BRITISH FINANCIAL STATEMENT

Dominion, Volume 8, Issue 2495, 23 June 1915, Page 7

BRITISH FINANCIAL STATEMENT

WAR AT THREE MILLIONS A DAY WAR LOAN AT FOUR AND A HALF PER CENT. FOR INDEFINITE AMOUNT s (Roc. Juno 22, 10 p.m.) London, June 21, The Chancellor of tho Exchequer (Mr. Reginald M'Kenna), in presenting the Financial Statement in the House of Commons, said that the deficit of £518,000,000 had to be made good by receipts other than revenue. The expenditure on the war was nearly £3,000.000 daily, and tho amount was rising. It was proposed to raise a loan at 4-J per cent, at par, repayable in ,1945, tho Government to have the option to pay in 1925. The Government was . not asking for any definite amount. The Chancellor appealed to the patriotism of the country for the use of its gigantic financial resources to enable Great Britain and her Allies to carry on the war to a successful issue. In the earlier stages of the war the Bank of England, with a Government guarantee, made advances to accepting houses and others to enable them to meet their bills. Liabilities in this amounted to £120,000,000, but that liability had no w been reduced to well under £60,000,.000. Ho now proposed to pay off the bank from the surplus of £80,000,000 it had, and thus leave the bank free to watch over the exchanges and protect the country's gold reserves. Treasury Bills Inconvenient. Mr. M'Kenna continued 1 "Wo have had already issued £235,000,000 in Treasury bills. There were two objections to an indefinite issuo ef bills: Firstly, they had a habit of falling due when, it might be inconvenient to find the money; secondly, although the distinction might be fine, wo borrowed the bankers' and not the public's. money. We wanted money in a way that we were not obliged to repay during the course of the war. The loan would give this advantage, also: it would have the effect of assisting foreign exchange. Consols had depreciated almost to the point of boing unsaleable. The Government was bound to afford relief in thei interests, of the commercial community. A sudden drop in Consols would entail rum and bankruptcy to many, and this the State was bound to avert." Tho Government, said Mr.. M'Kenna, thought it prudent not to fix the amount of the loan. He reminded the people that every effort made was not only necessary to carry on the. war, but to bear fruit enabling us to maintain our financial pre-eminence when the war was over. However long the war lasted, there was the future, and he did not want to seo it cripplcd by neglect of pru> denco and economy. Conversion of Present Holdings. It would be open till July 10 to proposed holders of the November war loan to be allowed to convert their holdings into tho new war loan stock; also to holders of consols and and 2} per cent, annuities, for £75 of consols to be convertible into £50 of tlie new loan, the annuities to be exchangeable in tho proportion of £78 and £67 respectively to £50 of the new loan. Subscribers to tho loan would bo entitled to any higher rate of interest that might be fixed for future loans. It was proposed to provide for the sale of £5 to £25 bonds through the post office. War loan vouchers for ss. or multiples to Jbe on sale at the post offices, trade unions, and other offices, with 5 per cent, interest for every complete lponth unfil it reached £5, when the vouchers would be oxchanged for a bond. An Act of Mercy. He who subscribed now would be doing an act of mercy and a benefit to himself and his country. He who saved to subseribo would bo better able to bear the strain after the war. (Cheers.) If consols were all converted that would mean tho application of at loast four hundred millions to tho new loan. Tho methods of issuo would be arrangod to meet overy class and every purso. Ho hoped all would curtail customaryexpendituro and subscribe to the loan. Time for Further Taxation Not Yet, Mr. M'Kenna. said that the strongest criticism of the loan were that the terms were too generous. The Government wanted to raise the money, and did not want people to. say that they would wait for bettor terms later. In reference to a suggestion that they ought to raise the money by taxation, Mr. M'Kenna declared that it would bo best to tako one step at a time. If further large sums were required, there must ,be further taxation, but tho time was not yet. He then movod to amend his resolution in the direction of giving him power to cancel tho Treasury bills now issued. The resolution and tho amendment were adopted. Mr. Asquith announced that a Bui postponing the elections for a year would be .introduced forthwith. WAR LOAN PROSPECTUS ISSUED ENORMOUS QUEUES OUTSIDE THE BANK OF ENGLAND. (Rec. .Tune 22, 10 p.m.) London, Juno 22. Tho prospectus for the new loan has been issued. (Rce. June 22, 10 p.m.) . London, June 22. Directly Mr. M'Kenna had concluded his speech in the House, enormous qncus of city men commenced to assemble at. the Bank of England to await, tho prospectus. The general opinion is that the. investment is the most attractive of modern times. Particular approval is expressed of the facilities, offered to small subscribers. ... h fluMti v-B.iic ijiU'rH w ihb ttfypiiwiliu lo t|i« railway. lei'« jaiuifoir distribution tlivoucnout the provwooB l