THE WAIPA POST. Printed on Tuesdays, Thursdays, and Saturdays. TUESDAY, 2nd AUGUST, 1932. NEW ZEALAND’S WAR DEBT.

Waipa Post, Volume 45, Issue 3211, 2 August 1932, Page 4

THE WAIPA POST. Printed on Tuesdays, Thursdays, and Saturdays. TUESDAY, 2nd AUGUST, 1932. NEW ZEALAND’S WAR DEBT.

, i IT was to be expected that the Australian and New Zealand delegates to the Economic Conference would take advantage of the opportunity for discussion of the question of Dominion war indebtedness with the British Chancellor of the Exchequer that is provided by his presence at Ottawa. The success of the conversion of the British war loan is assured. It was reported by Treasury officials that more than half the two thousand million loan had been converted from 5 per cent to 31 per cent, and there is every evidence thalt a last-minute rush to take advantage of the bonus provision would be made before the age of the bonus provision before the end of the past month. The proportion of stock-holders who, being unfavourable to the conversion, will have to be paid, is known to be extremely insignificant. Mr Coates has voiced the hope that the success of this conversion may have an important effect on the overseas war loan indebtedness of New Zealand, which has been funded at £24,000,000. The suggestion that this loan should be converted is one to which the British Government may be expected to give sympathetic attention. It has already shown its approval of the principle of scaling down of war debt obligations, and has made considerable concessions to its foreign creditors, and the fact that it has met with remarkable success in its stupendous task of converting its own huge war loan,, as a result of which an annual saving of £23,000,000 will be effected, renders it opportune that the war indebtedness of the dominions should be taken into consideration. An element in the matter that is of disltinct importance was mentioned in cable messages in the past few days. It has been observed that many large firms have not only converted their holdings in British war loan but have been buying on the market for the express purpose of conversion. This is a sure indication, as the Financial News has stated, that a gilt-edged security at 3i per cent must be regarded as a sound investment. In other words, the day of the gilt-edged stock bearing a high rate of interest is past, and it has been suggested that “ 31> per cent or a little better is destined to be the average basis of British Government long-term credit in the future.” The development is a healthy sign of the times, and has been described by Sir Walter Layton as the key move in the campaign to end the economic depression. In circumstances such as these the position of dominion Governments which are paying interest on their war debts at a rate that is appreciably higher than the average rate bn approved securities clearly merits sympathetic consideration. The relief that would be afforded to the Treasury in New Zealand if the funded war debt were converted at 3i per cent would be greatly appreciated by the taxpayers.