The Sun.
London, England, 1866-05-04 00:00:00

THE SUN, LONDON, FRIDAY EVENING, MAY 4, 1866.

has hitherto been bestowed on the question of the state and
movement of the National Debt. (Hear, hear.) I entirely
concur in the opinion expressed by the hon. member for
Westminster, whose absence on this occasion I deeply re-
gret, arising as it doesfrom severe indisposition; I entirely
concur in the doctrine he laid down that the first duty of
Parliament 25 years ago was to direct its attention to the
thoroughly unsound and rotten state of our fiscal system,
and its injurious effect in restrictions on industry and the
retardation of the growth of wealth. It would then have
been a great mistake if, instead of relieving industry and
the springs of commerce, we had applied our resources to
the reduction of the National Debt. But now we have got
through a great part of that work. There are taxes which
still remain, and which we are desirous to reduce; but now
that we have advanced so far in the work of reform in our
system of taxation, I think the time has come when we
ought seriously to consider the state and movement of the
National Debt. Besides the speech of my hon. friend there
have been other indications, which I for one have noticed
with great satisfaction, and which tend, I think, to show
that I am not speaking lightly or gratuitously when I sub-
mit to the committee that the time has arrived for dealing
with this question. Why, sir, the condition of the public
credit, as measured by the price of the funds, is in itself a
matter which might well attract the attention of Parliament.
It is not that the public credit properly understood is weaker
than it over was ; on the contrary, I believe there never
was a period when it was stronger ; but the rising rates of
profit upon money must necessarily raise, and I think have
already raised, but moderately, the rate of interest as repre-
sented by the price of the funds. At the same time, I be-
lieve it will be wise and politic on the part of Parliament,
with a view to exigencies which are not likely or proximate
but which are possible, to consider the present state of the
public credit measured by the state of the funds, and to con-
sider what would be our position if, under any overruling
circumstances of honour or duty, we are obliged to go to
market and borrow. There are several reasons which lead
me to think that this is a most proper time to open this ques-
tion. One is that next year, 1867, we are to receive another
large or at least a considerable falling in of Terminable An-
nuities. Nearly £600,000 of those Annuities will fall in, and
I think it well becomes Parliament to consider what substi-
tute it will provide for that annial change, with the view of
furthering the beneficial process of operating on the debt.
Nor can I fail to mention that the most powerful organs of
opinion, with no possible object, it seems to me, but that of
an enlightened zeal for the public good, have been labouring
to draw the attention of the public mind to this great sub-
ject, and have I think materially prepared the way for the
Government to submit to Parliament a proposal respecting
it. Now, sir, of course the movement of the National Debt
can easily be set forth in the most intelligible form to the
community. That debt consists of three items, but for the
presentpurpose it is not necessary that I should distinguish
one from the other, which would only perplex that view of
the total to which I wish to fasten the attention of the
committee. These three items are—first of all the Funded
or Permanent Debt, including the debt to the Bank of
England, though that is not precisely a funded debt,
and represented by theca.pital sum ; secondly, the Unfunded
Debt, of which I have already spoken ; and, thirdly, the
outstanding capital value involved in Terminable Annuities
that may still exist. Placing these three items of debt to-
gether, the total of the National Debt, which is commonly
supposed at the close of the great war to have been
£800,000,000, though not including all these items, had
turned £900,000,000 if money, the actual figures being
£902,264,000. Of course I do not include in that any allow-
ance for the Sinking Fund, which I exclude altogether, as I
speak only of the real obligation of the country. In 1830
that total had been brought down to £842,405,000. A good
deal had been done in that interval, as will be seen, forthe
reduction of the debt. but little had been done for the libe-
ration of the industry of the country. A beginning might
have been made, but if it was commenced it was acotnmence-
meat only. In 1840 the debt had fallen to £837,848,000
or by a very small stun - viz., 41 millions ; but it must be
recollected that during that interval a loan of 20 millions
had been contracted for the emancipation of the negroes in
the West Indies. Virtually, therefore, the reduction in
that period amounted to nearly 25 millions. The lowest
point was reached on the sth of January, 1854. It then
stood at £800,513,000. Then came the Russian war, and
Parliament resolved to meet the expenses of that war in
great part by taxes immediately imposed on the people ;
consequently the increase of debt was much less rapid
than it would otherwise have been, and much less rapid
than it must nndoubtedly be if ever unfortunately this
country should become involved in a prolonged war.
