WHY CONSOLS ARE LOW.

Taranaki Daily News, Volume LIV, Issue 243, 13 April 1912, Page 1 (Supplement)

WHY CONSOLS ARE LOW.

TIKSToniXn ("-RKUIT. g Loiulon. February -. The following aro tlio chief points iu Mr. Lloyd George's speech in the City Liberal Club on Saturday afternoon: Console have fallen. True. Tint all GovermiU'iit securities throughout the Continent of Europe have fallen, and it is only an amateur in finance who would ever have dreamed of attributing that to Budgets. Tt is a. matter of grave consideration, but clap-trap like that which was talked in the Albert Hall (by Mr. Bonar Law) is no contribution; it confuses the issue. For Heaven's sake let us get at the truth and the facts! Don't let us mix our finance and our politics when you come to examine a problem of this kind. ; It simply leads people astray. ] From 1898 to 1905 there was a fall of I 21 points in Consols. Since we came to power there has been a fall of 12 points, and yet the whole of that fall is. on our shoulders, •> < > ' ■Now, what are the reasons? They are not political; they are not even mainly political. As far as polities affected that. I tell you what is a fact, that >the South African war affected, them. You cannot "borrow 140 millions of money on the market without putting down your Government securities. You cannot borrow Ave or ten millions without putting down your Government securities, as the Irish Land Act, with the constant recurrence to the market, that has also had the effect of depressing Consols. * , ........,. , i What else? One of the causes which is political in the sense that Parliament is responsible for it, and a very important; cause, is the widening of the area of trustee investments. The Conservatives are partly responsible for that, and we are partly responsible for ft. AVhat is the other cause? The reduction of interest for Government securities while interest generally was going up. That was bound to affect Governmen securities. What is the other cause ? The reduction of interest for Government securities while interest generally was going up. That was bound to affect Government securities. Before the year 1988, when Parliament started first of all widening the area of investment for trustee investments, trustees had securities which were worth £1,000.000 to choose from. That was all.

CHOICE FOE TRUSTEES. Outside Consols a trustee can now choose from securities worth £1,800,000,000. Do not take it from me that I have said the question of Consols ought'not to be looked into. On the contrary, I think it ought. But let us have a judicial examination. Two considerations I would, in conelusion, put to you on the question of Consols and finance. You cannot altogether put out of account, when you consider the position of Consols, the fact that there has been a regular campaign to decry British credit, "British securities, no good! British Government securities, British railway securities, they are of no use! You must go abroad. Germany is the country." To do that when it is injuring innocent people, when it is putting down the value of their property, and to do it callously and recklessly, not to serve a ■piiblie and patriotic purpose, butp urely partisan purposes, it is one of .the most discreditable incidents in the history of the country. To say our credit has gone, our reserves vanished, and that if we were confronted with an emergency we should be bankrupt is grossly unpatriotic, and it is utterly untrue. There was never a time in the —story of this country when this country is better prepared to face any emergency with which it may hi confronted. But if you want really to effect an economy in finance—and we all do—who is it that is rejoicing in increased expenditure? The' Government do not. If you really want to effect an economy j'ou must arrest the growth of armaments. We honestly thought we could have put it back, but pressure of events has been too great, and this last year our expenditure for the Army, and Navy was seventy-two millions—a gigantic sum, a hideous sum, when you begin to reflect how much there has to be done to remove human misery.

GROWTH OP ARMAMENTS. Seventy-two millions! Are we at the end of it? Don't forget this. There are men applying great 'brains, working assiduously to devise new machinery of slaughter, and, however these machines may differ, they have all one common characteristic—that the newest is the costliest. Until you remove national envies and jealousies and fears and suspicions you will never arrest the growth of armaments. That is the first thing to do, and I believe that this is the most advantageous moment, in spite of a good many conditions which are adverse—this is the most advantageous moment to consider it. We are not alone in realising that danger that may arise from the international atmosphere. It has, in spite of all circumstances, which we deprecate—recent events have had the effect of calling the attention of all nations to the perils of the position. I am not going back upon any past circumstances. lam not going to defend the Government or to criticise others. lam not going to defend at all any part which I took. Why? Not because T am not prepared to" do so, or think it desirable, but because I am convinced that the more you go on disputing the more will you keep up the irritation. There is one very thankful circumstance. Morocco, which was a constant source of irritation and exasperation between the great Powers, has been ' settled. After all, the morrow of a dispute is not always the worst time to make up a difference. I believe it is in the interests of Prance, German, Russia and ourselves that there should be a better understanding between the nations. I believe that with candor, frankness and boldness it is obtainable. The world would be better and richer for it. Taxes might be reduced. AH the money that would be saved on armaments could be devoted to developing the resources of the country, and improving the conditions of the people. Money spent upon education, upon housing, upon lifting the lot of the people is » better and a more assured investment than any which can he produced. And I, in conclusion, would like to say this one word: The corner-stone of sound finance is peace on earth and goodwill among men. i