BANK RATE DOWN

Evening Post, Volume CIX, Issue 56, 7 March 1930, Page 12

BANK RATE DOWN

NOW 4* PER CENT,

LONDON MONEY CHEAPER

■(.Received 7th March, 10.30 a.m.) LONDON, Oth March. The Bank of England rale has been reduced to 4 per cent. The announcement in the above dispatch indicates plainly enough the City's idea of the value of money in London today: Within recent years the rate of 4 per cent, ruled at 30th July, 1914 y when it was raised from 3 per cent., followed by rapid advances to 8 per cent. 31st July, a-nd when war was seen to be inevitable, to 10 per cent, oil Ist August, reduced to 6 per cent, a week later, and to 5 per cent, on 12th August, 1914. Since then the rate was fixed at 4 per cent, on 13th April, 1922; on sth July, 1923, and on 3rd December, 1925. Variations for 1929-30 have been as follow.— 7th February, 1929, 5% per cent.; 2Gth September, 6% per cent.; 31st October, 6 per cent.; 12th December, 5 per cent.; 6th February, this year, 4% per cent.; 6th March, 4 per cent. The news of the reduction of the bank rate to 4 per cent, was received with satisfaction in Wellington financial circles to-day as indicating easier monetary conditions in London. If the rate remains for any appreciable length of time at 4 per cent, it should make for a more cordial reception of Dominions loans and conversions that the London market has of late been able to extend. Stringency in London has been unfavourable for all Dominion and foreign loans except on relatively high terms.The British Government itself is at present raising a ffi per cent, conversion loan for an undisclosed'amount issued at '£95/ redeemable 1940-44. Last week Mr. Snowden,, Chancellor of the Exchequer, informed the House of Commons that no part of that conversion loan would be privately underwritten. Cash responses were bo satisfactory, he said, that the list was closed on 27th February, but a. part iwould remain open for a few days longer. Last November the London money market was taken by surprise on learning the terms of a British Government conversion loan, one of the biggest conversion schemes since the war, the amount involved exceeding £2,000,000,000. The issue •was at 5 per cent., redeemable 1944-64 for cash, and giving holders of the 5 per cent, war loan the opportunity of converting their holdings into this new stock. The limit of that loan was not stated, but at that time £2,184,000,000 of 5 per cent. war loan was outstanding.