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Hokitika Guardian, 31 August 1927, Page 2

A notable event last week was the announcement that the Australian Commonwealth Government has arranged to raise a 40.000,000 dollar loan in New York. This was preceded by the statement that the Commonwealth Bank was about to open an agency in the American capital. This appears to suggest a definite intention to accept the invitations that have frequently come from Fnited States financiers of

late, that Australia should make more u.sc of Uncle Sant’s abundant supply of gold and credit. There are some reasons why this move may seem opportune The first is that Britain’s supply of gold, so considerably depleted since the war, is insufficient to meet tTie heavy demands made upon it. Secondly, Australia’s borrowing in London has reached such a huge figure that British investors have looked coldly upon several recent loan applications. On the other hand, from an Imperial point of view, the present change of policy will seem unfortunate. Australia already has the same habit which New Zealand has, of purchasing from the United States considerably more than she sells to that country. This business lieing a distinct diversion from the British manufacturers weakens the Empire’s trading position and prejudices the value of the pound sterling. The payment of interest to New York instead of to London will further accentuate Australia’s adverse balance with TT.S.A. and will, to that extent, tend to increase tho Empire’s difficulties both in regard to finance and general trade. As to the loan itself, approximately £8.000,000, this was raised at 9S in five per cent, bonds, hut, just how this will work out in comparison with the last loan secured in London at tho same figure, will not lie known until the flotation charges, generallv higher in New York, are made known.