AMERICAN LOANS.

Hokitika Guardian, 27 November 1924, Page 4

AMERICAN LOANS.

NEW ZEALAND FAVOURABLY VIEWED. NEW YORK RANKER’S C< EMBLEMENTS. WELLINGTON, Nov. 2f>.

“New A’ork would he oiily too delighted to arrange loans for the Australian or New Zealand Governments or municipalities,” declared Air l’ierpont I!. Davis, of New York, vice-presi-dent of the National City Bank of New York, v.ho is in Wellington pausing through oh his way to Australia. it was the National C’ity Company that facilitated tlio llolntinn e>f two loans for Queensland in the United State’s 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 in New York. Air Davis said: “We knew perfectly well what we were doing. We knew with whom we were dealing—with an Anglo-Saxon people, to whom rcpmliatiou or anything suggestive of it is unthinkable. The American public did not hesitate for a moment in taking no those Queensland loans, and the National City Company had no hesitation in recommending them. I hi' result has been, if niv memory is accurate, that the\ Queensland loans have never gone below their issue price, which was par. We know little of Labour Governments in America, but we eio believe that any Anglo-Saxon Government,. Labour or other, recognises that it it borrows a dollar it lias to pay hack that elullar. The’ lirst of these Qui’onsland loans, which was an amount of 12.0Tt.000 eloL lars, bearin'' » tier f*e’lit. interest was limited in October. 1022. At that time practically every foreign loan phieeel in New York bore S tier cent, interest. The second loan, for 10.000,000 dollars was sold in February. 192;). and bore 0 per omit-, interest. Our money market bail eased in the’ meantime, hut 7 per cent, was the’ll the going rale. “1 mention tin l fact that the Queclislanel Government borrowed their monev in New A ork we’ll under the leve’ls prevailing for other foreign bonds as further proof of the high regard ot the American investor lor the obligations of British dominions and States. In taking tip loans ol foreign eolinti ies everv conservative* banker must take the i|UOstiiin of moral risk into account. During lit” last live tears my company lms umh’rwrilten alone, "i with associates, more than ."50M.000,000 dollars of foreign securities, and Unmoral risk has hail to he more carefully criticised. Holland supplies a striking instance of the high value of national integrity. We knew that Holland had recently hail Budget deficits, nevertheless that, did not deter us from limiting or the American investor from subscribing to a loan ol -10.000,009 dollars for the’ kingdom of the Netherlands. We did so in confidence. that the Dutch are ahsoluti’ly hiiiiinirnhle. that their integrity as a nation is hoyoml ivproai’h. “We have lent great sums it) Camilla for tlu* same reason, realising that ill point of honour Great Britain anti the British dominions are as one. ( antu.ja n securities soltl. and still sell, as .second only to those of Great Britain itself. The British Empire has been built upon the great broad base ol sanctity of the contract.”

Mr Davis was asked if lie e-oultl throw anv light on tlie exchange’ problem, and lie confessed that lie was unable to do so. lie is visiting New Zealand and Australia for pleasure, and he is deeply impressed with the great advantages it would he to American liunncinl and commercial men if they made more, frequent visits to Australia anil New /.calami. “Your interests ami ours have 1 iime'h in 11)111111011." he eiiiielmleel. “and I cannot help thinking that such visits would he of mutual heui'lit.”