I wish to make a statement regarding a new issue of Savings Certificates. As the House doubtless is aware, the sales of Savings Certificates of the Second Issue, were suspended on and from the 22nd May, 1933. The main reasons for the withdrawal of these Certificates were the fact that the rate of compound interest, viz., £4 2s. 9d. per cent. over the full term of ten years, was considered excessive having regard to existing conditions in the money market, and the remarkable increase in the sales which manifested itself in the last months of 1932 and the opening months of 1933.
We have now decided to put on sale as from to-morrow (Saturday), the 8th July, a Third Issue of Certificates. The purchase price will be similar to that obtaining in the case of the Second Issue, viz., 16/- per unit Certificate. The term of life will, however, be 12 years, instead of ten as previously, and the yield of compound interest, if a Certificate is held for the full term of 12 years' will be £3 1s. 5d. per cent. per annum. In present monetary conditions this interest rate is reasonable and adequate. A similar rate is allowed on the current issue of British Savings Certificates.
We have further decided that the maximum holding in the Third Issue will be 350 unit Certificates, instead of 500 Certificates as in the case of the First and Second Issues. Persons, however, who already hold more than 350 Certificates of the earlier issues may retain them until they reach maturity. But they will not be permitted to purchase Certificates of the Third Issue, unless, by repayments, their present holdings are reduced below 350 Certificates.
It was not feasible to issue an advance notification of the close down of the Second Issue Certificates and, as it is felt that the decision to withdraw them would operate harshly on people who purchase certificates by small instalments of 6d. a week and upwards, we have agreed that holders of savings cards which were only partly filled on the 22nd May, 1933, will be allowed until the 30th September, 1933, to complete them.
