The Sun.
London, England, 1859-03-26 00:00:00

THE lONIAN ISLANDS,

Earl ST. GERMANS seeing the nobleearl inhis place,
he begged to put a question to him. When his noble friend
(Earl Grey) withdrew his motion for the production of the
correspondence on the subject of the lonian Islands, he did
so in consequence of the noble earl stating as a reason for not
producing the papers that the effect would be to cast
censure on some persons who would not be in a position
to give a satisfactory answer. An impression had arisen
amongst the friends of Sir John Young, in which he (Earl
St. Germans) did not participate, that he was in some way
alluded to. It would however bei satisfactory to Sir John.
Young if the noble earl would give a denial to the state-
ment in his place in Parliament.
The Earl of DERBY said he trusted he should be able to
give the noble earl a satisfactory answer. Ho did not use
the word censure.
Earl ST. GERMANS--That is not important.
The Earl of DERBY—In what I did say I had not the
slightest idea of castinganyreflection upon Sir John Young
who had acted during the time he held office with great
ability and discretion in a case of great difficulty.
THE GREAT CLOCK.

Lord CAMPBELL said he had expected, when ho re-
turned to town from circuit, to find the great clock of
the Houses of Parliament going. (Hear, hear, and a laugh.)
Although he knew the noble earl was occupied at the pre •
sent moment with matters of much greater moment—
(laughter)—he must again ask him what steps had been
taken in the matter, and when there would be a likelihood
of the clock being in going order.
The Earl of DERBY said, after the noble lord had asked
him the question on a former occasion, he had conferred
with the Board of 'Works, who in their turn had conferred
with Sir C. Barry, and he informed them that the bell was
entirely in the hands of Mr. Denison. He had, however,
1 reason to suppose that in a very short tima the clock would
be in working order. He could at any rate inform
the noble and learned lord that since he had spoken the
clock had passed on ^at least half-an-hour. (Hear, hear,
and laughter.)
POOR LAW (IRELAND).
The Marquis of CLANRICARDE presented a petition
from the guardians of the Tuam Poor-law Union, relating
to the baptism and religious education of deserted children
in Ireland, and moved for a copy of a letter addressed by
the Poor-law Commissioners of Ireland to the Tuam
Union upon the subject. The noble marquis entered at
some length on the present -system, which he said engen-
dered great irritation and acrimony.
The Earl of DONOUGHM ORE thought that legisla-
tion was much wanted on the subject alluded to by the
noble marquis apposite, but he must say he thought the
disadvantages of the present system had been very much
exaggerated.

After a few words from the Marquis of CLANRICARDE
he motion was withdrawn.

