INTERNAL LOAN

Hokitika Guardian, 28 October 1932, Page 3

INTERNAL LOAN

• ' AUSTRALIAN PROPOSAL. SYD:L-,1/, October 20. Although there is complete official .silence 011 the matter' it aa.ll be- stated as a fact that negotiations have Leer commenced with the object of boating, on behalf of “the various Governmenri in Australia,'- a giemt internal! ' *lcria of at 1ea.5t..,£2(),00j,000,...aiid f ,jmssilily, £2;5,600,000. The actual aanount wil depend 011 the which'' the. loan receives from the investing puli/ lie. In certain financial quarters- it i; considered that' the,, tune ior float/hit , the loan is propitious, especially in , view' of .the success which attendee, the New South * Wales conversion operations in London. It is pointer out that in short term securities tilt trading banks aiidithe'Ccnnnidrivvealt.' Ranfc.(are carrying approximately £45,0.0,000; .In the main these bills hav* a currency of three months, and tlk onus of indefinite rcupw-al at ffequept intervals’, with 1 little: :v imni.daiat.e_ pkmspect of a -substantial reduction of the ao-gregnte, has become-most irksome Tor the financial institutions of tin country, rue (short terrii) debt of Australia at the close of that last fluancinl year 011 June 30th., was about £82,000,000. of which £37,000,000-was outstanding in London and the remainder in Australia. If portion of the new loan wa« 1 earmarked for . .liquidating some of tlie outstanding debt in. Australia it would not involve the withdrawal of “new” money-frri-nf the ) ciil market, t/fhe loifff .It would open the way to’ more work, and would ea e the great burden in ■ the banks as a result of Government finance:.

;T)ie matter of faising an internal loan rests with the Common wealth and all the States who act through the Loan Council—the one authority which controls call public finance in Australia The Loan Council may bo described as the most powerful institution ever built up* in Australia. It is the financial dictator, and all Governments must how to its decisions. There wars one Government which refused to do so—that led by Mr Lang in New South Wales. What happened to Mr Lang is a matter .of, history. The Council will meet again next week, and .the question, of raising internal loan will he the biggest one it will be called upon to face. In financial circles it is believed' that the local markets, would absorb £20,-. 000,0'X), but there is no unanimity on the question of terms. The rate of interest will bp determined by , the current yields of the 4 per ...cent, consols, -which, according to the latest calcub’tiqns, are a fraction below 4 percent.

A' Sydney cpbto yesterday stated that the Premiers’ Conference hrs abandoned its p,roposa,l for an internal los of £20,000,000, and decided to devote its attention to a, loan of from eight to ten million for public ..works.