The Sun.
London, England, 1854-04-12 00:00:00

present state of public credit is not unsatisfactory. About being about to make a statement had caused a great
a fortnight ago something, which I will not designate a deal more alarm and apprehensiou than had eakted before.
panic, or even alarm, but only apprehension prevailed. No (Hear.) It was bruited about that they were to have a
people in the world have more self-command and know- loan, that a frith income-tax was to be proposed—in fact,
ledge of their own affairs than the people of this country. ell' sorts of rumours were abroad, and it turned out at last
In times of trouble and disturbance the imagination is ac- that all the right hon. gentleman wanted was to compare
tive, and men sometimes take an erroneous view of their the state of the French and English funds, and to tell the
position, but in this country the public mind soon recovers house that the English funds were not so low, and the do-
from any temporary aberration of this kind. Let us look ficiency not greater than it was in 1844 —a period following
at the matter as it stands. Perhaps the best way of esti- the enactment of Sir R. Peers income tax, which was in-
mating the present condition of public credit is to compare tended to correct the very evils which he (Mr. Baring) was
the price of public securities here with the price of corre- afraid were now arising. (Hear.) He certainly should not
spending securities in the most favourable foreign couutry. have thought it necessary for the right hon. gentleman to
and secondly with their price in this country at a former enter into so long a statement for the single purpose of re-
period. I will therefore compare the state of our public moving any apprehension which he might think existed.
credit now with what it was twelve months ago, and with He could see no cause for Alban] or apprehension ; the
the state of the public credit of France. On the Ist of only mode in which any cause could arise would be by mis-
April, 1853, the price of the French Three per Cents. was management. and he trusted that after all that had passed,
79f- 25c- ;on the Ist of April, 1851, they were 62f. 60c. ; the Chancellor of the Exchequer would, in his future
so that there was a fall of 16f. 65c., or nearly 2l per cent. financial proceedings, show more prudence than he was
I will now take English Consols.. On the let of April, afraid had been displayed during the last year. (Hear.)
1853, they were at 99k; on the Ist of April, 1854, they Ho had certainly heard with great regret that the right
were at 861. Thus there was a fall of 133, or a decline of hon. gentleman recognised as the basis of his system that
about 14 per cent. in the value of those great securities in he should not provide for the expenditure which he had to
England, compared with 21 per cent. decline in similar se- meet by the incoming revenue, but that he should rely
curities in France. (Hear, hear.) Now, compare the pre- upon the subsequent accruing revenue, and meet the deli-
sent price of Console with what it was 20 years ago—and ciency by Exchequer-bills. He quite agreed that the Go-
I trust the house will remember that we are in the midst vernment had a very fair claim for accommodation and
of an European war, and that we are called upon to pro- ' assistance on the Bank of England, seeing that no private
vide extra armaments for the purposes of the war. Ido credit could be maintained in this country if the slightest
not propose to go back to years of war in producing my suspicion were thrown on the maintenance of the public
standard of comparison ; but I assert, that compared with faith. The Government had the first claim on the Bank no
years of peace, the present state of the public funds is not j doubt, and that' assistance under ordinary circumstances
altogether devoid of material for satisfaction and congra- might be rendered by the Bank, not only without damage
tulation. There are six, within the last 20 years of peace, to the commercial body, but also with profit to itself ; but
in which the price of Consols has gone lower than it now the right hon. gentleman must remember, before calling for
is in the midst of war. Those years are-1847, when the that assistance too often and too systematically, and be-
price was, 793 ; 1848, when it was 80k. Four other years fore making deficiency-bills the basis of his system, that
preceded—years of peace—when Consols still went down. circumstances might arise which no Government could
In 1841 they were 87k ; in 1840 they were 87 ; in 1836—a foresee, in which that assistance, if demanded from the
year of great prosperity—they declined to 86i; and in Bank, could not be afforded without interfering very
1834, a year of uniform prosperity, they were only at 87i. largely, under the present banking system, with the con-
It appears, therefore, that you have not always been able dition of the banking community. His right hon. friend
to keep up the price of Console. What is the state of our the member for Backs had alluded to the evidence of the
public securities now—in the midst of disturbance and hon. member for Kendal, but it would be seen that that
menace—compared with France, or with a few years ago hon. member, when giving evidence and advocating the
