| Admin History | The prospectus for this loan appeared on the 21 Jun 1915. The loan was redeemable between the 1 Dec 1925 and the 1 Dec 1945. The first dividend was due on 1 Dec 1915, with dividends thereafter due on 1 Jun and 1 Dec. It was the first time since the Napoleoic Wars that British Government's credit had been on a 4 1/2% basis.
Investors were offered conversion options in relation to older issues of government stock, including the 3 1/2% War Loan 1925-1928 as well as Consols, 2 3/4% Annuities and 2 1/2% Annuities. Ledgers record many of these issues as either ‘cum rights’ or 'ex rights', referring to whether an investor had conversion rights or not. Holders would also be given the option of converting into future loans.
Cash applications for this loan were open between the 22 Jun and 10 Jul 1915. Applicants could pay in full 10 days later and insribe their scrip. [If not paid in full outright], the last instalment was due on the 26 Oct, and the last day for receiving conversion applications was the 30 Oct.
With the 4% Loan 1925-1945, it was decided to create the facilities for small subscribers to invest, and provision was made for subscriptions of less than £100 in multiples of £5 to be accepted through the Post Office, making this also the first of the First World War loans to feature a Post Office option.
This loan featured no special privileges with regards to income tax.
With an estimate of the required amount being £750,000,000, it was decided to issue the loan for an unlimited amount, to avoid creating alarm if the public was made aware of the true sum that was actually required. The total amount subscribed in cash applications by the closing of the lists on 10 Jul was £571,139,400, for a total of 547,000 applications. In addition, there were later cash subscriptions, Post Office Subscriptions, and conversions, for a total of over £900,000,000.
The large workload generated by this loan required the employment of additional staff. There was also a shortage of space, with work taking place in areas of the Bank such as the Court Room and the Committee Room in the evenings and on Sundays. In addition, the Grocer's Company also offered use of their Hall. The experience gained on the occasion of the 3 1/2% and 4 1/2% loans made it clear that another large Government loan could not be properly maneged by the Bank without new premises. Steps were therefore taken to secure a part of the recently erected building of the Scottish Provident Institution in Lombard Street. With alterations, which were quickly carried through, the offices were found very suitable for the work and could accommodate over 700 clerks.
In view of the large subscription to the 4 1/2% War Loan made by private banks, who had agreed to take up £200 millions and had actually taken up over £183 millions, banks were allowed by the Chancellor to exchange part of their holdings of the 4 1/2% War Loan for 5% Exchequer Bonds (20A29/4, 5, 8) under two different schemes in 1916/1917 and early 1917. It is worth pointing out that the conditions governing this exchange did not prevent the banks from converting their holdings of 4 1/2% War Loan into the War Loans of January 1917. [p. 409 ff, Ch. 3. of the Unpublished War History provides more detail: https://www.bankofengland.co.uk/-/media/boe/files/archive/ww/boe-1914-1921-vol1-chapter3.pdf]
Conversion into the 5% War Loan 1929-1947 (Series 20A29/7) and 4% War Loan 1929-1942 (Series 20A29/7). |