QUEENSLAND LOAN

Waikato Times, Volume 94, Issue 14773, 12 October 1921, Page 5

QUEENSLAND LOAN

NOT A GOOD BARGAIN

REPAY £230 FOR £iOQ RECEIVED.

EXCHANGE A DISADVANTAGE

(Australian and N.Z. Gable Assn.) Received October il, 5.5 p.m. LONDON, October- 10.

American advices deceived in London state that the Queensland loan was issued at a minimum price of £9O, less li per cent brokerage. The loan works out at £7 7s id per cent. R is repayable in 20 equal annual instalments. The repayment after the first five years must be at the rate of 102± per cent. A high financial authority points out that so far from stabilising the exchange, the loan will have the opposite effect, because, calculating discount, interest, brokerage and other charges, besides the annual repayments, at, a premium, Queensland will return £250 for every £IOO received. The Morning Post says it is surprising that, Queensland's borrowing should be denied officially when the issuers are actually offering bonds for subscription. Equally curious is the claim that the loan was issued on the dollar basis in order to obtain the advantage on exchange, as the Government will convert the loan to pounds sterling. The loan will cost the borrowers 7.2 per cent, and must be paid in dollars whatever their price. The only possible advantage will be that derived from the recovery of the American exchange, which will reduce the annual interest and lessen the cost of repayment, and it ; s equally possible that the exchange may fall. No British colony has yet paid 7 per cent for a loan from Britain. Meanwhile the firmness of the American exchange is a disadvantage to Queensland as regards the meeting of her London liabilities. MR THEODORE'S STATEMENT. LOAN ON DOLLAR BASIS. J Received October 11, 11.20 p.m. BRISBANE, October 11. Mr Theodore states that the loan was a straight-out dollar loan, with interest and sinking fund on the dollar basis. Thus Queensland would get the benefit of the inevitable improvement in the rate of the dollar exchange over a period of 20 years. AMERICA ANXIOUS TO INVEST. PLENTY OP MONEY AVAILABLE. Received October 11, 9 p.m. WASHINGTON, October 10. The Australian Press Association learns authoritatively that Wall Street financiers, attracted by the success of the Queensland loan, are making inquiries direct as to whether any other Governmental body in Australia is requiring money, since there is plenty of money available on the same terms.