HC Deb 20 March 1888 vol 323 cc1798-810

Clause 1 (Conversion of New Three per Cent Stock and redemption of dissentient stock holders).

MR. SYDNEY GEDGE (Stockport)

said, he had placed an Amendment on the Paper to insert, in the first line of page 2, after "Part I." the insertion of Clause 2 (Denomination or Incidents of New Stock); at the end thereof, to insert "Part II.(Conversion or Redemption of New Three per Cent Stock)," and insert Clause I, making it Clause 2. Clause 1, which would then be Clause 2, page 2, lines 10 and 11, he proposed to amend by leaving out all after "amount of," and insert "the new Stock." He proposed to move the postponement of the clause, in order that these Amendments might be discussed, and he had to apologize to the Committee for moving Amendments which might, at first sight, appear to be simply matters of form; but he thought it would be seen that Clause 2 created new Stock which came under Section 1. He was of opinion that the powers relating to the creation of new Stock ought to come in the first part by themselves, and then the position in which every description of Stock stood would be seen at once. He hoped that the Chancellor of the Exchequer would accept the Amendments, in order that the Bill might be drawn in a proper and logical way. There was, however, something further. The object of the Bill was to enable all the existing Stocks to be converted into new Stock. But the Bill did not provide for that, seeing that it made no provision for the conversion of any Consols or Reduced into new Stock, except such as was so converted immediately with the consent of the holders. It did not provide for notice to be given to those holders of Consols and Reduced who did not accept the offer of exchanging their present Stock for the now Stock at once, but preferred to wait until the expiration of the 12 months' notice that they wore entitled to before making their election. He had understood that the object of the Chancellor of the Exchequer was to provide that these different descriptions of Stock should come to an end, and that there should be only one new champion Stock. He would therefore venture to move the first of his Amendments.

THE CHAIRMAN (Mr. COURTNEY) (Cornwall, Bodmin)

pointed out that the proper course to take would be to move either that the clause be postponed or negatived.

MR. SYDNEY GEDGE

asked, in the event of Clause 1 being negatived, what would be the best course to adopt?

THE CHAIRMAN

said, the best course would be to move the postponement of the Clause.

MR. SYDNEY GEDGE

accordingly did so.

Motion made, and Question proposed, "That the Clause be postponed."—(Mr. Sydney Gedge.)

MR. BARING (London)

said, he thought the Amendment was entirely unnecessary, and he hoped the hon. Member would not press it.

THE CHANCELLOR OF THE EXCHEQUER (Mr. GOSCHEN) (St. George's, Hanover Square)

said, he thought the view of the hon. Member behind him (Mr. Sydney Godge) had been somewhat I influenced by a misunderstanding of a portion of the entire scheme—namely, that it related to Consols and Reduced. He was sorry that he (Mr. Goschen) had so expressed himself on a former occasion as to leave any possibility of doubt upon the point. The Bill proposed to make the immediate conversion of the new Three per Cents compulsory, and that of Consols and of Reduced optional on the part of the holders. The question of notice, therefore, did not arise in regard to the latter. There was no compulsory conversion of Consols and Reduced. As a matter of fact, the Bill dealt practically in a compulsory form with regard to New Threes, but in a totally different form with Consols and Reduced. This explanation affected the other Amendments which is the hon. Member put on the Paper. As far as the New Threes were concerned the Government had followed the precedent set by Mr. Goulburn in 1844, which established a compulsory conversion, but in regard to Consols and Reduced they had followed the precedent set in 1884 by the right hon. Gentleman the Member for South Edinburgh (Mr. Childers). He hoped that in these circumstances the hon. Member would not think it necessary to press his Motion.

MR. SYDNEY GEDGE

said, he was quite willing to withdraw the Motion.

SIR WILLIAM HARCOURT (Derby)

said, he wished to put a question to the Chancellor of the Exchequer. He did not know whether it arose on a general Amendment in regard to the names of the Stock, but he wished to understand what would be the exact position of the new Stock that was to be created, and whether or not existing Stocks would merge into it. Would the existing Two-and-a-Half or Two-and-Three-Quarters per Cents become one with the new Stock which was created by the Bill? Would the portions of the existing Stock, which might be converted optionally, become one Stock under the Bill? Would the operation of the Bill create one single Stock which would absorb all the old Stocks, the old Two-and-a-Half, the old Two-and-Three-Quarters, the new Two-and-a-Half, and the new Two-and-Three-Quarters, and so on.

