RELIEF FOR POSTERITY

Hawke's Bay Tribune, Volume XXIII, Issue 77, 13 March 1933, Page 5

RELIEF FOR POSTERITY

EFFECT OF CONVERSION, YOUTH VITALLY CONCERNED. Young people who are inclined to regard the loan conversion as something which does not concern them, do not realise that they will benefit by it. Life at present is not treating them too well, and their minds are centred mainly on the probability of obtaining employment in a world which seems singularly destitute of jobs. It is not usually the habit of any present generation to worry much about posterity but rather to adopt the attitude of “let posterity look alter itself.” I’he fact is overlooked that posterity is with us now. The youngsters of to-day are the posterity of future years.

It is a fact, however, that within the next 15 years many Government loans which are now being converted would have been due for redemption. And, although elderly people of to-day may not be here, most of the younger generation will be alive. It would be an embarrassment to those who are now growing up and have had little say, if any at all, in public affairs, to be faced with the problem of redeeming loans at high interest rates. This redemption almost certainly could only have been carried out by creating new loans, and with the precedent of a relatively high rate of interest, the community of that- time would have been called upon to pay equally high rates.

Hitherto, in all national borrowing, posterity has usually been left to pay the piper, but in New Zealand’s debt conversion scheme posterity is being well protected. There will be little difficulty in renewing the new loan issue when they mature within the next 22 years.

And that is not all that conversion is doing for posterity. It also is spreading the dates of maturities over a range of years, extending from 1940 to 1955; and does this without any hardship to the holder of the stock so far as the availability of the capital is concerned. The stock may be sold on the market at any time, possibly at an increased cost, and certainly, on present indications, with very little loss of capital.

The alterations in dates of redemption mean that instead of tho country's internal loans maturing within 15 years—the earliest one being this year —the dates will extend from 1940 to 1955.

In future years, even- when prosperity smiles on them, the younger generation will have cause ”to be thankful for the service which loan conversion is doing for them. Nobody can predict what interest rates may be in 22 years’ time or at tho shorter terms of maturity. They may be higher or lower, but whatever they may be, the 4 per cent, rate to which all internal loans are being converted, should very closely approximate the rates which are likely to rule. It is a fair rate.

The youth of to-day has had a bad time, perhaps worse in the mass than any other section of the community. The world to them is a jobless one. But this will change. Soon they will be pressing on towards their goal of success, whatever it may be. And there is one thing which they will not be called upon to face, unfess something radically wrong occurs, and that is the redemption of loans at high rates of interest. With this fact before them, they should feel that in this respect at least their future is being taken care of.