LOAN FROM U.S.A.

Hawera Star, Volume XLV, 11 July 1925, Page 5

LOAN FROM U.S.A.

AUSTRALIAN PROPOSAL. NOTHING DEFINITE YET. BRITISH PRESS COMMENT. BY CABLE—PRESS ASSOCIATION —COPYRIGHT, (Received Julv 11, 11.15 a.m.) NEW YORK, July 10. The J. P. Morgan Company is reticent. regarding the proposed Australian loan here, which, it has been reported, they would handle. It is said that nothing definite had been arrived at, arrangements so far being a very tentative form. —Reuter. (Received Juluy 11, 11.15 a.m.) LONDON, July 10. The Evening Standard says that the argument against allowing the Australian loan to be raised in London was that it would give the Commonwealth power to take gold if it were desired, because the money was required to meet maturing internal obligations. It adds that the gilt edged market is bitterly criticising the policy of sending Australia to New York as a display 'of weakness, while the supporters of the restoration of the gold standard are running away at the firing of the first shot, instead of facing the consequences of a free gold market, even at a certain amount of risk. —Reuter.

A MIXED RECEPTION. REGRET IN FINANCIAL C'l HOLES. LONDON, July 10. Th© Financial Times says the decision of the Australian Government to raise a loan of £10,000,000 to £15,000,000 in the United States is the subject of widespread discussion and considerable criticism on the Stock Exchange, the opinion being expressed tliiLt the issue .should be made in London. It is pointed out that such sail issue will not enjoy the status of a trustee security here. The city correspondent of the l'lnancial Times- eays the consol market gravely discussed the plan. Considerable regret was expressed at the handing over "to <tlio United States onidaily as it were, of the business of lending money to our colonies. Doubtless* eagerneiss to retain all the gold possible now that the gold standard has been reintroduced lies at the root of this rather startling departure from the good old-fashioned theory that London should maintain- the position as the world money market. The Fimanoia l News says: ‘‘Admittedly we have been isuffering from a steady demand for our money from the Dominions, and if the Commonwealth can obtain better terms elsewhere they are justified in obtaining them, but it must be realised that no dumping by American interests will be allowed on this side.” The Morning Post’s financial editor, dealing with the question of Australia borrowing in America, says: “The departure of the Commonwealth Government in borrowing in another centre than London is both interesting and important because it brings into prominence the whole question of the policy of our foreign loans, regarding foit the moment the Dominion loans as coming under the heading of foreign. Naturally there is divergence of opinion, some having the opinion that trade with Britain should be stimulated by foreign loans, and that until the embargo is removed the gold standard cannot be regarded as completely effective. On the other hand it must be remembered that no reliancq can be placed on the signs of Britain having surplus savings for foreign loans at the present time, when the need for cheaper production and larger exports is becoming clearer every day. There w'asi talk yesterday of blocks of the Australian loan being absorbed here, but we fail to see the wisdom of this course. Either it is safe and proper to make the issue ourselves, as we could do, or the matter should be left, entirely in American hands. Presumably even the Dominion’s loan, if floated in the United States, would not come under the category of trustee securities.” The Post’s city editor adds: “The city is keenly discussing the possible details of the issue. In some respects the .announcement bias been well received because it is regarded as calculated to help the general foreign exchange position, and throw some burden of financing Australia upon New York. At the same time there are regrets, even if for a brief time, that. America rather than.the Home country should be meeting the necessities of Australia. The neww shows the supreme need of an early recovery of trade, for the whole thing works* in 3 vicious circle. Financial power in London is still as great, but it does net consist merely of credit. Hot air needs to be backed bv surplus wealth, created industry and an exportable surplus of goods services. There must be a revival of trade if financial supremacy is to ho maintained.”