WITHIN THREE DAYS

Evening Post, Volume CXV, Issue 68, 22 March 1933, Page 5

WITHIN THREE DAYS

LOAN CONVERSION

STATEMENT BY PRIME MINISTER

An appeal to Government bondholders to give their unbounded support to the conversion scheme and ensure its complete success was issued this morning by the Prime Minister (the Et.

Hon. G. "W. Forbes).

"From a combinationof causes, the Dominion is passing through a serious financial and economic crisis that ia adversely affecting, more or less, every, one of our people," said Mr. Forbes.

"These causes are largely beyond our own control, and • have arisen principally because the prices of ourj products sold on the world's markets have been drastically reduced. The result has been a tremendous shrinkage in the national income, producing a deficit in the Budget, an unprecedented amount at unemployment, and depression, in every sphere of our business life.

"During the past two years the Government has taken far-reaching measures to remedy this situation, but by themselves they have proved insufficient to counteract the steep decline in our income, and to enable trade and industry to be carried onwith any degree of success. As we all benefited during our national prosperity, so must ive now all share in our day of national adversity. All people receiving money from the public purse had to be asked to share in the general sacrifice. Pensions, salaries, and wages have beeu reduced; and today, however much we may have wished to avoid it,, we have had to appeal to all Government bondi holders within New Zealand to accept a conversion of their stock to interest rates 20 per cent, lower than the existing rates.

FOB THE COUNTRY'S GOOD,

' "Bondholders have not been singled out in our appeal for self-sacrifice, and

what we have asked of them we believe to be essential for the country's good. The conversion has involved the huge sum of £11^,000,000, and represents for the New Zealand Government an

undertaking of unparalleled magnitude. It is not simply an expedient to relieve our own budgetary problem, but it is part of a wider plan to reduce interest rates in the Dominion to a new low level, and so to ease- the burdens which are "stifling'many of our' industries.

"The effort we are making is &s national effort, for every citizen stands to gain from this great public saving and r from the benefits which it will confer on New Zealand. The holdings of the debt—laTge, medium, and small

—are so widespread in every section pf the community that it is almost impossible to distinguish between the holders of Government bonds and the nation as a whole. Whatever benefits

the nation will assuredly benefit also the holders of New Zealand Government stock.

"Kepresentatives of public opinion of every shade are united in. commending the scheme. Bankers, stockbrokers, insurance companies, leaders o£ industry and commerce are all agreed that the Government's plan is wise and courageous, bringing relief to the national Budget, hope of new chances for trade, and yet making a fair business offer to the investor. As Prime Minister-1 am speaking of the national interests, and unquestionably the national interests demand that every, bondholder should convert. As for the other side of the. bargain, I think it may be said that the terms chosen, are fair and equitable as between the bondholders and the country; and the fact that the shrewd and instructed financial opinion represented by tho banks and large commercial firms has been the first to approve and adopt the schema should reassure smaller investors that these terms indeed are fair and equiti able. \

OVER NINETY-THKEE MILLIONS.

"We are now three days from the end of the scheme. Nearly £93,000,000 worth of stock has been " voluntarily, offered for conversion, which means that there is still more than £20,000,000 to be accounted for in. these last fow hours if the scheme is to be a eompleta success. The fact that the notices of dissent cover only the negligible amount of £300,000 indicates that the people of New Zealand are behind their Government in this national effort. Apparently a great many small investors, knowing that their assent will be taken for'granted so long as they, do not dissent, have not troubled so far to take an active part in convertingtheir bonds. I must urge them not to accept passively the sacrifice that is asked of them, but to do as the vast majority of bondholders have already; done and willingly ofier their stock to the Government for conversion. I feel I cannot over-emphasise the value of an overwhelming response from our people in favour of conversion. It will give strength to the Government at Home; abroad it will improve our credit aiid prestige, and in doing both these things it wDI prepare the way for a return of prosperous conditions for all our citizens. I appeal to Government bondholders as I have appealed to other sections of the community in the past; to help bring back prosperity, to make the wheels of industry turn again, and

to relieve their country of burdens .which it has. borne - honourably though they have oppressed it sorely."'