WAR LOAN (REDEMPTION) BILL. (Hansard, 4 March 1910)

Sir F. BAN BURY
Before this Bill passes I would like again to draw the attention of the right hon. Gentleman the Financial Secretary to what I consider to be the mistake the Government are making is offering to fulfil their obligations after a certain date—and I lay emphasis on those words—in a manner different from that in which they had undertaken to carry them out. The right hon. Gentleman and the Chancellor of the Exchequer did not meet my arguments upon that point yesterday at all, but they endeavoured to show, first of all, that in their opinion there was no demand for this alteration. Whether or not there has been a demand has nothing to do with whether the proposal of the Government is right or wrong, or whether or not it is a breach of the undertaking they gave to the people who invested in this stock. They also tried to drag a red herring over the track by saying I had endeavoured to depreciate English securities by the Amendment which I had brought forward, and the Chancellor of the Exchequer said, "Let us have enough of this cry of 'stinking fish,' and depreciating everything that is English." Perhaps the Financial Secretary will draw the attention of the Chancellor of the Exchequer to this statement written by the hon. Member for Louth (Mr. T. M. Healy) in this week's "National Review," page 46:— In December, l908, Mr. Lloyd-George told British investors that it would be safer for them to put their money in an old stocking than in Irish land. What is that but depreciating an English security?

§ The FINANCIAL SECRETARY to the TREASURY (Mr. Hobhouse)
I do not quite understand. Is this an article by the hon. Member who sits for the Louth Division in Ireland or for the Lincolnshire Division?

§ Sir F. BANBURY
Louth in Ireland.

§ Mr. HOBHOUSE
The hon. Baronet puts some words into the mouth of the Chancellor of the Exchequer, but I do not understand whether it is ipsissima verba or merely what is called a "free translation."

§ Sir F. BANBURY
Of course, I do not guarantee implicitly the statement of the hon. Member for Louth, but I gave the quotation, and the words are in inverted commas, so it is to be presumed they are the words spoken by the right hon. Gentleman. The article goes on to say:— In the course of the previous Session, the Chief Secretary, when someone in the House of Commons spoke of Shamrock stock, declared it was better known on 'Change as 'Bog Stock.'

§ The CHIEF SECRETARY for IRELAND (Mr. A. Birrell)
I beg the hon. Baronet's pardon. I have always been the highest commender of Irish stock. [HON. MEMBERS: "Bog stock."] You called it bog stock. It is the slang expression on the Stock Exchange, and I was speaking of the unpatriotic conduct of the Stock Exchange in using this slang expression of one of the very finest securities in the whole world.

§ Sir F. BANBURY
I am not a member of the Stock Exchange. I only rose to call the attention of the House to the fact that the right hon. Gentleman should remember that those who live in glass houses should not throw stones. I also wish to ask the Financial Secretary whether, if he finds there is a universal opinion amongst investors that the Treasury are guilty—I do not wish to say anything in an offensive sense—of a little sharp practice, he will avail himself of the other place to make the alteration he refused to make in this place. I do not think it could be against the dignity of the House of Commons or of the Government, if they found they were wrong, to allow an alteration to be made in another place. It would take no time, and I trust, if the right hon. Gentleman sees he has made a mistake—and we all make mistakes—he will remedy it in another place.

§ Mr. HOBHOUSE
I can reply in a sentence to the invitation extended to me by the hon. Baronet, but it is more difficult to answer that challenge or invitation, 1121 because, while I gave him an explicit assurance the first day that this subject was discussed, he did me the honour yesterday to refuse to believe the assurance I gave him. That assurance was that the Government were not taking the action they were with regard to this unclaimed money on account of the desire to keep up the market in Consols.

§ Sir F. BANBURY
I admit that I did make that statement the day before. The right hon. Gentleman assured me that was not so, and I never repeated it. It was a follower of the Government, the hon. Member for Hackney (Mr. Bottomley), I believe, who alluded to it. I accepted the right hon. Gentleman's assurance, and I did not allude to it any more.

§ Mr. HOBHOUSE
Then the answer is more easily and readily given. The action of the Government was taken at the express desire, not of the Government at all, or with any idea or relation to the price of Consols. It was taken purely at the request of the Bank authorities for purposes of general finance.

§ Sir F. BANBURY
They may make a mistake.

§ Mr. HOBHOUSE
The hon. Baronet asks me if I find a widespread desire to make this alteration in another place. I should be disposed to accede to that if there was the slightest trace of that desire, but it has found no expression in any quarter. The hon. Baronet knows perfectly well that there are difficulties upon this Question from the financial point of view. It would be exceedingly difficult for me to answer that invitation off-hand, but, if there were any indication of this widespread expression of view which he says he thinks there is, but of which he adduces no proof, I should accept that invitation.

Mr. WORTHINGTON-EVANS
I would also press, if I may, the request of the hon. Baronet, because yesterday, when we complained that the Government were not carrying out the bargain made with the original subscribers of the War Loan issue, the only answer given was that we were decrying the securities of our own country. That was not at all my intention, and I do not believe that it was the intention of my hon. Friends. We were calling upon the Government to give at least more time to those who did not come up on due date to receive their cash. It was denied by the Chancellor of the Exchequer—although in effect the right hon. Gentleman admitted the charge we made that the 1122 Government was not carrying out the bargain made with the holders of War Stock. I notice the right hon. Gentleman said that those holders who had not received and not applied for their cash on the due date or within seven weeks thereof, had got to invest it in Consols. Our point is that the Government has no right to alter the bargain and to force holders of War Stock who did not apply with due diligence for their money to invest it in Consols. The right hon. Gentleman added that they were giving those holders a great chance by allowing them to invest the money in Consols, and, in answer to cries of "Why," he stated that it was in order that they should get interest—that obviously it was in the interest of the holder that should be so. On the other hand, is it the duty of the Government to do more than they promised the original subscribers? By giving them something beyond that to which they were entitled, they are again varying the bargain made. There is another financial point which I feel sure has not escaped the Government. It must be at the root of their attempting to alter the bargain made with the War Stock holders. If they did not convert it in the way they are proposing to do, into Consols, it would be necessary for the Government to make a new issue of Consols, and, having regard to the present price of Consols, it is perfectly clear they would not net to the Treasury more than 80 per cent. or 80½ per cent. Therefore the Government are forcing on the War Stock holders a bargain which is a bad one for them, because it is making them take Consols at a price greater than the Treasury could get for them in the ordinary way. At least further time should be given to those who are not following their investments very closely. It is not yet too late to extend the period of seven weeks to three, four, or even five months. The point made yesterday was that the Government did not want to force the investment on the particular day when the stock was ex-dividend—the 1st June. That could be got over by making it the 1st or 2nd October, and if that alteration were made substantial justice would be done. I support, therefore, the suggestion of the hon. Baronet the Member for the City that in another place this alteration should be introduced.