BRITISH WAR LOAN.

New Zealand Herald, Volume LII, Issue 15951, 23 June 1915, Page 7

BRITISH WAR LOAN.

MUSTERING OF resources.

AID FROM ALL CLASSES.

NO LIMIT TO BE FIXED.

CALL TO NATIONAL EFFORT.

FIVE HUNDRED MILLIONS TO

BE MET.

London, June 21.

Mr. Reginald MeKenna, Chancellor of the Exchequer, speaking in the House of Commons to-day, said that a deficit of £518,000,000 had to be made good by receipts other than revenue. The expenditure was nearly £3,000,000 daily and was rising. A loan at i\ per cent, at par repayable in 1945, with Government option to repay in 1925, was to be raised. The Government was not asking for any definite amount, and the lists would be open till July 10. It was proposed that holders of the November war loan should be allowed to convert ' their holdings into the new war loan stock, and also holders of Consols and 2i and 2f per cent. Government annuities. £75 of Consols would be convertible into £50 of the now loan, and the annuities would be exchangeable in the proportion of £78 and £67 respectively to £50. Subscribers to the loan would be entitled to any highe'r rate of interest that might be fixed for future loans. Appeal to Nation's Patriotism. It was proposed to provide for the sale of £5 to £25 bonds through the Post Office. War loan vouchers for 5s or multiples would be on sale at the post offices, trade unions, and other offices, t with 5 per cent, interest for every complete month until the total reached £5, when the vouchers would be exchanged for a •bond. '■'■." Mr. ; McKenna appealed to the patriotism of the country to use its gigantic financial resources to enable 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 the Government guarantee, made advances to accepting houses "and others to enable them to meet bills and liabilities. This amounted to £120,000,000, but the liability was. now reduced to well. under £50,000,000. Ha now proposed to pay off the bank from the surplus of the £80,000,000 it had in hand, and thus leave the bank free to watch over exchanges and protect the country's gold reserves. Borrowing Prom the Public. V' Mr. McKenna added that Britain had already issued £235,000,000 in Treasury bills. There were two objections to the indefinite issue of 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, the Government borrowed the banker's, not the public's, money. The Government wanted money in a way that did not oblige repayment during the course .of the war. A loan would give this advantage, and also had the effect of assisting the foreign exchange. Consols had depreciated almost to the point/.of unsalability, and the Government was bound to afford relief in the interests of the commercial community. A sudden drop in Consols would entail ruin and bankruptcy to many, and the State was bound to avert this possibility. Safeguarding the Future. The Government thought it prudent not to. fix the amount of the loan. He reminded the people that every effort made now was not only necessary to carry on the war, but would bear fruit in enabling Britain to maintain her financial preeminence when the war was over. However long the war lasted, there was the future, and he did not want to see it crippled by neglect of prudence and economy. He who subscribed now would be doing an act of mercy and benefit himself and his country, and he who saved to subscribe would be better j able to bear the strain after the war. (Cheers.) If Consols were all converted, that would mean the application of at least £400,000,000 of the new loan. Methods of issue had been arranged to meet every class and every purse. He hoped that air would curtail their customary expenditure, and subscribo to the loan. Generosity of the Terms. Mr. MeKenna' added that the strongest • criticisms of the loan were that the terms were too generous. The Government wanted to

raise money, and did not want people to say that they would wait for better terms.

Later, in reference to a suggestion that the Government ought to raise taxation, Mr. McKenna declared that it was best to take one step at a time. If further large sums were required there must be further taxation, but the time for that was not yet. He then moved to amend the resolution adopting the loan in the direction of giving him power to cancel Treasury bills now issued. The resolution and amendment were adopted.

The prospectus of the new loan has been issued.

OPINION IN TIE CITY.

ATTRACTIVE INVESTMENT.

(Received Juno 22. 3.15 p.m.)

London, June 21.

Directly Mr. McKenna had con eluded his speech enormous queues of city men commenced to assemble outside the Bank of England to await the issue of the prospectus. The general opinion is that the investment is the most attractive of modern times. Particular'approval is accorded the facilities offered to small subscribers. ]

A dozen vans carried consignments of the prospectus to the- railway termini for distribution in the provinces. ("..,'