USEFUL TEST

Evening Post, Volume CXXIX, Issue 16, 19 January 1940, Page 7

USEFUL TEST

CONDITIONS FOR LAUNCHING NEW LOANS

BOLD STEP PRAISED

(British Official Wireless.)

(Received January 19, 11.20 a.m.)

RUGBY, January 18.

The large- conversion operation announced yesterday, although it has nothing to do with, new loans to finance war, is regarded by the Press as a useful test of the condition's in. j which these" new loans must be launched. J There is general agreement that the j Government was well advised to take the opportunity of liquidating the 1924 loan. '

As to the terms of the conversion, "The Times," which describes it as a real economy,' says that it cannot, of course, be pretended that the new offer does not rely to some extent on patriotic sentiment. Such sentiment is a factor in market conditions on which the Government has to rely to a greater extent than it did in the last war. It adds that it would be unsafe to take the character of the new 2 tier cent, security as any indication "of the terms on which further loans will be offered,, but' it can be said that this addition to the volume of Government securities redeemable at a fairly early date should not be unwelcome to the large financial institutions and should be, easily dfgestible by them. ;

The "Daily Mail" says that the Government has taken a bold step, which is likely to strengthen the whole, basis of Government finance during the, war. The financial position is sound. There ,is no need to offer, high interest rates to attract new money when the time comes to ask for it.