The Sun.
London, England, 1838-05-19 00:00:00

THE BUDGET.

The CHANCELLOR of the EXCHEQUER moved the Order of
he Day for the House resolving itself into a Committee of Ways an:l
Means, which having been done, he proceeded to make a preliminary
observation, which owing to the noise of Members rushing to their places,
was inaudible. We believe the purport of it was that he would proposea
vote to which no objection could be taken, upon which the debate might
proceed. I will endeavour to be as brief as the circumstances will permit
—as clear as the nature of the subject mid my own intellect will
enable me to be—and undoubtedly as perfeetly sincere in the staterx ent
which I have to make, es it is possible for me to be. There is no Gen.
tleman whom I have the hca our of addressing that must not be aware,
from the papers already in hia hand, what are the prospects of the present
ys ar, and what the state of the public revenue and expenditure has been.
I.Tufoubtedly while in that statement there is nothing to ereate
any real or permanent apprehension on the part of the public, there is
Much in that statement which, for a time, is the subject of regret. The
year, Hon Gentlemen know, has been a year of increased expenditure
and diminished receipt. The result has been that which appears upon
the balance sheet—that there is at the present moment a very consider.
able deficiency. In a hot k which has lately been published by a
writer of the highest possible authority on the subject (Mr. Tooke),
there is so perfect and accurate a description not only of the existing
state of the revenue and the expenditure but of the causes that have led
to that state, that, with the permission of the House, I will take the liberty
of reading the extract :
" The revenue has experienced a falling off in the past year as
compared with tie preceding; but independently of the operations of
the tea duties, there is reason to believe that the revenue of the prece-
ding year was an inflated one. It is quite clear that a period of specu_
lation must be attended with an increase of revenue; for not to men-
tion the operation of over trading, it may be observed that vehen prices
have been rising for some time, the tendency to anticipations of a fur.
titer advance, in other words, to speculation, extends itself to retail
dealers, who, under such circumstances, are induced to enlarge their
stock. This causes entries for consumption, and consequent payment
of :duties, in the expectation of a continuance of the increasing
rations demand. Such was probably the case in 1835-6. When, how.
ever, the event proves that the demand for actual consumption does not
equal the exaggerated expectation, the dealers are disposed to run off
their old stock before they make fresh purchases ; and the difference be_
tween a disposition and an indisposition on the part of dealers, as well
retail as wholesale, and of manufacturers to get into stock, or, in other
words, the difference between an anticipation and postponement of de-
mand, is very great, not only upon prices, but also upon the revenum,
Now, Sir, it is quite clear that the circumstances stated by Mr. Tooke as
matters probable to arise, by general reasoning, will be shown to have
actually arisen in the last two or three years. You will find that, in_
dependently of the altered state produced by the alteration of the law,
rendering it the interest of parties to pay up the amount of the duty
upon a given day—you will tind before commercial pressure was felt,
there was every tendency towards decreased receipts, as at present there
is the other way. The operation of the revenue is affected by trifles.
You have often a period of increased revenue with a commercial pres-
sure, and you have often a depressed revenue at the time prices are
up. The commercial prices to which this country has 'alien,
and which have shown themselves already, is not one which
has led to such a calamity as that in which this country was placed in
1825, and yet it is one that those who have considered it in all its bear_
ings will say with me, that if the pressure was greater then
than now, it is rather by reason of the greatly augmented
resources of the country; of the greater preparation that existed in
meeting that pressure ; that there was more capital and wealth ; and -
that there have been a succession of prosperous years greater than
has been known front the year 1830 up to the co nmereiai pres.
sure, for there never had been so long and unvaried commercial
and manufacturing prosperity as during that period. Not only, Sir,
was that the position in which we stoo.l, but it is to be recollected that,
had
sdi
been
,eerciuodatoifont e
afloats commencementinbcoofuntthieys?
in which capital
le
lavatarstgtheel;Pl invested. I mean that of the railroads, and the specula, ions
in foreign stocks. Nevertheless, taking all these matters into aced dint,
such was the power, and such the resources of this country, that even
when that storm came, the country bore up against it with great sr strength,
and submitted to the pressure with less suffering than in the year 1825.
There was not, as at that period, suspension ofpayments and great failures.
I am not under Valuing in any degree the distresses of the last two years, or
the effects whieh they still have upon the manufactures and commerce
of the country. But the result of the trial has proved that there has been
an addition to the capital and resources of the country. But, Sir, I
must, never heless, admit that the pressure has been great, and that
the effect upon the revenue has been great also. I must also admit,
that the pressure has been accompanied with circumstances, which
were calculated to excite apprehensions of no ordinary nature.
.The calls on the Bank for treasure for exportation were calcu-
lated to add to the alarm; and during the pressure conse-
quences were manifested in another way, by no means unim-
portant, but en the contrary calculated to create serious reflections.
There was at that time an increased demand upon the saving banks, and
the money, drawn out, greatly exceeded the amount of the deposits.
With all this, I think, Sir, that our prospects are now im-
proved, and those very exponents to which I have referred as marking
the general condition of the country, in those adverse years, would now
lead to an inference directly contrary.—(Hear ) Sir, 1 have entered upon
these considerations because it is important the House should accompanY
use throughout my statement, in order to ascertain whether the hypothesis
is correct or not—whether the present state of the revenue is connected
with causes which have ceased to operate, or with causes of a permanent
character. In like manner when we come to speak of the increased
expenditure, it will be for the Committee to consider whether it is of
a temporary or permanent nature, and whether the two difficulties of di-
minishe.d receipts and increased expenditure are temporary or permanent.
The operation of the commereal crisi• to which I have referred, the
diminution of demand from our manufacturers and experts, and the di.
minished employment of hands to a certain extent, has, of course, shown
itselfin the diminished receir is for the year. This is observa' le in
the Bank balances and other less material points than the ac•
turf income of the country.—(Hear, hear, hear.) In 1836-1837, our
income was 48,340,0001., and, in 1837-1838, it was 45,808,0001; s!l°w-
ing a difference between the two years of no less a sum than 2;532,0001.
Now, undoubtedly, that would, in the first instance, appear to be a most
alarming decrease ; and, if we considered that it was of a perma-
nent nature, we should either cave to look to the expenditure
side of the account, and see whether it should not be reduced to such
all extent as to meet the difficulty, or we should have to make some pro-
position for an increase of taxation. But I trust I shall be able to
make it clear to the House that the diminution of income to which
have adverted, is not of a permanent character, or not of a character
that need lead to any well-founded alarm. But before I go into an analysis
of the point, I wish to make some observations on our expenditure.
The whole year has been one of diminished income and increased ex-
penditure, and Hon. Gentlemen should bear in mind that we have had
to provide for the whole of the interest of the West India loan, amount-
ing to 750,0001, which has been done without the imposition
of a single additional tax—(Hear, hear)—that must always be
taken into account in reckoning, our income and expendi-
ture.
Weof our have
expenditurealsoalso
ctohneneccotuerdse,,ih of, the present
My Right
year, an
increase
Honourable Friend on a former occasion, has asked for informa-
tion on this peint, and I shall endeavour to give the best infor
mation in my power I Ileac taken the libel ty of anticipating
some of the items, but even at this day I ant not able to state with great
certainty the amount of the charge, andl shall give the best explana.
tion I can.—(Hear, hear.) There is an increase, as Gentlemen will see,

