The Sun.
London, England, 1855-04-24 00:00:00

cretion of a future Parliament. They were unwilling to
create a permanent burden-upon posterity ; buteaireutn-
stances prevented them from borrowing any large sum of
niey in terminable annuities. It had been stated by the
hon. member. for Huntingdon, who spoke on subjects of
that description with great authority—and his statement
would be confirmed by all persons who carefully examined
the question—that a loan of 16,000,0J0/. could not effected
in terminable annuities without giving terms so extrava-
gant that the Government would justly be condemned by
that house if it consented to grant them. (Hear, hear.)
He even questioned whether, without giving terms abso-
lutely extravagant, a loan of so large a sum as, sixteen
millions could be effected at all in terminable annuities for
thirty years. The objections on the part of the public to
receive their capital in driblets year by year, subjecting
them to the necessity either of spending their capital as
income, or of reinvesting it in small sums under circum-
stances of difficulty and embarrassment, would be se great
that it was questionable whether so large a loan could i.e
effected at all in terminable annuities. - The Government
had gone as far as they could do in effecting a portion of
the loan in terminable anuuities ; and if they had thought
it expedient to raise the bulk of it in Consols, they at the
same time proposed to apply one million annually to the
redemption of the debt so contracted. He was willing to
admit that the obligation so to provide and apply that one
million annually was not of a paramount nature—that it
was in the power of Parliament at any time to rescind it—
but it was impossible for them, without makkg the repay-
ment of the debt a matter of contract between the Govern-
went and the lenders, to impose any more stringent obli-
gatien upon future Parliaments. -His right hon. friend the
member for the University of Cambridge had made some
remarks as to the inexpediency of contracting this loan in
the Three per Cent. Consols, and had stated that he would
have preferred it to have been contracted in the Three per
Cent. Reduced Annuities, on the ground that the one could
not be zodeemed without one year's notice, whereas in the
other description of security that was not the case. The
right hon. gentleman spoke of Consols as if they were an
unredeemable stock. In doing so, he confounded two ideas
which appeared to be wholly different, namely, the reduc-
tion of interest upon the stock, and the extinction of that
stock. If that house should at any future time—as he hoped
it would—make a real sinking fund, that was tb say, not
an imaginary or illusory sinking fund founded upon the
principle of borrowing and of compound interest, but a
simple sinking fund derived from the surplus taxation of
'the year—he saw no reason why Consols, or any other per-
petual annuities should not be redeemed by the Govern-
ment going into the market and buying up their own an-
nuities, thus extinguishing bdth debt and interest. He
confessed he was not very sanguine as to the possibility, at,
any time within the lifetime of the present generation, of
reducing the interest of any 3 per cent. stock ; but he saw
no reason for thinking that they might not advantageously
extinguish any amount of 3 per cent. stock by the annual
application of the surplus taxation. Some honourable
members seemed to think that it was not in the power
of the Government to extinguish a perpetual annuity.
They contrasted a terminable annuity as being something
which the Government could extinguish with a perpe•
tual annuity, as being something which the Govern=
merit could not extinguish. He must be permitted to say
that no error could be more apparent with regard to a sim-
ple financial question. It was convenient to the Govern-
ment to borrow in perpetual annuities, because they never
could be called upon to pay the rrincipal at any definite
time, and it was convenient to the lender to lend in perpe-
tual annuities, because he never could be called upon at any
definite time to receive back his principal. The convent-
ence was mutual ; but if the Government was in the pos-
session of a surplus revenue applicable to the extinction of
debt, it could go into the market and buy its own perpetual
annuities, and as effectually extinguish the debt as if it
had contracted the loan in terminable annuities. The
propositions which had been made at different times for

