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

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 cold 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—great 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 whoso 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. Hl73lE—Tell 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 30,000,0001. of Exchequer bonds
and put them out at 2i 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 150,0001
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 account 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 the 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 endeavoured
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 sense, 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 opposite 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 30,000,0001. 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, bat there is no danger attend-
ing its creation. There is no fear of too much ;it is only
of too 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 important 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 original 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 thegividends 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-
. .

iion 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
3,000,0001. 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 principal of the national
debt of no less than 589,000,0001. 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
171,000,000/. 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 8,000,0001. 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 we 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 interest 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 great 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-
mittee, nor did the resolutions informthem, in what amount
these bills were to be issued.

The CIIANCELLOR of the EXCHEQUER—The amount
stated is 30,000,0001.

Mr. HENLEY : The right hon. gentleman did not say
whether they were to bel,ooo/. bond; or 5,0001. bonds or in
in what amounts they would be issued.
The CHANCELLOR of the EXCHEQUER—The bonds
will be 100/. and upwards.
Mr. HENLEY : If the bonds were issued in 100/. 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 right hon.
gentleman took the limit of 30,000,000/. 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 30,000,000/. 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 wig, 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 should 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 50 millions, but
he had not the least objection to increase it by 3 millions,
that he might have the pleasure of founding a Two-and-a-
Half per Cent. Stock. (Hear, hear.) The right hon. gentle-
manm
osuaisd,,b`u`tllaecltmmietiiitaNN,Veould bt eh an aggravated sin to add 50
—it is but a little one—[a [alaugh)—and thenl shallmorsel
per-
formed
a great national feat." (Hear, hear.)
to know what was the only this little H
eo fs
h3ou
haveld millions
lke
on a ground admitted to be if
use of t
oecir ?: these 30 millions of
Two-and-a-Half per Cent.lie
it
he
entcloeumhr
gowaosn
nwoitthsanthis.n could only be done
objectionable ? If the right
enough to think that next
hon. gentleman
Stock without adding to the debrt°-
\a:id-a-Half per Cent.
making a beginning ? And
if
he
,o,,meheat was the use of
believe that next year or the year afirrgwilinl' enough to
create a Two-and-a-Half per Cent. Stock without the could
shilling to the capital of the debt, then he wasr "Alin!, aa
very bad bargain to offer to commute on any othraerat
(Hear hear.) There was another point, though onel-yins.
a
slight one—upon what plea of justice was it proposed to
shut out from this commutation trustees having funds
invested by order of the Court of Chancery ? He thought,
generally speaking, all parties should be allowed to take
advantage of this scheme, if they so chose, within a
limited period, Ile doubted the justice of shutting 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?
i events it was an unusual course,
and
n( Hd ekaarr, d
ihye
justar. ) t
oAmt a aklel
an exception ; and that was another reason why the house
should not be asked to coma 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 wore 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 foundation
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 Chancelkir
of the Exchequer would have come down and proposed the
commutation of 500,000,0061. of debt, either by reducing
the interest to 24 per cent., or offering to pay off
the holders of the stock. (Hear.) 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 whale 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, he 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 so 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-
lly, 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, or 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 100, 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
100. 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 not 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 having 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.) The 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 2i per
cent. stock, but the question was, whether the operation
could not be effected at a more favourable period than the
present—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 puttinoc, 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 fhe 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 mono-

tali- interests] of tyhe'counry.whether it was possible for
the right honourable gentleman to keep 18,000,0001. of Ex-
chequer bills at 1i per cent. in floating circulation with
Exchequer bonds at 2# 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
objects ; but if the right hon. gentleman expected that
he would keep 18,000,0001. of them in circulation at 13
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 ho viowed 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 20,000,0001. or 30,000,0001. 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 2} per cent.
stock, giving thereby a bonus of 3,000,000/. 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 30,000,000/. ; 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
2.# per cent. interest and Exchequer bills at 1 would cir-
culate together. (Hear.) He agreed that it was desirable
to take a little more time to consider the important subject
before the house, and not decide upon it that night. (Hear,
bear.) 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 toinquire into the practicability of that. If that
object could be effected it would afford great facilities for
reducing the interest.
Sir F. KELLY 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.
Kelly) 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. 2/ per cent. with the
other two modes of conversion proposed, no man in his
senses could hesitate for a moment which he 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
the owner of 1001. South Sea Stock considering which of
the three proposals it was to his interest to accept. No
doubt the benefit to the country might be termed incalcu-
lable of converting a considerable portion of the national
debt into 3- per cent, stock on the terms here stated ; but
it was a mockery to pretend that any one would dream of
accepting
that proposal if he could obtain either of the