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

Uørntn24lll.

LONDON, SATURDAY, MARCH 9, 1844.

The CHANCELLOR of the EXCHEQUER has brought
forward a most important financial measure, which
has been anticipated for some time by the country,
and which we are inclined to think will be received
With general satisfaction. It may be considered hard
by an annuitant to have his income reduced a quarter
per cent., and, ten years after, a half per cent.; but
this is only the natural result of circumstances.
Money is so abundant that a high interest cannot be
obtained ; private individuals who can furnish good
security are yearly reducing the interest on their
debts, and the consequence is a rise in the funds ;
but it is not reasonable or just that the Government
should continue to pay the same interest for all time
to come while-reductions are taking place in every
other quarter. The plan, proposed, therefore, cannot
be objected to, it has taken no one by surprise, and,
on the whole, may be' regarded as a measure
creditable to the Government and the country. It
will not increase the national debt; it will not throw
burdens on future generations for the sins of their
ancestors; and it will save the country from the
tricks and juggles of loan contractors. The amount
of stock to be reduced is 250,000,0001., about one-
third of the national debt, and nearly equal to the
whole debt of France. This is certainly an enormous
sum to meddle with. It comprises four- different
kinds of stock, including the Three-and-a-Half per
Cents. of 1818, amounting to 10,000,0001.; the Re-
duced Three-and-a-Halfs established in 1824, amount-
ing to 67,500,000/. ; the Five per Cents., established
in 1784, afterwards, at various times, reduced to
Three-and-a-Half (the amount is not stated) ; and
the Old Three-and-a-Half per Cents., created in
/787, amounting to 14,600,0001.—which makes a
total of 249:600,0001. The plan or the Government
is t:. place an these stocks on the same f .oting,
itnd to bring in a Bill to allow every holier of Three-
and-a-Half per Cent. Stock. a like amount of Three-
and-a-Quarter per Cent. Stoa, the interest 0: 3/. 5,
per cent. to be, paid till the 10th of October, 1854,
and at the end of that period the interest to be only
3/. per cent., h i :11 shall be guaranteed at the same
ra:e :Or twenty years, namely, till 1874. The saving
to the Treasury will be 625,000/. yea,ly by the first
reduction, and the same amount for the next twenty
years annually, making a reduction in the interest of
the debt, by October next, of 625,000/., and, ten ye Lrs
after, a reduction of 1,250,000/. annually. A simpli-
fication also of the mode and times of payment is
Proposed, fur which we refer to the speech of Mr.
GOULBURN. Such a result is honourable to the
United Kingdom, and shows a marked contrast to
the financial conduct of many other nations, who have
broken faith with their creditors, who are shunned
by all honourable men, and who are driven
to some desperate and disreputable scheme for
supplying even the immediate wants of the Executive,
We have pleasure, therefore, in quoting the conclud-
ing words of the CHANCELLOR of the EXCHEQUER :
" This measure," said he, " shows the mighty advan-
tages which attend a sacred regard to the obliga-
tions of national honour and good faith. We have
had many arduous contests, many bitter reverses, to
contend 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, adherence to the principles of national honour
and the obligations of public faith."

In the House of Lords, after some remarks from
the law Lords and the Bishop of EXETER, the
Court of Privy Council Bill was read a second time
and ordered to be committed, with an instruction to
the Committee to make that part of it which related
to the law of divorce a separate Bill.
In the Commons the Sheffield, Ashton-under-
Lyne, and Railway Bill, was read a second time.
Mr. HINDLEY moved a resolution, in reference. to
Railway Committees, that any Member whose con-
stituents are locally interested in competing lines,
may sit on the Committee without voting. The mo-
tion was opposed by every Member who spoke ex-
cept Mr. PETER BORTDWICK, and Mr. HINDLEY
withdrew his motion.
The Newbury and Great Western Railway Bill
was read a second time, and ordered to be committed
In answer to a question from
Mr. MA.CAIILAY, Sir
ROBERT PEEL said the Government, in the course of
the day, had received official dispatches relative to
the events which had taken place at Gwalior, but
therewere no less than seventy-five inclosures, and
he had, not vet had time to examine them. With
regard to the question put by the Rilt Honourable
Gentleman about the priclainatio:), he could only
Ly that 11., had no doubt it inclu led in the dis-
patehe:.. Mr. NIA.CAULAY said, uader thcse circum-
stances, he would wait till Sir ROBERT PEEL WO in
a position to wive a distinct answer.
Sir J. GRAHAM postponed the second reading of
th,T; Factories Bill till Friday next.

In answer to a qu,,,,,tion from Mr. TURNER, Sir J.
GRAHAM said he did not intend to make any al.era-
tion in the law relating to religious instruction in
union Workhouses.

