The Sun.
London, England, 1844-03-09 00:00:00

that by their exertions in the year 1842—by their
energy, foresight, and determination—they had been
able to place the revenue of the country on a footing to
meet the exigencies of the service. They had now got
a revenue more than equal to their expenditure, and
they were thereby enabled to reap the advantages which
a firm adherence to a principle of that nature was ever sure
to give—and thus realise to the country the benefit not
merely of a temporary reduction of a few taxes, but of
the permanent obligations of the State. He had said
that the income of the present year was more than suffi-
cient to meet the charges of that year. . So far as the two
last quarters were concerned the excellent state of the re-
venue was shown by documents already on the table of the
House. The House would find by the papers that had been
laid before it, that, at the commencement of thelast year the
balance in the hands of the Government was 1,400,0001,

while, at the termination of it, it was upwards of
4,7oo,oool—(Hear, hear.) I am happy (continued the
Right Honourable Gentleman) to inform the House
also that, speaking at the present moment, I can
state to them that there arc no deficiency bills
of the Bank unsatisfied. We are free at this quarter
from repaying those advances made by the Bank for the
purpose of meeting the demands for the public service.
I can also state that, since the sth April last, it has not
been necessary to apply to the Bank for advances in an-
ticipation of the votes of the House of Commons. So far
as these things are concerned, however useful they may be
in themselves, yet they are calculated to cripple the
Goveinment. I can assure the House that from those
encumbrances we are at the present moment free. I
will also point the attention of the House to this
fact, that the amount of the unfunded debt
at this moment is less than it has been
for many antecedent years ; that the amount
of Exchequer-bills is only between eighteen and nine-
teen millions—that they bear an interest of 2/4s. percent.
and that, at the present moment, they bear a premium
of 735. Looking, therefore, at the growing wealth of this
country, looking at its capital, considering its vast
resources, looking at the continuance of its friend-
ly relations with foreign Powers, considering that the re-
venue has recovered from the temporary difficulty under
which it laboured—considering that we are free from
unfunded and floating debt, I think that I
have made out a case to this House, to show that the
time has arrived when those who have the management
of the financial affairs of the country should make an
attempt to reduce the interest on the national debt.
The debt we have to deal with on this occasion amounts
to nearly 250,000,000/, and consists of four several kinds
of stock. The first is the Three-and-a-Half per Cent.
Stock, originally created in 1818, which is the foundation
of stock of this description, and amounts to 16,000,000/
The next is the Reduced Three-and-a-Half per Cents.,
being a stock which was first established in the year
1760, originally as a Four per Cent. Stock, added to
at various periods, and reduced to Three-and-a-Half
per Cent. in 1824, when Lord Ripon was Chancellor of
the Exchequer. It amounted to 67,500,0001. The next is
the Three-and-a-Half per Cents., originally funded
in 1784, at 5 per cent., and which has, in the gradual
progress of the country, the growth of capital, and
confidence in our own resources, undergone two
several reductions—one in 1822, when Mr. Van-
sittart was Chancellor of the Exchequer, from
five per cent to four ; and the other in 1830, when
I had the honour of holding the office I now fill, and
when it was further reduced to Three-and-a-Half per
Cent., at which it has ever since remained. The last
stock is the one called the Old Three-and-a-Half per
Cents., which was an Irish Stock created in 1787, and had
been from time to time augmented to the sum of
14,600,0001. ; the whole amount of these stocks is
249,600,0001., or, in round numbers, nearly the amount
I at first stated. Now it might, certainly, have been
legally correct to have dealt separately with these sepa-
rate branches of the Three-and-a-Half per Cent. Stock ;
but I conceived that this course, though legally correct,
would be essentially unjust. I thought it would not be be-
coming in a great country like this to take advantage of
one or two particular branches of stock being of small
amount, and to call on the proprietors who have invested
their money in these funds to submit to a re-
duction, which, from their being small in num-
ber, they could not resist. I have, therefore,
recommended that the same rule should be applied to all
these stocks, and that the reduction of interest shall be
made at once upon the whole of them.