MR. GOSCHEN

said, that would not be the case. The new Stock would not absorb all the other Stocks, because no provision was made in the Bill for the conversion of the old existing Two-and-a-Half and Two-and-Three-Quarters per Cents. He thought, however, it would be well worthy of considering in the future, when this new Stock was once established, whether it was not desirable to offer terms to the holders of other Stocks. But he had been of opinion that it might embarrass the Bill if such a proposal had been contained in it, and therefore there was no provision of the kind. If there wag a large conversion of Consols, they would be merged in the new Stock, and it would then be the duty of himself or any other Chancellor of the Exchequer to give notice to the outstanding portion of the holders of Consols, and endeavour either to pay them off, or to bring them within the purview of the new Stock. The Bill applied to the compulsory conversion of the New Threes and to the optional conversion of Consols and Seduced.

SIR WILLIAM HARCOURT

said, it was obviously inconvenient to have different descriptions of Stocks in the market, some of which would be of some amount. Judging from what the right hon. Gentleman the Chancellor of the Exchequer had now stated, there would be some four or five public Stocks, some of them being of the same denomination, and yet separate and distinct Stocks.

MR. GOSCHEN

said, it would be impossible to deal with the new Two-and-a-Half and the new Two-and-Three-Quarters Stock established by the right hon. Member for South Edinburgh without the consent of the holders; because they were not yet redeemable, and the Government could not yet apply any compulsory conversion to them. Any attempt to bring them under this scheme within the new Stock would have to be conducted on the voluntary principle of offering- them terms. He would undertake to confer with those who might be able to advise with him on the subject with regard to terms. Various suggestions had come to him already from various quarters; but he could say nothing upon the matter until he know what terms were likely to be accepted. No doubt it was inconvenient that the Bill should increase the number of Stocks by one: but it was only adding to an inconvenience which already existed, seeing that there were several kinds of Stock. If any inconvenience were experienced, he would endeavour to meet it; but he could not undertake to delay the present Bill until some conclusion had been arrived at.

MR. SYDNEY GEDGE

said, he had got his idea of the meaning of the Bill not so much from the Bill itself as from the speech of the right hon. Gentleman in introducing it. As he misunderstood the object of the right hon. Gentleman he would not press the Amendment.

Motion, by leave, withdrawn.

MR. SYDNEY GEDGE

moved an Amendment to sub-section 1 of Clause 1, to provide that the holders of the New Three per Cent Stock who do not signify dissent by the specified date, shall afterwards receive in lieu of the amount of New Three per Cents an equal nominal amount of new Stock— And the reception of that amount of New Stock shall not be considered to be a change or variation of investment by the holder. He trusted that the Chancellor of the Exchequer would accept that Amendment, or otherwise great difficulties would be imposed upon persons who were in the position of trustees, and who had no power of making a change of investment, or who were disinclined to consent to a change.

Amendment proposed, In page 2, line 12, after the word "Stock," to add the words "And the reception of that amount of Now Stock shall not be considered to be a change or variation of investment by the holder."—(Mr. Sydney Gedge.)

Question proposed, "That those words be there added."

MR. KIMBER (Wandsworth)

suggested that there should be an interpretation clause to provide that the new Stock should be distinctly called new Consols. He would suggest the insertion of words to that effect.

THE CHAIRMAN

pointed out that an Amendment of that kind would not apply to the present Clause, but to Clause 2, Sub-section (4).

MR. KIMBER

said, that in Part I., Sub-section (1), the following words occurred:—"In this Act referred to as new Stock." He proposed to substitute for those words "new Consols."

THE CHAIRMAN

said, if the hon. Member would look at Clause 2, Subsection (4), he would see that it referred back to those words "new Stock."

SIR JOHN LUBBOCK (London University)

asked the Chancellor of the Exchequer, what the effect of the Amendment would be, as he understood the right hon. Gentleman to accept the words proposed.

THE ATTOENEY GENERAL (Sir RICHARD WEBSTER) (Isle of Wight)

explained that if the Amendment was accepted, it would provide that the holders of New Three per Cents who did not dissent would afterwards receive an equal amount of new Stock, which would be subjected to the same conditions as the old Stock.

Question put, and agreed to.

