The Press. — London, England, 1854-10-28 00:00:00

1012 Perhaps The most obvious and intelligible mode of treating this part of the subject will be to place before our readers in figures, and from documents which cannot be questioned, the charge or cost to the country of Exchequer Bills on the 13th of February, 1853, before the operation took place, and the charge or cost to the country of the same amount of Exchequer Bills at the present time. By reference to the parliamentary paper (60 of last session it will be seen that on the 13th of February, 1853, there were outstanding Exchequer Bills to the amount of 17,742,5001., and that of these Exchequer Bills 9,238,7001. bore interest at the rate of lid. per day, or 11. 18s. Old. per annum, being the June bills, 1852, affected by Mr. DISRAELI'S reduction of the May previous ; while the remainder, viz., 8,503,8001., being the March bills, 1852, and unaffected by Mr. DISRAELI'S reduction, bore interest at the rate of lid. per day, or 21. ss. 71d. per annum ; and the charge of those two classes of Exchequer Bills were as f ows : £9,238,700 at lid. .... £175,631 10s. Bid. £8,503,800 at lid. .... £193,994 18s. 9d. £17,742,500 £309,620 9s. 51d. These latter bills, of course, on becoming ex changeable in March, 1853, would have fallen under Mr. DISRAELI'S reduction, and the charge for the whole 17,742,500/. Exchequer Bills hese be oome 837,2921. Os. 40. The charge, therefore, supposing Mr. GLADSTONE to have made no altera tion, but to have been satisfied with carrying out his predecessor's operation, and supposing also that he had exchanged the 8,503,8001. March bills for others at the rate fixed by Mr. DISRAELI, namely, lid. per day, or U. 18s. Old. per annum, would have been at the present time for the whole 17,742,5001. Exchequer Bills But we are now paying 2d. a day, or 31. Os. 10d. per annum, for the same 17,742,5001 £539,607 14s. 2d. Actual loss Now, this is the plain matter-of-fact view of the case. Had things remained as they were we should now have been paying 337,2921. for our Exchequer Bills. The result of Mr. GLADSTONE'S operation has in volved us in a charge of 539,6671., and in a loss of 202,3751. But it may be said that in the foregoing statement we are dealing unfairly by Mr. GLADSTONE ; that the difference in the cost or charge of Exchequer Bills at the present time as compared with February, 1858, and the increased charge of 202,3751., is attributable, not to his operation in February, 1853, but to the in crease in the rate of interest on Exchequer Bills made by him on the 11th of October, 1853, from Id. to 2d. per day, and which increase was rendered necessary by circumstances unconnected with the operation of the preceding February. We have no desire to deal unfairly with Mr. GLADSTONE in any way. Our argument is this. Mr. GLADSTONE, on the 14th of February, 1858, made a financial blunder in reducing the interest on Exchequer Bills to Id. when the rate of interest generally was rising; this mistake on his part, by deranging the proper relations between the interest on Exchequer Bills and the ordinary interest of money, and by creating, moreover, mistrust and insecurity as regards Exchequer Bills, led the holders of the June bills to demand money for their bills instead of accepting bills in exchange ; that this, with other causes, exhausted the Exchequer ; that Exchequer Bills would no longer float; and that, in consequence, when it became necessary to replenish the Exchequer in October, by the issue of the Exchequer Bills rejected in June, Mr. GLADSTONE was obliged not only to undo his operation of February, but to reverse it, and to double the rate of interest on Exchequer Bills, raising it from Id. to 2d. a day, and thus giving a higher interest for Exchequer Bills than they had borne for a considerable time, we believe we might say for several years. We allege that the whole was one series of cause and effect. First, an improvident reduction in February ; causing, secondly, a demand for payment in money; and that occasioning, thirdly, a financial derange ment in the Exchequer; which resulted, fourthly, in the necessity of doubling the rate of interest in October; the whole consequently having its origin in the improvident reduction in February. If, then, we can establish that these several events do bear to each other the relation of cause and effect, it cannot be denied that we are justified in our statement that Mr. GLADSTONE'S first financial operation has involved the country in a loss of at least 202,3751. a year. Let us, then, as the first step, consider whether, if Mr. GLADSTONE had been observant of the manifest signs of approaching difficulties, and had made no further reduction in the rate of interest on Exche quer Bills in February, 1853, he could have ex changed the 8,503,8001. March bills, then bearing interest at lid. per day, for new bills bearing the same rate of interest, or bearing the rate of interest TFI PRESS. settled by Mr. Durum in respect of the June bills of 1852. In fact, supposing Mr. GLADSTONE to have