The Sun.
London, England, 1853-04-09 00:00:00

NATIONAL EDUCATION IN IRELAND.

Mr. F. SCULLY wished to ask Lord John Russell,
whether any arrangements have been adopted to insure
the sale of books intended for the use of the Irish Na-
tional Schools, to the promoters of schools and the pub-
lic, in an authentic form and at a moderate price.
Lord J. RUSSELL replied in the affirmative.
THE FUNDS.
Mr. DISRAELI said the amended resolutions on the
subject of the public funds had been placed in his hands
to-r;ght ; and as there were numerous alterations in
them, he should be glad to know if it was intended to
take a vote upon them to-night, or only to have the
statement of the Chancellor of the Exchequer upon
them ?

The CHANCELLOR of the EXCHEQUER said
that would depend upon the house itself. It would
be for the house to determine, after hearing his state-
ment, whether it would proceed at once to a vote or
postpone it until next week.
WEST INDIA MAIL•

In reply to Mr. SPOONER,
Sir J. GRAHAM stated that complaints from all the
outports were daily pouring into the Admiralty of the
irregularities which were constantly taking place in the
dispatch and arrival of the West India mail. The West
India Steam Packet Company were in receipt of
270,0001. for carrying the mails, and these irregularities
were most unjustifiable, but the company insisted
that as these irregularities related to a point of time,
they did not vitiate the contract, and the subject had
been submitted to the law officers of the Crown. (Hear,
hear.)

THE NATIONAL DEBT.
The CHANCELLOR of the EXCHEQUER moved the
preliminary resolution, that the house resolve itself into a
committee on the Consolidated Fund and National Debt
Redemption Acts.
On the motien of Lord JOHN RUSSELL, Mr. Bouverie
able, y d ut thye,
took the chair amid considerable cheering.
The CHANCELLOR of the EXCHEQUER.--It is now
m
naturesr to
eoxfptlhaeinprotoptodhetcioonmmiwhttichee„
on the part of as well as I am
her Majesty's Government, I have to make to them in re-
spect to the operations of the National Debt ; and the
course which I think most convenient for the committee
to take will be, that I should in the first instance state the
plan which her Majesty's Government recoihmends for
adoption, and that I should then put together, before I
sit down such alterations as have been made in the draft
resolutions since they were first distributed. The com-
mittee will then see both the plan as ,it is, and the altera-
tions separate from the plan. I shall not commence this
explanation by dwelling in any degree upon the import-
ance of the subject. I would rather, if I Could, after
viewing the amount of public interest which it has excited,
endeavour to moderate such expectations as may have
been formed in the public mind. I do not recommend the
proposition that is now before the committee as a proposi-
tion which can effect any sweeping or fundamental change,
but I recommend it to them as a propositionlwhich is just
and prudent in itself, and which will probably lay the
foundation for more extended improvements in future. The
committee ought to understand that there is the broadest
possible distinction between our position at the present
time and the position in which former finance ministers
have stood when they have produced extensive operations
of this kind. Every one of those operations between the
peace and the year 1844, when they were ably wound up
under the auspices of my right honourable friend the mem-
ber for the University of Cambridge, by a plan which was

is this, that of those great Three per Cent. Stocks, which I
have stated in round numbers as amounting to 500,000,0001.
the whole are secured by a provision requiring a Parlia-
mentary notice of twelve months' duration before any mea-
sure of reduction or commutation can be applied. (Hear.)
I only ask the committee to recollect how serious a matter
it would be for any Government, under present or any other
circumstances, to sketch out a plan of operations affecting
so vast a capital, involving the possibility of such an enor-
mous payment received from you within a period of twelve
months, and including all the chance vicissitudes which we
have seen happen often in the course of less than a single
year. Our present position, therefore, is entirely different
from this. The expectations which were thou reasonably
entertained it would not be reasonable to entertain now.
The plans then proposed to the house were reduced to a
single and simple issue. The stocks with which you had
then to deal were subject to redemption by Parliament
after an offer of repayment at short notice, and as many as
declined that offer were required to accept other stocks ten-
dered in lieu of those which they held. Therefore, I lay it
down in the first instance, that a large operation of a com-
pulsory character is totally out of the question. And the
next inquiry is, shall we, notwithstanding the impossibility
of such extended and comprehensive operations, come to
the conclusion that a new state of circumstances has ar-
rived in which it is incumbent on the part of the Govern-
ment and of Parliament that they should make some effort
to obtain for the public the fullest value that equity and
justice will permit for the security which they give to their
creditors, and a rigid observance of the perfect good faith
with those creditors which it has ever been the study and
the glory of this house to maintain? (Cheers.) The opi-
nion of her Majesty's Government is, that although we can-
not now effect the magnificent results achieved in former
periods, yet the time has come when a beginning may be
made, and when steps may be taken which may be useful
so far as they go, and which will lay the ground where no
ground has yet been laid. There is another preliminary
point on which I venture to make a remark. You have,
on approaching a subject of this kind, a choice of difficul-
ties, and it was because I wished to put those difficulties
clearly before the committee that I did not answer at
greater length the question put to me by the right hon.
gentleman the member for Buckinghamshire. On the one
hand, no man can admit more fully than I do the perfect
title of Parliament, and of every member of Parliament—
and indeed it is their bounden duty—to maintain intact its
control over the whole of those operations. If it is our
duty to fence about with strict and rigid forms the whole
process of taxation, and to look closely into every proposi-
tion submitted to you by a Government for raising money
from the people, it is still more your duty to see that you
no not give a blind and unreasoning confidence to a Mini-
ster where the case is either the creacion or the commuta-
tion of public funds. The more the house takes' on itself
those functions, the less is the burden incumbent on her
Majesty's Government, and the less the anxiety
i which at-
taches to the individual on whom the duty is imposed of
making propositions of this kind. But, on the other hand,
while I thus state the prerogative of Parliament and of its
members, it is an undeniable fact that when you come to
deal, with the public creditor, his position may be Mate-
rially amended by conferences conducted in public with the
Ministry, and the Finance Minister in particular, and
having reference very much to points of detail ; and, there-
fore, I wish to ask the committee to extend to hr Majesty's
Government that degree of confidence with respect to
giving effect to those operations which they think moderate
and just—that they will remember the extreme import-
ance when once a matter of this kind has been broached
of carrying tit forward with resolution and promptitude,
and that they will be governed by those considerations in
balancing between the inconvenience of entrusting the
discharge of weighty functions to those who admit their
own insufficiency worthily to bear them, and the inconve-
nience of doing damage to the public interests, and mar-
ring a groat public object by discussing it in a spirit which
may be fatal to its very essence. I have been most anxious
to make this application at a comparatively early period of
the present session, because, being aware that it is an ope-
ration of a kind that does not aim at very great results,
and being undoubtedly of necessity a novel operation, and
not analagous to those that have gone before, I am anxious
that the operation should go forward, and should reach to
some degree df effect, if it is to take effect, while Parlia-
ment is sitting, so that Parliament may have an opportu-
nity of exercising a judgment upon it ere long, and so that
Government may, if satisfied with the working of the plan,
come back to Parliament, if need be, for extended powers,
before the session shall run to its close. I come, then, to
my plan, which consists of three portions. The first of
these is certainly a minor portion of the scheme ; and I
will enter upon it first, in order to dispose of it and put it
out of view. It is the liquidation of certain minor stocks
which appear in the schedule of the national debt, and the
very existence of which is unknown to a great portion of
the public, and perhaps to a great portion of this house.
These minor stocks are chiefly connected with the South
Sea Company. There is the debt due to the South Sea
Company, amounting now to 3,622,000/. ; the Old South
Sea Annuities, amounting to 2,775,000/. ; the New. South
Sea Anuities, amounting to 1,997,000/. ; the South Sea
Annuities of 1751, amounting to 460,000/. • and the Bank
Annuities of 1726, amounting to 676,0001. The whole
amount of those stocks is about 9,500,0001. sterling. With
respect to those stocks, it is proposed to take a compulsory,
operation—that is to say, we shall tender a certain alterna-
tive to the holder, and at the same time inform him that
if he does not accept this alternative, he will bo paid off at
the expiration of a proper period. I think the committee
will agree with my view that, at this moment, this will be
an eminently safe operation. But perhaps I may be asked
why I touch these funds in particular. They may well be
called the patriarchal stocks of the country—they have re-
mained longest on the records of the national debt—they
have subsisted for many generations—they may be said to
have grown hoary with age ; then why should you trouble
them ? I hold that it is useful to have different descrip-
tions of stock, yet it is a bail arrangement to have different
descriptions of stock which have all their essential charac-
teristics in common, and in which there is not one that is
opposed to the other. Again, those limited stocks create
but a small market, and small transactions invariably bear
small prices. You thus complicate the public debt with-
out any countervailing good, together with the manage-
ment of that public debt ; because, although I believe there
is no possible blame that can be brought against the South
Sea Corporation, highly respectable as it is, and having
now effectually purged itself of the recollections of its
earlier days—(a laugh)—and though there is no possibility
of finding fault with the way in which this public debt
has been managed ; yet this is an agency without any
adequate purpose, and I think the committee will agree
with me that the time has come for a different arrange-
ment. It will also effect a real economy. I frankly own
that I think with respect to this portion of the public
debt we shall obtain only a moderate reduction, but
still a reduction, in the rate of interest. If on this
9,5C0,0301. we effect but a reduction of a I per cent. in
the interest, yet that will represent a permanent annual
saving to the country of something like 25,003/. ; and,
besides that, we are perfectly prepared to meet the views
of those who may wish to be paid in cash ; and if the
holders of this stock shall desire to have cash, and will
make a call for it, that call will not be inconvenient, but
on the contrary it will enable us to employ in a profitable
manner a portion of the balances now unemployed, and
thereby to displace, with a debt which will carry a regular
interest, that which now bears comparatively little or no
fruit. With respect to the means of paying off this portion
of the debt, there will be, first, the power which I propose
to take of raising money on Exchequer bonds by deposit at
the Bank, with certain exceptions ' • and, lastly, and alter-
native stock, which we shall offer to parties at an auction,
which all will have an opportunity of attending. And
perhaps a doubt may have arisen in respect to most of
those stocks whether Parliament is bound lsy law to give a
notice of twelve months to the holders. The case did not
appear to us entirely. clear ; and, it not being clear, and
considering the limited amount of the stocks, we thought it
right to allow the stockholders the benefit of the doubt,
and to give them the full circumstances, which, under any
circumstances, could be required. There is only one ex-
ception in the case of one of those stocks, with respect to
which a notice of six months is clearly defined by law, and
that notice must be signed in the handwriting of the sove-
reign, and exhibited to public view on the Royal Exchange.
I have now disposed of one portion of this scheme, and I
come now to the second and third. The second of these

