AUSTRALIAN LOAN.

Auckland Star, Volume LXX, Issue 139, 15 June 1939, Page 8

AUSTRALIAN LOAN.

COMMENT IN SYDNEY.

IIE A SOX FOR POOR RESPONSE

AMi' wjli ,:).S1 jier cent of Australia's 'i."M» 4 j..1 1- cent defence loan in i-ond ii lias been left with the underwi iters. tin' issue cannot be pronounced a failure lrom tile point of view of the t "milieu wealth, altJioji-h it may be so ironi tlie point of view o; the understates the '".Sidney Morning lleia.d. It is evident tliat Mr. I>ruce bargained very keenly and that although (it the time of deciding ilie issue the terms w el e struck so as to give a little more than the market was showing as a return, in order to induce su ln-cri I>l mil s to the loan rather than purchase on tlie market, vet since the decision was made Tlie market lias moved so as to increase tlie yield of jiiii(liases to just about or a little above what the terms of the new issue work out at. Hence there was no adfieatage m subscribing to the loan. That the loan has gone to a discount of 2.)/. on the issue pqic-e of £98 10/ is probably the effort; „f '"stasis." that is, t.iose who applied niereh- to sell verv soon at a profit, endeavouring to get rid oi their commitments. Too much notice should not be taken of dealings in the loan at this early stace. lliis this was written the London market tor the loan has dropped to 35/ discount. PURPOSES OF LOAN. AIRCRAFT AXD FLEET. Details of the loan were announced hy the Commonwealth. Prime Minister. Mr. • . Menzics, 'in the House of Representatives Jast week. It was stated that the loan would be allocated as follows:-Constriction of n o| up? iivinsrboats and necessary stores. L'L 1 ,2-*>Ci,'>« plant ;:ud_ machinery. t'tC'Cool; ammunition. ,i.2iO.4KH»: a;iti-air< raft ciuipment, .t jjciii-r.il stores. ma:ciia! and equipment. i'lJ-JO/ani; pav a:ui allowances. etc., 1' 1 i-i/'Ai 'I lie amount of f... aircraft "will include the purchase of Sho:t Sanderland flying-boats for the seaplane base at Lake M-icqua: ie. near Keucistie. The item of t"l.4<Vl.o"Kl for the construction of fleet will include an instalment of the new cvuiseis. Mr. Menzies snid that. h!: "'ich on paper the loan did not appear i.i be as success; :il as so;ne prevr-'is loans, the large percentage left w:th the underwriters indicattd thai the i-r-.-.c-t rate was in fine ivith tie London ::: :• kei. The !\\ce of the H:_-h C.%r: • Mr. S. M. P.rure, had been .-r:-ct. he add<-d. air! showed that 'he interest rate had been shaded as rinelv p= it cor:ld be. It was anticipated that the ":.i.'h per* j c-entags left with the underwntors wo:dd Inot be s-.ifneient to prevent proper tior. r.-" ihe loan by the London market eventually.