THE LOAN OF FIVE MILLIONS TO NEW ZEALAND.

Inangahua Times, Volume II, 20 February 1880, Page 2

THE LOAN OF FIVE MILLIONS TO NEW ZEALAND.

In making the first announcement con* ccruing this loan the Times s;iys : — ' The Bank of Enyiacd, on behalf of the

Crown Agenta'',for tho Colonies and the Agent-General for New Zealand, has issued the prospectus of a new loan for that colony. It borrowed £3.500,000 last year, and that operation was so successful that it now wishes to borrow £5,000,000 more in debentures at the same rate of interest— viz., 5 per cent. The price of issue will be £97 10s, as compared with, we think, £100 for that issued last year. According to a statement accompanying the prospectus, the net debt of the colony after this loan has been issued will amount to £26,513,000, the accrued sinking fund now amounting to £1,709, 000. Nearly all the money raised on loan has been spent on public works for the benefit of the co'ony, railways having absorbed £9,850,C00, and buildings telegraphs, harbours, roads, &c , £5,120,000. In addition to this, £3,f70,000 has been spent on immigration. £1,470,000 in buying up Native lands, and £2,000,000 oa the Maori war. For the? financial year 1578«79 the gross revenue of the colony was £3,552.000, which wa§ about £363,000 lesa than in the previous year, This reduction is stated to be due to a large decrease in the proceeds of land sales, which is regarded as *only tern porary. That, however, remains to be seen. The population of the colony was 414,412 in March, 1878, and the imports and exports last year amounted to £14, 760,000. With these data before them the public must judge for themselves whether the colony is making too nr.uch baste to be great or not. Its progress in the past has been undeniable, but we doubt whether progress so exclusively made on borrowed money can be a good thing, A good deal of property in the colony is more or less mortgaged, and tho Government is busy laving a heavy mortgage on the soil in addition. The very immigrants themselves are mostly a product of debt. We should add that these debentures may be converted at the Bank of England into Four per Cent. New Zealand Consolidated Stock, the rate of conversion being £120 of consolidated stock for every £100 of debenture.' The following observations appear in the Pall Mall Gazette :— ' Once more the colony of New Zealand has come forward to borrow another sum of five millions sterling in tliis market, and the Bank of England by acting as the intro* ducer of the loan, gives it a character in the eyes of the general public which it would not otherwise possess. We have frequently expressed our opinion about New Zealand. It is the colony of all others, perhaps, best suited to emigrants from this country, and the strides which it has made in prosperity during the last lew years could not be exceeded by any American State. Climate, soil, position, roast line — all seem to point to New Zealand as the Britain of the South Pacific. But all this notwithstanding, there can be little doubt that the colouy is at present borrowing in excess of what is prudent or even safe. To begin with, the revenue of the colony is made up in great p^rt of sales of Crown lands. These sales are dealt with entirely as income, and of late there has been a heavy falling off. The failure cf the City of Glasgow Bank had an effect which has not jet been fully realised ; there is a reaction against previous in* flited prices -, and it is distinctly admitte.i that work for the people is scanty and that assisted immigration will have to be stopped for a time. This loan therefore would seem to be not so much the outcome of a natural demand for further development as a means of providing work for (he navvies and otters who would be thrown out of employment by a cessation of Government enters prises. That another loan was inevitable unless the New Zealand Government could be content to ester upon a less ambitious system has long been apparent, but this does not make ihe security any better.' In another number the Pall Mall Ga« z^tte says .—' New Zealand finances in many respects do not compare favorably with those of Victoria. In the former case the revenue is £4168 000; in the lattet £4,501000. New Zealand raises from taxes £3 12s 5J per head ; Victoria £1 19s 10J4. The puWc debt is £52 5s 5d por head in New Zealand, and £19 7s I|-1 in Victoria. On the ether hand, NVw Zealand his. or rather hid at the close of 1878, 1089 miles of railway, and 8035 miles of telegraph wire open for traffic, while Victoria has but 1052 miles of railway, anH 5103| miles of telegraph wire open. r We take these figures from a return printed in the- ' Statist of November 22nd.] New Zealand, in short, is much more highly deyelope.l thnn Vie toria, and has bad to pay for its develops ment. A steady increase of immigration is highly necessary to its continued prosperity. Anything like a loss of pops ulation would plunue the co'ouy into srvero financial difficulties. We rfgref, therefore, to see tlie new issue ' for carrying on Public Works and Immigration ' — for the former are already sufficient, and the latter ought not to require artificial stimulation at the cost of continual new loans.' A correspondent who, the Pall Mall Gazette says is entitled to be heard on Colonial subjects, writes that journal as follows; — 'In this count. y we have one mile of railway for every 2,000 of ihe population ; in America, which is supposed to be the most ' over-rail, -.aveJ country en the face of the curth, thty

have one m'ie for every 560 of the population ; but in New Zealand they ' already have one mile for every 345 of I their population, and yet they wish to ' spend (according to the Ministerial state" < tnent) other £9 000,000 in that direction, s lhe truth is, as you observe [we need l not perhaps correct our correspondent's < somewhat strained interpretation of what I we did observe], they only wish to keep i their workmen employed and keep up the present inflated prices of land until the present holders can get it sold to our simple and ill-informed farmers ; then the land speculators will clear out of country and leave the purchasers to pay the taxes— which they can never do. The other day I took up the advertising sheet of the Scotsman newspaper an I found no fewer than seven different companies ad» vertising for money to lend in New Zealand. Yet they want more money.'