§ MR. HUBBARDsaid, he rose to ask the right hon. Gentleman the Secretary of State for the Home Department what are the rates at which he estimates the interest attaching severally to the Three per Cent Consolidated Annuities and to the Thirty Years' Annuities, given in consideration for the Loan of £16,000,000 which he made as Chancellor of the Exchequer in April, 1855?
SIR GEORGE LEWISSir, I am afraid that I cannot give a perfectly direct reply to the question of the hon. Gentleman, on account of the manner in which that Loan was contracted; but I will give the best answer in my power. Assuming that the Loan of £16,000,000 in April, 1855, might have been raised at £88, if the whole had been raised in Consols, which leaves a bonus of only £2 for risk, &c, Consols being quoted at £90 at the time of the Loan, the interest payable on that portion of the Loan of £16,000,000 which is represented by Consols may be taken at about £3 8s. per cent sterling. The bidding was in one sum for both Consols and Annuities. Assuming, therefore, that the remaining £12 represents the capital received for the annuity of 14s. 6d. for thirty years, which is equal to a perpetuity of 9s., the interest payable on this portion of the Loan may be taken at about £3 15s. per cent sterling. Therefore, the difference in the rate of interest, according to my calculation, is that between £3 8s. and £3 15s. That is matter of calculation, and may be disputed; the following, however, is matter of fact, and cannot. The present price of the Annuity is about £16 ⅞ per £1 annuity, up to April, 1885—about twenty-five years. This gives an interest of £5 18s. 6d. per cent, which includes about £2 10s. for sinking fund; this leaves £3 8s. 6d. for interest per cent sterling. According to the present price of Consols, you may say that a 3 per cent annuity is worth about from £3 4s. to £3 6s., and therefore 212 the difference, as I submit, between the price of Consols now and that of these Annuities is not much more than 2s. 6d. per cent.
§ MR. HUBBARDgave notice that he should to-morrow call the attention of the House to the impolicy of raising money by loans repayable by terminable Annuities.