portions relate to the issue of Exchequer bonds, and the
third relates to a voluntary commutation 'dependent en-
tirely on the option of the holders of the great Three per
Cent. Stocks—namely, the Three per Cent. Consols and
the Three per Cent. ReduCed—making together the capital
very nearly of 503,000,000/. But I now refer to both those

plans, beciluse both have in view one and the same ultimate
object, and that object is to lay the foundation of a perma-
nent
form of irredeemable public debt—irredeemable, I
mean, at the option of the holders—bearing an interest of•
2A per cent. The mode in which we wish to attain that
end will appear as I proceed, but that is the ultimate end
which we have in view. I know there are some who think
that this reduction is a very simple matter, which may be
delayed for one or more years, but which is sure to come
at last. Those persons aro mere sanguine in their tempera-
ment than I. I do not say you may not entertain the hope
of effecting that object, but I say it is a subject of consi-
derable uncertainty ; and if you hope to attain it you ought
not to omit the use of any auxiliary means towards the
end, and certainly you ought not to depend on the simple
force of circumstances to effect any great reduction in the
interest. Not extending our view as far as we ought to

extend it-knowing that our fathers borrowed money from
the public at 51. and even 61. per cent., and that we bor-
i row it at 31. per cent.--we assume that we are travelling
down an inclined plane. But it is a curious fact that there
was a time when the Public credit was higher than it is at
the present time. I think it was in 1739, 114 years ago,
and in the month of July, that the Three per Cents., which
are now just at par, were at the price of 1071. I wish to
call these facts to the recollection of the committee, in
order that they may appreciate the real difficulty attend-
ing an operation of the character which we have now in
view. Now, with respect to the Exchequer bonds, I pro-
pose that the issue of them will have the following leading
c.aracteristies, which I will in the first instance state con-
; eisely together, and without any comment of my own. In
the first place they will be transferrable by simple delivery,
and without cost or expense of any kind. In the second
place they will bear interest in the first instance at the
rate of 2/. 15s. per cent., and subsequently at the rate of
21. 10s. ; and I propose with respect to the number of years
during which the interest shall continue at 21. 15s. per
cent., that a limit shall be fixed by Parliament, beyond
which that rate of interest, shall not be allowed to extend,
and that a discretion shall be given to the commissioners
of the Treasury to reduce that limit before they come to
the actual period for issuing the bonds, so that we may
give the public every advantage of the latest information
of which the Government is in possession at the time
when they are called upon to afford it. The bonds will,
after the Ist of September, 1864, at the latest, but per-
haps from an earlier period than that, boar interest at the
rate of 21. 10s. per cent, till September, 1894. After the
year 1894 they shall be subject to redemption, but whe-
ther by the State or by the holders is a point to which I
shall presently more particularly advert. My present pro-
posal is, that the question as to at whose option the
bonds shall be redeemable shall not be decided by a vote
of the committee to-night, but shall be confided to the dis-
cretion of her Majesty's Government. I propose also that
these Exchequer bonds to be issued shall not exceed, under
any authority to be conveyed by these resolutions, a sum
of 30,000,0001. in amount. There are many other minor
questions, which are, however, of considerable importance,
with respect to these bonds, and which bear materially
upon the value and popularity of these securities. Among
them I may mention the form in which the bonds are to
be drawn, the mode in which the interest is to be paid-
which will probably by coupons attached to the bonds-
the places at which the interest is to bo paid-that is to
say, whether at the Bank of England, or at the Bank of Ire-
land, or also, at the branch banks, the mode of securing these
bonds against the possibility of forgery, and the means to
be adopted for replacing them when lost. Many of these
arrangements are of an executory description ; they will.
require a great deal of careful consideration ; and it is not
necessary now to detain the house by any details respect-
them. We propose that these Exchequer Bonds when
issued may be used in various modes; and I am sure the
committee will forgive me for stating, in as plain language
as possible, the propositions contained in the resolutions,
for the wit of man has not yet desised a mode of framing
resolutions of the kind so as to satisfy the jealous but just
demands of Parliament for information in cases of this
sort, and at the same time to frame a pleasant and what is
called a readable document. (A laugh.) I propose that
these Exchequer Bonds shall bo capable of being disposed
of in four different modes. The first is that they shall be
exchangeable against Exchequer Bills. There may be
hon. members who may say, " Why not leave the Ex-
chequer Bills alone. Surely you ought to be satisfied with
the conditions under which you now hold so large a sum
as you have invested in Exchequer Bills, viz., at the rate
of interest not rising above the very moderate figure of 1a
per cent." My reply is lam perfectly satisfied with the
present condition of Exchequer Bills. But the condition
of Exchequer bills is like a summer sky-it may be varied
or even reversed under the influence of circumstances, in
a very short time. The funding of Exchequer bills, when
toil have an opportunity of doing so, is a wise operation,
and I do not fay that it would be unwise under certain cir-
cumstances if we were to use these Exchequer bonds at the
rate of 2); per cent. for the purpose of funding Exchequer
bills which we hold at 1i per cent. When you can get
your quantity of Exchequer bills very low, then their po-
sition becomes secure ; but when you have got it low, you
are enabled thereby to strengthen greatly the position of
the Government against any possible vicissitudes, and the
Government are enabled to go into the market as borrow-
ers in a case of emergency, with an amount of advantage
which they could not possibly obtain if the rate of Ex-
chequer bills was not low. Now, with respect to this par-
ticular proposition which is not actually that we should
fund Exchequer bills, but that we should exchange Ex-
chequer bonds against Exchequer bills, I will just state to
the house the rate at which previous fundings of Ex-
chequer bills have been effected. In the year 1826 there
was a funding of Exchequer bills, and the rate at which
they were commuted was 1001. Exchequer bills for 1071.
in the Four per Cents, representing a rate of interest of
4L 6s. Bd. per cent. ; in 1829,1001. in Exchquer bills upon
being fnnded brought 101/. lOs in the Four per Cents.
thus representing a rate of interest of 41. is. 2d. per cent. ;
in 1839, 1001. Exchequer bills were commuted at the rate
of 109/. and 1101. in the Three per Cents., representing a
rate of interest equal to 31. 6s. per cent. ; in 1841, Ex-
chequer bills were again funded upon the condition of
being exchanged at the rate of -1001. for 1121. 2s. of
Three per Cents., the interest being equivalent to
31. 7s. 3d. per cent. Thus, whenever you have had
occasion to fund Exchequer bills, the best terms
upon which you have succeeded in doing so have been at
the rate of 31. 6s, per cent., and they have been funded at
rates oven as high as 4/. 6s. Bd., and that rate of interest
not representing, as in the case of Exchequer bills, a tem-
porary bargain, which in a few mouths might be modified
by the Government, but representing the contracting of a•
new public debt, as permanent as any other portion of the
public debt of the country. These facts form, we think, a
justification of the request of her Majesty's Government,
that wo may be trusted, within the limits laid down in
these resolutions, to exchange Exchequer bonds against
Exchequer -bills, for the purpose of funding at tho rate of.
21. 10s. per cent., thus effecting a saving of snore than 1
per cent. upon the rate at which Exchequer bills have
heretofore been funded, (Hear.) The next purpose for
which wo propose Exchequer bonds shall be aplicable is,
that they shall be exchanged against the "stocks" which,
by these resolutions, it is proposed to commute. We pro-
pose, also, that Exchequer bonds may be sold by tho Go-
vernment, and the proceeds of their sale applied to the
purchase of " stock, for the purpose of cancelling it, or
to the purchase of Exchequer bills, These bonds are like-
wise intended to meet the particular case with respect to
the small portion of the public debt which we give abso-
lute notice to pay off; and this might be found the most
convenient mode of dealing with it - that we sell the
bonds, and apply the proceeds in cash to meet the demands
of those who might require to be so dealt with, for, keep-
ing. extreme cases in view, it might possibly occur that the
balance, in the Exchequer might not be sufficient to meet
the demands which might be upon it. This subject has
been one of careful and anxious consideration, and one of
the great difficulties besetting questions of this nature is,
that they of necessity involve arriving at conclusions upon
questions of great importance with very imperfect infor-
mation. Public feeling, after all, and the opinion of the
commercial classes, are the tests by which ultimately a
measure of this kind can alone be tried, and what will be
the state of public feeline, at a given time with respect to
such measures is a matter upon which very opposite judg-
ments, 'even under the most favourable circumstances, will
greatly fail. I cannot blame myself for not having taken
all the means in my power, compatible with the strict and
absolute secrecy which those measures require, to ascertain
what prospects, according to the best and highest judg-
ments, there of bringing out " bonds" of this kind in the
market. But, at the same time, it was matter of extreme
difficulty to arrive at such certain data as would have jus-
tified the Government in absolutely fixing upon terms of
the proposition, from which there should be no variation
whatever. I will now, however, state the grounds upon
which we think that these " bonds" will be popular cur-
rent securities. In the first instance, the very easy trans-
fer of these securities entirely without cost. It is very
difficult for us to say what may be the precise effect of that
easy and rapid transfer without cost, because we have no
precedent to guide us among the various descriptions of
the present public securities of the country. 'We have,
however, a pas tial moans of forming a judgment on the
subject, from the fact that there aro many foreign securi-
ties current in this country, and which are transferable
from hand to hand without cost. I by no means compare
those foreign securities with those which we now propose to
deal. I hope that without undue pride, Englishmen may
so far lift up their heads as to flatter themselves that the
instruments by which they secure their claims upon any
public security in this country do, at any rate, hold a very
high rank-perhaps it would not be too much to say the
highest rank-among documents of a similar character in
the other countries of Europe, It does happen, how-
ever, that there are sometimes foreign securities cu- rent
in this country, bearing, the same rates of interest
and similar in almost every respect, but differing in
this one respect - viz., that in the one case they
require a a formal legal process in order to their
transfer, while in the other the transfer is effected by
merely passing from hand to hand. I believe that I am
correct-and shall be borne out by the opinion of many of
the best informed men-in saying that this power of easy
and rapid transfer from hand to hand adds as much as
several pounds per cent. to the value of the securities which
enjoy that advantage. (Hear, hear.) We propose, then,
that these bonds shall possess this advantage, that they will
also be of a permanent character, so far as fixing a long
term during which no change can take place with respect
to them. I must take this opportunity of pointing out
as whatn elementno tosfogumaurachnteine the presentexercises
on casethe
price of public securities. My right hon. friend the m_om-
tahnelomtlirersrt,anthtiseffeat,
be that the Three-and-a-Quarter per Cents. should reduced,
ber for the University of Cambridge, when be pros.ded

