The Sun.
London, England, 1854-03-07 00:00:00

reudered another bill necessary, in order that the stockholders
might be enabled to receive their money. That was no such
thing. The amended hill to which the right honourable
gentlemau refers, was a bill for an entirely difrorent purpose.
It was introduced to meet the case of a particular set of per-
sons, who were holders of portions of South Sea Stock, with
regard to whom it was found that their peculiar case did not
come within the provisions of the former act so as to give
them an option. (Hear.) The right honourable gentleman
here seems under some hallucination. He passes off a series
of factS which have no relation to each other. Either he or
I must be dreaming to admit them. I have yet one more
point to deal with. I have dealt with the question of the
rate of interest upon Exchequer-bills—l have dealt with the
much larger scheme that I proposed last year—and I hope
that there was no want of frankness in what I said of it. I
recollect saying that it might in its main objects be abor
tive. But the right honourable gentleman says, I will not
make confession. Why, I have made confession. I told the
house so at the close of the last session. My conscience there-
fore is clear as to this charge of the right hon. gentleman.
But, on the other hand, I tell the house that so far from there
being a loss upon other parts of the plan, when the transac-
tions are wound up there will be a profit ; but though it is
impossible to state with precise and rigid accuracy the profit
and loss upon the transactions, le have the means of stating
that the profit will be about 132,0001. a year. No doubt that
is a very contemptible sum in the estimation of the right lion.
gentleman, who thinks 600,0001. upon 500,000,0001. of debt
not a sufficient saving to induce the Chancellor of the Exche-
quer to give a guarantee of 42 years. I do not pretend to
put myself upon a par with the right hon. gentleman, but I
do humbly venture to think that it is better to have a profit
of 132,0001. a-year than nothing. Then we come to the state
of the public balances. Here so many fancies spring up in the
mind and brain of the right lion. gentleman, that it must be
perfectly extraordinary to see one so possessed with bugbears
and delusions. He has got it into his head that the public
credit is in au unsound state ; he is not satisfied with the price
of the Three per Cents, being at 91 in a time of war—a state
of public credit unexampled and unparalleled in history. But
he gives a hold upon the public creditor, and how ? re-
commending that you should borrow ;3,000,000/. It was
a marvel to me and to some gentlemen near me what the right
hon. gentleman would do. He was to vindicate the liberty of
debate, and he left out of consideration the reason which had
operated upon me in the production of my plans; and by and
by he recommends to me a loan of 8,000,000/. of money. I
admit that if I had accepted the proposal of the right hon.
gentleman I should have had a loss upon my transactions.
But, let me ask, for what purpose is it necessary to have this
loan ? We do not want it. Nobody wants it. The Bank do
not want it, and there is no pressure on the money market.
At the same time, I am bound to add, that I do not under-
stand the arithmetic upon which the right hon. gentleman
recommends us to take this loan of 8,000,0001. He estimates
the anticipated balances on the sth of April at 3,000,0001. I
have the misfortune to differ from him here, for I estimate
them at 4,000,0001. He. estimates the demand upon the
Bank at 10,000,0001. Here again. it is my misfortune to
differ from the right honourable gentleman, for I esti-
mate it at less. And lie is still more wrong in another
point either in his addition or substraction, whichever it may
be. I should have said that, taking the advance from the
Bank at 10,000,0001., and the balances at 3,000,0001. or
4,000,000/., the difference would not be 8,000,000/. But let
that pass. The real question is this - Are the public balances
iu such a state as to be in the slightest degree injurious to the
credit of the country? I say they are not. The right hon.
