The Press.
London, England, 1854-09-30 00:00:00

SEPTEMBER 30, 1854.

Lord DERBY'S Government. Even the defeat
of Mr. DISRAELI'S budget afforded the opportu
nity of a reconstruction of Lord DERBY'S Go-
vernment, and of including in it those whose
co-operation Lord DERBY had solicited in the
preceding year, but who had refused their
co-operation by reason of the differences which
then prevailed on questions of commercial
policy. Some people have gone so far as to
suppose that the refusal of Mr. DISRAELI to
amend his budget, and the chivalrous resigna-
tion of Lord DERBY, were influenced by some
such considerations or expectations as these.
We say, then, that the Coalition formed for
the overthrow of the Conservative Government
was base, unprincipled, and treacherous; and,
by the sacrifices which dishonour and treachery
involve, Mr. GLADSTONE earned for himself the
distinction he has since enjoyed. But just in
proportion as a man raises himself by undue
means to a high and honourable and respon-
sible station, in the same proportion must he
expect to have himself judged severely, and
to have his measures subjected to a stern
scrutiny, both as regards their policy and the
motives which may have led to them. Mr.
GLADSTONE'S first measure as the Finance
Minister was the reduction of the rate of
interest on Exchequer Bills, and this measure
shall form the subject of our strictures upon
the present occasion.
It was rather stealthily effected ; the first
mention of it was in the House of Commons
on the 22nd of February, 1853, when it was
elicited by a question of Mr. MASTERMAN ; and
it was then stated, with a suspiciously elaborate
apology, that on the 14th the rate of interest
had been reduced from lid. to Id. per day.
Before discussing this first of Mr. GLADSTONE'S
financial measures it may not be amiss to
make a few remarks upon the nature and inci
dents of these Exchequer Bills which form
the subject of his operations. Our readers, of
course, are well aware that an Exchequer Bill
is, in fact, a Government bill for a given sum,
payable in twelve months, to the holder, with
interest at a given rate, and negotiable with
the utmost facility. Exchequer Bills thus
constitute a species of currency, entering into
our circulation to some extent, forming in a
great degree the means by which the Govern-
ment and the Bank conduct their large trans-
actions, and being used in certain cases as
money in payment of taxes and for other
purposes. It therefore follows that Exchequer
Bills are influenced and operated upon, as
regards their value, in a great degree by the
principles and laws which are applicable to
our monetary system, and that the amount
and condition of Exchequer Bills affect
materially the value of money. The interest
on Exchequer Bills is lower usually than the
ordinary rate of interest ; but there are many
purposes in commercial matters which they
advantageously subserve. Upon their demand
for these purposes, as well as upon the rate of
interest, depends their value in the market,
which value is denoted by the premium they
bear. The premium, therefore, it is necessary
to remark, cannot be taken as the criterion
precisely of the relation which the rate of
interest payable on Exchequer Bills bears to
the rate of interest or value of money gene-
rally.
We have thought it necessary to make
these remarks because considering the
large amount of Exchequer Bills (nearly
eighteen millions)—considering their various
uses—and considering, above all, that
they constitute the means by which, on
an emergency, Government can raise money
for State purposes—we hold that nothing in a
financial point of view can be more im-
portant than that these securities should be
managed on sound principles—that they
should not be rashly or inconsiderately
tampered with—and that they should be kept
always in a high and satisfactory state of
credit. For these reasons Chancellors of the
Exchequer, before Mr. GLADSTONE, have been
very cautious in reducing the rate of interest
on Exchequer Bills. It is no light matter to
tamper with 18 millions entering so exten-
sively. into our whole system, and which, by an
Improvident step, may be withdrawn from cir-
culation or occasion serious losses and de-
ngements in sustaining them And when
Chancellors of the Exchequer have effected a