in this country ? On the Ist of April, 1853, Exchequer- course taken by the Chancellor of the Exchequer of relying
bills in England—l am going to institute a comparison be- on deficiency bills, had very shrewdly remarked inimedi-
tween Exchequer-bills and similar documents in France, ately afterwards that in that case the bill of 1844 must be
Bons de Tresor —stood at 1k per cent. ; on the Ist of April, altered. Without entering into an argument on that sub-
-1854, they stood at 3 per cent., being an increase of up- ject, he might say that if the act of 1844 was to be fairly
wards of 1 0 per cent. in the rate of interest. On the Ist tried, the Government must not resort to the system of
of April, 1853, corresponding documents in France bore a keeping small balances, and obtaining the aid of the Bank
rate of interest varying according to the terms—according by deficiency bills. In fact, a shrewd opponent of that act
to echanges—from 1k and 2to 3 par cent., the mean rate could not take a course more likely to damage it than to
being 2i per cent. On the Ist of April, 1854, our bills advise the Chancellor of the Exchequer not to provide for
stood at 4 5, and 5t per cent, the mean rate being 5 per his deficiency, but to rely on the aid of the Bank of Eng-
cent. While we, therefore, have an increase of from 1k to land by means of deficiency bills. He was convinced that
3 upon 1001., the French increase is from at to 5, or very great injury would arise to public credit if this system of
nearly 122 per cent. I have, therefore, shown that the relying on what were in point of fact advances from the
rate of interest is lower in this country than in France, Bank were resorted to, and it was on that account that he
and that the rate of interest in several subsequent years is desired to enter his protest against it as a policy fraught
lower than it is in France. This is the whole statement with danger to the financial security of the country. In
with which I think it necessary to preface the motion France the system had been too much strained, and great
which I have to make. I have confined myself strictly to difficulty had been felt in consequence, and the right hon.
matters of fact, although I might have had much more gentleman, too, might find it not so easy to get out Exche-
to say—altogether warranted by the importance of the quer-bills as he would have found it toikeep them out at a
subject—upon this very subject. No doubt, many oc- reduced rate. He might
_find it, too, not so easy to borrow
casions may arise on which this portion of the manage- money from the Bank of England, and then, probably, lie
ment of the debt may be discussed. I trust I have would be driven to apply for a loan at a much less favour-
shown that, taking all circumstances into consideration, able moment. He would not, however, be supposed to be
it is needless to view with any alarm or appre- of opinion that the country was not and ought not to be
hension what has occurred within the last few weeks. able to raise a loan without the least damage to the future
With respect to the unfunded debt, it is moderate, and prosperity of this country, and he thought the right hon.
likely so to continue, which is gratifying under the diffi- gentleman in his budget speech took a very narrow view
cult and menacing circumstances in which this country of the subject when he stated that our great debt threw
and the whole of Europe are placed. Having said thus impediments in the wa. of our raising a loan. Prove
much, air, I will only move that the balance-sheet be laid the war to be just and necessary, and every effort would be
upon the table. made by the country to carry it on, and although it might
Mr. DISRAELI—WhiIe I agree with the right hon. be very well to say that so long, as they could they should
meet the expenses of the war by taxation in the year, yet
gentleman that the occasion for laying the balance-sheet
when those expenses were changed from 2,009,0301. to
upon the table is not a convenient opportunity for discus- 20,000 0001., they would not be able, neither would it be
sion, still it must be admitted that the Chancellor of the just; to raise such a sum as that 'from the annual taxation,
Exchequer has opportunities to collect and compare his from the capital, in fact, of the country. If they attempted
such a course capital would be driven out of the country
facts and statements which I have not. I accept the pro-
the resources of the country would be impaired, and pos-
mise of the right hon. gentleman, that he would make no terity would feel its effects quite as much in proportion as
observations beyond those naturally and necessarily educed the present generation. (Hear, hear.)
from his motion upon the paper. The returns which I Mr. LAING agreed with the Chancellor of the Exche-
quer that great good well be dme by disabusing the public
have moved for have no reference to the present matter in
dispute. I confine myself, therefore,, to matters of fact ; mind of the statements which laid been put forth withregard to the great amount of the deficiency-bills. He
and I beg to remind the house, in vindication of previous believed there was nothing whatever in the present state
statements of my own, of one or two circumstances which of things to justify anything like alarm or apprehension.
