The Star. WEDNESDAY, AUGUST 9, 1876.

Star (Christchurch), Issue 2613, 9 August 1876, Page 2

The Star. WEDNESDAY, AUGUST 9, 1876.

The news of the placing of the million and a quarter loan is no doubt satisfactory so far as thafc ifc will serve to relieve immediate difficulties. Bufc fchafc ifc is a subject for much congratulation, or thafc fche fact of its having been successfully negociated should re-establish confidence in the farther borrowing powers of New Zealand are points to which cool-headed persons will demur. The pressure under which the Oolony must; be labouring in order fco induce her to borrow on the terms named will nofc fail fco be the subject of remark in London. Two months ago the New Zealand five per cenfc debentures were quoted afc 104i£ to 105!, and since that time the telegrams have stated thafc fche present is a favourable time for the Colonies fco go into the market. That in fche face of this late quotation, and the cheapness of money the Oolony ahould be willing to take par

for her fivo per cent debentures is a circumstance which will not be lost sight of. Comparing the price obtained in this instance with the quotation two months ago, for the loan of last year, we find that the four and a Ualt' per cent debentures were then quoted at 9<H- to 95£, whereas the rate at which the present million aud a quarter loan haa been negociated is equivalent to the sale of a- four and a half per cent debenture at 90. Yet another element haa to be considered which should prevent the people feeling too boundleas a gratitude for the floating of this loan. A million pounds worth of these debentures were, according to the financial statement, in process of negociation "on short-dated debentures," and, said the Treasurer, " we are led to believe the transaction will be completed on the receipt of the advice that the necessary authority has been issued on this side. It would probably have been completed before now, but for the interruption to cable communication." It has not been stated that this negociation has been abandoned, and this leads to the conclusion that the loan referred to in this morning's telegram has been placed on short-dated debentures. "We are far from urging that there is the least need for alarm in this circumstance, or thafc the course adopted is an unwise one. But it should be borne in mind that the Loans Aots provide that the principal moneys secured by this class of debentures " shall not be made payable at a later period than seven years after the date of issue thereof." In the estimation of Colonists seven years very generally appears equivalent to the century of older countries, so great are the changes which may take place in a short time in newly settled lands. To trouble themselves about contingencies so distant, appears to Colonists the very extravagance of providence. The negociability of the loans depends, however, not upon Colonial but upon old-world and old-fashioned notions, and, no matter how erroneous these may be, the Colonies may be sure that it will take them more than seven years to reform them, or to teach their aged grandmother the most modern and expeditious mode of sucking eggs. Seeing then that the maternal ideas have lost their plasticity through age, is it altogether certain that in . the course of seven years a time will come round, when the Oolony will be able to place its debentures more satisfactorily, and so to redeem these shortdated bills. That they will be redeemed in that time, except from the proceeds of a further loan, is a hope which none can entertain. It is hard to believe that there should be any difficulty in the direction indicated, but it should not be forgotten that when once an unfavourable impression has got abroad in the money market, it is almost as difficult to remove as the black pigment from an Ethiop's skin. The Treasurer admitted that such an impression had begun to gain ground at Home, and the manner in which he dwelt upon this point was in itself well calculated to increase and give emphasis to the fact which he deplored. Can he, or any sane man, hope that the urgency with which these loan balances have been pressed upon the market will not give increased strength to that unfavourable view of New Zealand's financial position P And if this is so, where is the use of disguising the facts, talking vaguely about detractors, and lulling the public into a false sense of •ecurity ?