SEVEN MILLION LOAN

Evening Post, Volume CIX, Issue 115, 19 May 1925, Page 11

SEVEN MILLION LOAN

TERMS HELD TO BE • SATISFACTORY

]JY HON. \Y. NOSWORTHY

In his first public pronouncement since lie became Minister of Finance last week the Hon. W. Xosworthy has declared his belief that, the terms of the £7.000,CC0 lean—only 15 per cent, of which was subscribed by the public—are satisiac-

" The loan of £7.000,000 just raised in London, as already announced, is at AL per cent, at £94* 10s, to mature in Ivi4b," said the Minister. Alter allow-

ing fov expenses, including stamp duty and redemption, the annual cost pev cent, will be £5 2s 4d' as compared with £5 Is &d for the 1924 loan, with the same charges debited: the difference being lOd per cent. ,

" In view of the various circumstances surrounding the issue, the terms must be regarded as satisfactory, the London market-generally not being as favourable tills year as it was twelve months ago, as indicated by the; increased rates offered for- Imperial Treasury Bills in the last few months, now as high'as £4 10s 6d, as compared with £2 18,s twelve months ago.

" In addition, the recent'increase in the Bank of England rate and the notable change made by the ■ Imperial Government regarding the gold standard, had a prejudicial effect on the absorption of the stock by the general investor. It is doubtful * from advices received whether the conditions are likely to improve for some time, and the terms on which we have received the loan will probably not be disadvantageous compared with subsequent issues to other borrowers in the future.

" The bulk of the loan, it may be mentioned, is ior interest bearing and directly reproductive purposes, such as railway construction, additions, and improvements, telegraph extension, hydroelectric, and State advances to settlers and workers."