gentleman asks what will be the 'amount of the deficiency
bills for which we shall have to draw upon the Bank in the
course of the month of April ? Only to-day I made a memo-
randum upon this subject ; but through my own carelessness,
anticipating that the question would turn upon the finan-
cial measures of the year rather than have assumed a retro-
spective character, I left it behind, But lam very near the
mark when I say that the demand for deficiency bills upon
the Bank during the next quarter, to be chargeable to the
public revenue, will be from 4,000,000/. to 4,500,0001.; and I
have not the slightest reason to suppose that the accommoda-
tion will be anything but convenient at the Bank. If, how-
ever, it should not be convenient to the Bank, the power
which I shall ask from the House of Commons to issue a cer-
tain amount of Exchequer-bills, keeping within the margin
of the unfunded debt as it stood last year, will enable me to
reduce the amount of the demand. This is the simple state
of things. If you ask inc whether 4,500,0001. of deficiency
bills is an amount which the Government ought to be taking
from the Bank quarter after quarter, I say " No." I think
it is too much. But if, on the other had, you ask me whe-
ther it is an amount which, if taken only at a particular
period, will give the slightest shake to public credit, I an-
swer, unhesitatingly, " No." When I listened to the wind-
ing-up of the right hon. gentleman's outpouring, to the close
of all this " sound and fury," I found there was nothing left,
because he stated the question to be really this—whether it
is safe and right, in circumstances of emergency, or in
any circumstances whatever, for a Government to he
under the necessity of making permanently a really
large demand for advances upon the Bank, I
understand him to say that by these large ad-
vances he means 6,000,000/. There is no such demand
going to be made, There is no such demand about to be made.
The demand that is to be made is a demand that can be re-
duced according to the convenience of the bank; and the
right hon. gentleman ought to know that leaving the defici-
ency bills within a limit is no operation disadvantageous or
disagreeable to the Bank. It is an operation which the Bank,
as a banking corporation, considers to fall within its baukiug
business. The right hon, gentleman, however, seems to have
another confusion in his head, for he says, " You go on ask-
ing for deficiency bills at a rate that must raise the rate of
interest on money." He seems to think we are about to ask
for less than is worth while—

Mr. DISRAELI—Less profitable.
The CHANCELLOR of the EXCHEQUER—The Bank do
not think it a bad transaction; and I hope there is no Go-
vernment which would go to the Bank and ask for bills at less
than their market value. The right hon. gentleman will re-
collect that these bills are the subject of loans, at rates that
are alike on uo two days. They run out gradually day by day,
and run in again day by day ; and the transaction suits the
convenience of the Bank, Bill-brokers will be found to lend
money, for short periods, at lor 1 per cent. Why ? Be-
cause the securities are left one or two days, and there is a
convenience to all parties. These loans are the brokers' de-
ficiency bills ; and this is precisely the basis of the transaction
between the Government and the Bank. I hope, sir, that I
have shown that the transactions upon Exchequer bills will
not prove to be the bad transactions which the right hon.
gentleman has described. I have also demonstrated that the
rate of discount ought to have been considered by the right
hon. gentleman. I have also shown that he was in error as
to his statement respecting the object of the bill which was
introduced.to amend the act which he said had been hastily
passed. Then as to the loan proposed by the right hon. gen-
tleman, I ask the house whether they are prepared to
saddle the country with debt to the " crack of doom ?"
If they are, I cannot conceive a more effectual plan
than to have the burden of the proposed luau placed upon
them, A very few weeks will show who is right. The right
hon. gentleman will have another opportunity of reviving this
debate ; and whenever he does, he will find me perfectly ready
to meet him. (Cheers.)
Mr. DISRAELI--The right bon. gentleman states that the
balances are perfectly satisfactory, therefore it is unnecessary
for us to talk upon that subject. But I entirely differ from
him, being quite sure that the state of the balances will
create a very uneasy state of mind. I say the present is not
a proper state for the balances in the Exchequer to be in
when we are embarking in war, and when the Chancellor of
the Exchequer, according to his own statement, requires
4,510,000/. of deficiency bills. The real point is this—do the
committee of ways and means think, iu the present state of
the country, embarked as we are in what may be a protracted
and expensive war, that the balances in the Exchequer ought
to be in such a state that habitually the Chancellor of the
Exchequer is obliged to have recourse to deficiency bills to
the extent of 4,500,000/. for the quarter? This is the real
point. The right hon. gentleman says I had not taken into
consideration the circumstances which led to the failure of his
plan. I did take them into consideration ; but the right
lion, gentleman entirely misapprehended what I said. I said
I objected to his purkining his plan at a time when stock was
falling and- the Bank was raising its rate of interest. I com-
plained that he was lowering the rate of interest upon the
public securities when the Bank was raising its rate of inte-
rest. I find from the returns which I hold in my hand, that
the gain from the reduction of the interest on Exchequer-
bills has been 45,581/., while the loss has.been 82,480/., leav-
ing a balance less of 36,8991. (Hear, hear.) The right
honourable gentleman may divert for a moment the atten-
tion of the committee from the important point of the ba-
lances in the Exchequer by light criticisms upon isolated
topics, which are soon forgotten, but the state of the ba-
lances is a subject which must occur and recur to the house
again and again during the session, and I repeat it is not a
proper state for the Exchequer to be in, especially in a
time of war, that the Chancellor of the Exchequer should
be carrying on the public business habitually by deficiency
bills, according to his own statement, to the amount of four
and a half millions. (Hear, hear.) What is the real point
before the house ? The right lion, gentleman misunderstood
me when he said I proposed a loati of eight millions, What I
said was that the right hon. gentleman appeared to have paid
eight millions out of the Exchequer, and certainly I did think
the house would be perfectly willing to give him every as-
sistance they possibly could in order to enable him to carry
on the business of the country upon real balances in the Ex-
chequer, and not by habitually borrowing money from the
Bank of England. The right hon. gentleman says he has no
difficulty in borrowing money from the Bank. If that be so,
I can only say that the Bank of England is a very good
banker, and if it will carry us through the war, as the right
hon. gentleman seems to anticipate, the expenses of the con-
test will be much less than what we have been led to expect.
