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LONDON, TUESDAY EVENING, MAY 9, 1854.

time a single complaint had not reached him on the sub- obliged to raise the interest on Exchequer-bills to a rate
ject. (Hear, hear.) unduly high. At present they bear interest at 2d. a-day,
METROPOLITAN SE W ERS. or 31. per cent. per annum. Is that a rate unduly high or
Mr.W. WILLIAMS asked the Home Secretary when he not? What is to be the test, and where am Ito get the
would bring iu his promised bill to constitute a Metropoli- answer? I decline to take the answer furnished in the
tan Commission of Sewers on the representative principle? mere unsupported statement of an individual. (Cheers.)
Lord PALMERSTON said the bill was in preparation, We have the means of ascertaining what is meant by the
and he hoped very shortly to be able to introduce it. term "unduly high." By "unduly high" we mean that
CIVIL SERVICE OF INDIA. which is out of proportion to other transactions. I will
Mr. SEYMOUR asked the President of the Board of take this test. At present it will be admitted that money
Control when the first examination will take place for ad- is tight-not in a very high degree, but son)ewhat above
mission into the civil service, and when the Government the average of late years. Is the rate of Exchequer-bills
will be able to state what the nature of the examinations above the average of late years? Ever since the peace 31.
will be. ss. is the average rate of interest of Exchequer-bills; and
Sir C. WOOD, in reply to the first question, said the now it is 31. Let me compare it with the rate of discount
examination would take place at Midsummer, but with at the Bank. I have looked at the rate of interest at the
regard to the second question, the form of examination Bank since 1840, and I find there is no occasion since 1840
had not yet been prepared. when the quotation of the rate of discount at the Bank has
OATHS BILL, AND BRIBERY PREVENTION been, as it now is, at 5 per cent., when the interest on
BILL. Exchequer-bills has not either been 2d. a-day or more than
In reply to Sir F. THESIGER, 2d. a-day. On March 15, 1842, the rate of discount of the
more pressing business of the country made.
Lord J. RUSSELL said lie proposed the Oaths Bill to Bank was 5 per cent., and the rate of interest on Exche-
come on on the 25th inst. With respect to the other bill,
(H and quer-bills was 2d. a-day ;in June, 1847, the rate of dis-
he could not give an answer until he saw what proeoear,
ress the count at the Bank wasp per cent., and the rate of interest
on Exchequer-bills was 2d. a-day ;in December, 1817, the
a laugh.) rate of discount at the Bank was 6 per cent., and the rate
J. RUSSELL said he intended that this bill should
SCOTCH EDUCATION BILL. of interest on Exchequer-bills was 3d. a-day ;in March,
In reply to Mr. BAILLIE,
terest on Exchequer-bills was renewed at 2d. ; and in
1848, the Bank discount was 4 per cent., and the in-
Lordcome on on Friday next. May, 1854, the rate of discount at the Bank was 5 per
cent., and the rate of interest on Exchequer-bills 2d. a
THE FINANCIAL STATEMENT.
The order of the day having been moved that the house day. So far therefore as the standard furnished by the
resolve itself into a committee of ways and means, Mr. Bank rate of discount is concerned, I apprehend you will
agree with me that the rate of interest 2d, a day oft. Ex-
The CHANCELLOR of the EXCHEQUER said-Mr.tightness
t eosft,maonndetyhahtaiss the
producedrelativ relative
ne effect
chequer-bills is not a rate unreasonably high. I referred
Bouverie in the chair, . the other
the daysamt°e an
Bouverie, towards the end, sir, of the month of February, interest of temporary Government securities in the only
her Majesty's Government found it to be their duty to other country between which and this country any fair
comparison can be drawn-namely, France. In France,
propose, and the house has been pleased to sanction, such the money rate of interest in April, 1853, on Exchequer-
an addition to the expenditure of the country as would bills, was 2i in ••
per cent., and April, 1854, it was 5 per
necessarily entail an addition to its taxation. It was cent. In England, on the other hand, in 1853, it was 1}
also the view of the Government that that addition to Per cent. ; and in 1854 it was 3 per cent. So that, while
taxation, the necessity for which was then demonstrated, in England it increased by 100, it increased in France by
120 per cent, Now, I have given you these tests of the
should be made in the form of doubling the first yearly ma p ative rates in France and England, of the rate of
payment of the income tax. At that period war had not discountcomparative
at the Bank, and of the average rate of interest
been declared, and it was totally impossible for the Go- of Exchequer-bills, and ask you whether I have not de-
vernment to form any reasonable or trustworthy estimate monstrated that you have got your Exchequer-bills at a
of the expenses of the year upon a footing of war. It was very reasonable rate of interest, comparing the circum-
stances of the times ? The first objection was that when
also impossible for them to judge at what revise time precthe we reduced the rate too low at the beginning of the year,
calculations connected • h
novel to the most of us would be completed ; and they had of the year. I have shown that it was neither too low in
to consider that the passing of the income tax, and the the one case, nor too high in the other. But one circum-
doubling of the first yearly payment, was a measure re- stance I ought to mention-namely, that the period of an
easy money market was the period for reducing our un-
quired to be treated at a very early period of the session, funded debt. Although, as I have said, in March there
because the machinery of collection connected with thatwas no disposition of the holders of that unfunded debt to
tax is so complex and laborious, and the time required in reduce the amount of it, yet in June the circumstances had
preparing it is so considerable, that, unless the house pass changed. 3,000,0001. of Exchequer-bills were sent in in
it at an early period of the session, the tax is thrown cash, and a very great and sensible relief was the result.