On the 31st of llarch, 1857, the debt had risen to
.£831,729,000 ; on 31st of March, 1859, it was £823,934,000 ;
and on March 31, 1866, it was £798,909,000. (Cheers.)
That iseominally a point sornewhatlower than it has stood
at before ; but it must be remembered that wo have can-
celled two minor sinking; fund stocks which formerly formed
part of the nominal capital, so that, in fact, we may say
with substantial accuracy, for it is not necessary to be par-
ticular to a million or a million and a half, it has now just
reached the point at which we have effaced the results of
the Crimean war, and the debt thus stands at the very
place which it occupied at the commencement of the year
1854. It is not necessary to observe that there are several
sums not very material in themselves—we are indebted to
the savings banks in the sum of about £3,000,000, and on
the other hand we have moneys lent on perfectly good se-
curity on bonds to drainage commissionbrs and other bodies,
that amount to about 110,000.000, but that is not an amount
that we need take into view in dealing with this enormous
accumulation of the national obligations. £799,000,000,
then, is, in round numbers, the present capital debt. Now,
let us observe the rates at which wo have operated upon the
debt. From 1815 to 1854 there wore nearly 40 years of the
most profound peace ever known, and that, therefore, was
the very period in which it was most desirable for us to
deal efficiently with this debt, if we were to place ourselves
in a position to look at war as a necessity iuthe face again.
Well, sir, I have stated what was then done. The rate of
decrease per annum at that period was £2,6o9,ooo—un-
doubtedly a very trivial sum when we consider the
enormous amount of what has to be achieved. In the
three years and a quarter from the sth of January,
1854, to the 31st of March, 1857, the rate of increase was
nearly £10,000,000 ter annum, in exact figures £9,602,000.
From 1857 to 1866 the total rate of decrease has been some-
what better, but still far below what it ought to have been,
—viz., £3,646,000. (Hear, hear.) Now, I wish to call the
attention of the committee to this, that what we must ex-
pect is, that whereas two or three millions a year have re-
presented the average of our operations in time of peace—
I do not believe if we take the whole years of peace since
1815 that the average operation would reach three millions
—if ever you become involved in any great and protracted
war, you must expct, not immediately, but after a year or
two of war, to see the debt grow at about ten times the
rate at which you reduce it in time of peace. (Hear.) Now,
sir, the next question I come to consider is whether that is
a satisfactory state of things for the country ; but I cannot
proceed further on that subject without asking the com-
mittee to observe what has taken place in other countries.
The chapter of National Debts is assuming, I think, a
painful and a baleful prominence as a social and political
fact of modern experience. (Hear.) I do not know whether
the house is aware to what extent this mischievous and
injurious process is going on, but I will refer first to what
I do not hesitate to declare I contemplate with the least
anxiety, and that is the debt of the United States. The
debt of the United States is in itself something wonderful
—wonderful as the creation of four years, strictly of four
years, and no more, and yet amounting to nearly 3,000
million dollars, or £600,000,000, and the rate of growth
of the debt in the last year exceeded, I think, £200,000,000.