after October, 1854, to 3 per cent., likewise provided that
they should have
ratehav e 0
fa
3p
furtheror n
oe certain
v
years
should not be subject to further reduction. It is perfectly
Nithin currencywhich otefrmtwtehnetyy
and
etphroeesds
ii
value,tl
credit,
e of t oa
gg
under
nvadereaarnn t present
rencsb: eyv ne
Irt at croli ritachmuemeqnsutt 'a
nn i 'oci teo snt
o---oreduce.nl o na
ttehyi es rate
of interest upon a particular security below 3 per cent.
within twenty-one years from the present time?" It will
be recollected that this, after all, is only a guarantee not
to reduce below 3 per cent. ; but the committee has the
means of testing exactly the precise value of that guarantee.
The present price of the right hon. gentleman's (Mr,
Goul:
burn) Three-and-a-Quarter per Cents.—whichwill wilbel
liable
to become
Three Three per Cents. after October, 1851,
but not
to further reduction for twenty years --as appears from the
official records of yesterday's sales, is 1031.55., the dividend
having just been paid, so that that does notenter into the
This particular stock has, however, three
yet to receive at the present rate of 3i per cent.
dividends
vlwciudilelalntr'iloosone.i v e one d ivid en d next October, a second next
April, and the third in October, 1854. As the mess of
dividend which will be receivedeae upon each of these occa-
osirodnesr
toi s justeoni p2asr.
thee
6d . must
guaranteed
with
ht
tshuemu n
focase of thi
guaranteed stock. Deducting,ielrefore, the 75. M. due to
thethe guaranteedex 'a mnp t er
iT
cid,
er,
eae dividendepereoraccording
Cent.git
t
ce evoe2tas the price of the
17s. 6d. That is
of your Three per Cent. Stock
oStt?i k (lay, official sale
shist of. yester-
further reduction for 21 years. This being sO,algelinusistnnoilv);
see what is the price of the Three per Cents not fortified
by any such guarantee—that is to say, Consols. From the
same official record, I find that the selling price of Consols
i was 100/. 12s. 6d., but as the dividend upon this stock is
' payable in July, one half of the dividend, tha' is, 155.,
must be deducted from the apparent price in order to moor-

