§ MR. J. G. HUBBARDasked Mr. Chancellor of the Exchequer, with reference to the recent exchange of £4,000,000 in Three per Cent. Consols, belonging to the Savings Banks, for £4,000,000 in Two and a-Half per Cent. Stock, coupled with a twenty years' terminable annuity, equivalent to the difference of £11 7s. 6d. per £100 between the prices of the stocks, with an addition of £2 per £100 to secure the Commissioners from loss, Whether, seeing that the receipt of £100,000 interest on the Two and a-Half per Cent. Stock, and of £16,050 as interest at three per cent, on £535,000, the amount of difference for which the terminable annuity is issued, leaves a loss of £3,950, he will take any, and what, steps to compensate the Savings Banks Funds administered by the National Debt Commissioners for this loss of income?
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)I am sorry that when my right hon. Friend asked me a Question on this subject without Notice in Committee on the National Debt Bill, I failed to explain to his satisfaction the nature and effect of the transaction; but I hope to have better success now. The conversion of Three per Cent Consols held by the Post Office Savings Banks Fund into Two-and-a-Half per Cent Stock was commenced by the Prime Minister in 1863; its object was not to leave the Two - and - a - Half per Cent Stock in the hands of the National Debt Commissioners, but to broaden the basis of that Stock in the hands of the public in anticipation of some future larger conversion. All I did in the Acts of 1883 and 1884 was to carry out this policy, the Stock available for conver 823 sion in the hands of the National Debt Commissioners having been exhausted. I may repeat that the Act of this year was only introduced to make clear an expression (about which doubts had been raised) in the former Acts. The financial result, so far from being unfavourable to the Post Office Savings Banks, has been highly beneficial to them. Of the £4,000,000 of Two-and-a-Half per Cent Stock recently taken with the annuity in exchange for Three per Cent Stock, £1,160,000 have been sold, and the gain of capital to the fund has been £20,156. If the balance, £2,840,000, be sold at the price of this day, the additional profit would be £80,053; or the total profit in the shape of increased capital to the Post Office Savings Banks Fund will be £100,209. If my right hon. Friend still fails to understand these details, I shall be happy to explain them to him personally.