NOTES AND COMMENTS.

New Zealand Herald, Volume LXI, Issue 18896, 19 December 1924, Page 10

NOTES AND COMMENTS.

THE GERMAN LOAN. The immediate and overwhelming success which attended the German loan issues in New York and London shows unmistakably that, given a reasonable assurance of political tranquillity, the investing public is not merely willing but eager to support schemes of reconstruction. even when the attraction offered by { way of yield is not spectacularly in ex- j cess of that obtainable on the more fami- j liar types of Government securities, I says the Statist. The British portion I was £12,000.000 iri 7 per cent, bonds re- j deemable by annual drawings at par or j bv the application of a sinking fund if the market price is below par, final redemption to be completed by October 15, 1949. At the issue price of 92 the loan offered a Hat yield of £7 12s 2d per cent, and a minimum redemption yield of £7 6d per cent. Undoubtedly, the liberality of these terms, in comparison with these obtainable on other investments of not more questionable security, was mainly responsible for the readiness of the investors' response. Principal and interest are payable in sterling without any deduction in respect of German ta,xes. The whole international issue is to yield, in the aggregate, the equivalent of 800,000,000 gold marks clear of all ex^ 1 penses. The other countries participating in the issue are France, Belgium, Switzerland, Holland, Italy, and Sweden, besides Germany herself. All the issues are in the form of 7 per cent, bearer bonds, with a maximum currency of 25 years. The total annual charge on the German Government in respect, of the loan will be approximately 9l£ million gold marks, on the basis of the present exchange The loan is not intended for the economicrestoration of Germany. It is to be used wholly in payment of Germany's Treaty charges; its proceeds are to be spent wholly within Germany for the benefit of the Allies—they may be used in meeting such charges as cost of the armies of occupation and payment of the 26 per cent, duty on exports and are not intended for the purpose of covering ordinary budget deficits during the transition period. Secondary objects of the loan are to afford the initial help in establishing the new bank of issue and to create the atmosphere of confidence necessary for the working of the whole scheme of the Dawes Report.

GERMANY'S FURTHER NEEDS.

The Statist adds: The loan to Germany for 800,000,000 gold marks is only a beginning. Apart from the great shortage of business credits at present experienced in Germany itself and in most other Middle European countries, the Dawes plan will require further issues amounting (o at least 800,000.000 gold marks within the next two years, being 300.000.000 gold marks of the capital of the new bank of issue and 500 millions in railway preference shares. The remainder of the latter, amounting to 1,500,000,000, will have to be taken up by the public very soon after, if not before, 1925-26. Later on the Reparation Commission will be at liberty to issue bonds to a total of approximately 42 milliard gold marks, representing railway mortgage bonds, industrial debentures and the proceeds of the assigned revenues mid transport tax capitalised. In addition, the German Government will be at liberty to sell to the public the railway ordinary shares, amounting to 13 milliard gold marks. It is unthinkable, of course, that issues of such colossal proportions would lie made all at once, but it i< clear, at any rate, that from these, and other quarters as well, the appeals made to the investor in coming years promise to lie very numerous.

THE SEQUEL TO FASCISM.

The Fascist coup in Italy is described by Signor Ferrero, in a history of the four years' regime of Fascism, as only half a revolution, created, as in moat cases, not by real revolutionaries, but by the crumbling away of an old order whose disappearance left a vacuum that had to be filled up somehow. He admits there have been certaii superficial good effects. "The country is a little more tranquil; tho public services arc in slightly better order." But the whole regime is merely a return to the personal rule with which Italy was so long familiar under Giolitti, Crispi and Depretis. To Fascism itself Signor Ferrero will allow no future at all. It hangs 01 the personal supremacy of one man, who is in danger pt anv moment of becoming the vic tim of his closest collaborator-:. There have been only two solid bases of government fV>r Italy, as indeed for all Europe, Ihe dynaslic and (Le democratic. Since 1917 the kings have come tumbling down, and those remaining can merely reign, not rule. There is !*ft the voice of the people. Will it yet be heard in Italy ? S'gnor Ferrero has few doubts about that. After a page of fierce exposure of the scandals of t'no rigged election of this year he points out that even under those impossible conditions a minority of some two and a-half millions out of seven recorded votes in opposition to the Government bv which (he elections were made. In (Tie courage of the two and a-half millions he sees ground for hope that the'will of the people will be effectively asserted. But lie does not predict how the will of the people will prevail while Fascism is in power. ' « ' •