Jain the real price. I ai actual present price, therefore, of
the Three per Cent - asamranteed Stock is 991. 17s. Oda
that is, 1001. ri. G‘t., mi ho 15s. which has accrued as
part of the dividend. I _rice of the Three per Cents.
guaranteed for 21 years is 10'2l. 17s. Gd. The value, there-
fore, of your guarantee, not to reduce the interest below 3
per cent. for 21 years, in the market at the present time,
as tested by the daily transactions, is no less than 3 per
cent.- Now I want to get hold of that value, if I can, for
the public. (Hear, hear.) Let us guarantee some of! this
stock which has now no guarantee, and let us perpetuate
for the benefit of the public the increased value which will
thereby be obtained. (Hear.) Another of the uses to which
the Exchequer Bonds may be usefully employed will, no
doubt, be that of obtaining temporary loans upon their
deposit, without any expense, and affording ample security
to the lender. This is a circumstance which will also tend,
no doubt, to increase the value of these bonds. (Hear.) There
is another point, which I confess I look upon as one of
considerable importance in connection with this subject.
If we go back for a certain number of years, we find
ourselves in a period when dealings in public securi-
ties were almost entirely confined to the metropolis. In-
deed, with reference not only to public securities, but to
stock generally, it could hardly be said that there was a
stock market out of London. The immense progress of
enterprise, the formation of a multitude of joint-stock com-
panies of different descriptions—many of them if a high
class—investments in railways to the extent of 200,C03,11ad,
or 300,000,0001., giving rise to transactions every year of
immense magnitude, and various other circumstances con-
nected with the commercial condition of the country, have,
however, led to the establishment of regular stock markets
in the provinces. Liverpool, Manchester, Leeds, Glasgow,
Birmingham, and other towns have stock markets, where
a very large amount of business is transacted ; but at the
present moment, considered properly as " stock, the pub-
lic securities are almost hntirely excluded from the pro-
vincial markets. Ido not mean to say that nobody in the
provinces holds pnblic securities for the purposes of invest-
ment. No doubt many persons do, but they hold them
through the medium of agents and correspondents in Lon-
don. lam most anxious, therefore, if it can be done, to
bring the public securities into the provincial markets ;
because I believe that, by enlarging the scale of demand,
you would increase proportionately the value of the com-
modity, just as when, with a fixed number of buyers, if
you increase the amount of commodity you reduce its va-
lue ; so, when with a fixed amount of commodity you in-
crease the sphere of the market and the number of tho
buyers, you augment and enhance the value of the commo-
dity. (gear.) Some persons may perhaps ask why we do
not propose to alter the present mode of transfer of public
securities by personal appearance at the Bank, and the in-
scription of a signature in the books to the same simple
manner to which ordinary securities are transferred. My
reply is, that I do not see my way clear to such arneasure.
The present mode of transfer—for London, I mean, which.
is the centre of monetary transactions, not only of Eng-
land, but of the world—is as near as possible to perfection ;
it is the most rapid, the cheapest, the most secure, and the
most satisfactory, which has ever been devised. There
may be a mode by which, without breaking up that system
which works so well in London, the provinces may be pro-
vided with a mode of dealing with these securities. I
confess, however, that I am not as yet aware of that plan,
and it would certainly be a very serious matter to sacrifice
the immense advantages which the great central market
enjoys for the purpose of benefiting the minor markets.
No doubt we shall achieve a great good if we can, by the
means now proposed, get the public securities into the pro-
vincial markets. The advantages derived would be that
you will give an increased value to the securities, and you
will introduce a further element of steadiness into the mar-
ket, for when you deal in one market only you are rendered
more liable to the influence of combination than you would
be by having a number of markets for the same commo-
dity. (Hear.) Another recommendation which securities
of this kind will poisess will be that they will form most
eligible investments for foreigners who may wish to be in
possession of public securities, and to have the documents
which constitute their right to the property in their own
possession. These are the principal considerations which
have induced her Majesty's Government to ask the house
to give their permission to issue this description of stock.
There are, however, two points of considerable difficulty ,
connected with this subject, to which I ought not to omit
to refer. The first question which may be asked is, " Are
these securities which you call ' Exchequer bonds' to be
merely very long dated Exchequer bills, which at a certain
period Parliament, whether it will or no, and irrespective
of circumstances, may be called upon to repay? or are they
to be securities guaranteed on the part of Parliament
against any reaction or interference for a certain pe-
riod, but with respect to which, after that period,
Parliament, and Parliament alone, shall enjoy the
power of redemption, to use, or not to use, as it
thinks fit ?" Now, her Majesty's Government felt the
difficulty of coming to any conclusion in the absence of
that direct information which they could only receive from
the full expression of public opinion and the discussions
which are elicited in the public journals and elsewhere,
when a plan of that kind is proposed. We felt the diffi-
culty of coming to an absolute decision on those questions
in the dark:. We had to choose two courses, both of which
were attended with considerable difficulties, and by the
adoption of either of which we might have sacrificed a
very considerable part of the objects which we had in view.
If, for example, we had said, "These securities shall be
securities absolutely irredeemable at the will of the holder"
—if we had determined to invite the House of Gammons to
vote such a proposition to-night, we might have run the
risk of discrediting those securities at the first moment
they were born into the world, and of thus seeing the
whole plan abortive. If, on the other hand, in order to
ensure the working of the plan, we had written expressly
in the resolutions before the committee that these securi-
ties were to be redeemable at the option of the holders, we
might have been told, as in point of fact we have been,
that the securities aro so satisfactory in their, character,
that, as permanent, irredeemable securities, there may be
many persons found who would be willing to hold them.
It appeared to her Majesty's Government, therefore, that
the wiser course was to ask Parliament to entrust them
with a discretion in the matter, and using the time, infor-
mation, and the discussion which will be elicited between
the present time and the period when the act is passed and
the securities issued, and bo permitted to act for the best,
as the circumstances may seem to them to require. It is
quite plain that to get out these securities at the rate of
interest proposesl-2:,1 per cent.—it would be well worth
while to make them redeemable at the option of the holder
after a certain number .of years. At the same time it is
by no means certain that, even by succeeding up to that
time, we should still succeed in the principal object which
we have in view, and that is bringing before the public eye,
and enabling the public freely to deal with public securities
I
bearing 21 per cont. interest, while the Exchecluer.l/ondail-
to be issued would in fact be long dated Exchequer bills.
and not permanent securities. (Hear, hear.) The com-
mittee will sco that we propose to ask for power to sell the
" bonds" in open market, and to apply the produce of their
sale to the purchase of Exchequer bills. The committee
will, no doubt, be jealous of bestowing such a power upon
the Government. They may suppose that the Govern-
snout will throw them away, or give them away, or that
they will be so stiff in their dealings that , when the full
value is offered for them it will not be taken. . It appears
to me, upon the whole, that while those who have to act
for the State may fail in the discharge
,of their duty, yet,
upon the other hand, the objection would be very great to
the committee now fixing absolutely the terms upon which
these bonds should be issued. Her Majesty's Government
are your agents in the matter, and you will hamper and
prevent us taking advantage of the circumstances which
may arise up to the latest moment, if you insert in these
resolutions absolutely the terms upon which these Exche-
quer bonds must be sold if disposed of in that way. Her
Majesty's Government have thought, for various reasons,
that the best way of meeting the reasonable desire of .
Par-
liament to be completely master of all these transactions,
would be to ask you to confer upon the Goternment such
al amount of discretion as will bo ample for the purpose,
and will enable them to deal freely with the securities
about to bo created, but at the same time to limit the
amount of the securities which shall be issued by them
under these resolutions, and for this reason I have pro-
posed that the eniount to be issued shall not exceed the
sum of 30,000,0001. Another limitation which is pro-
posed is, that the power to issue Exchequer bonds will
absolutely cease and determine on the 4th of April,
1851. It is not that I assume either that .30,000,000/.
will be the utmost limit to which Parliament will go, or '
that no bonds will be issued after the day named. The
object of the limitation in both cases is, that we shall have
the power to try the experiment, as your agents, to a
limited extent ; but to come back to you for increased
powers if we find occasion to go beyond the extent named
en the resolutions. (Hear.) It may be asked, what is the
nature of those bonds, :..nd would they c.institute a suffi-
ciently broad basis for the operation which we are
proposing to Parliament ? To this I must say I think
not. I have said lunch in commendation of instruments
of this character as a-form of public sanitrity. But I think
it is obvious—and it lnia been broadly itunarked in ninny
of thoseo intelligent discussions on the subject.which have
already 'appeared since the resolutions were printed—that
these bonds would not be securities of• the most desirable
description for all the parties who are at present holders of
public stock. I look upon these bonds as being in a man-
ner commercial and trading securities, which will suit the
purposes of the classes engaged in commerce gonerally,
including, of course, those who aro dealers in public, stock.
But there are very large classes of holders of, stock, who
aro in different circumstance; to whom it would be no
advantage to have the power of transferring stock
cheaply and rapidly, inasmuch as they do not wish
to transfer it, to whom it would be no recom-
mendation to have the interest )ayable in, the manner
proposed, and with whom the present mode of proceeding
is perfectly satisfactory. These classes consist of the
ofthosethewmhoishtollit
them
the
andst stocks—of c
whol es—
hold
capacity of trustees, or under private settlements. Her
permanent a permanent hoider
s of
f property, public
Majesty's Government, therefore, do not propose to found
their operations upon the issue of Exchequer bonds alone.
east the
because it is obviously desirable,ife public Creditors
ito
deroendewrsithobuet.
h a
uded,
mischievous consequences, not only to improve the condi-
otifont,hebuitnitoblmicakcree thoseditors i.mpThroevreeinfoerpet,sinfaollrdoevretroamll cel
acrilialsswltimotws of
fc th h
I have alreadyviz.,there
should
be a means of voluntary conversion sense of the word, " the Great Three
of, in the strictest
per Cents." In ap-
proaching this great phalanx of th
de-
fended as it is by its amount,
its e Three per Cents.,
necessity fora twelvemonths' rate of interest, and the
as a prudent general would iotice, we must deal with it,
fortifica-
tion of the first class, and when approaching a the utmost caution. The our steps must ho directed by
ment is to give terms pro our
of her Majesty's Govern-
as being too liber l which I have not seen described
a to the fundholder. II ain ll
winced that it would be an error y but at at the same time, when it isto give terms too fuliberal ;
said that you would get
very much bettel• terms than you are now asking, much
y m
as I should respect the estimate which the
for I'should
respect the opinion still more if it was founded upon' actual
account instead of being merely •
an estimate. The proposal
of the Government is that any person
who now is, or may
be, interested in the Three per Cent. Consols; and who shall
between the time of the passing of this act and the 10th of
October, 1853, signify his desire to commute any or all of
his share in the stock, may have the option of exchanging
each 105/. of such stock into one of three forms. The first
of these will be the Exchequer bonds at par, upon the ad-
vantages of which I have already dilated at seine length ;
secondly, into a Ne* Three-and-a-Half per Cent. Stock, to
be created for the purpose, upon these conditions, that
103/. of Perpetual Annuities, now bearing 3 per cent. in-
terest, may be exchanged for 821. 10s. of this New Three-
and-a-Half per Cent. Stock, giving to the'present holder
of stock an income of 21. 17s. 9d. per cent., instead of 3/.
per cent. The reduction in this case is certainly not a;
large one ; but the imure.]sien oppeara to be thief even thin
reduction will not be: vei-7 r..3f,,dilv. subniitted t?: Fcf

my part, I have not the 'least t:‘ar of seeing it very
extensively adopted. The advant.tgeg of this Commutation
are not to be limited to the rate of interest; it will be
fortified with .a guarantee of no less than 40 years—a long
period, no doubt, but small in the history of national debts,
at the expiration of which period, instead of being a Three
per Cent, Stocko it will be one of a. los.; redeemable