THE INDIAN MONEY MARKET,

The arl of ELLENBOR,OUGH then rose on the mo-

tion of which he had given notice, " That there be laid be-
fore this house copies of all the notifications issued by the
Governor-General of India in council from the commence-
ment of the year 1857 to the present time, relative to the
terms on which the Government of India would receive
money on loan." He said the recent accounts received from
India were so very serious as regarded the financial embar-
rassments of the Government in that country that he thought
it right to call their lordships' attention to the subject.
There had been a fall of 9 per cent. in the Four per Cent.
Stock, and of 51 per cent. in the Eight per Cent Stock.
That the funds should have fallen at that particular mo-
ment was the last thing that should have been expected,
having regard is political aspects. The rebellion was put
down. Tantia Tepee and the Begum and the Nana had
sought refuge in Nepaul, and everything looked as if they
were returning to a pacific state of things. Just at this
juncture the Government resorted to a fresh scheme for
raising money on loan in India, and he believed it was im-
possible to attribute the great fall that.had taken place in
the Indian funds to any other circumstance. It had not,
however, merely affected the price of funds, but he under-
stood that the Bank of Bombay had been in difficulties so
far that it had been unable to accord the usual assistance
given to mercantile men who, had been compelled to resort
to the native bankers, and were paying 13 or 14 per cent.
for money. It was also said that the Government were in
pecuniary difficulties, and that they had been compelled
not to pay the salaries of the civil servants in full, but to
pay them only in part. Undoubtedly the rebellion had
caused great pecuniary difficulty. It was felt at a very
early period that the Government would be under the ne-
cessity of making an alteration in the terms on which they
were willing to receive subscriptions to the Five 'per cent.
Loan. They were compelled to permit the holders of Four
per Cent. Stock to subscribe one-half in cash, and the
remainder in that stock at par. Unfortunately the Go-
vernment at the end of 16 or 18 months resorted to a
Five-and-a-Half per Cent. Loan, and the consequence
was a great reduction in the receipts on the Five per
Cent Loan. It was impossible to get the loan filled up. No
difficulty occurred last year when no less a sum than six
millions were subscribed, and he believed that nearly two
millions were subscribed in the previous half leer. Under
these circumstances the government of India, on the 13th
of July last, laid a letter before the directors, in which they
proposed to obtain a loan at 6 or 51 per cent., according to
the condition of the money market ; the second was to raise
from the directors a sum of one and a half or two crores of
rupees; the third was to effect a Six per Cent. Loan; and
the fourth was to issue Treasury notes at not less than 500
rupees, each bearing an interest of six per cent. The Secre-
tary of State for India was induced to adopt the latter sug-
gestion,_which he thought was a most unfortunate resolu-.
tion. Unless for some palpably useful object, it was most
impolitic to disturb the money market. The issue of Trea-
sury notes in India, which were equivalent to Exchequer
Bills in England, was totally unfitted to the circumstances
of India, and he believed was calculated to do great injury.
There were different sorts of banks in India—the chartered
banks, which took deposits on call, and the unchartered
banks, which took deposits on notice, varying from ten days
to a year. If the Government offered inducements to with-
draw this money, the result would be that the banks would
be unable to afford the usual mercantile accommodation,
unless they sold stock, and that again would derange the
money market. The money so deposited in the banks was
used by the bankers in advances on indigo and other pro-
duce, and if it were withdrawn the result would be that the
banks would be compelled to withhold their commercial ad-
vances, and there would be a panic. He should therefore
deprecate a large issue of Treasury notes in India. He
observed in the
.public press of India a general desire was
expressed that, instead of resorting to an open loan, which
had been the immemorial custom in India, the Government
should raise a loan in a similar manner to that practised
in this country. In this country capital was in large
masses, and the capitalists acted in concert, which gave
facilities for effecting loans in the manner adopted here,
but in India capital was dispersed in many hands, and he
did not think that a loan could be effected in that manner,
unless very high interest was offered. Besides, the govern-
mentin India never knew the amount it would require. It
was always either at war or going- to war. This being the
state of things on the 20th of January, the Government gave
notice that after the 30th of April the 4 per cent. stock
would no longer be received in subscription to the loan then
open, but that Treasury notes would be issued at an interest
of about 51 per cent. Now, two errors were committed in
adopting this course. In the first place, there was the error
of attempting to raiso a large sum of money by Treasury notes
in that country, and there was this further error, that it ne-
cessarily depreciated the 4 per cent. stock. On the 10th of
February an alteration was made, and it was stated that the
notes should be issued for as low as 200 rupees. On the 21st
of February a further alteration was made. It was declared
that after the first of May Treasury notes'should be issued,
not at 51, but at 41 per cent., and another notice was given
that 5 per cent. stock might be subscribed, but not a word
was said as to the 4 per cent. stock, which was the great
stock of the country. Under these circumstances, it could
not be a matter of wonder that the Government found it
difficult to raiso money on loan. Now, what we had to con-
sider was, whether it was open to us here to do anything to
relieve the Government of India. What occurred to him
was that the home Government, instead of taking powers to
raise £7,000,000 in this country, should take powers to raise
£12,000,0000. Ho did not know that it was necessary to
raise that sum, but of this he wasquite sure, that the know-
ledge in India that there was the possibility of raising that
sum here would materially assist the Government of India.
The Earl of DERBY said it was difficult to overrate the
importance of the question which his noble friend had
brought before them. It was his wish to conceal from Par-
liament nothing with regard to the state of India. He said
it with regret that its financial prospects werenot as good as
when the Secretary of State for India brought forward his
proposition to raise a loan of seven millions in this country.
The noble lord had accurately stated the proceedings that
had taken place in India, and shown that in point of fact,
although we were nominally raising a 5 per cent. loan, yet
inasmuch as only one-half was received in cash and the rest
taken in 4 per cent. stock, it was in reality a 6 per cent.
loan. In the meantime Treasury notes were issued at the,
rate of 61 or 51 per cent. Now he was not prepaied to say
whether it was altogether judicious to issue these notes
simultaneously with the announcement respecting the loan,
but no doubt that after the 30th April, when 4 per cent.
stock would no longer be taken, they would very consi-
derably augment the quantity of paper. But he had great
doubts as to the immemorial practice in India with regard
to open loans. There might be circumstances in the parti-
cular condition of India that might render it necessary to
resort to that course, but in point of principle he could not
conceive anything more objectionable in practice than keep-
ing open loans for an indefinite amount. The result was that
if the Government found themselves in funds, they took the
step which Was taken by Lord Dalhousie. They reduced
theinterest. He reduced it from 5 to 41 per cent. That was
the step which of course caused great discontent among the
lenders. But if a change of' circumstances took place, and
it became apparent that the Government was in distress
and in difficulties, then the capitalists, not knowing- what
amount would be required, were always hanging back,
waiting to seo what better terms Government would give.
He thought, therefore, that when the Government wanted
a loan, they would intimate fairly 'what was the amount
that they required, and they should not go into the
market for some time after. Ho saw by the last tele-
graphic information received from Bombay that an an-
nouncement had been made that the loan would be open to
the amount of £5,000,000, at 51 per cent., and that no
further sum would be asked for in India this year. He
had before him the estimate of the Secretary of State for
India of the receipts and disbursements laid before Parlia-
ment, from which it appeared that on the 30th April, 1860,
there would be a deficit of £5,500,000, which included the
raising of the cash balance from £78,000 to £1,000,000.
Under these circumstances it was that the Government
came to the conclusion that they would leave a sufficient
margin if they took powers to raise a loan of £7,000,000.
The Government of India sent a despatch on the 26th of
January to the Government in this country, in which they
made several propositions, one of which was to supply all
that was required by remittances in bullion from London,
and they requested that a crore of rupees might be sent, one
half to Calcutta, and the other half to Bombay. That was
acknowledged on the 9th of March, when the Secretary of
State for India told the Indian Government that it was im-
possible for them to entertain for a single moment the idea
that all their demands could be supplied by remittances of
bullion from London, but that in the meantime ho would
transmit ono million for their immediate requirements. One
portion of that million had been sent, and the other would
be sent shortly. But after the despatch was written, and
before it was sent, there was received a second despatch of