should not be forgotten—l mean, first, as to the probable From the figures before the house it appeared and our
amount of balances in the Exchequer at the end of the finan. balances in the Exchequer had been diminished by some
5,000.0 0/. or 6,000,000/. below the amount at which they
cial year; and, secondly—a very important point—as to the would otherwise have stood, end that that amount had
amount of deficiency bills. I stated that, so far as I could been employed in pitying off the South Sea Stock an, other
form an estimate, it appeared to me that the balance in funds. He went with tbe right hon. gentleman in mak-
the Exchequer, upon the sth of April, would not exceed ing that experiment, but he thought that when it was
3,000,0001. The right hon. gentleman upon that. occasio n found a mistake had been made, it would have been the
said, that he had the misfortune to differ from me I beg Wiser course to propose a conversion of a large proportion
to remind the house that my estimate was not prepared of the stock into ordinary stock, offering some "mall bonus
with the data which the right hon. gentleman has at his to the holders, which might have induced them to take the
command ; still, the present balance, which is not more, I stock instead of being paid in money. The wisest mode
believe, than 2,800,0001., affords a proof that my estimate of replenishing the balances, lowered by this operation,
is more accurate than his. It appeared to me, also, that would be, he thought: by a loan, and it would be better
the right hon. gentleman would require 6,000,0 )01, of lee- for the Chancellor of the Exchequer to propose it now;
ficiency bills. The right hon. gentleman said that the tie- when he could get it under favourable conditions.
ficiency bills would nut exceed 4,0,40,0001. or 4,500,000/. Sir H. WILLOUGHBY would only say, upon the ques-
I said '6,000,009/. It now appears that they amount to tion of balances, that in his view it would be better for
5,412,003/. I think, therefore, that I was much more the right hon. gentleman, by some means or other, to re-
accurate in my estimate of the amount of deficiency bills store his balances, if necessary, by a direct loan.
than the right hon. gentleman. I did not collect from the The CHANCELLOR of the EXCHEQUER said, the
right hon. gentle can, but I gathered from what he said
two or three weeks ago, that the state of the consolidated right hon. gentleman (Mr. Disraeli) and, still more, the
fund was— hon. member for Huntingdon (Mr. T. Baring) had entirely
The CHANCELLOR of the EXCHEQUER.—It doesn't misapprehended, and, consequently, had mis-stated to the
in any manner affect my statement. What are called the house both the language he had used, and the principles
Consolidated Fund Bills are bills lent by the Bank, but and opinions he had expressed. The right hon. member
not held by the Bank ; but held by the public or, through for Buckinghamshire said, "It won't do for t b
you o ean
the public, by the Commissioners of the National Debt. habitual borrower upon the Bank ;'• and the hon. member
They amount to about 750,000/.
Mr. DISRAELI continued —Having adverted to these for Huntingdon declared that he (the Chancellor of the
two topics, I must make to the house one or two observe,- Exchequer) made the use of deficiency bbl's the- keystone
tions upon the subject of deficiency bills. I confess that to of his system of finance. Now, he had never used any such
me the statement of the right hon. gentleman is not antis- language, and had never done any such thing. What was
factory. The right hon, gentleman acknowledges that the
public requirements exceed the resources at the end of the the truth about his being an habitual borrower ? Why,
financial year to the amount of 6,000,0001., but he says this was the first quarter he had borrowed at all—(hear)—
that he did not require to borrow that amount from the and, under such circumstances, it was very hard to be
Bank—the revenue came in, and he managed to get on, but charged with being an habitual borrower. He had been
he could not conceal from the country that he was at that furnished by the Bank with a statement of the amount of
time deficient to the extent of 6,000,0001. The right hon. deficiency bills issued and brought to charge during the
gentleman may put off the evil hour ; still the fact remains last quarter, and the result of this statement was, that there
that the public Treasury is minus 6,000,0001. The right were only eight days during the last quarter—during the
hon. gentleman treats very lightly, and I must say that he previous quarters he believed there was not any at all—at
very ingeniously glozed over, the very important subject which the Bank was in advance of the public balances,
to which lam about to refer. I shall follow his example, and upon those eight clays the amount of accommodation
and adhere to facts, but not enter into any arguments varied from 29,0001. to 125,0001. The sum of 125,000/ was
upon the subjects, although I must observe that the views the largest amount of accommodation from the Bank dur
which the right hon. gentleman expressed upon the subject jug the last quarter. There was, he repeated, no founda-
are not the views which are entertained by men of busi- tion for the statement that he was an habitual borrower--
tress, who, I believe, daily experience the evils of the sys- far less that he had made the issue of deficiency bills the
tern which he proposes to encourage. See, now, what was keystone of his system of finance. Nothing which he had
said upon this subject before the Distress Committee in ever said, and nothing wh.ch he had ever done, bore the
1848. I shall not cull an answer here and there, but I slightest correspondence with the statement of the hon.
shall quote evidence which I believe will be undeniable— member for Huntingdon on this point. He lied, indeed,
I mean the evidence of the hon. member for Kendal. He said—and this was a matter no doubt open to
discussion—
was
asked :
that a moderate and limited use of deficiency bills was, in
"By the returns before the committee, it appears that in his opinion, a good and prudent practice
October, 1841, there was a demand for 4,800,000/. ;in Oc- Mr. T. BARING—I did not attribute to the right hon.
