CONVERSION LOAN

Ashburton Guardian, Volume 53, Issue 133, 17 March 1933, Page 5

CONVERSION LOAN

TOTAL OFFER OF £84,435,922, OVER 73 PER CENT OF WHOLE, QUESTION OF INTEREST RETURN. ! (Special to the "Guardian ") WELLINGTON, This Day. The provision that has. been made to meet cases where, it is claimed", conversion of' Government securities will impose real hardship was discussed today by the Minister of Finance (the lit. Hon. J, G. Coates) when ho announced ihat applications and promises to convert had reached a total of £84,435,922, or over 73 per cent, of the whole internal debt. Offers covering a further £3,000,000 have been received during the last 24 hours, and the number of notices of dissent is still negligible. Mr Coates pointed out that the Conversion Act made provision for holders of Government securities who might suffer undue hardship, as a result of conversion, to apply through the Treasury to the Public Debt Commission to purchase their securities at a price above the market price, but not above par. Where such application was made the holder had first to convert \ his stock, for the Act gave the Commission power to purchase new securities only.

"The main difficulty that will have to face investors who redeem their money in this way will be the difficulty of finding other suitable investments," said the Minister, "considering that conversion was undertaken with "a view to reducing interest charges to a new low level of 4 per cent. Investments as safe and sound as Government securities and yet offering higher returns will not be by any means easy to find. Even under .to-day's conditions, when the market might have been expected to react unfavourably to the conversion operation, Government securities have maintained their .values and are readily saleable. It will probably be.better for small in-, vestors to retain their Government investments until they are actually in need of the money and then sell them on the open market, ra.ther than to make immediate application for redemption'and then have to invest in some other stock that is not so safe. The best safeguard they have at present is the marketability of their Government stock, and while that exists there seems really .very little need for any hardship provision at all.' Many bondholders who have been unable to take advantage of the offer of free advice given by stockholders, bankers and officials of the Post Office have had great difficulty ini filling in their application forms and describing their stock or debentures. The Treasury wishes it made known that any holder in this position need only sign "the' conversion foim r fill in his full name and address, .and post it with relative documents and they will do the rest. ' §