§ If I may briefly pass in review the successive stages in the campaign which His Majesty's Government have waged, and of which I have been the instrument, since we took office, for cheaper money and lower rates of interest, the following features stand out. In my first Budget speech, in October, 1945, I announced a cut in short-term interest rates, a half of one per cent. in the case of Treasury Bills—from about one per cent. to about a half of one per cent.—and, in the case of Treasury Deposit Receipts, from one and one-eighth per cent. to five-eighths per cent. These rates have not be changed since that time. Shortly after this, in November, 1945, I gave notice of the repayment of £206 million of the 2½ per cent. Conversion Loan 1944–49, and £444 million of 2½ per cent. National War Bonds 1945–47. No less than £176 million of the former and £284 million of the latter were exchanged into 1¾ per cent. Exchequer Bonds, 195o, with a saving of interest. The balance of these loans was paid off, on the due dates, the Conversion Loan on 1st April, 1946, and the National War Bonds on 1st July of the same year.
§ I took the next step in the cheap money campaign last May, when I replaced the current issue of 3 per cent. Defence Bonds by a new issue of Defence Bonds at 2½ per cent., raising the maximum holding from £2,000 to £2,500. £112 million of these new 2½ per cent. Bonds had been taken up by 31st March last. Last May, I also reopened the tap, and kept it open till July, with an issue of 2½ per cent. Savings Bonds 1964–67. £419 million were subscribed in cash—a very good total—and £334 million were issued in conversion of maturing 2½ per cent. National War Bonds 1946–48. The importance of this operation was that it established the Government's credit at 2½ per cent. on a long-term security with a final redemption date.
§ In September, I gave notice of a new Savings Certificate to replace the old at the beginning of this month, April. It bore a lower rate of interest, more in line with the higher level which national credit had then reached. [An HON. MEMBER: "Question."] It is not a question, it is a fact. In October last, I announced the redemption of the 3 per cent. Local Loans Stock, which was undated, and the issue, 61 at par, of 2½ per cent. Treasury Stock, 1975, or after. This tap was closed on 14th January, 1947, by which time £305 million had been taken up by holders of Local Loans in exchange for their maturing stock, and £117 million had been issued for cash. I said then, and I repeat now, that for the first time in the long history of our National Debt a British Government commanded such credit as enabled it to raise money at par on an irredeemable 2½ per cent. security. Whatever happens in the future, that is a significant historical event, and I think that should have been a proud day for patriots.
§ In the past three months, since this operation concluded, there have been some fluctuations in the national credit. The fuel shortage, the freeze, the snow, the gales, the floods, uncertain news from all over the world, uncertainties about the Budget and organised gloom in certain sections of the Press, all these factors combined to cause a noticeable fall in gilt-edged prices, a noticeable but, I am glad to say, a short-lived fall. There followed a substantial recovery, then a slight relapse, followed, in the last few days; by a good rally up to Budget eve. Today I read that, on the whole, the Stock Exchange is not unduly apprehensive about what I may say before I sit down. During these fluctuations, which are very natural, there was never any heavy selling. It is important that this should be understood. There was not a vast volume of transactions. There was never any heavy selling, but there was, it seems, a momentary loss of nerve in the gilt-edged market and particularly among the jobbers, who were unwilling to take more stock on their books until they knew what was going to happen next. I hope that all these gentlemen will feel stronger tomorrow.