LOAM FROM

Taranaki Daily News, 12 October 1921, Page 5

LOAM FROM

QUEENSLAND FLOTATION. INTEREST SEVEN PER CENT. UNFAVORABLE TERMS. ' By Telegraph.—Press Assn —Copyright Received Oct. 11, 5.5 p.m. London, Oct. 10. American advices received in London state that the Queensland loan was issued at a minimum price of 99, less lt£ per cent, brokerage. The loan works out at £7 7s 4d per cent. It is repayable in twenty equal annual instalments, and repayment after the first five years must be at the rate of £lO2 10s per cent. A high financial authority points out that so far from stabilising exchange the loan will have the opposite effect, because, calculating discount, interest, brokerage and other charges, besides the annual repay- ; ments at a premium, Queensland will re- : turn £250 for every £lOO received. The Morning Post says it is surprising I that Queensland’s borrowing should be deI nied officially when the issuers are actually offering bonds for subscription. Equally curious is the claim that the loan is issued l on a dollar basis in order to obtain an advantage in exchange, as the Government will convert the loan to pounds sterling. The loan will cost the borrowers £7 2s i per cent, and must be paid in dollars, what- , ever their price. The only possible ad- • vantage will be that derived from the re- ! covery of American exchange, which will reduce the annual interest and lessen the cost of repayment. It is equally possible that the exchange may fall. No Bricisn colony has yet paid seven per cent, for a loan from Britain. Meanwhile the firmness of American exchange is a disadvantage to Queensland as regards meeting her London liabilities. ATTITUDE OF VICTORIA. NOT DESERTING LONDON. Received Oct. 11. 9.30 p.m. Melbourne, Oct. 11. The Treasurer (Mt. McPherson), questioned regardihg the possibility of Victoria negotiating a loan in America, declared the Government would stick to London for loans. OPINION IN MELBOURNE. REGRET FOR THE MOVE. Received Oct. 11, 9 p.m. Melbourne, Oct. 11. The Federal Treasurer considered Queensland’s American borrowing regrettable, firstly, because it is the first time an Austraian State has gone outside the Empire for financial accommodation, and secondly, the rate of interest at 7 per cent, for Government securities is very high.—Aus.-N.Z. Cable Assn. * Received Oct. 11. .9 p.m. Brisbane, Oct. 11. Mr. Theodore stated that it’ was a straight-out dollar loan, interest and sinking fund being on a dollar basis. Thus Queensland will get the benefit of an inevitable improvement in the rate of the dollar exchange over a period of twenty years.—Aus.-N.Z. Cable Assn. PLENTY OF MONEY. MORE DEALS _ SOUGHT. Received Oct. 11, 9 p.m. Washington, Oct. 10. The Australian Press Association learns authoritatively that Wall Street financiers, attracted by the success of the Queensland loan, are making inquiries direct as to whether any other Governmental body in Australia is requiring money, since there is plenty of money available on the same terms.