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

lion embodying the terms of the loan, and carrying them
ent. The right hon. gentleman concluded by placing in
the hands of the chairman a resolution setting forth and
adopting the terms of the loan as they have already ap-
peared in print.
Mr. M.
T. SMITH asked whether the Government had
given notice to the parties with whom they had that
morning contracted a loan, partly in terminable annuities,
that it was their intention to levy a tax on those
annuities ?
The CHANCELLOR of the EXCHEQUER said that
it was impossible Government should make a statement
to the contractors for a loan as to the additional taxes
about to be proposed to Parliament. Of course those who
contracted for a loan must be aware of the possibility of an

increase of taxation taking place.
Mr. LALNG thought that the house should not by a
silent vote commit itself to an approval of the important
principles involved in the resolution just proposed
b
right hon. gentleman—principles with respect
'
to ythe
which
a strong and by no means favourable opinion was enter-
tained in circles conversant with monetary matters. We
appeared now at the commencement
l of the war to beennd er-
e magnitude ; ait
ing upon a succession of loans of arg
Was therefore incumbent on the house to exercise due
deliberation as to the ter s iasch
et hr
reoyn
ewoeurse caosntthroascet eodn,
or we might act
ei nmc rt rheodd d
oufr irnagi
stihn eg
taht
ee
which Mr. Pitt cogrlhac-eteriitcohlue
war. An obvious ho tdoebtht
byettheiaCshancellor of the Exchequer was that
loan proposed nor another. He could understand
it was neither on
its being said that it was not incumbent upon us to impose
any burden upon
the present generation for the sake of pos-
terity, and that it was therefore desirable to raise the loan
Three per Cant. Consols, because they being the most
in
marketable security were the one in which a large sum of
most readily raised on an emergency. That
doctrine could
1?e different from the
doctrine was indeed very one they had
beard from the late Chancellor of the Exchequer, who only
two months ago appealed to them not to throw the whole
burden on their posterity, but to make a gallant effort to
bear part of it themselves. That doctrine might, however,
be pushed too far, for there could be no doubt that in great
emergencies we could not raise the whole revenue by taxa-
tion, bat Must resort to a loan. But then came the question
as to the form in which they should contract the loan. The
Chancellor of the Exchequer said that it was impossible
to contract it in terminable annuities. But if from
60,000,000/. to 100,000,0001. embarked in French and other
foreign railways had actually been raised on terminable
securities, how could it be impossible for the Government
of England, with the vast credit it possessed, to raise
16,000,0001. at a time when the money market was re-
markably easy ? It was said indeed that there was to be
a sinking fund, but with the light of experience to guide
us, could any oue doubt that on the return of peace that
fund would be speedily sacrificed in order to enable the
Government to meet the pressure for the repeal of some
obnoxious tax. There was really no hope of paying off
any considerable portion of debt unless it was expressly
contracted in a terminable form. The raising of money
by terminable annuities was, in fact, simply a question of
price in the market. An annuity of 60 or 100 years had a
clear and intelligible market value. It would not indeed
fetch quite so much in proportion as the Three per Cent.
Consols because the latter being a larger stock, there was
more dealing in them ; they were, therefore,, a morereadily
available security in the market, and consequently com-
manded a higher price. But if now, at the commencement
of the war, they began to create terminable annuities, and
continued so year by year, so as to make them all
expire together, and thus form one stock, they would be
as readily available, and would therefore command as
high a proportionate price, as Console. (Hear, hear.)
Let the house consider the effect of contracting a new
loan in Consols. That stock was at present kept up at
an artificially high price, because it was the only ae ail-
able security for the investment of trust funds. But if,
by an increased issue, they increased the quality in
the hands of jobbers and large capitalist., the value of
Consols, which was the barometer of the money market,
and regulated the price of all other securities, would fall,
and the amount of money obtainable by Government for a
certain amount of stock must necessarily be diminished.
Why, what occurred lately ? Some few weeks since Con-
sols were at 92 to 93, with a tight money market, and the
Bank rate of discount 5 per cent. The money market
had since become easier, the rate of discount had fallen to
4:1 per cent., with a probability of further reduction ; but
Consols, instead of going up, had fallen to 90 to 91. No
doubt this was partly due to the rumours of the impend-
ing loan, and partly to the suicidal policy of the Govern.
went in selling savings bank stock at the very time they
knew they were about to contract a loan. Had a more
judicious policy been pursued, he believed that the loan
might have been negotiated at 92 to 93, perhaps even 94
or 95 ; whereas, if they calculated the terms of the present
loan, they would find them only eqpivalent to 85 or 86.
Then with regard to the method of negotiating the loan.
The Government might appeal to the public either directly,
as has been done in France and Austria, or through the
medium of the agents or middlemen. Now he did not,
for his own part, participate in the prejudice entertained
by some persons against middlemen. But, then, if their
• agency was to be employed, the element of competition
amongst them ought to be brought into play, which had
not been done in the present instance. If they adopted
the other method, they must fix a price which private ne-
gotiations would easily enable them to do ; throw open the
loan at that price to the nation, and let any one who liked
subscribe 1001., or any other sum. That course had been
adopted by the French Government on a recent occasion
with far better success than had attended the Chan-
cellor of the Exchequer's operation ; and he must say
that he believed that the money might have been ob-
tained by this plan oa terminable annuities on much more
favourable terms than had actually been done. (Hear.)
