BRITISH WAR LOAN

Poverty Bay Herald, Volume LV, Issue 17588, 2 October 1931, Page 5

BRITISH WAR LOAN

CONVERSION PROJECT OUTLINE BY CHANCELLOR ENTIRELY VOLUNTARY (British Official Wireless.) ■>, Kcc. noon. RUGBY, Oct. 1. In the House of Commons to-night, the committee stage of the Finance Bill, by which additional taxation to balance the budget, will be imposed, was completed. Speaking on the clause giving stock holders the right to convert holdings in the 5 per cent. Avar loan, the Chancellor of the Exchequer said the purpose of the clause was to give the Treasury powers which would be used at a favorable opportunity to convert this huge block of 5 per cent. Avar loan, amounting to over £2,000,000,000. To a very great extent the terms of the conversion offer, Avlien it is issued, Avould folloAV the conditions attached to the present stock. It was proposed to give three months’ notice to holders of stock. During those three months they would have the option of transferring into ucav stock, or asking at the end of three months to bo repaid in cash. The poAVer Avhich was asked for Avas not new in operations of that kind. It provided that if the holder of existing stock did nothing he avus taken as accepting the offer. If he accepted ho retained his old stock, but the rights attaching to the stock Avould be different. In an ordinary conversion operation the holder surrendered his old stock and received neAV. Under this continuous operation he Avould retain his old security with changed conditions. It Avould he obvious that if there Avere a large number of holders of present stock Avho asked to be paid off in cash the Government could not raise that huge sum in the course of a feAV days, and, therefore, time Avas taken in order to see Avhat the results of the conversion operation Avould be, and then make provision for finding the cash for those who wanted to he paid out. Dealing with sub-sections of the clause, Mr. SnoAvden said one of them gave power to the Treasury to approve of a very small bonus for early applications for conversion.