But as it has been said that this affair of the Exchequer-bills
greatly into arrear; ;and, in truth, if the financial state- has reduced the money of the country, I will just statehow
ment had been unusually late, many payments that ought that stands. The charge on the Exchequer-bills of 1853,
to be subject to that tax would have escaped it altogether, payable in 1854, amounts to 342,0001. The charge amounts,
Under these circumstances it was, and because the course in fact, to 347,0001.; but then there is a deduction of 5,0001.
was thought most constitutional by the Government, on account of payments in the selling operation of the bills
that on an early day I made an application to the house at the time of the re-issue. With that I must compare the
charge as it would have been if I had kept the rate of in-
for such a sum as they then thought necessary ; but terest at five farthings, instead of one penny, and therefore,
they instructed me to state, that the demand then made of course, avoided the sending in of anynUli
sfor money in
on the representatives of the people was not a demand June, If I had done that, an if in consequence-which
adequate to the purposes of the war-that it was that ivavicAusl.iliandavhee been tthienns..tural and certain consequence -no
demand which we knew had been entailed by the on the March bills 175,0001.,une,
andthe cohnatte
Jwuonuellills have
227,000L,been
fact that we had sent an expedition to the East; and making together the sum of 402,000/. The actual charge,
that in the event of a declaration of war, and of the con- however, has been 312,0001., and hence there has been an
actual saving of 60,0001. (Loud cheers.) The right hon.
tinuance of that war-on which we now must of course
calculate-it would be necessary for me again, on the part gentleman
financialan (Mr. Disraeli) adverted to my having stated, in m
statement of last year, that I anticipated a
of the Government, to appeal to the house for an augmen- saving of 65,0001. upon the Exchequer-bills ; but really,
tation of that demand on the resources of the country. Sir, considering what were the vicissitudes of the year, lwn.
that duty I now rise to discharge ; but, before I discharge not far from the mark in having estimated it at 60,0001. It
it, it is necessary for my own honour, and for the respect is, of course, of little importance that a reproach should be
which I owe to this committee, that I should advert to the cast upon me or any individual minister ; but it is a mat-
accusations that have been made, industriously enough, ter of great importance that this Committee of the House
occasionally within these walls, and elsewhere, both that of Commons should form a clear view as to the principles
the Government is liable to great discredit for the manner on which the department of finance is to be managed. A
in which it has dealt with the essential department of minister, and even a Government, is weak to cope with the
finance, and that, in particular, the person who is now ad- powers of those who are the dealers in the important com-
dressing you is totally unfit to be entrusted with the modity of money, and who are justified in seeking to give
management of that department. Now, sir, there are value to this commodity. It is impossible for the Execu-
those who say that a period of war is not the time when tive Government to do justice to the country except on one
questions of confidence should be entertained. To that I condition, and that condition is, the support of this house.
reply that the period of war is the very last when (Hear.) Do not let it be said, " This is a time of war, and
that important trust should be committed to the hands of do not let us raise this question." It is being a time of war
a man who would exercise it to the discredit of his coun- that you should make up your minds whether this matter
try ; and it is therefore my duty to advert to those accu- has been mismanaged or not. As to the results, they are
satious ; and lam sure those who hear me-whether or before you. You have got your Exchequer-bills at a mode-
not they agree in all the propositions which I may ad- rate rate of interest-at a rate of interest, in fact, much
vanoe, and however largely it may be necessary for me to less than it has ever been, on an average since the peace
tax that patience which I know to be unbounded-will -whilst there has been a saving to the country of
not grudge me the time necessary to make thorn masters no less than 60,0001. So much for the matter of the Ex-
of the facts, as they have occurred, and inasmuch as they chequer-bills. That is a subject on which there can be no
are the persons ultimately responsible to the people for the doubt as to who is the responsible party. I, for my part,
management of the funds levied on their industry and have no disposition whatever to avoid the responsibility of
their capital, lam bound to place in their hands all the my office. lam bound, indeed, to remind the committee
information necessary to enable them to form a correct that the matter of the unfunded debt is one in reference to
judgment on a matter so important. (Cheers.) Mr. which the minister is peculiarly responsible -and almost
Bouverie, it has been stated, in the first instance-and alone responsible. It is one, of course, on which it is his
although these matters are retrospective, yet they have a duty to get the best advice he can, and having done that,
prospectiva bearing, and I hope -the committee will to act according to the best of his judgment for the benefit
not deny me the time necessary for their discussion-it of the community at large. Ido not seek for one moment
has been stated, in the first instance, that there has been to shirk that responsibility.
a gross mismanagement of the unfunded debt of the " Me, me : adsum qui feci :in me convertite ferrunt."
country ; and the particular allegations, sir, are these :- It
is said that in the spring of last year the rate of interest on (Loud cheers.) The next question is that of the proposed
scheme for the conversion of a portion of the public debt ;
Exchequer-bills was rashly and unwisely lowered, with
great discredit to the security, and with an ultimate loss a
)ortions and he
durin the course of the present year, is, that in
re the charge, which was thrown into goodly pro-
to the public, on account of the necessity of raising that 1
g
rate of interest to a highei sum than would otherwise have spite of adverse circumstances-that in spite of the warn-
been required. That, sir, undoubtedly is a very serious ings of the wise-a scheme was attempted by the Govern-
matter, because the unfounded debt of the country is of ment which has resulted in heavy loss-a loss not fairly
vital importance, at least in my view, in a time of war. ascribable to the change of circumstances, to the existence
It is then that you require to have the means of its rapid of a war, and to deficient harvests, but to the character of
and easy extension. If you keep your credit in such a state the measure originally proposed. Sir, it is easy to pass
that you can rapidly and easily extend your unfunded debt retrospective judgments. (Cheers.) But if we are to form
in a moment of need, it is perfectly plain that you may a fair opinion upon these questions we must go back to a
dispense, in the interest of the state, with the costly, but day dated about thirteen months ago. This matter was
otherwise necessary practice, of keeping in hand, and not like that of the Exchequer-bills-it was not a question
lying idle, a great sum in the Treasury. Now, I cannot of mere Executive discretion-it was not a vote passed by
pretend that what was done last spring, with respect to the the House of Commons as a mere affair of confidence. It
unfunded debt, was hastily or thoughtlessly done. On the is true there are many members in this house who wished
contrary, I say, it was deliberately and advisedly done ; it to be considered as a matter of confidence ; but a portion
and lam desirous that the committee should form its own of the members of this house, including the right hon.
judgment of this proceeding, because, as I said before, it is gentleman the member for Buckinghamshire and the hon.
