HC Deb 30 March 1925 vol 182 cc939-43

asked the Chancellor of the Exchequer whether he is aware that the intention of the Government to offer a further issue of 3½ per cent. Conversion Loan for the amount of £30,000,000, announced on Wednesday last at four o'clock, was publicly known on the Stock Exchange during the morning; and whether there is any explanation of this disclosure?


asked the Chancellor of the Exchequer whether he is aware that the issue of £30,000,000 3½ per cent. Conversion Loan was prematurely divulged on the Stock Exchange; and whether he will institute an inquiry directed to the discovery of the source and method by which this information was divulged?


asked the Chancellor of the Exchequer whether his attention has been drawn to the premature disclosure of the terms of the offer of Conversion Loan announced on Wednesday afternon; and whether he will make any investigation into the circumstances?


asked the Chancellor of the Exchequer if he has any information as to the manner in which the news of the 3½ per cent. Conversion Loan was divulged; and if he is prepared to take strong action to prevent such disclosures in the future?


As soon as I heard of the suggestion that the new 3½ per cent. Conversion Loan issue had been disclosed before the public announcement at 10 minutes to four on Wednesday last, I asked Sir Warren Fisher, the head of the Civil Service, to make a full personal investigation on my behalf. Sir Warren informs me that after inquiry of all the persons directly concerned in the preparations for the issue, and of those in the market who would be directly affected, he is satisfied that no such disclosure in tact took place. I am also informed that the movement of prices, which was general, and not confined to Government stocks, was entirely explicable by the state of the market, and that sales on Wednesday were not abnormal.


Will the right hon. Gentleman cause some inquiries to be made of the Committee of the Stock Exchange as to what losses were suffered by dealers in the Consol market owing to this suggestion?


The inquiries which Sir Warren Fisher made covered that sphere, but if the hon. Gentleman has any further information to give on the subject I shall make further inquiries.


Who prints these prospectuses? Is it done by the Government Printing Department or are they printed outside?


Prospectuses are printed in the Bank of England and there is no suggestion that any leakage occurs there.

Captain GEE

In view of the fact that this knowledge was divulged, will the right hon. Gentleman have another searching inquiry, because it is proved that leakage takes place somewhere and we ought to know where?


The tenor of my answer was contrary to the assumption contained in the supplementary question of the hon. and gallant Gentleman.


Does the right hon. Gentleman think it a proper course to pursue to introduce the name of a permanent civil servant in a controversy in this House when the responsibility is his own?


I do not in the least desire to avoid responsibility, but it seems to me a natural thing to ask Sir Warren Fisher, who is the head of the Treasury and also head of the Civil Service, and who happened not to be directly concerned with this particular transaction, to make inquiry of the Governor of the, Bank of England, the Government broker, and among jobbers in the Stock Exchange market concerned to ascertain whether anything abnormal or unusual had taken place, and I have given his report to the House. I take the fullest responsibility for anything which took place. If there are any other facts which are known to any other Member of the House, and they are brought to my notice, I will make further inquiry.


What is the authority of the right hon. Gentleman for the entirely new precedent of introducing the name of a permanent civil servant as head of the Civil Service?


If I have unwittingly trespassed into the field of constitutional precedent, I wish to enter at this stage all possible disclaimers, but the Permanent Secretary to the Treasury is responsible to the Prime Minister as First Lord of the Treasury, and only in a secondary degree is he responsible to the Chancellor of the Exchequer, who is the Second Lord of the Treasury.


As this movement was not quite normal, and these stories have been circulated, does the right hon. Gentleman think that there was an absolute coincidence on that morning?


I have given all the information which has been in my possession. Of course, many people are interested in finding out what is going to take place in these matters. They make their living by doing so, and many rumours are current from time to time. I have given all the information that is at my disposal.


Can the right hon. Gentleman indicate any occasion during the last generation when there have been similar rumours accompanied by a similar movement?


I am unable to indicate everything that has taken place in a period covering so many years as the last generation without making some further inquiries than are open to me at present.

76. Mr. DALTON

asked the Chancellor of the Exchequer if he will state approximately the saving in interest and the addition to the nominal value of the National Debt which are likely to result from the conversion of Treasury Bonds maturing on 1st May next into 3½ per cent. Conversion Loan, and the corresponding saving and addition to nominal value which would be likely to result if the conversion of these bonds were to be made into 4½per cent. Conversion Loan?


The offer of 3½ per cent. loan is by tender, and the result of the offer is not, of course, yet known. At the minimum price of 76¾ the saving of interest would be over £100,000 a year. The increase in the nominal amount of the National Debt would be a little under £7,000,000, but the new stock is virtually irredeemable. The second part of the question is purely hypothetical and depends on the price at which 4½ per cent. Conversion Loan could be issued. The annual saving would, however, certainly have been less and there was no question on the present occasion of issuing a stock which the Government are under an obligation to redeem in 19 years.


Will the right hon. Gentleman consider the relative merits and demerits of making a conversion into 3½ and 4½ per cent. stock respectively?


I cannot pretend to be a great authority on this subject, but I took the advice of the Governor of the Bank of England and of the high officials at the Treasury, who have been for a long period concerned in those matters, and it seemed to me from the arguments put before me that the course which they recommended was a right one and a wise one, and, therefore, I accept full responsibility for it.