§ Mr. BOOTHI beg to ask the Chancellor of the Exchequer whether his attention has been drawn to a statement by an official of the Birkbeck Bank that the recent failure of that concern was due to "Lloyd George Finance"; whether he has also noticed subsequent allusions of a similar nature in the daily Press; and whether he is prepared to make any statement to the House on the subject?
§ Mr. LLOYD GEORGEI am informed by the Board of Trade that the failure of the bank is due to depreciation in the value of the securities held. They have communicated on the subject with the chief accountant of the bank, who was in charge of the security department. He has made the following statement on the subject. I am reading from his signed statement:—
"The great fall in the investments of the bank took place at the time of the 1681 Boer War. At the time of the Boer War the reserve was more than ample to cover every scrap of depreciation. I am saying this without reference to figures, but have no doubt substantially it is quite correct. At the time of the Boer War our securities began to drop away. In 1900 the making of Colonial Securities Trustee Investments was also the cause of a large depreciation. The effect of legislation of that sort is often not felt until several years afterwards. To these two factors I put down the greater part of our depreciations." He then furnishes particulars of the Consols held by the bank at different dates. He goes on to say: "I think financial authorities attach great importance, so far as depreciation of securities is concerned, to the extension of the power of trustees to invest in Colonial stocks." He also says the society lost a considerable sum owing to the forced realisation of £3,000,000 of securities to provide for withdrawals made during the run on the bank in November, 1910. I have examined the stock quotations in respect of the holdings of this bank, and they all show a much larger depreciation from a date shortly before the outbreak of the Boer War up to the end of the lifetime of the late Unionist Government, than since the initiation of what is called "Lloyd George Finance." I will furnish a few examples which are given here upon the authority of the chief accountant.
London and North Western 3 per cent. debentures, March, 1899, were 112; at December, 1905, when the late Unionist Government came to an end they showed at 98, a drop of 14 points. At April, 1909, they were 90, and on the 9th June, the date of the failure of the bank they were 85¼ a drop of 4¾ that is to say 14 points in the lifetime of the Unionist Government and 4¾ since the date of what is called the "Lloyd George Finance." Take Cambridge Corporation 3 per cent. stock, of which I believe they have a very considerable holding. At 31st March, 1899, this stock stood at 101; on 8th December, 1903, it was 881, a drop of 12½ on 29th April, 1909, it was 85, and on 9th June, 1911, it was 84, a drop of just one point. The same applies to Great Western, Midland, North Eastern, Metropolitan 3½ per cent. and London County Council stock. The drop in each case was very much heavier. I am very glad to be able to state that the Board of Trade are very hopeful that the depositors in this bank will only lose a small proportion of their deposits. But, undoubtedly, during the past few days 1682 they have been both anxious and apprehensive of the worst, and under the circumstances I cannot help regarding the conduct of the papers which supported the Government who made the Boer War and passed the Colonial Securities Act, and which now try to persuade these poor people that their loss is attributable, not to those causes, but to the action of the Liberal Government, as not only mendacious but mean.
§ Mr. BONAR LAWIs it a fact that during the period the right hon. Gentleman has described as being under the Unionist Administration the securities of all nations fell, as well as those of the United Kingdom, while since the introduction of the Budget ours was the only national security which had continued to fall?
§ Mr. LLOYD GEORGEThat, like most of the hon. Gentleman's facts, is strictly inaccurate. I may also point out that it is equally irrelevant. The whole point is whether the failure of the bank is due to something which happened two years ago, for which this Government is responsible, or whether the depreciation in securities which caused the failure is attributable to-something which occurred much earlier. That is the whole point; and upon that point. I am able to prove from the statement of the chief accountant who is responsible for keeping these securities. [HON. MEMBERS: "There are no figures."] I have given the figures— that this statement is an unqualified falsehood.
§ Mr. FELLIs it not a fact that when that Liberal Government came into office Con. sols were ten points higher than they were at the date of the failure of the Birkbeck Bank, and whether it is not always the last straw which tells?
§ Mr. HUNTIs the right hon. Gentleman aware that the Liberal Government injured the Bank quite unnecessarily by backing the Boers and so protracting the war?
§ Mr. FALLEOne point the right hon. Gentleman has not made quite clear. Have not these securities dropped in value since the present Government came into power?
§ Mr. LLOYD GEORGEAgain I would remind the hon. Gentleman that I think he had better stick to his own Press— that it is due to the depreciation in. securities since what they call "Lloyd George 1683 Finance." That is, since 29th April, 1909. If hon. Gentlemen wish to shift their ground and say that is not true, I should be very willing first of all to accept that and then proceed with the next point.
§ Mr. R. S. GWYNNEWill the right hon. Gentleman tell us what proportion of the assets are invested in stocks and shares, and what proportion in buildings and land?
§ Mr. LLOYD GEORGEAs a matter of fact I did make some inquiry, and the proportion in buildings and land is very small. The vast majority of the holdings is in stocks and shares.
§ Mr. G. TERRELLWhat is the amount of the depreciation since the introduction of the Budget of 1909?
§ Mr. LLOYD GEORGEThat is exactly what I have stated.
§ Mr. GEORGE TERRELLMay I ask the amount of the depreciation since the introduction of the Budget referred to?
§ Mr. LLOYD GEORGEIt is exactly what I have stated.
Several other Members having risen—