the party who are ultimately responsible to the country. member for East Suffolk, demanding the privilege of sifting
The proceeding was founded on these two principles. In and discussing this question, returned to the charge on re-
the first place, the public is entitled to borrow money in peated occasions, and took many discussions during the
the market on the best terms which its credit will com- Passage of this measure through the house. We therefore
mend ; and in the second place, in order that the unfunded had had many admirable opportunities of knowing what
debt may be carried to the full height of its utility and were the real opinions of these gentlemen on the subject,
power in difficult times, you ought to keep it within nar- and what were the declarations that were made ? The
row limits in easy times. These, sir, wore the principles right hon. gentleman opposite (Mr. Disraeli) sometimes
on which I thought it my duty to act. What was the state states he will not quote Hansard. After all, when you
of things to which I had to apply them ? A state of things mean to charge your opponent with inconsistency, the best
had grown up in which the premiums on Exchequer-bills way is to quote Hansard. You do not make his case better
in twelve months only amounted frequently to about -you do not make it worse at all events-and if you do
double the whole interest of the twelve months' cur- not quote Hansard, the fear is you will quote something
rency. What was the effect, first in regard to the much worse than is to be found in Hansard. On the Bth
holders, and secondly in regard to the State ? As regards April the right hon. gentleman the member for Bucking-
the holders, so long as the Exchequer-bills were moving hamshire rose to discuss his scheme, and he said :-" Ho
upwards all was well • but it was plain that that state thought it right before this resolution was agreed to, to
of things must come to an end, and that an immense pre- warn the committee that, from the alterations made in
mium was adverse to the well-understood interests of the the resolutions, from the admissions made by the right
holders of those bills, because the amount of the premium hon. the Chancellor of the Exchequer, and from various
was in point of fact the measure of the risk they in. other statements, this (the one creating the new stocks) was
curred. (Hear, hear.) If I may explain my meaning in fact, the important resolution." What a misfortune
it is this. The man who buys his instills at a that he did not stop there. His evil genius, however, led
premium of 5s or 10s. knows these three things :-First him to go on. (A laugh.) "He wished the committee to
of all that his interest is secure ;secondly, that, at a given bear in mind, and he protested against the supposition that
day, he can receive the principal; and, thirdly, that the by allowing the resolution to pass, he, for one, assented to
measure of his Possible loss is ss. or 10s., that being the it. If the committee agreed to the conversion of the whole
amount of premium he has given. But if, on the other of 500,000,000/. under the second resolution, he must re-
hand, he buys at 60s. or 80s• he knows his loss may amount mind the committee that the profit of the country would
to 60s. or 80s. These are the principles of the proceeding. but little exceed 550,000/. a year; and they should
To allow your annual securities to float with a premium Well consider whether, for such an object as reducing the
of 60s. or 80s. just means that you cannot redeem them at interest of the debt by 500,0001. sterling, they would do
PRIVATE BUSINESS. ••ht to fix
all. You cannot redeem the whole, because the amount l!gan
~s . the rate of interest to
tentr cent. for more
The following bills were read a third time and passed :- is too large, and you cannot redeem a part, because rarlia- th 4.° years. Twas a most imp point, whichthe
1 committee aeared to be disposing of in almost a formal
Executor and Trustee Society ; Ryde Improvement ,• St. ment would never endure the redemption of an annlia
manner, butt , ! was a point to which they must give deli-
Mawes Port, Harbour, and Pier ; Blyth and Tyne Rail- security bearing perhaps 21 per cent. interest, by.realcsing
berate attention. The interest guaranteed was higher than
way ; Caterham Railway ; Darlington and Barnard Castle that interest to sor 6 per cent. What has been tn c.)
lilin; he, for one, thought
Railway ; Eastern Union Railway ; Lancashire and York- sequence of this in the management of Exchequer- 18 • , , would prevail for the next 40 years."
shire Railway (Middleton Branch) ; Lancashire and York- What has happened since the peace? Ever since the peace kll.en.r, near from Mr. Mathes.) I hear the hon. and learned
shire Railway (Liverpool Dock Branches) • London, the principle upon which we have acted has been this- gcntteraenhe member for Wallingford cheer that expres-
Brighton, and South Coast Railway ; 'Newcastle- when we had got Exchequer-bills at an easy rate of in- Tr, I shalt have a word with him byand bye. (Laughter.)
It was an enormous responsibility to undertake to make
upon-Tyne and Carlisle Railway; Perth and Dun- terest, then we let them remain. Times of difficulty have
such
keld Railway ; Whitehaven, Cleator, and Egremont come, and you have been obliged to fund at a most dis- an arrangement, and he trusted the committee, when
the came. to discuss the subject on a future occasion,
Railway ; Hertford and Welwyn Junction Railway; advantageous rate of interest. In 1819 you funded In
and North London Railway. 27,000,0001. of Exchequer-bills at W. ss. 9d. per cent. ;in would think it their duty most carefully to consider whet
North Railway Bill, and the Swansea Harbour Bill 1821 you funded 7,000,0001. at 41. 19s. 7d. per cent. ; in thor
they would assent to it." Such was the ground of
were considered considered and agreed to. 1826, you funded 8,000,0001, at 41. 6s. 2d. Per Gent. ; and jection taken by the right hon. gentleman at the time of
The Holyhead Harbours Bill was road a second time, in 1830 you funded 3,000,0001. at 41. is. 9d. per cent. the discussion of this scheme, that it would amount to a
and ordered to be committed. In the years 1839 and 1841, however, the rate was sacrifice of the public interests and the interests of the
GOVERNMENT ORDERS. not so disadvantageous, being in the one case 31. 6s. Public creditor, and that that sacrifice would be the more
Lord J. RUSSELL moved that orders of the day should per cent,in the other •
and 3l es, 11d. per cent. • ruinous, inasmuch as the whole 500,000,000/. of debt would
with b t 'be convertedunder the •ofthe I in the
Lord a you
but it was a high rate compared
have precedence of other orders on Thursdays during the • •le instance was the un- recollection of the committee as to what were the objec-
remainder of the Session. pay in easy times. In no sing
funded debt reduced except when the public credit was tions really taken to the plan. Some of them were very
Mr. FREWEN moved as an amendment that on Thurs- 90. Thegood objections-one, in particular, hon.
