CHEAP MONEY FOR STATE BORROWER

Evening Post, Volume CXVII, Issue 127, 31 May 1934, Page 10

CHEAP MONEY FOR STATE BORROWER

v If the Commonwealth Government secures £12,000,000 from the people of Australia oh the terms it is offering, it will, according to yesterday's cablegram, beat its own record.

The average yield to the investor will be£3 7s 8d per cent. These terms are the lowest on which; an Australian Commonwealth internal loan has ever boon offered; ■ '■ .

When interest took its lowest dive in the nineties, following the great depression of that period, the Commonwealth Government was not in existence; its record, therefore, is as >for this century.. . Its internal borrowings since, the present depression began have/been: £8,000,000 (3J per cent.) in November, 1932; £5;000,000 (3f per cent;), in May, 1933; £10,000,000 ; (3£* per- cent.) in November, 1933. ■•'■, The capacity of the Government to borrow cheaply in Australia is appreciated by Australians; Evidently there, is-con-fidence in the Government,' but it.is partly the result of lack of confidence in private investment. A great deal of the community's savings can be tempted into circulation only if the Government is the borrower. The questidn is being asked whether it will be possible to taper off Government borrowing if and when the industrial borrower and the private lender again get on terms with each other. _ Not until it is 'promoting industrial enterprise' (apart from public works) will cheap money confer its full benefits.