WAR LOAN BILL. (Hansard, 30 July 1919)

§ The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)
I beg to move, That the Bill be now read the third time. I will take this opportunity of making a statement to the House about the figures rather more complete than that I have given before. The revised figures now available indicate that the total of the Loan 2143 exceeds the figures of £708,000,000 given by me on the 17th instant, just after the closing of the lists, by about £59,800,000. The revised figures are as follows: Stock and Bonds, applied for in cash, of the Funding Loan, £287,956,000; Victory Bonds, £286,748,000; total, £574,704,000, as compared with the £539,000,000 previously announced. This figure includes £18,744,250 for which Treasury Bills were tendered. It will interest the House to see that those applications are almost exactly divided equally between the Funding Loan and the Victory Bonds. Stock and Bonds created in respect of conversion are: Funding Loan, £120,617,000; Victory Bonds, £72,203,000; total, £192,820,000, as com. pared with £169,000,000 previously announced. The total Loans created in cash applications and conversions are £767.524,000, as compared with £708,000,000 previously announced by me. In considering the financial effort which these figures imply, it must be remembered that since the beginning of the calendar year 1919 there has also been raised in cash by National War Bonds of the Fourth Series £290,205,832 and by War Savings Certificates £47,000,000, making together with the Victory Loan a cash total during the calendar year, apart from Treasury Bills and short - term advances, of over £800,000,000.

§ Sir D. MACLEAN
On a point of Order. May I ask whether it will be open to us to discuss the question of Government expenditure or whether we are limited to the rather narrow title of the Bill?

§ Mr. SPEAKER
On the Third Reading the general rule is that the discussion must be limited to the contents of the Bill. This Bill, as 1 understand it, authorises the proceedings which took place in respect of the recent Loan, which was started before the Bill was introduced, but was authorised up to that time only by a Resolution of the House. This is the Bill which authorises the transactions which then took place.

§ Sir D. MACLEAN
I was about to ask the Chancellor of the Exchequer a question, which, I hope, will be in order, as to the inflation of the currency. I think that is not outside the scope of the Bill. He gave us some very interesting particulars at an earlier stage, not of this Bill, but of a Bill relevant to the scope of this Bill, informing us what was the paper issue at the date of the Armistice, at the beginning of the year, and then at 2144 about 1st April. If he could tell us-whether that has been increased, and, if so, to what extent, I think it would be a matter of public interest.

§ Mr. CLYNES
I think there is one question which I would like to put to my right hon. Friend on the statement which he has made, as to whether he can give the House any information as to how the investments on the part of the small investor in connection with the recent Loan compare with previous Loans, and whether he has to hand any information which shows how far industrial and trade unions and labour organisations may have invested their funds in the recent Loan as compared 'with previous Loans?

§ Mr. LAMBERT
Does the Treasury-consider that the response to this Loan was satisfactory, because there was a rumour that banks had to help considerably in raising money for the latter part of the Loan? I would also like to ask whether he could give us any assurance that the Government will not raise another Loan?

§ Mr. CHAMBERLAIN
I am afraid I cannot answer questions about the amount of the currency issue without notice. As regards the second question, I think I must say, speaking very broadly and generally, that the response of the small investor to the recent Loans was less, proportionately, than his response to some of the earlier Loans-I could not say about trade union money, or any other particular form of working - class money, certainly not without notice, and I am not sure whether 1 could get the information, whether the application on the face of it shows for whom it was made. I could, however, make inquiries if my right hon. Friend desires it. The right hon. Gentleman the Member for South Molton (Mr. Lambert) asks me whether the response to the Loan is satisfactory. It is a larger sum than I was advised that I could get. If I am asked whether it fulfils all my hopes, well, sometimes I am unduly sanguine. When you take into account, as I did in the statement that I made just now, the fact that this is not the only Loan this year but that the calendar year from January includes the last months of the previous War Loan campaign and the tremendous whip-up that was then made, and further when you take into account the issues of War Bonds and of War Savings Certificates, then, I think, the response is 2145 satisfactory. I do not contemplate issuing any new loan at present. If my right hon. Friend means, "Will any new Loan ever be issued," he is asking me a question that really is not capable of a satisfactory answer. I am not contemplating anything at present. When shall I contemplate something? I cannot say. I must be governed by the circumstances of the time.

§ Lieut.-Commander KENWORTHY
I would congratulate him and his permanent -officials on the excellent campaign and the wonderful organisation in connection with the Loan. Under all the circumstances, the response was very good indeed. We are faced now with an extraordinarily complicated and difficult financial position which is not understood in the country. My right hon. Friend below me (Sir D. Maciean) made a few remarks on the subject of inflation, and the question is most serious. Practically, the whole of our trouble can be traced to the unavoidable; inflation of currency at the present-moment. I have put down two questions on policy with regard to this matter. Those questions were put with the intention of assisting in any way that I could to draw attention to this very serious matter. The general public do not understand the situation. I do ask the Chancellor of the Exchequer to take us into his confidence as soon as his experts have advised on the policy which they think is for the general good of the country, and to tell us what steps it is proposed to take with reference to this question, because in my opinion heroic steps will have to be taken. We shall either have to stop the issue of further notes, which may mean considerable loss to business men, or we shall have to have very much heavier taxation in order to reduce the floating debt. That being the ease, it is necessary to educate the people beforehand, and I urge the right hon. Gentleman to let us know exactly what is the policy of the Government and what his experts are proposing with regard to the matter. We find ourselves faced with the necessity of paying £400,000,000 yearly interest on loan. This country as at present constituted cannot stand it, and the future financial policy of the country will have to be radically changed. I am sure that in every part of the House the Chancellor of the Exchequer will receive the utmost sympathy and assistance if he will tell us what the policy is going to be, and, by doing so, be will begin the necessary, though pos- 2146 sibiy painful, education of the country in our financial position and in the necessary remedies.