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

THE SUN, LONDON TUESOA_V EVENING, APRIL 24, 185 5.

'i_111" a 4-
i •
'

Iwas not his intention to offer any opposition to the confir
ntatian of the contract into which the right hon. gentle.
m all bed entered. Abstractedly considered, the loan ate
',eared to have been contracted on terms fair to the con.
-Lectors, and nut mil& to the country; but as he thought
the house must be prepared to anticipate that in future
years they might be called upon for a repetition of the
process of raising money
by loan, he was anxious to point
out the mode in which he thought the inconveniences of
the sye tern might be lessened. If he could believe, with
his right honourable friend the Chancellor of the
Exchequer, that the Parliament on the arrival
of peace, would be prepared to apply a surplus of
1,003,0001. annually to the redemption of the debt new to
be iucurred, then he should have no objection to make to
the measure, but as he did not believe this, he could hardly
psrsuede himself that when his right hon. friend came to
consider what experience had pointed out as the reason-
able objections to the course proposed, he would still be
I disposed to persevere in it. He denied the justice of the
resolution, against which
applied with st 11 greater force
the objeeti n usually brought against loans, that they threw
a burden upon posterity, whist the parties borrowing de-
rived all the advantae*e. But if they threw the entire
burden, not merely of the increase of the debt caused by
the loan, but of the redemption at the rate of 7 per cent.
upon posterity, they enhanced the objection heretofore
raised to loans. Bit let thew consider w/ether it was in
the least degree probable that on the arrival of peace Par-
e u to enter, to raise an additional
lietnent would be prepared to fulfil the engagement into
which th y wore called pen
revenue of 1,000,000!. annually for 16 years for the pur-
pose of repaying the capital borrowed. Ae the beginning
of the term tor which he hart sat in Pa!liament there was a
sinking fund, maintained by men cf groat experience in
financial affairs. The house was unwilling to bear the bur-
den of the sinking. fund, hut they came to a solemn resolu-
tion that 5, 0 ./,000/. annually should be set apart for the
redemption of the debt. But was that resolution adhered
to? Two years afterwards their cenfidence failed them,
and the house declared that 3,000,000/. a-year should be
set apart for that purpose; but they observed that resolu-
tion with jest as much punctuality as they had d .ne the
first. In the end the only mode adopted of reducire the
funded debt was by comparing quarterly the amount of
revenue with that of expenditure, and applying any
surplus to its redemption. As the custom had been to
apply this to the payment of deficiency bills, the sur-
plus which was intended for the reduction of debt bad
been generally used to eke out the revenue of a deficient
quarter. He, therefore, hoped his right honourable friend
would abandon the resolution by which he proposed to lay
on this hoc, ease:( burden for the repayment of tne debt. He
was bound to take the loan as an irredeemable annuity to
the amount of somewhere about 500,0001. a-year, and it
was as an irredeemable annuity that he objected to the
principle on which it was b tsed. They were about to im-
pose on the country for ever the charge of 500,0001. ; and
if succeeding loans were contracted on the same principle,
a burden would be imposed on the country from which
there was no hope of relief. It was perfectly true that,
technically speaking, the Three per Cent. Consols were
redeemable; but twelve months' notice was required be-
fore any alteration could take place ; and he would ask
any man conversant with financial affairs where he could
I find a Chancellor of the Exchequer bold enough, in the
circumstances in which the country might find itself placed,
to give twelve months' notice that at the end of that pe-
riod he would be prepared to deal with that large amount
which the Three per Cents. offered to the operator. He
contereled, therefore, that the funds must be regarded
as practically irredeemable annuities. It was the bu-i-
-bees of the Minister entrusted with the management of
the finances to apply himself as far as possible to the re-
duction of the liurden which the national debt imposed
upon the country. He could only do this in one of two
modes—by applying a special revenue for the reduction of
the capital of the itebt, or by availing himself of those re-
ductions of interest which might take 'dace from time t
thus, and thus relieve the public of part of the general
&large of the debt. Exactly in proportion to the difficulty
of the op oration was the duty incumbent on us to take care
that we did not throw away a favourable opportunity of
reducing the interest of the debt, and it was iu that respect
he thought hie right hon. friend had failed. He believed
the Chancellor of the Exchequer would have acted a much
wiser arid safer part if he had made an offer of this new loan
in the Three per Cent. Annuities, which represented a ca-
pital of 25 ,oeo,ood/., and were cap able of redemption in
the year 1874, rather than in the Three per Cent. Consols,
which, as he had already shown, were in feet irreleem able.