Words added

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill,"

MR. MONTAGU (Tower Hamlets, Whitechapel)

said, he wished to ask the Chancellor of the Exchequer whether he could not extend the clause, so as to include another portion of the National Debt, not a very large portion, but which, if brought within the scheme, would effect a saving of about £26,000 per annum to England. He referred to the Four per Cent Guaranteed Turkish Stock, originally £5,000,000, of which nearly £4,000,000 were still outstanding. There might be political considerations involved in the question, as the Stock was guaranteed jointly by England and France; but he thought that the ingenuity of the Chancellor of the Exchequer might overcome the difficulty, and that the Stock might be called in and divided between the two Governments. The interest now paid upon this Stock seemed to him to be an extraordinary interest to pay on Government security. By calling in the bonds France would save £7,000 per annum and England £26,000. In line 11 of the present clause the Government took power to give for New Three per Cent Stock an equivalent amount of the Stock to be created. He would suggest that the Government should take power to give £104 of New Two-and-a-Half per Cent Stock, so as to create a fairly permanent Stock with an unchanging income. In his opinion, the Government ought to take power to give a sufficient amount of Two-and-a-Half per Cents that would yield £2 12s. per cent, the same as the new and varying Stock would yield. The Two-and-a-Half per Cent Stock was really the Stock of the future, in which the Three per Cents would eventually be merged, and therefore the popularity of that Stock ought to be maintained, and, if possible, increased, and its market ought to be widened. Certainly 2½ per cent was a more convenient interest than 2¾ per cent. There was no Stock paying 2¾ per cent outside the United Kingdom. In the case of Holland, the Two-and-a-Half per Cents were a much more favourite Stock. It was even in more favour than the Three per Cent or the Three-and-a-Half par Cent Stock, where there was no fear of redemption, and so far as Two and Three -Quarters were concerned, they bore, as regards interest, a complex relation to all other Stocks. Two-and-a-half per cent was exactly one half of 5. No doubt it was quite possible, when they were dealing with fractional interests, to add one-tenth and convert Two-and-a-Half into Two and Three-Quarters; but Two and Three-Quarters was a Stock which never had a good market. The Chancellor of the Exchequer, in introducing the Bill, told the House that the banking community preferred a Stock at 1½ per cent to one at 2¾. He quite agreed with that statement, and he also believed that options would tend to confuse the public mind. In some cases it would be difficult to invest in the new Stock, especially when it became necessary to settle annuities. He believed that the public would prefer Stock with a fixed yield for 35 years, and many persons in England and abroad would prefer to invest in the New Two-and-a-Half Stock, under par, than to invest in Stock which was over par, seeing that they would have to sacrifice a certain portion of the capital for the benefit of those who had a life interest in the security. He hoped the Chancellor of the Exchequer would promise to provide some means of amalgamating the present Stocks, and he was quite sure that 2½ per cent, at very nearly par, would constitute a real champion Stock. He had no wish to criticize the scheme of the Government unfavourably; on the contrary, he thought the proposals of the Chancellor of the Exchequer in regard to the New Three per Cents were very reasonable.

THE CHAIRMAN

said, he must point out that the hon. Member was making a speech which would have been much more appropriately delivered on the second reading of the Bill.

Question put, and agreed to.

Clause 2 (Denominations and incidents of new Stock).

SIR GEORGE BADEN-POWELL (Liverpool, Kirkdale)

, in moving, as an Amendment, in page 3, line 12, after "called," to leave out to "stock," in line 15, and to insert— Consolidated Two and Three-Quarter Pounds per Cent Annuities, until the fifth day of April, one thousand nine hundred and three, and thereafter shall he called Consolidated Two-and-a-Half Pounds per Cent Annuities; said, he believed that a great majority were in favour of this small modification. Among the many practical reasons he would only mention three. It would prevent the new Stock being confused with the Two and Three-Quarter per Cont Stock created by the right hon. Gentleman the Member for South Edinburgh; it would obviate a change in title in 15 years; and it would give the new Stock a right to the time-honoured title of "Consols."

Amendment proposed, In page 3, line 12, after "called," to leave out to "stock," in line 15, and insert the words "Consolidated Two and Three-Quarter Pounds per Cent Annuities, until the fifth day of April, one thousand nine hundred and three, and thereafter shall be called Consolidated Two-and-a-Half Pounds per Cent Annuities."—(Sir George Baden-Powell.)

Question proposed, "That those words be there inserted."

