Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image
Article image

THE CONVERSION PLAN

AUSTRALIA'S BIG LOAN

SHIPMENT OF GOLD

(From "The Post's" Representative.) SYDNEY, 2nd July.

"With the broadcast appeals throughout Australia this week.by the Prime Minister (Mr. Seullin), tho Federal Treasurer (Mr. Theodore), and the Leader of the United Australian Party (Mr. Lyons), it may be said that the campaigu for the great conversion loan has been opened. Tho conversion of all interior loans with the object of reducing interest all round to 4 per cent, is the most important part of the plan adopted by the Premiers' Conference in Melbourne last month, with tho object of rehabilitating Australian finances. AH the oGvernments realise the big task that is ahead of them, and that publicity will play a vital part in securing that co-operation that will be essential to success.

Tho total of Government debts (Commonwealth and States) domiciled in Australia is £556,000,000, but the nj}.pros.isaale amount for conversion into

consolidated securities of tho Conversion Loan is £196,000,000 less than that. Here are particulars of the amounts that must be deducted: — Holdings of Commonwealth and State Savings Banks, maturity dates of which are subject to arrangement—£ll7,----000,000. Tax free securities held by public and Governmental authorities other than savings banks, maturities of which will remain as at present —say £50,000,----000. Treasury bills held by banks which will not bo converted into long term securities, £22,000,000. Securities representing investments of overseas trade money, for which short-dated securities may be issued— say, £7,000,000. MATURING DATES. Undor. the Act ten maturing dates have been provided, and the amount maturing at each fixed dato will be £36,000,000. It is pointed out by Mr. Theodore that the manner in which the new maturity dates have been fixed will enable a better spread of interest payments over the various months of each year. The necessity will be avoided of storing up money i'or the payment of large sums at inconvenient periods. The Treasurer considers that it should be possible to increase the maturities of 1938, 1941, and 1944, by, say, £20,----000,000 in each case, making the total redeemable in each of these years, £56,000,000. Interesting British parallels for the debt conversion that Australia is about to attempt have been found by Mr. Theodore. In 1832 the British. Chancellor converted Navy and other 5 per cent, stocks amounting to £152,000,000. The holders were not asked to assent. The Act provided that those who did not dissent should be assumed to have assented to the terms proposed. In 1824 the British Government dealt with £75,000,000. The object then was to reduce the interest from '4 per cent, to 3$ per cent. In. 1830- £154,000,000 was converted from. 4 per cent, to Si per cent. A total of £558,000,000 was dealt with in like manner in £888. Under the authority of the Act recently passed by the Federal Parliament, £5,000,000 in gold was shipped from Sydnoy for London, this week to pay Australian Treasury bills discounted on the London market and due on 30th June. Pending the arrival of the gold in London tho bills will be taken, up hy the Commonwealth Bank, assisted by the various Australian trading banks. As the gold reaches London it mil be used to replace the funds of the banks. The shipment of the gold was the only way in which Australia could escape default. The shipment of the gold will not have any immediate effect on. the high rate of exchange between Australia and London, but should do a great deal to restore confidence. SUCCESSFUL ADJUSTMENT. In a statement this week the chairman of the Commonwealth Bank. (Sir Eobert Gibson.) said: "It may bo of interest to call attention to the way in which unfunded Australian debts in London have been dealt with since the Premiers' Conference in Melbourne last August. At that time a total of £18,----000,000 was owing to other than Australian banks. A sum of £8,000,000 of this was owing to a London: bank , and £10,000,000 short-dated treasury bills had been discounted on the London market. The amount owing to the London bank has since been reduced to £5,000,000. Treasury bills amounting to £5,000,000 were paid off by the Commonwealth Bank in March last, and with the payment on 30th June the total owing to other than Australian banks will then be reduced to £5,000,----000, as compared with £18,000,000 owing last August. This readjustment has been accomplished.during a period of acute financial stress throughout the world, and during a period when the collapse in the price of raw materials and cereals had greatly reduced the value of Australian products. It has, moreover, been carried, out during^ this difficult period without recourse to assistance from, other than Australian banks."

, When millions in gold coin passed through the streets of Sydney on Tuesday last on their way from the bank to the wharf nobody took the slightest notice. Tho coin, placed in numerous small boxes, was loaded on to a motor lorry, and there was nothing to indicate the value of the cargo. There were neat steel bands about the little white boxes, and on each there was a big red seal. It was noticeable that the wharf labourers treated these boxes with a little more reverence than usual, but there was no fuss, no'armed guard, no scowling at onlookers. It was a tribute to the respect for thelaw in Australia.

This article text was automatically generated and may include errors. View the full page to see article in its original form.
Permanent link to this item

https://paperspast.natlib.govt.nz/newspapers/EP19310708.2.59.6

Bibliographic details

Evening Post, Volume CXII, Issue 7, 8 July 1931, Page 10

Word Count
890

THE CONVERSION PLAN Evening Post, Volume CXII, Issue 7, 8 July 1931, Page 10

THE CONVERSION PLAN Evening Post, Volume CXII, Issue 7, 8 July 1931, Page 10