HC Deb 20 November 1912 vol 44 cc277-8
34. Mr. MacCALLUM SCOTT

asked under whose supervision is the under- writing of Indian Government loans in London arranged; and by whom are allotments made?

Mr. H. BAKER

The Bank of England supervises the arrangements for the underwriting of these loans and makes the allotments.

35. Captain FABER

asked whether the loaning of large sums from the Indian Reserve to certain banking firms at a rate of interest of 2½ per cent, was equivalent to making such firms a present of at least 1 per cent, per annum on such sums as they received from the Indian Reserve for use in their business; and whether, as the transactions for which the moneys were chiefly used was the provision Of advances made from account to account on the Stock Exchange, which transaction involves a minimum amount of clerical work and which stockbrokers always undertake for a small commission for their own clients, the India Office will in future deal direct with members of the Stock Exchange, and so secure a larger return on the money, while obtaining exactly the same security as is given to the bankers?

Mr. H. BAKER

The rate of interest at which money has been deposited with banks has varied with the rate of discount current at the time. It has been as high as 4¼ per cent. The Secretary of State has received information from all the banks now holding India Office deposits as to the manner in which they have employed them. They have not used them for the transactions mentioned by the hon. Member; and their profit has averaged less than ¼ per cent. Deposits 'with banks have been made only as a temporary measure when the India Office balances were unusually high, and could not all be lent in the usual way, i.e., on security to borrowers on the approved list, which includes some leading firms of stockbrokers. But this has been, and is being done to the fullest extent possible.

Captain FABER

Has the hon. Gentleman received information from the banks that they never really make more than a quarter per cent, profit?

Mr. H. BAKER

A quarter per cent. is the average.

Sir GEORGE YOUNGER

Is the hon. Gentleman prepared to say that that money is only lent from day to day and night to night?