But, in my opinion, the right hon. gentleman will find, as af-
fairs proceed, that it will be impossible for the Bank of
England to sustain our finances by a system of continual loans.
The CHANCELLOR of the EXCHEQUER—The right hon.
gentleman says I was wrong in stating that there was a saving
of 20,0001. upon the reduction of the interest on Exchequer-
bills, for on the contrary he proved from my own returns
that there was a loss of upwards of 36,000/. lam sorry to
thetsi
sah yeT3plteir. heto. committeeev.CHANe
CELLOR
certainlyd
bßeyAn tnEhimeL.treturnst wheno wasGi
vwsoeaafasi an error
n there
underratingi
was
n the h
ae g astatementuhengain.
af 2ion
~I00n0(1 made to
l.lla nEaTQthi
uoe nE.
if us aeenr EXCHEQUER—Dry XxupCs statementiiicreaso
ofcostair.
Di s
IBs2R,
A4BEOLI. Ltlhvehcaotl column columnl of
nyeofurredfiuresttieintemis li2no,tohoeo/.
latter
column ?
The CHANCELLOR of the EXCHEQUER--35,0001
Mr. DISRA.ELI--That is a reduction •
that I made. You
are not entitled to it.
The CHANCELLOR of the EXCHEQUER--It is a reduc-
tion upon the interest of Exchequer-bills.
Mr. DISRAELI —Yes ; a reduction f 1
each bill which I effected iu 1852, - from id. to 14d. upon
The CHANCELLOR of the EXCHEQUER-_I do not I
what the right hon. gentleman means. What I stateis cupew
ly
this : that the right lion. gentleman is mistaken iu
that there was a loss of 36,0001. upon the Exchequer-bill
l ill
transaction in 1853. And the plain statement I make
is ihat
the whole charge which will have to be paid by the country'
during 1854, in respect to Exchequer-bills, is less either by
20,000/., or by a larger amount, than the whole charge that
was paid by the country in 1853. (Hear.) I hope that is
intelligible.
Mr. DISRAELI—I must say a few words in justice to my-
self. According to the right hon. gentleman, I have stated
that his financial arrangements of last year with respect to
Exchequer-bills have occasioned a loss to the country of about
36,000/. He challenges the accuracy of my computation ; but
in order to make out his case be is obliged to take into
account a sum of 35,0001., being the gain upon a reduction
effected in June, 1852. That reduction was effected under
my advice, when I had the honour of holding the office of
Chancellor of the Exchequer, and I certainly do not think the
right hon, gentleman is entitled to take credit for it, and to
set it off against the loss which has resulted from his own
operations.

The CHANCELLOR of the EXCHEQUER—I can assure
the right hon. gentleman that the case shall be treated simply
upon the merits of the alterations proposed under my sanc-
tion, and that no attempt shall be made to deprive him of the
credit which is justly his due.
Mr. G. A. HAMILTON said the statement made by the
Chancellor of the Exchequer, to the effect that his second bill
of last session was not rendered necessary by reason of any
omission in the first, was incorrect. The right hon. gentleman
would *And, on- referring to the Bth aeAl Oth clauses Of the