Sir HENRY DRAYTON:
I believe my hon. friend will not make use of this legislation unless the price readies such a point as will ensure an immediate profit to the country in these transactions; I would assume that to be his underlying policy in this matter. I do think, however, that the minister should take very careful cognizance of the suggestion made by my leader in connection with the right of redemption. Personally I think we are in for lower money rates; we have had no difficulty at all in disposing of very large emissions both in Canada and the United States where the right of retirement is given after the lapse of so many years, at $102, $104
or $106, which is the highest I remember in any single emission of really good securities. That, of course, is extremely valuable in case what I expect does come about; that is, if we have a progressively lowering rate of interest so far as governmental securities are concerned.
During the discussion another point has come up; that is, the danger of these maturities accumulating at any one time. I assume that my hon. friend does not consider issuing all these securities at once, or making them all payable at a certain time; I suppose he will issue them in each instance having regard to two things. First he will consider the way to get the best value for the security at the time it is issued, and then he will bear in mind the dates upon which other payments fall due, in order to avoid that lumping of governmental obligations which would naturally depress the market price.
Then my hon. friend said something about a sinking fund, and I think he is really getting around to that idea. I will admit that it does cost something to administer a sinking fund, but I do not think it is going to cost much more to administer it if we make use of the machinery and personnel we already have. Even if we give them a great deal more work to do I do not think it will cost a great deal more, although of course my hon. friend has to consider several things in connection with that proposition. He has mentioned the sinking fund on the one hand, while on the other he appears to lean more to the alternative that we should sell instalment bonds. I desire to point out to my friend that instalment bonds do not command a price anything like as good as the bonds which are issued for a stated period, and I think he would find that as a rule we would save money by looking after our retirements through a sinking fund, even though it cost a little more, rather than by selling securities at the lower rate which these instalment bonds always carry.