The Sun.
London, England, 1855-04-14 00:00:00

THE NEW GOVERNMENT
LOAN.

(From the Times of this clay.)

The notification of the Chancellor of the Exche-
quer, which was conveyedyesterday morning by the
Governor of the Bank of England. to the knowledge
of the public, can hardly be said to have taken any
one by surprise. The necessity of a loan to meet the
large and increasing demands of the war has for
some time past been all but universally admitted.
We have no longer to deal with the arguments of
those short-sighted financiers whO flattered them-
, selves that a contest of this magnitude could be
supported by a temporary addition to the taxation
of the country ; and it only remained to be seen
at what moment the operation would be com-
menced, and iu what form it will be concluded.
Sir Cornewall Lewis appears to have decided that
it is desirable the announcement of the terms and
amount of the loan should precede the Budget,
which stands for the ensuing week ; and accord-
ingly Monday next, being the first day of the
resumption of bssiness • after the Parliamentary
recess, has been fixed by the First Lord of the
Treasury and the Chancellor of the Exchequer, for
the preliminary communications to those persons
who may be desirous of contracting for a loan for
the service of the present year. The very large
amount of bills on the Treasury, drawn from abroad
by the Commissariat and other departments engaged
in the conduct of the war, require daily and imme-
diate payment, and it is absolutely necessary to
provide without any delay funds to meet these ex-
traordinary demands.. We cannot at present pre-
tend to form any correct estimate of the extent of
the liabilities already incurred by,the Government
in the course of these operations, nor is it easy. for
the Treasury itself to ascertain the amount of
an expenditure which arises, as it were, pro re nata,
and admits of no control but that of the necessities
of war. But the lowest computation we should be
disposed to adopt of the extraordinary expenses of
the year, in addition to the increasedTevenue raised
by the existing taxes, is 20 millions, and we are by
no means satisfied that the real amount of the defi-
ciency will not be found to be even greater. This
sum must therefore be raised, partly by a loan and
partly by increased taxation. Modern science has
lent great additional facilities to the prosecution of
war ; our fleets are . propelled by machinery and
coal furnaces ; our projectiles are elaborate pieces
of mechanism worth 5/. or 6/. a-piece ; we have a
railway within our lines, and a transport service
of vessels costing millions per annum lying off the
coast ; for, although the object we desired to ob-
tain has frequently escaped us, our expenditure
has been profuse, unbounded, and indiscriminate.
But war, carried on with these means, becomes in-
finitely more costly than it ever was before, arid
our only hope is that the increase of the outlay
while it lasts will be compensated by such success
as to abridge its duration. The country will form
its estimate of these sacrifices, not by their magni-
tude, but by their results. Heavy taxation may
be cheerfully borne, permanent financial burdens
may be accepted, and even voluntary contributions
will still attest the patriotic spirit of the nation
but while the people of England have not been
slow to perforin their part in this enterprise, and
to give without a murmur their treasure and
their blood for the cause they have espqused,
they undoubtedly have a right to demand of the
Ministers of the Crown that this expenditure
should be wisely made, and that the operations of
the war should be conducted with that union of
vigour and prudence, of . intelligence and of
strength, which can alone crown our Efforts with
success.

We await with some anxiety the announcement
of the conditions on which the Chancellor of the
Exchequer proposes to offer this loan to public
competiticin. The notification already published
calls upon " the gentlemen who may be desirous of
contracting for a loan" to attend at the Treasury
on Monday next ; whence it may be clearly infer-
red that the proposals are to be made in the usual
form of contracts for loans established by usage in
this country. This point would scarcely-be worth
notice if it were not for the signal success which
has attended the experiment of loans opened by
national subscription both in France and in Aus-
tria. The inducement to speculate in a loan con-
sists of course, in the hope that a portion of the
public securities of the nation may be purchased
rather below their marketable value. But if this
be the case, the gain of the individual is the loss of
the State, and it would seem more just that this
difference, whatever it may be, should not contri-
bute solely to increase the millions of some bloated
capitalist. Nothing would be easier in this coun-
try than to raise any sum by subscriptions limited
to a comparatively small amount at a price not
perceptibly differing from the market value of the
public funds. To give a loan the preference over
the existing stocks it must either confer upon the
holders some slight advantage which they do not
possess, or it must be sold at a rather lower price.
Mr. Gladstone showed in one of his late financial
speeches that the mere condition of rendering a
particular stock irredeemable for a certain number
of years gave it a preference in the market which
may be estimated at from 1 to 2 per cent., and this
at no expense whatever to the country.
As, however, the Chancellor of the Exchequer
is about to make his first step in what may un-
happily prove to be a long series of financial
operations of this nature, the principle we should
be glad to see him adopt is of a different character.
It is just that we should seek to throw off, in part,
the. burden of a year of war upon future years, and
even on the next generation ; but forty years of
peace have demonstrated how little can be done,
even under the most prosperOus circumstances, for
the actual reduction of the national debt. The
country may be enriched, the revenue thrives, the
nation claims to share in the blessings of pro-
sperity ; and the surplus revenue, which might
have been devoted to the reduction of our perma-
nent burdens, is appropriated to the diminu-
tion of those annual taxes which press most
heavily upon us. England has done little to
lessen the mountain of her debt thrown up
by the last war ; but she has succeeded in
ridding herself of a large mass of taxation, far
more oppressive to the industry of the country.
But, if we cannot hope to shake off the load of
debt we already carry, it is by no means clear that
we are justified in adding to it upon the same con-
ditions. It is a familiar proposition to actuaries
that a very small difference can be established
in the marketable value of a security for a long
term or for ever. In other words, the Chancellor
of the Exchequer may sell the credit of the
State for a period of 100, or 80, or 60 years
at a price not materially lower than that
which can be obtained for an indefinite liability ;
and in dealing with the affairs of a nation, the
interests of which are not to be measured by the
span of human life, there is an obvious advantage,.
and we think a political duty, in making arrange-
ments of this nature with a view to the future, by
borrowing money under the form of terminable
annuities, rather than by increasing the consoli-
dated debt. Had Mr. Pitt and his successors
contracted their loans from 1794 to 1814 in part,
at least, in the form of terminable annuities we
should now be able to look forward to the extinc-
tion 'of some considerable part of the debt ; whereas
the Long Annuities which expire in 1860 are the
only portion of the public stooks from which we
shall be relieved by this just and natural process.
Under the system of terminable annuities • the
gradual repayment of the capital borrowed becomes
an integral element of the contract, and it affords
the only moral security we can have for the reduc-
tion of the debt. This is an advantage which more
ttlhieeselighalinteaeulglouir eoifi`ztahteioExn ocfhpergieueer;
andtin wc eo intrust ts
hat
will act upon this principle as far as the present
state of the market will enable him to do 'K4The