LURE OF THE GILT-EDGE

Evening Post, Volume CV, Issue 91, 17 April 1923, Page 6

LURE OF THE GILT-EDGE

It is very comforting no doubt to holders of gilt-edged securities in Great Britain and the Dominions to mark their popularity, to notice (as the cablegrams record) that British 5 per cent. War Loans have rißen £5 since October last, and that most similar securities are in demand at a premium. But there is another Bide to the picture. Keference waß made in the same message to the decline of the value of sterling in New York, indicating inter alia that the economic balance as between America and Britain is still more agai^t us.

Nor are political atmospheric conditions exactly "anti-cyclonic," as meteorologists put it. The availability of so much money for giltedged investment means a want of equal confidence in investments of a trading and industrial character. The returns by way of interest on what are regarded as gilt-edged securities when bought in the open market are usually very low. There' are in New Zealand some investments returning under 4$ per cent, on stock exchange quotations, but they are often preferred to others returning 7 per cent, to 10 per cent., or more, with wide margins of security. So it is with the gilt-edged security in London. It is preferred to industrial and trading ventures, which, with the settlement of affairs and improvement of exchanges in the United States and in Central European countries, would call for an enormous amount of capital and greatly reduce the acute unemployment and unrest in the Mother Country.