That is a wonderful debt, and its charge is enormous. It
is not possible, in the present state of the financial arrange-
ments of that country,to ascertain with precision, but I be-
lieve I am not wrong in saying that the charge of that
debt is considerably heavier than ours, though the capital
is less. (Hear, hear.) The smallest sum at which I can
estimate the charge is 31 or 32 millions sterling ; and if
upon the back of that sum wo lay the necessary cost of
raising the revenue, which in America is much heavier
than it is here, I do not think the effective amount of taxa-
tion incumbent upon the nation at this time in consequence
of the Northern debt (I do not include one farthing of the
Southern debt) cannot be taken at less than nearly 35 mil-
lions sterling per annum. Well, now, looking at those
figures, a man would be struck with something like
despair; but if we look at the position of the country
which has to bear the burden I must confess that I think
the future of America, as far as finance is concerned—
political emblems are not now in question —will not be
attended with any embarrassment. I do not believe that
that debt will constitute any difficulty for the American
people. (Cheers.) I am confident that if they show
with respect to finance any portion of that extraor-
dinary resolution which on both sides alike they mani-
fested during the war, and of that equally remarkable reso-
lution with which, on the return of peace, they have
brought their monstrous and gigantic establishments within
moderate bounds—(hear, hear)-1 won't say that this debt,
according to an expression which was once fashionable in
this country, will be a fleabite—(a laugh)—but that in a
moderate time it will be brought within very small limits,
and may, even within the lifetime of persons now living, be
effaced altogether. (Hear, hear.) At this moment America
is, I believe, paying war taxes, and the amount of the re li
-
venue of the United States is not less, I apprehend, than
about 80 millions of money, the largest sum ever raised in
any country for the purpose of a central Government. The
estimated surplus is from 20 to 30 millions sterling a year,
and I believe at present only about 10 millions of their
taxation are menaced by the natural impatience of the people.
with respect to some of the taxes that leave been imposed.
Mr. M'Culloch, the Finance Minister of that country,
strongly urges the policy of reducing the debt, and I am
quite certain that from this side of the water we shall send
him a hearty expression of good wishes for his success, both
on account of cur interest in the well-being of a friendly
nation, and because it may be hoped that the example of
America will react beneficially on this country. (Cheers.)
But have gentlemen who sit here paid attention to the
stealthy manner in which borrowing is becoming the stand-
ing vice of almost every Government in Europe? I do not
speak now with regard to that uneasy state of things in
which the Continent is at this moment liable to bo in-
volved. We hope that neither unrestrained ambition
nor neglect of the rtlee of prudence will deprive Europe

of the inestimable blessings of peace. (Cheers.) But I ask
the house to consider how enormously important the prac-
tice of the Governments of Europe with regard to the con-
traction of debt is becoming. I have here the National
Debts of nine countries in Europe, estimated from the most
trustworthy data I could obtain. I find that, with the ex-
ception of Holland's, there is not one of these that has not
been virtually contracted in the last half century, and by
far the larger of them has been contracted during the last
20 years—a time of peace ; for if there has been any war
expenditure added to them during that time it is insignifi-
cant in amount. Holland, I find, acts prudently, and re-
duces her debt, while the finances of Prussia are a model
of good administration, for Prussia's debt stands at
£43,000,000, and Holland's at £85,000,000. Russia's debt is
estimated at £279,000,000, and Austria's at £316,000,000.
The debt of France is not a capital debt, and it is difficult
to estimate it with accuracy. It is made up of Rentes of 23
years' purchase, and, as nearly as possible, it amounts to
£400,000,000. It is the largest of these debts, yet, because
of the immense resources of the country, and the energy
and wonderful thriftiness of its people, one need, perhaps,
feel less anxiety for its future security and strength than
for the stability of any other European Government. Italy's
debt stands at £152,000,000, and it is increasing with por-
tentous strides. The debt of Spain amounts to £145,000,000;
Portugal's is estimated at £33,000,000 ; and the debt
of Turkey, which I believe to be entirely a modern
institution, principally created since the Crimean war,
amounts to £51,000,000. The great bulk of these debts,
amounting together to 1,500 millions, have accumulated in
a time of peace, and have not been thrown upon the several
countries during a struggle for life. I will not trouble the
Committee with details of their rate of increase; but,
omitting Holland, which has decreased its debt, and omitting
Prussia, which does not habitually increase it, and omitting
Spain also, which keeps its debt nearly at an equilibrium
(laughter), we have six of the nine countries who have
managed to increase their debts during atime of peace at the
annual rate of £61,000,000 sterling. And this isgrowing, for,
like other bad habits, debt-making has a tendency to spread.
