Mr. CHAMBERLAIN (by Mr. Speaker's leave)made the following statement in regard to a new Treasury Bond issue:—
The first dividend date for Treasury Bonds falls on 1st November. It is, therefore, necessary to bring the present issue to an end on Saturday of this week, 30th October.
The House will remember that, when announcing the original issue, I stated that I believed it to be generally agreed that the time had not come for attempting any large funding operation. The situation to-day is certainly not more favourable for such an operation which, apart from other objections, would inevitably destroy the present prospects of housing finance, and, after careful consideration, I have decided not to attempt it.
Subscriptions to the first issue of Treasury Bonds have certainly been disappointing, especially in the case of the large investor. On the other hand, the Bonds have met with an unexpectedly large and steady sale among small investors. This is satisfactory, and it indicates a continuous demand for Government securities by a class who, before the War, took little interest in them. I think it would be a mistake to close this avenue of investment to the class in question at a time when no other issue is contemplated, and I have therefore decided to place on issue a second series of Treasury Bonds, beginning on Monday, 1st November. The conditions will be the same as for the first series, except that the first dividend date will be 1st May, 1921, after which date the two series will be identical.
I have been further influenced in reaching this decision by the fact that, on 1st December, I have to deal with the maturity of approximately £25,000,000 of 5 per cent. Exchequer Bonds, representing the outstanding balance of an original issue of approximately £238,000,000. In order to offer a special inducement to holders of these bonds to re-invest in Treasury Bonds, and so assist in avoiding a further increase in the Floating Debt, holders of the maturing bonds will be given the privilege of using their bonds ex-dividend as the equivalent of cash at par as on 18th November for the purpose 1948 of subscription to Treasury Bonds, in addition to receiving a full six months' dividend on 1st December on their maturing Exchequer Bonds.