HELP FOR AUSTRIA

Dominion, Volume 24, Issue 225, 19 June 1931, Page 9

HELP FOR AUSTRIA

Bank of England Will Provide Credit BANKRUPTCY AVOIDED By Telegraph—Press Assn.—Copyright (Rec. June 18, 8 p.m.) London, June 18. “A dramatic decision of the Bank of England to provide credit amounting to £4,500,000 has averted a probable declaration of Austrian bankruptcy,” says the “News-Chronicle” correspondent in Berlin. Negotiations between the Austrian Government and French bankers broke down owing to the French political demands. , Berlin and Vienna newspapers welcome the action as showing that British finance is prepared to apply its vast resources to the restoration of European finance. CREDITS IN EUROPE An International Company LOANS TO CULTIVATORS Official Wireloss. Rugby, June 17 Referring in the House of Commons in answer to a question raised on the discussions of the Commission of European Union to-day, to the scheme for an International Agricultural Mortgage Credits Company, the Foreign Secretary, Mr. Arthur Henderson, said that Its purpose was to make loans on mortgage through central banks to peasant cultivators in Central aid Eastern Europe, and in particular to assist them to change over from wheat-growing to other forms of agricultural production. It was hoped to raise £10,000,000 In various financial centres, of which £1,000,000 would be issued at the outset. In addition a special reserve fund of £1,000,000 would be set up to which all Governments, partigs to the Convention, would contribute. The British share would be about £120,000. It was proposed that this reserve should be deposited with the Bank of International Settlements, should bear interest, and in due course be repaid out of the company’s profits. As was reported recently in the commercial section of "The Dominion, the recommendation of the Financial Committee of the League of Nations that an international institution should be formed to lend money on mortgage to agricultural interests through the medium of existing national and local channels, was followed quickly by definite action. On March 3 a new bunk was founded in Basle under the title of the International Mortgage Bank. The objects of the bank are stated to be the granting of credits in Europe by taking over mortgage bonds and debentures from the leading mortgage banks, and possibly the direct granting of loans on mortgage. If the policy and objects of 1 the bank are realised to the full, it will become an institution of the first importance to Europe. Its formation is the outcome of * desire shared by a large and influential international group of banks and banking houses, numbering over 20, to provide cooperatively long-term capital for mortgage business, and incidentaly to release short-term credit locked up in mortgage business. The objects of the company comprise the financing of mortgage credit either by granting direct loans against mortgage on real estate or by the purchase of mortgage bonds on first-class home or foreigu mortgage institutions. The company will be entitled to acquire, real estate, and also to participate in other mortgage institutions at home or abroad by purchase of shares or the granting of credits. It is also empowered to carry out all banking and financial transactions connected with its activities. It is always more easy to obtain short term than long term credit, and the difficulty has been to provide sufficient of the latter to prevent the immobilisation of too much short-term funds. The new institution provides machinery for remedying this defect. ' By the purchase of bonds of mortgage institutions, it will provide these institutions with funds, and in that way will provide means for releasing credit for short-term financing.