§ 67. Sir CLEMENT KINLOCH-COOKEasked the Chancellor of the Exchequer what is the amount of the pre-war funded debt still in existence; at what sum can this debt be redeemed at the present market values; and whether the redemption of this pre-war funded debt would mean a saving to the nation which would set off the total amount of the premiums repayable on National War Bonds and the obligation which devolves upon the State in relation to War Saving Certificates?
Mr. CHAMBERLAINThe stock now stands at about 55, but I am advised that any large purchases at or near that price would not be possible. But 1103 even if the whole amount could be purchased at 55 with money borrowed at 5 per cent. or over, it is obvious that the operation would result in an increase of annual cost to the taxpayer. How far such annual loss would be covered, or more than covered, by future gains depends entirely on the value of money and the state of the national credit when the new securities mature for renewal or redemption. The suggested operation, if it could be carried out—and I do not think it could be carried out on any considerable scale—would, however, have the result of converting funded into unfunded debt, at a time when the unfunded debt is already of dangerous dimensions and of directly retarding that recovery of the national credit on which the operation itself would have to rely for its success.