§ 62. Sir ALFRED KNOXasked the Chancellor of the Exchequer why the terms offered on the occasion of the flotation of the recent Palestine loan, guaranteed by the British Treasury, represented a yield of £4 19s. 6d. per centum, whereas the present yield of British Government long-dated securities is approximately £4 15s. per centum?
§ Mr. CHURCHILLThe Palestine Loan is redeemable in 15 years, at the option of the Palestine Government, and on that ground alone, apart from other considerations, it is not comparable with the British Government long-term stocks, which my hon. Friend has in mind, which cannot be redeemed for 30 or 40 years or longer. The actual yield of the Palestine Loan, on the basis of redemption in 15 years, is £4 19s. per cent.
§ Sir A. KNOXIs the right hon. Gentleman aware that prior to the issue of this loan the London County Council 5 per cent. loan stood at 103¾ on the market, and is the London County Council security a better guarantee than that of the Treasury?
§ Mr. CHURCHILLI should not like to answer that question at Question Time. All these matters are extremely complicated, and if, in the ordinary course of the financial business of the year, it be desired to raise a Debate on our conversion policy, or loan policy, I shall be quite ready to give a reply.
§ Sir W. DAVISONIs it not the fact that on the issue of this loan our own Conversion Loan fell substantially? Are not these matters that should be looked into before further issues of this kind are made?
§ Mr. CHURCHILLThese matters are considered by the authorities on whom the Chancellor of the Exchequer has to rely, and every consideration is taken into account. In this case, it appears that this loan has received a measure of support on sentimental grounds on which the Treasury could not possibly count beforehand.
§ Lieut.-Commander KENWORTHYHave not the Treasury also to count on the anti-Zionist sentiment and propaganda of the party opposite?
§ Sir A. KNOXDoes not this loan represent the presentation of a large sum of money to Stock Exchange speculators?
§ 66. Sir FRANK NELSONasked the Chancellor of the Exchequer the cost of issue of the recent Palestine loan, including cost of underwriting, brokerage, advertising, etc.?
§ Mr. CHURCHILLThe Treasury is not responsible for the expenses incurred in connexion with the issue of this loan, which are a matter for the Palestine Government.
§ Sir F. NELSONMay I ask on whom the responsibility lies as to whether or not a loan of this description is underwritten; a loan in which the principal and interest is guaranteed by the Treasury?
§ Mr. CHURCHILLI should like to have notice of that question. I understand that the arrangements for this loan were not in any way out of the ordinary.
§ Sir F. NELSONIs the right hon. Gentleman aware that a great body of opinion has arisen which holds the view that, as very favourable terms were offered, it was quite unnecessary to underwrite it at all?
§ Mr. MACQUISTENIs the right hon. Gentleman also aware that probably the profits of the loan will go into the pockets of the same people who go out to Palestine?