Loans.

Now some people say—in fact, I think it has been said by Mr Bryce—that the reason why our loans were depreciated was that we took and seized the sinking fund—a most unfortunate expression. First, there was no seizure of the sinkingfund, and second, so far as our loans were concerned, the loan that was floated after the passing of the amended Consolidated Stock Act, which dealt with this question of the sinking fund, which I shall explain in a few minutes—Sir Dillon Bell explained it in London by publishing letters and by circulars; he explained it to the Bank of England Directors, he explained it to the Stock Exchange, and after his explanation,—after this act called "the seizure of the sinking fund" took place, our loan in 1885 fetched a higher price than the loans of Victoria, Queensland, and South Australia. You will find it detailed in the Financial Statement of 1885, so that I give you book for everything. The loans fetched—Victoria, £99 4s 3d; Queenslond, £97 3s 10d; South Australia, £99 5s 6d; so you will see that this question of the sinking fund and Consolidated Stock Act had nothing to do with the price of our loans. The sinking fund was paid to the present time. The sinking fund is an absurdity so long as the colony is borrowing. All sides of the House recognised that—all sides of the House said so; there was hardly a member in the House but said so. Therefore, so far as the sinking fund is concerned they said you do not need a sinking fund if we are continually borrowing money. What then did the Colonial Treasurer? The Colonial Treasurer, with great ability, made this provision : He kept on paying the sinking fund as before. He never touched a penny of the sinking fund, but he created bonds equal to the amount he paid into the sinking fund. When the bonds became due they were paid, and the drawn bonds were converted into permanent stock. Mr Bryce said that what we did in reference to the sinking fund was an immoral act. Let me read you the figures. The total amount of the New Zealand 4 per cent, inscribed stock is £22,493,255. That is the amount of our debt that has no sinking fund. Now how much of that is the late Atkinson Government accountable for? They are page 22 accountable for a little over the half of it. Because in 1879 they raised a loan of £5,371,200 for which stock at 120 was issued. And that had no sinking fund. Then there were £1,832,000 of Treasury bills inscribed without a sinking fund, and the following loans were also inscribed, viz.:

£101,400,	five per cents in	1884
£190,600,	five per cents	1884
£212,400.	five per cents	1884

And £3,053,900, four and a half per cents in February, 1884. I have given the amount of the loan, but the stock issued exceeded that amount somewhat. And then they had to pay considerably for the inscription; the total amount was something like £40,000 or £50,000. We may say that practically if you add up the figures you will find that the Atkinson Government are accountable for more than one-half the inscribed stock. If therefore the having to lose that sinking fund is an immoral transaction they seem to have have thrived very well in immorality. I do not think it is immoral, and I am glad that in this respect Mr Bryce thoroughly agrees with me. We are at one on this question, because Mr Bryce very ably and very properly pointed out when this Consolidated Stock Act was before Parliament in 1884, that it was an absurdity for us to talk about a sinking fund when we were going on borrowing money—that if we wished to pay off our debts we ought to pay them—that it was absurd to be paying off with the one hand and borrowing with the other. I cordially agree with him; on this question we are at one. This question of sinking fund could have nothing to do with our bonds. There was no such thing as a seizure of the sinking fund. But I will tell you what did affect our bonds. Unfortunately for New Zealand there is a habit of absentees when they get out of the Colony to look very blue on the place they left. Perhaps some of them have been unfortunate, or perhaps some of them have political animosities. It is extraordinary when Colonists return to England that many of them—three-fourths of them, beoome conservatives as soon as they land in England. I do not know how that is, whether it is because it gives them the entree into aristocratic circles which they could not get otherwise, or whether the climate or soil of England has such an effect upon them that they become Conservatives immediately. I do not mean the colonists of New Zealand alone. Mr Heaton has stated that the colonists from Victoria, although Liberals and Radicals in the colony, as soon as they reach England suddenly become Conservatives. Well, these Conservative colonists at Home apparently pass their time in abusing the colony that has helped them and done them some service. There is also a class of people who have political animosities when they get Home. They avenge themselves of political wrongs by denouncing the colony. There there are some writers like Froude, who have visited Auckland have seen some sweetbriar growing, and declare that the colony is going to be ruined by sweet briar. We have also again the London Standard, a powerful paper continually denouncing New-Zealand. They have been denouncing Queensland, which has a most able politician at the head of affairs. Had not New Zealand come to the rescue the last loan to that colony would not have been floated at all. It is not a question of the soundness of the security that affects the floating of loans in the English money market, but the English money lender has got afraid to lend to the colonies further loans. I only hope the mining companies that seem to be in favor just now will be as safe an investment as the English bonds. If we are wise we should try and do without borrowed money so that the English money lender may see that as a colony we were not depending upon him either for our national existence or our continued page 23 progress. Now, I am afraid I will be unable to deal with all the subjects I intended to bring before you. Let me, however, say one word; it is that out Government is to be conducted economically. Now, I believe that the Government can be conducted economically only by care being exercised, and by proceeding on some well defined lines.