P j ions-one,
low and the mice of the funds was below
day, the 25th of May, and on every alternate Thursday, ' • - '
in Exchequer-bills member for Lambeth, in reference to the principle of mak-
quence is that you never funded 9/.
bills introduced by the Government, or any other Govern- unfunded debt at least 10/. or 11/., in additions to the capital of the debt. It was also ob-
without increasing the
ment business, shall have precedence of the other orders and in some cases 121. It is in easy times that you ought jected that it was grossly improper to guarantee 21 for 40
of the day till the end of the session. to reduce the debt • because if you wait till difficult times years. One of those objections turned out to bet r valid
Mr. L. KING supported the amendment, observing that you do it at an ' cost. In February, 1853, the one. I think, however, I may answer that objection in the
the state of public business did not justify the original amount of Exchequer-bills currency was 17,743,000 a, negative. The valid ojection which has turned out is that
in
motion. y per day, or 455, the necessity of turning out the non-assentient South Sea
and the interest was a penny halfpenny
The Marquis of BLANDFORD also supported the b'll and on another creditors has led to the withdrawalof the bl•
pet lebalances
per annum, upon one portion of the i s,
amendment. portion it was 1/. 17s. But while that was the rate of in a larger degree than is consistent at a period of war.
Mr. GOULBURN supported the original motion. and in a short time Who took that objection, I want to know? And now I
Mr. NEWDEGATE opposed it, interest the premium was even 555.,
before it had been considerably higher. On the 15th Feb. come to the hon. and learned member for Wallingford
Mr. F. SCULLY observed that so long as the war ab-
rusty it was announced that the new bills were to bear ( Mr. Malins). He was perfectly silent on this point. Why
sorbed the public mind in the manner it does now it was interest at a penny day, and on the 18th February, in was he silent ? Certainl not for want of words, nor the
useless for independent members to be promoting bills of the a ' those Exchequer-bills was faculty of speech. The hen. and learned gentleman was
consequence, premium on
their own. He should therefore support the original mo- only 15s. Now, then, I ask whether the operation that perfectly silent. This objection was not taken by any-
tion. . was per formed was a justifiable operation or not ? Those body; and I now stand here to say that I was the only man
Mr. HUME thought, in the existing state of affairs, it'. Exchequer-bills were issued in the middle of February, who stated to the committee of this house on that occasion
would be better to give up Thursdays to the Government. . nd in the middle of March the holders of them had an that if the South cos creditors did not assent, we should
Lord J. RUSSELL explained the reason which induced aopportunity of sending in their securities and getting their require to pay them out of the public balances. The right
him to propose the motion, which
t o haveras simply to forward money, but not a single person availed himself of that hon. gentleman the member for Buckinghamshire was
the public business, so as not such an arrear of opportunity. (Hear, hear.) My duty, I say, was to bor. the only man who named the South Sea creditors, and be
business as too often happened towards the close of the row for the public upon the best terms that the market did so only in an incidental way, and for the purpose of ex-
session. afforded. 9 000 000/ of Exchequer-bills were issued on a cusing himself from discussin their position in reference
Mr. SPOONER thought this motion ought not to have • " •
particular day, and within three weeks, when the holders to the project. But there area great number . of those gen-
d should not affect noticesalready as to the
a retrospective effect, an were naturally alarmed, they had an opportunity of get. tlemen who have the most convenient persuasion
and
on the paper. tine their money, and yet not a man of them availed him- force of the objections they take on such occasions,.mis.
Mr. DISRAELI hoped the noble lord would accede to
self of that opportunity. (Cheers.) What was the con- that if the Government had taken their advice the
world not
member for North
the proposition of the hon. - dition of the Exchequer-bills afterwards ?As you went chievous consequences which they apprehended 7.° i what is
shire, and thereby save them from dividing on the ques- on, the conditions on which you got credit altered ; but have ensued. This is a very good examplertLc
at the
tion. a the very first day on which the word "discount" appears at called mythical history. Events of no imp
COBDEN in favour of eellooking back
After a few remarks from Mr. e 1
the quotation of Exchequer-bills was on the 6th May, time, subsequently become interesting upon.
for North Warwickshire, but through the
suggestion of the hon. member
Lord J. Russell motion, On that day the discount was ls. On the sth May the 1 upon them, not as they actually were,
wish them to b
s
and Sir G. GREY, in favour of s Government made a purchase of Exchequer-bills, on 1 haze of distance, and as some person•
Lord J. RUSSELL said he would agree to alter his mo.
which we were obliged to pay is. discount ; but never . Hence we are told there were anu
number of prophets and
tion, so that after the 20th May Government
until the sth May were we able to effect a purchase of wise men whose opinions were disrega e was
of other orders of the day, the events that afterwards
day should take precedence Exchequer-bills et a discount ; and then we got them not one of them who foresaw
gentleman the mem-
ROMAN CATHOLIC SAILORS. at a discount of is. Well, sir, what followed was happened ; and the hon. and learned
respectable type of the class.
Mr. BOWYER asked the First Lord of the Admiralty this. With the advance of summer end towards the ter for Wallingford is a mostßut, undoubtedly, irrespective
whether Roman Catholic sailors are to be compelled to autumn the circumstances of the country materially (Laughter and cheers.)
were facts at which itof
changed, and the bills were proportionally affected. On the opinions of some men, these was
attend Protestant religious worship.
not want to state the case too high.
Sir J. GB, e HAM sail the law as it at present stood was the 28th September, we purchased them at ss. discount ; , our duty to look. Ido
that I regret at this moment
that
that divine service should be performed every Sabbath on and in the month of October the interest was 2d. a-day. It is easy for me to say
I do not
board her Majesty's ships according to the ritual of the So far as respects the impropriety of the reduction, there. the scheme was brought forward.. admit that it
ecuniary loss; it is easy to show that it
Church of England. The instructions further were that fore, I think I have disposed oft hat. And now I come to has resulted in p.
snob loss • but it ha resulted in •
the crews of all religious denominations should be " per- 1 the other charge, which is this, hat in consequenee of that 1 has not resulted in _. led amounts
_ gain with
'neon-
Mitteas" not compelled, to attend; and up to the Noma xoducticaz we lays a violent reaction, and we him beau Tex:Once greater than lum f gEkln with which

MR. ALBERT SMITH'S MONT BLANC,
including the BEIINESE OBERLAND and the SIMPLON,
THIS EVENING, and Every Evening at Eight o'Clock, (except
Saturday) ; and Tuesday, Thursday, and Saturday Mornings, at Two.