Europe should therefore know the increase, and look at it
from the right point of view. It is spending in a time of
peace the resources of war ; it is exactly as if in a year of
good harvest the country spent the whole of that good har-
vest, and half another harvest beside ; and it should be re-
membered that if peace be preserved in Europe for the rest of
the century, the debts of these nine countries at the present
rates of increase would amount to nearly £4,000,000,000.
These are really portentous circumstances. It is not
merely the money engagements; that is comparatively a
little matter. It is not only a very great mischief that 60
or 70 millions should be drawn away from useful profitable
purposes for what is even worse than unproductive expendi-
ture, but it is an enormous political and social difficulty
which is being gradually stored up by this most improvident
course. There is nothing so insidious, at least we know of
nothing so insidious, as financial difficulty. It approaches
you in the first moment with smiles and caresses. The ex-
pedient of borrowing appears at the first temptation to bo
open to no objection whatever. It is like what the poet
described in the lines :

" Parva metu prime ; mox sese attollit in auras,
Ingrediturque solo, et caput inter nubila condit."
And it is more like that which one of the Greek tragedies de-
scribes of the cub of the lioness, which, having been incau-
tiously taken by the hunter to his home, is reared with his
dogs and petted by his children ; it fawns upon every one
while it remains a cub, but when it grows to its strength
its meekness suddenly forsakes it, and, coming out in its
terror, it deluges the whole house with the gore of its
victims. It is so with financial difficulties. They begin
with the most insinuating address, and grow so gradually
that you are wont to put off the evil day of reckoning ; but
you will nevertheless have to look it in the face some day,
and that may be when the difficulties have become actually
insurmountable. (Hear.) So much for other countries,
and now let us look at our own. I must ask you to bear
with me while I endeavour to point out what I take to
be the true state of our own case. I address my request
to the whole Committee, and especially to gentlemen op-
posite, and those who say, and say truly, that they are
deeply interested in the land and fixed property of the
country ; because I apprehend that if there be any special
interest concerned in the subject I am about to consider it
is the interest of the landed property. In the first place,
then, let it be remembered that we are living in a commer-
cial era, the prospects of which it is almost impossible to ap-
preciate, from their magnitude. Every five years the rate of
increase is continually shifting, and always shifting up-
wards. The liberation of industry, the progress of inven-
tion, the steady investigation of science, the improvement
of social habits are all combining together to induce the
conclusion that in the days of our childhood, when we
thought the commerce of England was a wonderful thing,
and that the commerce of the world was wonderful; and
when we had an idea that a century's development had
brought about almost a mountain of transformation, the re-
sult was, in point of fact, nothing but an infant in the
cradle. But it was an infant Hercules that has ever
since been bursting its bonds; and, depend upon it, great
as is the extension to which it has now reached, in all
likelihood it will go on extending still more in the future.
We are not prophets here ; but it is our duty, although we
must refrain from dogmatising, to estimate probabilities
as well as we can, and, like wise men, permit ourselves
to be guided by the balance of probability. During the
next 20 or 30 years, then, or perhaps more, for I cannot
pretend to name a time, we are to look for a still further
development and extension of the commerce of this country,
which is now in the aggregate, I apprehend, at least three-
fold what it was five-and-twenty years ago. Well, the
population has been increasing at a less rate than five-and-
twenty per cent., while our commerce has been multiplied
three times, and this we must fairly presume will go on.