The consideration was one of vital importance to the pe.
cuniary interest of the country. He maintained that we I
ought to purchase the power of redemption in twenty years
by some sect irice of immediate interest rather than entail
on ourselves and on posterity the burden of a perpetual
charge. The theory of the plan of raising money by an-
nuities was, that at the expite.tien of a certain period of
years the whole sum they borrowed would be discharged,
and to secure that advantage the borrower consented to
pay a Consli • lerable additional interest above the inerket
trete. If, therefore, fur the sake of the extinction of the
debt at a distant period, they were willing to rape the
terms to be given to the loan contractor, he maintained
that it would. be good policy to raise the terms to a limited
amount, in order that relief might be afforded, by the re-
duction of interest on the debt when the market rate fell.
When he spoke of the reduction of interest he might be
told that he was indulging in a premature.speculation; but
with his knowledge of the industry and energyof the people
of this country;with the great facilities of enterprise pos-
sessed by the inhabitants in time of peace, and the great
accumulation of capital that was continually taking
place, ho could not conceal his conviction that if they
should be blessed with a return of peace, the interest of
money would be at a far lower rate than it steed at the
present moment. (Hear, hear.) Ho trusted, therefore,
that they would take care not to divest themselves of the
possibility of effecting a reduction of interest, of which
they ea( already experienced the benefit.
Mr. T. BARING confessed lie had heard with great
astonishment the observations of the right hon. gentleman,
beeause he should have thought that be, if any man,
would have upheld the duty of repaying what we bor-
rowed. The right hon. gentleman opposed the louse
setting spat a surplus of 1,033 0301. annually for the re-
payment of the loin now contracted, a clause which pledged
us to the rep tyment iu time of peace of what we borrowed
for the purposes of war. It was no answer to the le in :A pl
to say that because they had abolished sinking funds
formed oat of surplus revenue in times past, therefore we
ought for the future to make no effort to repay what
we owed, or to argue that although the present House
of Commons might be honest, yet another House of Conn-
tomes might arise which would not be honest. He thought
it a principle of the highest ,value and importance to de-
clare that, :Although in times of emergency and trial the
public debt must neciesse:i;y be increased, yet that it was the
duty of non uncut, when it should again rind itself in p
sessien of the means, to iiitnieith the debt by applying the
surplus revenue for that purpose. Even against precedent
and experience, he would still cling to the hops that they
might find a Government honest and powerful enough, on
the restoration of peace, to resist the pressure for the re-
duction of taxation. It was a phrase touch abused, but
one in which there was great wisdom—that of the ignorant
impatience of taxation. With regard to the question
avlo ther the Chancellor of the Exchequer would not have
suede a better bargain if he had offered the loan in
what were calle 'the Reduced Three per Cents., he
should only observe, that when they reflected that
there were about 250.000,000 which could be reins-
bureeil about the year 18 4, they would see that the
elenister of the day might have enough to (lo in deal-
ing with them. (.1 laugh.) As far as ho could judge, the
plen seemed. a just. and honest one in this respect, that the
Chancellor of the Exchequer had gone
on the principle that
during 00 yearE the nation should pay 14e. 6.i. for every
100/. of money borrn wed, in order that at the end cf that
period there should be no repayment of the principal more
than had been actually received. • He must express his
hope that the Chancellor of the Exchequer would persist
in the clause for applying 1,0040001. annually to therepay-
tnent of the loin, inasmuch as it would record the resolu-
tion of the house to apply this amount out of the surplus
revenue to that purpose after the restoration of peace. He
had been surprised to hear the hon. member for Wick (Hr.
