AUSTRALIAN LOAN.

Hokitika Guardian, 11 July 1925, Page 3

AUSTRALIAN LOAN.

FURTHER LONDON C OMM ENT.

tAustralia it N.Z. Cable Association.] LONDON, July !). The London Stock Exchange men declare the money market never suggesteal to resort to Wall Street in preler--011 ci! to London. This came only irom the Treasury and the Hank of Kurland and probably is due to their anxiety over the gold standard anti a desire' to maintain the present Hank rate because a large loss at present to Australia won 111 put the Commonweal I h in tlu> position of being aide to cniumaiid gold from Britain. The Stock Exchangers declare fhai this did not represent their advice I" the Commonwealth as they believed .she could obtain the money as advantageously in London as in New \nrk though they admitted that London might not he able immediately lo absorb a twenty million loan. The Underwriters state they would lie content even il lelt wilu a large portion of the issue as they realise u •would event ually he absorbed by Ihe investing public. Bust experience has always shown, the Americans are not an investing people. I! is regarded as a certainty that il the loan is floated in New York il will not he long before it, is unloaded on the Loudon mulle t where (lie ((notations id the dollar on the Stock Exchange will probably be strongly opposed on the ground that they interfere with sterling seoui dies. The “Evening Standard” says the. report that the loan can he flouted jointly in New York and London is doubtful, because it would be difficult to obtain support here lor Colonial dollai stock which does not find Invour with investors. In all circumstances the Commonwealth flovernmeiit would piobnblv find it better to came lo London than transfer her abactions to New York, where it, might find its new lover fickle in troiibulons times. Queensland had not found America encouraging and had repented of its experiment.

“FINANCIAL TIMES" COMMENT. LONDON. July in. The “Financial Times" says: The decision of the Australian Tlovernment to raise its loan in the United States is the subject of widespread discussion, and considerable criticism on the London Stock Exchange, The common opinion being expressed is that tho issue should be made in London, it is pointed out that such an issue will not enjoy the status of trustee security here.

The “Financial Time"” City correspondent says: “The consol marklias gravely discussed the Australian plan. Considerable regret is expressed at ibis handing over to the Unit States—officially as it were—ol the business of lending money to our colonies. Doubtless the eagerness to return all tho gold possible, now that the gold standard lias been re-introduced, lies at tho root of this rather startling departure from the good, old-fash-ioned theory that London should maintain its position as the world’s money market.”

The “Financial News’’ says: Admittedly we have been suffering from a steady demand for our money troni tne Dominions, and, if the Loinmonwoalth can obtain hotter terms elsewhere, they are justitied in obtaining them, l>ut it must be realised that no dumping by the American interest will be allowed on this side.”

BRITAIN’S SURPLUS AVKALTff. LONDON, July 1). The “.Morning Post. ” finnncinl editor, dealing with the question ol Australin borrowing in Amorim, says: “The depnrture of the Commonwealth Government in borrowing in another centre than London is both interesting and important. It brings into prominence the whole question of the policy of other foreign lands, regarding for the moment, the Dominions’ loans as coming under the heading ‘ Foreign. Naturally, there is a divergence of opinion—some holding that the trade of Dritain should he stimulated by foreign loans, and that, until the embargo is removed, the gold standard cannot be regarded as completely efientire. On the other hand, it must he remembered that no reliance is to be placed oil signs of Britain having surplus savings for foreign loans at the present time, and a need ol cheaper production and for larger export's is becoming clearer every day. There was talk yesterday of blocks of the Australian loan being absorbed here, but we fail to see the wisdom of such a course. Either it is safe and proper to make the issue ourselves, as we could do, or the matter should he left entirely in American hands. Presumably even a Dominion loan, even il it were floated in the United States, would not come under the category of ‘trustee securities.’ ” The “ Morning Post ” city editor adds: “The city is keenly discussing the possible details of the issue. In some respects the announcement is being well received, because it is regarded as being calculated to help the general foreign exchange position, am. to throw some of the burden ol financing Australia upon New York. At the same time, there are regrets that even for a brief time, America, rather than the Home Country should lameeting the necessities ol Australia. The news shows there is need ol an early recovery of our trade, lor the whole thing works in a vicious circle. The financial power of London is still great, hut it does not consist merely in credit or hot air. It needs the hacking of surplus wealth, created by industry and of an exportable surplus ol goods and services. I here must be a revival of trade if our financial suprenincv is to lie maintained.