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-

‘->"<

[pßicE SD.

fortunate delusion upon the subjee, (Cheers and laugh:
ter.) My right hon. friend during. t hat quarter never took
one farthing out of the Bank of °Es igland—(hear, hear)—
and if you please, you may see that demonstrated, to the
satisfaction even of the learned member for Wallingford,
in returns whichesr
f;me
obatuyl
yt betir
true
lyea
you
uh
aobtnohr
borrow
otlka,bo great
,f the.
bycieuwahanoytiu s
toof
of(il deaerfilenlctyis perfectly
loan from your banker when you have 1,5001. or 2,000/. in
his till, I hold that, so far from his being your creditor,
you are his creditor. (Hear, hear, from Mr. Melina.) So,
we are agreed upon that. Very good ;I am entirely satis-
fied. The learned gentleman and I have made a compact
across the table, and I venture to say that if he follows me
to the end, we shall both arrive happily and satisfactorily
at the same conclusion. (A laugh.) My right hon. friend
the member for Hulifax, in the month of April, 1847, took
deficiency bills to the amount of 2,267,0001., and he liqui-
dated his last bill in .May; but the minimum excess of the
public balances in the Bank during that quarter over the
advance in deficiency bills was 1;696,000/. ; and therefore
I most respectfully submit that, instead of my right hon.
friend having taken accommodation from commerce, he
was giving accommodation to corasnerce. (Hear.) Ho
certainly was giving less accommodation to commerce than
if he had taken no accommodation bills ; still, at the same
time, he was giving accommodation to commerce, and the
complaint made against him was neither more nor less there
this,. that he was claiming and exercising a right to make
use of his own money. (Hear.) Ile made use of it with
such a liberal :and generous spirit that the smallest sum he
left in the Bank on any one day was 1,696,0001. But the
question has been asked of me—" Why borrow from your
banker when you have money of your own with him ?'
That is a question not so easy to answer as some may sup-
pose. All I can say is, that such is the system which we find
established, and though my notions in these matters are
very revolutionary, I have not yet reached such a pitch of
boldness as to say that I object altogether to borrowing
from our banker, even though we may have money with
him. But, sir, I come now to my own case, which is the
most important of all, because I am held up, not as an
occasional borrower—a man who borrowed only occasion-
ally might be forgiven—but the right hon. gentleman the
member for Buckinghamshire has repeatedly termed me in
this house an " habitual borrower." My answer is, that I
have borrowed in consequence of the large drain caused by
the liquidation of minor stocks and other circumstances ;
but I think I cannot fairly be called an " habitual" her-
; rower, and for this reason—l have borrowed only once.
(Hear.) lam accused of borrowing during the last quar-
ter. I can assure you, sir, it was exactly a repetition of
the case of my right hon. friend the member for Halifax.
I was not indeed quite so liberal as he was; but though it
was currently reported and believed that I was a borrower
of 3,000,000/. or 4,000,0001. during the last quarter, I never
had ono shilling. (Hear, hear.) The amount of deficiency
bills issued last quarter was 3,711,0001., but the amount
lectually brought to charge was 2,490,000. upon which
interest was paid, Now mark, while we took" these
defi-
ciency bills and paid that interest, the excess of balance
intmheusßh forank wasthe nevercase
ofl the last
e thansa 1
'lq6a, Ter 01.
a s regards (Hear,tli
heane)
So
deficiency bilk And now, having stated that I borrowed
only once, and that I had always an excess of balance in
the Bank, I hope the right hon. gentleman the member for
Buckinghamshire will let me know, after that, how he de-
fends the term " habitual borrower " which he has repeat-
edly applied to me in this house. (Hear.) Now, sir, we
come to the April quarter, and here I am most desi;ons that
no misapprehension should prevail. I believe lam correct
in stating that when.the public read the amount of income
charged on the Consolidated Fund at the end of the last
quarter, they saw at the close of that charge the amount
of Exchequer bills which would probably be required to
cover the deficiency on the Coiasolidated Fund. The amount
was 5,852,0181.; and I believe the public were under the
impression—nay, I may even go further and say that the
great bulk of the members of this house were likewise
under the impression—that that was really a loan which I
had contracted with the Bank, and which I was to liqui-
date from the incoming revenue. I say, then, that if such
an impression does prevail, it is of the greatest importance
to the public interests that it should be dispelled, and that
the truth should be made known. It is of the greatest
importance to the public interests that these sham, ficti-
tious figures, which are only calculated to mislead and de-
ceive, not however intentionally, and to create alarm in
the public mind, should have their right value put upon
them. I have done what lay in my power to place the
matter on a proper footing, and I shall continue my efforts
in the same direction. As I have said, the deficiency in
April was stated in the quarterly returns at 2,852,0484., to
which should be added a small sum of 240,0001. which was
left out in mistake, making the total nominal amount of
advance to be required from the Bank of England,
6,092,0481. The amount issuable at that period, according
to the usual practice, was 5,643,0001., and the amount on
which the public would have paid interest would have been
4,730,0001. And this reminds me that it has been stated
in another place that no issue of deficiency bills could have
been made with a view to economy, because interest was
only paid on the amount which was issued. I will let the
committee judge of the accuracy of that statement from
the fact which I have already mentioned—namely, that in
the last quarter, when we paid 364,0001. for interest, we
had not one shilling from the Bank. But, as I have
said, the amount which would have been brought to
charge in the present quarter would have been 4,730,0001.
