The Manawatu Daily Times The Loan Conversion

Manawatu Times, Volume LVI, Issue 7106, 15 March 1933, Page 6

The Manawatu Daily Times The Loan Conversion

11l times of national crisis New Zealanders have always shown themselves ready to sacrifice themselves for the good of their country, and signs are not wanting that they will run true to form in the test now being applied by the Government’s appeal for assistance in its great loan conversion scheme. Already the response has been most gratifying, and it is quite evident that the great majority of bondholders are converting not to serve their own ends but from a high feeling of public duty.

One inevitable and far-reaching result of conversion will bo the introduction of a lower level of interest over the Avhole held of investment. Government loans do not represent the only quarter in which millions of money are tied up. It is well known that many millions are locked up in other safe securities, where they are being held until the revival in trade or overseas prices make it wise to invest in productive schemes.

When the success of the conversion is fully demonstrated and there seems little room for doubt on this score—a most gratifying return of complete confidence should be achieved. Then there should be a loosening of money and the release of funds for industrial, mortgage, manufacturing and other enterprises which employ brains and brawn in their functioning. There is ample evidence in New Zealand of the possession of large funds by companies and individuals who arc awaiting openings, but satisfactory returns must be assured. It is an accepted fact the world over that the sooner idle money is put to good use the better, but to bring this about there must be confidence.

Much has been said concerning the alleged hardship which loan conversion will impose on small bondholders. But since the passing of the Debt Conversion Bill, stock exchange quotations for Government bonds show an advance. This means that bondholders may dispose of their bonds at a good price should they wish to do so. The fact that the Stock Exchange which is the recognised channel for dealing in Government securities, is still active in the matter of sales of existing Government securities which are necessarily subject to the conversion operations, is sufficient evidence that confidence in the securities is well maintained.

The upward tendency of Government stocks in New Zealand is all the more satisfactory because of the fact that the New Zealand money market is not nearly so sensitive as those of larger centres, where so many securities are dealt with in a complicated manner.

A happy feature about the conversion as far as it has gone, is the cheerfulness with which practically every holder has accepted the new idea. Obviously they realise that this is a national effort, in which they must play their part as New Zealanders with their country’s honour at heart. The effect of this ready response in countries overseas must be beneficial to New Zealand credit and national sense of responsibility. A leading London newspaper, at the time of the British conversion scheme, in its editorial columns quoted Prince George’s declaration that the successful accomplishment of the conversion would “greatly fortify our finances and prove of lasting benefit, not only to the country but to the whole Emprie.”

It should be the aim of investors throughout the Dominion to ensure that New Zealand’s effort will be an overwhelming success and thus indicate to the world in general that the citizens of this fair Dominion have a full sense of the duty they owe to their SQimtry.