at par by Parliament. Although I am by no means bold
enough to assert that under no circumstances would you be
able to effect this redemption, yet I am strongly of opinion
that in no very long time, having effected reductiona in
the capital of the debt, with a smaller amount of revenue,
it would be practicable to effect still further reductions in
this portion of the debt. We also propose that i t be
open to the parties, in lieu of the option to take Exchequer
bonds, or of the power to take the New Three-and-a-Half
per Cent. Stock at the rate of 821. 10s. against each 1001.
Three per Cent. Stock—that it shall be open to the holders
of such stock to take, for each 1001.410/. of the New Two
and-a-Half per Cent. Some objections are, I kew,
en-
tertained to this particular feature of the plan, upou.nwh ich_
I venture to- request the attention of the committee.
will state, as impartially and as fairly as I can, the reasons
why it appears to me extremely desirable that this feature
should be retained in the plan. I may state that her
jesty's Government purpose effectively to limit the extent
to which this option can be acted upon. The objection
urged against this portion of the proposal is that, in order
to reduce the annual charge, we are going to increase the
capital
of the debt. ,Now let us carefully weigh this ob-
jection, for, in my opinion, it is
it is not
to which con-
siderable force attaches. But not true that we are
going to increase the capital of the debt for posterity, in
order to reduce the present annual charge. The proposi-
tion submitted is not one to reduce the interest to 2i per
cent. for 40 years, in order that, at the end of that period,
the right to demand 3 per cent. might arise on the pai t of
the holders of the stock on the increased capital. It is
proposedr to secure for ever, and absolutely to posterity,
a edu ttion of I per cent. upon the annual charge. This
will place posterity under no disadvantage whatever, rela-
tively to the circumstances under which we now place our-
selves. It is also objected that we are going to add to the
capital of the debt as much as we are going to save in the
interest during 40 years. If that were ti ae, it would not
be conclusive against it, because there would still be a per-
manent saving after the expiration of the 40 years upon
the annual charge of the debt. But it is not true that the
addition to the capital is equal to the saving in the reduc-
tion of the annual charn, for if any person will take the
slightest trouble to calculate, he will find that the present
value of 101. in 1894 is far below the present value of an
annuity of ss. a-year for 40 years. (Hear.) If, then, you
balance the alternatives properly, the one against the
other, the presumption is, that the increase of the debt by
10 per cent. by the creation of the Two-and-a-Half per
Cent. Stock will be more than redeemed by the immediate
diminution in the capital of the debt by the creation of the
New Three-and-a-Half per Cent Stock. If you are skilful
in the operation, you offer to the stockholder two alterna-
tives, as nearly as possible alike—as nearly alike, in fact,
as two peas. If you give the Two-and-a-Half per Cent.
Stock such a rate of interest as will enable him to deter-
mine which of the two stocks ha will take—if you do that,
the presumption is you will have as much Two-and-a-Half
per Cent. Stock taken as the Three per Cent.
An HON. MEMBER—No, no.
The CHANCELLOR of the EXCHEQUER—Then the
hon. gentleman does not cast the balance rightly. (A
laugh.) Does the hon. gentleman mean to say that the
mere notion of a nominal increase in the capital of the debt
would give the capitalist a right to de
fair price, according to the annual interestmaud higher than a
for his capital ?
The annual interest he has a right to demand. But this
is a balance between two alternatives. I do not deny that
the stockholder looks to the capital as well as to the annual
interest, but he also looks to the annual interest as well as
to the capital; and therefore I say it is your duty to balance
the two, one against the other, in such a way that there
shall be no great commercial advantage attending one as
compared with the other. If you do that, then, 1 say, the
presumption is that the stocks may not be unequally taken.
An HON. MEMBER here made some observation which
was not audible in the gallery.
The CHANCELLOR of the EXCHEQUER—The hon-
durable gentleman refers probably to a former operation,
when the Four per Cents. were converted into Three-and-
a-Half per Cents. The terms then offered included an
alternative somewhat of this kind. The persons holding
Four per Cent. annuities were offered two • alternatives.
One was 701. stock at 5 per cent.; which would have yielded
interest at the rate of 31. 103. per cent. ; and the other, if
I mistake not, was stock at par, at 31. 10s. per cent. But
everybody chose the 31. 10s. stock at par to the Five per
Cent. Stock at 701. ; that is, everybody chose 1031. at 31.
10s. per cent. rather than 701. at 5/. per cent., because
there was no difference in the rate of interest. If, while
the 51. per cent. yielded only 3'. 10s., the other yielded
3/. 155., of course they would have chosen the higher rate.
But that is not theicase here. The man who chooses the
Two-and-a-Half per Cent. Stock under our plan will choose
an annuity of 21. 15s. for a limited period, while the man
who chooses the Three per Cent. Stock will choose an an-
nuity of 21. 17s. 9d. But I beg the house to recollect that
this operation is quite distinct from those of the loans made
during the war. I look back upon the period when those
loans were made with regret, and I have groaned inwardly
at their consequences, under which we are now suffering.
The practice of borrowing at 3 per cent. during the war,
when the natural rate of interest was 51. and Si. 10s., placed
the country in the predicament of securing the insignificant
advantage of a lower rate of interest by a few shillings per
cent., but it entailed upon us a permanent debt, the amount
of which, I think it is clear, if a wiser system had been
pursued, we might have reduced before this time, in capi-
tal and in the annual charge, by something like from
100,003,C?,1/. to 200,00,00/7 (Hear, hear.) I do not
mean to blame those who conducted these operations. They
were placed in circumstances of difficulty that we cannot
now appreciate ; but certainly the system entailed an ex-
ceedingly heavy charge upon posterity, for it left to pos-
terity a debt almost irredeemable for the sake of a very
small temporary advantage. (Hear, hear.) But surely
those operations are not to be compared with a case of this
kind, the whole basis of which is an advantage to the
present period and to posterity also. (Hear, hear.) I am
not going to sacrifice the interests of posterity ; on the con-
trary, I am promoting the advantage of posterity by the
course I am proposing to the committee. It may, perhaps,
be said, " You might do that by taking another course."
Certainly, that is a question open to discussion and to ar-
gument. Still the fact is that by this proposal the house
will secure to posterity an absolute reduction upon the an-
nual charge of the debt. But I wish the committee to un-
derstand—and I urge this as a plea on behalf of my pro-
position—that I freely assent to the general doctrine that
it is not desirable to increase the nominal capital of the
debt. (Hear.) All I ask you is this, that you will, I do
not say indulgently, for it is not a matter of indulgence,
but that you will fairly and candidly look at the case as it
stands, and consider the great object of public policy that
we have in view. The Government may be right or it may
be wrong in any proposal of this kind—and I will state by
and by more distinctly how the proposal will he guarded—
but the proposal unquestionably rests upon a broad ground.
(Hear.) I have said that the great object which her Ma-
jesty's Government had in view was to establish, if it be
possible, an irredeemable public debt, which will bear a
respectable price in the market, and bearing an interest of
not more than 2,1 per cent. It is for that purpose we
propose to include these among the various forms of
the conversionable Three per Cent. Stock. Perhaps
you will tell me, " You may secure that by means of
Exchequer bonds." I should be delighted to do that. I
trust we may ; but we may find that we cannot bring these
bonds into credit and character, unless we give a power of
redemption to the holders. That may be very well, but,
any operation of that kind, involving redemption at a par-
ticular time, when you might be in difficulty or in
war, must necessarily be a limited operation, and it does
not lay the ground for that which we want to see—namely,
the creation of a Two-and-a-Half per Cent. irredeemable
public stock. (Hear.) Give us this public stock, and then
I say we shall have made solid ground where now is only
morass ; then may tread where we could not before ; then
we shall have a fixed point down to which we can work ;
and we shall have something by which to direct our opera-
tions in future with certainty, where all now is compara-
tively speculation and suspense. If, I will add, the com-
mittee think it is a great public object to establish firmly
this Two-and-a- Half per Cent. Stock in such a manner as
shall make it an ordinary subject of commercial dealing,
then I do hope they will not exclude this pas t of the pro-
position. (Hear.) Now I come to a point to which I am
most anxious to call the attention of the committee. It
has been pointed out to us that as the resolutions stood as
first printed it would have been open to all the holders of
Three per Cent. Stock to effect their conversion into this
Two-and-a-Half per Cent. Stock. Though that was not a
probable, it was at least a supposable et.se that such would
be the effect. If 50,00,000/. of Three-and-a-Half per
Cent. Stock were to be reduced into Two-and-a-Half per
Cent- Stock, a reduction in the annual charge would be
effected which would be most gratifying to me. It would
relieve the finances of the country to a very great extent—.
to the amount, I think, of about 1,54000/. a-year. That
would be a most gratifying circumstance, but I certainly
was not sanguine enough to anticipate it. But it was also
pointed out that this resolution would entail an increase
upon the nominal capital of the debt to the extent of
50,000,0001. (Hear, hear.) Sir, I at once defer to that
objection. I do not think any such increase ought to be
allowed. (Hear.) It is not necessary for the purpose we
have in view, which is to lay the foundation of a two-and-
a-half per cent. stock. For great and essential purposes I
ask you to allow me to create this stock ; but it is not ne-
cessary we should allow it to be created to such an extent
as it was felt it might be by the terms included in the re-
solutions. Here I must make an apology to the house.
The draft of this plan was framed with a somewhat diffe-
rent effect ; but in drawing out the resolutions—a most
difficult operation, even if done by the most skilful per-
sons, in order to conform to the rules of the house, and
cover the extent of the object—l must admit they took a
form which, though I did not perceive so clearly as I do
now, left them open to the just objection that they might
go to the whole capital of the Three per Cent. debt, and
thus entail much difficulty. But it is understood, I admit
at once, that that ought not to be the case—(hear)—and I
propose to meet the difficulty by an alteration that has
been introduced into the reprint of theresolutions. If the
committee will have the kindness to turn to the reprint of
the resolutions they will find that the amount to which
this Two-and-a-Half per Cent. Stock may be created under
Ilia. authority of the act to be founded upon the resolutions
is l4nitiatkel rue30,f003,0001. Some additions to that amount
South
eoe _rom the compulsory commutation of the
ever, to into Stock. It is not necessary, how-
that by An I fun now concerned to say is,
utmost
t„,”.• tliewa resolutions, as it now stands, the
Cent. st7(wLi
,eation 'of this new T d-a-Half per
lust apprehensionstia"), /Tr, I proose,wtoheann, to meet the
BdtlubcjeeLtt by the lipaitaa'n-i-an-_6T? been expressed upon this
Mr.
stock t
which have been thus intro-
The CHANCELLo°lviomftlithee EXc be apportioned
ri RItIeimA:11::)b-1111
allyheattyteritZtrnt,:::3le in the books
Ebßoo—ksßYatPrith°o-
- When entr7e(slonshei
ate thea &Dna Bank,
.inonclundinf g the names 0
aA.ouuent of 30,000,0Z1:a-lialf
Cent. Stock option
thei axour
of
the Twli-e rrties exer-
image
will
beithont
aPPoTtionmentthen
power will cease.
by priority, and it will be he
Ptheer
any difficulty. The effect ofliilecdf think, ww-a' be
the utmost nominal addition that
, that
capital of the national debt under theaup take
rhaiel, to the
you thus to confer will be somethin,,era-.o7oetrism,
ittee is, that a noini-
Fmapared with the
What, then, I would put to the co'
nal addition to the capital of the debt c
small 'price to pay for the
present annual saving, is a very
attainment of such an object—for the object which the Go-
vernmentara:ne...llitalrfupn eid Cent.
Stock. (Hear.) I know no other
way
have in view, namely, thelaying of the of an irredeemable and permanent Two-
with certainty attain the same object. If we cwoul(clhotaie can
by the issue of Exchequer bonds, certainly I should penfiert
it; but, seeing we cannot make sure of it in that
mannrer,l
venture to hope the proposal will have not only the candid,
but, I will venture to say, the favourable consideration of
the committee. (Hear.) I have thus, at a length very
much greater,than I anticipated, gone through the details
of this proposition. I have endeavoured to keep close to
the subject. I thank the house for its kindness. I know
that upon a
question of this nature the attempt to be con-
cise might have led me into obscurity, and have made that
wh• h professed to be an explanation utterly unintelligible
But I have now come to the end of this explanation, and all
I have to say more may be comprised in a very few sea-
terms, With regard to the discretion which I ask yon to

