HUGE LOAN

Rotorua Morning Post, Volume 2, Issue 374, 8 November 1932, Page 5

HUGE LOAN

(Press. Assn.-

TREMENDOyS SAVI$G EXPECTED TO REACH THIRTY MILLiON POUNDS CONVERSION OPERATIONS

-By Telegraph — CovyYlht).

Rec. Nov. 7, 5.5 p.m. London, November 6. The financial records of no coimttry parallel the eaae with. which the Treasury placed its loan of £300,000,000, thus cro-wnmg a stupendous series of operations converting nearly 37 per cent. of Britain's internal deht an4 transferring a large proportibn from the unfunded to the fundecf category. The, annual gross , interest bill has been reduced ^rom £117,500,000 to £70,000,000. Th'e net saving, allowing for re- • duced receipts from income tax, cannot be under £300,000,000. The Treasury can now rest at least for 18 months before other maturities and obligations at call, arise. The Financial News expresses the opinion that a grateful nation will not be niggardly with K.B.E's. or even Baronies; nevertheless the Government's chief adjutant was the general depression, assuring a glut of sterile idle funds. Despite the conversion success, bad trade remains, concerning which it is hoped the Government will bring positive proposals before th'e World Economic Gonference, which, unhappily, will not be held until the spring. It is anticipated that the preparatory committee will sit for three weeks and adjourn in January, delaying the full conference. The Stock Exchange is. uncertain following the conversion loan. A turn from long to short-dated stocks and a move towards industrial scrip can be observed. There is a belief that gilt-edged securities have now reach'ed their top and the reinvestment of gilt-'edged profits are likely to provide a fair market turnover for a considerable period. The indices show that one unit of giltedged is now worth approximately two units "of jndustrials. The authorities arai reported to be preparing for the repayment of an instalment of the American debt in December, which amounts to £30,000,000 at the present rate of 'exchange, being equivalent to approximately two years of British exports to America. The present level of Britain's advers'e trade with America, exclusive of.dehts is estimated at £35,000,000; consequently the deht must he paid from the Equalisation Fund, weakening the control over exchange. Nevertheless the budgetary embarrassment of France and the United States is enqouraging to "bullish" speculators.