Laing) the other night say that the right hon. gentleman
might with the greatest ease have obtaiued his money in
terminable annuities. It was very well in theory or in
the closet to say that it might have been so obtained
easily. But in all contracts there were two sides,
and you might no doubt find a seller with
opinions that this would be the more just course, and
the more advantageous for the country, but on the other
hand you must find your buyer,
and if you wanted the
money you must offer a commodity that would be dealt in.
He must confess his doubt that the right loon. gentleman
would have been able to obtain it on those terms, except
by making some great concessions and sacrifices, which
would have been at once repudiated by the house. The hon.
member referred to the large sum of money borrowed for
the French railways in annuities, for a term of 03 years,
but he forgot to say that it was a question of fixed rental
but of fluctuating profit in that case, and that the parties
lending entered into a commercial speculation. (Hear.) It
would be impossible that the Government affairs of finance
could be conducted iu that way, and to parallel two ways
of raising money for different objects, and with uifferent
terms and inducements, seemed to him a notion utterly
preposterous. The honourable member again recent-
-mended them to try the plan of subscription, as had been
(lone in France ; but in that country there was a large
class of proprietors of small means, who, having before
ties as they had witnessed in their own country, Were
their eyes the dread of such revolutions and public calami-
anxious either to hoard their money or to lay it out only in
what they thought a secure investment upon very favour-
ablery low rate of interest.
i the
England. people, either th
T ehr e hoa r
w,
nnleerd
s
terms. The French, too, as a community, were a more
saving people than the English. The people in the interior
of France had, and still have, a great deal of money di-
vided amongst the
great m
or,
iatt any,hlelsamem
suratset,ohfi
thing didlnoney
were hero not only more employed at a very
not a'sexist s f
intelli-
gent but also more enterprising; they generally invested
their sayings in something that woul l give them a good
rate of interest. The French Three per Cent. loan was ne-
gotiated at 62 ; could the Chancellor of the Exchequer have
offered the same inducement here ? He could have, at the
most, offered 3i per cent , and did the house think that
persons holding small sums would have diverted them from
existing investments and subscribed them to a loan at 3ti
per cent.? He did not believe that the Chancellor could
have raised a loan either by terminable annuities or an
open subscription ; but by inserting the clause they were
then discussing, he had done what he could do in order to
comply with what he felt to be the true policy of this
country—that we should continue a surplus Income in time
prosperity in order that we might apply it to the dimi-
nution of our debt. (Hear.)
Mr. GLADSTONE agreed with thehon. gentlemen who
had just sat down upon the two important points to w h h. h e
had last adverted. He—and he believed the ma •
ority of the
house also—was firmly convinced that it was noti
the Chancellor of the Exchequer to contract largefor so
fur
sum of money as the present !oan in terminable
except at a price altogether extravagant. He thoaunries,
the remarks of the hon gentleman would also tendgtotatissj-
li at
pate the delusive opinion prevalent throughout the country,
that it was competent to the Chancellor of the Exchequer to
adopt the mode of procedure wisely adopted is France—
an opinion which, he believed, never could he
entertained
by those who had made a careful estimate of the n • ense
difference which existed between the circumstancesllm of
two countries. But the lion. geetleinau had not been just
the
to hie right hon. friend (Ur. (ioulburn) near him
His
right hon. friend quite concurred in the *
policy of Parlia-
ment, in easy times, maintaining a surplus
revenue for the
reduction of the debt ; and had manifested his concurrence
in such a policy in something better than words, for while
he was Chancellor of the Exchequer hissenest
u
and his successful efforts were directed to the creationn °eari;da
largo surplus applicable to the reduction of the debt,
year by year applied to that purpose. The point of diffe-
rence between the hon. gentlemanopposite (Mr. Baring) and
his right hon. friend was not in reality whether it was de-
sirable to maintain a surplus revenue in time of peace for
the extinction of the debt, but whether the clause hey
were then discussing would really and practically assist
them in maintaining such a surplus. The hon. gentleman
said that this climes contained the assertion of a principle.