With respect to these stocks, there is "some dif-
ference in the circumstances in which they
stand. Three of them are absolutely at the disposal of
Parliament, to deal with as it thinks fit ; but one of
them, the Three-and-a-Half per Cents. of 1818; stands
in a different situation. When that stock was created,
the holders received a security that their interest should
be paid them till 1829; that they should have six months'
notice before any reduction of interest, or redemption of
stock took place ; and, thirdly, that they should not be
paid off in sums of less than 500,0001. at a time.
In any arrangement which may be entered into, I am
sure that the House will go along with me when I de-
clare, that we ought to adhere to every engage-
ment into which we have entered, and to give
to the holders of that stock every advantage
to which they are entitled under the provisions of the
statute.—(Cheers.) We are bound to adhere to the
strict letter of our agreement with them.—(Cheers.)
If we look for precedents as to the manner in which
this conversion may be brought about, we shall
find that at various times different plans have been
adopted under similar circumstances. In some cases
advantages have been given to the holders of the
higher stock, in order to induce them to accept of an
amount in the lower stock in the place of that which they
held iu the higher. These advantages have been of a
different nature. In some cases a pecuniary bonus has
been proposed to the holders of the higher stock, thus
augmenting the actual amount of the debt while it
diminished the interest of it. In other cases an en-
gagement has been entered into with the holders of the
higher stock, that no further reduction of interest should
take place until after a given time. The House must be
aware that many plans have been proposed in the differ-
ent organs of public opinion, for the purpose of effecting
the reduction which I now propose to accomplish, and
each of these plans has its peculiar advantages and dis-
advantages. The House will agree with me, however,
think, in being of opinion that all these plans resolve
themselves into three cases, which are open for our adop-
tion. The first case is to give to every holder of Three-
and-a-Half per Cent. Stock as equal amount in the
Three per Cent. Stock, thus adding to the capital of the
debt. The second plan is to create a Two-and-a-Half
per Cent. Stock for the holders of every 1001. Three-and-
a-Half per Cent. Stock, and give them such an amount
of the Two-and-a-Half per Cent. Stock as would give
them an increase of 3 per cent. upon the capital they
have already invested in the Three and-a-Half per Cents.
The third plan is to reduce the Three-and-a-Half per
Cents. to Three-and-a-Quarter per Cents. The object
of all these plans being to effect a reduction of the in-
terest at present payable on the debt from 3i per cent.
tbi 3 per cent. It is impossible to deny but that each of
these plans has its peculiar advantage, and no doubt each
plan will find its advocates; but I think, before I
state the plan which I propose that the House should
adopt, it would be well that I should lay down
the principles which I have adopted in review-
ing the several plans to which I have alluded.
I think it my duty, as the agent of the public debtor,
to secure the public credit with the greatest possible ad-
vantages, consistent with a due regard for the interests
of the State. My first duty is to the public, whose ser-
vant I am but I feel that it is perfectly possible to recon-
concile that duty with the regard that is due to the in-
terests of individuals who lend their money. I do not
think it would be just to purchase great advantages at the
expense of burdening those who will come after us. With
respect to debts incurred in time of war, it is perfectly
fair and legitimate that posterity should bear a share of
those burdens by which the empire was extended or its
existence preserved. But to incur an additional debt in
time of peace, and to throw *that burden on those who
come after us, with a view that we may obtain great
present advantages, for the purpose of relieving ourselves,
is a course which I need not say I reprobate, because I
am sure itmust be universally disagreeable to all who
consult the true interests of the country. But, Sir, I
have to call upon the House to adopt a course which, I
trust, I will be able to satisfy them of the propriety of
pursuing. It must be obvious to the House that if the
Three-and-a-Half per Cents. were, reduced to Three per
Cents., by giving an amount of Consols, it would be ne-
cessary in the operation to do what was done in 1822
to give a bonus on the Three per Cents., for the purpose
of insuring operation. Considering the present price of
the Funds, and the necessity of endeavouring to secure a
conversion, the country would be obliged to submit to ad-
ditional capital of fr0m.10,000,0001. to 12,000,0001. of debt,
though the immediate result would be a saving to the pub-
lic of between 800,000/. and 900,000/. - On the principle
laid down of saving we are not justified by adding to the
mass of debt, though the immediate result of the saving to
the public would be between 800,0001. and9oo,oool. For
however at the present moment some gentlemen might
think it a matter of indiffence to what amount our debt
was extended, being, as it was, 700,000,000/.. yet still
the future condition of the country should be looked to;
and when, if we were engaged in wars, the debt which
we now recklessly contracted might become a ruinous
burden, and detrimental to the best interests of the
country. Sir, the other plan remains to be considered,
which is to reduce the Three-and-a-Half per Cents.
through the medium of a Three-and-a-Quarter per Cent.
