BORROWING IN U.S.A.

Auckland Star, Volume LVI, Issue 210, 5 September 1925, Page 6

BORROWING IN U.S.A.

(By BANKER.) | Owing to lack of support, the syndi- j ate which floated the Commonwealth 3an in New York, was dissolved as rom Monday last, and it is stated that bo bonds which had been selling at '9J per cent broke two points on the xchange last week. The floating of oreign loans in New York is a much nore difficult matter than issuing such oans in London, partly because foreign oans must be sanctioned by the Ameri-, an authorities, and partly because the nvestors in the United States are infamiliar with the financing of foreign •ountries. The procedure, too, in the wo capitals is different. Several foreign oans have been issued in New York in ecent years, but in every case the in;crest rate lias been high to serve as in attraction. In London an issue like he Commonwealth loan would be unlorwritten and then offered to the pubic for subscription. Of the last C'omnonwealth loan issued abroad £0,000,000 .vas raised in London and f 15.000,000 n Xew York. The interest in eacli ■nse was ii per cent. The portion ssued in London was offered at £99 10/ •jut with the return of the £1 in the irst interest payment the actual price vvas £98 10/ per cent. The issue was if course underwritten. amount Mieretl in New York was fr£ 70,000,000 lollars. Such issues are not underwritten in New York but syndicates purchase the bonds and retail them through their various organisations. On Tuly 17 last the J. P. Morgan Company announced the purchase of 30-yeav, 5 per cent gold bonds from the Commonwealth, and those associated with the Morgan Company in the deal were the First National Bank of New York, the National City Company, the Guarantee Trust Company, the Bankers' Trust Company, the Forbes Company, the Lee Higginson Company, the Kidder Peabody Company, and Brown Brothers. The price paid for the bonds was not disclosed, but they were offered for sale over the counter by members of the syndicate at 99_ per cent. It is apparent from tho latest news that the syndicate has found considerable difficulty in unloading the bonds, and as a consequence it has been dissolved. This will give the members freedom to sell the bonds at any price. The real trouble is, no doubt, the rate of interest, which was not sufficiently attractive to tho investing public. • Foreign loans floated in New York during the past two or three years have carried G per cent interest and over except Canadian bonds which are in a different category so far as New York is concerned. It is perhaps interesting to note that whereas the proportion of the Commonwealth loan floated in London ranks as a trustee security in Britain, the loan floated in New York does not possess that advantage. THE LONDON MARKETS. LONDON, September S. SHORT LOANS AND BILLS. Short loans, 3 J per cent, compared with 3J per cent last week; three months' bills. 3j per cent, compared with 3} per cent last week. FOREIGN EXCHANGES. The following- rates on foreign exchanges are current to-day, as compared with the cabled quotations on August 3i and par:— Sept. 2. Aug. 31. Par. New York (dol.) .. 4.64* 4.65 7-16 4.866 Montreal (dol.) ... 4.84J 4.85* 4.860 Paris (fr.) 102.45 103.45 25.225 Brussels (fr.) 108.55 107.95 25.225 Rome (lire) 121g 129 25.225 Stockholm (kr.) .. 18.09 15.09 18.159 Oslo (kr.) 23.50 23.42 18.159 Calcutta (d.) 18* 18* 24 Hongkong (d.) ... 29| 29* — Yokohama (d.) .. 201-16 20 24J Amsterdam 12.04g 12.051 — CONSOLS AND NEW ZEALAND STOCKS. The following- table gives quotations ror consols and New Zealand inscribed stocks, compared with those of August 27:— Var laPrice, tion. £ £ Consols, 24 per cent. OoJ — British 34 p.c. war loan 07 if British S p.c. war loan 1013 t * British Conversion, 3i p.c 764 i* New Zealand 4 p.c, 1929 074 it New Zealand 3J p.c, 1940 84§ it New Zealand (5 p.c, 193G-01 .. 10S4 i* t Higher. * Lower. — Not quoted last week. TUE METAL MARKET. (Quotations on August 3 1 in parentheses.) Copper.—Spot, . £63 1/3 (£6l 16/3); three months, £03 i/3 (£62 16/3). Lead.—Spot, £37 10/ (£3B 17/6); three months, £35 17/6 (£36 18/9). Speller.—Spot, £36 15/ (£3O 16/3); three months, £;ifl 3/0 (£36 1/3).. Tin.—rSpot, £-Jsi> IS/9 (£VSI 18/0); three months. £5!55 18/0 (£25-4 18/9). Silver.—Standard, 33Jd (32id) per oz; line, 2'oia (254(1). WHEAT, FLOUR AND TCLSE. Wheat.—Cargoes are inactive, and have declined 3d to Gd. Parcels are steadily held, aud quo ted as follows:—October, lu/'jj per cwt: December, 10/-I£. The spot trade is quiet ana easier, Australian ex-ship, oi/. Flour.—The market is quiet. Australian ex store, H/9. Oats.— The market is slow. A grade Gartons, 32/ to 3i/. Peas.—The market Is inactive. Blues. Tasmanian, 340/ to 350/; New Zealand, 280/ to 320/;-maples, Tasmanian, 77/ to SO/; New Zealand, .74/ to 78/. Beans.—The.market is unchanged. Sugar.—Granulated, 31/1 4. WOOL. There is slightly more inquiry for Bradford tops. Quotations are unchanged. HOPS. Lemay's annual report estimates that there will he a full average crop or line hops In Great Britain.— (a. and N.Z.) DAIRY PRODUCE. Messrs. Norden and Co. have received the following cable rrorn their London principals, Messrs. Andrew Clement and sons:— Butter.—Sew Zealand salted,, 108/; unsaited, 200/. Market iirm. Cheese.—New Zealand white, 107/; coloured, 106/. Market quiet. The New Zealand Loan and Mercantile Agency Co,, Ltd., have received the following cablegram from their London Souse, under date 2nd instant:— New Zealand Butter.—Choicest salted, 197/ to 200/ per cwt; unsaited, 198/ to 202/. Market Arm. Cheese.—lo6/ to 108/ per cwt. Market firm. j Tallow.—Wo quote present spot values for the following descriptions:—Fine mutton, 50/9 per cwt; good beer, M/; mixed, 42/- Market upward tendency. Wool.—September sales: Lists closed August 31. ' Turakina, Kent, Rualiine, Tasmania, Argyllshire, Rotorua, Tongariro, and Orari available.