the establishment of a sinking fund had gone upon the as-
sumption that it would be impossible in that manner to
extinguish debts. He regretted that the acts relating to the
sinking funds of 1823 and 1827, which rendered it necessary
that a surplus revenue in the first instance of 5,000,0001.
and in the second of 3,000,0001. should be applied to the
redemption of debt, had been repealed, and he trusted that
whenever the present war should have ceased, it would be
in the disposition of Parliament to revert to that system.
But let not the house suppose that there was any difficulty
in the nature of perpetual annuities which impeded the
extinction of that description of stock. SoMething had been
said upon the subject of opening a subscription loan. He
entirely concurred with the very instructive remarks made
upon that point by the hon. member for Huntingdon, who
illustrated it by a comparison of the different circumstances
of England and France. It.was to be remembered that if

the Government had opened a subscription loan they should
not only have encountered the difficulties referred to by the
hon. member for Huntingdon, bat they would also have
created a demand upon the savings banks which they could
only have met by a sale of the stock in the hands of the
Commissioners for the Reduction of the National Debt.

(Hear.) Nor ought hon. members to forget another cir•
cumstance—namely, that in a loan raised by subscription
it would be necessary for the Government, to fix the price
at which they would receive the sul:vcriptionF. The lists
would necessarily be kept open for a considerable time, and
the Government would lose the advantage of that competi-
tion in the money market which they secured in the case
of contractors, and even when it happened, as in the pre
sent loan, that only ono tender was sent in, bccquse the

person who made the tender acted with the know]. Igo that
if the terms he offdred were not reasonable there wore

others ready to come forward and offer more moderate
terms. (Hear.) Ho had listened with satisfaction to the
testimony rendered by so great an authority as the hon.
member for Huntingdon and other members of that house
with respect to the terms on which the loan had been con-
tracted. He had every reason to believe, from all he bad

heard since the acceptance of• the tender, that while the
terms were fair and not disadvantageous to the con-
tractor, they were also beneficial to the public, and that the

very onerous responsibility which lay upon the executive
'Government in contracting a loan• withontite being pos-
sible for them to obtain the proviona •sanetion. of Palia-
ment,. had been fulfilled. in a manner which could, he
hoped, receive the approval of that honse. Same remarks
had been made is to its being de.sirable that; the Govern!
!neut.-should, before receiving tenders for a loan, inform
that'housO of the conditions - upon which th 4 riropOsed
effecting the loan. lie coug assure. the house that if it
had d6penited nierely upon'the wish of thoGoverniLeat to
free themselves from.a semewlcat painful. responsibility,
they would unquestionably IJAN-is resorted to that, coupe..
They found no alternative left them, hociever, but strictly
to adhere to the practice of former. times, and take upon
t.,einselves the responsibility of making a provis:onsl c0n-
....

tract before submitting the subject to'triat house.. With re,-
ference_ to what fell from the right hon., gentlenittu the,
member for the University of Oxford as to' the passing of
the income tax.resolu:ion on Friday ni3ht, ho could only

express his regret that he should unintentioually have
done anything contrary to the practice of the house with
reference to such resolutions. it Wall entirely owing to his
inexperience in such matters. Nothing was said on the
subject of the income tax* when the resolution; was read
Jima the chair. if any objection had been communicated
to him he would unquestionably have postponed the reso-
lution on the income tax. (Bear.) He was not aware

that there were any other points which required explaurt-
tien at present; but he should be glad to furnish any fur-
. . . . .

Cher intormation which the house -might desire.
Sir H. WILLOUGHBY thought the loan was on the whole
a fair transaction, though ho complained of the amount as
excessive, wising from the large margin of 5,000,0001.
which the Chancellor of the Exchequer had allowed him-
self in the estimated expenditure for the years He also ap-
proved of the proposed plan for the repayment of the loan
in annual instalments of 1,000,0001. There had recently
been extensive sales of savings' banks stock. He wished
to have an explanation of those transactions which had ex-
cited a good deal of observation, and which were calculated
to produce much mischief. He objected to the Chancellor
of the Exchequer borrowing money nu terminable annui-
ties one day and putting an additional income tax on the
annuitants the next.