Stock. The result of that arrangement undoubtedly
will, in the first instance, be a diminished annual saving
to the public; but against that is to be set the fact that
there will be no increase of capital; and there will be,
moreover, this additional advantage, that by the arrange-
ment I shall propose to the House, there will be a future
further reduction. which will give in due time an increased
advantage in point of annual income, an increased ad-
vantage so much the more valuable, because though it
may not be brought to apply so immediately to the re-
sources of the country, the country will receive the full
value of the whole reduction, without any countervailing
disadvantage. The plan, therefore, which I shall pro-
pose to the House will be this :—" That every holder of
Three-and-a-Half per Cent. Stock shall receive a like
amount of Three-and-a-Quarter per Cent. Stock, on which
interest at the rate of three-and-a-quarter per cent. per
annum shall be paid until the 10th of October, 1854 ;"
giving ten years during which the three-and-a-quarter
per cent. will be payable upon the stock in question.
I shall further propose, " That from and after the date of
October, 1854, the interest to be paid shalt be at the rate
ef • three per cent. only, and that this stock,"
sosbeing at the rate of three per cent., "shall be gua-
ranteed against any further reduction for twenty years
after that period." This stock, therefore, will remain at
three-and a-quarter per cent. until October, 1854 ; it
will remain at three per cent. until 1874, whatever may
be the improvement in the finances of the country, or
whatever may be the reduction applied to other portions
of the national debt.—(Marks of surprise, followed by
laughter, on the Opposition benches, in the midst of
which several Hon. Members rose and left the House.)
I hardly expected any further attention.—(Laughter.)
The arrangements must be made in the mode in which
all similar arrgigemeuts have been wade before, by

allowing all persons a limited time to express their
dissent from the terms offered. With respect to that
branch of the stocks which was created in 1814, I shall
proceed as has been always customary, and I shall call
on the House to resolve, that the holders shall be paid
off. The periods which I propose to fix upon are—
the 23d of March, for those in England ; the 22d of Oc-
tober, for those in Europe ; and the Ist of February,
1845, for those out of Europe. Under this arrangement
—if I should succeed in carrying it into effect—the im-
mediate saving to the public, from the 10th of October
will be, 625,000/. a year—and in the year 1854, when
the second reduction will take place, there will be a
saving of 625,0001. more. This gain will be effected without
any disturbance of the public credit—without nny
tion of the capital• of the country—or any embarrass-
ments of commercial dealings. The relief to the country
will be more certain than could be obtained by any at-
tempt to grasp at immediate advantages, by throwing a
portion of the public burdens upon the public creditor.
I trust that I have clearly explained the principles on
which I intend to act. There is, however, another
important point connected with this arrangement, which
I think it necessary to explain to the House. It is
well-known to those who have paid attention to the
finances of the country, ;that hitherto considerable in•
convenience has been occasioned in respect to currency
and credit on account of the great inequality in the pay-
ments of the interest of the debt in different quarters of
the year. At the present moment the amount of the
debt on which the interest is required to be paid in the
quarters ending January and July, is 534,000,000/,
whereas the amount of debt on which the interest is
paid in April and October is 216,000,000/. This in-
equality necessarily produced great fluctuations in the
monetary affairs of the country. I therefore think it
my duty to take the opportunity of equalising the pay-
ment of the dividends, so that on each occasion the de-
mand for money may be about the same amount. And
for this reason I propose that the dividends on all the
new stock shall be 'paid only in April and in October.
