LOAN BILL. (Hansard, 6 June 1902)

§ VISCOUNT GOSCHEN

With your Lordships' permission I should like to make a very few remarks on this Bill, illustrating the extraordinary strength of the credit of this country. This Bill, authorises the issue of £32,000,000 in Consols. The issue has already taken place. The price of issue was £93 10s., and I understand the price today is about £97—that is for a stock which is practically a 2½ per cent. stock, because next April the final stage in the conversion of the National Debt which it was my privilege to carry through, will have taken place, and the interest on the stock will be reduced from 2¾ to 2½ per cent. The fraction of the ¼ per cent. for one year may be eliminated, and practically these Consols may be regarded as 2½ per cent. stock, and it stands now at 97. And under what circumstances of borrowing does it stand at that high figure? The country has borrowed £159,000,000 for the war. A portion of that, a comparatively small proportion, has been borrowed on Treasury Bills; but what I may call the addition to the permanent debt is £122,000,000—namely, £30,000,000 of War Loan and £92,000,000 of Consols. Therefore, the total addition of permanent debt is £122,000,000 besides the addition to the floating debt. And notwithstanding this vast sum which has been borrowed it is possible, so strong is the basis on which the credit of this country rests, to borrow this last £32,000,000 at the price of £93 10s., and to see them stand now at 97. One retrospect I should like to make in connection with these statistics. In 1888, when the conversion took place, the 3 per cent. Consol stock stood at about 101. The equivalent in a 2½ per cent. stock to a 3 per cent. stock at 101 would be that they would stand at about 84 per cent. I call your Lordships' attention to this fact, that in 1888 our Consols, translated into 2½ per cent., would have been worth about 84, and they stand now at 97; that is to say, the credit of the country has so improved, and the finances of the country have so been managed during the last fourteen 8 years—I think both circumstances ought to be put together—that that which in 1888 would have stood, if it had been a 2½ per cent. stock at 84, now stands at 13 points higher, and this after an exhausting war and after borrowing £159,000,000! I think the country may congratulate itself upon this situation, which shows that, besides its magnificent resources from the military point of view, the financial resources and the credit of the country have been adequate to the occasion, and that we have no reason whatever to despair of the financial position of the country.

§ THE PRIME MINISTER AND LORD PRIVY SEAL (The MARQUESS of SALISBURY)

I am sure your Lordships are very much indebted to my noble friend for the very interesting statement with respect to the present financial position of the country which he has given to the House. It is very interesting on general grounds, but it is the more so that probably he is the only man in the House who is capable of making such a statement. It is of very great importance that we should be assured, upon authority so high, that our monetary dealings, which undoubtedly have not been distinguished by timidity of late years, have not seriously impaired, on the contrary that they seem rather to have strengthened, the financial position of the country. I can only repeat my thanks to my noble friend for a statement which will be widely read and which will give very great satisfaction. This House contains many elements of great expert knowledge. Perhaps we are a little too sparing in keeping it to ourselves; but I think we may press upon my noble friend, what must have already occurred to him, that though the attendance on the occasion of statements of this kind cannot be described as numerous or enthusiastic, nevertheless the information which it is in the power of men like him to give, and which through the medium of this House is scattered throughout the length and breadth of the land, is more important than many debates or discussions which might have a higher literary value. I hold that noble Lords who place their enormous, their unparalleled acquaintance with public 9 affairs at the disposal of your lordships, and bring it within the knowledge of the people of this country, deserve our most sincere thanks.