LOAN ETHICS

Northern Advocate, 11 July 1925, Page 5

LOAN ETHICS

BORROWING ABROAD

BRITISH CONDITIONS

AUSTRALIAN MISCONCEPTION

(Received 9 a.m.)

LONDON, July 9,

Concerning the Australian Federal Government's reported intention to borrow £10,000,000 to £15,000,000 partly in London -and partly in New York, on behalf of itself and the Australian States authorities of the Stock Exchange declare that the money market n ver suggested resort to Wall Street in preference to London. This came only from the Treasury and the Bank of England and was probably due to anxiety over the gold standard and the desire to maintain the present "bank rate, because a large loan at present to Australia would put the Commonwealth in the position of being able to command gold from Britain.

Stcck Exchange men declare that this did not represent their advice to the Commonwealth, as they believed she could obtain money as advantageously in London as in New York. Though they admitted that London might not be able immediately to absorb a £20,000,000 loan, the underwriters state that they would be content even • if left with a large portion of the issue?, as they realise it would eventually be absorbed by the investing public. ' Past experience had always shown that Americans were not an investing people. It is regarded as a certainty that if if the loan is floated in New York it will not be long before it i:-i unloaded on the London market, where a quotation for dollar bonds on the Stock Exchange probably would be strongly oppose 1, on the ground th&t tin v interfere Avith sterling securities.

The "Evening Standard" says: "The report that the loan will be floated jointly in New York and London is doubtful, because it would be difficult to obtain support here for colonial dollar stock, which would not find favour with investors. in al?" the circumstances the Commonwealth Government would probably find it better to come to London than to transfer its affections to New York, where it might find its new enamorata fickle in troublous times. Queensland did not find America encouraging and had repented its experiment."—A. and N.Z.

THE GOLD STANDARD,

SOME BITTER CRITICISM.

(Received 11 a.m.)

LONDON, July 10.

The "Evening Standard" says: The argument against allowing the Australian loan to be raised in London was that it would give the Commonwealth power to take gold if it desired because the money was required to meet maturing internal obligations. It adds that the gilt-edge market is bitterly criticising the policy of sending Australia to NewYork as a display of weakness and accusing the supporters of the restoration of the geld standard of running away at the firing of t,T*e first shot instead of facing the consequences of a free gold market, even at a certain amount of risk.—Reuter.

THE AMERICAN ASPECT,

(Received 11 a.m.) NEW YORK, July 10. The J. P. Morgan Company is reticent regarding the proposed Australian loan here, which it has "been reported the company would handle. It is said that nothing definite has yet been arrived at, the arrangements being in a very tentative form.—Reutor.