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

that I did not know in the month of March what would be
the state of trade, what would be the character of the
harvest, what would be the state of Europe in the latter
part of the year. (Hear, hear.) The right hon. gentleman
says that these things have nothing to do with the matter.
Nothing to do with the matter ! Nothing to do with the
rate of interest upon Exchequer-bills. Why, if the right
hon. gentleman will investigate papers relating to the finances
of the country, let him investigate some other papers. Let
him ask himself what was the state of all these symptoms
• , 'which determined the condition of trade—which determined
, the state of the money market at the beginning of last year,
and what was the state of tridetand of the money market at
the latter part of last year. Let httreask hirneelf what was
the -state of the bullion in the Bank of ,England in January,
and what was its condition in September; what was the price
of corn in January, and what was the price in Oct. and Nov.;
• -what was the rate of discount charged by the Bank in Jan.,
• and what was the rate charged in Sept. (Hear.) I have not
by me the returns as to what the rate of discount was in Jan.
• lam quoting from memory; but I believe lam correct in say-
's • ing that it was 21 per cent. [An Hon. Mruezn--2 per cent.]
Well, certainly, not more than 21. In Sept. the rate of dis-
count had advanced to 5 per cent., and the right hon. gentle-
• man, forsooth, wants to make me responsible for this increase.
(Hear.) But the right hon. gentleman who thus passes by
facts which ought to be plain as the sun at noon day—
Mr. DISRAELI—I only referred to the fall iu the price of
Consols.
The CHANCELLOR of the EXCHEQUER.—The right hon,
gentleman shall have that subject by and by. The right hon.
gentleman made no reference to the increased rate of discount
charged by the Bank of England, to the rise in the price of
corn, to the state of the bullion in the bank ; but he does re-
fer to the operation with respect to Exchequer-bills, as if it
had been. a mere freak on the part of the Chancellor of the
Exchequer, charging upon me the additional expense he
said it entailed upon the country. But, sir, the right hon.
gentleman is not correct in his facts. The right honourable
gentleman is not right in saying that there was any loss at
all in consequence of what I did in respect to Exchequer-
bills ; nor does he give a fair or true representation of the
case as it regards the premiums upon these Exchequer-bills.
Why the right hon. gentleman, it may be observed, after
telling us what was the rate of premium upon Exchequer-
bills before the interest was reduced—instead of giving us the
rate of premium just after the interest was reduced, when it
would have been a fair presumption that the reduction and
nothing else was operating—passes on to the month of May,
while the reduction was announced in the month of February.
(Hear.) He says the premium in May was down to 2s. ; and
so it was ; other circumstances were then in operation. But
nay justification is this with regard to the reduction of the
rate of interest :—No annual security ought to bear a high
premium. (Hear.) It is an absurdity upon the face of it
that an annual security the whole interest upon which
*At • amounts to 455. should be at a premium, of 608. I mean, of
course, that the holder of the security has only the guarantee
that he will be paid his rate of interest for 12 months, and,
therefore, if at the expiration of that time he is paid off at
pare he gets 15.5. less than no interest at . all, (Hear.) This
absurd state of things—a -state of things- which ties up the
• hands of the Government—makes it impossible for them to
a, ;u redeem these securities witlethe balances which are then in
eik-:!1.; the Bank. The only way by which I could reduce the
amount of unfunded debt was by bringing Exchequer-bills to
something like a reasonable premium.. I am sorry I have not
now before me the statement. which I had in my hands a few
days ago, showing the price of Exchequer-bills after the re-
duction ; but, speaking from memory, I think the right hon,
gentleman will find that for two months after the reduction
the premium upon Exchequer-bills ran between 10s. and 20s.