upon the estimates for the present year, but there has been an increase
of expent; frOM Canada, which showed itself in drafts upon the
Treasury on the part of the Commissariat; and the bills falling due in
the months of January, February, March, April, May, and June. for
the services of there provinces, amounted to 467,5461. and there are fur-
ther outstanding bills to the amount of 6,260/., making in all 473,806/.
In eilditiOn t 8 that there is a sum which will be paid to the Commis-
sariat from the taitiathata Treasury, amounting to 100,0001., and there
are dollars remitted from Jamaica to the amount of 180,0001.
Sp that the total amount provided for Canada is 681,000/.
•-• to be provided for. lam not in a con.
Thus was a sum of 68; ee course it has
dition to say that this sum has been expenctea—e.
not been expended, for the military chest has been recruited
to a considerable excess over any ordinary occasion. Upon a former
occasion my Right Honourable Friend asked me for the excess
of the present time over the average of other years, so that we
might arrive at a proximate estimate of the two periods. The average
expenditure of the year immediately preceding the present was 205,0001.
so that tor the months to which I have adverted, the expenditure being
681,000/, that sum compared with the annual average of expenditure of
205,0001., will show the difference, but at the same time the Committee
will see that there was a much greater supply of all necessaries laid in.
Of course the Commissariat must have larger resources at its com-
mand, in proportion as the force in Canada is augmented—therefore
I do not think it fair to assume that ti e proportion is as those
two sums, The balance or difference between them would not, in my
opinion give the fair ratio. lam not enabled to state with any accu-
racy the eXact condition of this expenditure, because at the outbreak
it was necessary to arm an irregular army, and to establish an irregular
commissariat; but since the accession of Sir John Colborne, a Board of,
Officers has been established in order to make a strict examination of the
whole of the expenditure, and I am in hopes that before the end of the
Session I shall have such information as will enable me to,
lay before the House a full and accurate account of the whole
expenditure. At present I have endeavoured to make the state-
ment as clear as possible. If I had now asked for time,
in order to have made myself acquainted with the details
of this expenditure, I Would have been very much taunted, and with
justice, and therefore it is that I now bring it forward upon the imper-
fect information I now possess. —(Hear, hear) The Committee have
lso to be infarmed that, amongst the payments of the present
year, there is a sum of 200,000/., which is a payment not
belonging to it—a payment which came upon us unexpectedly. I
allude to the time when the change took place in the payment
or exdhange of Exchequer bills. On a former occasion I stated
to the House the grounds upon which I felt the necessity of
changing the time of those exchanges, so as to fiat due at a
time when the Parliament was usually sitting. The exchange, which
took place in 1836, when Parliament was not sitting, when 12,000,000/.
were to be provided for, showed me the absolute necessity of no consi-
derable exchange being allowed to take place, except when Parliament
was in session. We made the alteration, and the effect of that
aitetatien was to put upon the expenditure of last year this
sum of 200,0010/.5 which under ordinary circumstances would
not have to be provided for until June in the present year.
Therefore we have not only the extra charges of Canada that
have been paid, but we have 200,000/. of charge belonging
properly to the current year, which we have, in point of fact,
paid by anticipation. Sir, there is a third ground of increase with which
Gentlemen ate also familiar—l mean the increased charge of the in-
chequer bills. That is the charge for the six quarters
fereat on • which amount to the sum of 396,0001.
which have elapsed, an. „ .hequer Bills, the effect of
Since the rise of the interest in _ the amount
that rise, 13y etfnittaring the amount paid Ns._
which Would have beenpaid at the interest of lid. Addy, Cr. ounts
of 396,000/. Sir, I may without anticipating a discussion that may
take place hereafter on the question of the Hen. Memoers for Coventry
and Ililkeni4-1 may say that I do not; on reflection; in any the
slightest degree, regret the rise of the interest on EXcheqUei
When that is impugned I shall endeavour to defend the step I took;
but I think it is somewhat hard, when I made this state-
ment of the interest—l think it extraordinary, when the
object for which the rise in interest took place has to
a considerable extent been answered—l do not think it is just
that Gentlemen should, after that, attack the measure in which they
appeared at least to acquiosce. The Honourable Gentleman upon
a former night seemed to think that he could dispose of the whole
of this question by saying, that now yen are paid an Interest
of three per cent., money can be had at two per cent., and he said public
security is better than private security. If the interest on private se-
curity is two per cent., you ought to have made your loan of Exchequer
bills at a much lower rate. How would the lion. Gentleman work out that
preposition, if he compare the interest which he states to be 2 per
cent. in Bills of Exchange or private security, with the intere:t repre-
sented by the actual pride of Consols., because, according to his argu-
ment, public security is better than private security. Why, Sir, he knows
very well, the present price of Consol:, that 31.65. is the interest of money.
The Hon. Member knows well that his two per cent. interest is the in-
terest upon some peculiar transactions—upon deposits upon bills or stock
for a time; but for any lion. Gentleman to say, that, generally, the
interest upon money
of declarationwhich news saw equalled.—(Hear.) Sir, I have now
in the City is only two percent., exhibits a rashness
endeavour6d to show the House that the present year is one of increased
expenditure and diminished income. I have told them the grounds
which lead to that result. I shall now endeavour to compare my
estimate of income and expenditure fur 1837 with the results.
And I confess, Sir, that my enticipatioes have been contradicted
by the result. My anticipations as to the revenue In the
last year hare been disappointed. The . estimate which I
made of the revenue for the last year ending April, f 837, was
47,240,000/. The actual income was 46,090,0001. My estimate of
expenditure was 46,873,000/. The actual expenditure has
been 47,519,000/. There has, therefore, been a deficiency,
0f.1,428,000/. ; but, then, there is a comparison which I think I have'a,
right to institute. I made an estimate of the Meanie for the year pro.
ceding, as well as the year following, April, 1837 ; and there was Olson
the income of the one year an excess fully counterbalancing the deficiency
upon the other. And therefore I should wish the House to consider
how the income of the two years will stand as ompared with my estimate.
Mr. HUME was understood to say that he thought the Hon. Gentle-
man's calculaticn not quite correct—the deficiency would be 1,700,000/.
The CHANCELLOR of the EXCHEQUER—The calculatian which
I made was I,42B,oool.—namely, deduction of 46,090,0001., the
actual expenditure, on the 10th April, 1838, being 47,519,000/.
I wish to call the attention of the House to the compari
son of the income and expenditure of the two years 1836 and
1837. The total estimated amount of income was 94,220,000/. ; the
actual receipt was 94,543,000/. The average would be on the estimated
amount 47,110,000/. The average on the actual receipts 47,271,000/.
—(Hear, hear.) Now wills respect to the expenditure, the total
estimated expenditure of the two years was 93,710,000/.; the actual
expenditure 94,109,000/. ; the average being—on the estimated expert-
dituee 46,871,0001., on the actual expenditure 47,054,000/. Therefore
gentlemen will see that though we have had a considerable deficiency
on the income of the single year, yet there has been a considerable ex-
cess on the income of the previous year. Taking my anticipation of the
income of the two years together, and comparing that with
the result, so far from there being any deficiency whatsoever, there in on
the contrary as much of identity as can ever be expected on an estimate.
. . _

- •lIM

I shall now proceed., Of the whole of that 428,0001. which appears to
have been the deficiency, the House will recollect that 200,0001. of
that is accounted for by the payment of Exchequer Bills, which in ordi.
nary circumstances would be paid in June, but which have been paid in' the
month of March. Now I will proceed to state what the prospects of the
year ensuing will be. I have made my calculations in two ways--
the one which I think is a fair one, upon the average of the two last
years, taking the productive and unproductive years. I think
that will lead me to .st fair result. At the same time not wishing
to lead astray, I have taken a wider average—l have taken an average
of three years. which is more disadvantageous for my purpose. Now I
shall tell the House how the account stands.—(Hear, hear.) On the
past average—taking the average of two years—l calcu.
late the income from the Customs at 20,795,0001., the
income of the Excise at 13,950,000/., Stamps at 7,000,0001.,
Taxes 3,600,000/, Post.office 1,000,0001., Miscellaneous 979,0001. I
have omitted the smaller sums, introducing them—the total amount
would be 47,971;803/. Now the expenditure is as follows : —The interest
of the Funded Debt and Exchequer Bills, 29,350,000/. ; charges on the
Consolidated Fund 2,400,0001; total 31,750,0140/. The surplus ser.
vices of the Army 6,800,0001 ; the Navy 4,800,0001., and the
Ordinary 1,500,000/. ; the miscellaneous 2,550,000/.—making toge-
ther 15,729,0001 a and a total expenditure of 47,479,000/. Sir,
the miscellaneous services include a vote, which is in the nature of a
vote of credit for our military expenses in Canada. The House is
aware that for the last five or six years I have altogether omitted taking
a vote for army extraordinaries. I omitted that, because I thought it
improper in the time of peace, and because I felt that it would lead to
complaints from the House. That account, therefore, has been dis
continued ; but at the present moment, in reference to the
provinces of Canada, I think the just and legitimate
way of providing for that expenditure in place of coming
down with an estimate ,for the truth of which we could
not make ourselves responsible, to state that which, we
considered to be the probable amount of expenditure, and to take a rate
fur army extraordinaries upon that, The amount which I propose to
take is 500,000/. But that is included in the miscellaneous expenditure.
The account will show that if the calculations are correct, so far from hay.
frig a surplus revenue, at present there is an actual deficiency of 208,0001.
Instead of exaggerating the account of the revenue, it would have ap.
peered more favourable if I had taken the average of the last three years.
The difference would have been diminished, and there would have ap.
peared a decrease of 505,000/. 1 present the account under the double
it for one year or for three years.
alternativesaoß ofE taking
Rtiakp
EEL here made some observation across the table,
which was not heard in the gallery.
The CHANCELLOR of the EXCHEQUER proceeded—l beg the
Right Hon. Baronet's pardon. No taxes were reduced last year, but there
were reductions the year before. But I do not think that the reductions
which tookplace in that year had any considerab'e effect upon the revenue
Taking it under the most disadvantageous view of the case I have
been recommended to make it upon the average of three years, and not
upon the average of two years. This shows, as I have taken the liberty
of statsng, an actual deficiency of the sum of 208,000/. under one aspect,
and 505,000/. under the other. Then the question is how is this deficiency
to be met ? It certainly is not by a question of reduction of taxation
as I hare endeavoured to explain to the Hon. and Gallant Officer oppo-
site (Col. Sibthorp). I wish the state of the finances could hold out a
prospect of a reduction of taxation. That is not our position. We
must deal fairly with the actual state of things, and admit, small, I grant,
and not exceeding between 260,0001. and 500,0001., but we are now
to ask ourselves how is this to be met? There are only two
means to meet this question, and the preference given to the
one above the other resolves itself into the answer tile House may give
to one question. If this be permanent in its nature—if there be any
ground to apprehend that this deficiency, small, or ally, be permanent in
its character, there is but one way in which it ought to be met —and
that is, by coming boldly to the House of Commons, stating the facts,
and asking it to give us the means of increased taxation as an additional
means of discharging the obligations of the country.—(Hear, hear.)
From that position no man who feels his duty sensibly can retreat;
always assuming that they see in the nature of the case presented to
them a permanent and not a transitory diminution or reduction of the
expenditure, Now the question is, is this deficiency of a per-
manent or of a
temporary nature ?—(Cries of " Hear, hsar.)
Is the increase of
expenditure temporary or permanent ? There is no
one who looks at the whole of the facts of the case, that must not feel as
reasonably Confident as any one can in future events, that the cause
of this depression of the income is temporary, and that the calls'i
of the increase of the expenditure is temporary also. And if
this be the case, the very cause which might induce a Minister
to come down to the House of Commons and ask for an in-
creased taxation, would also, if he thought the deficiency but tem-
porary, in some degree dissuade him from taking that course. Sir,
undoubtedly during the time that has passed since the formation
of Lord Greys Government we have had some experience
in the reduction of income consequent upon the reduction of taxation.
In the October quarter of 1831, in consequence of the reductions made by
the Right Hon. Baronet opposite, there was a deficiency of 20,000/.
In January, 1832, 69,800/. ; in April, 1832, 124,000/. ; in July, 1832,
126,0001.; but then the tide turned, and in the following quarter there
was a surplus of 467,000/. ; in the quarter following that, of 640,0001;
then of 1,400,(00! ; then of 1,500,000/4 and so on augmenting up to
October, 1836. As to the period since I have been in my present
office, in 1836, the surplus was 2,312,000/. ; in 1837, it had fallen to
2,130,0001.; and in April, 1837, it had fallen to 1,008,000/ ; and in the
2 or 3 last quarters, there was a deficiency of income under:expenditure.
In 1832, in the second quarter, there was a deficit, but afterwards the
resources rallied, and the year was good. I have no doubt but tie same
result will follow in the present case, for already, I am happy to say,
that the income (f the country is exhibiting an improvement—all the
accounts I receive are most satisfactory and cheer ng. Then, if I am
right in calculating that this small deficiency upon the present year i
merely temporary, that it will be all made up by a revival of our trade—
d- I am right in considering that the depression is only temporary, then,
I say, that it must be met, not by coming to Parliament, .to add

to the taxation of the country---(Hear, hear, hear)--but by tak-
ing the very same course as was taken upon a similar
occasion, and which course was assented to by Parliament. I wish, Sir,
to call the attention of the House to the state of things •in 1827, the
period when Mr. Canning filled the office of Chancellor of the Ex-
chequer. Sir, I find that Mr. Canning in moving his resolutions founded
on his financial statement, estimated the receipts of 1827 at 46,000,0001.
The expenditure, not including the Sinking Fund, he estimated at
51,800,0001., and the Sinking Fund he estimated at 5,700,0001., there-
fore, he found himself in a deficiency of 2,900,0001.—(Hear, hear.)
Sir, the observations of Mr. Canning on that occasion were as follows :
—" For the present year the question which arises out of the statement
"-we made to the Committee, and which they will have to consider Is,
4^6ciency, which I have stated in round numbers
'- whether this deficiency shall be
• an the peculiar cir-
--dient

