POINTS FOR CONSIDERATION. '
Having, however, dealt with the factors making for ease in money and a Government debt conversion operation, I will now refer to one -or two factors Which make me less disposed than some other -writers to speak very confidently of the feasibility of an early conversion of the 5 per cent. War Loan. According to the terms of that Loan, the Government cannot compulsorily redeem one part of the Loan but only the whole, which repre- sents a total of over £2,000,000,000. This means, therefore, that the Chancellor has two alternatives. Ile can at any-time-make a -vohmtarjr offer to holders of the Loan of a longer-dated obligation bearing a lower rate of interest, and admittedly there are many who, if the new rate were not too low, would be -prepared to make the exchange so as to be quite sure of there being no further redemption- for a number • of years. Such an operation is possible at any time, but it will be seen that to make it acceptable the Chancellor must offer fairly satisfactory terms, and those who did not accept would be free to retain their present Bonds and continue to receive 5 per cent. interest. To enable the Chancellor, however, to be in the position to say to holders of the 5 per cent. War Bonds that if they - did not accept his particular terms they would be_paid off at par, it would be necessary that all other Government stocks should have been raised to such a level as to ensure the vast majority of the 5 per cent. :War Bond holders accepting his offer. At the moment such an operation would not, I consider, be possible, as Mr. Snowden could not count on a sufficient number_of assents, to make the operation a feasible one.
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