The right hon. gentleman has stated that there has been a
4 loss to the country of 36,0001., and what does he mean by
that statement He means to make Inc responsible for the
, occurrences of those various circumstances which rendered
it necessary to raise the rate of interest, quite forgetting
that, although ho accuses me of causing that result, ho might,
t-j 4
" .by referring to what had taken place in France, where there
" is no imprudent and rash Chancellor of the Exchequer, have
observed that the same causes which rendered it necessary to
raise the rate of interest in this country had operated there
with even more effect. Well,' sir, the right hon. gentleman
has said that there has been a Item to the country of 36,0001.,
but i should have been very glad if that statement had been
explained, for it is, I confess, to me a perfect mystery. (Hear,
hear.) I say more—l say that the right hon. gentleman is
completely in error—(cheers)—and I say that, notwithstand-
ing the unfavourable circumstances of the autumn, and not-
withstanding the doubling of the rate of interest, which those
circumstances brought about, there has been on the whole a
saving effected. In the year 1852-53 the amount paid was
3(17,0001., while in the year 1853-54 it has only been 347,000 e,
and that is the state as regards the Exchequer. The right
hon. 'gentleman says that I persisted in acting contrary to the
warnings of every kind addressed to me by all the wise men
in Parliament, although he himself was too modest to offer
his advice. I will admit that several hon. gentlemen did
entertain doubts of the success of the plan, and the words of
the hon. member for Huntingdon turned out right. The right
hon. gentleman spoke, however, as if I had acted contrary to
the whole course of public opinion, both in and'out of the
houee. But what were the facts? Why, the whole course of
the criticisms of the right hon.gentlemau and his friends, at
. that time, were against the terms I was offering to the public
4creditor ; they declared over and over again that they were
too good for the public, coeditor, and against the interests of
4 `the public. (Hear, hear.) Was no such opinion expressed
• 'in this house? Why, whom do I see opposite, I see the
• Ficius Achcaes of the right hon. gentleman, the honourable
' e and learned member for Suffolk (Sir F. Kelly), who recreated
his powerful mind with all-manner of facts and fancies as to
the bargain I was proposing. Did he not enjoy the confidence
and possess• the sympathy of the right hon. gentleman ?
Did he not fairly exhaust the English vocabulary, and drag
out of it every epithet which its resources could furnish, in
order to reprehend me for the extravagant, the monstrous,
the lavish, the wasteful, the utterly incredible project
of offering a guarantee of 2/ per cent. for forty years ? (Hear,
hear.) The right hon. gentleman says he has been denied
the liberty of discussing these subjects. No, sir, I haye not
• denied it to him; and I never will so long as he uses the
• liberty as he has done to-night. (Cheers.) Do not, however,
• let me lay all the responsibility of the course then taken upon
• the shoulders of the hon. and learned gentleman the member
for Suffolk, To do him. justice, I must say he never shruuk
from his opinions, though I differed from him at the time ;
and the house will do me the justice to remember that I
never held out any great expectation of immediate results.
(Hear, hear.) But what was done by the right hon. gentle-
' . man himself ? What did ho say ? Did he tell rue that the
scheme would fail, because the public creditor would not ac-
, • oept it ? No, sir ! lie says this was not a simple error of
mine, but that it was an error in defiance of all advice and
all warning given in the course of the discussion. And how
does he make out that case? He says that in December the
price of Consols was 1011, This was when Lord Derby's
Government went out. Consols, he says, went down directly
afterwards la per cent. ; and I thought it was great modesty,
I‘e • on the part of the right hon. gentleman that he did not at-
tempt, at this period, to join together cause and effect, and
to state at once that the fall took place because Lord Derby's
't i Government were out. (A laugh.) lam sorry, however, to
. say that this very plain stattment of the right hon. gentle-
. man is susceptible of an easy explanation, to which I am
• under the necessity of begging his attention. His case was
this—in the month, of December the price of 100/. Consols
was 1011 ; and in the month of February, when Parlia-
ment met, the price of Console
-was 99 and a fraction ;
f • that,' consequently, was a decrease of fully 11 per cent.
(Hear, hear.) Now, did it 'never occur to the right hon. gen-
; tlenaan to ask himself whether anything had ever happened
• •in the meantime. (Hear.) lam surd it ought to have
sps,,•, done. He quotes the price of Consols at the end of De-
e •
,' • ceanber at 1011 ; but what happened on the sth of January
- • to the holders of Consols ? Why, upon the sth of January
they received 1/. 10s. the half-yearly interest, the precise
amount, or nearly so, by which the price had fallen. (Hear,
hear.) There was, however, a great deal of discussion in this
house about the probability of the permanent lowness of the
rate of interest. I need not remind the house, because the
house well remembers them, of the positive opinions on this
subject of the hon. and learned member for Suffolk. I was
never bold enough to give any opinion upon that subject.
