TRADE STIMULUS

Hawera Star, Volume XLV, 13 July 1925, Page 5

TRADE STIMULUS

TO FOLLOW LOAN,

AMERICAN EXPECTATIONS

MARKETS IN AUSTRALIA

HY CABLE—PRESS ASSOCIATION—COPYRIGHT

(Received July 13, 11.15 a.m.) ' NEW YORK, July 12. Under the heading of “Topics m Wall Street,” the New York Times says: “Aside from its importance as a financial development, the Australian loan to be floated soon in New York is attracting attention because of the stimulus to trade which it is expected funds raised here will be required for refunding purposes in Australia, the operation is likely to open up markets in the Commonwealth for many lines of American products. The terms of the Australian loan are expected to be announced this week. The amount is variously estimated at 50,000,000 to 100,000,000 dollars.”—A. and N.Z. Assn.

AUTHORITIES NON-COMMITTAL. NO SENTIMENTAL REGRETS. BY CABLE—PRESS ASSOCIATION—COPYRIGHT MELBOURNE. July 12. The Federal Treasurer declines to comment regarding the rumoured floating of an Australian loan in America. He will neither deny or confirm it. Mr W. Raws (president of the Associated Chambers of Commerce) declared that the loan was an inevitable development of the present economic conditions. If America did lend the money it did not necessarily mean that trade' would flow in that direction from the Commonwealth, and consequently there was no occasion for any sentimental regret that Australia was borrowing from America instead of Britain. Even if it were not inevitable it would be preferable that she should do this under existing conditions.

REPORTED TERMS. LONDON, July 10. It is reported in London that the Australian loan was obtained in New York at 5 per cent., issuing at 98J. The Evening Standard understands that the balance of the Australian loan will be issued in London. It will be 5 per centum, and stock will be offered at 83)- or 99 per centum. The issue will probably not be long delayed.

NOT A NEW THING

EARLIER PRECEDENTS. OTTAWA, Jukv 11. The. Montreal Gazette, commenting editorially on the placing of the Australian loan i n New York, says: “The action is not a matter for surprise. New York has become a resort for international borrowers. Even before the war Canadian provincial Governments and municipalities went regularly there for the increasing sums needed and not readily obtainable at Home. During the war no other market was available, and when peace came the gold supplies of the European nations were exhausted and the currencies de-. predated. Only Britain so far has been able to re-establish its currency on a gold basis. “Iu time, with the revenues it receives from investments in all parts of the world, Britain will accumulate reserves of sound money, which it can invest on something like the old scale. In the meantime it s recovery is being delayed by labour troubles, decreasing production and the curtailing of trade, while taxes are kept high by its socialistic legislation, to which even the Conservative Government adds. New York, on the other hand, seems to have an increasing amount of money to loan. Some comes from profitable investments at home and not a little from Britain, which is paying its war debts to the United States. “Australia is going where others have gone, Canada- included, for the monev it needs. New York has not replaced London as the world’s money market, but it has won a, place in the financial sun, and henceforth will he a factor to he counted with when heavy national borrowings are to be made.”

U.S.A. HAS VAST SURPLUS. NEW YORK, July 11. The Evening Telegram, referring to “the proposed loan to our antipodean cousins, the Australians,” says: “Regardless of what some nervous people pretend to think, the bankers of the United States are desirou R of finding solid substantial collateral, such as the credit of the Australian Commonwealth, upon which to end their surplus funds. There is said to be, and undoubtedly there is, a vast volume of money in the United States .seeking just- such investments as that proffered from Melbourne.” JOINT LOAN SUPPORTED. LONDON, July 11. Tlie Financial News, reverting to the Australian loan from New York, asks : “What should prevent an issue being placed here and part of the underwriting offered to New York houses, or vice versa ? This would be decidedly preferable to a refusal to entertain the business in London. The suggestion doubtless means a departure in underwriting practice, hut it is not desirable that underwriting should be modified in order to fit closer the international development of finance? New York would have the benefit of the experience of London issuing houses, and. on the other hand, the money could he invested safely and profitably through London channels. Under these circumstances there would he no need to put up any ‘bar.* ”