AUSTRALIAN LOAN

Nelson Evening Mail, Volume LVI, 13 July 1925, Page 5

AUSTRALIAN LOAN

THE NEW YORK VENTURE

FIVE*PER CENT ISSUE AT 98J

A CANADIAN COMMENT

'By Electric Telegraph-Copyright.) (AustraUu* & N.Z. Cable Association.)

LONDON, July 10 It- is reported in London that the Australian loan has been obtained in New York at five per cent issuing at 58 V A OTTAWA, July 11

The- Montreal Gazette, commenting editorially on the. placing of the Australian loan in New York says: Ihe action is not a matter for surprise. New York had become a resort- for international borrowers, even betore the war. Canadian Provincial Governments and Municipalities vent regularly there tor increasing sums needed, and not. readily obtainable at Home. During the war, no other market- was available and when peace came, the gold supplies oT European nations were exhausted and currencies depreciated. Only Britain, so far. had been able to re-establish its currency on a gold basis. In time, with the revenues it receives from investments in all parts of the world, Britain will accumulate reserves of sound money, which it can invest on something like the old scale: meantime its recovery is being delayed by labour troubles decreasing production and curtailing trade, while taxes arc kept high bv its Socialistic legislation, io which even the Conservative Government adds.

New York, on the other hand, seems to lmve nil increasing amount of money to loan. Some comes from profitable inveptments at home and not a. little from Britain which is paying its war debts io the United States. Australia is going where others have gone. Canada included, for the money it needs. New York has not replaced London ai? the world’s money market, but it has v.on a place in the financial sun, and henceforth will be a factor to be counted with, when heavy National borrowings are to be made.”

SUGGESTION BY FINANCIAL NEWS

LONDON, July 11

The Financial News, reverting to the Australian loan in New York, asks what should prevent an issue being placed here, and part of the underwriting offered to New York houses, or vice versa: It would be decidedly preferable to a refusal to entertain the businees in London. The suggestion doubtless means a departure in underwriting, practice but is it not desirable that underwriting should be modified in order to fit closer the international development of finance? New York would have the benefit of' the experience of London issuing houses and on the other hand money could be invested safely and profitably through London channels. Under these circumstances there would bo no need to put up any “bar.”

EXPECTED STIMULUS TO TRADE

NEW YORK, July 12.

Under the heading Topics in Wall Street, the New York Times says:—.. “Aside from its importance ns a financial development the Australian loan to be floated soon in New York is attracting attention because of the stimulus to trade which it is expected to cause. While a large part of flu; funds raised here will be required for refunding purposes 5n Australia the operation is likely to open up markets in tire Commonwealth for many lines of American products. The terms of the Australian loan are expected to be announced this week. The amount is variously estimated at 50,000,000 to 100,000,013 dollars.”

FEDERAL TREASURER DECLINES TO‘ COMMENT

MELBOURNE, July 11 The Federal Treasurer declines to comment regarding the rumoured floating of an Australian loan in America. He will neither deny nor confirm.

Mr W. Raws, president of the associated Chambers of Commerce declared that the loan was an inevitable development of the present economic conditions. If America did lend the money it did not necessarily mean that trade would flow in that direction from the Commonwealth. Consequently there was no occasion for any sentimental regret that Australia was borrowing from America instead of from Britain.