New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-06-22
Commons Authorizes Is
sue of Bonds Without
Definite Limit.
SMALL VOUCHERS
FOR LIGHT PURSES
Poor Glasses Given the Chance
to Invest Their Savings at
Good Interest.
tBy Gable 70 The Tribune J

may be the excess Of expenditures
over revenue for the year.
The speech of Reginald McKenna,
Chancellor of the Exchequer, introduc-
ing the resolution authorizing the loan,
caused considerable surprise in the
House Many members of Parliament
were still under the impression that
another internal loan would not be
tried for the present, being unaware
that the government, through the Bank
Of England, had for the time being, as
stated in The Tribune dispatch OF June
IS, put aside all thought of attempting
to raise loan in America.
General satisfaction was expressed
in the lobby that inducements were
being held out for the poorer classes
to take part in the loan, thus both
exercising thrift and making one pa
triotic act possible for even the hum
blest members of the community. On
the other hand, there is general be-
lief that allowing an issue Of so small
denomination as five shilling
voucher. bearing interest at per cent
for every complete month, may have
consequences entirely unanticipated by
the government
Blow to Savings Banks.
In the first place, it is asserted that
this feature is going almost to ruin all
savings banks, benefit societies and
other institutions where the working
classes place their savings. Trustee
savings banks now nave about f58,OOO,-
900 deposited with the government,
representing 100000 depositors, while
postoffice savings bank funds are about
$50. 900 900. The general rate of inter
est on all these is pa per cent, the
same rate prevailing in all similar in
sttutions, and deposits generally being
withdrawable on from three to seven
days notice. AS natural consequence
of the issue of five shilling war loan
vouchers it is likely large part of
this money will be transferred to the
investment in which double the interest
is obtainable, with the result that all
smaller savings banks will be seriously
affected, probably having to realize on
securities at the worst possible time,
while the government will be over
whelmed with an extra quantity OF
clerical work which they at present
are without machinery to handle. FUR
thermore, as previously indicated IN
The Tribune, the fact that the govern
ment is placing holders of the Novem-
Der issue with holders Of the present
loan will mean a wholesale rush to the
Bank Of England to convert previous
stock.
A prominent banker who was pres
ent when the Chancellor's speech was
delivered said to The Tribune tonight:
There were several presidents of great
British banks there, and. comparing
notes, we found we agreed on several
first impressions, although none OF US
cares to express any definite opinion
until he has had time to study the bill
thoroughly.
First. we were surprised, because
we thought the issue would be made
more attractive. ] must say we ad-
mire the courage Of the British gov
eminent in issuing a loan at par at
the present time. The general feeling
until the last moment among bankers
was that 81 would be top price. How
ever, the Cabinet is probably right IN
going slow and following a conserva-
tive course. II they can get the money
they require at Az per cent, all the
more credit to them.
at is sound move, also, not TO
state any amounts for the loan. In
this respect they are following the lat
est and most successful continental
policy. II they don't get what they
require then at least there is not the
outward humiliation of having failed.
Uncertain as to Consols.
"McKennas conversion proposals as
regards the holders of consols and also
government annuities were too com
plicated to follow at the first hearing,
and in some respects are not quite clear
in their application, but should mag
inc that holders of consols will be in
clined TO regard their position as some
what critical.
but the great outstanding feature
of the situation seems to be that the
Cabinet won't get in the big investors
except through motives of sheer pa
triotism. The merest tyro in finance
knows that money is going TO get
dearer very soon. and even conservative
Judges regard 3 per cent as the gem
eral rate of interest within a couple
of wears. Big investors are not going
TO take Al per cent now, when they
can get more very soon. OF course.
this makes il all the more admirable
II the Cabinet can get all they require
now. but if they do IL Will come from
80 a ~
In asking the indefinite credit Mr..
Mckenna announced that he proposed
to issue a war loan, TO be terminated
AZ the option OF the government be-
tween 1925 and 1915 for sum the
only limit OF which will be the eX-
cess of the national expenditures FOR
war and other services for the year
over the revenue.
The loan will be put out at par ana
will bear interest at the rate Of Al
per cent. Holders Of the first war loan
and OF consols and annui.ies will be
given the privilege of converting on
specified terms.
First Come First Served.
Facilities for subscription are so
wide that the man who has a dollar
will be able to invest as easily as the
millionaire. First come will be hrst
served. as the allotments VIII be made
on application. The lists viii close on
or before July 10.
THE time has come" said the Chan
cellor, when the necessity II q iurther
loan has become apparent, ana a
prompt decision is required. as u IS
undesirable that a big loan should De
kept hanging over the market -,
I'VE require many hundreds OF mill
IONS" said the Chancellor. III on tine
old war loan the investor can get
rather better than AZ, we cannot ex-
pect the new issue TO be fcated at less
than Al. -,