NO PARALLEL.

Auckland Star, Volume LXIII, Issue 264, 7 November 1932, Page 7

NO PARALLEL.

BRITISH FINANCING. Conversions Carve Millions Off Expenditure. BAD TRADE REMAINS. (United P.A.-Electric Telegraph-Copyright) (Received 10 a.m.) LONDON, November 6. There is no parallel in the financial records of any country to the ease with which the Treasury placed the loan of £300,000,000, crowning a stupendous series of operations by which nearly 37 per cent of Britain's internal debt was converted, transferring a large proportion, from the unfunded to the funded category.

The annual gross interest bill will be reduced from £117,500,0,00 to £70,000,000. The net saving, allowing for the reduced receipts from income tax, cannot be under £30,000,000. . The Treasury can now rest for at least 18 monthe before other maturities calling for further obligations arise.

The "Financial News" expresses the opinion that a grateful nation will not be niggardly with K.B.'e, or even with baronies. Nevertheless the Government's chief adjutant was "General Depression," assuring a sterile glut of idle funds. Bad trade remains despite the conversion, for which it is hoped the Government will bring positive proposals to the World Economic Conference, which unhappily will not be held until the spring. It is anticipated that the Preparatory Committee will sit in three weeks and adjourn till January, delaying the full "conference. '.

The Stock Exchange is uncertain following the conversion. A turn from long to short dated stocks and a move towards industrial stock were observable.- There is a belief that gilt-edgeds have now reached the top prices and the reinvestment of gilt-edged profits is likely to provide a fair market turnover for a considerable period. Indices show that one .unit of gilt-edged is now worth approximately two units of industrials.

Britain's Debt to America. The authorities are reported to be preparing for the repayment of the American debt in December. This amounts to £30,000,000, and at the present rate of exchange is equivalent to approximatelytwo years' British exports to America. The present level of Britain's adverse balance of trade with America, exclusive.of debts, is estimated at £35,000,000. Consequently the debt must be paid from the Exchange Equilisation Fund, weakening ihe control-of exchange.

Nevertheless the budgetary embarrassment of France and the United States is encouraging "bullish" speculators.

"The Statist" says that when the seasonal pressure on sterling decreases it may be difficult to prevent a substantial appreciation. Groups of lead manufacturers in Britain are pressing the Government to force the Empire lead producers to supply products at prices ensuring a continuance of high manufacturers' profits which for years have restricted the consumption of the metal. It is learned authoritatively that the Empire producers prefer free trade in lead and the lead manufactures to a system under which they (the- producers) v will be compelled to supply the manufacturers at their own figure. *