THE CONVERSION LOAN

Otago Daily Times, Issue 23884, 11 August 1939, Page 8

THE CONVERSION LOAN

It has not unnaturally been a matter of surprised comment that no information was available earlier than it has been concerning the applications for.- investment in the £16,000,000 conversion loan, for which the list was opened on July 26 and was closed on August 5. Even such information as has been afforded nearly a week after the closing date is scrappy and unsatisfactory. It is so meagre as, more or less, to justify the cabled intimation that “ officialdom has drawn a veil of secrecy” around the transaction. Apparently—and this is one feature of the conversion in which cause for gratification may be discovered—the Government was, from the first, assured that the amount of the loan would be made available to it. This fortunate issue of the transaction was due to the cooperation, in the interests of the Dominion, of the “ financial gangsters ” who have been the subject of delicate allusion in the House of Representatives this session. The Bank of England itself seems, at no cost to the Government, to have guaranteed as much as £10,000,000 of the loan. In this respect “the Montagu Normans,” whom Mr Lee, the Under-Secretary in charge of the Housing Department, has anathematised as the modern counterpart of Shylock, rendered a distinct and invaluable service to the Dominion. Other banking institutions, which may perhaps be identified as those commonly described as “ the big five,” were, if the scanty information that has now been supplied regarding the loan is accurate, called upon to guarantee the balance of £6,000,000 presumably upon terms. It is to be gathered that the respective guarantors have been placed under the necessity of shouldering a substantial share of the emission. Less than one-half of the total amount of the loan is said to have been covered by cash and conversion applications. The proportion of subscriptions by the public would, it may confidently be assumed, have been considerably smaller if the list for applications had not been closed before Mr Lee spoke in Parliament on Wednesday night. It is an ironical circumstance that the Government has had to rely so largely upon the “ financial gangsters ” for the accommodation which it required.