whether the preseti,..—

to be three millions—the plenum

provided for by any extraordinary vote, or whetnei

cumstances of the present year it may not be more ext.--
to make a credit on the Consolidated En's./ This is a pro-
posal to attach the amount to the unfunded debt." Mr. Can-
ning had before him a- deficiency of three millions sterling. The
maximum of deficiency which I have to deal with is from 280,000/. to
500,0001. The analogy between the two cases is in many respects sin.
gular and complete. Mr. Canning's deficiency was occasioned by an expen-
diturefor Portugal, and betook a vote for it. We have to meet an increase
of expenditure with respect to Canada, and we have got a vote for that.
Mr. Canning stated that he took that course upon the ground that the
amount of Exchequer bills outstanding was lower than was
customary, and that the price of Exchequer Bills marked a pre-
mium. He stated the amount to be 24,000,0001. That
is the amouut of Exchequer Bills which now exist. He stated the in.
terest to be 3 per cent —that is the interest which Exchequer
Bills now bear. He stated the premium to be 50s ; the
premium they at present bear is about that amount. There-
fore, if it were safe for him to have taken that step in
reference to a deficiency of no less a sum than 3,000,0001, I trust the
Committee will see there is no improper risk run now, but that on the
contrary, I should act improper by the House and the country if,
in order to meet a temporary evil, I asked the House or the
country to submit to a permanent augmentation of the taxes.
I have stated that the amount of Exchequer Bills outstanding at
this moment is 24,000,0001. An account has been called for, for the
information of a Member, which will show not only the state of sup-
ply of Exchequer bills, but also the state of the deficiency bills.
'1 here is an account, I believe, already exhibiting something
of this in detail, but I wish to have that account before the House in a
fuller way, and brought down to a later period. The amount of Sup-
ply Exchequer bills outstanding in January, 1838, is 24,044,0001.,
the lowest amount which I find since the year 1827. The amount
of Deficiency bills in 1838 has also been less than was
known in previous times—the lowest amount between 1827 and 1838
was 18,871,000/., which Was in 1837. In 1838, the amount of defi.
c:ency bills had naturally augmented— they have augmented to
22,000,0001., which is less than the outstanding bills in 1829.
I wish to call the attention of the House to those fscts. In the years from
1828 to 1834, large a lvances were continually made by the Bank to the
Government upon sugar Bills. But in the years 1835, 1836, and:lB37,
up to theist ofJanuary, 1838, there has bean no single advance of that
e:sracter a=kcil for or obtained by the government of the Bank.
I soy this in the presence of gen:lk men who are connect,d with
that establishment. I say confidently that the Bank at all events
has nothing to complain of in its transactions with the Govern-
ment—that the operations of the Government have had no
effect upon the Bank. The advances we have received were not only of
the ordinary kind, but they were of much less than the ordinary
amount within these last three years. I have now shown the
- se that if we compare the estimates of the last year with
—suit, my statement was erroneous; but if it be
—rtes of the three or four previous years, my
^ deficiency of 300,000/. or 400,0001.
,rtunate occurrences in Ca-
sussed at all, but
:nation Loan.
a sus-

the actual
compared with the
statement will be justified. In.. ,
would not helve eXisted but from the
nada. Nay, more so, it *Mild not have- au,
for the obligations of the existing Slatit Ety
Either of these results would have converted that cicNicncy int.

plus; but I am not called upon either to argue the necKs.!`"itY of ti,.
measure for Canada, or the obligation of the West India
I find them cast upon the country, and they have led to the
result I have been describing. It is undeniable that this prospect is
not satisfactory—that the House has not a right to be satisfied, or the
public, without the exposition I have laid before them of the income
and expenditure Still, at the same time, lam not conscious
that the events wl,ich have led either to tl:e increase of the
expenditure, or the diminution of the receipts, 'are matters
with which I ought justly or fairly to be taxed.' I do not
. .

think that they could have been averted by any will of the Government,
or provided for by them, but whether they a ere or not I feel
every confidence that they are but temporary in their character,
and looking forward to the resources of this country, to
its prospects even at the present time, I think it
would be absurd if any Gentleman should say, that because
at the present moment there may be some deficiency, there is any or
the slightest reason to despond with respect to the credit or resources of
the country. It would be absurd to feel any such distrust. There arc cir-
cumstances, even if we were apprehensive with regard to the state of the
public income and charge to which I think it necessary to advert —I
mean not only the large conversion, which has been often adverted to,
of interminable annuities into terminable annuities, and we are look.
ing (Oval d to t' e time which is now rapidly approaching,
when we shall begin ,to reap the fruits of that conversion,
for we have the means with correct accuracy to calculate the amount of
the life annuities, but of some annuities there is no less than between
four and five millions of public change, which depend alto-
gether upon the effiuxion of time. The annulty for years are
beginning to fall in, between 1839 and 1840 there will fall in a sum of
upwards of 150,0001., from 1843 to 1846 an additional sum of 220,0001.,
and between 1846 and 1860, 500,0001., and, looking to the whole term,
of the annuities, excluding the dead weight, and the Long Annuities,
there would be a sum of 1,464,0001. at the period at which their termina-
tion is fixed. Before the year 1867 there will be a diminution of the
public charge, adding the dead weight, and adding the Long Annuities
of no leis a sum than 3,057,0001. At that period there will be an actual
saving to that amount, upon the charges of the country. I stated"' that
we had a prospect, and I trust a just one of improving the.
receipts. The prospect of the revenue is better than it was
—the actual receipts are more consolatory. Gentlemen will see
that the banking accounts show that there has been a return to a sound
state, and a fair comparison may now be made between the treasures
in the hands of the Bank and its issues. The account of Savings
Banks is also consolatory. The deposits exceed the drafts. On these
grounds I feel no reason to rpprehend danger for. the future,
and Ido not think that I am asking too much of the House and the
public, to venture to run this risk upon the increase of the unfunded
debt of the country to so small an extent. The Right Hon. Baronet
the late Member for Cumberland (Sir J. Graham) called the attention
of the Government to the state of advances for workhouses. Un-
doubtedly there has been an additional charge upon the public
for public works in England and Wales, and for building workhouses.
Under the system, however, now pursued, we apply the repayments
of former loans to the extinction of a new loan. That is, we pay
off the amount of the bills issued for public works, taking into the
receipt of income the amour.: of the repayment. And the
-^nt on former loans, are
amount of receipts at the present mow_
they come in for
of themselves sufficient to discharge the bills as .
the Right
payment. [This is the effect of what we understOot;
'rse
Honourable Gentleman to convey.] And I hope in the cow
of the present year to make due additional provision for these purposes I
without any inconvenience. I feel it right to say that in the course of

the present year I shall propose the reduction of the 4 per Cents. I shall
also recommend a measure for the recon,truction of the sugar draw-
backs, by which I anticipate a proportionate saving to the country.
I do not take that into the present estimate, but I mention it because I
do not wish Gentlemen to suppose that I tun disposed to retire from any
engagement which I have entered into. At present I will also mention
the state of the question which the South Sea Company have upon
the public, but I refer to it so that I may not be charged with having
neglected my duty. I thank the House for its attention to the state.
ment which I have been obliged to make. If it be unpalatable for the
Committee to hear of a falling revenue and an increasing expenditure,

they can easily form an idea of how much more unpalateable it is
for he whose duty it is to make that statement.—(Cries of Hear,
hear, hear.) I thank the Committee the more, because that

I have been labouring under a very considerable degree of inconve.
nience and personal suffering.—(Hear, hear.) One thing I cannot
be charged with. I cannot be charged with having endeavoured
to make the best of the case, or with in any degree overcharging my
statement. I have endeavoured to state it correctly, and according to
the truth ; but where it was a matter of calculation or estimate, I have
been careful to go, what I would consider, much under the mark,
On these grounds, if-the Committee think it should not be expedient or
right on so small a deficiency—that deficiency arising on temporary
grounds—to appeal to the House for augmented taxes, I think they will
see no other course is open to me but to follow the precedent of 1827, not
indeed to the same extent—not to the extent of millions, but to the
extent of a few hundred thousand poudds—trusting that the augmented
resources, that the increased activity of trade and of manufacture,
would enable us in the next year more than to wipe away the existing de-
ficiency.— (Hear, hear ) The Right Hon. Gentleman then moved that a
sum of thirteen millions be raised by Exchequer Bills, for the service
of the year 1838.

The resolution having been read;
Mr. HUME said that the statement of the Right Honourable Gentle..
man had not been by any means satisfactory to him, nor would it be, he
was quite confident, to the public ; but before he addressed the Com-
mittee he begged to ask the Chancellor of the Exchequer a question, be-
cause, on the answer which he (Mr. Hume) should receive, would de.
pend the nature and extent of the observations he should feel it his duty
to make. It would be recollected that when the Committee to inquire
into joint stock banks was appointed, the Chancellor of the Exchequer
engaged that an early opportunity would be ~fforded for entering into a
discussion how far the action of the Bank of England or the conduct
the Chancellor of the Exchequer had tended to produce the mischief t hat
had recently arisen in the commercial affairs of this country. He was
anxious to have an opportunity of showing that the public,,revenues
had suffered, and that millions of individuals had also been distressed
for want of employment, in consequence of the recent shock given to
pubic credit, and that that shock had arisen from mismanagement oil
the part of those who had th'e control of the money affairs of the coun.
try. If the Chancellor of the Exchequer would now fix a day for enter.
ing upon the discussion of that question, he would on the present oc-
casion confine himself to the subject of the revenue and expenditure of
the country.

