THE SMALL HOLDER.
For the benefit of those who desire to see just how the proposals work out in the shape of income it may be useful, perhaps, to note that in the case of those who relinquish the 31 per cent. War Loan, the annual income under the terms of conversion should be just under £4 13s. per cent., while in the case of the 5 per cent. War Bonds the terms of conversion give a future yield of just under 5 per cent., and in the case of the 4 per cent. War Bonds the yield is about £4 14s. per cent. If only in view of the fact that so many of the maturing Bonds are held by the small investor unaccustomed to the intricacies of conversion proposals, it is well, I think, that these terms should be expressed very clearly and simply. And if I may put the matter in another way to those holders of 5 per cent. Bonds who may wonder whether the terms are as good as could be obtained by receiving next year £105 for each £100 surrendered, I may say that the terms now offered by the Government are (even allowing for the fall which has taken place in the Conversion Loan) equivalent to very nearly £106 for each £100 of stock surrendered. Of course there is always the possibility of investment stocks being at a lower level when the Bonds are paid off, thereby enabling the recipients of the cash to reinvest with profit, but over a fair number of years British Funds have now shown a stability which makes that prospect unlikely. At the time of writing there appears, in fact, to be every indication that those who have gone most closely into the matter will elect to convert on the terms offered by the Government.
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