The Treaty of Peace was signed on the 30th March, 1856. In May, 1856, another £5,000,000 was raised through Messrs. N. M. Rothschild & Sons, by an issue of Consols with interest from 5th January, 1856-£107 10s. 7d. Consols was given for each £100 cash, Consols being taken at 93. This loan was payable in six instalments. Such, very briefly, is an outline of the national borrowings in connection with the Crimean War. Coming now to the war in South Africa, we find that the first Act authorising the raising of money for the purposes of the war, was passed on 27th October, 1899. This Act (63 Vict., Ch. 2) sanctioned the raising of £8,000,000 (cash), for the service of the year ending 31st March, 1900, by means of Treasury Bills. The next Act (63 Vict., Ch. 2), called the "War Loan Act, 1900," was passed on 27th March, 1900, and sanctioned the raising of £35,000,000 (cash) for the service of the current year (ending 31st March, 1901), by means of a Special War Loan, or by means of Treasury Bills. Then came the " Supplemental War Loan Act, 1900" (63 and 64 Vict., Ch. 63), passed on the 8th August, 1900. This Act sanctioned the raising of £13,000,000 (cash), for the service of the current year (1900-1901), by means of a Supplemental War Loan, or by means of Treasury Bills, or by means of Exchequer Bonds. During the recent short session of Parliament, a fourth Act (64 Vict., Ch. 1) was passed. This Act is known as the "Supplemental "War Loan Act (No. 2), 1900," and sanctioned the raising of £11,000,000 (cash) for the service of the current year (1900-1901), by means of a Supplemental War Loan, or by means of Treasury Bills, or by means of Exchequer Bonds. This Act is dated 15th December, 1900. The issues under these various Acts have now to be considered. With the methods adopted when Treasury Bills are issued, the public have been long familiar, and it is not proposed to refer further to any of the Treasury Bill issues which have taken place since 27th October, 1899, when the first of the four Acts was passed. Readers of this article will have noted that the issues of the Crimean War period were issues at a fixed price. Between 1856 and 1900 the Bank of England issued many loans, on behalf of the Local Loans Fund, for the Indian Government, the late Metropolitan Board of Works, the London County Council, and various corporations and colonies, but these loans were all, or nearly all, tender loans with a published minimum price. The tender system was successful as long as members of the Stock Exchange formed themselves into syndicates and tendered for large amounts. But the day came when there were no longer any such syndicates, and this was recognised as having come some time before the Chancellor of the Exchequer had to decide in what form he should make the issue of thirty millions. He elected to make the issue at a fixed price (981), and on the 9th March, the prospectus, of which the following is a copy, was issued. [PROSPECTUS.] NATIONAL WAR LOAN. Issue of Loan of Thirty Millions, bearing Interest at 23 per cent. per annum, to be redeemed at par on the 5th April, 1910. Price of Issue, fixed by H. M. Treasury at £98 10. per cent. The Governor and Company of the Bank of England give notice that they are authorized to receive applications for this Loan, which will take the form either of Inscribed Stock, or of Bonds to Bearer, at the option of the Subscribers. The Interest at 23 per cent. per annum, and the Capital, will be a charge on the Consolidated Fund of the United Kingdom. The books of the Loan will be kept at the Bank of England and at the Bank of Ireland. Dividends will be paid quarterly, in the same manner, and on the same dates, as the dividends on Consols. The first Dividend (a full three months' Dividend) will be paid on the 5th July, and the second Dividend (also a full three months' Dividend) on the 5th October. The Loan will be repaid on the 5th April, 1910. Applications, which must be accompanied by a deposit of £3 per cent., will be received at the Chief Cashier's Office, Bank of England, and may be forwarded to that Bank either directly, or through the medium of any Banker, or Stockbroker, in the United Kingdom. The list will be closed on, or before, Thursday, the 15th March, 1900. In case of partial allotment, the balance of the amount paid as deposit will be applied towards the payment of the first instalment. Should there be a surplus after making that payment, such surplus will be refunded by cheque. The dates on which the further payments will be required, are as follows: The instalments may be paid in full on, or after, the 9th April, 1900, under discount at the rate of £2 per cent. per annum. In case of default in the payment of any instalment at its proper date, the deposit and the instalments previously paid will be liable to forfeiture. Scrip Certificates to bearer, with Coupons attached for the dividends payable on the 5th July and 5th October, 1900, will be issued in exchange for the provisional receipts. These Scrip Certificates to bearer can be inscribed (in other words, can be converted into Stock), as soon as they have been paid in full; or, they may be exchanged for Bonds to bearer after the 5th October, 1900. The first Bonds to bearer will have quarterly Coupons attached. Coupon will be that for the Dividend payable on the 5th January, 1901. Inscribed Stock will be convertible into Bonds to bearer at any time after the 5th October next, without payment of any fee; and Bonds to bearer can be inscribed (or, in other words, converted into Stock), on payment of a fee of one shilling per Bond. Applications must be for even hundreds of Stock; but the Stock, once inscribed, will be transferable in any sums which are multiples of a penny. as in Consols. The Bonds to bearer will be of the same denominations as in the case of Consols Certificates to bearer, viz., £100, £200, £500 and £1,000. The Inscribed Stock is an investment authorized by "The Trustee Act. 1893." Applications must be on printed forms, which may be obtained at the Bank of England, and the Bank of Ireland, or at any of their Branches; at any of the London Banks; of ; of Messrs. Mullens, Marshall & Co., 4, Lombard Street, London, E.C.; or of any of the principal Stockbrokers, Bank of England, 9th March, 1900. The loan was an immediate success, and when (on the evening of the 14th March for London, and the morning of the 15th for the country), the Bank closed the list, 39,834 applications had been recorded, and a total of £335,517,400 reached. The first batch of allotment letters was posted on the 17th, and the last on the 23rd March. Every applicant received an allotment. Applicants for £100, £200, £300 and £400 received allotments in full, and applicants for £10,000 and upwards received, as nearly as possible, 6 per cent. of the sums applied for. Between £500 and £9,900, both inclusive, there was a graduated rate of allotment. Applicants were of all classes and from all parts of the United Kingdom. Many of them were extremely ignorant of business methods, and some were very troublesome. Amounts due upon application, or allotment, were in some instances made up of fifteen or sixteen items Bank of England notes, country notes, cheques, postoffice-orders, postal orders, coin and postage stamps. The arithmetic of many of the allottees was very faulty, and it was difficult to make some of them understand the necessity of punctuality in making their payments. A considerable amount of money was withdrawn from the Post-office Savings Bank for investment in the loan. The 26th March (Monday) was the day on which the amount payable on allotment was due, and the scene in the "Rotunda the Bank, on that day, will not be easily forgotten by those who at witnessed it. The scrip, which took the place of the allotment letters, numbered 63,210 pieces. There were naturally many cases of temporary default, but there was no need to exercise the right to forfeit an allotment. It should be mentioned that in connection with this issue a commission of per cent. was paid to brokers, etc. Early in August, it became necessary to raise a further sum for the purposes of the war, and the Chancellor of the Exchequer decided to have recourse to an issue of £10,000,000 £3 per cent. Exchequer Bonds, with a currency of three years, at the price of 98. The prospectus was issued on the 3rd August. The following is a copy: [PROSPECTUS.] EXCHEQUER BONDS, Bearing Interest at £3 per cent. per annum, payable quarterly. The first Dividend (a full three months' Dividend) will be paid on the 5th October, 1900. Issue of £10,000,000 Bonds, repayable at par on 7th August, 1903, in amounts of £200, £500, £1,000, £5,000, and £10,000. Price of Issue, fixed by H.M. Treasury, £98 per cent. The Governor and Company of the Bank of England are authorized by the Lords Commissioners of Her Majesty's Treasury to receive applications for Exchequer Bonds, as above, to the amount of £10,000,000. The Bonds will be issued for three years, and will be dated the 7th August, 1900. Interest at £3 per cent. per Annum will be paid by Coupon, the first Coupon being payable on the 5th October, 1900. Applications, which must be accompanied by a deposit of £5 per cent., will be received at the Chief Cashier's Office, Bank of England. The list will be opened on Tuesday, the 7th August. In case of partial allotment, the balance of the amount paid as deposit will be applied towards the payment of the first instalment. Should there be a surplus after making that payment, such surplus will be refunded by cheque. The dates on which the further payments will be required, are as follows: £20 per cent. on Wednesday, 15th August, 1900. The instalments may be paid in full on, or after, the 15th August, 1900, under discount at the rate of £3 per cent. per annum. In case of default in the payment of any instalment at its proper date, the deposit and the instalments previously paid will be liable to forfeiture. Scrip Certificates to bearer, with a Coupon attached for the dividend payable on the 5th October, 1900, will be issued in exchange for the provisional receipts. Notice will be given in the Public Press when the Definitive Bonds are ready. Applications must be on printed forms, which may be obtained at the Bank of England, and the Bank of Ireland; or of Messrs. Mullens, Marshall and Co., 4, Lombard Street, London, E. C. The Lords Commissioners of Her Majesty's Treasury reserve the right of rejecting any applications. Bank of England, 3rd August, 1900. One-half of the issue was subscribed in anticipation, by the London representatives of large American houses. This step caused a considerable amount of adverse comment, but, viewed from the standpoint of those who wished to see a flow of gold from America, there was a great deal to be said for it. The list was closed very soon after it was opened, and applicants, with the exception of those for £200, for what may be called the second half of the loan, received allotments of about 63 per cent. Applicants for £200 received allotments in full. In the case of this Ioan also brokers, etc., received a commission of per cent. The third issue of the year was also an issue of Exchequer Bonds. The currency was five years, and the amount £3,000,000. There were, however, some marked differences between the two issues. In the case of the £10,000,000 it was an issue at a fixed price. £5 per cent. was paid on application, and payment of the remaining £93 was spread over four months. In the case of the £3,000,000 (see prospectus below), it was a tender issue. Nothing was paid on application, and there was but one payment-a payment in full. Exchequer Bonds issued on these lines have a close resemblance to Treasury Bills. The minimum price accepted was £97 18s., and the average £98 2s. 10'6d., and there was no commission to brokers, etc. [PROSPECTUS.] EXCHEQUER BONDS, Bearing Interest at £3 per Cent. per Annum, payable quarterly. Issue of £3,000,000, in amounts of £100, £200, £500, £1,000, £5,000, and £10,000, repayable at par on 7th December, 1905. The Governor and Company of the Bank of England are authorized by the Lords Commissioners of Her Majesty's Treasury to receive tenders for Exchequer Bonds, as above, to be created under Act 63 & 64 Vict., c. 61. |