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Wednesday, 21 October 1931

Mr THEODORE - The answers to the honorable member's questions are as follow : -

1.   No. The option of investing for a period of two years was given partly with a view to attracting trade moneys and oversea traders were specially invited to subscribe to the loan.

2.   The rate of interest for the two-year period was C per cent. The telegraphic rate of exchange on London was 9 per cent., and difficulty was being experienced in securing exchange. Presumably, the investment met the convenience of many oversea traders.

3.   Before the terms of the conversion loan were fixed, representations were made to the conference of Commonwealth and State Ministers that, owing to exchange difficulties, large amounts of government securities had been purchased with oversea trade moneys as short-term investments. The conference considered that as these were not moneys available for permanent investment, but were required for carrying on trade, arrangements should be made for the issue of short-dated securities on the conversion of the old securities. Provision was accordingly made in the Commonwealth Debt Conversion Act which was passed by Parliament in Augustlast.

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