THE CHANCELLOR OF THE EXCHEQUER (Mr. GOSCHEN) (St. George's, Hanover Square)

said, there was no very great difference between the two titles; but he was bound to say he thought the name which the hon. Member proposed to give was even more awkward than the name contained in the Bill. "Two and Three-Quarter Pounds per Cent Annuities" did not seem a very simple title for that Stock. As it stood in the Bill it was called "Consolidated Stock," and that Consolidated Stock would, he hoped, carry with it, after a large conversion had taken place, the ordinary appellation of Consols. He had consulted some of the very highest authorities in the commercial world in regard to the name, and he was given to understand that they would view with regret any change in the title it was proposed to give. No doubt it was a simple point; but, as a matter of fact, nearly all the Notices which had been issued in connection with the Conversion Scheme had gone out with the name that appeared in the Bill, and unless some strong reason were shown for it he should be sorry to see it changed.

MR. KIMBER (Wandsworth)

said, that after the remarks which had been made by the right hon. Gentleman, he did not suppose that the Amendment would be pressed; but it did appear to him that the Bill should give to the Stock the title which it would eventually receive. The name contained in the clause, "Two and Three-Quarter Pound; per Cent Annuities," might be simple, but it was inaccurate in fact, and he was afraid it would not be clearly understood by a large portion of the public who were interested in the matter. At the expiration of 20 years the new Stock was to be entitled only to 2½ per cent, and to call it "Two and Three-Quarters Stock" would give a misleading description to the public who desired to invest in it. As the hon. Member opposite had pointed out, it would present to the public a depreciated idea of what the credit of the country was worth, because it would appear that the market quotation was the price of a Stock carrying interest at 2¾ per cent throughout; whereas it was liable to be reduced to 2½ per cent. He had himself to move an Amendment to provide that the new Stock should be called "New Consols;" but after what the Chancellor of the Exchequer had said, he would refrain from doing so. He was, however, of opinion that that description would have covered any variation, and would not have misled anybody.

SIR JOHN LUBBOCK (London University)

said, that the name by which the Stock would be known in the market would not depend so much on the wording of the clause, as whether Consols were largely converted or not. Under these circumstances, he trusted that his hon. Friend would not press the Amendment.

SIR GEORGE BADEN-POWELL

said, he was ready to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

MR. CHILDERS (Edinburgh, S.)

asked the Chancellor of the Exchequer, before the Committee parted with the clause, to explain what was proposed to be done with the small amount of Three-and-a-Half per Cent Stock, to which no reference had been made.

MR. GOSCHEN

said, he fully recognized the duty which devolved upon the Government in endeavouring to bring all these Stocks into one; but it would be impossible to deal in the present Bill either with the Four per Cent Stock or the Turkish Guarantee Stock. That Stock must claim attention at the proper time; but before it could be dealt with it would be necessary to take steps for consulting the French Government.

Question put, and agreed to.

Clause 3 (Mode of signifying dissent).

MR. SYDNEY GEDGE (Stockport)

, in moving, as an Amendment, to leave out Sub-section (3), which provides— That the transfer of any stock to which a dissent relates shall be subject to the prescribed condition, and shall be entered in the books of the Bank under the same number as was fixed for the stock when the dissent was so signified, said, his reason for moving the omission of the sub-section was that they were dealing with the stockholders who dissented to the conversion, and would be paid off at such times as suited the convenience of the Chancellor of the Exchequer. What might happen was this—it was quite possible that the holders might not be paid off until the 1st of August next year, and the fact that they were liable to be paid off would place them in an embarrassing position, seeing that they would have to hold Stock that was liable to be paid off. It appeared to him that the holders of such Stock ought not to be interfered with in regard to their right of dealing with it. A man might hold £100,000 worth of Stock and might desire to sell it bit by bit; but if he (Mr. Gedge) read the clause aright, there could only be one transfer of that Stock, and it was not to be dealt with unconditionally, but subjected to some conditions to be drawn up by the Treasury. The sub-section would, therefore, hamper the holders of Stock, and he submitted that the Government must either pay off the public creditor or leave him his rights until he was paid off. It would be unfair and inconvenient to the holders of Stock, who chose to be paid off and not accept the conversion, that they should remain until it suited the pleasure of the Government to pay them off hampered with restricted provisions.

Amendment proposed, in page 3, to leave out Sub-section (3).—(Mr. Sydney Gedge.)

Question proposed, "That Sub-section (3) stand part of the Clause."

THE ATTORNEY GENERAL (Sir RICHARD WEBSTER) (Isle of Wight)

said, that if the hon. Member would consult the Scheme of 1844 he would find that exactly the same provision as this was made, and that it did no harm to the holders of Stock. There were certain well-known rules applicable to the holders of Stock at the present time, and it was considered desirable, in dealing with the matter, that the holders should have no capricious right to break up the amount of Stock they held. The Government considered it necessary to follow the precedent of 1844, and he hoped the Committee would support them in that view.