The CHANCELLOR of the EXCHEQUER said he was most anxious
to discuss the whole question connected with the presont condition of
the law affecting the Bank of England, and the practice of the Bank
under that law. But he at this moment labour:d under a great diffi-
culty, in consequence of the unavoidable absence of his excellent friend
the Secretary .for the Treasury, the cause of whose absence he was sur,
every one must deplore.—(Hear, hear.) He would repeat that lie was
anxious that the discussion should take place, and he believed that those
gentlemen who Were connected with the Bank of England were perfectly
ready to meet that discussion.—(The Right Hon. Gentleman then
turned to consult with Lord .T. Russell as to what day could be fixed.)
Mr. HUME said he would take the first notice day; and he would
give notice now.--(" You cannot.") At all events he begged the Right
Honourable Gentleman to understand that it was not an inquiry into the
affairs of the Bank alone which he (Mr. Hume) proposed, but it was an
inquiry, likewise, i nto his own conduct as Chancellor. ofthe Exchequer. His
administration was so coupled with the Bonk of England, that it was im-
possible to inquire into their conduct separately.
The CHANCELLOR of the EXCHEQUER having starched the
Order-Book, proposed that the motion of the Hon. Member on this sul•-
ject should be fixed fur Thursday, the 31st of May.
This being assented to;
Mr. H U ME proceeded to state that he could not take the view which
the Chancellor of the Exchequer had done as to the state of the finances
of the country. The view which betook of the re:eipt and expenditure
of the country was very different. According to the statement he then
held in his hand, the amount of revenue in the year 1835 was
50,408,5791., and in the last year (1837) it was 50,663,3531. ; being
254,7741. in favour of the latter year. But comparing the year 1835
with the year 1836, there was a surplus in the latter year amounting
to 2,540,519/., the revenue of 1836 being 52,949,3981. In the next
year (1837), the revenue was reduced to 50,663,3531., being a defi •
cieney in that year as comparel with the former of 2,286,0451 That
was up to the end of .Tanuary last ; but the House would observe that
the Chancellor of the Exchc quer had made his statement up to the sth
of April, by which a further sum of 800,000/. had been added to the
revenue. It appeared by the statement of the Right Hon. Gentleman,
that 681,0001. had already been paid on account of the state of Canada,
and if he understood the Right Hon. Gentleman col rectly, a further
sutn of 500,0001. contained to be provide.; fur.
The CHANCELLOR of the EXCI.:EQUER said that the addi.
tional sun required would not be quite 50,0001.
Mr. HUME: at all events appeared that the extra ex-pense-already
incurred en account or Canada was more than a million sterling. If he
(Mr. Hume) could believe that that would be the outside of the expepse

he would be satisfied; but every account which he recived from Ca-
nada stated that the expenditure was most lavishly conducted. The
Right Honourable Gentleman would, therefore, be fortunate if he
could clear himself at the expense only of an extra million. But what
a picture was this to psesent to the country! Owing to misgovernment*,
and the not giving satisfaction to the people of Canada, England was at
once thrown into debt to the extent of 1,000,0001.; and all hcik of a
reduction of taxes was, for the present at least, wholly destroyed. He
had already stated the amount of revenue for the year: 1835,1836, and
1837. He found the expenditure during those years to be in 1835,
48,787,639/., leaving a surplus revenue over the expenditure for that
year of 1,620,9401.; in 1836, the expenditure was 50,819,301,, leaving;
a surplus revenue of 2,130,092/, over the expenditure; witile in the
71i ilia!
,su_nts
i:odttOso,
g,7.6hbrtt
though
gsa
tit:ealhr
arose entirely
ant
eiwgini deficiencyatsairreeexil a
expenditureo r revenue i
in
l so3f
year 1837, the expenditure was 51,319,114/., the revenue only a^nount-
e
o
t
765ar5L61.11. There
e
typfarormtlyaanroisnecrficoamsett the different estusbn;
--enensation loan. A reference to the expenditure on
of the slave sae-. ..,
pensions for sinecures, salaries and allow.
account of the civil
ances, diplomatic salaries and pt.-.e_sions, courts of justice, and miscel.:
ed echarge on these items of'
:rtments amounted to
laneous, on the consolidated fund, show--
2,082,817 L, in 1835 ; in 1836 the same dep.
2,866,9351.; but then a great portion of this was ol: account of the
slave compensation loan. In the year ending the sth °flan:My, 18See
however, there was no such eittra item, and yet the expenditure ors
account of the other items amounted to 2,411,4571., being an increase
of nearly 400,0001. above the expenditure for 1835. Why should this
increase have taken place? Why, for instance, should the expenses
of the courts of justice be increased from 430,495/., which was the
charge in 1835, to 674,4521., which was the charge in 1837 ? . Let
tl e Committee mark, first, that the increase of the revenue in 1630,
as compared wills 1835, was 2,031,6771., and that the increase of re.
venue in 1837, as compared with 1835, was 2,531,475/. Now all this,
the Committee would observe, was an increase of actual expenditure.
How had this arisen ? It was because the expense of the army, the
navy, the artillery and ordnance had been greatly augmented, and this
in a time of peace. It was ridiculous to say that these large esta-
blishments were its the least degree necessary. So far, there-
fore, from the Committee agreeing to a vote of credit, they
ought to oblige the Chancellor of the Exchequer to make a reduc-
tion in those establishments. The present frEaisters stood pledged to
!act upon a system of economy and retrenchment ; but he was sorry to
say that they had not kept that pledge. No circumstance:: had occurred
[.which warranted so large an increase in the military, naval, and ord-
nance departments. In 1835 the charge for those establishments*
was 13,801,8321.: in 1837 it was 15,229,927/, making a charge of
.1,428,095/. in 1837 more than in 1835. Here was et once a sum
,equal, and mere than equal, to the deficiency for which tine Chancellor
of the Exchequer now asked a vote of credit. He wished to point out
to the Committee what was the situation of the country this year as
compared with the year ending in January, 1835. It was all very well
for the Chancellor of the Exchequer to say that expenses had been in,
cuffed which he could not avoid. It was true the slave compensation
loan had been thrown upon the Government, and to that extent he was
t to complain. There had been in 1855 a surplus revenue Of
1 eie0,940/ , and in 1826 a surplus of .2,130,092/. ; so-that after de.
.ducting 665,760/., which was the amount of deficiency in 1837, there
still remained a surplus revenue of 3,085,272/. in 1837 over 1835;
and yet the Right Hen. Gentleman now complained of a deficiency. He
would now state what had been the addition made to the funded
debt. In 1835 the fended debt was 743,675,300/., the interest
and management of this amounted to a charge of e 7,783,45.41.,
in the year ending sth of January, 1338, the debt amounted to
762,275,189/., snaking an increase 0118,599,889/. in the capital of the
debt, and the charge fur interest and management was 28,524,740 e,
making an increase in the annual charge of 741,2851., in the course of
the three years. He ought to state that there was a set-off against this
increased charge, and a very proper set-off: The amount of outstand-
ing Exchequer Bills in 1835 was 28,446,7001 In that year there was
au increase of outstanding bills amounting to 473,000/. ; in the next
yeor there was a decrease of 672,000/. ; and in the year 1837 there was
a further decrease of 3,740,0001. ; after deducting the increase from
the decrease, the absolute diminution of the unfunded debt in those
the.. e years amounted to 3,939,350/. They had to set off the
egeses,,.' against the eighteen millions which he had before stated as
3,e- -nd the finances of the country would Le found to be
the whole e es,
' she difference to be in a worse condition now
n. instead of being only in a less de
found to the exter..!or
than they were three!. ea: else;,
grees
worse, as the Right Hon. Geise.eneeen stated, by a reference to two years
Gentleman himself had admitted
C
only ; whilst the Right Honoufetele ,
that the deficiency on the year costing
let April was as much
j cas* 1860
of the
came roundas
1,428,000/. It was true that when the
there would be a saving arising from the slropps.7,g in
annui-
ties, and in the year 1867 the country would ire freed from
three or four millions by the same means; but the whole emount sat
the annuities, although it had not been stated by the Right Herm:treble
Gentleman, was only 4,800,000/. ; and even when in 1867 or 1868 the
whole should have been got lid of, yet there would still remain an ad-
dition of twenty-four or twenty-five millions to the permanent debt.
Lie confessed, therefore, that he saw nothing but gross extravagance
and great mismanagement, and he thought that the Members of that
House ought to enforce a little more economy and retrenchment. lie
heel in his hand also a paper from which it appeared that the country
had lost, by the aggregate amount of increased interest on the Exche-
quer bills, 294,199/., and that the amount due and payable up to the
Ist of January, was 129,7e3/., besides a , loss of nineteen millione—
(No, no, from the Chancellor of the Exchequer)—he begged pardon;
he meant 19,3084—(Laughter)—on the increased interest on deficiency
bills. Add to this the further sum of 92,000/. for the increased interest
of 216. on Exchequer hills, and it would be found that the total loss to
the country was 536,164/. which had been paid, or would be paid, in
consequence of the increase of the rate of interest on the Exche-
quer bills alone, being almost equal to the deficiency of the
public revenue in January last—(Hear, hear, hear)—and when the
proper time came, he would not only show the deficiency to that
sum, but, besides, that there were other lessee 17 discount
on the fifteen millions loan, which would make the actual amount of
loss not less (hats 765,000/. /When he saw public confidence returning,.
and increased activity shown in the country, he thought it right that it
should be made clear to the House that the loss of the country was not
limited to the less amount of two millions in the Treasury, but also
what operation the shock given to public credit had had upon the
country. He had made out a table for the present year similar to that
made out by the Right Hon. Gentleman opposite in a former year, hut
as this would not in detail meet with such a gracious reception by the
House from him (Mr. Hume) as it had experienced from the Right Hen.
Gentleman opposite, he would not trouble the House with the full par-
ticulars. He might, however, briefly refer to the summary of exports
and imports during the last three years. The value of imports, which
amounted in 1835 to 48,911,5431,had increased in 1836 to 57,230,9681.,
but hail decreased in the last year to 54,737,301/., being a decrease of
two millions and a half ; whilst the whole value of exports, which in
1835 amounted to 91,174,456/., and in 1836 had risen to 97,621,459/,
had fallen off in 1837 to 85,681,6691., being a decrease of upwards of
13,000,000/. in the value of the exports and imports of the country.
Thus, when the public revenue was most impoverished, the means of pay-
ing the amount of taxation were lessened by this falling off in the
amount of trade. Let the House bear well in mind that it was impossible,
with a great decrease in fife rate of wages, for the people to pur-
chase many articles on which the excise and Customs duties were pay-
able, and that to this account was to be laid the great diminution in the
pule c revenue which had taken place. It might, perhaps, be worth
giving a proof of this falling off of exports in some of our leading ma-
bLeactures. In the leading article of cotton the exports in the year
t January, 1836 amounted to 44,849,038/. ; In the fleet year
ending „,6,g121.;, 'but in the year ending sth January last they
they roseo 50,0 _
making a decrease of not less than 8,746,802/.
came only to 41,900,
Take next the hardware and
in one branch of our mantita-Trures•
cutlery : the amount in January, 1836, was 1,152,811/. ; in 1837
2,842,792/. ; but in 1638 they faille only to 773,823/., being a
decrease in 1837 of 419,3491. The 'rein manufactures exported
in the year ending January, 1836, amountee to 2,955,867/. ; the •
amount was a decrease of 98,6231. Again, in the liieen manufactures
there had been a decrease between the years 1837 and 1838 from
4,469,330/. to 3,213,345/., being an actual decrease on the stl: Jdnuary
last of 1,255,185/. In the woollen manufactures the exports in the year
ending sth January, 1836, were 7,399,6571.; in 1637 they were
7,535,064/., but they had fallen in the year ending sth January last to
4,680,247 e, showing a large decrease of 2,854,8171. The same with
regard to the silk manufacture, the exports in which amounted in the
year up to January, 1836, to 792,0871, and to January, 1837, to
767,987 e, and in January, 1838, they fell to 433,1231., being a dimi-
nution of nearly one half, or 335,863/. ; making an actual decrease, in
the year 1837, of the large amount of upwards of 1e,700,0001., or very
nearly fourteen millions, in round numbers, on these six articles alone.
He thought that, in the linen manufacture especially, much of this ex-
traordinary result was to be attributed to the state of affairs in America.
He was sure that the House would agree with him in thinking that no-
thing was more important to this country, than a good commercial feel..
ing with America—(Hear, hear)— and that it depended in a great de.
gree as to the state of America, and the firmness of the money mar-
ket there, whether the shock to public credit would be quickly re-
covered.—(Hear, hear.) Now, he found that the number of yards
of linen manufactures exported from the United Kingdom in 1835
was 77,977,089, whilst the number had in 1836 increased to
82,088,760 yards, but had fallen in 1837 to 56,426,333 yards, being
a decrease in 1637, as compared with 1836, of 23,652,427 yards.
With France it appeared that, notwithstanding this decrease on the
aggregate of our exports, our linen trade had increased, for he found
that in the year 1835 we exported to France 1,247,901 yards; in
1636 we exported nearly two millions, or 1;998,158 yards; and in 1837
no less than 3,368,388 yards, the trade being More than doubled in
three years. Nor was this all. The total number of pounds of linen
yarn exported to France was 2,384,6781b5. in 1835, 4,942,1411b5. in
1836, and as much as 7,010,9831a5. last year. To America,.
boweier,
our exports in the same staple article had greatly decreased. The total
number of yards of linen manufactures exported to that country Was
39,937,620, but the quantity had fallen in 1837 to 13,495,453. It
was clear, therefore, that a severe shock had been given, and he was
anxious to prevent by some means a recurrence of the difficulties of
1835, and he was satisfied from a careful consideration of all the docu-
ments in his possession that those occurrences might have been in a
great measure prevented. There was also one subject to which he
wished to make one allusion, and a, a day was fixed for a die-
cussion upon them he would not then do more. He, referred
to the savings' banks; and he wished merely to assure Honourable
Gentlemen in that House, and to assure the country, that he Also
not anxious to shake in any manner the publiC confidence in those
establishments, but he was desirous of placing them on a firmer
and more durable footing than they were at present, without auy
loss to the public, and that the resolutions which he woad
propose would fully accomplish this, whilst it embraced a con-.
sideration of the state of the currency and the circulation. But
he would now ask the Hon. Gentleman whether they were quite Bathe.
fled with the situation of the finances of the country, and whether
they oughtnot to go further than the Right Hon. Gentleman con.
templated, to guard against the risk under which the country had been
placed, and might be again placed ? It was an extremely painful
duty for him to show the House in what difficulties the country had
been placed in the years 1836 and 1637; but it was wholly is miracle
that the Right Hon. Gentleman had escaped sa well. But When it
was known that there were ninety millions of floating debt, and that
there had been only four millions of bullion in the Bank of England,
it was only wonderful that the country had not got into still greater
difficulties. He was prepared to show that since 1830 there had al.
ways been an annual issue of deficiency bills; and what he wanted was
the Right Hon. Gentleman so to regulate the public affitirs as not to
want, by the aid of deficiency bills, to ask the Bank for continual advances.,
Was it not a scandalous disgrace that a great country like England
should not be able to pay the dividends without going to the. Bank to
borrow four millions or five and a half millions—in the last quarter it
was 5,220,000/. He called upon the Right Hon. Gentleman to look to the
difficulties which the country had to meet. Why should he go to the
Bank? He would ask the Right Hon. Gentleman why he did not
place a deposit sufficient to pay the dividerds in the Bank? Many
Members might not know what was meant by the term "deficiency
Bills."—(Hear, hear.) Theyewere Bills given to meet any present riell-
eiency its the Consolidated Fund in order to pay the dividends, such
Bills being repaid out of the fund when received—so that Hon. Members
would see that the country was obliged to borrow like a spendthrift every
quarter in anticipation of our income, and this at a time when the Bank
might be without a shilling or a sovereign. It was true that when the
malt Bills were in existence, the deficiency Bills were decreased, but in
1824 they amounted but to 15,000,000/, but it was only in 1828
that they rose to 05,000,000/e and in 1829 to 26,000,000/. What he
required, i.owever, was that the Governmment should not be obliged to
go to the Bank at all to borrow money for the purpose of paying the
dividends. Such a state of things ought not to exist. He would not
reer them to the other evils of so large an amount of Exchequer
Ulla, but on a more fit opportunity he would enter into them, and be
would close his present cbservations by entreating the Right Hon.
ourable Gentleman to leek well at the situation its which he was
placing the country by being dependent upon the Bank for the means of
paying the dividends. In October, 1836, there werebut four milling!.

