INTEREST RATES

Wanganui Chronicle, Volume 79, Issue 244, 15 October 1936, Page 8

INTEREST RATES

LOW LEVEL SOUGHT CONVERSION PROPOSALS MINISTER’S APPEAL ..... “ECONOMIC WELFARE OF N.Z. ’ [Per Press Association) WELLINGTON, Oct. 14. Prior to his departure the Hon. VV. Nash ,Minister of Finance, stated that he had made arrangements for the repayment at par on January 15 next of approximately £12,400,000 4 per cent. New Zealand Government stock and bearer debentures which fall due on January 15, 1940, but in respect ci which the right is reserved to the Minister to repay at any time within three years prior to maturity date on giving three months’ notice in the New Zealand Gazette. A special Gazette issued to-day contains official notice of the intention of the Minister to exercise his option to repay securities and fixes the date of repayment at January 15, 1937. The Minister stated that concurrently with the notice of intention to repay holders of 1937-40 securities are invited to convert their holdings either into 3* per cent, securities maturing m January, 1957, with the option to the Government to repay four years earlier, or into 3 per cent, securities maturing in July, 1941, with the option to the Government to repay two years earlier on giving three months’ notice to that effect. That is to say, present holders of 1937-40 stock debentures will have the option of accepting repayment in whole or part of their securities on January 15 next or of availing themselves of the offer now made to exchange their present holdings for new securities. A choice between a 20-year security bearing interest at per cent., and a short-term security of 41s years bearing interest at 3 per cent, is offered. For the purpose of providing funds to repay the holders of 4 per cent. 1937-40 securities who do not elect to convert, and also for retiring shortdated securities issued in connection with the purchase by the State of the undertaking of the Southland Elec-tric-power Board, investors in general are invited to subscribe for either the short-dated or the long-dated new securities. Copies of the prospectus and application forms for both conversion and cash issues are available from the Reserve Bank of New Zealand, at any branch of any trading banks, at any postal Money Order Office, and on application to any member of the Stock Exchange. Lists for the applications will be open until Thursday, November 5. A deposit of £4 per cent, must accompany cash applications and the balance of the amount is payable on January 18. “I am convinced,” continued the Minister, “that the continued prosperity of the Dominion is bound up to a considerable degree with the mainteanance of interest rates at a low level, and the success of this issue will have desirable reactions in that direction. Government securities provide the safest and most readily marketable form of investment possible, and the rates of interest paid on these securities are the standard on which interest rates of other classes of securities are based. Experience has shown that when the rates of interest rise to high levels depression invariably follows as the whole field of industrial activity is affected. “For this reason I appeal to the people generally to support the Government in its efforts to stabilise Interest rates at a level that will stimulate industrial activity and generally serve and promote the economic welfare of the Dominion.” Finally, Mr. Nash added, this was the first new issue of Government securities to the public since the issue of 1933. He stated that he was confident that it would be given wholehearted support by the present holders of securities and investors generally. CONVERSION LOAN APPLICATIONS INVITED Copies of the prospectus for the New Zealand Government loan of £13,930,000 may now be obtained, the lists for cash and conversion applications being opened to-day. They will be closed on November 5, thus allowing three weeks for applicants to lodge their requirements. The loan which is being placed before the investing public is an issue in the form of either 31 per cent, stock or debentures repayable 1953-57, or in 3 per cent, stock or debentures repayable 1939-41. Payment may be made in cash (4 per cent, on application and 96 per cent, on January 18. 1937) or in exchange for holdings of 4 per cent, stock or debentures 1937-40. An advertisement appears on the commercial nage of this issue.