Now, the great agents of production are three--first, we
have land and fixed capital ; secondly, we have movable
or transferable capital; and thirdly, we have labour. Let
us consider, for it is most important, the relative position of
these three agents. A race is going on between nations in
industry and ente►prise, and no doubt can exist as to what
nation is at this moment foremost in the race. The people
of the United Kingdom are by far the foremost. Their ex-
ternal commerce is, 'apprehend, as great as that of the two
countries which come next in order to it ; the United King-
dom, with its 30,000,000 people, is as great in commerce as
France and America, with their 70,000,000 of people. That
is an extraordinary fact. We have undoubtedly got the
start in the race, and it behoves us to inquire what has
given it to us. Doubtless we have great advantages ; our
geographical position is a great advantage, so also is the
character of the people. Both our geographical position
and the character of our people are the same as they were
a century ago ; and England then did not lead the trade of
Europe. What, then, has given us the lead? Of course,
there is an increasing cause in our accumulating capital,
but the chief cause is the possession of our mineral trea-
sures. (Hear, hear.) The fact, not merely of the posses-
sion of coal, but of the possession of vast stores of coal
under such circumstances that we can raise it to the sur-
face at a lower price than any other country in the world.
It is not the quantity of coal, but its production at a low
price which has given us the start, and has caused the
enormously rapid progress of the country, which
from many other points of view might have been expected
to make less rapid progress than it has; because, after all,
the very great treasure of nations—namely, their unoccu-
pied land—is a treasure which we possess, in our three
kingdoms, in a much smaller degree than almost every
other European country. It is, then, our possession of
coal near what depends on coal that has given us this
extraordinary pre-eminence in commerce and industry.
Well, it has often been a subject of very interesting dis-
cussion as to whether we may look upon our stores of coal
as being practically inexhaustible ; and in the condition
in which our commerce was 20 or 30 years ago it would
have been perfectly reasonable to answer that question
in the affirmative, and assume that our coal was inex-
haustible. But circumstances have greatly changed the
rate of increase in our production and consumption of
coal ; indeed, the consumption has become such that the
minds of the greatest among our scientific authorities have
been turned to the question, and the inquiry has been
raised as to what will be the influence on our supply if our
consumption continue to increase, and I venture to express
the opinion that it probably will continue. But for the
present argument I ask you to consider this :—Assuming
for the moment that we shall not be able to continue for
many generations to produce coal at prices cheaper than
other countries, what will happen ? Is it not enough to
say that the expenses incurred in maintaining ventilation,
keeping down the temperature, and such matters, will be
ecomised by new inventions and contrivances. Those
new inventions and contrivances there may be ; but they
won't give us a pre-eminence over other countries, because
other countries will be able to make use of them as well as
ourselves. (Hear, hear.) In the same way, thero is no
use in saying that a substitute will be found for coal. No
doubt thero are men of high authority who think that such
a substitute will be found, though the matter is one on
which there is a difference of opinion. But supposing that
a substitute will be found, it will not be peculiar to Eng-
land. I think it is clear that at whatever time—whether
50 or 100 or any other number of years hence—we may
cease to be able to raise coal at a lower price than other
countries our relative position towards other nations must
be lost ; but of the question of coal against coal there can
be no doubt as to how the case stands. There is another
country, not only as rich in mineral wealth as ourselves,
but with a coal surface 37 times greater than the coal
surface of this country—l allude to the United States of
America ; and though most of the coal there contains so
large an amount of anthracite that it is not fit for steam
or for smelting purposes, to domestic purposes it is
capable of being adapted. Suppose, then, that pre-emi-
nence in the cheap production of coal should be carried
from us away across the Atlantic, what will happen ?
There will be a decline of rents, a decline of profits, a
decline of wages. There will be precisely the reverse of
what we have all seen taking place within our time—au
increase of rents, an increase of profits, an increase of wages.
And when rents, profits, and wages decline, what will the
owners do ? Those who receive wages, finding that wages
are lower here than across the Atlantic, will migrate ; and
the holders of movable property, finding that there is a
wider and more profitable field for their capital elsewhere,
will send their capital abroad. What will the owners of
rents do? It appears to ale that they calmot migrate.

Personally they may do so, but that from which they derive
their income cannot migrate. The upshot will be :_hat the
charge of the National Debt, which is now borne in fuLl On
property, profits, and rents, will remain as a permanent
mortgage on the lands, houses, and works of the country."
