Manawatu Evening Standard. WEDNESDAY, JULY 15, 1925. THE AMERICAN MONEYLENDER.

Manawatu Standard, Volume XLV, Issue 189, 15 July 1925, Page 8

Manawatu Evening Standard. WEDNESDAY, JULY 15, 1925. THE AMERICAN MONEYLENDER.

I'hk Common weal (li Government’s decision to go upon the American market tor a twenty r million loan has been unfavourably received in London, although, apparently, it is acting upon the advice tendered to it by the Home Government and the Bank of England authorities. On the Stock Exchange there appears to be a very decided feeling that, in going to New York for the money needed by the Australian Governments, the.Eederal authorities are making a grave mistake. It is stated that the Americans are not an investing public, by which, we take it, is meant, that they are not permanent investors, and, unlike British investors, do not care to allow their money to be locked up in any particular class of security for any length of time. Hustlers in business, they are also hustlers in finance. Wall Street sets the pace for the other American exchanges, and has witnessed the rise and . collapse of many a fortune, made and lost by speculative operators ‘’on ’change.” When American financiers agree to float loans for other countries, it is generally as a prelude to extensions of American trade, and it has been the experience of more than one South American Government, which has negotiated loans through United States financiers, that they have had to accept a very considerable portion of such loan, or loans, in goods, plant or machinery. When the Queensland Labour Government obtained its two million loan in New York, it established a very undesirable precedent in British finance, and there was a generally expressed hope that its example would not be followed by other British countries. American financiers were keen to lend money to both Australia and New Zealand, and it is well known in financial circles in this country that the late Mr Massey could have obtained all the money he needed on the Now York exchange. But Mr Massey knew that, by accepting loan moneys from the United States, he would be prejudicing British trade by increasing the facilities for American trade in New Zealand. If British peoples overseas are sincere in the desire so frequently expressed, to foster interJ.mperinl trade, and to help the Mother Country they ought to have the good sense to avoid debt entanglements with a country whose policy is proving so detrimental to British trade. The

war left Great Britain heavily indebted to the people of the United States for foodstuffs and war supplies purchased on behalf of herself and her Allies at greatly enhanced values, and the repayment of the debt has been made as difficult as possible by the high tariff wall America has since built up around her industries, putting British trade with America almost wholly out of the question. Loans obtained in America must reduce the purchasing power of the countries obtaining them with other countries, with whom they may desire to trade, because, not only is it almost inevitable that the moneys borrowed will be represented to a considerable extent by goods in kind, but the interest payments, and the repayment of the debt itself, alike tend to restrict trade facilities with other than the creditor nation. That will be the case with Australia, if it adheres to its policy of floating its loans in America. It may be argued that what Australia does is no concern of ours, but the force of example is great, and we have no desire to see this Dominion following in the wake of the Commonwealth and borrowing money from Uncle Jonathan.