§ SIR HOWARD VINCENTI beg to ask Mr. Chancellor of the Exchequer if his attention has been called to the heavy discount at which British Government stocks now stand in the markets of the world; and, having regard to the fact that the national credit has never been brought so low within the memory of the present generation, if he proposes to take any steps to restore it.
§ MR. ASQUITHI fully recognise the serious character of the decline which has taken place in the capital value of our securities of recent years, but I cannot accept the statement that our credit is at the present moment lower than it has ever been within the memory of the present generation. The old Three per cent. Consols, which were for many years generally regarded as the premier security of the world, could so recently as 1885 be purchased as low as 94⅜ 465 and for no single year of their long history did they consistently stand above 100. A price of 100 for a 3 per cent. stock when translated into terms of a 2½ per cent. stock becomes 83⅓. The lowest price recently touched by our present 2½ per cent. Consols was just below 84½. Many of the causes which have contributed to the decline not only of British Government stocks, but also of most other high class securities, which has taken place during the last ten years, are international in their operation and independent of Government control. During the last twelve months I may instance the increased demand for money and consequent rise in the ruling rates of interest, duo to exceptional industrial and commercial activity at home and abroad and to the necessity for replacing the capital destroyed by the San Francisco earthquake and other disasters. On the other hand, the enormous increase of our national expenditure within recent years, the neglect to make adequate provision for the redemption of existing debt and the freedom with which new obligations have been created has, in my opinion, undoubtedly affected the national credit. The steps we propose to take—and are taking—for its restoration are to reduce expenditure, to strengthen the sinking fund and to avoid borrowing for current expenditure on services such as Naval and Military works which ought to be paid for out of current Revenue It is my belief that only by persevering in this course can a permanent improvement be secured.
§ SIR F. BANBURY (City of London)asked whether the right hon. Gentleman's attention had been drawn to the misappropriation of nearly half a million of money from the sinking fund within the last few days by the Secretary of State for War?
§ MR. ASQUITHThere has been no misappropriation. The money was applied to the reduction of capital expenditure; and it has been approved by a vote of the House.
§ MR. CHIOZZA MONEY (Paddington, N.)asked whether the right hon. Gentleman's attention had been called to the fact that that morning British 2½ per cent. Consols could be bought for the 466 April account at 85½, which yielded about £2 18s.; and that Imperial German 3 per cent. could be bought at 84½, which yielded £3 10s.?
§ SIR HOWARD VINCENTasked whether, on the other hand, the attention of the right hon. Gentleman had been called to the high price of French Rentes?
§ MR. T. L. CORBETTIs the right hon. Gentleman aware that the lowest point Consols touched was in 1885, the year in which Home Rule was threatened; and is it a mere coincidence that when Home Rule is once more threatened Consols should fall to a low point?
§ MR. ASQUITHThe hon. Gentleman is quite inaccurate. The Home Rule Bill was introduced in 1886.
§ MR. T. L. CORBETTThe word I used was "threatened."