Those who have hitherto been paid up to October will
have their half-year to receive in October next. Those
who have usually been paid in January will have
only one quarter in October ; so that all the new
debt may start from the 10th of October next. After-
wards there will be two equal divisions of payment,
which, in my opinion, will tend materially to the advan-
tage and interest of the country.—(Hear, hear.) I know
not that it is necessary for me to say any more. If it
be my happiness to carry this measure successfully
through, it will be one of the most gratifying circum-
stances in my life to be able to reflect that, on two seve-
ral occasions—in the year 1830 and in the present year
recommended to Parliament a measure with respect
to a reduction in our annual burdens, which cannot but
meet with the approbation of the country it is so well
calculated to benefit and to relieve. But however great
my gratification on this ground, there is still a higher
gratification which I feel, both as a Minister and an
Englishman, that this measure affords an irre-
fragible proof of the resources of this coun-
try, and that, with reference to other coun-
tries; it shows the mighty advantages which ever
attend a sacred regard to the obligations of national
honour and good faith.—(Loud cheers.) We have had
in our time to struggle with great difficulties—we have
had many arduous contests, many bitter reverses to con-
tend against—. difficulties which have made the strongest
minds to quail—but we have overcome and triumphed
over them all, and that by a simple, but sacred, adhe-
rence to the principles of national honour and the obli-
gations of public faith.—(Hear.)
Mr. BLEWITT then rose to address the House, but
was met with loud cries of " Order, order.")
Mr. GREENE, the Chairman of the Committee of Sup-
ply, then read the resolutions from the table.
Mr. F. BARING said it gave him much pleasure to
be able to state that he had heard the proposition of the
Hon. Gentleman with the greatest satisfaction.—(Hear,
hear.) He should be very sorry if any difference of
opinion prevented him from expressing his approval of a
plan so advantageous to the country. He spoke only of
the principle of the plan ; whether the terms were ade-
quate to carrying out that principle remained between
the holder of the stock and the Right Hon. Gentleman.
With respect to the plan itself, he thought it was one
beneficial in many respects.— (Hear, hear.) First, it
had this great advantage, that it did not create any ad-
dition to the debt ; that was in itself a very great ad-
vantage. He thought also it was a very honest plan for
a Chancellor of the Exchequer to propose.—(Cheers and
laughter.) The Right Hon. Gentleman might have
made the reduction of the interest immediate ; and this
advantage was no slight one to a Chancellor of the Ex-
chequer.—(Cheers.) There was also another advan-
tage as far as private individuals were concerned ; he be-
lieved the interest was to be reduced one quarter
per cent. at once, with a probability of a reduction
of one quarter per cent. more at a future time ; they
thus reduvd the incomes of private individuals in the
least incolvenient way possible. On another thing he
could not help expressing the utmost satisfaction ; the
plan would not only be an advantage to ourselves, but
would give to others a practical lesson that honesty and
good faith, even under the greatest difficulties, had their
pecuniary advantages, as well as the benefit to be derived
from the good opinion of the world at large.—(Cheers.)
He could only say, in sitting down, that he wished the
most hearty success to the Right Hon. Gentleman's
scheme.•—(Loud cheers, particularly from the Ministe-
rial benches.)

Sir JOHN RAE REID said nothing had ever given
him greater pleasure than the manner in which this
question had been received. He thanked the Right
Hon. Gentleman opposite for the liberal and handsome
manner in which he had spoken. He felt that feeling
would be general in that House, and he was sure that
the holders of Three-and-a-Half per Cent. Stock would
be highly gratified—(Cheers and laughter)—at the
manner in which the plan had been proposed. Under
all the circumstances, he thought it was most liberal, and
he had no hesitation in stating his firm belief that it
would be almost generally and entirely acceptable. He
had been accused on a former occasion of having been
too sanguine.--(A laugh.) A late Chancellor of the
Exchequer,who was now a Member of another House, had
accused him of having made use of a metaphor.—(A
laugh.) He (Sir J. R. Reid) had stated that the dis-
tress was merely a passing cloud.—(A laugh.) He now
saw before them a bright star, and he hoped they would
soon feel its influence—(Loud laughter)—and its influ-
ence would be felt—(Continued laughter)—and they
would go before it with prosperity and success.--(Roars
of laughter.)