tober, 1812, for 4,900,000/. ;in Oct., 1843, for 3,700,000/. ; gentleman the use of the expression that the issue of defi-
iu October,'lB44, for 2,500,00) ; and in October, 1845, for ciency bills was the keystooe of his financial system. I
829,0001. Subsequently to that, the Exchequer balances only said that was the tenour of his argument. (Hear.)
becoming full, that demand ceased ; but supposing that in The CHANCELLOR of the EXtellEQ UER continued—
October, 1817, there had been a demand upon the Bank of How was it possible that any such deeuction could have
England for advances for the public service to the extent of been made from what he had said, when his argument went
three or four millions, what, would have been the cone- only to the extent that you might within narrow limits, go
quence of such an advance in the then state of the to the Bank for advances which might be taken up within a
reserve ?" week or fortnight of the quarter's revenue? The amount
His answer was— of deficiency bills was the result of the extraordinary de
" Either the Government must have been refused, or the mends made for the liquidation of stock. But a more
directors must have limited the commercial discounts, in important point than this was, that the right hon. gentle-
order to meet the demands of the Government, or they must man• and other hon. gentlemen were under the impression
have sold stock to draw in the notes and advance them again that a deficiency of this kind, once created, was not to be
upon deficiency bills." restored without the use of some extraordinary measure.
The examinatioh went on. Now, he might tell the hon. member (Mr. T. Baring) what,
if he might say so, was the keystone of his system of
"It is unnecessary to pursue the consequences of refusing finance. It was invariably, to' ask this house to provide an
the demand of the Government, which would have been the income which would more than meet the expenditure of
refusal of the means of paying the dividends, but, passing to the year. (Hear, hear.) That, in his opinion, was the
the second alternative, what do you conceive would have keystone of finance, and his secondary doctrine was this—
been the consequence f limiting the commercial accommoda- that the question of having a large or small balance at the
tion, at that period, to that extent ? There would have been Bank was a question open to discussion, but it was a
an enormous increase to the pressure. It would have been matter of no great moment provided you kept within nar-
almost the ruin of the commercial world to have refused dis- row bounds, and provided you always adhered to the prin.
counts then. If two millions had been the amount of the ciple of avoiding a deficiency upon the year's account, of
deficiency bills, Ido not think the Stock.inarket would have avoiding a fictitious surplus, and of having an income which
borne the sale of two millions of securities at that time. At would always more then cover your expenditure. (Hear.)
any rate, it would have occasioned almost equal pressure at The right hon. gentleman the member for Buckingham.
the refusal of discounts, and a great depreciation in Govern- shire had stated that he trusted he (the Chancellor of the
ment securities, That period of pressure was relieved by the Exchequer) would devise some means of escaping from his issue of the letter of Lord J. Russell and the Chancellor of present situation in respect to the public balances during
the Exchequer. the recess. Now, the statement which he (the Chancellor
"Do you consider that the effect would have been the of the Exchequer) had made to-night was, with the same
i
same with respect to commercial credit if the letter had been exception, what he had stated about the issue of Exchequer issued, not for the purpose of relieving commercial pressure, bins—it was a retrospective statement. He had admitted
but in order to obtain an advance for Government purposes ? that, although he did not consi er there would be any-
I think it would have been a dangerouu experiment for the thing inconvenient or alarming in the present amount
of
Government to have issued a letter for the purposes of Go- accommodation under ordinary circumstances, yet that,
vernment, they would not have had much sympathy on the under present circumstances, the case was not exactly the
part of the public. same. (Hear.) He admitted that at such a period as this
" Then in the event of circumstances happening which, we ought to take what iu ordinary phraseology was called
either by increasing the expenditure of the country, or by more elbow-room, with reference to the provision of means
limiting the revenue of the country, would have the effect of for the public service. (Hear.) Upon that subject it would
reducing the balances in the Exchequer, is there not, as a be absurd to enter into a discussion at the present moment.
consequence, an impending necessity of borrowing upon defi- It might be his duty to take a further view of the demands
ciency bills to pay the dividends ? Certainly. of the public service for the year, anti, if he was unfor-
" Then, in the event of any circumstance reducing the tunately compelled to do so, then would be the time to
banking reserve to the extent to which it was reduced in state to the house the means by which he proposed to place
October last, do you see any mode of extrication from that the Exchequer in what he believed to be a safe and satin-
difficulty at such a period Not any mode of relief from factory condition. (Hear.)