of bullion, Including troth silver and gold, in the Bank, and this was
not the state on any one day, but on the quarterly balance; and
when the Right tfoncurable Gentleman bore In mind the situ-
ation in selllch he was at that time he (Mr. Hume) was sure that he
woutet not think that he had reposed on abd of roses. At that time
the circulation of the Bank was 32,000,0001., or, rather, including cir-
culation and deposits, it was 32,333,0004 ; and includin the Exche
quer bills there were 31,260,0001. in paper out, to meet whieh there
were but four millions of Bullion ; and in addition to this the Jemmies in
the Savings' Banee semi nied to eighteen or nineteen millions, which
might have been calledup at any' time; so that if there had been a
panic, the Bank met the Government would have been pieced in a situ.
ation in which he would be sorry to see a Government or a ;,setting
establishment at any time. They were going on a
,eaten Of from hand
to mouth. and There was nothing permai2-
meit or safe in the state of the
finances of the country; each (
.."eancellor of the Exchequer scented to
rest satisfied if he manasee to pass through hie own time, regardless of
the risk he might wee, or the dangers of his successors. He (Mr. Hume)
thought that the House ought not to be satisfied to meet the deficiency
in the revenue by adopting the plan proposed by the Right Hon. Gentle-
man. The Right Hon. Gentleman had indeed showed the difference
which had taken place between the last year and the preceding, but he
had omitted to show the reduction of two millions in the amount of mo.
net, in the Exchequer, so that there would be an actual
increased difference agzinst the country of 2476,0001. He
thought therefore, that the finances in the country were
not in such a condition as that the House should favourably receive the
proposal of the Right Hon. Gentleman. He (Mr. Hume) called upon
him to reduce the expenditure of the army, the navy, and the ord-
nance, which had been increased 1,400,000/. and upwards since the
year 1533 ; and if the resolution then before the House were intended
to provide for the deficiency he should have opposed it, and whenever
the time came to move the vote he would certainly take the sense of
the House against it ; and when the Right Hon. Gentleman told the
Heuse that there were only two ways of meeting the deficiency—first,
if it were permanent, by an increase of the funded debt, and, if it were
only temporary, then by an advance upon the credit of Exchequer bills
—he thought that, as there had been a great excess of expenditure
during the last three years over what had previously been, it behoved
the House not to add to the public debt, but to reduce the expen-
diture of the 'country, and thus to provide the means which the
Right Hon. Gentleman required of keeping the expenditure within
the income. For himself, he would oppose the increase of the debt in
ever y way, and would endeavour to compel the Government to pursue
that course of economy and retrenchment to which they were pledged,
and to which they had not for the last three years sufficiently attended.
Mr. W. WILLIAMS said although the Hon. Gentleman who had
resumed his seat had not entered fully into the subject of Exchequer
bills, he (Mr. Williams) would show that a large sum of money might I
have been and ought to have been saved by a reduction in the rate of in-
terest which they bore. When the Right Hon. Gentleman the Chan-
cellor of the Exchequer a few nights since, at a very late hour, mom d
a vote of 24,000,0001. to cover the Exchequer bills out, he (Mr. Wil-
liams) had asked at what rate of interest they were to be issued ? and
was astonished to hear in reply that they were to bear interest at two-
pence per day, or at the animal rate of 3/. Os. 10d. per cent. Ard the
Right Hon. Gentleman had imputed rashness to him in the statement
which he (Mr. Williams) had then made as to the rate at which money
could be borrowed. He had not stated that money was not worth more
than 2 per cent. for any period; but what he had stated was that it was
not worth more than 21 per cent. on ordinary securities, and that it
might be borrowed for a short term at 2 per cent. Since that night he
heed been informed by persons well versed in mercantile affeirs that any
sum might be raised on ordinary security at ei per cent., anti that it might
be procured at 2 per cent. for short periods almost to any amount. He had
then expressed, as he did now express, surprise that the public credit of
the country should be in a lcwer state than that of ordinary indi-
viduals, and especially that it should be lower than the credit of the East
India Company, but he found that such was not the fat; for if they
looked at the price of Exchequer bills bearing only 3 per cent. interest,
it would be found that the premium upon them amounted to 3i per cent
or more than the whole twelve menths' interest.—(Hear.) If 'floweve,
he had not expressed it before, he had expected thal. the Right Hon.
Gentleman would have now stated his regret
the advancr in the rate
of Interest, and he (Mr. Williams) Wes. sorry that he had not so, done.
The Right Hon Gentleman's atf.crimetii.• also differed from his, for the
Right Hon. Gentleman had stated the loss to the country t'etween the
interest of let. and 2 Tee per dog to hare amounted only to 396,0001.,
whereas, accordirtk to his (Mr. Williams's) arithmetic, the loss was as
much as 547,0001. The calculation was easy, the time was for six rmar-
ters, the amount twenty-four millions and upwards. Perhaps the Right
Hon. Gentleman would took at his figures again, and settle the diffe-
rence ; but he (Mr. Williams) stated again, that the advance of the
rate of interest on Exchequer bills, made on the 21st of November,
1835, had made a difference to the country of not less than
547,0001. The rate of interest had been raised in 1825, hut what
was the state of the country when the Right Honourable Gestleman
opposite raised the rate of interest from lid. to 2d. a day? This was
clone on the 19th of December, 1825, at the very commencement of the
panic ; but Exchequer bills, in lass than a fortnight from that time,
were at a discount of 83 : the premium was by no means increased.
Yet the Exchequer bills in 18:15 had not decreased in value to a discount
before the Right Hon. Gentleman had increased their rate to 2d., and
afterwards to 20. The question, however, was, at what rate of interest
could the Chancellor of the Exchequer now raise the necessary money
on Exchequer bills ? For six years the rate of interest had been only
21 per cent., and yet the Right Hon. Gentleman had advanced it to 3
per cent. He (Mr. Williams) said that there was no necessity for that
advance, for if the Right Hon. Gentleman had r illy propose] a large
funding of Exchequer bills, he would have prevented all inconvenience ;
and even without this they never bore a rate of premium so low at any
time as to answer the purpose of any party to pay them in for taxes.—
(Hear, hear.) No interest was allowed en the time unexpired after they
were paid in ; they never came down so low as to make it worth any
one's purpose to pay them in ; Lot suppose that had not been the fact,
even then a proposal for feuding them would have prevented the neces-
sity of raising the rate cf interest. The Exchequer bills bearing an
interest of ed. a day were now at a pren.;,am which amounts,'
to 31 per cent., or mere than one-half per cent. more than the
whole interest upon them. And yet the Right Hon. Gentleman said
that he could not borrow the .neney upon the same terms as it had been
borrowed during the last six years. Why, there never had been a
period when money was so ab:mdant, so easily raised, and so plentiful I
as at the present time. This was not only shown by the rate of premium
on the Exchequer Bills, but the East India Bondi only bore an interest of
31. per cent., and yet at what a premium were they ? Why, at a premium
of upwards of 80s., so that people were actually offering a year and a
quarter's interest for the purpose of getting possession of bonds bearing
an interest of three per cent. He believed there was not an individual
in the country would agree in the opinion of the propriety of tile course
pursued by the Right lion. Gentleman. The Right Hon. Gentleman
had asked him (Mr. Williams) what proof therewas that the money cored
be borrowed at so cheap a rate, when the Consols were only at a little
mo: e than three per cent. ? He was astonished that any gentleman should
have asked such a question, and still more astonished wes he that such a
question should have proceeded from the Chancellor of the Exchequer.
Die not the Right Hen. Gentleman know the difference between an
Exchequer Bill, which was paid in full under any circumstances
(Hear, hear)—and Consols, which, though now at 94, might fall any
day and occasion a great loss. In 1823 they were at 941 a but they came
down quickly to 771, so that a person buying in at the highest time,
and selling out at the lowest, would have suffered a loss of nearly 20 per
cent. And this was why Exchequer Bills might, always bear a lower
rate of interest, because there was less rr and the principal was sure
always to be paid in full. If they 10:,Ked at the rate of interest on Ex_
chequer Bills for a course of ten years, except during a short interval, it
had only been 2,-k per cenm, end although the intere,t in the funds might
have been 3e per cenee yet one security was at least as valuable as the
other. Now tte interest on the Exchequer Bills was nearly equal to
that on the Ponsols, and he would ask whether, with reference to the
state of the finances of .the country, this was proper ? During the last
fifteen months the Right Honourable Gentleman had even ene_half per
cent. more for Exchequer-bill interest than he need have given in the
funds; and if the country was losing by the unfunded debt, why did he
not fund it ? There never could be a better time. Now, however, he
was suffering a loss of the public money ; and if he would only issue
advertisements for ten hers for Exchequer Bills at I led. inte-
rest, he (Mr. Williams) was sure that the tenders would be soon
trade to as large an amount as the Right Honourable Gentleman
might require.—(Hear, hear, hear.) Why, then, should the public
, lose so large an amount by the interest ? He could see no rea-
son for the advance which had taken place except that there
might be a connection between the Treasury and the Bank. The Bank
was in distress—it wanted to dispose of a large amount of Exchequer
bills, and to prevent toss by the sale the Right Hon. Gentleman came
forward and advanced the interest. The consequence was, that in a
short time the premium rose to 30s.—as much as the advance which
had been made—a sure proof that the money was thrown away. The
other evening he (Mr. Williams) had stated that the cause of the
great pressure on the money market in 1836 and 1837 was produced
by the transactions between the Treasury and the Bank relating to
the West India loans. The Right Hon. Gentleman had challenged
him to prove the fact. He was now reedy to prove it, but as his
Honourable Friend (Mr. Hume) was to bring the question before
the House, he would not then enter upon the question. Ile hoped,
however, that the House would not sanction such a waste of
the public money, and he called upon them, as the representa-
tives of the people, to eie their duty in that House, and to interpose
between the country and the Right Hon. Gentleman the Chancellor of
the Excherpter. If any gentleman well versed in commercial affairs
would state in the House that the money could not be raised at the
lower rate of interest, he (Mr. Williams) would admit that he was in
error. He was sure, however, that no one would make such a state-
ment ; and, therefore, he hoped that the House would not permit a
greater expenditure of the public funds by the Government than was
absolutely necessary, or there would appear to be required to be laid out
in the case of any ordinary individual. Too much power had already
been placed in the hands of the Treasury, and he was really of opinion
that a question of such importance as that to which he was now referring
ought not to be left to the sole diseretion of the Treasury Board ; but he
must express his belief, that the reference of the question to a Committee
of this House was necessary for the purpose of securing the public
from unnecessary and wasteful expenditure. Such was the course
pursued by the Chamber of Deputies in Paris at every session, and he
was convinced that the adoption of a similar proceeding would be at.
tended with the greatest benefit. So certain, indeed, was he of this,
that he should feel it to be his duty at an early part of the next session
of Parliament to move that such a Committee should be appointed, in
order that they might exercise a control over the cash transactions of the
Treasury, and in order that they might investigate the expenditure of
the public money under the Appropriation Act. In conclusion, he must
again express a hope that the House would interpose its authority be-
tween the Right Hon, the Chancellor of the Exchequer and the people,
to prevent a waste of the public money, and he must repeat his con-
viction teat such an effect might be produced by the adoption of a
suggestion which he had already thrown out for the reduction of the
rate of interest from 2d. to 1 }rd.
Mr. GOULBURN said that it was not his intention to make many
observations on this subject, which was se important to the interests of
the country ; but, nevertheless, as this was one of the few occasions on
Which an opportunity was afforded to Members of that House to express
their opinions on the subject of the financial affairs of the empire, he
felt himself called on to say a few words in reference to it. He must
say that the very short address which he had proposed to make to the
House would be very much decreased in length by what had fallen from
the Hon. Gentleman who had just sat down, because in respect of much
that he had said in reference to the funded property of the country he
entirely concurred. At the same time, however, that he made this ad-
mission, he could not concur in the observation of that Hon. Gentle-
man that any control ought to be exercised by a Committee of the House
in the manner suggested by him over the financial transactions of the
Treasury. The view taken by the Hon. Gentleman was not eel...