The CHANCELLOR of the EXCHEQUER said the
sales of savings bank stock had been • made under distinct
powers, created by an act of Parliament, which authorised
the Government to direct the Commissioners for the Re-
duction of the National Debt to sell stock belonging to
savings banks, and to receive in exchangeother Government
securities. The house were aware that exchequer bills and
ways and means bills, though they were temporary and re-
newable, were just as binding upon the Government es
those securities which were of longer duration. When,
therefore, the National Debt Commissioners sold savings
bank stock, and took in exchange exchequer bills from the
Government, they did not diminish the strength of their
security. With regard to the income tax and the annui-
tants, he could only repeat the explanation which he-gave
on Friday night. The lenders of money on terminable an-
nuities necessarily took into their calculations possible fluc-
tuations in the amount of the income tax; and as they would
benefit by any diminution in the impost, he thought it was
but fair they should take their chance of an increase.
Mr. W. WILLIAMS inquired whether the 86,000,0001.
for which provision had been made included tho cost of
collecting the revenue ?
The CHANCELLOR of the EXCHEQUER was under-
stood to reply in the affirmative.

Mr. GLADSTONE suggested that, instead of binding
the commissioners to lay out the 1,000,0001. annually is
consols, the resolution should leave them at liberty to select
whatever description of security they might consider expe-
dient at the time. There'was another alteration which he
had to propose. The resolution bound the commissioners
to purchase 1,000,0001. of console annually until the whole
16,000,0001. should have been redeemed. But a portion of
the consols might be redeemed from other sources ; and if
that were so, the Chancellor of the Exchequer would not
be able to redeemC the 16,000,000/. with his annual sum of
1,000,0001., but perhaps not more than 5,000.0001. or
6,000,0001. If they were to have a clause of that kind at
all he thought it should be efficient for its purpose.
1 ' Mr. BARING could not help thinking that the sugges-
tion of the right hon. gentleman would frustrate the ob-
ject of the clause. There were a great variety of debts,
and the right hon.. gentleman proposed to say to the com-
missioners, " Here is a surplus of 1,000,0001. per annum,
and you mast apply it to buy off a portion of any of the
existing debts you please." But the object of the Chan-
cellor of the Exchequer was that, over and above what
might be done with respect to the other debts,
,uce
should be 1,000,000/. applied annually, to the rel
tion of the newly-created debt. (Hear, hear.)er The
ot
real object of the clause was that beyond any
upon the Exchequer, 1,000,0001. should be applied
redemption, by purchase,
ntleman 5 t hon ge to the
derstand what other objecteftheeenreigelhe,
the whole reso-
lution. he could sob,
pro-
posal could have than entirely to frustrate
lution. •
Mr. GLADSTONE thought he wa
charge of attempting to frustrateby
his
suggestions..
aseiehuseredlyta obj
ect, the;
which he had risen to facilitate f the right
Mr. T. BARING had
but of the effect of his suggestions
t to speak, not o.
, hon. gentleman's object,
if carried out.
The CHANCELLOR time to
tn n to allow him consider
of the EXCIIEQUER would, ask
the right hon.
power-to apply 1,000,000 L to the're-
his suggestions; gentleman
ho did not see that there vould be
any objection to g p
demption of any give stock. Willi regard to the
Melega
l
effect was idiffic.ult. for him to see the pre •
other point,
effect of the clause, but if it were possible, consistent with
the resolution, to alter the words. so as to make the mean-
ing clear, ho would have no objection-to do so.
Mr. WILLIAMS corOplained that the sum of 86,000,0001.
did not include the cost of collection of the revenue, yet it
was most important that that should be made clear) Th
tilid
object of the former, commission was to bring the whole.e
ex-
penditure of the country under the view of the house,
large amount which the
there was no reason at all why the
collection cost ghoul(' be kept out of view this year, al-
though the late Chancellor of the Exchequer had-given
very sufficient reasons why it should not have appeared last
year. Were that amount brought under the view of the
house it would he seen that the real expenditure would be
not 86,000,0001. but 90,000,0004
Mr. JAMES WILSON said that this year the accounts
had continued to
be made up on the old prinoiple. Thecost
of oollootio4 wotil be G`twicd4 before.* how; but In
• _
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