I wish to inform the House that a new National Loan will open for subscription on Monday next, the 13th February. The loan will be for £20,000,000 and it will be underwritten jointly by the Irish Banks and the Minister for Finance. The title "National Savings Bonds" has been chosen for the issue as a reminder of the importance of savings as a source of finance for capital development. The rate of interest will be 5 per cent. and the issue price of the Bonds £98 10s. 0d. for each £100 purchased. These terms will, I am sure, prove attractive to investors. The Bonds will be a sound and profitable security and should appeal not only to large companies and institutions but also to men and women of more modest means. To facilitate the investor there is, as usual, provision in the prospectus whereby only 10 per cent. of the purchase price need be paid on application, the remainder being payable in three instalments over the months of March and April. Applications may be for as little as one £10 Bond. No charge will be made to the investor by the bank or stockbroker who forwards the application.
The Bonds will be redeemed not later than 1981 and may be redeemed at any time from 1971 on. As the issue is being made at a discount, those who hold the Bonds to redemption will obtain the benefit of a capital gain of £1 10s. 0d. per £100 of Bonds held, a gain which will be tax-free to the ordinary investor.
The last National Loan, as the House will recollect, was very well received by the public. The present issue, with a higher, and indeed what is for a gilt edge investment a most attractive, annual return, should not be less successful. The credit of the State is high and bears favourable comparison with that of richer countries. Our national debt is moderate when regard is had to the development needs which confronted us on obtaining self-government. It is relatively low by international standards and is well within our capacity to service.
The issue will be charged on the Central Fund and will have behind it the full resources of the State. The market value of the Bonds will be supported by their status as a trustee security and also by the concession whereby they will be accepted at face value in payment of death duties. In addition, the substantial sinking fund provision included in the annual service allocation of £1,300,000 will be available for purchase of Bonds throughout the lifetime of the issue and will thus further help to maintain their capital value.
Moreover, the issue will benefit from the arrangements made in 1954 whereby both buying and selling prices for Irish Government stocks are quoted daily on the Stock Exchange and the Government Stockbroker is ready to buy or sell any such stock in reasonable amounts at a moment's notice. These arrangements will operate to maintain an active market in the Bonds.
In the course of my Budget speech last year, I pointed out that in our circumstances it is to our own people that we must look to provide the greater part of the funds needed for national development. The occasion of the present issue provides a suitable opportunity for emphasising this fact once more. Investors who place their funds at the disposal of the State through subscription to the present issue will be playing their part in ensuring that resources will continue to be available to promote the expansion of our agricultural production, the development of our fuel resources, the extension of afforestation, the purchase of tankers and dry cargo vessels, the improvement of the telephone system and the provision of houses, schools and hospitals. These capital schemes are not only desirable in themselves but are also, of course, of the greatest importance for the maintenance of employment, the curbing of emigration and the promotion of economic activity throughout the country.
I should like to stress once more, in the context of this Loan, the critical need at present for a higher volume of savings—for a voluntary switch from spending to saving—so that we shall have a better balance in our external payments and be able to continue, without setback, to develop our economy and raise living standards on a lasting basis. All subscribers to the Loan will be helping to attain this objective.
The prospectus will appear in tomorrow's daily newspapers. Copies of the prospectus and application form will also be available as from to-morrow from any bank, stockbroker or post office. The lists will close at latest on Friday, 17th February, and I suggest, therefore, that applications should be made as early as possible.
I confidently ask for the full and active support of every Deputy in the House for this issue.
