RESOLUTION'S. (Hansard, 11 February 1870)

§ THE CHANCELLOR OF THE EXCHEQUER
Sir, the object of the Bill, the foundation of which I am about to lay, by moving some Resolutions, is to carry out to the fullest extent the policy adopted last year of giving greater facilities to the holders of the Public Debt. Last year the Bank of England consented to allow the dividends to be paid without requiring the personal presence of the holders of Stock; the object of the present Act is to increase the number of payments of the dividends on Consolidated Stock, so that, instead of holders drawing their dividends half-yearly, they will draw them quarterly. This will be very agreeable, particularly to the poorer class of stockholders, who would rather receive their money in smaller sums and at more frequent intervals; and I am induced to hope, from correspondence I have had with the Bank, that it will not be attended with great inconvenience or trouble or expense. I do not intend to enlarge upon the advantages of such a system. Of course, the more convenient we can make this Stock to the holder the more popular we render it, the better the price it will fetch, and consequently the better for the public. Another part of the Bill, ancillary to the former part, aims at absorbing the Reduced and New Three per Cents into the Consolidated Stock. These reduced Stocks, although bearing 186 precisely the same interest, probably through being a smaller amount—£277,000,000 altogether—stand at a lower price in the market than the Consolidated. A man must give £100 10s. of this Stock to obtain £100 of Consolidated; and we propose to give the option of exchanging these Stocks for Consolidated on the payment of 5s. percent—that is to say, if a man holds any Reduced or New Stock he may obtain £100 of the Consolidated by paying £100 5s.; in fact, we take one-half of the 10s., which is the market price, and give the other as a bonus on account of the transaction. The change is perfectly voluntary; but as we propose to make the Consolidated a more marketable and more convenient investment, by allowing the dividends to be paid quarterly, we believe the change will be made. The right hon. Gentleman concluded by moving the Resolutions.

§ MR. CRAWFORD
said, he believed the 5s. which the Chancellor of the Exchequer imposed on the transaction was something in the nature of a fine, and would be fatal to the scheme. Few persons would deem the loss of 5s. compensated by the opportunity of receiving their dividends quarterly; besides, many trustees holding the Reduced Stock had no power to make the change. So far as the holders of Consols were concerned the quarterly payment would be a boon; but the public at large would suffer in the first instance, because paying dividends of £2,000,000 or £3,000,000 by anticipation would drain the Treasury just as the taxpayer by paying taxes in anticipation would raise the balances in the Exchequer.

§ MR. SCLATER-BOOTH
said, he had no doubt that the quarterly payment would be a boon to the holders of Consols; he, however, agreed with the hon. Member for the City (Mr. Crawford) that the proposed charge of 5s. would be fatal to the scheme, and thought it would be better to consolidate the whole funded debt by Parliamentary authority; without option. He also thought that trustees would be unable to exchange unless they were especially empowered; to do so by the Bill the Chancellor of the Exchequer proposed to introduce.

§ MR. BARING
said, that as the proposal was optional, it was a very innocent one. It would do no harm and not much good. It was a sort of doubt- 187 ful matter whether many people were anxious to receive their dividends quarterly; but, as the Governor of the Bank had stated, the facility was hardly worth paying for. He rather thought the Chancellor of the Exchequer would find it was a scheme not of much value to the public at large. But, it being perfectly optional with parties to make the conversion, it could, as he had said, do no harm. It was one of those many experiments which, perhaps, they would now see constantly occurring in financial matters.

§ SIR DAVID SALOMONS
said, he understood from the statement of his right hon. Friend (Mr. Chancellor of the Exchequer) that it was the intention of the Government in the Bill he was about to lay on the table to provide that the dividends on Consols should be paid quarterly. [The CHANCELLOR of the EXCHEQUER: Yes."] Well, then, he did not see why the holders of the New Three per Cents and Reduced should not have the same boon without the payment of 5s. per cent premium. He thought it would be much better to unify the whole debt. He ventured to press on his right hon. Friend what had been urged by the Governor of the Bank (Mr. Crawford) that when entering into large transactions for the advantage of the public he should not hamper himself by taking a narrow view of small details, but offer to the holders of the other Stocks the same advantage he gave to the holders of Consols free of charge.

THE CHANCELLOR, OF THE EXCHEQUER
would only say, in reply to his hon. Friend the hon. Baronet (Sir David Salomons) that at present when £100 and 10s. of Reduced was required to obtain £100 of Consols, if he allowed the holder of £100 Reduced to obtain the same boon as the holder of Consols, he would be making him a present of 10s. percent.

§ SIR DAVID SALOMONS
said, that would only be in case the holder sold.