LOAN CONSOLIDATION.

Otago Daily Times, Issue 9042, 18 February 1891, Page 2

LOAN CONSOLIDATION.

THE GOVERNMENT PROPOSALS,

(FaoM Ova Own Cobbespondent.)

Wellington, February 17.

I am in a position to-day to give you full detailed information respecting the conversion of loans which has been decided upon, and which was mentioned in the London cable message published on Monday. There is ona manifest error in the figures. The £54,5G0 in 5 per cents, should be £64,000. It i 3 the balance of a colonial issue of £77,000 (issued in 1870), under the New Zealand Consolidated Loan Act of 1867, of which £13,000 had been converted into 4 per cents. The balance of £64,000 falls due on the lst January 1893. There is no accrued sinking fund to speak of in this amount. The £491,000 in 6 per cents, is made up (I) £74,100 raised under the New Zealand Lean Act of 1860, and issued in 1861. The sinking fuLd on this loan amounts to £84,854, and so is £10,754 to the good; (2) of three separate sums of £154,800, £185,400, and £73,800, falling due respectively in March, June, and December of this year, all under the New Zealand Loan Act of 1863. The sinking fund accrued under this act amounts to £694,126, but it applies also to other amounts, £878,800 in all, which do not mature till tho years 1914 and 1915. It is impossible yet to ascertain what proportion of the total sinking fund will be set free by the conversion. The balance is made up of provincial loans amounting in all to £313,800. These comprise (a) nnder " Tho Auckland Loan Act 1863," £31,600 at 6 ncr cent, (due in 1896) accrued sinking fund £24,401; (J) nnder " Tbe Lyttelton and Christchurch Railway Loan Ordinance 1860," £77,700 at 6 per cent, (due between 1893 and 1897), accrued sinking fund £67,822; (c) under " The Canterbury Loan Ordinance 1862," £22,800 at 6 per cent, (dne in 1915 and 1916), accrued sinking fund £5934; (d) under "The Otago Ordinance 1862," £116,700 at 6 per cent, (due in 1893), accrued sinking fund £63,162; (c) under "The Westland Loan Act 1873," £50,000 at 5 per cent, (due in 1894), accrued sinking fnnd £50.000; (/) under "The Nelson Loan Act 1874," £15,000 at 7 per cent. (due in 1896) accrued sinking fund £15,000. The total sum to ba converted is £868,900. The total sinking fund to Ibe set free is not yet precisely ascertained, but it is estimated at over £420,000 in addition to the proportion which has to be applied to the redemption of debentures issued in aid of revenue against the accruing of sinking fund. The Government have decided to postpone for the present the larger conversion operation which, as I mentioned, was under consideration. The " wind-fall" derivable under the present operation will doublees be enough for the immediate purposes of public works extension, and possibly it may be found convenient to arrange another " wind-fall" next year, should circumstances prove propitious. The otber mass of debt which falls due this year, and which amounts iv tho aggregate to £1,190,084 can be reserved for various periods. Of this total, £251,000 is represented by various ''remnants" of loans issued eolonially during the years 1884, J.BB^, and 1886; tho balance £939,084 consists of debentures issued .against the accrued sinking funds under Sic J. Vogel's set of 1884. Part wiil be extinguished by the sinking fund released under the present conversion, and the rest can be renewed, but a conversion of some five million might be undertaken next year should this seem advisable. The Government fully anticipate a successful operation in the present case, aa there was an express understanding with the Agent-general tbat he should not attempt the conversion unless success were deemed virtually secure. The fact of the Bank of England having consented to undertake the conversion is regarded also as affording almost a guarantee of success, so the " windfall" is practically safe, and will doubtless be utilised in the way so ardently desired by certain Auckland, Wellington, and Otago members, and so strongly disapproved by others.