THE NEW ZEALAND DEBTS CONSOLIDATION.

West Coast Times, Issue 913, 26 August 1868, Page 4

THE NEW ZEALAND DEBTS CONSOLIDATION.

(rcoir Tire stoncy market bw cw.) On the Ist May last tlio Crown A;-eu<,s ftv the Co'ch^es issued proposals foe the conversion of the whole of the publ'c loans of New Zealand, general aud provincial, into one debt, to be designated the "New Zealand Consol'daed Loan." The motive which prompted these proposals was that of public convenience. The debts were seven in number, two being those of the General Government of the colon)', and the remaining five those of the provinces, of which Canterbury had two, aud Auckland, Otago, and Hawke's Bay one each. - It w"H be evident from this enumeraliou that the Be'fcish public and the colony itself were placed at a disadvantage by this diversity, while the securities themselves suffered undeserved depreciation in consequence of the obstacles to their ready negotiation imposed by the absence of uniformity. The remedy was obviously that of consolidation, and, responding to the public demand, the legislative of New Zealand passed last year the " Consolidation Loan Act of 18ti7," under which the Crown Agents proposed the conversion. We are gJad to observe that the conversion has proved a substantial success. According to the terms of the notice, the iime for it expired on the loth inst. ; and up to that date, out of the aggregate debt of £4510,000, about five-eighths, or £2,819,000, had been withdrawn for conversion, leaving £1,691,C00 outstanding. The details up to that date are as follow : With- Out-

The conversion, as we explained when the proposals were first issued, is into 5 per cent, debentures charged on the consolidated revenue of New Zealand, on which the interest is payable quarterly, and the principal repayable at par in thirty-six years by a 1 per cent, cumulative sinking fund applied by annual drawings to the extinction of the debt. It should here bo mentioned that for each £100 of the General Government Five per Cents, (payable in 1914) holders will receive £99 10s Nen- Five per Cents., but that, for the purpose of uniform adjustment, a payment of 10s has been required to make up the L 99 10s into £100. It will be observed that the greater part of this 5 per cent, debt has not been sent in for conversion. Surprise is felt at this circumstance, seeing that the conversion is a distinct element of value in the market. We suppose the payment of 10s may have had some effect upon the minds of holders, who, satisfied with their secui'ity and with the returns it brings, do not wish their composure to be disturbed even by modifications that increase its value. As this stock is at a premium of 1$ per cent. — that is to say, 35b — it is a little strange to find a trilling per ccntage objected to which the market price covers three and a half Hmes over. As soon as this condition is fully understood, applications will probably be addressed to the Crown Agents for permission to convert ; and, indeed, we are informed tliat many buch applications have already been received. As to the debentures outstanding from the remaining loans, thej r are probably held abroad or in New Zealand itself; and they will be converted hereafter. Meanwhile the amount of New Five per Cents issued in respect of the £2,819,000 withdrawn of the old loans is only £2,662,100, the difference having been paid ofi ; and this amount, added to (he £1,114,000 subscribed on the 4th of May, makes the total amount of consolidated stock in round numbers £3,780,000. It is manifest, from the progress now reported, that the entire operation will soon bo completed. The consolidation is not the only advantage arising from the change in the character of JN'irw Zealand securities. They will command greater confidence from the fact of the General Government having become liable to the creditors. The securities of the Provincial Governments were and are unquestionably good, but they were not readily negotiable, and some have never had a place in the Stock Exchange ab nil. But W'th the bonds of the General Government the case is completely altered. There is as much difference between the Government and the Provincial bonds in the view of dealers and investors upon the Stock Exchange as there is between Consols and county bonds. And, further, the interest on the new debentures, which commenced on the 15th April, is to be paid quarterly, an innovation on established practice obviously beneficial. With, regard to the value of the new debentures, tliere is nothing in the condition or the prospects of New Zealand to expose it to deterioration ; but, on the contrary, everything calculated to raise it. There is harmony and progress ; more land every year is being brought into cultivation, and, while pastoral wealth is increasing, mineral development is assuming very remarkable proportions. Coincidently with material progress comes a sound financial policy, by which provision is made for the reduction of the public debt in the course of a number of years, while its burden will be less and less felt as population increases. It is not surprising, under such circumstances, that the credit of New Zealand is rising in the market. The following is the second clause in the Act of the New Zealand Legislature, by which provision is made for the conversion and consolidation of the provincial loans into colonial slock : — "The principal interest and sinkingfund payable upon all provincial debentures already issued, rr which may hereafter be issued in accordance with the provisions of this Act undc i the authority of any of the Acts or ordinances of th'o Superintendent and Provincil Coum\! of any province of tlio colony, sprciiicdiu the schedule A to this i\ct, pli: 1, from and after ihu passing of this Act, be charged upon and paid out of l lie consolidated revalue of tho colony <;i New Zealaud; and tho Colonial Treasurer shall, from and after such da\ or days as shall be fixed by the Governor by proclamation in respect of the debentures of any particular province, pny all such interest and sinking fund a>> tho same shall become due at such times and places as ?uch interest and sinking fund may be payable," (> The practical success ot the consolidation will almost preclude the necessity of [issuing nny such proclamation, as thnt Keforred to,

A Yankee lias invented a new and cheap plan for boarding. One of his lodgers mesmerises the rest, and then cats a hearty meal — the mesmerised being satisfied froni " sympathy," as the Yankee terms it. The following is a speech by a successful competitor for the prize of a foot race : — " Gentlemen, I have won this cup by the use of my legs ; I trust I may never lose the use of my legs by the use of this cvp 1 "

drawn. standing, fjenoral GovcrDment 5 per cents £-109,300 £590,700 Do. do., 6 per couts ... 916,300 733,700 Auckland 6 per cents 462,500 37,500 Canterbury (1862) 6per cents 492,400 7,600 Do. (1860) 6 per cents 144,400 155,000 Otago 6 per cents 334,100 165,900 Hawke's Bay 6 per conts 60,000 Nil. £2,819,000 £1,691,000