He Glaastou!) 1144 grated, ou Friday maths flat

he entirely respected the motive and the object with
hich the Chancellor of the Exchequer had introduced
ttii 3 proposal into his scheme. But could it be contended
that the object was more likely to be attained by the inser-
tion of aclause of this description ? He apprehended that
when Parliament desired to assert a principle that was to
give a solemn expression to their conviction, the preamble
and not the clauses of a bill were, according to the usage
of the Legislature, on all occasions, the proper place fri
doing so. What was the use of Parliament enacting a clans e
for a purpose to which it had no power to give effect ?
This clause purported to be a contract to give a pledge.
But to give validity to a pledge it was necessary that it
should be given to somebody, and by somebody who had a
right to give it. But the future Parliament who might be
sitting some few years hence woultl question the light of
the present Parliament to fetter their discretion by spool-
flying the particular amount they should devote to the re-
p ,yment, and the particular stock in which they should
invest it— questions of which they would justly say they
were better judges than we. It was the duty of the
existing Parliament to raise supplies to meet the national
expenditure for our own time, and not for that of our
cldhlren. And they were trespassing on the province of
those who would succeed thorn on those benches when
they declared so many millions in such and such wars

s'iould be taken from the public Treasury and dcvotid to a,
particular purpose. ,(Hear.) And nut only ('id this ci cruse
profess to provide that a certain sum should at a future
time be devoted to the redemption of the nati,nal debt,
but it purported to apply that sum to the repayment of
Comols. Now, who could tell now whether in 1833 or
1370 it might not be the wiser course to devote our surplus
revenue to the repayment of Exchequer bills or bonds, or
of reduced stock? (Hear.) The real question was, whether
they were likely to promote the maintenance of a surplus
income by enactments of this kind. For his own part, he
tlyrught Parliament would do better to rest satisfied with
the performance of its own duty, and not to undertake to
teach future Parliaments their dillies, by making declara-
tions or issuing instructions which did not give them the
slightest assistance to do such duty. Nor was he even of
opinion that a clause of this kind was harmless. Enact-
ments of this kind had a tendency to thro v dust in the eyes
of the people. They gave rise to the belief that things would
be done which we were pretty well convinced would not be
done. They tended to give undue facilities for the ere ttion
of.' unnecessary loans, by professing to provide paper facilities
for their redemption. He thought that the more straight-
forward and explicit the house was in all matters that con-
cerned the money of the people, the better; and i i this
case the attempt which they called principles was really
nothing but vague paper promises which they bad no right
to make and which they would not find others to fulfil.
. . . •

He did not think such a course either wise, just, or expe-
dient for Parliament to pursue. (Hear) There was one
other point to which he wished to call the attention of
the house. It was no doubt through inadvertence that on
the other night the house passed, not merely the resolu-
tions relating to the loan, and those in reference to the in-
creased duties on coffee, sugar, and spirits, in conformity
with the usual custom, but also those in reference to the
additional income-tax, and the one for imposing a stamp
duty on bankers' cheques. Now, there were very suffi-
cient reasons why resolutions of the former kind sh add
be passed on the night of the financial statetuent ; but
similar reasons did' not exist in the latter case, and he did
not think that Parliament would be inclined to give
up their right of fully discussing these res dation', when
neither the necessity of the case nor previous custom called
for it. He had no doubt that what had o curred simi ly
arose from inadvertence, but he hoped it would not be
drawn into a precedent, (Hear, hear.)
_ _ _ .

Mr. JOHN M`GREGOR, said that the Chancellor
of the Exchequer ought to have thrown the loan open to
public competition, and that the Chancellor ef the Exche-
quer might have raised 20,000.0307. on terminable annui-
ties at less than 4 per cent., which, with 3,000,0001. of
Exchequer-bills, would have given him all the funds that
ho required, without having recourse to the imposition of
increased duties on tea and coffee. He quite agreed with
his right hon. friend the member for the University of
Oxford, that the house had no light to pledge a future
Parliament to the repayment of 1,000,003. per annum of
the debt now incurred. (Hear, hear.)