HE COMMONWEALTH LOAN. I EW YORK SYNDICATE DISSOLVES. \ I

_ I Owing to lack of support, the syndi- I :ate which floated tbe Commonwealth i oan in New York, was dissolved as j Vom Monday last, and it is stated that i :ho bonds which had been selling at ; )9J per cent broke two points on the j ixchango last week. The floating of foreign loans in New York is a much i "nore difficult matter than issuing such loans in London, partly because foreign loans must be sanctioned by tbe Ameri-, 2an authorities, and partly because the investors m tho United States are ! unfamiliar with the financing of foreign j countries. The procedure, too, in the i two capitals is different. Several foreign loans have been issued in New York in ; recent years, but in every case the in-j tcrest rate has been high to serve as I an attraction. In London an issue like i the Commonwealth loan would be 1111- j dcrwritten and then offered to the public for subscription. Of the last Commonwealth loan issued abroad was raised in London and £15.000,000 in New York. The interest in each case was 5 per cent. The portion issued in London was offered at £SW 10/ but with the return of the £1 in the first interest payment the actual price was £1)8 10/ per cent. The issue was of course underwritten. amount offered in New York was 75,000,000 dollars. Such issues are not underwritten in New York but syndicates purchase the bonds and retail them through their various organisations. On July 17 last the J. P. Morgan Company announced the purchase of 30-year, 5 ! per cent gold bonds from the Common- i wealth, and those associated with the Morgan Company in the deal were the First National Bank of New York, the National City Company, the Guarantee Trust Company, the Bankers' Trust Company, the Forbes Company, the Lee Higginson Company, the Kidder Peabody Company, and Brown Brothers. The price paid for the bonds was not disclosed, but they were offered for sale over the counter by members of the syndicate at 99J per cent. It is apparent from tho latest news that the syndicate has found considerable difficulty in unloading the bonds, and as a consequence it has been dissolved. This will give the members freedom to sell the bonds at any price. The real trouble is, no doubt, the rate of interest, which was not sufficiently attractive to tho investing public. • Foreign loans floated in New York during the past two or three years have carried G per cont interest and over except Canadian bonds which are in a different category so far as New York is concerned. It is perhaps interesting to note that whereas the proportion of the Commonwealth loan floated in London ranks as a trustee security in Britain, the loan floated in New York does not possess that advantage. THE LONDON MARKETS. LONDON, September 2. SHORT LOANS AND BILLS. Short loans, 3 J per cent, compared with 3J per cent last week; three months' bills, 3j per cent, compared with 3 J per cent last week. FOREIGN EXCHANGES. The following' rates on foreign exchanges are current to-day, as compared with the cabled quotations on August 3f and par:— Sept. 2. Aug. 31. Par. New York (dol.) .. 