The Press.
London, England, 1854-11-25 00:00:00

MR. GLADSTONE.
WE have described Mr. GLADSTONE'S first financial
operation—his reduction in the rate of interest on
Exchequer Bills. It has resulted in a direct loss to
the country of more than 200,0001. a year.
_

We proceed now to his second—namely, the re-

demption of the South Sea Stock.
He has himself pronounced this operation abortive ;
and, having made this confession, he has complained
in the House of Commons, with asperity, if not with
rudeness, that any one should presume to comment
further upon it.
It may be that, in Mr. GIADSTONE'S private rela-
tions, absolution may follow confession; but in the
case of a Finance Minister the public will be a se-

vere judge; and, as journalists, we hold that neither
the self-humiliation nor the confession of the peni-
tent can relieve us from the duty which we owe to
the public of criticising and exposing the delin-

quent.
The history of the transaction is a short one. It
is not uninstructive. In its results it will be found
to involve not only great pecuniary losses but politi-
cal considerations of the gravest and most serious
nature, and to have bearings and relations which we
undertake to show have contributA4 in no small de-
gree to " the timid counsels " which have given such
advantages to Russia, to the delays and difficulties
with which our armies have been encompassed, and
to the doubtful issue which now seems to hang over
our first and most important campaign.
When Mr. GLADSTONE became Finance Minister,
his object was to outdo his predecessors and to pro-
pound something new, surprising, comprehensive.
Rash and self-willed, he neglected, as we believe, the
advantages he possessed in the counsels of men with
greater financial experience than himself. Mr.
DISRAELI, by reducing the interest on Exchequer
Bills opportunely and cautiously, effected a saving of
35,0001. a year. Mr. GLADSTONE'S first object was
to outdo Mr. DISRAELI, and he involved the country
in a loss of 200,0001. a year. Mr. GOULBURN in 1844
successfully converted our Four per Cents. into Three-
and-a Quarters, and effected an immediate saving of
622,0001. a year. Mr. GLADSTONE contemplated the
grand scheme of converting what he called " the
Feat Three per Cents.," amounting to 500,000,0001.,
into a magical Two and-a-Half per Cent. We shall
examine the results.
There was 9,584,740/. (we will take it, for conve-
nience, as 9,500,0001.) old South Sea Stock. Mr.
GLADSTONE designated it "patriarchal." It bore
interest at the rate of three per cent., wag held by a
small proprietary, and was scarcely known on the
Stock Exchange. The conversion of this stock he
made the basis of his operation.
On the Bth April, 1853, he astonished the public
by laying on the table tf the House of Commons
certain resolutions having reference primarily to this
stock, but which he stated to be the foundation of
his larger and more comprehensive scheme. Upon
that larger and more comprehensive scheme we do
not mean at present to comment. It has been con-
signed to oblivion with the abortive schemes of other
Chancellors of the Exchequer—and peace be to the
ashes of all ! But we have to do with what Mr.
GLADSTONE described as the just and prudent propo-
sition for the conversion of these minor stocks,
because the country, as we shall show, is paying
dearly for this his second financial blunder.
We shall not trouble our readers with the details,
an outline will be sufficient for our purpose. He
gave the holders of these stocks the option of four
alternatives, viz., that for every 1001. of the old stock
they might receive-
1. 821. 10s. in a new Three-and-a-Half per Cent.
Stock, with a guarantee against a reduction of
interest till the year 1894.
2. 1101. in a new Two-and-a-Half per Cent. Stock,
with the same guarantee against reduction of
interest till 1894.
3. An Exchequer Bond for 1001., with interest at
21. 15s. per annum, and a guarantee against
reduction till 1804, the interest to be thenceforth
21. 10s. till 1804.
4. In case none of these should be accepted, a
money payment of 1001. on Jan. 5, 1854, for
every 1001. of the old stock.
Being desirous of likewise giving the holders of the
500,000,0001. Three per Cents. a foretaste of the ad-
vantages they were hereafter to receive under his
larger scheme, he proposed further that commuta-
tions might be made, on the same terms, by the
holders of Consols or Reduced Three per Cents. for
these new Three and-a-Quarter per Cents., new Two-
and a-Half per Cents., or Exchequer Bonds, limiting
the commutations in the two former cases to
30,000,0001. each.
From the compulsory commutation of the minor
stocks he stated that he expected only a moderate
reduction in the rate of interest : if one quarter per
cent. "it would be about 25,0001. a year." From both,
namely, the voluntary commutation of Three pe,