I wish I could convey to the house the impression which
the consideration of this subject makes on my own mind,
and I trust 1 take no unworthy view of it. I go upon the
results arrived at by able and skilful statisticians who, by
the authority of the Government, have made inquiries into
the matter. Mr.Hulme estimates the quantity of coal in the
United Kingdom within 4,000 feet of the surface at 83,000
million tons. He states that in 1854 the consumption was
64,000,000 ; in 1861 it was 86,000,000. Based on these
numbers the computed annual rate of growth in the con-
sumption is 3.7 per cent. Now, not taking it at so much
as 3.7, but taking it at 3.5 per cent., this would give the
annual consumption in 1961 as 2,607 millions of tons ; and
by 1970, 104 years from this time, the consumption will
have reached 130,000 million tons, or a greater quantity
than all the coal now known to be available in Great
Britain within 4,000 feet of the surface. I believe that long
before we reach that consumption the causes will be found
in operation from which an increase in price will follow.
Mr. Jevons, whose statistics my hon. friend the member for
Westminster has quoted, has gone very fully and carefully
into the facts, and he holds a similar opinion in respect to
our coal supply to that which I have just stated. Hon.
members remember the statment made two years ago by
Sir William Armstrong. Sir John Herschel agreed with
Mr. Jevons, as I believe does Dr.Percyalso. I myself have
have had an opportunity of communicating with my dis-
tinguished friend Sir Roderick Murchison on the subject.
He for years has believed the matter to be one of the very
gravest order, and one demanding our most earnest consi-
deration. In vain would it be to think of stopping the con-
sumption of coal in this country ; in vain would it be to
think of diminishing that consumption by the imposition of
a tax; and it would be more vain still to think of prohibit-
ing the exportation. [An hon .member expressed dissent.]
I only expressed my own opinion ; I shall not enter
into that matter now-(hear, hear) -I merely wish to re-
mark that, even could we limit the consumption of coal, 1
think it is perfectly obvious that we cannot continue to
supply coal in unlimitedquantities at the present low prices
for an unlimited time,-or, say, for one or two centuries.
In the face of such a state of things in the future we ought
to make preparations for it, and the way to do that is by
using moderate and reasonable efforts to rid ourselves of
our encumbrances. (Hear, hear.) As those who are to
come after us may have to encounter difficulties of which
we have no practical knowledge, we ought not to hand
down to them in their worst form difficulties which it is in
our power to alleviate. (Hear.) Should we not now, in
the time of our wealth and prosperity, reduce our great
mortgage debt ? I will tell the house how I propose we
should do that. There are two modes -and, as far as I
know, practically, only two-of operating permanently on
this great mass of debt. First, you can do it by the appli-
cation of surplus from year to year, when there is a surplus;
but though by the favour of Providence those surpluses
have come to us more liberally of late than they had usually
done, you cannot depend on them, either in respect of
amount or of their existence in a particular year. Another
mode of operating on the debt with a view to its reduction
is by the conversion of perpetual into terminable annuities.
(Hear, hear.) Now, nothing happens with me more fre-
quently than to receive -sometimes from skilled and com-
petent' persons-recommendations to introduce a scheme
of this kind. But the difficulty of such a scheme is this-
there are no purchasers of terminable annuities in the
market. If you go into the city to sell terminable an-
nuities you must be prepared to part with them at a low
price, or, to say the same thing in different terms, you
must pay a large rate of interest. Consequently, as a large
waste is involved in that business, no Minister has ever
recommended it. (Hear, hear.) But we have resources
-resources which we obtain through the medium of the
funds we hold in deposit. These it is in our power
to manipulate as we please. We at present hold £45,000,000
in all the different deposits, and this amount may be in-
creased in future years. A sum of £10,000,000 of those
deposits has already been dealt with in this manner. There
is a sum of £24,000,000 which stands in what is called the
State Deposit Account as due to the trustees of the savings
banks. Now, what the trustees of the savings banks have
to expect from us is payment of every farthing we receive,
with interest on it. They have nothing to do with the
£24,000,000 as far as any mode of investment is concerned.