aimed at no financial achievement as regards Exche quer Bills, would the bills about to he issued in March, 1853, in exchange for those then payable, have floated in the market? Upon this point there can be no doubt. It appears from the parliamentary paper (66) to which we have already referred that Exchequer Bills to the extent of 8,477,2001. were actually issued on the 10th of March, 1853, at the reduced interest of Id. per day ; and Mr. GLADSTONE, in his speech on the 6th of March, 1854, made a boast of the fact that for two months after his reduc tion, in February, 1853, the premium on Exchequer Bills ranged between 10s. and 20s. So far, then, it is beyond question that, had Mr. GLADSTONE, in February, 1853, merely carried out the prudent operation of his predecessor, the March Exche quer Bills would have floated, and the condition of the whole Fachequer-Bill account would then have been 17,742,5001., at a uniform rate of led. per day, or 11. 18s. Old. per annum, amounting to 337,202/. 6s. 41d. Well, then, the next. and more important question is that in reference to the 9,238,7001. Ex chequer Bills payable or exchangeable in June, 1853. Would they have borne a premium or floated at the rate of lld. per day, or 1/. 18s. Old, per annum? Upon this point, also, if our readers will follow us, we think it can be shown that no reasonable doubt can exist. The paper (66) informs us, in table ii., page 3, that, even at the reduced rate of Id., on the 9th of June, 1853, 10,753 Exchequer Bills, in amount 5,890,5001., were actually issued, while between the Ist and 10th of June bills to the amount of 2,910,0001. had to be paid in money. And it appears from the returns of the monthly price of stocks that the lowest price of Exchequer Bills in the month of June was 1 discount. Exchequer Bills, therefore, were at that period exactly in a state of equilibrium. In such case, it is clear, the farthing per day would have made all the difference. Had the interest been 11d., or 1/. 18s. Old., instead of Id., or 1/. 10s. 5d., it can not be doubted that the holders of the 2,910,0001. Exchequer Bills who demanded money would have accepted new Exchequer Bills in exchange, and the financial catastrophe of October would have been avoided. We can give other reasons which lead to the same conclusion. In June, 1852, the price of Consols was from 1001 to 1011. Taking the medium, 1001. 16s. 3d., it will be found that the rate of interest afforded by Consols, which may be taken as the index of all the permanent funds, was 21. 19s. Old., within a very small fraction of three per cent. Exchequer Bills bearing an interest of 11. 18s. Old. then bore a premium of 69 to 83. In June, 1859, the price of Consols was from 1001 to 104 Taking the medium, 1001. 3s. 9d., it will be found that the interest rendered then by Consols was a small fraction (less than 2d.) under three per cent ; so that, for all practical purposes, it may be assumed that Consols, and the other permanent Government stocks, rendered the same rate of in terest in June, 1852, and in June, 1853. We admit, as we stated on a former occasion, and as we shall have to remark again, that the price of Consols, or the interest rendered by Consols, isnot to be taken as regulating altogether the price of Exchequer Bills. But what we maintain is this, that the price, and interest, of Consols being as nearly as possible the same in June, 1852, and June, 1853, and Exche quer Bills in June, 1852, being at a premium of 69 to 83, it is a reasonable supposition, amounting to a certainty, that but for the reduction of interest of Exchequer Bills in February, 1853, under the cir cumstances we have stated, the June bills, 1853, would have been accepted ; and, if they had been then accepted, it would not have been necessary to have advanced the interest in the October following. There is one other phase under which we desire at present to present this subject to our readers. We have already stated that Mr GLADSTONE, in his inor dinate desire to outdo Mr. DISRAELI, inconsiderately disturbed the relation between Exchequer Bills and other species of Government securities. We are anxious to illustrate this remark by a few figures. In June, 1852, as we have observed, Consols ren dered an interest of 21. 19s. 6d.; the rate of interest on Exchequer Bills being then 11. 18s. Old.; the difference was 1/. Is. sfd ; that is to say, Exchequer Bills bore an interest less by 1/. Is. sfd. than the ordinary rate of the permanent Government stocks. In June, 1853, Consols rendered an interest of about 21. 19s. 10d.; the reduced rate of interest on Ex chequer Bills being then 1/. 10s. 5d.; the difference was no less than 11. 