NOT FLATTERING

Sun (Auckland), Volume II, Issue 568, 22 January 1929, Page 9

NOT FLATTERING

LONDON’S RESPONSE TO AUSTRALIAN LOAN

UNDESIRABLE REPUTATION,

(United P.A. —By Telegraph — Copyright) (Australian and N.Z. Press Association) Reed. 12.15 p.m. LONDON, Monday. The underwriters receive 84 per

cent, of the Commonwealth Loan of £8,000,000.

A high financial official at Australia House, commenting on the loan, says that the amount left with the underwriters was not unexpected, owing to the high issue price. The fact that the dealings in scrip closed at five-sixteenths discount after opening at five-eighths may be regarded as a tribute to Australia’s good standing on the London market. PAPER SOUNDS WARNING

The “Daily Telegraph” comments that the response to the Commonwealth loan was poor but no worse than was feared, and not flattering to the credit of the Dominion.

“The time has surely arrived when financial advisers should review the position," the paper continues. “Eighty-seven per cent, of the July stock, and 84 per cent, of the March stock was left with the underwriters. This is not a reputation to cultivate. The reluctance of the city to take up stock at the time of issue needs investigation. Either the price is too high or else there is an impression which certainly prevails that Australia borrows too heavily and too regularly. “It may be pointed out that as the control is In the hands of a central authority, and sinking-fund arrangements exist, the contention may be unfounded, but there is an element of doubt to which attention should be paid. “A rest from heavy borrowing is probably the best remedy. In due course the stock will doubtless be absorbed.