AUSTRALIAN WAR LOAN

Evening Post, Volume CXXIX, Issue 120, 22 May 1940, Page 12

AUSTRALIAN WAR LOAN

MAY BE £20,000,000

RATE OF INTEREST DISCUSSED

"Evening Pest," May 22

Consideration was given by the Commonwealth Bank. Board, at its meeting in Melbourne last week, to the new Commonwealth -loan which will be floated in a few weeks.

The money market in Australia is exceptionally easy and should easily take up the new loan. This, coupled with a strong patriotic urge, ensures that the issue will be quickly subscribed.

It is generally agreed by bankers that there are plenty of funds awaiting investment. Higher values for exports have helped to make the banking system more liquid, while restriction by official action of many avenues for capital investment has been a potent factor in causing money to bank up. The exact amount and terms, of the issue have not yet been announced. It-is generally accepted that not less than £20,000,000 will be sought. Australia has not yet issued a loan to be devoted exclusively to war purposes, for the £18,000,000 raised in March was partly for new works as well as for defence. The rates for that loan were £3 12s 6d per cent, for 10 to 16 years and £3 7s 6d for five-year terms. The loan was over-subscribed and £9,000,000 was received on the first day. [ It is not expected by financial men i that the new war loan rate of interest will exceed £3 5s per cent. ■ The Australian authorities, like the British, are anxious to finance this war on a 3 per cent, basis, and it is therefore almost certain that the rate will tend to ease rather than to harden at this stage. A British war loan of £300,000,000, carrying 3 per cent, interest, was subscribed in a day.