NEARING THE END

Waipukurau Press, Volume XXVIII, Issue 74, 21 March 1933, Page 5

NEARING THE END

Conversion Scheme APPLICATIONS OVER £90,000,000 79 p.c. OF THE TOTAL DEBT (Special to the “Press”) WELLINGTON, This Day. This morning the Government’s conversion scheme passed the £90,000,000 mark. The applications for conversion received yesterday amounted to £2,776,000 and the latest return from the Treasury, shows that the total now stands at £90,774,000, representing 75 per cent, of the internal debt. Dissents so far notified cover only £284,000, or less than one-third of one per cent, of the total converted. The beneficial effects of Australia’s internal loan conversion, particularly on prices of Commonwealth stocks, were discussed in an interview to-day by Senator Massy-Greene, head of the Australian trade delegation, which is now visiting Wellington. “Both from a national point of view and also from that of the individual investor nothing but the happiest results has come from conversion in Australia,” said Senator Greene.” From a variety of causes Australia felt the full force of the depression a good deal earlier than New Zealand, and it became abundantly clear early in 1931, that nothing short of heroic measures would save the Commonwealth from a financial debacle of the worst type. How serious the position had become is shown by the fact that before the conversion offer, 5| per cent, stocks, due in 1941, were quoted on the Australian stock exchange. at £7B 5s 9d.” It was in these circumstances, continued the Senator, that a great national appeal was launched to the bondholders of Australia in which they were invited to agree to a reduction of 22S per cent, in interest return on their bonds. The response had eclipsed the Government’s most sanguine expectations, for out of a total of £557,998,904, something over 97 p®- cent, of the bondholders converted. It was a magnificent, and up till that time, he believed ,aja unique response to a national call for sacrifice. “To-day our four per cent, stocks of various maturities, into which the major portion of our conversion loan falls, are" all well above par and including redemption bought at market rate, yield something less than 3i per cent. Not only has the bondholder saved his capital intact but in many cases he is the material gainer on the capital account. The nation has saved yearly an interest payment of £6,500,000, and with restored credit is able to face the future with relative confidence and certainty. One. has only to quote the prices of our indicator 5 per cent, stocks in London which on September 28, 1931, were £55 15s and to-day are £lO6 10s, to see that, the most discriminating of the money markets of the world not only appreciate, but also approves the steps that Australia has taken to rehabilitate her credit. The internal bond conversion was undoubtedly the greatest of these.”