THE DOMINION'S FINANCES.

Colonist, Volume LIII, Issue 13020, 8 February 1911, Page 5 (Supplement)

THE DOMINION'S FINANCES.

(From "The Colonist," Feb. 2.) In the publio addresses the Prime Minister has delivered during his Northern tour, lie has naturally had a great deal to say in refutation of the attacks made by unpatriotic politicians and newspapers upon the Dominion's financial stability; and Sir Joseph Ward is in a position to make a very effective retort. He has been able, in particular, to vindicate the credit of the Dominion in regard to the flotation of tho five million loan, and the critics of the Government's financial policy will not find it easy to clear themselves from his accusation that they have- been decrying the credit of the country in an unworthy attempt to serve political ends, By comparison with the experience of other countries in the money market at Hcme, New Zealand is shown to enjoy a unique degree of confidence. Of the £1,850,000 loan issued by New Zealand on March 31st, 1910, the issue being upon almost similar terms to those of the £5,000,000 loan, the underwriters were required to take only 17 per cent. Two months earlier, iv January, an Indian 3J per cent loan of £7,000,000 at £96 resulted in the underwriters having to take 50 per cent, while in the case of a Ceylon 3.J per cent loan issued in December, 1909, at £96 10s, the underwriters had to take 90 per cent. Again, a Straits Settlements loan of £2,750,000 at 3£ per cent was issued at £95 ll)s, and the underwriters had to take 93 per cent. The New Zealand £5,000,----000 loan was issued on November 11th, and closed on November 16th, the time being fixed by the representatives of the underwriters. The conditions as to the conversion, said the Prime Minister, were quite common ones. The agreement that the loan should be floated by the underwriters at 1 per cent was implicitly cairied out. To show tho value of some of the criticisms passed upon the transaction he might say that the latest acrvieo from the High Commissioner indicated that although half of the loan remained in the hands of tho underwriters, who were holding it voluntarily for investment, he also advised that up to December 21st, £760,200 of the loan had been converted, and that the conversions were still proceeding Further information was to the effect that some of the urider- • writers had earned a profit upon the portions of the loan that had to be sold to the public. As the Prime Minister has been telling his audiences, tho result of a cessation of borrowing would ho stagnation, unless the people were willing to be taxed in order to enable development to proceed. For tho next twenty years there must be a heavy annual expenditure on railways, roads, and bridges, and other facilities for settlement, ai?.d while these works remain to be done, j'.id:cious borrowing must be the policy of the country, whatever government may be in power. There is probably no one who would say that the objects to which the £5,000,000 loan is to be applied —naval defence, aid to public works and land settlement, advances to settlers, and advances to workers— are not proper and necessary objects for such expenditure, and while it is necessary to raise loans for such purposes, all parties could do the Dominion an inestimable service by expressing the. confidence they must inwardly feel in the stability of the country, and thus smooth the path of the Government in obtaining money on the best terms.