DOMINION LOANS.

Hokitika Guardian, 2 July 1925, Page 4

DOMINION LOANS.

sriori.n xew zeaeaxd fin to AMERICA ? WEU.IXfiTOX, -Tiuio :«t. Opinions have 1 ■ n collected in Wellington banking circles regarding raising loans in foreign connlries. The resnit is to show that Ininkers do not consider it sound policy, local borrowing—even if restricted—being preferable. One hanker informed a “Rost" representative that in his opinion it was undesirahle in principle for any British dominion to go to a foreign country for loans. Trite, there were precedents furnished hy Queensland and Xew South Wales, hut the principle held good. The exchange rate was virtually at par. hut if the pound sterling declined in Xew York, as it ultimately might, the meeting of interest due and payable there would he a serious matter for a borrowing dominion. The only way interest payments could bo met would he hy export of goods, but the United States balance, so far as Xew Zealand is concerned, is against us and likely to lie against us. Tt is the same in Australia. The tin.- | fortunate reception given to the last i Xew Zealand loan and other Dominion loans raised in London, had given underwriters much to think over. They would have got rid of the loans, of course, by this time, but it was evident that London, for ti e present, was disinclined to absorb further Australian issues, yet it was strange how much British money was available for investment in foreign countries overseas. Argentina 'and Brazil far instance. Of course, those investments gave a higher yield, their terms were more attractive, and labour troubles were probably less acute in South American countries than in. say. Australia.

NEW ZEALAND’S LAST LOAN. j Another hunker thought it regret- j table that a British Dominion should have to go to a foreign country for supplies. “There was no doubt about it—the recent reception of Australian j and the last New Zealand loans float- i ed In London were chilly, to say the least of it. The last New Zealand loan J was not good business' for this conn- j try.” he said. “The heavy percentage I of the issue loft on the underwriters’ j hands was as unfortunate for us as for them, more so for our reputation, because underwriters had ways and means of disposal of such investments as the public does not fall over itself to lake up when the subscription lists are opened. I am sure that the last New Zealand loan, which proved a trust in London could have been raised here at oil per cent, issued at, say £O9. It was offered in London at t; per cent, issued at L'Ob. We could have done hotter here. The loan would have cost less to raise, and the interest would have circulated in the Dominion. There is plenty of money avaduble for investment. Look at the position occupied by the Government war loan and other gilt-edged securities, as they appear in Stock Exchange lists, ami if we cannot raise all we ask tor here, then let us cut our coat according to our cloth, and retrain fiom going to London for a ye in' or two.