The Defence Loan Mr. Neville Chamberlain seems to have judged
his moment well, and the success of the Defence Loan is assured, even though his announcement in the House of Commons on Monday came as a surprise. The Loan, consists of k1oo,000,000 of zi per cent. stock, issued at £991 ; it is intended chiefly for the banks and investment institutions, but the small investor is encouraged to participate by the separate issue through the Savings Banks of Registered Bonds in amounts of £5 or multiples of £5 up to a maximum of £x,000. It is noticeable that, in order to borrow so cheaply, Mr. Chamberlain has had to borrow short, for the Loan is redeemable before the end of 1948 ; the last Treasury issue, in November, of zi per cent. Funding Loan, is redeemable in 1957. It would be difficult to raise a twenty- year loan at such a rate today. The amount of the issue exceeds the £8o,000,000 provided for in the Defence Esti- mates ; the estimates, no doubt, may be exceeded and the Chancellor wishes to guard against the necessity of further borrowing this year. By 1944 the country will have to find £20,000,000 a year towards paying for this expenditure on rearmament, and it is an advantage that the moment for shouldering the burden should not be deferred too long.
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