confide to the Government, that discretion may be limited
at any stage in the progress of the bill that will be founded
upon the resolutions. Perhaps it would be objectionable
to introduce new powers to the Government in the progress
of the bill ; but a limitation of their powers could not be
objectionable at any of its stages. There is likewise another
subject, which, though isolated, I may refer to here. It is
one of great importance. It is the subject of the large
amount of stock now held by the Accountant-General in
Chancery and the Accountant-General in Bankruptcy. I
no not purpose by these resolutions that the Accountant-
General in Chancery or the Accountant-General in Bank-
ruptcy shall have the power of exercising the option of com-
mutation excepting as to the limited amount of minor
stock which we are going to redeem. As to the great stocks
it is not proposed to give them the power of exercising the
option. The main reason for this I will state. There is
great reason to suppose—l will not say it is an absolute
conclusion on the part of her Majesty's Government—but
there is a great reason to suppose that more extensive
changes may be introduced into the law with regard to the
large amount of money in their hands. The system at pre-
sent appears to be of a most defective character. No doubt,
as far as regards the good faith upon which that large pro-
perty is held, it is unassailable; but in its nature it is fluc-
tuating capital with a fixed interest. Now, the interest of
the trust funds which are in Chancery is of comparatively
inferior consideration; but the integrity of the capital is a
matter of very great importance. It is extremely hard that
the property of parties who are debarred by legal difficulties
from its enjoyment should be subject to changes eat and
vital changes perhaps—from circumstances entirely inde-
pendent of their wills ; and I have great hope that it may
be in the power of Government, but I cannot venture to
commit them to the subject, to produce a measure that will
place the great amount of these trust funds upon a basis
more satisfactory to the persons on whose behoof and for
whose ultimate benefit it is held. For these reasons Ido
not propose to give the power of commutation of the great
stocks now held by these two officers, the Accountant-
General of the Court of Chancery and the Accountant-
General of the Court of Bankruptcy. I have now only just
to mention what are the alterations that have been intro-
duced into the resolutions—
Mr. HUME—TeII us what will be the saving under your
plan ?
The CHANCELLOR of the EXCHEQUER—My hon.
friend the member for Montrose has just asked me a
most important question. He has asked me what will
be the amount of the annual saving ? (Laughter.) I
do not know what the precise saving will be. I have not
ventured to put this plan to the house as a scheme involv-
ing a saving ; but if it succeeds the amount of saving will
be considerable. It cannot be but that there must be some
amount of saving. I would rather not make a calculation
of the amount, seeing that it does not depend upon circum-
stances that we can control, and which are beyond our
knowledge. If you take 30,000,000/. of Exchequer bonds
and put them out at 21 per cent., the saving upon them,
as compared with a 3 per cent. stock, would be for the first
ten years 175,0001., and after the first ten years 150,CC)l
That would be the amount upon these bonds ; but I by no
means limit myself to that. What I wish to secure upon
that framework is, that when Government shall come back
to Parliament and render an ac3ount of the success of this
operation, it shall be in your power to say whether it shall
be extended or not. Now the changes in ithe resolutions
are these. The third resolution, as it stands now, is a new
resolution, but the object of it is not to make any substan-
tial change. It is only -to make sure that the resolution
shall convey to Parliament the powers I have endeavourer`
to describe in the course of-my explanations, and with re-
gard to which a doubt had been raised whether the
language of the second resolution, if it stood alone, was
sufficient to convey those powers. The eighth resolution,
again, is a new resolution, but this resolution I believe I
may say is, in the strictest wise, merely a formal resolu-
tion. It is likewise to prevent legal doubts, and it implies
no substantial alteration whatever. The most important
change in the resolution is that which the right honourable
gentleman opposito with great rapidity discovered. It is
contained in the 10th resolution. The committee will see
that the effect of it is simply this, that it limits the com-
mutation which may be made of the Consolidated Three
per Cent. Annuities—that is of the great stocks—into two-
and-a-half per cent. stock to the sum of 30,00,000/. as a
maximum. It leaves' it entirely free to go on with the
Three-and-a-Half per Cents. I wish the committee to un-
derstand that. So far as. concerns the Government I do
not know any objection to limit the creation of the Three-
and-a-Half per Cent. Stock, lent there is no danger attend-
ing. its creation. There is no fear of too much ; it is only
of little. We do not therefore propose to attach any
limit upon that; but we do propose to fix this limit upon
the possible creation of the Two-and-a-Half per Cent.
Stock in the resolutions. This is the only change affecting
the general structure of the plan that has been made in the
second edition of the resolutions ; and there is no other
change whatever of any impoi Cant character. The com-
mittee will now be in a condition to judge whether the
change is of that character that would make it desirable
for them to take further time for its consideration, or
whether they would choose to proceed at the present mo-
ment. I, for my part, have discharged the duty which
was incumbent upon me. In conclusion, I have only to
thank the committee for the great attention and patience
with which they have listened to me, and to add that I
shall be most happy, if I have failed in any point to make
clear the intentions of the Government, to answer any
questions which any honourable member may wish to put
to me. (Cheers.) The right hon. gentleman then resumed
his seat.

On the first resolution being read,
Mr. HUME said the plan which the right hon. gentle-
man had just introduced as an experiment should be tried.
As it first appeared upon the oriinal resolutions he was
afraid it would have proved a failure ; but as it had now
been explained, and explained with so much clearness and
ability that no hon. member could fail to comprehend it,
he believed it would succeed. (Hear, hear.) There was
a large class of persons holding property in the funds who
disliked the trouble of the present system of transferring
stock, and who did not like to pay brokerage. To these
the change explained by the right hon. gentleman would
be very acceptable, whilst the plan generally would prove
a public convenience. He suggested that it might be de-
sirable to devise some method whereby theiddividends could
be paid in the large provincial towns. The change might
affect the interests of London bankers and agents, but it
would be an immense facility and give great satisfaction to
the community at large. It was only right that the stock
exchanges of towns like Birmingham, Manchester, Liver-
pool and Glasgow, and other places, now that communica-
tion was so easy and rapid, by means of the electric tele-
graph, should be placed upon the same footing as that of
London.

