U.S.A. MONEY MARKET

Grey River Argus, 11 July 1927, Page 5

U.S.A. MONEY MARKET

LOANS TO AUSTRALIA. Increase Predicted. (Australian and N.Z. Cable Assn.) (Received July 10 at 5.5 p.m.) NEW YORK, July 8. Hon. William McCormack, the Queens land Premier and Treasurer, interviewed here, said that he has been in touch with various leading bankers here, and Ims discussed the financial situation, but he remarked that no new Queensland loan is contemplated at present. He felt it was inevitable, however, that more of the Australian financing will be placed in future with the New York market, which offered possibilities, provided that adequate arrangements were made to look after such loans when floated. Referring to reports of a Commonwealth loan flotation of seven million at London, some bankers here claim that this issue could be floated on better terms in New York. Some keen observers, however, point out that only one hundred million dollars worth of new bonds has been floated here during the past fortnight, compared with two hundred and three hundred millions in single weeks earlier in tho year. These observers stress the fact that there is a tendency with many of the underwriting houses to allow the present supplies of bonds be fully distributed among the ultimate purchasers before bringing out additional large issues. There is also some comment on the fact that the last New South Wales bonds were recently sold in the open market at three points below the price at which they were underwritten. One interpretation is that the lower price indicates that a considerable portion of these bonds were left in the underwriters’ hands, although this in no way reflects on excellence of these bonds. Another interesting interpretation is that no loan can be considered a finished business, even after being successfully underwritten. It is stressed that any fall in the price can quickly be corrected by having the borrower buy on the open market any offerings of the bonds concerned. This is termed “looking after the issue after flotation,” and it is but one of the necessary manipulations in adequate financing operations. One other important observation is being made in Wall Street, namely, that it is difficult to indicate at any given time just what nett return any given Australian loan would bring here. It is said that would depend wholly upon the condition of the market, which just now is little slow. BANK BOSSES. INTERNATIONAL CONFERENCE. NEW YORK, July 8. Mr. Strong, the Governor of the Federal Reserve Bank, has issued a statement that the meeting of bank heads (cabled on July 7th.) has during the pact week, devoted its time to an exchange of views on financial an! economic matters, tho policies of banks of issue, and like subjects. These naturallv include the relationship of their respective rates of discount and the operation of the so-called gold exchange standard, which has had so extensive a development since the war in making of expensive shipments of gold, which where necessary affect the reserves of tho bands of issue. The purchasing power of gold and various proposals for promotion and closer co-operation were also discussed.