* * * * GOVERNMENT STOCKS EASIER.
At first sight the reaction in British Government stocks is a little surprising in view of the continued cheapness of money. The public is still unable to get more than per cent. on banking Deposits, while Government Treasury Bills yield even a slightly lower rate. Nevertheless, gilt-edged stocks have sagged -during the last-week or two,- and the main reason is to be found in the-temporary diversion -of interest to the more speculative departments, and also, perhaps, to the fact that there were a good many speculative accounts open for the rise, the realizations of which have' affected markets. A- further • explanation, however, -lies in the fact that dealers in the gilt-edged market are decidedly averse from the weekly offering by the Treasury of the 2/ per cent. Conversion Loan, the ,amounts usually varying from £5,000,000 to £10,000,000 being offered each week. This contant addition to the supply of Government Loans in the. market has, it is maintained, a damping effect upon existing stocks. There is, of course, something to be said for the argument, but then on the other hand it has to be -remembered that, partly, in connexion with the enlargement of the resources of the Exchange Equalization Account, the Government's Floating Debt (that is the debt expressed in the form of three months' Treasury Bills) has grown so large that the Treasury authorities have deemed it well that by these weekly offerings of 21 per cent. Conversion Loan there should be some partial funding of an unwieldy Floating Debt.
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