GREAT LOAN SCHEME

Star (Christchurch), Volume XLIV, Issue 494, 1 July 1932, Page 7

GREAT LOAN SCHEME

Britain to Renew 5 Per Cent War Bonds. £2,000,000,000 CONVERSION, British Official "Wireless. (Received July 1,2 p.m.) RUGBY, June 30. Mr Neville Chamberlain, the Chancellor of the Exchequer, announced in the House of Commons to-night a scheme for the conversion of the great 5 per cent War Loan, of which over £2.000,000,000 is now outstanding. Mr Chamberlain said: “ The Government intends to repay the loan in cash on December 1 next to any holder who decides to apply for repayment within three months from to-day, but holders in the loan at the same time are invited to continue in the loan on altered conditions and, it is rny confident hone, that the great, mass of the holders will respond to this invitation.” The Treasury, in accordance with the prospectus of January 11, 1917, will redeem the outstanding amount of the loan at par on December 1, 1932. At the same time it invites any holder of stock, or bonds, who wishes to do so to continue his holding in the loan after the redemption date, subject to certain modifications. The principal modifications are; (1) The rate of interest will be reduced as from December 1, 1932, to 31 per cent per annum; (2) the loan will be redeemable at the option of the Government at any time after December 1, 1952, but not earlier, either in a single operation, or by instalments; (3) The title will be changed to 3h per cent War Loan. The dividends will continue as before to be paid without previous deduction of income tax and the existing exemptions from United Kingdom taxation in favour of holders who are domiciled or resident outside' the United Kingdom will continue in force. Holders who notify their assent to the continuance of their interest in the loan will not later than July 31 be paid a cash bonus at the rate of £1 per £IOO nominal of stock under the special provision, which is embodied in the Act of Parliament of last autumn. Any holder who by September 30 has neither applied for his holding to be continued, nor applied for redemption, will be treated as if he had accepted the offer to have his holding continued. These are the broad outlines of this gigantic scheme, the largest operation of its kind ever undertaken in Great Britain, or any other country.