that difficulty upon an application made by Government to The paper was then ordered to be laid upon the table.
the Bank at any period. I conceive Government might have 'ORDNANCE OFFICE.
been relieved by a loan." Mr. MACARTNE I moved for copies of all correspon-
But, says the right hon. gentleman, you had in 1844 and deuce with the officers of Ordnance referring to the decision
1845 to meet an amount of deficiency equal to that which of the Board of Ordnance refusing to entertain the com-
I now call upon you to provide for. But what was the plaint against a senior clerk in the departmentin rortioolaintisotig-
state of the balances in the Exchequer in 1844 and 1845 ? tote an inquiry into his alleged misconduct,
They were much more considerable than they are now. the rules for the guidance of the civil service, *hereby
There is an 'opinion which ought to influence the house he became liable to dismissal.
upon the subject of Government borrowing upon deficiency Mr. MONSELL opposed the motion, considering that it
bills. The right hon. gentleman did not advocate the habi- would be most injurious to the public service if a prece-
tual borrowing upon deficiency bills and we are unable to dent for interference of this kind were established. The
gather what the whole amount of the deficiency bills is likely motion of the hon. member referred to a gentleman (Mr.
to be. But the appeal of the hon. member for Kendal is Garrett), who had been for 25 or 30 years in the public
not the only one. I myself was a member of that corn- service, and who, on account of his merits, had been pro-
mittee, and I remember that we had before us one of the moted over the heads of 10 other clerks in the office, upon
principal partners in the house of Baring and Co.—l mean a strong recommendation of the chief clerk; laud, because
Mr. Bates. What did Mr. Bates say? Mr. Bates attri- he had been thus promoted, persons who were his infe-
buted the panic GT April, 1847, to the fact of the Bank riors in ability and in business habitosnitnhdeucgerdeuannd
thhoent:
being called upon to advance heavily upon deficiency bills, member to make atnheatotarcakoeunpooenohilibiole,
he had transacted,l want the house to consider this. Are we now in a posi- while engaged in
tion which forbids our believing that a panic may ever some business as acveyancer. The fact was, that Mr.
occur again; and is it advisable that we, with the prospect Garrett was not
_prohibited by the rules of the Ordnance-
not merely of an European war, but of a protracted war, office from transacting his busbies as a conveyancer out of
should pursue habitually the much-to-be-deprecated sys- that office, and thecomplaint against him was founded on
tern of borrowiug upon deficiency bills ? I cannot assent the circumstance that he had sometimes answered ques-
to the statement of the right hon. gentleman so far as the tions upon legal points in the Ordnance-office, alai that he
balances in our Exchequer are concerned, or as to the mode hail there referred to certain papers connected with the
by which he proposes to replenish them—namely, by habi- wills of deceased clerks in the same offic® for whom he was
tnally obtaining loans from the Bank on deficiency bills ; acting as executor. Mr. Garrett had in; no single instance
nor can I think it one on which the country can be fairly neglected his public duties; but, on the contrary, had
congratulated. If the right hon. gentleman pursues that arrays discharged them in a most exemplary manner, and
coarse he will find himself ultimately in groat difficulty. he (Mr. Monsell) hoped, therefore, that the house would
I would much sooner that he should, during the recess, not assent to the motion.
devise some means by which he could put an end to that I .r. MACARTNEY wished to state that he had not been
necessity, and then, when the next financial discussion linducedIinduced to bring this subject forward in consequence of
takes place—which I suppose wilt be of a more cont er any representations from the clerks in the Orilnanoe-office,
sial nature than this—the right hon. gentleman would be but from information he had obtained from other soueces.
in a position which would inspire the country with much Mr. HUME observed that he had been furnished with
more confidence than it at present possesses- (Hear
Mr. T. BARING was certainly very much surprised to offices who also. acted as directors of banks or companies,
find that the right hon. gentleman the Chancellor of the and who, in consequence of their engagements in connec-
Exchequer should have thought it necessary to introduce tion with those companies, were frequently absent from
the paper which be had laid on the table with so long and the public establishments. He thought the question fairly
elaborate a statement. (Hear.) If he had understood him arose, whether men who were receiving pay from the pule-
aright, the object of the right lion. gentleman in so doing , lic ought to be allowed to engage in these private under-
was to remove any cause of apprehension which might takings. He had already moved for a retuere on the sub-
exist out of doors; but Vat very nOtiOo he had given of ject, and he reeernmeaded the hon, neentber fQX Antrim to