If we lost every farthing of it we should have to pay them,
nevertheless ; and if we made a good investment, that
would be our affair, not theirs. In point of fact, the state
of the case is this :-The assets of the National Debt Com-
missioners, who hold this money, are not equal in value to
their obligations to the trustees. They fall short of it to
the amount of £3,000,000. Now, by converting the
£21,000,000 into cash, we can pay up the £3,000,000 that
is wanting and completely square up our account with the
savings banks' trustees. If we clo so, that amount will no
longer be a part of the national obligations. I propose a
double application, which I think I shall be able to make
intelligible to the house. I will call the two operations A
and 13, for the purpose of distinguishing them. Operation
A is this : -We take the £24,000,000 that stand on the State
deposit account, and which now costs us £720,000 a year,
as already provided for in the estimate laid upon the table.
We convert that into annuities of 1835, thus increas-
ing the charge from £720,000 to £1,725,000-that is to
say, we add in round numbers £1,005,000 to the pre-
sent charge. That is the first operation, and I will
state the financial, assuming it to be adopted by the
house. In 1866-7, if the plan be adopted, we should pay
one half-year's dividend upon the capital-that is, £360,000,
and two quarterly dividends on the annuities, or £862,000,
making a total charge of £1,222,000, in lieu of the present
interest of £720,000, thus imposing upon the year 1866-7
an additional charge of £502,000. In 1867-8 we should
impose an additional burden, because there would be no
interest on stock paid, but all the four quarters would have
to be paid upon the dividends of terminable annuities in
other years. Then in 1467-8 expires what is called the
dead weight annuities, amounting to £586,000 a year, and
one-half of that, or £293,000, would immediately become
available, so that, in fact, the annual charge upon the year
would be insignificant in amount. The total charge under-
taken by this change in all the years after the present year
will, therefore, be £1,005,000. From this £586,000 relief
will be deducted, leaving a net augmentation of charge of
£119,000. If we are to operate in this way, that is not an
immoderate item-(hear, hear) -but then there is the
second operation-operation B. Gentlemen will observe
that the effect of this plan must be considered upon the
savings-banks funds and their commercial use on good
banking principles as well as upon the National Debt.
The savings-banks would I ,e in receipt of £1,725,000 a
year, and the question is, what aro they to do with it ? The
demands of the trustees have recently been very large, and
if it should happen that the price of money should con-
tinue as high as it is now I have no doubt that these de-
mands will continue large, and that a very considerable
portion of the £1,005,000 which will go annually to the
credit of the National Debt Commissioners will be absorbed
in meeting the demands of the trustees. (Hear, hear.) But
the demands of the trustees have never yet reached that
amount. I do not mean when I say that they have never yet
reached that amount to deny that they have done so under
the influence of an extraordinary panic, but normally their
demands do not reach that rate. It is probable that a por-
tion may be required for reinvestment, and the second
part of the operation I propose is this-with respect to the
dividends of the annuities now to be created, so much of
these dividends as is not required to meet the demands of
the savings-banks shall be reinvested from year to year.
The extent of that portion and the amount of burden en-
tailed by it will differ very much according to the assumption
made concerning the demands of the savings banks. For the
sake of argument I will assume that they will amount to
one-half, but I do so upon the supposition that you adopt
the two operations, first the conversion of the £24,000,000,
and secondly the reinvestment of spare dividends, and on the
assumption, of course, that you will have that one-half to
spare. The annual charge which begins at £419,000 would
gradually mount until it reaches in 1885 the suns of
£1,444,000, and the amount of public debt cancelled by
that time would be 49 millions, or in round numbers 50
millions of money. I do not say that that will be the pre-
cise effect, but it is more convenient to use the larger
figures, which will express the general effect and be more
easily understood. I may add, for the information of those
who desire to be informed upon the point, that the calcu-
lation is based on the assumption that the Stock is pur-
chased at 88. By this means we should, I think, be acting
prudently, wisely, and seriously in our treatment of the
National Debt, and the obligation which is imposed upon
us for its reduction. I am far from saying that this is the
only measure which we can employ for reducing the
National Debt; but the reduction is as great, perhaps, as
we should be justified in making under the circumstances.
