SETTLEMENT OF N.Z. LOAN

Dominion, Volume 32, Issue 257, 28 July 1939, Page 9

SETTLEMENT OF N.Z. LOAN

Six-Year Conversion At 31 Per Cent REDEMPTION FROM EXPORTS Warning Against Rash Future Policy By Telegraph.—Press Assn.—Copyright LONDON, July 26. Applications are being invited for a £16,000,000 New Zealand conversion stock (1939-45) at £99, the rate of interest being 3|- per cent., payable on January 1 and July I. Holders of the 1940 stock may exchange their holdings, receiving a cash payment of £1 per £lOO. The lists will close on August 5. New Zealand undertakes to provide redemption from funds accruing from exports, sufficient to meet instalments of £2,000,000 in 1940 and £3,500,000 each for the four following years. The city editor of the “Daily Telegraph” (Independent Conservative) considers that the terms of the conversion ensure an adequate resjonse from investors and financial institutions. The financial writer of the “Daily Mail” (Independent), considers that the loan settlement is proof of New Zealand’s willingness to face facts and it is a vindication of the view that :t financial crisis in the Dominion at this juncture must be avoided. Must Prove Worthiness, In the view of the “News Chronicle" (Liberal) it was impossible to sdenre the underwriting of the loan, but arrangements were made by which a full subscription, either by conversion or by cash, is now assured. “The Times” (Conservative), in a leader says that the British Government is putting its hand in its pocket on behalf of New Zealand to such an extent that it cannot be reproached with lack of generosity. The Dominion must prove its worthiness if future assistance is more easily to be forthcoming. There is no desire to interfere with principles in New Zealand, but the Dominion must recognize that it cannot again saddle Britain with the burdens of her own extravagances and must order her affairs accordingly. The £17,000,000 falling due in January, 1940, was first issued in 1889 at 3) per cent., and in October of that year £2,700.000 was taken up at an average of £9,> 16/8 per cent. The balance was issuee from time to time in the conversion of debentures issued at different times, but the maturitv date was the same, January, 1940. From the terms of the conversion operation, as outlined briefly above, it would appear that proceeds of New Zealand exports for the next five years are to be used in the complete redemption of the £17,000.000 loan in five years from January 1, 19-40.