"NO MORE CHEAP MONEY."

Wanganui Chronicle, Volume LXXIV, Issue 17672, 23 September 1919, Page 2

"NO MORE CHEAP MONEY."

VICTORIAN TREASURER'S VIEW,

LONDON HATE NOW 5£ PER CENT.

The financial outlook was discussed by the Victorian State Treasurer, Mr. McPherson, on his return from London, where lie arranged the conversion tit loan moneys amounting to £3,000,000. ''A higher rate, of interest had natural ly to be paid in the present condition! of the money market," he said. "I was a'.)]o to obtain the amount required at f:£ pe-- cent., and to get a loan which was _ underwritten, at par. The moss" feature of the transaction was that" I succeeded >n reducing tho underwriting charges by \ per cent-. The advantage m tii.s arrangement lias in the point that in the next decade Austral :r has £$00,000,000 of loans to convert, anfl the reduced underwriting will effect an economy of £200,000. The underwriters are willing to concede these n'-ore favourable teims as long as normal conditions do not exist, that is to say as long as the Empire is not at ;.va'r, or any other circumstance exists that would make the money market unstable. Providing international relations are on a peaceful basis, an-i conditions are no worse than they arenow, the lower rate will apply.

"The rate of interest which we have had to pay may seem high when compared with flotations negotiated by the Statoa in the past," Mr. McPherson added, "but that the term's are the best that could be obtained will be understood when I state that the rate is precisely tho same as the British Government were offering on bonds > to the public over the counter. No dependency can hope to get money at any time at a lower rate of interest than is paid by the Imperial Exchequer. My observations in England convinced me thnt iho days of cheap money, like the days of low v<nges and cheap production, are over. The very best of gilt-edged securities will hare to pay high rates, ant! Government bonds will not be floated in London for less than 5* per cent, in the course of years, when the industrial nositioji has settled down and business has resumed its usual flow, there may be some approach to former conditions. All the financial authorities,- however, aro agreed that dear money must continue to prevail, and our finance can he adjusted only from .that standpoint. '