While completely fulfilling our obligations towards the
trustees of the savings-banks, we should be making pro-
visions which would prevent our having to come into the
market as sellers of funds-a thing which would be very
undesirable. Independently, too, of surpluses in our revenue,
we should bo able to come into the market year by year as
buyers of stock. I have nothing left me now, sir, but to give
the sum of those operations which I have already stated in
detail. (Cheers.) The amount of the surplus is £1,350,000.
The remissions proposed are as follows: on wood, £307,000;
on wine, £58,000; on pepper, £112,000; and on stage
carriages and post horses, £85,000, giving a total of
£562,000. To this has to be added £502,000, applied to the
conversion of debt, swelling the total to £1,064,000, and re-
' during the surplus to £286,000. The burden imposed by
these changes in the year 1867-8 will amount to about a
quarter of a million, about which I feel no scruple of con-
science whatever, because there has been no year in which,
however bad the harvest, or however unfavourable the cir-
cumstances, the natural growth of the revenue has not
amounted to a much larger sum. I would propose to pro-
ceed as follows-to take the resolutions concerning the
changes in the duties, if, as I rather sanguinely anticipate,
they do not excite objection, on Monday next. I purpose
also to take the preliminary resolution relating to the Debt
conversion on Monday next, on the assumption that it
meets with the approval cf the house, and does not tend to
a long discussion. If there is a desire for discussion on
that preliminary resolution, 1 should not think of going on
with it ou llonday. And now, sir, I have to apologist' to

the house for the length: of time during which I have °s-
pied its attontion. (Cheers.) It did appear to us that the
time had arrived which w'as naturally and properly asso-
ciated with the fins \ncial arrangements of the year. I hope
th,:t I have not been. -unwittingly led to prophesy, or to do
anythi..lg more than give such sketches of the future as
will appeal' probable and present a fair and reasonable
_claim upon the Attention of prudent men. Regarding the
statements I have tr ade I would not say more than this:
—The facts which I have laid before the house are grave
facts, urgent, indeed, within certain limits. A lthortgb, Per"
haps, the proper business on these occasions is to announce
the financial proposals for the year, it did seem right
to us, actuated as we believed by grave and reasonsb!e
causes, to cast our glances into futurity and endeavour in
84-mae degree to meet those demands which might justly:l'e
nutt2e upon us, so that when we cease to apply
ourselves
our ar,:luous tasks—and when I say " we," Ido not wean
the Goveinment, but hon. members who now constitute
this house— when we have passed away from active life!
those who coins') after us may have reason to confess thatin the provisions matte for our own sous we have taken
some thought of then', and that our conduct has not been
such as to excite their regret or condemnation. (Cheers:)
The right hon. gentleman concluded by moving certainto
formal resolutions calculated to give effect to the propssl-
tions indicated in tAte financial statement.
Mr. WALDEGRAW:-LESLIE wished to know' wile'.
ther the Chancellor of the Exchequer intended to do Or
Mr. WARNER suggestet:
thing with the tax on d6:ge•
that the omnibus mileage dutY
had better be removed entirely:. as the farthing a milts r;
posed to be retained would only field .£30,000 a year
t
revenue.
Mr. WATKIN pointed out the vexatious and unneee;
sary delays which were caused to continental travellers
the examination of luggage at Dover and Paris.
Sir F. KELLY said that as the Chancellor of the
chequer had condemned the duty on timber because it bop
a charge upon the raw material he was encouraged
that he might see the expediency of substituting for the
tax on malt a duty upon beer. n the
Observations were also made by Mr. Ilubbar" °-
proposed creation of new terminable annuities; 01'1,3813/r,
a few remarks from Mr. Samuda, Mr. Henley, nor
Ayrton, on other portions of the Budget, the Chance
of the Exchequer briefly replied, and the Chairman
ported progress. w Writ6l
Some bills having been- forwarded a stage, no
were ordered for the election of members for Notting"39;
to bo
Windsor, and Northallerton, and the house adjourned
twenty-five minutes past twelve o'clock.