. -
tainly one in which he coincided, because he felt that it was due from
those who took no interest in the matter to call the attention of
the House to it—(Hear, hear)—and this course was not only called
for at the hands of those officers in whose care the finances of the coun-
try were placed, but also by that respect to which the llous, was en.
titled.—(Hear, hear.) He must say also that he certainly did not agree
with the Hon. Gentleman the Member for Kilkenny in the statement
which he had this evening again repeated with respect to the real causes
of the embarrassment of the country. The exertions made by the Hon.

Gentleman were always most laudable, but he must disagree with him
In the rule which he had endeavoured to impress on the Hons,, that the
only resl means of conducting the affairs of the country was to continue
in obtaining the greatest possible reduction in the expenditure of the
Government.—(Hear, hear.) Now, it was doubtless always expedient
and necessary to make such reductions as were compatible with the state
of the country and with economy—(Hear)—but his (Mr. Goulburn's) ob-
ject had always been to impress on the House, what appeared to have
been forgotten by the lion. Gent., that real economy did not consist in
a niggardly reduction of the ottcial establishment, so much as in the
careful husbanding of the means of the country; and that although
there was the greatest expediency in endeavouring to procure a reduc-
tion of the debt which rested so heavily on the country, yet the course
which was the most advisable to pursue was such as should be best cal.

