The Press.
London, England, 1855-04-21 00:00:00

THE PRESS.

results. Mr. GLADSTONE has been succeeded
by a gentleman in every respect his very
opposite. We bav, n,o desire to speak dis-
paragingly of Oic 0, Lewis, still less
sheMd *4? be 41gepose4 to notice any persogig
disadvggfages gilder which he may be isp,
posed tel labor. We believe him to be a min
of conelidelablOttleut, hut his talents are 144
dissimilar as gottoilito from those of
6LADgtONE. He had hitt% experience in St-
veral departments of Government. He was a
Poor-law Commissioner n Ireland, Under-
Secretary for the Home Department, and
Secretary to the Treasury. He conducted
himself respectably in each of these offices.
His appointment as Chancellor of the Ex-
chequer might have created surprise, if the
office had not been refused by all others to
whom it had been offered, and if Mr. WILSON.B
name had not been mentioned in connection
with it.

We considered him, however, a sensible
man, and we supposed he would have adopted
the Budget of Mr. GLADSTONE. But he has
chosen to take different ground ; and it will
be our duty to inquire whether he has exer-
cised a sound judgment in his first financial
operation.
We condemned Mr. GLADSTONE'S doctrine
that the expenses of a war are to be defrayed
out of the year's taxation ; and we were pre-
pared to have supported a loan. But the
value and merits of a loan depend above all
things upon the manner and terms of effecting
it. No one will now deny that Mr. PITT, not-
withstanding his financial abilities and ex
perience, committed great mistakes, and has
involved the country seriously by his mode of
contracting loans.
Great Britain, moreover, is not now what
she was then, and the war with Russia is
unlike the war we were waging with France
and the world. Assuming a loan to be
decided upon, we expected something new in
1855.
We will explain the CHANCELLOR of the Ex
JHEQUER'S plan before we proceed to comment
upon it.
Requiring sixteen millions for the public
service, he might have borrowed it in various
ways.
1. He might have raised it by the creation
of Stock—say Three per Cents.—and made
the competition the price at which this Stock
would have been taken in the market.
The objection to this plan would have been
that, in the present depressed state of the
market, with the additional depression caused
by the operation, the country would have
been pledged to pay hereafter 1001. in clash (if
the Stock was ever to be redeemed) for Stock
which under existing circumstances would
scarcely bring 861.
This is the objection which lies against
most of Mr. Purrs operations; and it holds
good even against the last of our war loans;
for, in 1815 we borrowed thirty-six millions,
and we gave for every 1001. in cash no less
than 1741. in Three per Cents., and 101. in
Four per Cents., making the interest 51. 12s. 4d.
per cent.
2. He might have raised it by the creation
of terminable annuities. The objection to the
system of raising money by terminable an-
nuities is this :—that the public are thought to
ba disinclined to such annuities, and the
terms consequently are usually ur favorable.
But there is much to be said in favour of
terminable annuities ; they really embody the
principle of a Sinking Fund in its best form ;
and we believe there would have been no great
difficulty in obtaining the sixteen millions on
such securities.
8. He might have raised it by the creation
of Stock to be issued at par, fixing the rate of
interest himself. Or,
4. He might have left the rate of interest to
be determined by public competition. There
are other modes which we need not notice.
We believe the 3rd of these modes, under all
the circumstances of the case, would have
been found tho best, being analogous to the
means used by our great companies for rais-
ing loans. Had he fixed a liberal rate of
interest, and opened subscription-lists in our
principal towns, so as really to have brought
the loan home to our small capitalists, we

SATURDAY,

have no doubt the operation would isave been
as successful here as in France. Butk then he
would have displeased the great caAitalists.
Routine. to got eoufined 1. the Commiissariat
or the Wat office. Houtine-4a slavish adhe-
rence
to precedept, lout a pusillanimous
timi4ty depavtimil from the beaten p th—
perveides our w„hc4le kystem. It is the baits of
the ariti4 Government—ssuit in some, b tin
all it 4 departments.
•T 1 plan adopted b)' Sit G. C. Lxwis is s
follows
He requires 1001. cash to be given for 1001.
Three per Cent. Consols. Ho therefore in-
crcasee faze orawavit tiatictual Doht tty sit-.
teen millions ; but inasmuch as sixteen Mil;
lions Three per Cent. Stock will fall very far
short of producing sixteen millions in cash, he
proposes saddling the present generation with
the difference, by converting that difference
into annuities terminable in thirty years.
This is the main feature of his project. It
has nothing of novelty to recommend it. The
plan is an old one adopted frequently during
the American War of Independence. He fur-
ther proposes that the capitalist who con-
tracts shall pay by stated instalments, the
whole to be paid up within a year, but with-
out allowing the contractor to take up the
whole of his Stock at the present time.
Originally he appears to have contemplated
the encouragement of competition by receiv-
ing tenders forparts of the loan; but, frightened
by the menaces of the great capitalists, he
changed his intentions in the Treasury Cham-
ber, and has limited the competition to ten-
ders for the whole sixteen millions, thereby
virtually placing himself in the hands of Baron
ROTHSCHILD.

We have stated that in the year 1855 we ex-
peeted something new, even in the contnict-
ing of a loan ; and we thought, at all events,
that the political axiom of unrestricted com-
petition might have been made applicable to,
and dissipated some of the mysteries of the
abstruse science of finance. Our first objec-
tion, then, to the present operation is that the
old system of dealing only with large contrac-
tors has been adhered to. Enormous fortunes,
it is well known, were made by such contrac-
tors during the late war, and every pound be-
yond a reasonable profit, it should be remem-
bered, is so much added to the debt of the
country.
Our second objection is that the considera-
tions involved in this loan are too complicated
to admit of.general competition, even if ten-
ders for parts of it were admitted Let our
readers just observe what a person intending
to bid has to do. First, he has to estimate the
present value of the 1001. debenture, with all
the contingencies of peace and war, with all
the vicissitudes in the value of money, and
with all the uncertainties of the wet harvest—
one-fourth at least of the capital he proposes
to invest will be subject to these contingencies
for nine months. Well, supposing him to
have solved this nice calculation of chances,
and to have arrived at the conclusion that—
say 81 is the present value of the debenture,
there remains 121. 10s. to be converted into an
annuity of thirty years, with the contingencies
of thirty years superadded. The capitalist
must employ an actuary for this. No ordinary
capitalist, we venture to say, is competent to
arrive at a satisfactory conclusion upon so
complicated a calculation.
The first financial operation of Mr. GLAD-
STONE was unsuccessful. The first financial
operation of Sir G. C. LEWIS is unpromising.