Mr. LAING said that he desired to say a few moor's in
explanation of the remarks which he had made on a former
evening, and wWch had beer misapprehended by the hon.
member for Huntingdon (Kr. Baring). He did net on that
occasion contend that this loan should have been raised by
terminable annuities simply. What he contended was,
that it would have been perfectly possible to raise it by one
of two alternatives —the first of these being by a system of
terminable annuities, and the other by the creation of a
stock bearing a rate of interest—probably per cent.—
which would have enabled Government, with their credit,
to have raised the requisite amount of stock in the market
at par. By the present plan, as he had then stated, the
Government sacrificed the chance of reducing the rate of
interest on the whole amount if they borrowed; and it had
also another disadvantage, for as the Three per Cent. Con-
sols were the barometer of the money market,i.ny ad:Thion
to them not only depressed their own value, but also the
value of all other securities which they regulat Forthat
reason he thought they ought always to avoid the creation
of New Three per Cent. C tnsols, except in cases of great
emergency. He still maintained that the loan might have
been raised in terminable annuities, aml that the possibi-
lity of getting them taken was simply a question of price.
In referring to the case of the French railways, he had
simply done so for the purpose of showing that a kind of
security in which 100 millions had been already invested '
was as marketable as any. other, and that its being taken
by the public was simply a question of price. No doubt a
censiderable sacrifice must be made in the first 'instance,
because until a large amount of stock of this description
had been created, it would not be so available in the mar-
ket, and would consequently bear a lower price. But ho
thought now tint we were commencing the negotia-
tion of a new series of loans, it was worth while patting up
with this disadvantage for the sake of having a security
the repayment of which was guaranteed by its terminabi-
lity being of the essence of the eontrJet. Believing as he
did that it was not right to burden posterity perpetually
with a charge of this description, he, like the right lon.
gelitleinan opposite (Hr. G.,ulburn), would be no party to
a guarantee which he condlerel eatirely illusory
he regarded merely as asserting something on paper to re-
here ourselves from doing something whi.:ll would hold us
fast when subjected t the test of future exi;encies.
(Hear, hear.) He sheuld, therefore, vote %%NI the right
lion. gentleman if he pressed his amendment to a division.
Mr.-JA ME 3 MACGREGOR said it was true that money
was invested in French railways on a terminable security,
but then the profits of thos,e undertakings were so consi-
derable that they admitted of a certain sum being set aside
yearly for what the French called_ the amortiesenten.t of the
capital, so that at the end of .the term. the' lenders would
receive the whole amount of the capital they had in-
vested. (Hoar, hear.) He believed that these sixteen
millions bad been obtained by tb• Chancellor of the Ex-
chequer on as favourable terms for the public as. could be
expected ; nor had we ever seen an operation of the kind
carried through in a more creditable manner by those
charged with conducting it on behalf of the public.
Mr. T. HANKEY was surprised to hear the right hon.
member for the University of Oxford object to the house
pledging itself to the red( mption at a future time of the
money now being raised on loan. For to what else did his
own policy amount when lie issued Exchequer bonds, and
asked the house to i opoee taxes for the purpose of redeem-
ing them. lie quite agreed with the lion. member for
Huntingdon in thinking that although no doubt a future
House of Commons might reverse the decision to which
they came on the present occasion, yet that it was not
inconsistent with their duty to show iu the best manner
'they could their honesty of purpose, and that it was tli&w
intention on the resorption of peace to impose an amount
of taxation adequate to the repayment of the loans that
were flaw about tee be contracted.
