INDISCRIMINATE LENDING.

Hawera Star, Volume XLVI, 4 May 1927, Page 5

INDISCRIMINATE LENDING.

AMERICAN BANKER’S WARNING

BY CABLE—PRESS ASSOCIATION—COPYRIGHT. NEW YORK, May 3. Mr Thomas Lamont, of the Morgan Company, addressing the American section of the International Chamber of Commerce, said that, from the point of view of the American .investor, it .was obviously necessary to scan the situation with . increasing circumspection, and avoid rash or excessive lending. “I have in mind,” he said, “reports I have recently heard of American bankers competing on an almost violent scale for the purpose of obtaining loans in various foreign markets overseas. That sort of competition tends to insecurity and unsound practice.” He indicated that the gross annual interest and sinking funds payable in America on foreign loans issued here total about a billion dollars yearly, and, with such a vast sum due to America, “how much further,” he asks, “will foreign countries be able to stand this annual burden? Will their exports so far exceed their imports that they can continue to accept, by fresh borrowings, the fresh transfer of the sum necessary for interest and sinking funds?

“The American investor,” he said, “is an intelligent individual, and can be relied upon to discriminate. Yet, in the first instance, such discrimination is surely the province, of the banker, who buys”the goods rather than the investor, to whom he sells them.

“A warning needs to be given against, indiscriminate lending.”