STATE SECURITIES

Evening Post, Volume CXV, Issue 64, 17 March 1933, Page 8

STATE SECURITIES

LOAN CONVERSION

STATEMENT BY MINISTER

The provision that has been made to meet cases where- it is claimed that the conversion of Government securities -will impose real hardship was discussed today by the Minister of Finance, the Et. Hon. J. G. Coates, when he announced that applications and promises to convert had reached a total of £84,435,922, or over 73 per cent.' of the whole internal debt. Offers covering a further £3,000,000 have been received during thelast 24 hours, and the number of notices of dissent is still negligible. Mr. Coates pointed out that the Conversion Act made provision for holders of Government securities who might suffer undue hardship .as a result of conversion to apply through the treasury to-the- Public Debt Commission to purchase their securities at a price above market price but not above par. Where- such an application was made the holder had first to convert his stock, for the Act gave the commission power to purchase new securities only. "The main difficulty that will face investors who redeem their money in this way will be the difficulty of finding other suitable investments," said the Minister. "Considering that the conversion was undertaken with a view to reducing, interest charges to a new low level of 4 per cent., investments as safe and sound as Government securities and yet offering higher returns, will not be by,any means easy to find. Even under today's conditions when the market might have been expected to react unfavourably to the conversion operation, Government securities have maintained their-values and are readily saleable. It would probably be better for small investors to retain their Government investments until they are actually in need of the "money and then sell them on the open market rather than to make immediate application for redemption and then have to invest in some other stock that is not so safe.. The best safeguard they have at present is the marketability of their Government stock, and while that exists there seems really very little need for any hardship provision at all."

Many bondholders who have been unable to take advantage of the offer of free advice given by stockbrokers, bankers, and officials of the Post Office have had great difficulty in filling in their application forms and describing their stock or debentures. The Treasury wishes it made known that any holder in this position need only sign the conversion fornf, fill in his full name and address, and post it with the relative documents and they will do the rest.