AMERICAN FINANCE

Otago Daily Times, Issue 20089, 4 May 1927, Page 9

AMERICAN FINANCE

A BANKER’S ADVICE. EXCESSIVE LENDING CONDEMNED. (Fret* Association—By Telegraph—Copyright, j NEW YORK, May 3. (Received May 5, at 8.30 p.m.) Mr Thomas W. Lament, the well-known banker, of the J. P. Morgan Company, m an address to the American section of the International Chamber of Commerce, said : ‘‘From the point of view of the American investor it is ' obviously necessary to scan the situation with increasing circumspection, and aivoid rash or excessive lending. I have in mind reports I recently heard of American bankers competing on almost a violent scale for the purpose oi obtaining loans in various foreign markets overseas. That sort of competition tends to insecurity and unsound practice. 11 Mr Lamont indicated that the gross annual interest and sinking funds payable in America on foreign loans issued here total about a billion dollars yearly, and with such a vast sum duo to America, how much further, he asked, will foreign countries be able to stand this annual burden? Will their exports so far exceed their imports that they can continue to accept, by fresh borrowing, a fresh transfer of the sum necessary for interest and sinking funds? “The American investor,’’ he continued, “is an intelligent individual, and can be relied upon to discriminate, yet in the first instance such discrimination is surely tho province of the banker, who buys the goods, rather than of the investor to whom he sells them. A warning needs to be given against indiscriminate lending and indiscriminate borrowing. Mr Hoover, Minister of Commerce, addressing the third Pan-American Conference, said that no' money should be lent to Latin-Amcrican countries unless for productive purposes. The State Department, questioned relative to this statement, said it still supervised all foreign loans by American bankers, but took no action sue]) as suggested by Sir Hoover.—A. and N.Z. Cable.