 July 1938, Page 10

LONDON LOAN OPERATIONS

Dealing with Government claims in finance during his contribution to the Imprest Supply Bill debate, Mr. Coates vigorously denied the present Minister of Finance credit for the £10,000,000 loan conversion operation of 1935. He was justified in taking this attitxide, for, as he says,, full details of the transaction were given in the 1935 Budget, presented while he was Minister of Finance. The prospectus of the new issue was published in London in June, 1935, nearly six months before the change of Government. The loan was dealt with by converting £8,000,000 into new 3 per cent stock, the balance being paid off in cash. After giving these facts in his last Budget, Mr. Coates mentioned the 1936 maturity of some £5,870,000 which was handled by the present Government in a similar way, £1,870,000 being redeemed for cash and the remaining £*1,000,000 offered for conversion. The terms in both instances were very similar. Mr. Coates is correct in saying that while his last issue was over-subscribed, £1,204,000 of Mr. Nash's was left with the underwriters. It happened to meet an unfavourable market. The moral of these instances is that while Governments come and go, financial transactions have to be dealt with continuously. As the Minister of Finance remarked in Christchurch last week-end, more than £17,000,000 of New Zealand debt will mature in London on January 1, 19-10. The Government, he said, was already making preliminary arrangements for dealing with it. That is necessary, and the business will proceed whether this or some other Government is in office when the maturity date arrives. Whatever success is gained, it will be less a tribute to the Government handling the business than to New Zealand's credit. Incidentally, judging by an Australian attempt to borrow £7,000,000 of new money in London earlier this year, the market is not so favourable to Dominions issues as it was. Consequently, in the absence of a change in its tone, New Zealand should not expect too much from the conversion now being planned.