TORRENTS OF PAPER

Hawke's Bay Tribune, Volume XXIII, Issue 74, 9 March 1933, Page 8

TORRENTS OF PAPER

RUSHING OUT AND IN.

WHAT LOAN CONVERSION MEANS

The following statement has been received from the Minister of Finance with the request that we give it publicity :— The holders of bonds and stock in Government loans in New Zealand to whom appeals to.convert are now being made, are scattered far and wide. It has been a great task, on the part of Treasury and Post Office staffs, to reach them all in quick time, with prospectuses and application forms for transferring to the new issue. No less than 310,000 letters addressed to householders have been sent out, and before they could be despatched the forms had to be printed. The Government Printer and his men had a hectic rush, and the rush did not cease with the printing. Post Office delivery waggons were standing in the yard and into these were loaded the filled envelopes in bundles, to be distributed through all the mails.

While the How of returning application forms, duly filled in and signed, does not yet equal the torrent of paper which rushed out last week-end, the volume is steadily increasing. It conies from post offices, Treasury offices, banks and stockbrokers offices, ind the banks and stockbrokers are doing this work for their clients and others free of charge in a patriotic effort to ensure New Zealand’s good name and honour in the eyes of the world.

Since there are only 80.000 holders of bonds and stock in the Government loans, this large number of letters seems extravagant but of the 80,000, only 40,000 holders have their names and addresses registered at the Treasury these being the holders of inscribed stock. No record is kept of the bearer bonds. The whole operation of converting £115,000,000 worth of Government loans to an issue with a flat rate of 4 per cent., colossal as it is, may seem but a mechanical process of finance. Yet there is romance in this as in every human effort. People of all classes hold the bonds, the matter is discussed and discussed again by thousands of interested families who are glad to con. vert and so help New Zealand. In times of stress and trouble the national spirit and thought are uppermost. These are the factors which make the huge task possible and send the stream of letters hack to the Treasury, where men work niglj,t and day to keep things in due order. New Zealand’s conversion scheme is just as big, in proportion to population, as those cf Great Britain and Australia, which were so enthusiastically taken up. New Zealand is enthusiastic, too.

Speaking of the British scheme, a leading London paper said: “The conversion scheme will go down as one of the most courageous strokes of finance . . . . The first result in England has been a sudden jump upwards in all sorts of securities, a movement that is a sure indication that the business community approves of the proposal. •Industry, indeed, will benefit all round. When the conversion scheme is out of the way it will be possible to float debenture issues on a 4 per cent, basis, instead of the 5, 6 and even 7 per cent, that many firms have had to pay since the war.”

The result of al] this financial, offi. cial and postal activity will be more work for the workless. Money will turn from the gilt-edged Government bonds, now that the interest is lower, into channels where greater profits can be earned. Everywhere there aie businesses and enterprises waiting for money to finance them. This has been proved in other lands. The New Zealander has as much vision as the people of these countries, and as much patriotism. The response to the country’s appeal to convert is just as spontaneous as in other places.