COLONIAL VERSUS FOREIGN LOANS.

New Zealand Times, Volume XL, Issue 6887, 18 May 1883, Page 2

COLONIAL VERSUS FOREIGN LOANS.

Yet another Australasian loan has been successfully floated in London, Queensland this time having been in the money market for two millions and a half of money; the average price fetched was .£97 Is 2d. Very likely there have been the same solemn warnings as before published by some of the monetary authorities of high standing as to the danger of over speculation on the part of the Australasian colonies, and with regard to their burdening themselves with liabilities they are not likely to be able to meet. Meantime, the London Stock Exchange goes on with its transactions in its stolid, sagacious fashion, taking the odds on the speculation paying, and backing the colonists to win. And the Stock Exchange is in the right. It is quite true that the warnings uttered and published regarding the frequent Australasian loans are not all empty follies, or old-womanish dread of enterprise. There is a small section of our public men who have no respect either for common honesty or for the good name of their respective colonies; men like Mr Lokgmoke, of Victoria, who, in the true spirit of the burglar, are “ thankful that at last the people have their hands on the throat of capital," and who at the first outbreak of a popular cry would not; hesitate to advise repudiation of the debt to the foreign capitalist. Such disreputable politicians as these are fortunately rare, and the overwhelming majority of people at these parts of the world are both willing and able to pay their liabilities when they fall due. It is this matter of ability that some of the great London authorities in finance, such as the Times, Bankers’

Magazine, Pall Mall Gazette, &c., question. They do not understand our position, because they have seen nothing like it. They regard the matter vo-tY much in the same way as people vvio have always lived in temperate climates look on the prodigal abundance of vegetation and animal life in some tropical countries, and take the short-cut of doubting what they do not understand and have never had experience of. Yet the growth of the Australasian colonies has been of a tropical character, and what has been their goal one year, becomes usually their starting point ten years afterwards, and there is nothing visionary in these estimates of our material progress as colonies. The most sceptical of our English critics will scarcely doubt their own export and import returns, and these show millions on millions of traffic to and fro, amounting, according to Sir Francis Dillon Bell, to £100,000,000 sterling, and according to any authority in the world to a very large number of millions. And the best part of the matter is, too, that we not merely do a large trade with the Home Country, but we pay the interest on all our loans to the last fraction on the very day when it falls due. Not one single Australasian colony has ever yet been defaulter for a day to the extent of sixpence. That is a great deal more than can be said of some of the foreign States with which England has had transactions. Spain and Portugal, Egypt and Turkey have all stopped payment at various times ; Greece has been very shaky, Austria not strong, and even great Russia owes as much as she can manage to meet. Roruschild might well say that he could stop any war in Europe if it was worth while. . England does not lend much to African chieftains for very obvious reasons, and the Asiatic rulers so often tumble off their thrones with alarming rapidity, that they are not first-class “ marks ” to deal with. As for the South American Republics, Chili is, if we recollect rightly, the only one which has always paid her debts promptly. And even in the great Republic of the United States of North America, within the last half century, there have been several States, notably that of Pennsylvania, which have repudiated. It is far safer, therefore, to trust the Australasian free States than the countries anywhere else. And the money lent does far more actual good to England than if sent away elsewhere. Almost all our trade is with England, and whatever is lent to us, either directly or indirectly, comes back into the pockets of her own citizens. We do not want money, like the people of Italy or Greece, or Russia or Austria, in order to keep up extravagantly large standing armies, the loans for which are financially quite unproductive, but for public works, such as railways, &c., which are generally reproductive, and at any time are worth what they cost. And the London capitalist must invest his money somewhere. He cannot let it lie idle—burying it in the ground, as is the custom in Central Asia; or merely lodge it at his banker’s. As he must invest, the only question with him is, where is it safest, provided it is lodged at a decent rate of interest ? It is there that a complete answer is found in Australasian requirements, and thus it is that now we always get the money we want from the Home Country, and the investment proves a great convenience on both sides of the water. As we have now, however, at this end of the world got almost all the plant we require for our national business—railways, roads, reservoirs, harbor works, &c. —the probabilities are that henceforth we shall not require anything like the money we have asked for hitherto from England, and the time probably is not far distant when, instead of there beingany doubt about die validity of our securities, English capitalists may actually be tempting us and urging us on to raise fresh loans, and so afford good scope for their investments.