eulated to keep the resources of the country in such a state of elasticity
hat they might speedily recover the effect of any sudden shock which
hey might sustain. The truth of this argument was expressly affirmed
ay the statement made by the Right Hon. Gentleman the Chancellor of
he Exchequer. For what said he? He said that there had been an ex.
aense of one million incurred, in order that the necessary means might
>e afforded for putting down the insurrection in Canada. He would
only ask any Honourable Member, who had at all looked into
transactions accompanying that revolt, into ta-
...a ettaets and cireurn-
stances attending which it
a., aria necessary
her the great for him to go, whe-
t
s proportion of this expenditure might slot baize been
saved if there had been a limbed augmentation of tlie establishment,
se which the teritintianCe of the existing tranquillity' of the country
night Gave been 'secured—an augmentation which might have been
supported at the comparatively trifliag cost of 20,00C1. or 30,0001.
—and whether, therefore, instead of the extravagant outlay alluded
to by the Honourable Member, a positive saving would nest have been
effected ?—(Hear, hear.) He i-ould not, however, pursue this part of
the subject ally farther, because it would more properly come under dis-
cussion when the vote which was hereafter to be proposed should come
under consideration—(Hear, hear)—for he was firmly of opinion that
,ugh matters best met with the attention of the House in moments of
ealm and temperate inquiry, rather than at times when the debate was
of an opposite character. He was anxious to impress on the House,
aowever, that real economy consisted in keeping the public debt in such
a state as that it was capable of being easily managed, and he had to
romp'ain that under the administration of the financial affairs of this
country of the Right Honourable Gentleman opposite there was far
from having been any reduction of that debt, but that, on the con.
trary, the alteration which had taken place in it was an increase in
its amount; and he was prepared to say that the augmentation was
such as to have led to the difficulties in which the Right
Honourable Gentleman found himself placed, and which, if a due
degree of watchful care were not taken, might eventually lead to conse-
quences to the country of a most alarming nature. With respect to the
public debt, if its present total amount were compared with its amount in
the year 1831 and the year 1836, it would be found that there had been
an augmentation of the capital er funded debt; and if the total charges
of the debt at the same periods were compared a similar result would be
discovered. This was the case at the time of peace and of plenty, and
of unusual and boasted prosperity; and this, too, when there were no
evils of a commercial nature to be complained of, and when, therefore,
if at an, time, one would have imagined that the debt could have been
reduced. It was not of this alone, however, that he had to complain,
but he complained on another ground. The House would remember,
and the Hon. Member for Kilkenny he was sure would remember, that
in 1825, the principles on which the Sinking Fund was supported were
stated by the Honourable Member to be rested on a fallacy, and
was declared by the House to be of an objectionatile nature. In,
order to keep up that fund, specific sums were applied to the re.
duction of the public debt, while, on the other hand, another
debt was created at. the same time, equal and sometimes even
greater than the amount paid off. In 1828 it was declared by
Parliament that this system should cease; and in 1829 it was laid
down as a rule for the conduct of these who should afterwards have
the government of the financial affairs of the country that the surplus of
the public funds should be clearly and positively stated every year; and
that no debt should be incurred on the one hand merely for the purpose
of paying off another, in order that the pub'ic and the country might
really know what was the amount of the surehts in the hands of the
Government. Now, under the operation of this law, during the period
that the Right Honourable Gentleman had been in office, he had been
guilty of a violation of its principles, end hail produced to the public a
false account—he did not mean false as conveying any imputation on
him, but an erroneous account of what had been the surplus, and an
equally erroneous account as to what was applicable to the payment of
any deficiency which might appear. Under the Bill of 1829 it was de.
Glared that whatever raal surplus might arise after the revenue expen.
dituTe should appliea to the red= ion of the debt, and provision was
maaa '• 'mat it might be applied to reduction of the amount of Exchequer
Bills, and in the absence of that to the purchase of deficiency
bills. He did not object to this latter course, because occasions
might arise when the greatest and most important interests of the coun-
try might depend on the necessity of so applying part of the funds, and it
was the intention of Parliament that they should be so applied ; but yet
it was found that during the last three years what had been stated as the
surplus revenue had been applied to the reduction of deficiency Bills,
The Honourable Member for Kilkenny hail sal I that there were perhaps
same Members in the House, who were not acquainted with the exact
character of deficiency Bills, and he would just explain to the House
the effect of the mode of applying the public funds to meet them.
It was known that the Government was bound on each quarter.day,
to provide the amount necessary for the payment of the dividends on
the Consolidated Fund. The course firmerly adopted was that the re-
venue was permitted to accumulate duri ,g the whole quarter in the
hands of the Bank until quarter-day, where it was required to be paid.
This, it was found, was attended with loss, and therefore it was deter-
mined to apply the public money as it came in to general purposes, with.
out allowing it to accumulate, and at the quarter the deficiency Bills were
issued, when the required amount of money was not at the Bank, for
the security for the payment of the debt necessarily incurred with
the Bank for the payment of the funds advanced, and it was proposed
that these bills should be paid during the ensuing quarter. If, there-
fore, it was stated that there was a surplus revenue of a million, and
the public were led to believe that it vas an actual surplus, and if five,
sia, or seven hundred thousand pounds were applied to the payment of
these bills on the one hand, or of the public debt on the other. what
was it but the very fault intended to be remedied and prevented by Par-
liament in the Act of 1829, and did not the Government lead the
public to entertain erroneous views in reference to the revenue ?
(rear, hear.) Yet this was the practice adopted, and it was against
this that he most strenuously protested. With regard to the unfunded
debt, he might almost repeat what he had said before; and he must say
that it was a subject which had been the source o; considerable anxiety
an] attention. The Hon. Member opposite had stated in his speech that
tire arneunt of Exchequer Bills was very considerably: reduced, the re--
duction lacing four millions; and be had stated that the extent of the
issue of them did not exceed that cf 1827, and he therefore infer re I that
the amount was not greater than was required by the state of the market.
This evidence would be conclusive if it had not been met by other parts of
the statement of the same Honctirable ars maer ; but these, as well as
the obs_rvations of the Honourable Member for Coventry, whose autho-
rity and experience on the subject every one must respect, completely
oversee his inferences. The Right Honourable Gentleman him-
self, however, in endeavouring to maintain that the amount was not
greater than was required, said that the public property was interested,
and that if he did not maintain the interest at more than the rate of 3
li.tr cent., the persons who otherwise would be disposed to purchase
Exchequer Bills would be induced to embark in those wild speculations
at present going abroad, and would probably so far involve themselves as
materially to suffer by their adopting stmh a course. But this was alto-
gether fallacious; and, if it were not, was the principle one on which
the Government should proceed ? It wa.s fallacious because the Right
lion. Gentleman imagined that the public and the individual who was
the purchaser cf the bills received the interest paid ay Government. But
it was not the fact that if the Government paid three per cent. on Ex-
chequer Bills, these parties -would receive it, for there would be found
alenty of persons who were willing to take them at 72s.—(Hear)--and
the principle, therefore, was to reduce the interest to the rate paid
in the market, so that if it were proposed to raise money on Exchequer
aids at five per cent. it would have no edict, for the public would pay
the full per center, while the individual who bought the bills would
:slake no more than by any ordinary sperntation. The argument,
therefore, was a fallacy, for Vie payment of Exchequer bills did not de.
:rend on the amount of interest paid, but on the state of the money
.narlset.—(Hear, hear.) If, however, it were 'true, as it was stated,
!iy the Right Hon. Gentleman, in what situation did the admission
lace the Government ? No dependence was to be placed on all those
aalinary means by which the Gc vernment had hitherto been in the
habit of raising money. No attempt was to be made by the Govern.
rent to avail itself' of the additional security which its name would af-
Ord, nor was it to avail itself of the high credit which the Govern-
ment had invariably supported by its uniform good faith ;
but they were to go tc market precisely on the same footing as
f they were speculators without any such means as those he had
suggested to support them. This was a plan which must
soon utterly fail and break down, attended as it was with the
;realest difficulties and inconveniences, and calculated as it was
it involve the Government in principles which were altogether
false.—(Hear.) But the Right Hon. Gentleman said that he must
seep Exchequer Bibs to meet the demand ; and this he was prepared to
.admit ; but at the same time he must do so taking due care that the
amount should not exceed the demand, and in considering this he must
look not at the numerical amount of Exchequer Bills alone, but at all
the other circumstances of the country, and he must take care not to
add to the natural difficulties which the system must create if it should
itot be kept within proper bounds. He was prepared to contend that
if the Right Hon. Gentleman had attended to the reduction of the un-
aunded debt, he would not have been in the position of being obliged
to raise the rate of interest; but at the same time, situated as the Right '
lion. Gentleman found himself, he had no hesitation in admitting that
he was right in the step he took in that respect. It was true, that the
Exchequer Bills were not now higher than they were in 1827, but
were the public now in the situation as they were then ? They must
consider the Exchequer Bills as payable on the demand of the party
holding them, and they must recollect too that the Government had
not only the difficulty of being compelled to provide for the payment of
them at ordinary times, but also that they could not when any sudden
call was likely to be made avail themselves of the issue of an
Additional 500,0001. or 1,000,000/. to meet the casual want. It was
not then the numerical amount which was to be considered, but all the
other circumstances which might tend to increase the danger in case of
any sudden emergency; and he would tell the Right Honourable Gentle.
man that there had been a great alteration in the circumstances of the
country in this respect. In 1827, when Mr. Canning had only twenty-
four millions of Exchequer bills, and proposed to raise three millions
more, what was the amount of deposits in savings' banks ? There were
no deposits. What was it now? Twenty millions—(Hear, hear)—so
that if there should be any sudden want—if there should be a bad har.
vest, with which, thank God, this country had not been afflicted for
some years, but which, nevertheless, might occur sooner than was ex-
oected—or if there should be any other cause by which the people would
be compelled to fall back on their own resources, how were their demands
to be supplied if there should be a sudden call for their deposits, such as
had bean made in France some time ago ? Government would
not only have to meet these demands, but they would also
hive to meet them under the additional difficulty of their
having no funds at their disposal but stock—(Hear)—which they
would be compelled to sell at 60 or 70, having purchased it at 93 or 94.
—(Hear, bear.) He was not calling on the House to reduce the amount
of the interest pa'd, hut he was simply doing all he could to put the case
to the House of the poor being compelled to rent on their own resources,
and of all adventitious aid being withdrawn from the Government, and
their being left to meet the demand which would be made upon them,
and which they would have to meet from their own resources; but he
said that the House was bound to protect the country against the risk
which would be run, and from the danger to which the public would be
exposed in the event of the present system being allowed to continue.—
;Hear.) He had already said more than he had intended, and he re-
grettest having so long occupied the attention of the House ;—(Hear)
but he was really anxious to point out to the Hc,use the apprehensions
which he felt, because at the moment of calamity or difficulty, it
was difficult to reflect on the dangers which might be produced by
the continuance of a system so bad in its details, while it was
easy to tnake provisions for the future, when the evils which might
fallow were foreseen ; and when he made this statement to the
House he did so declaring that he should take an early opportunity
of submitting to the consideration of the House the real state of the debt
of the country, and he sincerely trusted that some measure might be
adopted by which, in case of difficulty, whether it arose in consequence
of a bad harvest, or of a foreign war, or a revolt in the Colonies, or any
of those other calamities the nature of which prevented their being an.
ticipated, the resources of this mighty empire might be immediately
applied without difficulty, and without producing any of those concur.
sions or disturbances which were so much to be regretted.—(Hear.)
Mr. 31. ATT WOOD rose to address the House, but was almost in-
audible. He said, however, that there could be no doubt that the
Government were right in raising the amount of interest on Exchequer
Bills, but, at the same time, they were not justified in taking such a
course merely in consequence of the temporary fluctuations of the
looney market ; and it was their duty before they took any such step
to wait until the market should be settled, mid Until some definite opi.
nion could be formed in reference to the average amount of interest to
be demanded.

Mr. GILLON felt that the debate had been carried on on too narrow
a basis, as the discussion had almost entirely been confined to the rate
of interest on Exchequer Bills; but there were many other grave
topics which, on taking a review of the financial state of the year, it
was necessary to reurd with attention. He trusted that those disasters
which the lion. Member for Whitehavon said would befal the country
would be found to be fallacies, and that those anticipations which the
Itight Hon. the Chancellor of the Exchequer had expressed with r,gard
to the future prospects of the revenue would be realised ; and he had
heard the grounds which he had given for such inferences with great
satisfaction. He thought that in the present circumstance of a detal.