The maximum amount which has actually been
brought to charge, in consequence of the mode of issue
which has been adopted, is 3,0481. Sir, I repeat, I have
been borrowing during the present quarter under peculiar
and extraordinary circumstances. The maximum excess of
the Bank advances over the public balances during the pre-
sent quarter has been 1,350,0001. On a former night anxious
not to overstate the case, and not having at that period,
although I had been workingi pretty hard, penetrated into
the inscrutable mystery of deficiency bills, I was not aware
of the whole arrangement. I then stated that the cash ad-
vanced by the Bank amounted to 2,150,000/. ; but I stated
the case against myself, because the maximum excess of the
Bank advances, on the 19th of April, was only 1,350,0001.
That sum was subsequently reduced to 900,0001., and I be.
lieve at the present moment that debt is entirely extinct.
(Cheers.) Thetefore, sir, I think I have disposed of the ac-
cusation of being an habitual borrower from the Bank. I
-hope also I have disposed of the charge of being an enor-
mous borrower, because it appears that, under extraordi-
nary and peculiar circumstances, the sum I have been ow-
ing is 900,0001., and that for a period of between four and
five weeks. (Hear.) Sir, the real truth is that the amount
we borrow in this way is of little importance one way or
the other. The sums I have named are all trifling sums-
they scarcely affect the business of the Bank; and the only
important question which you have to consider is, are you,
or are you not, to make use of your own deposits? There
is no complaint whatever from the Bank ; and I think I
have shown you that the complaints which have been made
against me are not founded on justice. I may here add,
what I have not yet mentioned, that the greater part of the
Bank advances have gone in meeting naval and ordnance
charges in connection with the expedition to the East ; so
that, in point of fact, but for those charges, the whole sum
which it would have been necessary to borrow from the
Bank would have been 400,0001. or 500,0001. (hear.) Then
sir, it is said that there was an understanding between the
Government and the Bank. There could not be a greater
error. When my right hon. friend the member for the
University of Cambridge, together with the late Sir Robt.
Peel, made the agreement in 1844 which now governs the
relations between the Government and the Bank, there was
a distinct understanding come to that the Government
should always maintain "the usual amount" of deposits in
the Bank, which means, in other words, a small amount of
deficiency blls, for the one is the correlative of the other.
It was also agreed that if, on the one hand, the public
balances should be increased beyond the usual amount, the
Government were to have a claim upon the Bank for a
share of the profits ; but if, on the other hand, the balances
should be diminished below what they commonly were,
then the Bank was to be entitled to remuneration from
the Government. Well, sir, in order to ascertain what
was meant by " the usual amount" of the advances, per-
haps the fairest manner would be to take the average
amount in the quarters immediately preceding the agree-
ment of 1844. That amount was, doubtless, taken as the
foundation of the compact; but it was an amount exceed-
ing that which I have taken during the last two quarters,
under extraordinary and peculiar circumstances. (Hefei
And now, sir, with regard to notice. It is supposed that
nothing was done by me to prepare to Bank authorities
for what was coming. Now, hold in my hand a memo-
randum which I placed in the hands of the Governor of
the Bank on the 26th of July, 1853, and in that document
I pointed oat that it was extremely probable, as
shetpe
rsathtioonf
jinaureugattryrdwtoe tshheould demand deficiency stocks had then failed, ..t ehtms to the
the
amount of 3,300,0001. more than the
actually taken. I trust, therefore,
w(Hasear due to
Itthaulat oagunftarwhasichnowasitioe
wthase
Bcoankncernauedd
tolthwaesgrneoattuniumiterndfests involved.
ofvo what
is proper, also, to state that, although the authorities of
the Bank have since laboured under circumstances of some
difficulty, at the period when my memorandum was de-
livered not the slightest objection was made to my pro-
posal. With respect, sir, to the accommodation of trade, I
believe I need not go deeply into that question, because
trade has not been injured, and has not complained. Ido
not think that a state of things in which, for the greater
part of this year, the rate of discount in Lombard-street
has been below 5 per cent. is much to be complained of, all
circumstances considered. But then it is said that we have
been favoured by the Bank, and that we are paying rates
of interest lower than those common in the market. That,
again, is a total and entire fiction. The rate of interest, I
admit, is apparently low, but it really is not so. The esta-
blished system is this. At the end of every quarter the
Chancellor of the Exchequer writes to the Governor of the
Bank, hoping that the court of directors will provide what-
ever amount of deficiency bills may be required to meet
the public charges. Last year the rate of interest was
only ld. a day ; at present it is 2d. a day, or 3 per cent.
per annum, which undoubtedly is a low rate of interest ;
but I think you will not consider it so low when you bear
in mind that the Bank received in the last quarter upwards
of 300,0001. as interest upon deficiency bills, when the
minimum of the excess of the public balances over the
Bank advances was 1,160,0001. Although the nominal rate
of interest which we are to pay in the present quarter is 3
per cent.'per annum, the real rate we are to pay upon the
sums advanced to us by the Bank in excess of the public
balances is a rate which varies from day to day between 4
and 5 per cent., according to the issue of deficiency bills,
as regulated by me; but if the deficiency bills had been
issued in the ordinary manner, the rate of interest would
have been from 6to 7 per cent. I do not call that an im-
moderate rate of interest for the public to pay upon de-
cieney bills • at all events, it disposes, I think, of the notion
that the Bank has sacrificed its interests by taking from
the Government only a low rate of interest. Now,
.sirs
the question arises, whence is it that all these delusions
have arisen ? Why is it that the public is so comniestl
in the dark with respect to the issue of deficiency bills q
1
I This house seemed to be equally in the dark. Many will
recollect the speech of the hon. member for Peterbourokulaghst,
a gentleman who was himself Governor of the
Bathe member
he was believed by the right hon. gentleman year, in which he declared, in his place in this house—and
present quarter a
obliged to demand from the Bank in the
toask.
