LONDON. 3,5% Bond of £100. Serie B. brown, black. No 330890. Folds. Printed seal of "The Lords Commissioners of his Majesty's Treasury' and printed signature of N.V. Warren Fisher who signed the Bank of England Banknotes at that time. In 1917, to finance the cost of WWI, the British government floated a huge bondissue, the so-called 5% War Loan. It was scheduled for repayment in 1947, although it could be repaid any time after June 1, 1929. By 1932, due to the Depression, government revenues were low. Just the interest on this single bond issue absorbed 40% of all the money collected from income tax. In late 1931 there was a run on the pound. Soon after, the Bank of England injected immense amounts of liquidity into the banking system. As a result, interest rates for loans fell to 2%. In June 1932 Chancellor of the Exchequer Neville Chamberlain announced a conversion offer for the entire 5% Loan into this new issue without any specific maturity (so in effect a perpetual bond) - it was announced as a matter of patriotic duty. In the end 98% of theWar Loan holders accepted the conversion.
Themes: ARMS â€“ MILITARY, CITY & STATE BONDS
Date: 1 December 1932
Startprice: € 200