§ SIR EDWARD WATKIN (Hythe)
asked Mr. Chancellor of the Exchequer, Whether he is prepared to issue his proposed Local Loan in the form of ninety-nine years Terminable Annuities; and, if he will state the amount per cent of difference of annual charge of ninety-nine years, as compared with Perpetual Annuities, taking three per cent as the standard annual charge of perpetual annuities?
§ THE CHANCELLOR OF THE EXCHE-QUER (Mr. GOSCHEN) (St. George's, Hanover Square)
I should not be prepared to substitute 99 years' Terminable Annuities for the proposed Local Loans Stock. I hope that this Stock will be accepted by the public on equal terms, and with precisely the same readiness as the other great Parliamentary Stocks. Terminable Annuities, on the other hand, are not so readily marketable; because they are unsuitable investments for trustees—who form a large portion of the holders of Government Stocks— by reason of the periodical reduction of capital, and the difficulties which surround the re-investment in small sums of a proportion of each annuity instalment for the purpose of replacing the capital repaid by the annuity. The amount of difference per cent of annual charge between a 99 years' Terminable Annuity and a Perpetual Annuity at a rate of interest of 3 per cent per annum payable half-yearly, would be 3s, 4d. (£0.16605) per annum in respect of each £100 sterling borrowed.