BORROWING FROM U.S.A.

Hawera Star, Volume XLV, 10 July 1925, Page 9

BORROWING FROM U.S.A.

LOAN TO BE RAISED. IN LONDON AND NEW YORK. BY CABLE-PRESS ASSOCIATION—COPYRIGBT. Received July 10, 11.40 a.m.) MELBOURNE, July 10. It is learned definitely from official sources that the Commonwealth Ministry has decided to raise a loan on behalf of itself and the States, partly in London and partlv in New York. Probably the amount will be £10,000,000 to * £15,000.000. The terms have not yet been announced. DISAPPOINTMENT IN LONDON. NOT GOOD FOE TRADE. (Received July 10, 12.30 p.m.) LONDON, July 9. A special inquiry shows that the Stock Exchange is surprised and disappointed at the Commonwealth’s reported decision to raise a 100,000,000 dollar loan in New York. Most of the influential authorities state that the London market is distinctly hostile to Dominions borrowing outside of Britain, which was considered would he had for British trade, as America was sure to see that trade follows the loan. It is asserted that Britain could well supply all the Dominions’ needs, provided suitable times were chosen for the issues of the loans. The market here was, in the first instance, unwilling to accept the accuracy of the New York reports, but Melbourne confirmation has now been received that the Imperial Treasury has approved of the Commonwealth’s departure from the established practice of borrowing here. —A. and N.Z. Assn.

RESENTMENT ON EXCHANGE

ACTION REGARDED DOUBTFULLY

Received July 10, 2.5 p.m. LONDON, July 9. Stock Exchange men declare that the money market never suggested a resort to Wall Street in preference to London. This came only from the Treasury and the Bank of England, and was probably due to anxiety over the go'd standard and the desire to maintain the present bank rate, because the large loss at present to Australia would put the Commonwealth in a position of being able to command gold from Britain. The Stock Exchanges declare that this did not represent their advice to the Commonwealth, as they believed slie could obtain money as advantageously in. London as in New York, though’they admitted that. London might not be able to immediately absorb a twenty million loan. Underwriters state they would be content even if left with a large portion of the issue, as they realise it would eventually be absorbed bw the investing public. Past experience has always shown that the Americans are not an investing people. It is regarded as a certainty that if the loan floods New York, it will not he fong before it is unloaded on the London market, where quotations for dollar bonds on the exchange will probably be strongly opposed on the ground that they interfere with sterling security. The Evening Standard says that the report that the loan will be floated jointly in New York and London is doubtful, because it would' be difficult to obtain support here for colonial dollar stock, which would" not find favour with investors. Ip all the circumstances the Commonwealth Government would probably find it better to come to London than transfer their affections to New York, where it might find its new lover fickle in troublesome times. Queensland had not found America encouraging, and liad repented its experiment.—A. and N.Z. Assn.