EMBARGO ON LOANS.

Hawera Star, Volume XLV, 19 October 1925, Page 5

EMBARGO ON LOANS.

DOMINIONS AFFECTED. VARIOUS EXPLANATIONS GIVEN. 8Y CABLE—PRESS ASSOCIATION—COPYRIGHT. LONDON, Oct. 16. The interview of the Agents-General with Mr L. C. M. S. Amery regarding the embargo on Dominion loans was of the most, cordial nature. Mr Amery received them in the most cordial mood, but it is understood the main difficulty rests with the Treasury. It was pointed out that there was no reason for an embargo on loans, in connection with Which the Dominions, as junior partners in the Empire, were entitled to an explanation. One source, which is regarded a» inspired, advances as a reason that the need for preserving the gold standard is preventing the efflux of, gold, but the Agents-General h.ad figures showing that the quantity of gold sent to Australia in connection with the last two years’ loans has been infinitesimal. Mr Amery could not give an indication as to how long the embargo would last, but promised an immediate and fullest investigation of the whole and the speediest reply to the deputation. The position is being widely discussed in London. A strong body of opinion links the policy with th© city’s insistent demand that the embargo on foreign loans should be lifted so as to give a much-needed fillip to the British export trade. It is suggested that the Treasury is faced with the difficulty that it cannot consistently preclude foreign loans while permitting new Dominion issues; hence the embargo. It is understood the Agents-General told Mr Amery that if the restoration of an open market wvere contemplated the Dominions should have priority of treatment because, if the release is simultaneous, they are sure to he submerged amongst the rush of foreign flotations, which are offering a higher rate of interest and would get a more favourable reception on the market, thereby prejudicing the terms nnder which th© Dominions are seeking money. The question was also raised of the effect of the loan harrier on migration settlement commitments! The Colonial Office has not issued any official report of the deputation, at which all the Agents-General spoke at length. The proceedings lasted for an hour. It is understood that the Imperial financial authorities ar© hopeful of lifting the barrier in the near future not only on Dominion but also on foreign loans. The Daily Telegraph’s diplomatic correspondent states that with the decline on the trade balance on the one hand and the conditions of stringency created by the return to th© gold standard on the other hand, it was agreed between the Treasury and th© chief hankers that the drain on the country’s financial resources by constant foreign loan issues in London should be checked. The banks consequently took their own concerted measures to stop . the efflux of British money to Europe and overseas by declining to issue any more foreign or Dominion loans. Thus, when Australia expressed a desire to issue a loan here she was advised to raise it in the American market, which is suffering from an overflow of resources, and for the same reason the Belgian Government is not finding it easy to secure a British “for stabilisation" loan.

It is suggested that the Dominions, at any'rate, should receive from British banks preferential treatment as against foreign competitors. It is certain, however, that if and when the city hanks, in an informal consultation with the Treasury, decide to remove or curtail the restrictions on foreign loans those on the Dominions will be raised at the same time.