Mr. P. M. STEWART thought that the Chancellor
of the Exchequer had exercised a very sound judgment
in proposing the plan which he had submitted to the
House. He had also shown no inconsiderable portion of
self-denial. The present holders of stock had been sub-
jected to a less reduction than they would have been
subjected to under any other scheme which could have
been proposed. There was one portion of the statement
of the Right Hon. Gentleman, however, against which
he must enter his protest. The Right Hon.
Gentleman had alluded to the manner in which
the Four per Cents. had been reduced by Lord
Ripon at the time that he was Chancellor of the
Exchequer. The Right Hon. Gentleman should recol-
lect the statements which had been made by Lord Ripon
on that occasion, and which had procured for him the
name of " Prosperity Robinson." He hoped the Right
Hon. Gentleman would not be misled by appearances.
No doubt there was a great deal of money in the market,
and in consequence of its plenty, the Right Hon Gen-
tleman had been able to make his present arrangements,
but that arose from the valueless state of money in this
country at present. Trade in general was in a state of
the greatest stagnation ; and hence the rush of
unemployed money to the public funds, which
had raised the price and enabled the Honour-
able Gentleman to propose his present plan; but he
warned the Right Hon. Gentleman against believing that
the country was in a prosperous state. A revival of
trade was much needed, and the present superabund-
ance of money was no sign of prosperity. He highly
approved of the proposal of the Chancellor of the Ex-
chequer, as he considered it would not only conduce to
the profit of the country, but that by its adoption the
character and credit of the country, which were still more
valuable, would be materially strengthened.—(Cheers.)
Sir J. EASTHOPE expressed his admiration of the
plan which had been proposed to the House. A more
just, a more simple, or a more certain plan, could not
have been devised.—(Hear, hear.) Whether he regarded
the justice of the plan, in reference to the money market,
its simplicity, as being' divested of all kinds of com-
plexity, or the certainty of its meeting with general ac-
ceptance in the country, he thought the plan equally en-
titled to admiration.—(Cheers.) This was one of those
occasions on which party feeling should subside—(Hear,
hear)—and he congratulated the House and the Right
Hon. Gentleman on the general concurrence which the
measure was likely to receive.
Mr. W. WILLIAMS felt great pleasure in expressing
his unqualified approbation of the plan which had just
been submitted to the House.--(Laughter and cheers.)
He thought the plan'was liberal, in the present state of
the money market, to the holders of Three-and-a-Half
per Cents. He regretted that the Right Hon. Gentleman
had not proposed to reduce the interest on Exchequer
Bills to lid. instead of lid. per day. There had been
other periods of abundance of money which were as
transitory as he feared this was likely to be. Prices
would soon rise, the exchanges would turn against us,
and the state of things would be reversed.
Mr. Alderman THOMPSON believed that the unusual
abundance of money was occasioned by the distrust of
the British public in foreign securities, especially North
American. He expressed his grateful acknowledgments
to the Government for the alterations introduced by
the Chancellor of the Exchequer, and he thought the
holders of Three-and-a-Half per Cents. would be much
better off than they had anticipated. He thought the
Right lion. Genthanah had exercised a sound discretion
in reducing the Three-and-a-Half per Cents. one-fourth.
Mr. HAWES felt happy in. expressing his satisfaction
at the proposition of the Government. With regard to
the equalization of the dividends, which were so inti-
mately connected with the financial affairs of this coun-
try, he thought the arrangement was one of great
practical importance. He hoped the Right Hon. Gen-
tleman fully appreciated the absence of anything like
partyfeeling on that side of the House. When the Go-
vernment introduced measures of sound, practical
utility,_ they might depend upon it that Hon. Gen-
tlemen on his side of the House would give them their
entire support. He (Mr. Hawes) would on certain
questions avow himself and act as a party man; but when
any great public measure was introduced, party consi-
derations must at once give way to the promotion of the
country's welfare.—(Hear.)
Mr. WARBURTON thoroughly agreed in the com-
mendation which had been bestowed on the proposition
of the Government, but at the same time, it should not
be forgotten that it was the low rate of profits which
enabled Ministers to make this proposition•, and the low
rate of profits was, if there were any faith to be placed
in the opinions of Mr. Ricardo or Mr. Malthus, attri-
butable to the corn-laws.

Mr. RICARDO congratulated the Right Hon. Gen-
tleman on the plan he had laid before the Reuse. He