A COMPLIMENT

Hawera Star, Volume XLVIII, 26 November 1924, Page 5

A COMPLIMENT

INTEGRITY OF BRITONS

ACKNOWLEDGED BY AMEBICA,

A BANKER’S TRIBUTE,

(By Telegraph— Special to the Star.) WELLINGTON, Nov 26 Y ° rk WoUld be cn ly too de--5 !?,. to arra “ge for loans for the Australian or New Zealand Governments or municipalities,” declared Pierpont Y. Davis, of New York, v£epresident of the National. .City Corifpany, aii affiliated company of the Natmnal City Bank of New York, who is m Wellington, passing through on his way to Australia. It was the National City Company that facilitated the flotation of two loans for the State of Queensland in America some years ago a transaction that caused much- discussion in Australia and in the City of London at the time it was effected. Speaking of the two Queensland loans floated m New York, Mr Davis said: ‘We knew perfectly well what we were doing. We knew we were dealing with an Anglo-Saxon people, to whom repudiation or anything suggestive of it is unthinkable. The American publie did not hesitate for a moment in taking up those Queensland loans, and the National City Company had no hesitation in recommending them. The result has been, if my memory is accurate, that loans have never gone below their issue prices, which were par. We know little of Labour Governments in America, but we do believe that any Anglo-Saxon • Government, Labour or otherwise, recognises that if it borrows a dollar it has to pay back that dollar. The. first of these Queensland loans, which Was to the extent of 12,000,000 dollars, bearing 7 per cent, interest, was floated in October, 1921. At that time practically every foreign loan placed in •New York bore 8 per cent, interest. The second loan for 10,000,000 dollars was sold in February, 1922, and. bore 6 per cent, interest. Our money market had eased in the meantime, but 7 per cent, was then the going rate. I mention the fact that the Queensland Government borrowed their money in New York well under the levels prevailing for other foreign bonds as a further proof of the high regard of the American investor for the obligations of the British Dominions .and States. In taking up the loans of foreign countries every conservative banker must take the question of the moral risk into aecouut. During the last five years my company has underwritten alone, or with associates, more than 500,000,000 dollars of foreign securities, and the moral risk has had to be most carefully criticised. Holland supplies a striking instance of the high value of national inetgritv. We knew that Holland had recently had Budget deficits. Nevertheless that did not deter us from floating a loan, and American investors from subscribing to a loan of 40,000,000 dollars for the kingdom of the Netherlands. We did so in confidence, because Ave knew, as all the world knows, that the Dutch are absolutely honourable and that their integrity as a nation is beyond reproach. We have lent great sums to Canada for the same reason, realising that in point of honour Great Britain and the British Dominions' are as one. Canadian securities wore sold and still sell as second only to those of Great Britain itself. The British Empire has been built upon the great broad base of the sanctity of the contract. Mr Davis was- asked if he feould throw any light on the exchange, problem, and he confessed he was unable to do so. He is visiting New Zealand and Australia for pleasure, and he .is deeply impressed with the great advantage it would be to American financial and commercial men if they made.more. frequent visits to Australia and New Zealand.

“Your interests and ours have much in common,’’ he concluded, 1 and_• I cannot help thinking that such visits would be of mutual benefit.”