LOCAL LOAN

Evening Post, Volume CXXVII, Issue 131, 6 June 1939, Page 12

LOCAL LOAN

INTEREST AND TERMS An issue by the Federal Government of a loan for £4,750 ; 000 is at the present time before the Australian public. The rate of interest ■is 3 7-8 per cent, per annum, and the issue price is £9y. . The Australian local loan immediately preceding the present loan was opened for subscription in February last, issued at £100 and redeemable 1953-55; also it was at 3 7-8 per cent, per annum.' The present issue is .supplemented by £3,000 000 m Treasury bills issued at par and bearing interest at 3£ per cent. In the case of the £8,500,000 loan, £3,700,000 was left with 'the underwriters. But this loan was preceded by a conversion of various loans amounting in all to £71,700,000, at 3 7-8 per cent., issued at par. In explaining the public reception of the £8,500,000 loan in February, the Federal Treasurer, Mr. Casey, said: "We had to, keep off the market during the latter part of last year because of the big conversion operation. In addition to the conversion we secured £10,400,000 new money, and that combined with the fact that people are used to loan issues being made in MayJune and October-November accounts, I think, for the undersubscription of the £8,500,000 (February) loan." But the factor of reduced income/ from exports had to be taken into account, in that instance, and as to the future of supplies of money from that source. Sir Howard Lloyd, chairman of the Bank of Adelaide, recently remarked: "It is evident that- if the present trend of the ratio of advances to deposits to increase continues, the banks will be forced to restrict their present liberal credit policy." He pointed out that the aggregate advances of the nine trading banks had increased by £13,200,000 in 1938, while the upward movement in deposits which had been so marked in 1937 had been somewhat arrested, the net increase being £4,500,000. The ratio of advances to deposits, therefore, had risen considerably. LONDON FUNDS. "The continuance of a large volume of imports and the reduced value of Australia's exports have decreased London funds," Sir Howard Lloyd said. "It will thus be apparent that while the present low export prices prevail the position calls for care, economy, and conservation of liquid assets in London."