After a few words from Mr. WILKINSON,

Mr. CARDWELL said that he had heard with some
surprise the remarks of the hon. member for Peterbo-
rough, for if two things were perfectly distinct they were
these : one for the House of Commons to do a thing at a
particular time, end the other for them to enter into vague
paper promises which they themselves had no power to per-
form. Besides, the case referred to by the hon. member
was otherwise different from the present loan. When the
Exchequer bonds were issued, the condition for repayment
within a certain period was a stipulation entered into with
the lenders—it was part of the contract, and was not
therefore likely to be broken. The taxes, therefore, im-
posed to meet it wore to be maintained. But what the
right hon. gentleman the member for Cambridge contended
was, that this clause would not constitute any obligation
theon l public ; that it would merely act as an opiate, in-
ducing them to believe that this was a mere temporary
loan, and that provision had been made for its repayment
in time of peace, although at the same time we knew that,
except in the formal words of an act of Parliament, no such
provision had been made, because it was not in our power
to make any. The hon. member for the Wick Burghs
(Mir. Laing) said that the borrowing of money on termin-
able annuities was a que-tion of price. No doubt it was.
And it was the duty of the Chancellor of the Exchequer to
pursue the requisite calculations on matters of price, and
to take care that the loan was negotiated on as favourable
terms for the public as possible. He believed that the
Chancellor of the Exchequer had done so on the present
occasion, and that the present loan was negotiated in a
manner. highly advantageous to the public. He thought
that there was a solid advantage to be gained by suffering
the reduction of price consequent upon not engaging to
give twelve mouths' notice of the repayment of the loan,
because such a stipulation imposed an insuperable difficulty
in the way of any future reduction of interest. (Hear.)
The CHANCELLOR of the EXCHEQUER had listened
with the ut most respect to the remarks of his right hon.
friends the members for the two universities upon the pro-
posal in the resolution before the house with respect to
the annual repayment of the loan after the expiration of
the war. The opinions which they expressed would com-
mand great weight, not only from their extensive financial
experience, but also from. their great ability on all ques-
tions of that nature. He fully admitted that the resolu-
tion in dispute was not a matter of contract with the lend-
ers of the 16,000,000/.—that it was perfectly open to the
house to discuss the question without any limit upon their
discretion—and that they were at liberty to deal with the
clause before them as they might think fit. But the pro-
position had been made deliberately to the house by the
Government, who believed it to be a proper and defensible
proposition, and when the proper time came they would
think it their duty to adhere to that proposition, and take
the sense of the house upon it. (Hear.) He could not
but think that there had been some misapprehension on
the part of his hon friends as to the precise effect of the
proposition in question. When he hail the honour to ex-
plain on Friday night the nature of that proposition, he
stated distinctly that he was aware that ho could make no
irrevocable laws—that no act passed in that house could
bind the Parliament fifteen years hence—and that nothing
they could do would tie up the hands of their successors.
Precisely the same objection which his right hon. friends
made to this proposition might be made to almost every act
of Parliament which passed that house, and affected future
generations. (Hear.) There was nothing peculiar in the pro-
position which ho now made as respected a control over the
discretion of Parliament itself. The effect which the clause
:vou—it 1
createda hav ifa it
permanent r ece ved
rag lei thuoproi
upon
y t
ho
of lawco4oonvsweorieni state:l,3:i
Fund, and it would become the duty of every
to make provision for the repayment of 1,00 ),otm(
(Hear.) Tr° was
out of the ways and means of the yeatr.
g necessity wliieli
might make it expedient that no stup
to the reduction of debt ;
revenue should in
some particular year be
appliedwould be competent to Parliament
and, if that were so, it
ment and repeal, eitheain be engaged in
r
permanently of the Govern
pwearrf,eee trltyhaatw
tahreertehma
gthhte nbaetei eel
emii)grhensisig,
to untie the hands of
permanently or temporarily,
an-
nuallyt
for the extinctizn
which
might be suited to the
mightmake
any
time until Parliament did so interfere
exigency of the tants
of,
1 Government, it would be bound to
and untie the hands hovneK
e whichap millionrenderediam n
limit
tiott.uhpeoenattihnectizion.
That was all that it was possible
Of debt. (Seer, hear.) .
thew to do in the way
far n:mt
otnheanrqn)ouvaelrluoyit:rie;:tita:oi provide
of ththeedPebmt.viTsl
i providein