Mr. 'WILLIAMS said the plan involved an increase of
3,00,000/. to the amount of the national debt ; and to this
he objected on principle. This system had been the bane
of the financial policy of this country. From the year
1775, the commencement of the American war, down to
the year 1816, the termination of the continental war,
there had been an addition to the pi incipal of the national
debt of no less than 589,00,00/. But how much of that
amount had been received ? Why, only 417,000,0001.
Thus, by abandoning the sound principle of having 1001.
sterling for 1001. Consols, the nation had been saddled with
171,000,0001. of debt more than it ought to be, Again,
when the right hon. baronet the President of the Board of
Control (Sir Charles Wood), as Chancellor of the Exche-
quer, raised the loan of 8,000,0301. for the relief of the
people of Ireland, a large amount was added in the same
manner to the national debt. Such additions amounted to
a declaration that wo never intended to pay it. In his
opinion the right hon. gentleman had commenced dealing
with the debt too soon. If he had delayed any scheme for
reducing the intend for twelve months from this period,
the operation would probably then have been attended
with advantage.

Mr. HENLEY had no great objection to that part of the
scheme which proposed to deal with the South Sea Stocks,
nor to the proposal for creating a new species of pub-
lic security, called Exchequer bonds ; but he did not
see any gloat public advantage in creating new stock
markets in different parts of the country. He
could not conceive how any great difference of prices
could exist between London and any other town, when by
means of the electric telegraph to which the hon. member
for Montrose had referred,° the prices on the London Stock
Exchange were conveyed in five minutes from one part of
the kingdom to the other. That shut out the notion com-
pletely of any difference of prices in different parts of the
country. (Hear, hear.) With respect to the Exchequer
bonds he agreed perfectly with the right hon. the Chancel-
lor of the Exchequer, that securities of that nature passing
from hand to hand the same as Exchequer bills, would be
a considerable convenience to the public, (Hear, hear.)
But the right hon. gentleman had not informed the com-
i mittee, nor did the resolutions informthem, in what amount
these bills were to be issued.

The CHANCELLOR of the EXCHEQUER—The amount
stated is 30,009,0301.

Mr. HENLEY : The right hon. gentleman did not say
whether they were to bel,ooo/. bonds, or 5,0001. bonds or in
in what amounts they would be issued.
The CHANCELLOR of the EXCHEQUER—The bonds
will be 1001. and upwards.
Mr. HENLEY : If the bonds were issued in 1001. and
upwards, that would very much increase the convenience
which he admitted such securities would afford to the pub-
lic. (Hear, hear.) One part of the scheme struck him as
requiring some consideration. Although the sight hon.
gentleman took the limit of 30,000,0001. he evidently con-
templated, if this operation should be successful, to con-
tinue to issue, at some part of the present year or of a sub-
sequent year, these securities. It was not usual to entrust
the Government with the power of acting on the Money
Market by means of issuing securities of this nature to a
certain degree without the control of Parliament. It was
said that the issue could not exceed a certain amount ; but
to give the minister of the day the power to act on the
market to the extent of 30,000,0001. without control, was
not a course of proceeding which Parliament was in the
habit of taking, and he should be sorry to give an opinion
on the matter off hand. He was the last to suppose that
any Minister would make an improper use of powers en-
trusted to him, but the great point was, not only to know
that he would not do it, but to relieve him from the pos-
sibility of being suspected of doing it. This was only to
be the beginning of important changes, and therefore it was
a very strong reason why the committee shouill • not be
asked to agree to the resolutions without having had time
to examine them. Another valid reason for some delay,
was the fact that these resolutions had assumed a very dif-
ferent shape from that in which they were first presented.
The right honourable gentlemen had admitted the inconve-
nience of adding to the capital of the national debt. The
right honourable gentleman had spoken in language much
mere forcible than he could use of the great wrong of so
doing. That conviction seemed to have sprung up within
the last twenty-four or forty-eight hours, because unques-
tionably these formal resolutions did not indicate anything
which would lead a human being to suppose that the right
honourable gentleman had any such indisposition to add to
the capital of the national debt. He now said it would be
an abomination to increase it to the extent of 50millions, but
he hail not the least objection to increase it by 3 millions,
that he might have the pleasure of founding a Two-and-a-
inillions, but admit
utaatiti zrtiC, cl 4. Stock.i.. (Hear, hear.) The right hon. gentle-
to know what was thea ufeseatOf
—it is but a litetlento
mit it would be an aggravated sin to add 50
?aye only this little morsel of 3 millions
8 ula a
1,.e.r l3llsgtohe:inf laugh]—and I shall have per-
foo r:uaed aro great naatioenla
Cent.
Two-and-a-Ralf
year he could ."Waosnnot sal)
creating these 30 mill' f
Hear, hear.) He should like
lOns 0
glum,
moionable ? If the right
could only be done
hon. gentledmanreittetl to
be
objectionable
snaking
Stock -without bo
create with this TWO-0.
And if he was
I,the use of
illdi to think that next
a begimi adding to the debt, whoZ-Ralf per Cent.
ieeatrharwto..nartexcFag!A'
1 shilling to the per Cent, Stock witii( s'ila°
a'arlfor the year p.faateurivaaira3
capitalo_9f the debt, then he yrs enoughtaadadkii
adding
to
could
of
to commute on any oath making
a
very bad bargarrisiht,toro
whatwi another point, tho
ai ilviglihene propose, eot
6nfeeulrFn ;1(.4.
(Hear hear.)
slight one—uponplea of justice was i
shut out irons this commutation trustees Its
partiesrt of Chancery ? He thought,
ginevneesrtalledybyspoerateirngo,f
autheCou
if should be allowed to take
hey so chose, within a
advantage of this scheme,
limited period, He doubted tho justice of shuttin
g out

any one, and the right hon. gentleman had assigned no
reason for the exclusion pointed out, except that he had
some scheme in the clouds for dealing with all sums
in the Court of Chancery. Was the house to take that as
an indication that the Chancellor of the Exchequer in-
tended to lay hands upon it? (Hear, hear.) At all
events it was an unusual course, and hardly just to make
an exception ; and that was another reason why the house
should not be asked to come to a conclusion to-night.
With regard to the general scheme, what effect it would
have on the other securities of the ;country—whether the
Exchequer bonds would circulate at a greater premium
than Exchequer bills—were questions very difficult to deter-
mine until the test of experience had been applied. He
thought the issue of a Two-and=a-Half per Cent. Stock
was a very important change, and that the several other
changes proposed were of such moment that it was not
fair of the Government to ask the house to come to a reso-
lution before they had been well considered, especially as
he did not anticipate any public inconvenience would re-
sult from a few hours' delay. (Hear, hear.)
Mr. E. ELLICE took an entirely different view from
the right honourable gentleman who had just sat down,
with regard to the advantage or disadvantage of delay in
passing this resolution. It must not be forgotten that
this proposition exceeded by far in amount every attempt
made by any previous finance minister of this country to
deal with the national debt, and as it laid the foandatlon
of a greater scheme hereafter, it ought to be viewed with
the greatest indulgence by the house, and the greatest pos-
sible facilities ought to be voluntarily given to carry out
the object of his right honourable friend the Chancellor of
the Exchequer. (Hear, hear.) He confessed that as the
resolutions originally stood he could not have supported
that part which added to the capital of the debt, but that
had now been modified. The right honourable gentleman
opposite complained that his right hon. friend (the Chan-
cellor of the Exchequer) only dealt with part of the debt.
He did not know how any Chancellor of the Exchequer
could deal with the whole. (Hear, hear.) He should
never have thought it could have entered into the contem-
plation of any member of that house, that the Chancellor
of the Exchequer would have come down and proposed, the
commutation of 509,009,000/. of debt, either by reducing
the interest to 2i per cent., or offering to pay off
the holders of the stock. (sear.) The only possible
principle on which the operation of reducing the debt
could be conducted was that proposed by the Chancellor of
the Exchequer. He had always thought it desirable for
this country to create a Two-and-a-Half per Cent. Stock,
as had been done in Holland, which should find favour
with the 'public, and afford the means of ultimately re-
ducing the interest on the whole debt to that sum. The
right honourable gentleman said it was proposed to give
great discretion to the Government. He should like to
know how the scheme could be carried into effect without
it. So far from throwing obstacles in the way, ho should
have expected the right hon. gentleman would have done
everything in his power to facilitate an object which must
be of such benefit and advantage to the country. (Hear.)
The right hon. gentleman made objection to the holding
out advantages to the stockholders. He did not "say there
had ever been a case analogous to the present, but when-
ever Exchequer bills had been funded the advantage was
given to the parties subscribing, and the same inducement
must be given, unless they were prepared to deal with the
whole debt. With respect to the funds of the Court of
Chancery, for the last thirty years, ever since the peace, he
had been astonished that in this country more attention
was not paid to the interests of property, and that no pro-
position had been made to place those funds on a more
reasonable footing. Nothing made a case co clear as an il-
lustration. He recollected the executors of the late Duke
of Queensberry were called upon to invest upwards of a
million of money in the funds, in consequence of suits be-
ing instituted in the Court of Chancery against them.
When the stock was purchased it was at 52-53, and when
it was sold, at 96-97; so the result was the residuary
legatee made a profit of three, o;.• four, or five hundred
thousand pounds. That was a very good bargain ; but
suppose to-morrow he was required to invest for an infant
a large sum in stock at 103, who could tell that the con-
verse of the transaction would not take place, and he
might have to sell at 52 or 53 that which he invested at
109. Such a thing might occur. We had now been forty
years at peace, and he hoped we should be at peace forty
years longer—at least as long as he lived—but suddenly
we might find ourselves involved in war, and that contin-
gency justified his right hon. friend in hazarding a great
deal, and in making this great; experiment to obtain the
public advantage. To revert again to the Court of Chan-
cery : the court would no::, allow infants' property to be
dealt with in any other way than to be invested in the
funds, and was it fit that the property of infants and other
persons which was obliged to be invested in the funds
should be constantly exposed to these risks, and that no
attempt should be made to devise some scheme to give
security to capital ? He tendered his thanks to his right
hon. friend for havine, been the first to grapple with this
subject. (Hear, hear.) He entreated the house to give
every possible facility. It was, of course, a great experi-
ment. The right hon. gentleman did not profess to intro-
duce it in any other light than to enable him to take ad-
vantage of a favourable moment to attempt a reduction of
the interest of the national debt. He hoped it would be
successful, and he could not understand the grounds on
which, if they gave the Government their confidence, and
wished to enable them to go on with their measure, they
should withhold their assent to the resolution. What good
could result from postponing it for a day ? It would only
keep the public mind in a state of excitement. (Hear,
hear.) They must deal with a case of this kind by repos-
ing confidence in the Government, and giving them every
facility, or they had better at once reject it. The public
ought not, upon a subject of this importance, to be kept in
doubt and uncertainty. He, therefore, entreated the
house to go on with an experiment to which everybody in
that house wished success, and which was of such great in-
terest to the public.___

