TRIUMPHANT FINALE

Poverty Bay Herald, Volume LIX, Issue 17954, 5 December 1932, Page 5

TRIUMPHANT FINALE

CONVERSION OPERATIONS THE DECLINE IN STERLING WAR DEBTS UNCERTAINTY (Elec. Tel. Copyright—United Press Assn.) (Received Dec. 5, 11 a.m.) LONDON, Dee. 3. The conversion operations were brought to a triumphant conclusion on Thursday, when a turnover of more than £600,000,0000, the largest amount recorded in any market, was completed without disturbances, despite the war debt uncertainties and exchange complications. The expected increase in the market supplies of credit has not materialised, as the authorities have been for many weeks purchasing unconverted war loan, testifying to the care .and skill with which the entire conversion was planned. War debts overshadowed the markets. Gilt-edged movements were unusually wide, but there was not the slightest evidence that confidence was affected. The City is admittedly more concerned at the honoring of the obligations to America than as to the economic consequences thereof. The recovery of gilt-edgeds significantly inspired reports that Britain would pay if America insists.

The fall of sterling is out of all proportion to the actual business transacted. There is no evidence of a flight from fixed interest securities owing to inflation fears. On the contrary, the trend of industrials is downward. The worst feature of the decline in sterling has -been the destruction of cohesion among the sterling bloc. Scandinavian, South American, and other currencies linked with sterling appreciated. Sterling’s decline was also a powerful stimulant in the deflation of gold prices. Most commodities have fallen during the week. Meat and wool are notable exceptions, but wheat touched a new low record.