He must say he had heard, with great regret, the enume-
ration of the additional taxes by which the Chancellor cf
the Exchequer proposed to raise the amount required for
the service of the year. The income tax stood during the
late war at 10 per cent., and he could not think that the
present generation were less willing than any former one
to bear by direct taxation the burdens of a war into which
they had entered with their eyes open. Now, the whole
additional revenue it was proposed to raise might be ob-
tained by a 9 per cent. income tax. Why, then, should
they prefer to retrace the steps of their recent legislation,
unsettle the system of taxation which had been established
of late years, and for such small sums as it was proposed
to raise by the additional duty on coffee and sugar disturb
interests so important as those which were concerned in
the production or import of those great articles of con-
sumption? He did trust that the house would declare its
readiness to vote a 10 per cent. income tax, if it was ne-
cessary, to support the expenses of the war, but that they
would not fritter away the recources of our trade, burden
the working classes, and unsettle commerce by peddling
and petty alterations in the system of taxation established
by Sir R. Peel.
Sir H. WILLOUGHBY observed that it was utterly' im-
possible to extract eighty-six millions and a quarter in one
year from the pockets of the people, either by direct or in-
direct taxation, and that the necessity for a loan was there-
fore, beyond dispute. He wished, however, for information
on two or tlirea points embraced in the statement of the
Chancellor of the Exchequer. He understood the right hon.
gentleman to say that the expenditure for the year ending
March 31, 1854-5 was 65,656,5921. Did not that represent
the accounts that had come to hand rather than the total
expenditure of the year; and, if so, could the right hon.
gentleman say what the total expenses up to that period
were likely to be ? He also wished to know to what extent
the country had run in debt during the last year ? Of the
additional ten millions revenue voted last year, he under-
stood five millions had not been paid. On the other hand,
7,300,0001. additional debt, consisting of Exchequer bills
and bonds', to be repaid it was true in future years, had been
contracted and the money had actually been spent. He
wished to know when the Chancellor of the Exchequer had
taken credit for the five millions of unpaid taxes for the
past year? He wished also to ask whether, in imposing the
income tax on terminable annuities, they were not taxing
prinecipastl, and if so whether it was not evident that they
/Ver
.what:veerlngupon a career opposed to any sound principle
The CHANCELLOR of the EXCHEQUER said that
the chief portion of the payments on account of the expenses
of the army, navy, and ordnance were either madein ready
money, or at all events fell due in the course of the quarter.
And therefore, although there might be some arrears, he
did not think they would be
.very large. He was quite
aware that annuities were subject to the income tax. Ho
was. however, of opinion that an annuity, whether termi-
nable or perpetual, should be considered as !income and
treated accordingly. Undoubtedly the fact of their being
thus liable to taxation one
on was of the reasons which tleterred
the public from taking them t any extent. But those who
purchased them reckoned on theincome tax—its increase or
decrease—as one of the contingencies
nade to which they were
exposedand for which they allowance. With regard
to what had been said about foreign securities, he
apprehended they were not terminagreeilwlnaYany other sense
lies taken fur a
than railway debentures, which w
short time, and to be renewed by reloorro°:
Mr. FR EWEN said it was evident, fprloamasg.the speeches
which had been already made, that the
the Chancellor of the Exchequer would meet Pwith a rproposedd I°l by
e(
deal of opposition. There was one point to evhicllhe
wished to call the attention of the right hon. gentleman.
It was this, that, the Government should give every possible
facility to those persons who were charged with taxes
which they ought not to pay to appeal against the injustice.
Mr. GLADSTONE—I am induced to rise at this period
of the discussion, because I do not feel entirely certain
whether the committee are aware of the precise nature and
hearings of the resolutions which have been read from the
chair. In the excellent speech of my right hon. friend,the
Chancellor of the Exchequer, a speech distinguished as well
by the utmost candour and fairness as by its great clearness
--(itter)—in that excellent speech I only regretted a single
' omission, namely, he did not state to us precisely either the
414" of the votes he intended to ask for to-night or the
',....L•ffect and character of those votes. If, therefore, I
to state what I believe to be the character
holLat'ire,f those votes, it is only by way of offering my
staa!staiace to the committee, and my observations
tiler .Iteet to the correction of my right hon. friend if
_ Itaitie-nitrerittat- The Chancellor of the Exchequer asks
s!ttele shw,re, Axe. first place, for a vote which embraces the
atonal con'em4t7_tite loan for which he has made a provi-
fee on to eekt4l744lsreenme that having done so, he will
Iti!tiaiso,y,Tutrhae furthernathreeleizseesfw,c, votes which will enable
Now, if I at, : teY he has proposed this even-
friend will thus' the ~,64 the class class of indirect taxes.
Which my right hon.
their substantial character' I 1 distinctgue paid different in
enable him to ley; • -et
• coffee, and spirits, ainilereed asks " for a vote to
he would be in a _end thanesto.ll-1)" sugar, tea,
night does not in any conditionmanet: tell us tomorrow morning
but that every gentleman whocramirtiNir r vote to
free at the next stage of the
different amuse, and reverse the re' indict
to ne
of the Exchequer, as if he had never n-ee—fat,aat ettgreent,
lire of the e 17ittLz t a
liminary step. The case is different, ITTettih this
spect to the loan. Not from any fault on erxer. withPreel
Chancellor of the Exchequer, but in strict coneetmilithf the
previous practice and the dictates of prudence mitt' with
hon. friend is asking us to give a vote upon the'smal;• tight
the loan which will be virtually binding and conclusive
t° °f
between us and the contractors. We are called upovntaos
night to give a vote which is to be a distinct " aye" or
' " nog' upon the arrangement proposed by the Chancellor of
• the Exchequer between the State and certain contractors,
who are about to lend him 16,000,0001., and after having
given that vote it will not be competent to us to inter-
feteswer,ll(__*or- impair the conditions of that contract.
PrePaPed,to withhold my affirmative from the pro-
posal of the Chancellor of the Exchequer, that the com-
mittee should confirm the contract into which he has pro-
visional', entered ; but before I
say
anything upon the
-merits o thai ontract, ,iiguii wis h
to express my desire