asked the Chancellor of the Exchequer on what grounds the, C.I.C. refused the application of the Imperial Tobacco Company, Limited, to issue new share's on terms which would have brought its Ordinary dividend more into relation with the real capital employed in the business; and if there has been any change in Treasury policy since his instruction to the C.I.C. last August authorising them to exercise their discretion in approving prices of issue.

Because such an issue would have been inconsistent with His Majesty's Government's policy regarding bonus issues. No new instructions have been issued since last August?

Is it not a fact that the Chancellor is opposed to this issue, and others of a similar character, mainly because if they were made he would no longer be able to claim that these companies pay enormous dividends on their capital?

No, Sir, but if the companies pay out the same sum of money in dividends nominally on a larger capital the rate may be lowered, and the public thereby deceived.

Will the right hon. Gentleman look at the matter again, and see whether the instructions to the Capital Issues Committee are not in need of modification, in view of the changed circumstances?

In this case the margin was very wide indeed. It was proposed to issue for the price of £1 a share for which the market price was £7 15s. That is much too wide.

Would it not be wiser to give the Committee instructions to deal only with the desirability of making the issue, and not interfere with the discretion of the company as to the price of the issue?

I think this kind of discretion should be allowed.

Will the right hon. Gentleman agree in principle that it is desirable that the issued capital should be brought into relation to the capital employed in the business?

It must all depend on the issue proposed to be made.