HC Deb 23 April 1903 vol 121 cc242-4

Before I leave the subject of Consols, I should like to refer to a correspondence which was opened by my hon. friend the Member for Exeter, whose opinion as a financial authority must necessarily have great weight. My hon. friend has drawn a somewhat depressing comparison between our credit and the credit of foreign countries in the past and present, as represented by the prestige enjoyed in the Money Market by the respective Government stocks. He makes out that, as compared with average prices during the period from 1895 to 1898, our stock has fallen much more than that of other countries. But it is hardly fair to take that period for comparison, because it was marked by quite an exceptional rise in the price of Consols, while there was no corresponding simultaneous rise in the price of foreign stocks. For the purpose of comparison I take the yield and not the price of the different stocks because of the difference of denomination. The yield of Consols fell from £2 6s. in 1895 to £2 in 1898, while the yield of French Rentes fell from £3 to £2 19s. only, and the yield of German Three per Cents, actually rose from £3 2s. to £3 4s. But if we are to draw comparisons, I think we ought to deal with a much longer period of time, so as to avoid the concatenation of extraordinary circumstances which has been so upsetting to our calculations. Let us take the period of ten years, and what do we find? We find that in 1893 Consols yielded £2 12s. per cent., French Rentes £3 2s., and German Three per Cents. £3' 10s. 6d. At the present time Consols yield about £2 15s., French Rentes £3 1s. 3d., and German Three per Cents. £3 6s. 4d. Thus the prestige of French Government securities is much what it was ten years ago. that of British securities is a little lower, and that of German securities a little higher. If we bear in mind that German Three per Cent. stock did not come into existence until 1891, and, therefore, had hardly secured an established position in 1893, the difference to our disadvantage is very slight. When we also remember that we have gone through a great war, which necessitated our borrowing over £150,000,000, I think we may congratulate ourselves on the fact that the difference is not more marked; and that we may, with a light heart, put aside all the sorry prognostications made of late with regard to the financial position of the great stock of this country.