§ MR. J. HOWARD (Middlesex, Tottenham)
I beg to ask the Chancellor of the Exchequer whether Her Majesty's Treasury will authorise the Public Works Loan Commissioners to receive hack, without demanding a high premium, moneys which were formerly borrowed when the rates of interest were abnormally high, in order that School Boards and other public bodies may re-borrow from the same authority at the current rates fixed by the Commissioners, or in the open market, upon very much lower terms than those upon which the moneys were originally borrowed?
§ THE CHANCELLOR OF THE EXCHEQUER (Sir MICHAEL HICKS BEACH,) Bristol, W.
Every loan amounting to £100 outstanding represents the asset of £100 Local Loans stock, which has been borrowed for the purpose of making the loan. But £100 would barely cancel £90 of that stock at its present price. It is evident, therefore, that such a proposal as the question suggests would endanger the solvency of the capital account of the fund to the loss of the general taxpayer. Similarly, the solvency of the income account 102 would be endangered by the simultaneous repayment of millions, even if they were all lent out again, for that would mean a loss of about ¾ per cent. on loans amounting to about 14 millions, which represent the loans to School Boards outstanding. A request that in the present state of the money market loans should be received back at par before they are due is one that would certainly not be entertained by other lending bodies.