THE CONVERSION QUESTION.
For the time being the Stock Exchange is less inclined to look for any immediate attempt to convert the 5 per cent. War Loan to a lower interest basis than was the case a little while back. The disposition now is to wait for the conclusion of the various Conferences-Lausanne, Ottawa, and the proposed World Conference-as possibly leading to more set- tled conditions internationally. Meanwhile, the tendency of the longer-dated stocks continues to be upward and the move- ment will probably be sustained so long as commodity prices show no signs of hardening, which would indicate that money would be attracted into trade. There are some people who think that the Treasury should take the bold course of announcing an offer of conversion, coupled with the intimation that any stock not converted would be definitely repaid in accordance with the terms of the prospectus. The result, it is argued, would be a further big advance in the prices of sound fixed interest stocks, including long-dated Government securities, which would enable a conversion to be carried through, perhaps, upon a basis as low as 31 per cent. In the present condition of world trade, it is argued, there would be no danger of inflation, and for the success of such a plan it would not be necessary to wait for settled conditions, for as things are, there is less disposition for money to seek investment abroad in the search for higher rates of interest.
A. W. W.
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