EIGHTY PER CENT

Rotorua Morning Post, Volume 2, Issue 488, 23 March 1933, Page 3

EIGHTY PER CENT

(Special to "Post")

STOCKS CONVERTED SENATOR MASSY GREENE ON AUSTRALIA'S EXAMPLE THREE DAYS TO GO

' Wellington, Tuesday. By to-night, three days before applications close, the response to the Government's appeal for conversion had reached £92,000,000 or exactly 80 per cent. of the full internal debt of £115,000,000. The ntimber of notices of dissent made to the Treasury is still negligble.. Although the scheme nominally closes on Friday, all applications will be accepted which bear Friday's post mark from any part of New Zealand, or which are lodged With any branch of any bank on that day. Since this nieans that at least part of the mail, will not be received nntil the following M'onday, the final result of the conversion will not be known until early next week. Australian Conversion "From the national point of view, and also from that of the private investor, nothing but the happie-st results havd followed from the Australian conversion," said Senator W. Ma^sy Greene, Assistant Federal Treasurer, in an interview to-day. Senator Greene, who heads the Australian Trade Delegation which is now visiting Wellington, quoted sorne strilcing exaniples to show the beneficial effects of the conversion upon the prices of Commonwealth stocks. From a variety of causes, Australia had felt the full force of the depression earlier than New Zealand, he I said, and early in 1931 it had become abundantly clear that nothing short of heroic measures could save the Commonwealth from a financial debacle of the worst type. Saved From Ldss Had events been allowed to take their natural course, the bondholders in common with every other form of creditor, would have been inevitably involved in a tragic loss, not only of income, but probably of pL'hicipal also. Default, both public and private, was writ largely over the horizon of the future. How serious the position had become was shown by the fact that before the conversion, the Commonwealth 51 per cent. stocks, due in 1941, had been quoted on the Australian stoclc exchange at £78 5s 9d. Balanced Scheme "It was in these circuinstances that the great national appeal was launched to the bondholders of Australia in which they were invited to agree to a reduction of 221 per cent. in the interest return on their bonds," continued Senator Greene. "It was part of a balanced scheme which so far as was practicable, asked all sections of the people for a common sacrifice. The response eclipsed our most sanguine expectations for out of a total of £557,998,904, something over 97 per cent. of the bondholders converted. It was magnificent and up till that time, I believe, a unique response to the national call for sacrifice. Today, 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 31 per cent. Not only has the bondholder saved his capital intact, but in many cases he. is a material gainer in his capital account. "The nation has saved a yearly interest payment of £6,500,000 and with restored credit is able to face the future with relative confidence and security," added Senator Greene. "On has only to quote prices of our indicator five per cent. stocks in London which, on September 28, 1931, were £55 15s, and to-day are £106 10s to see that the most discriminating of money markets in the world, not only appreciates that, but also approves the steps Australia has talcen to rehabilitate her credit. The internal bond conversion was undoubtedly the greatest of these."