AUSTRALIAN FINANCE

Otago Daily Times, Issue 19530, 13 July 1925, Page 7

AUSTRALIAN FINANCE

FLOTATION OF LOAN. REPORTED ISSUE IN NEW YORK-. Prca* Association—By Telegraph—Copyright. LONDON, July 10. It is reported in London that an Australian loan ha* been obtained in New York at 5 per cent., and that it is being issued at 98^. —A. and N.Z. Cable. PRESS COMMENT. WORLD’S MONEY MARKET. LONDON NOT DISPLACED. LONDON, July 10. The Montreal Gazette, commenting editorially on the placing of an Australian loan in New York, says: “This action is not a matter for surprise. New York has become a resort for international borrowers, and even before the war Canadian provincial Governments and municipalities went regularly there for the inareasing sums needed and not readily obtainable at Home. During the war no other market was available, and when peace came the gold supplies of the European nations were exhausted, and their currencies depreciated. Only Britain so far has 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. In the meantime its recovery is being delayed by Labour troubles, which are decreasing production and curtailing trade, while the taxes are kept high by its Socialistic legislation, to which even a Conservative Government adds. New York, on the other hand, seems to have an increasing amount of money to loan. Some comes from profit able investments at home and not a little from Britain, which is paying its war debts to the United States. Australia is going where others have gone, Canada included, for the money it needs. New York has not replaced London as the world’s money market, but it has won a place in the financial sun. and henceforth will be a factor to be counted with when heavy national borrowings are to be made.’’ —A. and N.Z, Cabin. NEW YORK, July 10. The Evening Telegram, referring to the “proposed loan to our Antipodean cousins, the Australians,” says:—“Regardless of what some nervous people pretend to think the bankers of the United States are desirous of finding a solid and substantial collateral, such as the credit of the Australian Commonwealth, upon which to lend their surplus funds. There is said bo be, and there undoubtedly is, a vast volume of money in the United States seeking just such investments as that preferred from Melbourne.” —A. and N.Z Cable. LONDON, July 10. The Evening Standard says: “The argument against allowing the Australian loan to be raised in Lon don was t hat it would give the commonwealth power to take gold if it so desired, because money was required to meet maturing internal obligations. The gilt-edged market is bitterly criticising the policy of sending Australia to New York as a display of weakness, and supporters of the restoration of the gold standard are running away at the firing of the first shot, instead of facing the consequences of a free gold market, even at a certain amount of risk.—Reuter - July 11. (Received Julv 12, at 5.5 p.m.) The financial News, reverting to the Australian loan, says; “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 business 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 into the international development of finance? New York would have the benefit of the experience of the London issuing houses, and on the other hand the money could be invested safely and profitably through London channels. Under these circumstances there would ho no need to put up any ‘bar 1 .” —A. and N.Z. Cable. MORGAN COMPANY RETICENT. NEW YORK, July 10. The J. P. Morgan Company is reticent regarding the proposed Australian loan here, which it has been reported it would handle. It is said that nothing dcfihitc has yet been arrived at, the arrangements being in a very tentative form. —Reuter. FEDERAL TREASURER RETICENT. MELBOURNE, July 12. (Received July 12, at 11.1 p.m.) The Federal Treasurer declines to comment regarding the rumoured floating of an Australian loan in America. He will neither deny nor confirm the report. Mr W. A. Raws (president of the Associated Chambers of Commerce) declared that the loan was the 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, and consequently there was no occasion for any sentimental regret that Australia was borrowing from America instead of from Britain. Then if it w'ero not inevitable it would be preferable that she should do this under existing conditions. PORTION RESERVED FOB LONDON. LONDON, July 12. (Received July 12, at 11.5 p.m.) The Evening Standard understands that the balance of the Australian loan to be issued in London will be five per centum. The stock will be offered at 981 or 99. The issue will probably not be long delayed.—A. and N.Z. Cable.