There is yet another fixed debt of about forty millions sterling called "Local Loans Stock," being money borrowed by the Government for the purpose of making advances to Corporations for local works. This stock may be redeemed at par in 1912.
The Unfunded Debt (2) consists of loans to the Government for temporary purposes. These loans are for various periods varying from seven days to as many years. They are represented by Exchequer Bills, Exchequer Bonds and Trea- sury Bills, which bear interest, according to the value of money at the time they are issued, from day to day. Due notice is given when a loan is to be paid off or renewed, and interest ceases on the day named for redemption.
TERMINABLE ANNUITIES.
Terminable Annuities (3) may be regarded as a "Sinking Fund," or means by which a con- siderable portion of the National Debt is paid off every year and "The Funds" proportionately reduced.
Thus the Government is empowered to give an annuity for a certain number of years in ex- change for permanent stock in the Funds. For instance, a holder of £1,000 2 3/4 per cent. stock is receiving £27 10s. a year in the shape of interest. The Government offers to pay double the amount of interest or £55, if the £1,000 stock is trans- ferred to them, and to continue this £55 a year for twenty years and no longer.
At the expiration of that period the interest ceases and the principal sum of £1,000 is struck off the National Debt, which is in consequence reduced by that sum.
LOANS - THE INTEREST ON WHICH IS GUARAN- TEED BY THE BRITISH GOVERNMENT.
These consist of loans to the Government of Canada for railway purposes, upon which 4 per cent. per annum is guaranteed. Also loans to the Colonies of Jamaica at 4 per cent. and Mauri- tius at 3 per cent., to the Egyptian Government at 3 per cent. and to the Turkish Government at 4 per cent.; in this latter case the French Government joins in the guarantee.
These are all perfectly safe investments, so far as the interest or income derived is concerned, but there appears to be no arrangement for the redemption of the loans.
The large loans to the Government of India at 3 1/2 and 3 per cent., repayable in 1931 and 1948, are guaranteed by the Secretary of State for India, practically the British Government.