His
for Buckinghamshire and several others—that we would be
sum three times larger than we proposed
statement fitted for
a fictitious statement of accounts, . a
ass of people who
statement was credited, and why ? ltcause you have got
ce is a virtue. (A laugh.) I
think that mystery in finan
t quite sure that the Co
sop•
every purpose of delusion. There is acl
am bound to say that I am no
appearsalso. in the
troller of thoepil.:uxiocoh.equoueraudgohestern.o)t in
li He is
veedryegrunefeopttaarntiactei-
pate in that
Earl Grey •
upon this subject of
halltlesration in the mode of issuing and
refer to oroEsapreel
respect
Grey, I cannot do so
feel for his ohs-
meeting deficiency
.1 . f t
racter, his abilities, and his patriotism—(cheers)—but Earl
ti
expressingcud
the
elsiroe
Grey is
' stated to have said in another place that the
same
without position—and
s
effect of the change in the mode of issuing deficiency bills
had been to blind the public. There is a short answer to
that statement. The effect of the h c ange could not pos-
sibly be to blind the public, for the public was, unfor-
tunately, blind already. ( A
laugh.) The public believed
that 6,000,0001. of deficiency bills were to be issued when
only 1,000,0001. were issued, and that 3,000,0001. were to
be issued when none were issued at all. I admit, air, that

it may be attended. I regret it; and if an error has been
commit ted, be it small or great, lam the man upon whose
head tl to blame ought to rest. But let us look at the
case as it really stands. In the year 1852 the bullion in
the Bai tk rose to a higher point than it had ever before
reached ; it was close upon 22,000,0001. sterling. In the
month c if January, 1853, it had diminished to 19,170,0001.
(Hear, I tear.) The right hon. gentleman the member for
Bucking liamshire, in discussing this question on a former
night, q noted the quantity of bullion in April, which was
18,816,0 DO/. ;he likewise quoted the very high point at
which it had stood some months before, and he gave it to
be unde catood—at least he did not prevent it from being
understo ;id—that there had been something in the nature
of a coat i mons decline in the quantity of bullion in the
Bank at the end of 1852. At that time thoe2Bank raised
the rated ):1' interest upon discount from 9
and after wards it raised it to 3 per cent. The bruelinetii,
which ha 3 been 21,876,003. in the month of July, 1852,
sunk to 17, 672,0001. in the month of February, 1853 • but
proposal. The
time was nc t the time when we made our
time was °lithe Bth of April. How was thebullion then?
The bullion then had risen to 18,816,0001., or more than
one million in the course of the preceding four week.
(Haar, bean) The drain of bullion which had taken place
was at that ti me generally accounted for by a reference to
causes which were short-lived and local in operation. It
was the &mind for gold in Australia which Occasioned it
in a great decree ; the state of the exchanges with India
and China occasioned it in a further degree ; in short,
there were many causes but they were not looked to as
causes which would have a permanent operation ; on the
contrary, they were expected after a time to cease. And
now, with. -regard to the harvest, we have seen corn so
high since that we are apt to forget what it was then. At
that perio I, although our prospects were certainly not the
best, yet that they were not very gloomy is evident from
the fact that the average price of wheat in April was 465.
4d. The price of Consols was, on the 4th of April, 1001
to ; after the publication of our plan they were 100 g.
There could not be a more distinct proof that, in the
opinion of the moneyed world, money was &bout to be t-
cheaper, 'because the expectation of cheaper money is at
the moms nt the cause of a rise in the Funds. The mini-
mum of t he public balances in the Bank in the quarter im-
mediatelr before had been no less than 4,940,0001.; and,
as I have already said, the export of bullion was imputed
to tempoi my causes. But other operations were going on
at the san se time. A great operation of that kind had just
been corn plated in France ; another great operation was
going on, in the conversion and reduction of the debt of
the East In dia Company, an operation, moreover, which,
up to the present moment, has met with the most perfect
success. trne bonds of the East India Company have been
put out sinice the month of May last year at a lower rate
of interest. than was experienced before. I say, let us
keep these, facts in view, as well as the discussions in this
house ; and I really think I may venture to hope that I
have given. something like proof that these warnings of
plain, palpable facts, that could not be misunderstood, and
especially these warnings of sages who were all perfectly
aware of wh at would take place, do partake of that mythi-
cal chare.cta r which I have dared to impute to them. (Hear,
hear.) Sir, Ido not like to dwell much upon a question
of minor interest, namely, the pecuniary result of the ope-
ration, but 1 may be permitted to say a few words. It is
perfectly true that we thought it necessary to borrow a
certain sum of money, which we have paid away, and that
we have had to do that at a loss ; but on the other hand,
I do not see why you should enter into calculations which
have no reference to the reality. I think I can demonstrate
that the effect of the operations as it stands is a loss of
from 60,000/. to 100,0001. a-year only ; a sum which,
though undoubtedly quite large enough, is not a matter to
be much considered, when we are discussing the policy of
an operation of so serious a character. But, sir, as I have
said, there is one other point connected with this conver-
sion scheme, upon which it is necessary that I should ad-
dress a few observations to the committee, because it is
one of great; importance at a moment when, in consequence
of a change of circumstances, we certainly must have to meet
great, and xnayhave to meet unexpected, demands upon the
public revenue. I have just now adverted to that which
has turned. out to be the only real object to the conversion
scheme, though it was an objection not anticipated by any-
body, namely, the inconvenience of withdrawing from the
Exchequer so large a sum of money as has been necessary
in order to pay 8,000,000/. to non-assenting stockholders.
