BORROWING IN AMERICA.

Otago Daily Times, Issue 19529, 11 July 1925, Page 11

BORROWING IN AMERICA.

The announcement that the Federal Government in Australia has decided to raise a loan partly in the United States and partly in England—but mainly, it is to be gathered, in the United States —has been productive of surprise and disappointment on the Stock Exchange in London. It would seem that the Australian Government has taken more literally than was intended the recent warning from England that it might be necessary to place some restriction upon loan issues by the dominions. The Stock Exchange disclaims any association with such advie-e as has led the Commonwealth Government to look to the United States for a proportion of the funds that are required this year by it and by the Governments of the Australian States, which have arranged with the Commonwealth Government that the latter shall act this year as the sole borrower of the new money that is needed by them as well as by it. The warning came, however, from the Treasury and the Bank of England, which may perhaps be regarded as even higher •authorities than the Stock Exchange upon matters such as the financial operations of the Governments of the dominions. If the warning was not intended to operate in the direction of curtailing borrowing at Home by the Governments of the dominions-it is unfortunate that it was issued, but the dominions had already learnt by recent experiences on the Home market that tlrcre was at least a comparative shortage of moneys lor investment in colonial securities. Nor, indeed, in the present condition of trade and industry in Great Britain, is it surprising if loan issues aro absorbed there with some difficulty. It is to be regretted, however, that the needs of the Australian Governments are so urgent that an appeal has to bo made by them to Wail

street for funds. As is observed in a cable message in this issue “it is bad for the prestige of London as a financial centre and bad. for British trade, as America is sure to see that trade follows the loan.” And British trade is in need at the present time of all the encouragement that the dominions can give it.