MR. SYDNEY GEDGE

said, he had either shown a grievance or he had not done so. If he had shown a grievance, a mere reference to a precedent set 45 years ago did not cure it, and he considered that the grievance itself ought to be remedied.

THE CHANCELLOR OF THE EXCHEQUER (Mr. GOSCHEN) (St. George's, Hanover Square)

pointed out that the holder of Stock could sell his Stock before he accepted the scheme of the Government, and by that means the whole difficulty would be avoided. Much inconvenience would arise if the Stock held by dissentients was liable to be split up into a number of fractions. If there were dissentients, he would endeavour to meet their case by paying them off in full at the earliest possible moment.

Amendment, by leave, withdrawn.

Clause agreed to.

Clause 4 (Time for signifying dissent in case of persons abroad) agreed to.

Clause 5 (Dissent by executors, trustees, & c.)

MR. SYDNEY GEDGE (Stockport)

said, he was sorry to be so frequently on his legs; but he had been in communication with many persons in regard to this Bill, and he was endeavouring to attain some of their objects. The next Amendment he had to move was to insert in page 4, line 18, after the word "Stock," "or any Consolidated Three per Cent Stock or any Reduced Three per Cent Stock." He hoped the Chancellor of the Exchequer would accept that Amendment. He did not see why the New Throes provided for in the clause should not have the same provisions extended to them as other Stock. Unfortunately, in the Bill, as it stood, all kind of Stock had been dealt with in a confused manner. The whole Bill was full of bad drafting, and it required amendment in various parts.

Amendment proposed, In page 4, line 18, after the word "Stock" insert "or any Consolidated Three per Cent Stock or any Reduced Three per Cent Stock."—(Mr. Sydney Gedge.)

Question proposed, "That those words be there inserted."

THE CHANCELLOR OF THE EXCHEQUER (Mr. GOSCHEN) (St. George's, Hanover Square)

said, that the hon. Member was again pursuing what he might call the same erroneous hypothesis which had induced him to put his first Amendment on the Paper. The hon. Member said the Bill was badly drafted; but it appeared that it was badly drafted only in the view that it intended to do something which it did not intend to do. Considering that the Bill dealt with a very complicated subject, he thought that it was extremely well drafted, and extremely well arranged. The hon. Member himself complained of the omission from Part II. of Part I. the plan laid down was that the two Stocks, in order to avoid confusion, should be dealt with in two separate Parts. For that reason he could not accept the Amendment, which was contrary to the general construction of the Act.

Question put, and negatived.

Clause put, and agreed to.

Clause 6 (Funds in Court).

Amendment proposed, in page 4, line 26, after the word "name," to insert the words "or in the books."

Question, "That those words be there inserted," put, and agreed to.

MR. SYDNEY GEDGE (Stockport)

, in moving, as an Amendment, to omit Sub-section (2), which relates to the application of the High Courts and the Court of Session, said, his reason for moving the Amendment was that the application might be necessary, not only with regard to Part I. of the Bill, but also with regard to Part II. As a matter of fact the sub-section clearly referred to the whole Bill, and not to this part of it merely, and he urged that it should be omitted and re-enacted with another sub-section as a whole in another part of the Bill—namely, Part IV.

Amendment proposed, to leave out Sub-section (2).—(Mr. Sydney Gedge.)

Question proposed, "That Sub-section (2) stand part of the clause."

THE ATTORNEY GENERAL (Sir RICHARD WEBSTER) (Isle of Wight)

said, the Government could not accept the Amendment. The hon. Member had referred to the drafting of the Bill. Nobody would suggest that a lawyer might not have drawn it in a better form if there were only one mind brought to bear upon it; but one of the objects the Government had in view was so to draft the measure that laymen as well as lawyers should be able to feel their way about and fully understand what they were doing. The object had been to make the Bill as easily understood as possible. It was, therefore, important to follow the language of precedents. As to the Amendment, it was thought desirable that the scheme in this particular part of the Bill should be completed, and the sub-section, therefore, was necessary.

Question put, and agreed to.

Clause, as amended, agreed to.

Clause 7 (Stock held by official trustees of charitable funds).

Amendment proposed, in page 5, line 7, to leave out "may" and insert "shall."

THE ATTORNEY GENERAL (Sir RICHARD WEBSTER) (Isle of Wight)

said, the Government had no objection to the Amendment.

Amendment agreed to; word substituted.

Clause, as amended, agreed to.

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