And now, sir, it is not only desirable for my own sake,
and for the sake of the Government, but it is in my judg-
ment most necessary for the public interests, that I should
endeavour to dispel the masses of misapprehensions which
have gather 3d round this part of the question. Some por-
tion of them, I think, are already disposed of by what was
stated on a former night, but I hope at present to make
a yet more complete clearance of them. Now, sir, I think
it will not be denied that I am correct when I say that
the current 'belief both within and without these walls has
been to the following effect that very large sums of
money, in the nature of advances or temporary loans,
have been demanded by the Government from the Bank
of England ; that this demand has been in violation of the
spirit of an agreement made between the Government and
the Bank in 1844; that it has been made in the present
instance without forethought, and without due notice be-
ing given to the Bank ; that it has been made to the great
detriment and inconvenience of trade ; and that, more-
over, though the loans may be regarded as a favour and an
accommodation, yet that they have been taken from the
Bank upon a very low rate of interest. Now, sir, having
mentioned the Bank of England, let me here dispel one
serious misapprehension. If lam arguing with respect to
the Bank of England, that the demands have net been
made upon it which are commonly supposed ; that the
compact of 1844 has not been violated that the rate of
interest has not been low, and so forth, do not let it be
understood for a moment that I intend to cast the
' slightest imputation upon the Bank. I apprehend
that, although there ought always to be harmony an d
co-operation between the Bank and the Government, yet
that sometimes the Governor and Deputy-Governor of the
Bank, on the one side, are the special guardians of the sepa-
rate interests of the Bank, and the Chancellor of the Ex-
chequer, on the other side, is the peculiar guardian of the
interests of the public—(hear' hear)—and I say it is the
duty of the Chancellor of the Exchequer, on the one side,
as it is the duty of the Governor of the Bank on the other
side, to assert in friendly argument together whatever they
think the separate interests of which they are the special
advocates requite. I have the happiness to entertain the
greatest respect for the present Deputy-Governor of the
Bank ; the Governor of the Bank I have the pleasure and
satisfaction of having long called my friend, and I am
quite certain that we shall never be the worse friends be-
cause, when we discuss the subject of the public balances,
the accommodation due to the public, and the remunera-
tion due to the Bank, he may urge what appears to be for
the interest of the Bank, and I may urge what appears to
be for the interest of the public. I do not think that on
that account we shall have one jot less of cordial satisfac-
tion in co-operating together in what concerns the public
interests. (Hear, hear.) In fact, those matters upon
which I am now going to enter do not bear upon the de-
mends made by me upon the Bank, nor upon the demands
made by the Bank upon me. There has been no demand
made by me upon the Bank which is not satisfied. There
has been no demand made by. the Bank which is not satis-
fied. They bear retrospectively upon the question what
has been; they bear prospectively upon the question what
should be the right arrangement to make hereafter ; but,
as I have already stated, the Government has never asked,
the Bank to sacrifice its separate interests, and I am in-
formed by my hon. friend, the Governor of the Bank, that
he has announced, in a meeting of the proprietors, that
he has never, upon any occasion, received from me any
such demand, but, on the contrary, has always heard me
recognise the perfect right—nay, the duty—of the Bank to
guard its own interests, as those of an institution eminently
useful and beneficial to the community. (Hear.) I hope,
therefore, it will not be understood that I enter into this
discussion with the slightest feeling in regard to the relations
between the Government and the Bank. Now, sir, I be-
lieve a noble lord in another place, who holds an important
financial office—l may say at once that I refer to Lord
Monteagle—has been loudest in his complaints of the
great amount of deficiency bills taken from the Bank. I
confess I am surprised at the source from which those
complaints proceed, because, if action may be taken as an
illustration of opinion, which appears not an unfair prin-
ciple to lay down, I should have thought the noble lord
had a very tender feeling towards deficiency bills. (A
laugh.) My deficiency bills have been taken under extra-
ordinary and peculiar circumstances, the result of an abor-
tive operation ; his deficiency bills were taken from year
to year, under circumstances of a usual kind, with his eyes
open, with a perfect knowledge of what he was about, and
with no disturbing circumstances to contend against. My
deficiency bills, upon the average of the last three quar-
ters, have amounted to 3,540,0001.; his deficiency bills the
first year he was in office amounte to 4,287,0001.; in the
second year he improved them, and they amounted to
4,346,0001. ; in the third year he improved them
still further, and they amounted to 5,380,000/. ; in
the fourth year he again improved them, and they
amounted to 5,455,000/. (Cheers and laughter.) If the
noble lord had happily for the country continued in
the office of Chancellor of the Exchequer till the pireett
it
day, what, sir, do you think the amount of his definiency
ma
bills would have beennow. (Laughter.) Perhapsy
be said—l hope it will not be said—that this was b.efore.
the act of 1844 ; that the issues of the Bank now are
based
upon a metallic foundation ; that
o caitrctuihaattitoinin
atuhde issues
were not based upon a meta
consequently, deficiency
ation will not be made,
11:;illsobws ere then mere creations of
paper. I say I hope th
because it really amounts to this—at present we pay our
, _without any reference
obligations in real mone.7,_b_utuantt that time we paid them
in money created ad iibit
to gold. But I am • not making a charge upon
act ;
surprise
this subj
araminsetulmy pre
e ebxythsesinngoblme ylords. Andri
at the charge madle
Ileg to ca
now, sir, l the attention of the committee to
what I have described great as the misapprehensions which
prevail respecting the advances demanded by the Govern-
ment from the Bank. This is not the first time that no-
tions of that kind have been abroad. The same fate, in a
much smaller degree, befell my right hon. friend the mem-
ber for Halifax, in the spring of 1847. At that period there
was a very considerable difficulty as to trading accommo-
dation. Money was much tighter than at the present time.
Various gentlemen in this house—among others, the hon.
member for Montrose, the right hon. gentleman the mem-
ber for Buckinghamshire, and the hon. member for Hun-
tingdon—found great fault with my right hon. friend for
having withdrawn from the Bank, in the form of a tem-
porary loan, the money that was necessary for the accom-
modation of the trade of the country. That charge I find
contained in the declaration in this house of an hon. friend
of mine, of great commercial experience, one of the mem-
bers for the city of London, a man who, I believe, what-
ever his party connections may happen to be, never utters
a word under the influence of party feeling or party preju-
dice. Mr. Masterman, in May, 1847, censured what he
termed " the improper arrangements made by the Chan-
cellor of the Exchequer," and declared it to be his opinion
that "it was impossible for the Bank, under the existing
act, to advance every quarter two or three millions of de-
ficiency bills, and at the same time to do justice to the
commercial community." Having made that speech
he went on to make a motion, the purport of which
was that, when Government required deficiency bills,
they should take them, not from the banking
department, but from the issue department of the Bank.
(Loud cries of hear, hear, from Mr. Melina.) That is
cheered by the learned member for Wallingford. It ia a
ere
very plausible arrangement indeed, and if the facts
ewr
true, I would join in the cheer ; but the hon. member
London was then, and the learned member for Walling-
ford ford is now, 1412ourieg under the moot complete and