cation in the revenue, it was necessary that the Chancellor of the Ex.
chequer should pay the greatest attention to the finaneial Cir.
curnstances of the country. He lied heard with regret that tbere
was to be no reduction ha the taxes of the country; but he (Mr.
Gillon) .was convinced that by changing the mode of levying
many of the taxes a considerable increase of revenue would
be obtained, and ta•-•
, great relief would be afforded to the country. This
was particularly the case in the Excise department, where from
600,0001. to 700,0001. a year might at once be obtained by adopting
the enggestions of the Commissioners Of revenue inquiry: He was con.
vinced that by reducing the soap duties one-half they would get more
than the present amount of revenue, and at the same time considerable
relief would be afforded to the public and manufacturer, and it would
put down the illicit manufacture. Again, in the Customs, by altering
the duties on timber, more than 1,000,0001. a year might be brought
into the Treasury, and in addition td this commerce would be benefited,
and the public would be gainers by obtaining a better article than they
did at present, at a cheaper rate. The greatest advantages would also
be bestowed on the commercial and manufacturing interests of the
country by getting rid of the corn laws; and this might be managed in a
way so as to be highly productive to the revenue.
Mr. HUTT could not let the present discussion close without making
a few observations, as he felt a deep interest in one or two matters that
had been adverted to. The Chancellor of the Exchequer had informed
the House that the country bad no surplus revenue, and that he there-
fore could propose no reduction of taxation. This,
he was sure, was a
statement which could not be satisfactory to the country, but it was a
matter of necessity which there was no resisting ; it was one of those
vicissitudes to which a commercial country was exposed, and which wag
not chargeable On eithet the Government or the Legislat tar e. He could
not help feeling, however, that some degree of censure WaS justly due tei
the Government and the Legislature, for there had been an evident in.
disposition on the part of both to inquire into those causes which had
so often paralyzed the commercial transactions of a country. When his
Hon. Friend the Member for the Tower Hamlets moved for an inquiry
into the joint stock banks, the Meta Hon. Gentleman as well as the
leading Members on both sides of the House, resisted the motion
to inquire into the proceedings of the Bank of England as re.
girded their mode of dealing with the circulating medium.—(Hear,
hear.) It was the opinion of Mr. Thomas Tooke and others
of the most enlighted men lo the country, that the power
the Bank of England had of expanding or contracting the
revenue of thecountry was one of the main causes of the crisis it had
experienced. This was a matter of great importance, and required the
most serious consideration ; but it was one that the Chancellor of the
Exchequer ought to take into his serious consideration. Hedid not be.
Ileve that Gentlemen Opposite were _satisfied that the monetary system of
the country was in a sound state. This was evident from the effects
that the proceedings of General Jackson in the United States had in our
financial proceedings ; fer it caused such a run on the Bank of England
that it reduced the amount of the precious metals in its coffers to about
four millions ; and if the run had gone on but a short time longer, it
Would have caused a panic, and no doubt would have led to a commer.
cial crisis, attendant with all its evil consequences. On this subject Mr.
Tooke made some pointed observations, and dwelt upon the injudicious
proceedings of the Bank of England Looking to the speculative cie-
rector of the country at the present moment, he asked whether it was hot
one which should be retarded with great alarm ? He therefore en-
treated the Chancellor of the Exchequer narrowly to watch the pro
ceedings of the Bank.
Colonel SIBTHORP remarked, that the deficiency its the amount of
the revenue was greater than it had ever been before, and he was con.
vinced that it was considerably more than two millions. The Right
Hon. Gentleman went back to a former period ; but what had they then
to do with the proceedings of former Chancellors of the Exchequer ?
He referred to what he called a similar deficiency in the time of Mr.
Canning; but he might as well have gone back to the days of Noah, if
there was such a person as the Chancellor of the Exchequer in those
days, and he (Colonel Sibthorp) really did not know whether there was
or was not.—(A laugh.) lie had never seen a Chancellor of the Ex-
chequer rise with a more pallid countenance than the Right Hon. Gen-
tleman bore when he got up to address the House ; indeed he appeared
the very picture of despair.—(Laughter.) He would tell tile Right
Hon. Gentleman that he had not the slightest confidence in him nor in
any of her Majesty's Ministers : -and he would at once tell them that the
most prudent and manly course they could pursue would be to walk out
of the House and their places at the same time, so as to allow thorn, to
be occupied by those who were better able to rule the destinies of thi°
greatcountry.—(Laughter.)
The CHANCELLOR of the EXCHEQUER was not surprised at
the recommendation of the Hon. and Gallant Colonel, after the attacks
which had so often been made on himself end colleagues. After the
lengthened statement he hed made in the first instance, he felt some
apology was due for again trespassing on the attention of the House ; but
he hoped that he should be allowed to make a few remarks in reply to
the statements that had been made in the course of the debate. The
Hon. Member for Coventry said that the additional expense of Exche-
quer bills for tee six quarters had been 540,0001.; but he would, in the
course of the evening, lay returns on the table from which it would
appear that the exact amount of the expense incurred was 396,0001.
In the statement that he had made on this part of the subject, the Right
lion. Gentleman had also forgotten to mention that the East India
Company had received notice from the Bank of its paying off one-half the
bond debt due to the former. This was one of the main causes which
had operated on the price of India bonds at the present moment.
The Hon. ,teniber fur Kilkenny, as well as the Right Hon. Gentleman
opposite, had adverted to the state of the unfunded debt, but they had
omitted to take into account the amount of reduction of the funded debt
which had taken place of late years.—(Hear, hear.) There had been,
as he need hardly mention, ansincrease of twenty millions to the
'dela in consequence of the slavery abolition measure, but at the
sense time he had it to state, that during the period which had or.
curred since he had been connected with the Treasury, namely,
since 1831, up to the present time, 'a considerable reduction of the
debt had' yearly taken place. In the year ending January, 1832,
the amount of debereduced was ,673,0001.;2 in the next year, in con-
sequence of a great deficiency of income, only 5,6001. was paid off; in
the year following the sum was 1,023,0001.; the next year 1,776,0001.;
and the next 1,270,0001.; and in the year ending January, 1837,
1,500,000/., making a total of about ten millions of debt paid off within
that period.—(Hear, hear.) Hon. Gentlemen, when they adverted to an
increase of debt occasioned by the necessity of circumstances and of the
time:, should not forget to give Government credit tor the reduc-
tions which had been made.—(Hear, hear.) Hon. Gentlemen, too,
whin they entered upon calculations as to still further reductions cf
expenditure, must take care that they were not led into serious mistakes.
So Car from thinkirtA with them that Government had not gone far
enough in reducing the expense of establishments, especially of those
connected with the collection of the revenue, he would be bold enough
to say that Isis doubt rather was whether they hail not gone somewhat
too far in many instances. Taking the case of the Excise Laws, to
which the Hon. Member for Falkirk had referred, he could state that
the number and nature of the complaints which he received from trades-
eeople and others subject to the operation of these laws rendered it ques.
tlonable whether many of the persons employed in the excise were not
so slightly remunerated as to subject them to the temptation of abusing
their offire.—(Hear, hear.) He had likewise reason to believe, from re.
presentations constantly made to him, that in many important places the
establishment for the collection of customs was hardly sufficient fur the
purpose, and he was sure that on reflection every Hon. Member would
agree with him that it would be as mistaken an economy to reduce the
establishment for either of these services below the just proportion as it
would be the height of absurdity.
Propter vitam, viver,di perdere causes.
Measures, however, were either in progress or in active preparation
which would greatly improve the administration of these departments.
He (the Chancellor of the Exchequer) had been reproached by an Hon.
Gentleman opposite with having, in 1836, misled the House and the
country by exaggerated calculations of coming prosperity. The Hon.
Member had herein shown himself to be strangely deficient in memory,
for it so happened that in 1836 his (the Chancellor of the Exchequer's)
words were so decidedly those of guarded caution that he was taxed by
the Hon. Gentleman himself—the lion. Gentleman who now charged
him with having given on that occasion an inflated view of the revenue._
he was absolutely taxed by that Hon. Gentleman with speaking too
despondingly as to the financial state of the country.—(Hear.) The
question of savings' banks had been introduced, and he (the Chancel_
lor of the Exchequer) could not but express how rejoiced he had been
op this
tihmaitiorhtean,,t,ousuldbjencet,.,—er(cHoenatre.m)
or sane.
to hear the observations which had fallen from the Right Hon. Gen.
t'm
lightedn ol
to contemplate
ee was de_
tion any plan of economy involving any reducticn of the rate of interest
now paid to depositors in savings' betake—(lcer, hear.) If ever
there was a subject which ought to be approached with the greatest dis-
trust and the greatest caution, it was anything like a meddling with the
interest which parties were entitled to receive on deposits in savings'
banks.— ( Hear, hear.) The taking any step which should enable any
person, however mischievous or misguided, to say that Government
was about to be economical at the expense of the poor, would entail
greater loss on the country than could be compensated by any saving
which could be effected by a reduction of the rate of interest on the
deposits in these banks.—(Hear, hear.) The Hon. Member for Kil.
kenny had reproached him with not having gone sufficiently into de-
tail', and more particularly that he had not gone into such details as
the subject of the trade with America, and the American commer.
cial crisis ; but, though most unquestionably they had had very con-
siderable influence on British commerce, yet he had not conceived
this the proper time or occasion for discussing the measures of
President Jackson or Mr. Nicholas Biddle.—(Hear, hear, heir.) Ile
could not make this passing allusion to America, without paying a
most deserved tribute of admiration to the conduct of the American
merchants and people throughout the whole of the unhappy crisis re.
ferred to, in reference to their British engagements.—(Loud cheers.)
That conduct had been such as to maintain America proudly in her
high caste among the great nations of the earth—(Hear)—and to pre.
serve her credit in the fullest degree unimpaired with this country.—
(Cheers.) The merchants of America had throughout made the most
merle efforts,—(Hear.) The Right Hon. Gentleman went on to observe,
that the Right Hon. Gentleman opposite had indulged his imagination
in a long series of contingencies, various enough, if they occurred, to
baffle all human calculations. It would therefore be quite absurd to con-
template them at all : all that a Chancellor of the Exchequer could do
in cases like the present was to make the best calculation he could,
founded on the ordinary course of human events. The accounts given
by the Bank of its situation were far different from the very discou.
rasing view which had been given by the Hon. Member for Coventry. He
should, however, reserve what he had to say on this momentous subject
until the period when it should come before the House in the mo-
tion of the Honourable Member for Kilkenny. lie could only assure
the House that there was no individual who viewed the subject with
more seriousness than he did, or was more anxious to have it well and
wisely considered; but he must say that he had invariably observed, in
the discussions on this subject, the anxiety in various quarters to dis-
cuss favourite themes, rather than to deal with the absolute facts of the
case, and to act according to those recta—(heer, hear, hear.) If
Honourable Gentlemen looked back from 1825 to the present time,
they would remember that, on every occasion in which a discussion
respecting banking occurred, some new theory had invariably been
started as a solution of difficulties, each novelty of this suit as invaria-
bly yieleing place to a successor. In the time of Lord Liverpool, for
instance, joint-stock banks were held foith as the infallible remedy for
everything. Joint-stock banks were instituted, and soon after the
outcry was that all the mischiefs in the country were owing to
joint-stock hanks. By anti by the cry was that the monopoly enjoyed
under the Bank charter was the great source of all the mischief,
and it was insisted that this monopoly should be crushed, for that a free
trade in banking wee as necessary and as proper as a free trade in
baking. The charter was withdrawn, and now again the cry was in fa-
vour of a single batik, for abo.ishing all competition and giving the Bank
of England unlimited control over the whole currency of the country.—
(Hear, hear.) He did not advert to these circumstances as an argu-
ment on the question, but simply for the purpose of entreating Hon.
Gentlemen, when they came to the discussion of the subject, not to dis-
cuss any particular remedy or supposed nostrum, but to view the subject
at large, in all its great relations to the commerce and manufactures of
the country. There was no state of currency or of the standard of value
which could protect the community from the alternations of commercial
vibrations. The Right Hon. Gentleman concluded by again thanking
the House for the indulgence it had exhibited in his favour.
Sir J. R. REID did not rise fur the purpose of making any observa-
tions in reference to the subject of banking. His views
on
this hit.
portant question he should attempt to explain when the question came
substantively before the House. He rose in reference to what had been
paid with respect to the American crisis, to express his feeling that the
conduct of the American merchants during that crisis had been most
honourable to them.—(Hear, hear.) To meet their engagements they
had unhesitatingly made the greatest sacrifices of their means; he knew
of many cases in which American merchants had maae sacrifices of tell,
twenty, and thirty per cent., to enable them to pay their debts.—
(Hear.) He had often wished for an opportunity of making this
statement, and he felt satisfied that when these debts were paid
(and they were for the most part in rapid progress of liquids
tion), the confidence which had hitherto happily existed between this
country and America would continue unimpaired. The Hon. Member
for Coventry had observed, in reference to Exchequer Bills, that he