The Sun.
London, England, 1853-04-11 00:00:00

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[PRICE SD.

, .
reducing the burden of the Debt as a mere party
question. As Lord John Russell remarked, a bit-.
ter/lege' very unusual' under such circumstances,
was exhibited itt ' the criticisms to which the Rm.
Jutions were subjected ; and -yet the success of the
objections which were urged would only have,de-
prived the Treasury of., definite aclvantage,..'which
certainly, whether large'tir sinalk itiVOlveStio e'er-
responding risk. Mr. Disraeli expressed his ,sur-
prise at the declaration of Mr. Ellicei that- the new
project Was one of the,most important Which any
Finance Minister had ever proposed; and it- is true
that Mr. -Gladstone, On the other hand, Vail pru-
dently protested against any'" exaggerated expec-
tations which- might be formed -cespeeting the
results of his plan.— There-is,- however • incon-
sistenCy between the views
put forWa'rd by the
author of the schenie,. and those of- his, able and ,
experienced suppprter. As, an experimental and
gradual -measure, the creation of the new Stcas
will effect but a moderate reduction in the public'
burdens—it is only when its success shall have'
been established that the prospect of a reduction
in the total interest of the Debt will become dis-
tinct. Mr, atioz himself has long considered: the
expediency of, placing the Suitors' Fund: on a
securer basis, and. the same time providing the
nucleus of a Tiro-and:a:Hall per Cent. -StOck,
which, may prepare the way for the ultimate eon-
Version of the- -Three -per Cents.. It •is not sur-
prising, -therefore, that he should appreciate the
-utility of a plan !which renders possible, the great
improvements which he desired to see effected:
Mr. GLiosoi,TE's anticipations. of the ultimate re-
sultS of his own :policy may Probably net be less
-sanguine • but at present he'. judiciously takes
'credit only for the good-which he-is enabled to re-
alise; knowing-that. experience will -best develepe-..
the future possibilities of public advantage. The
objections which are urged against the_ plan are
partly conjectural.
Sir Fitzroy Kelly's' argument, was; intembad .to
show that, of three proposed securities, only' one
Would be selected by capitalists. And if so, *hat'
then ? Investments in the Two-and-a,-Half per
Cents. would produce a clear profit to the public,
'even if a sinking fund were set-aside to absorb the
future increase in the nominal capital of the Debt;
;The Chancellor of the
,Exchepier, is of course pre-
pi,tred td satisfy a.dentand for any class of the New
Securities which he ' offers, though -it should' be
exclUsiVely preferred.. Sir Fitzroy Kelly wastes- a
good deal of energy and ingenuity in Proving that
the Two-and-a-Half per Cent. Stook will be a More
desirable purchase than either Three-a-Half
per Cents. or Exchequer tends. The calcUlation
is, iirelevantio the" question which Parliament has
to decide, and it assumes throughout the 'Treasury
will be bound in 1894 to pay off the new stock at
par. Froth the beginning of the discussion to the
end, all the opponents of the measure seemed to
forget that the Government, can buy up its own
securities in the market, instead of dealing directly
with the whole body of creditors.
If Two-and-a-Half per Cents. are, under the pro-
posed scheme, cheaper than Three-and-a-Half per
Cent. Stock, capitalists in general will of course
prefer them ; and- there is little doubt that such
will, in fact, be the case as to the majority of
investments. But the objection to a threefold al-
ternative of conversion involves the erroneous as-
sumption that all purchasers require precisely the
same commodity. SoUnd policy suggested the
prudence of 'making the new experiment as varied
and exhaustive as circumstances would allow ; and -
Mr. Gladstone's measure is intended not merely to,
test certain very. important :facts and probabilities
in finance, but also..to. satisfy the different wants of
classes placed in the Most dissimilar :positions. A
man may sell shoes and boots in the same shop,
Without subjecting himself to the reproach of
caprice or inConsistency. Sir Fitzroy Kelly, may
persuade himself that the dealer makes a somewhat
larger. profit on the boots ; but his inference that
those who require shoes will not buy what they
want, is„-to' say the least, somewhat hasty. , Mer-
chants and bankers have frequently occasion for a
portable security which can be deposited or passed
from hand to hand' as often as convenience may
suggest. Trustees and persons living on fixed in-
comes require investments of a totally . different
character ; but> , according to . the ex-Solicitor-
General, both classes.
,ought to forego their re-
spective habits and interests, if they can save 6d.
per cent. by the operation. Mi.' Gladstone has
ascertained that the portable character of foreign
securities- adds some shillings in the pound to their
value ; but-Sir Fitzroy Kelly altogether disregards
any facts of this kind, in the ardour of his investi-
gations into the deferred value of 1%, forty years
hence, which the State, as it happens, will not
even be liable to pay. The experience Of a few
hours after the passing of the 'act will Supersede
all speculation as to the deinand for Exchequer
Bonds. The money dealers in the'City are, it is
believed, prepared to take them, notwithstanding
the demonstration which has been tendered that
they ought to prefer the Two-and-a-Half per Cent.
Stock, for which they may have no occasion. If
the Bonds cannot be sold, neither good nor harm
will have been done. -If the Three-and-a-Half per
Cent. Stock hangs on hand, its nominal creation
will have cost nothing. The greater part-of the
South Sea Annuities, can be
„conveniently paid off
in cash ; and the most zealous, adversaries of the
whole projeat declare that the TWo-and-a-Half per
Cents. will'Oultte -COO geed a baisain fei• the ftind-
holder.