asked the Chancellor of the Exchequer whether, in determining the permitted rate of dividend during the war, companies will be allowed to take into account the fact that bonus shares were issued in lieu of dividend in the standard years?

No, Sir; an issue of bonus shares will not count as dividend distribution in respect of the standard year for the purpose of determining the permissible dividend during the war, nor will bonus shares issued after the standard year reckon as an increase of capital for that purpose. Bonus shares issued before the standard year expired will, of course, count as capital.

asked the Chancellor of the Exchequer whether the proposal to prohibit the issue of bonus shares for the duration of the war will apply also to the issue to shareholders, in virtue of their present holdings, of rights to take up further shares on bonus terms?

In order to make the proposed limitation of dividends fully effective, it will be necessary to ensure that new issues of capital to existing shareholders are made on terms which do not conflict with the principle of prohibition of bonus share issues. The control of the Treasury over new capital issues affords the necessary safeguard.

May I take it that that control will be rigidly exercised?

Yes, Sir. I shall try to exercise it fairly.