9s. 5d., a difference so great in its proportion to the whole interest payable in respect of Exchequer Bills that it only, we think, requires to be noticed to convince any one that it must have disturbed the whole natural relation of Exchequer Bills to other Government securities. The fact is, that of all species of Government securities-we might perhaps add, of all things which represent value-Exchequer Bills are the most delicate, and require the greatest prudence and the best judgment SATURDAY, in dealing with them. They stand in rather a❑ ano malous position. Subject to many of the laws and properties and influences of a circulating medium, and, from their large amount, discharging most im portant functions, both in our commerchtl and mone tary system, they partake also of the nature of Government securities, and are under the control and caprice of a Chancellor of the Exchequer as no other portion of our Government securities, and as no portion of our mere monetary system, would be permitted to be. They are not a species of security to be tampered with, or made the subject of rash and inconsiderate experiment. Mr. GLADSTONE, with all his ability, is rash, self. willed, and hasty. He could not resist the tempts tion of a financial achievement, especially if it had the character of outdoing Mr. DISRAELI. The first subject that presented itself to the ambitious CHAN CELLOR of the EXCHEQUER was the interest on Exehe• quer Bills. At an auspicious moment Mr. Dissugu had 'educed the interest, and thereby effected a saving to the country of 35,0001. a year. Mr. GLAD LTONE, at au inauspicious moment, by reducing it still further, hai involved the country in a direct loss of 202,375/. a year, to say nothing at present of the indirect and collateral losses which flowed from it. This has been the result of Mr, OLAnsrosx's first financial operation. TRADE IN RUSSIAN PRODUCE. 'MO A SINGULARLY illogical article in the " leading *tr. nal" of Wednesday demands passing notice. It is admitted that the effect of the order in council ad mitting enemy's produce during war has been most beneficial to Russia, and that " a large amount of " gold is still being remitted to Russia in exchange " for its produce," but it is contended, on the other hand, that our" community have been benefited by " the supplies of hemp, tallow, flax, and linseed, " which have reached us through the neutral ports:' So far, the argument on the ground of reciprocity of interest is intelligible enough, only it may be asked why, if this trade is to be allowed on the ground of mutual advantage, are the ports of Russia to be blocked at all? The writer, still strongly arguing against any prohibition of Russian produce, as being likely to distress our people and enormously raise prices, considers the expediency of resorting " to coercive measures against those ports which " serve, by their geographical position, all the pur " poses of Russian ports in a neutral territory." Be cause Russian produce is transmitted to us through the ports of Prussia, that power is said to pursue an " unjust and injurious course." How so? If it be desirable for us to receive Russian produce through any neutral port, we ought to be glad to get it through that neutral port most convenient, in order to save that rise of price which the writer deprecates. But the fact is, that it is impossible to reconcile the order in council admitting enemy's • produce with any restrictions to exclude it. In other. words, what may be called governments) war and commercial peace cannot be maintained together, and our merchants and whole community must be prepared to make all necessary sacrifices to cripple our enemy. While on this subject, our weekly con temporary, the Leader, must allow us to correct a mistatement in his last issue. The PRESS did not quote its returns of Russian produce imported during the eight first months of the present year from the Invalidea Runes, as the Leader supposes/ but from " the Trade and Navigation Returns, or " dere' by the House of Commons to be printed." dered THERE has been a rupture between the Govern ment and the GUNMAKERS at Birmingham. The execution of the contracts for the Board of Ordnance has been progressed with so tardily that the head of the department from London announced that, in Con sequence of the delays, an order had been despatched to the establishment at Liege for 20,000 guns. Some of the most extensive gunmakers foresee the creation of a Government factory of small arms which has been suggested more than once. Iv ever the memory of a brave man deserved con secration, that of Dn. JAMES THOMSON, assistant surgeon of the 44th Regiment, merits such a &uric. tion. He and his soldier-servant had to wait upon and support the seven hundred wounded Russians who were removed from the south to the north bank of the Alma after the battle. The patients themselves were not to be trusted. The Cossacks were also at hand, the dead were festering in heaps around the sick and dying, and the two poor fellows had to btu/ carcases and fragments before they could get at the suffering, wounded wretches. The soldier managed to drive in a stray bullock which was killed and made into soup. Eventually 340 of the patients were con veyed on board the screw-transport Avon and born . e to Odessa. This noble, unselfish minister of charity, at such a trying time, sank in two or three days after wards under an attack of cholera. ''`•T