Mr. Alderman THOMPSON was quite ready to ac-
quiesce in the recommendation which had just been.made
to them to give the question before them a fair, candid,
and impartial consideration. He admitted the immense
magnitude of the question as regarded the public interest.
Most certainly during the period he had the honour of
sitting in that house—now upwards of 33 years—he had
never yet heard from a Minister of the Crown so bold a
measure in reference to the national debt. (Hear, hear.)
But, while he admitted the magnitude of the question,
and while he was anxious to give it a fair and candid con-
sideration, he must still ask whether it was not right that
members should have at least 24 hours to consider it ; for
it should be recollected that the first edition of the resolu-
tions was only delivered yesterday morning, and the second
edition had only reached his hands since the house had
met ? If the scheme was a wise one, why not give
members time to consider it ? (Hear, hear.) Tie scheme
contained matter of great and serious importance. • He
had long thought that the South Sea debt should have
been dealt with before now. It occasioned a charge to the
country for which there was no sufficient justification.
He admitted also that it was desirable to create a 21 per
cent. stock, but the question was, whether the operation
could not be effected at a more favourable period than the
preeent—at a period when the scheme would be sure to be
carried into effect and a saving effected to the public at
large, instead of putting it forward as a mere experiment,
as the right hon. gentleman himself admitted it to be.
For himself, he (Mr. Alderman Thompson) did not think
that the present was the best time for the operation. It
appeared to him also, from the little consideration he had
been able to give the subject, that the right hon. gentle-
man's resolutions contained principles which acted in op-
position to each other. The right hon. gentleman took
credit to himself for having created a great saving of in-
terest on Exchequer bills. But he (Mr. Alderman Thomp-
son) would ask any gentleman connected with the mone-
tary interests] of the counry whether it was possible for
the right honourable gentleman to keep 18,000,0001. of Ex-
-chequer bills at 11 per cent. in floating circulation with
Exchequer bonds at 2s per cent.? (Hear, hear.) The
one was utterly inconsistent with the other. He did not
deny that, to a certain extent, the Exchequer bills would
be taken, because they were the most convenient security
which individuals could hold for temporary and particular
object 3 ; but if the right hon. gentleman expected that
he would keep 18,030,0031. of them in circulation at 11
per cent. with his Exchequer bonds at 24 per cent. he
would find himself mistaken. Besides, if ho paid 1 per
cent. more upon Exchequer bonds than upon Exchequer
bills, would not that occasion a loss to the country? (Hear.)
In connection with the proposed bonds there was one thing
which he viewed with considerable alarm, and that was
with respect to the conditions on which they were issued.
He should be quite indisposed to grant to any Government
whatever the power of issuing bonds on such a condition
as that of redeeming them when they thought fit. His
own opinion was that they should be redeemable at some
fixed and positive period, as he believed all foreign bonds
were. It might indeed be very inconvenient to have bonds
to the extent of 20,003,0C31. or 30,030,0031. falling due all
at once, at a particular period. Still that difficulty had
been met by other countries, and why not in ours? (Hear,
hear.) On the whole, he was quite willing to show indul-
gence on this important question, but he did think the
country would expect that the resolutions should be de-
layed at least till next week, to allow time to consider
their effect.

Mr. J. B. SMITH confessed that he had felt great alarm
on reading the first edition of the resolutions of the Chan-
cellor of the Exchequer. The second edition he had not
yet seen ' • but he understood, from what had fallen from
the right hon. gentleman, that his original proposition had
been so far modified as that he now proposed to add only
30,000,0001. instead of 50,000,0001., to the nominal capital
of the national debt, though he still adhered to the bonus
of 10 per cent. for the purpose of establishing.a 2A, per cent.
stock, giving thereby a bonus of 3,009,000/. for that pur-
pose. He thought that hon. members should inquire,
before assenting to a resolution of this kind, whether the
right hon. gentleman intended to follow it up by the crea-
tion of a larger amount of stock than 30,000,0001. ; be-
cause, if not, where was the use of passing the resolutions?
(Hear, hear.) It appeared to him that it would be better
to wait, and take their chance of a more favourable oppor-
tunity of reducing the interest of the national debt. He
(Mr. Smith) was disposed to think with the hon. alderman
that there was great doubt whether Exchequer bonds at
2A per cent. interest and Exchequer bills at 1,1, would cir-
culate together. (Hear.) He agreed that it was desirable
to take little more time to consider the important subject
before the house, and not decide upon it that night. (Hear,
hear.) The Chancellor of the Exchequer might do well to
consider whether the time might not have arrived when
some effort should be made to reduce our debt ; whether
any scheme was practicable for paying off a portion of it.
He might perhaps some day be induced to ask for a com-
mittee to inquire into the practicability of that. If that
object could be effected it would afford great facilities for
reducing the interest.
Sir F. BELLY wished also to submit to the Chancellor
of the Exchequer whether the house could with any pro-
priety be asked to proceed to a decision upon this vast and
important question that night. (Hear, hear.) The effect
of the resolutions was to deal immediately with about
10,000,0001. of the national debt, and possibly with nearly
500,000,0001. Gentlemen, on coming down to the house,
found that no less important a change had been made in
the resolutions than a limitation of that portion of the debt
with which it was proposed to deal to 30,000,0001. ; and
this change must be considered with respect to its effect
upon the option proposed to be given to the fundholder.
What was the option given to him ? Unless he (Sir F.
Belly) entirely misapprehended the resolutions, the appa-
rent option was absolutely nugatory, and neither more nor
less than a pure and mere delusion. Contrasting the pro-
posal to convert 1001. into 1101. 21 per cent. with the
other two modes of conversion proposed, no man in his
senses could hesitate for a moment which ho could accept ;
and the idea of putting this forward to the country as if it
were really a question of equivalents, the one as like to the
other (as the right hon. gentleman said) as two peas—the
idea of putting forward these proposals as in any way equal
as approaching to each other in advantage and disadvan-
tage,
,was a pure delusion. (Hear, hear.) As had been said
there was nothing like a plain illustration :—then suppose
theia4,
doubt
bto
three
or
tnfehee
er
converting
proposalsbo efnel fil
to
. oSai
tto
hu eNtvha
s considerable Seaut
ont r
country
t:ac
might
interestohrportion
iboconsidering
termedot of t
the
accept.
e which
incalcu-
labletc
national
ho
Nn oa of
ciltetasa into.1per cent. stock on the terms here stated ; but
accepting ockery to pretend that any one would dream of
that proposal if ho could obtain either of - the