THE“VOLUNTARY” LOAN.

Manawatu Herald, Volume XXXIX, Issue 1711, 12 May 1917, Page 4

THE“VOLUNTARY” LOAN.

A dual significance attaches to the “voluntary” loan which has been made by the United ‘ tales to Great Britain. It indicates firstly America’s eagerness to be of practical assistance in pressing the conflict ugainst the Germanic Powers. It also reveals an abounding confidence on the part of the States Treasury that the financial resources of (he country will prove ample for their own requirements arising from the prosecution of the war, and, more, will leave available a surplus of funds, which evidently is to be placed at the disposiil of the Allies. The spirit which Ims prompted (he granting of this loan of £40,000,000, quite as much as the largeness of the sum of the advance, evidences the sincerity of the friendship of the United States, and til once removes any lingering remnant of the erstwhile suspicion (hat her policy wtis to pursue the dollar and to preserve peace til no matter what price. The terms of the £40,000,000 loan were not conveyed in the cable messages. It must not be supposed that the credit thus established in New York on account of Great, Britain represents anything in the nature of a free gift, but it may be assumed with reasonableness (hat the interest rate to be levied by the lenders will be nearer fit per cent, than the •') to 5A per cent, range which had become the customary basis of borrowing between the two Powers prior to the junction of their forces against the European foe.

Kurland's hast , previous loan operation in New York wns an issue early this year of £50,000,000. of which £20,000,000 lias a twelve months’ currency and the ha lance a tenure of two years, the interest rate being 51 per cent. The minimum subscription price was tixed at 00.52, and interest for the one-year notes, and 09.07 for the two years’ maturity, (hose rates being' equivalent to a 0 per cent, return to investors. Ah unusual feature in connection with this operation was that the notes were to be convertible at holders’ option, prior to maturity, into a British Government 51 per cent, twenty-year bond. The collaterial security for the new notes comprised stock, etc., to the amount of £00,000,000, half of which was to be American or Canadian corporate or municipal issues, the remaining portion consisting of obligations of Australia, India, Argentine, Chili, and other countries, with some bonds of-British dividend-pay-ing railways. Inclusive of the £40,000,000 loan now announced, the borrowing of Great Britain dn the United States since (he autumn of 101.1 have reached an aggregate of £268,000,000.