Dramatic Slump On London ’Change

Northern Advocate, 27 October 1949, Page 5

Dramatic Slump On London ’Change

LONDON, Wed. (11.30 a.m.)—British Government securities slumped on the London Stock Exchange for the second successive day, following the announcement of the Government’s economy cute. All the £1,784.000.000 of nationalisation stocks which the Labour Government has.issued since the Bank of England was nationalised In March, fell to new low records.

Treasury stock then issued at 100 to the dispossessed owners of the bank, fell to 8U this morning. Transport stock issued at the beginning of 1948 in compensation for the nationalised railways was quoted at 884. Gas stock, issued at 100 as recently as May, went at 87i. The slump clipped £190,000,000 off Government stock issues originally valued at £12,784,000,000.

Treasury 24 per cent stock fell to a new low record of 66i’. In less than three years its holders have thus lost one-third of their capital—£l6o,ooo,ooo of the £482,000,000 which they put up in January, 1947. War Loan—by far the biggest single issue—fell to its lowest since 1939, several points below its worst level of the Dunkirk crisis in 1940.

Reuters says some depression of the price of money stocks was to be expected after devaluation of the pound and even if last Monday’s economic announcement had been regarded as adequate, gilt-edged might have . weakened.

Today’s dramatic slump is regarded as a reflection of the money market’s dismay at what it considers the inadequacy of the economy measures.