4.84* 4.85 7-16 4.866 Montreal (dol.) ... 4.84J 4.85* 4.860 Paris (fr.) 102.45 103.45 25.225 Brussels (fr.) 108.55 107.95 25.225 Rome (lire) 121g 120 25.225 Stockholm (kr.) .. 18.09 15.09 18.15!) Oslo (kr.) 23.50 23.42 18.159 Calcutta (d.) 18* 18* 24 Hongkong (d.) ... 29| 2»i — Yokohama <d.) .. 201-16 20 24J Amsterdam 12.04g 12.05$ — CONSOLS AND NEW ZEALAND STOCKS. The following table gives quotations ror consols and New Zealand inscribed stocks, compared with those of August 27:— VariaPrice. tion. £ £: Consols, 24 per cent 55) —I British 34 p.c. war loan 97 it British 5 p.c. war loan 1013 t* British Conversion, 3i p.c 764 i* New Zealand 4 p.c, 1929 974 it New Zealand 31 p.c, 1940 84§ if New Zealand 6 p.c, 193G-51 .. 10S4 i* t Higher. * Lower. — Not quoted last week. THE METAL MARKET. (Quotations on August 3 1 in parentheses.) Copper.—Spot, . £63 1/3 (£6l 16/3); three months, £03 1/3 (£62 16/3). Lead.—Spot, £37 10/ (£3B 17/6); three months, £35 17/6 (£36 18/9). Speller.—Spot, £36 15/ (£36 16/3); three months, £;ifl 3/0 (£36 1/3).. Tin.—v Spot, £252 IS/9 (£251 18/0); three months. £255 18/0 (£254 18/9). Silver.—Standard, 33Jd (32id) per oz; line, 2'oia (1354(1). WHEAT, FLOUR AND TLLSE. ! Wheat.—Cargoes are inactive, and have declined 3d to Gd. Parcels are steadily held, and quoted as follows:—October, iu/'jj per cwt: December, KJ/-IJ. The spot trade is quiet ana easier, Australian ex-ship, oi/. Flour. —The market is quiet. Australian ex store, 44/3. Oats.—Tlie market is slow. A grade Gartons, 32/ to 31/. Peas.—The market Is inactive. Blues, Tasmanian, 340/ to 350/; New Zealand, 280/ to 320/; maples, Tasmanian, 77/ to SO/; New Zealand, .74/ to 78/. Beans.—The.market is unchanged. Sugar.—Granulated, 31/1 i. WOOL. There is slightly more inquiry for Bradford tops, "notations are unchanged. HOPS. Lemay's annual report estimates that there will be a full average crop or line hops in Great Britain. — (a. and N.Z.) DAIRY PRODUCE. Messrs. N'orden and Co. have received the following cable Trorn their London principals, Messrs. Andrew Clement and sons:— Butter. —New Zealand salted, ( 138/; unsalted, 200/. Market linn. Cheese.—New Zealand white, 107/; coloured, 106/. Market quiet. The New Zealand Loan and Mercantile Agency Co., Ltd., have received the following cablegram from their London Souse, under date 2nd instant: — New Zealand Butter.—Choicest salted, 197/ to 200/ per cwt; unsalted, 198/ to 202/. Market nrm. Cheese. —106/ to 108/ per cwt. Market firm. Tallow. —We quote present spot values for the following descriptions:—Fine mutton. 50/9 per cwt; good Beer, 18/; mixed, 42/. Market upward tendency. Wool. —September sales: Lists closed August 31. ' Turakina, Kent, Ruahine, Tasmania, Argyllshire, Rotorua, Tongariro, and Orari available.

MELBOURNE HIDE SALES. MELBOURNE, September i. Hides are firm, especially stouts. Values are unaltered.— (A. and N.Z. Cable.) VICTORIA PRODUCE. MELBOURNE, this day. tn^wln 1 ' l''\ to , r,/s * : oats, milling 2/9 rw'.''J c /?, ~ n ; harle -V- English 5/6, (.ape 4/ to 5/3; potatoes, £11 -to/ to £13----\J__tJ3 £w 10 / »o *18 15/.-(a. ana xz.