OVERSEAS LOANS.

Hawke's Bay Tribune, Volume XVI, Issue 13, 29 December 1925, Page 7

OVERSEAS LOANS.

EMBARGO TO BE REMOVED. QUESTION OF PREFERENCE. London, Nov. 6. Mr. Winston Churchill, Chancellor of the Exchequer, made the important announcement in a speech at Sheffield that the Government had decided to ' remove the embargo on the issue of dominion, colonial, and foreign loans in the London money market. In carrying out u'great change like the return to the gold standard, he said, it had been necessary to move with extreme care. So many objects had to be kept in view at the same moment that delicacy and judgment were required at every step. In the Treasury and in the Bank of England they had the most skilful advisers and financiers that any country could show. They had nad to bear in mind not only the desirability of removing the embargo on overseas loans, but the possible effects on home industries of overlending abroad and the consequent stringency of credit for domestic purposes, which would ensue.

COMPLETE FREEDOM

“I am glad, however, to say,” ho added, ‘‘that the time has now come when we can take a further step towards the establishment of complete freedom and normal conditions in the money market. From this time forward no objection will be raised on general grounds by the responsible financial authorities to the issue of dominion, colonial, and foreign loans oh the London market. “What has been known as the embargo will now bo removed. The old and full freedom of the market will be restored. The City of London must be responsible for using that freedom wisely and soberly. Over-lending, that is to say, lending beyond or strength, straining our future credit, lending beyond our savings or our earnings, such over-lending will bring its own corrective. I trust with confidence to the corporate good sense of the city to manage its own affairs with discretion, to pay regard not only to the capacities of the market, but to the position towards this country of would-be borrowers, and I hope so far as possible without impairing the freedom of the market, that preference will be given in the matter of credit to those issues which bring a high proportion of orders for goods immediately to the trade of this country.”—Christchurch “Press” correspondent.