When I brought forward my proposal I did not venture to
, found It upon anything so unstable as any opinions of my own
. as to the permanent rate of interest. I founded it upon the
fact that there appeared to be a state of public feeling which
would secure such an amount of agreement upon the plan as
would make the experiment worth trying. Any gentleman
who will read the statement I made at the time will find that
that is their scope and strain. But the right hon. gentleman
who now comes forward to show up my weakness and frail-
ties, has he never dealt with this subject of the permanent
lowness of the rate of interest t Yes, sir, ho dealt with it iu
December. (near, hear.) In December he spoke of increas-
ing and confirming the credit of this country in consequence
of the discovery of gold. He said, " But, sir, although the
• rate of profit depends upon the rate of wages, that is not the
only element in this great question. There is another ele-
ment still more important in its solution, and that is the rate
of interest. I maintain that it has not only given activity to
commerce, but that it has influenced the commercial opera-
,
tions of this country to an extent which no other article could
• • have exercised. I say that the discovery of gold, considering
the currency which we possess, has established credit in this
country in a manner which no political economist could ever
have imagined. I say that it has increased and confirmed
' credit in this country, and that increase and confirmation of
credit has of course, proportionably
increased the employ-
ment of the people.
It would seem to be mere blind and ob-
. stinate prejudice to.ahut our eyes to that conclusion. But
there is another question to be considered iu regard to our
prosperity at this moment, and that is, will the present low
rate of interest last ? I hope it will. My opinion is—though it is,
perhaps, imprudent in me now to volunteer it—my opinion is,
that whatever imprudences may occur—and I need not say that
I deprecate them, but, notwithstanding some imprudences—
, ' • the present rate of interest will mainly continue." Such were
the vatieinations of the right honourable gentleman—of him
who reproaches me in this house to-night for not having fore- '
seen what would happen six or eight months before it oc-
curred, and for not thinking the state of politics anything ;
• and what will be thought of him who, considering me respon-
sible for reducing the rate of interest, prophesied himself that
. the then low rate of interest was to be " mainly permanent'?"
(Hear.) That was in December. • That was before the fall of
• la per cent, in Consols. But, sir, lam now about to quote
some language used by the right hon. gentleman at another
time, in the midst of the very dlecussions on this abominable
bill of mine, finding fault with me--for what ? Not for dis-
turbing the money market with experiments whichmust prove
abortive—not for proposing a scheme calculated to meet the
difficulty of the case in my view, though he might not agree
. with me—but still, on the old doctrine that the rate of in-
• , terest was too high, (Hear.) What was the speech of the
• right hon. gentleman? He gave a long display of all the
magnificent reductions in the interest of the national debt,
• • from Walpole downwards, and said that all our reductions
amounted only to the contemptible sum of 600,000/., upon
.500,000,0001. of debt. This was the argument of the right
honourable gentleman ; but it went upon the doctrine—the
very opposite and contradictory doctrine to that which he has
broached to-night—the doctrine that the terms offered were
both extravagant to the public creditbr and unjust to the na-
tion. He said, " If the committee agreed to the conversion of
the whole of 500,000,000/., under the second resolution, he
must remind the committee that the profit of the country
would but little exceed 550,000/. a year ; and they should well
consider whether, for such an object as reducing the interest
of the debt by 500,000/. sterling, they would do right to fix
the rate of interest at 21 per cent, for more than forty years."
It was too bad a bargain for the public to fix the rate of
interest at 21 per cent. and give them a guarantee of forty
years. That was the opinion of the right honourable gentle-
man—(hear, hear)—that is his opinion still. Very well ;if it
is so, let us know how the matter stands. If ho holds to the
opinion, let him enjoy it ; but if he thinks that 21 per cent.
was too high a rate of interest, with a guarantee of forty
years, do not lot him now find fault with 1110 for having done
wrong to the stockholder by offering those terms. This state-
ment was made on the Bth of April, long after the fall in
Consols. (Hear, hear.) The right honourable gentleman
says the bill was passed in such breathless haste that a great
error was committed in it—that it was found that the parties
could not get their money, and that the new bill was pushed
through with only twenty members in this house. The right
honoura.ble gentleman surely has been indulging in the power-
ful faculty of his imagination. He may be right ; it is not
for me to dispute what he asserts so confident); but all I
can say is, that the whole of that strange assertion is entirely
new to me. lam not aware that in consequence of the haste
With Which the bill was passed AU error was committed, which

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