The New Zealand Times. WEDNESDAY, DECEMBER 10, 1934. OUR STOCKS

New Zealand Times, Volume LI, Issue 12008, 10 December 1924, Page 6

The New Zealand Times. WEDNESDAY, DECEMBER 10, 1934. OUR STOCKS

What the object whs of the remarks made by a London correspondent about colonial loans in London, it is not quite easy to comprehend. 'lt has the appearance of a warning to investors that the stocks are not safe, merely because the English law permits the investment in them of trust ’moneys. Analysis of this warning results in the demonstration that the English statutory permission to invest trust moneys in oversea Government slocks is not a guarantee. But this has been perfectly well understood in the, money market from the day the law* allowed such investment. The history of the matter is simple enough. There was a time when colonial . securities were mew things, and strange, and in consequence regarded by financial people with suspicion. It was not at all evident that the bond of a 'colonial Government was worth even the paper on which it was printed. As .lime went on, the colonies forced recog-' nltion of their financial possibilities by the rapidity of their sound development. Now, in the beginning, their stocks were Hot "for the investment of trust moneys. But as the financial stability of the colonies—mostly now known by better titles—became more and more evident, their stocks came to he regarded as really good securities, i As such securities were not as plentiful as the ’demand for them required, attention was very soon directed to the stocks of the oversea dominions, and the evidences of their stability were duly noted. The natural 5 consequence was the statutory admission of these stacks to the area of trust investment. But it was well understood that the permission was not a British Government guarantee. Investors have accordingly to judge for themselves the stability, of the oversea stocks offered them. To enable them to exercise judgment, the oversea Governments always take care that loon prospectuses convey to the public the fullest information of all things necessary for judgment. . That publication .is - followed by the best results. What addition; if any, the correspondent in question thinks ought to be made; it is not possible to see. The abidance of the countries’ resources; the very large percentage of interest-bearing stocks in their public debt lists; their volume of trade; the revenue and expenditure of their Budgets; the values of property, public and private; their established sinking funds and their amounts—these tilings are always set out for the Investors who .watch the loan issues. According to the impression produced by this information is the credit of each particular dominion. The credit of New Zealand stands as high as the credit of Great Britain. What more nan he desired P No guarantee is wanted. The knowledge of tile grand stability of the financial position is guarantee, enough. .New Zealand, wants no other guarantee. New Zealand is 'perfectly willing to stand by any judgment of her affairs. New Zealand is quits aware that, should the evidences of her 1 stability ever dimmish, her credit will diminish accordingly.’ It is the care of her Governments always to see to the maintenance of those evidences at highest level. New Zealand Has grown out of swaddling clothes; has token place among adult peoples; Is satisfied to* he judged by adult stdndards; and, as a matter of fact, is placed by the best judgment in the highest category. The past was the period of probation Which is over and done with. The present is a period of healthy, rapid development on a basis of financial selfreliance. The, future we are beginning to see the shape of. It will, things going on as wall as they are in the markets of the world, see the extinction of the great public debt by regular annual payments. It. win he .a period in whioH all the moneys required for development or for ' the' maintenance of the best' up-to-date conditions, wdl he raised in the Dominion, and all requirements of defence, order, and social obligation will be met with ease. This was the ideal at which the framers of the! 'public policy of the 'seventies aimed. I The progress has advanced in that direction, in a way that justifies the conclusion that the end will justify the means taken for its attainment. There | is much borrowing before ns, because j there is much potential wealth to he de-1 veloped. But the lines of progress, 5 adopted have proved' safe, and, given j prudence and care in the fhture, as| they have been given In the past, the stability of the country will increase 1 from year to year until this Dominion becomes one of the great nations ofl theiworfff,