DEVELOPMENT OF COMMONWEALTH

Press, Volume XCVII, Issue 28701, 26 September 1958, Page 12

DEVELOPMENT OF COMMONWEALTH

Finance Provision (Special Correspondent N.Z.P.A.) LONDON, Sept. 25. The Chancellor of the Exchequer’s proposals for providing finance for Commonwealth development raise two major questions, says “The Times.” The first is the one of principle: it appears that countries which are not credit-worthy financially will be able to borrow direct from the British Government on terms cheaper than those which have to be paid by credit-worthy countries in the market. The second is the practical question: how much more can the market provide for Commonwealth development, bearing in mind other demands on its resources? “The Times” adds that few Commonwealth territories either independent or colonial could now borrow on the London market at 6 per cent. But it seems that the rate to be charged to colonial borrowers for Exchequer loans and to independent countries for loans under the Export Guarantees Act, will be slightly less than this. This provides the obvious incentive for borrowers to make a case for a direct Government loan—a case which, on political grounds, it might be difficult to refuse.

Commonwealth public utility authorities such as harbour boards or hydro-electric boards are now to be allowed to come to the London market, “The Times” continues. A queue of borrowers now waiting to come to market is already long, and it is doubtful whether the pace at which new issues are brought forward can be increased. While these factors will necessarily limit the amount of additional new money that can be raised for Commonwealth development in the near future, this measure is welcome in principle and should in due time assist the provision of funds for specific projects. The immediate question is whether it will lead to a resumption of small gilt-edged placings. With the current queue of large borrowers waiting, the most convenient way of obtaining more money for the Commonwealth might well be by allowing a certain number of smaller placings. This is of course something in which the market would have to co-operate.

BULL SELLS FOR £lOO

(New Zealand Press Association) AUCKLAND. September 25. A potter bull sold for £lOO at the Pukekohe stock sale today. This easily eclipsed the high price of £94 paid at the same centre last week. The bull was a heavy five-year-old Ayrshire in good condition. It was sold by Mr J. E. Cole, of Waiau Pa. Patumahoe, and will probably be killed for shipment as manufacturing meat to the United States market.