DR. PAGE EXPLAINS

New Zealand Times, Volume LII, Issue 12195, 21 July 1925, Page 6

DR. PAGE EXPLAINS

LOAN FLOTATION IN NEW YORK ‘•RELUCTANT TO LEAVE LONDON” “ACTED ON LONDON ADVICE” By Telegraph.—Press Assn. —Copyright. (Received July 20, 7.5 p.m.) MEBOURNE, July 20. Dr Earle Page, the Federal Treasur- .. er, in an official statement regarding "i the new loan, says that the amount cf •" £20,000,000 will be offered at 99J, carrying 5 per cent, interest. Of this the amount of £5,000,000 is being floated in London, and £15,000,000 in New York. The 'London portion is redeemable in ... 50 years, with the option of redeeming an three months’ notioe at any time after 30 years. -The New York portion is redeemable in 80 years, with the option of redeeming at the end of 27 years. It is anticipated that the average interest over the whole period will be ii, fii per cent. The expenses of flotations, it is expected, will be practically the same in the two oapitals, ~ The -treasurer explains that the necessity for appealing to the American market is due to the London markot not being capable of immediately absorbing all flotations offering. The Loan Council was most reluctant to leave the London market, which has - served Australia so well, but after an ... exhaustive inquiry it acted upon the .. advioe of the best London finance authorities. The Treasurer added that it seemed manifest that had a large sum been placed in London the favourable terms secured would not have been obtainable.

NEW YORK ARRANGEMENTS NINE FIRMS SHARE BUSINESS. Australian and N.Z. Cable Association. (Received July 20, 8 p.m.) NEW YORK, July 19. The J. P. Morgan Company announces further terms of the Australian loan. Subscription hooks will be opened at the Morgan office at 10 a.m. on July 20th. The bonds are dated July 15th, 1925, mature on July 18th, 1955, and aTe not redeemable prior to July 15th, 1952. They may be called for on or after the latter date at £IOO and interest. The bonds will be offered at £99f and interest. Eight firms are associated with the Morgan Company in the underwriting, gamely, the First National Bank of New York, the National City Gom*any, the Guaranty Trust Company, the Bankers Trust Company, the Forbes Company, the Lee, Higginson tbmpaijy. Brown Brothers, and the Kidder, Peabody Company. The loan is the largest floated in New York since the French loan of 100 million dollars last November. INFLUXW GOLD LONDON MARKET BRIGHTER STOCKS APPRECIATING. Australian and N.Z. Cable Association. (Received July 20, 5.5 p.m.) LONDON, July 20. The “Morning Post’s” financial editor says: “The outstanding fact in the money market is the remarkable change in the monetary situation and the improved tone of the market for highclass investments, due to tbe unexpectedly extensive and persistent charactr of the gold influx. This has added so much to the bank reserves and the floating credits in the market that it was impossible to maintain the 5 per cent, bank rate. ‘■‘Naturally the market for gilt-edg-. ed'stocks was sympathetically affected, especially as the knowledge that large colonial borrowings are being shared with the United States had a stimulating influence. “The English portion of the Australian loan appears Tather cheaper than the American. The market, while glad to be relieved of the task of absorbing the full amount, is glad that the Australian Government is no*t turning to New York instead of London, and that the entire operations are in the hands of the firm responsible for the earlier Australian flotations There is every likelihood of more gold arriving in the near future, which is a favourable point for the gilt-edged market.”

The newspapers give prominence to the Australian loan. The “Financial News” emphasies the sinking fund clauses of the loan. The “Financial Times” savs the reception of the loan doubtless is favourably affected by the change for the better in monetary conditions.