A SUCCESS.

Colonist, Volume XXXVIII, Issue 8246, 13 May 1895, Page 2 (Supplement)

A SUCCESS.

(•Colonist 1 May 6.) It is extremely gratifying to learn that the loan placed on the London market with a view to the provision of funds to lend on the security of land under the Advances to Settlers Act has been so well taken up. While only a million and a-half was asked for, the amount offered was nearly six millions, and the tenders ranged from 4>97 downward, the average price realised for the amount needed being about £94 10s. Thus the proceeds of the loan, not including expenses, will be £1,417,500, or £82,500 less than ft million and a-half, but the saving in interest in consequence of the loan being issued at a lower rate than any previous one by a-half per cent will make good the difference between the face value of the loan and the sum actually received in eleven years. It may be accepted that the Colony will save, roughly speaking, £4000 a year by reason of the loan being thus advantageously placed, andi that this is mainly due to the efforts of the Colonial Treasurer seems plain enough from the fact that New Zealand has done better than Australian colonies. In the Opposition Press, or rather in those journals which take an extreme position in their opposition, every effort has been made to depreciate the efforts of Mr Ward, and it has been implied that such a success as that which has been attained could not be credited to the Colonial Treasurer, as no doubt the . loan agents, Sir W. B« Perceval, Captain Ommaney, and Si* Penrose Julyan fixed the rate and ierms. But admitting that they did, they had the advantage of conferring with Mr Ward, and not only the representations of the Treasurer to the loan agents, but the more public utterances of that gentleman have had effect, so that attempts to belittle his services will only be appreciated at their little worth. It cannot be denied that the syßtem whereby Che State advances on mortgage to borrowers is in the experimental stage at present. T.-ue, the borrower will save in a'- iual payments by way of interest, and wiil at the same time be creating a sinking fond which in thirty-six and a half years will wips oat his indebtedness, bat inasmuch ag the values of lands have of late depreciated, there are some who fear that the State may lose by reason of a proportion of the borrowers being unable to meet their payments for interest, and a farther depreciation in Values preventing saoh land realising the amount lent upon it. Such fears are, we believe, uncalled for. Providing doe care is exercised in the issuing of loans under the Act, and some regard is ha* to the character of the would be borrower, ac well aB to the actual security he offers, there should be little risk. On freehold land not more than three-fiftha of the value may be lent under the Act, and upon leasehold land not more thau half, and in 'ess thau five years tbe borrower will have paid off five per oent of the amount borrowed, while the proportion of the annual charge credited to repayment of principal increases as the years pass on until the debt is extinguished. If we oonld suppose that land might depreciate in value 50 per oent within a year or two three might be a danger, but the scheme has been inaugurated at a time of depression end after values have materially fallen, when its advantages wiil be appreciated by straggling settlers who find it difficulty meet interest at a high rate on what they may have borrowed, and when the rick of any considerable further depreciations is not great. The provision that loans may ouly be advan«ed by the fct*ie up to three-fifths of tbe present value of property will prevent many obtaining relief, but the provision is a safeguard t) the State. Concerning ths price at which tbe loan has been issued and the estimate formed of the security offered, it may be pointed out that this indicates a rise in the value of older etook. On the latest dite for which we have newspaper qaotsti >n<?, the 18th March, oar three and a half per [cent inscribed stock was quoted at lOlf, although we have since been advised by cable of an advance, and the rpeoial loan jrjßt floated must have a beneficial influence upon the older stock. This, of course, will not direc'ly benefit the Colony, but the very substantial evidence afforded that the credit of New Zealand is held in high esteem, more particularly after all that has been said and written in the direction of depreciating the Colony, must be accepted as extremely gratifying.