:The CHANCELLOR of the EXCHEQUER then brought
forward his motion for the reduction of the Three•
and-a-Ralf per Cent. Stock, to which we have al,
ready adverted.

Mr. P. BARING, Sir JOHN RAE REID, Mr. D. bi

STEWART, and several Members on the Opposition
benches, expressed their hearty approbation of the
measure, which was gratefully acknowledged by the
Cii.AscELLos of the EXCHEQUER.

On the motion of Mr. EWART a discussion took

ggee on the disputes between Buenos Ayres and
j&onte Video, and all parties seemed to agree in the
---37essity of putting a stop to such an unseemly
tontest.
On the motion for goinginto a Committee of Sup-
ply, Mr. S. CRAWFORD Btatect hi§ Infelition 'of giving
no farther opposition to the granting of sppplies, on

the ground of want of proper support both in and out
of the House.

The Army and Ordnance Estimates were then
proceeded with, and a great many votes were agreed
to, one of which gave rise to a discussion on the re-
fusal of a pension to the widow of Lieutenant-Colonel
FAWCETT.

No other question of interest came on in the course
of the evening, and the House adjourned at a Quarter-
past Eleven o'Clock.

The intended conversion of the Three-and-a-Half
per Cents. is a topic of engrossing interest in the City,
and forms the subject of many communications from
our Correspondents in the country. We should be
the last persons in the world to undervalue the im-
portance of the operation, or to detract from the'gene-
. ral impression in its favour, as a step towards the
reduction of the National Debt. And let no man,
say we, regard with indifference any financial mea-
sures in this important direction, merely on account
of the immoderate disparity between the specific means
under immediate consideration, and the mountain of
difficulty which it is the object of these, and of all the
other financial efforts to be hereafter made, in con-
formity therewith, ultimately to remove. A reduction
of 1,000,0001: of capital, for example, would not
represent, in reference to the aggregate of our
Public Debt, a proportion of but 1 to 766. But
there is encouragement, as well as wisdom, in Dr,
JOHNSON'S admonition,—that the firstbdelve of the first
mattock which breaks ground, and the first blow
upon the first pile that is to be driven below the sur-
face, infinitesimally disproportionate though they
be to the total of the same repeated operatious that
must be performed before a bridge can be constructed,
—are yetpreliminaries as essential to the production of
the complete fabric as the insertion of the keystones,
or the adjustment of the last block of masonry which
is to terminate the structure.
As a reduction of the Debt, then, we hail with
great satisfaction the proposition for converting the
Three-and-a-Half per Cents. ; but we cannot yet
regard the operation, even considering it only
in the extent to which it goes, as an unmixed good
to the country, until we know a little more of
the intentions of Government as to the mode and
terms of the contemplated reduction. From what
took place in 1830, it is evident that there must be a
very great number of small dividends at present pay-
able on that portion of the public funds. The
reduction of 10s. per cent. of this moderate interest to
such poor annuitants must be severely felt in propor-
tion to the tenuity of their capitals. It now appears
that to the prcprietors of lowest capitals in such
stocks, in reference to this circumstance, and to the
payment of income-tax by funded property, the Go-
vernment will postpone the conversion of three-and-
a-half per cent. interest to three per cent. only, for
ten years ; reducing it, in the meantime, as to the
parties in question, to three-and-a-quarter per cent.
There is this additional—and it is also an
inevitable—evil, attending such financial con-
versions on the part of the Government,
they who are compelled to accept the offer of
being paid " off," or " out," altogether, are too apt
to be allured by the temptation of higher interest,
to invest their thus retrieved capital in foreign funds
or other inadequate securities, to their own ultimate
loss, perhaps ruin, and to the propagation of that
rage for improvident speculation which released heaps
of capital, under such circumstances, are sure to
excite.

Our own great anxietyremains unrelieved by the an-
nouncement of the CHANCELLOR of the EXCHEQUER as
to the Three-and-a-Half per Cents. What is to be done
with the currency ? If it be not forthwith established on
a sound and permanent basis, such as we have stre-
nuously advocated for example, in the issue of
" Government" notes to the amount of 50,000,000/.,
payable in discharge of taxes, and circulating as a
legal tender—in the meanwhile abrogating the gold
" standard" by repeal of the Act of 1819,
but leaving gold and silver to maintain them-
selves in the circulation,—to increase or to
diminish, in coin or in bullion, according to the de-
mands or exigencies of the bullion market; a crisis must
presently come upon us more terrible than any of the
monetary convulsions which have been experienced
since 1797. Now, we own that we are startled by
the contents of the Letter of "An Observer ;" a
gentleman, we have reason to believe, competent to
write on those subjects with the highest authority.
For " An Observer" gives us an insight into the
" intentions of Government," which our experience
of Sir ROBERT PEEL'S perversity throughout the
whole series of his tampering, yet obstinate, legisla-
tion on the currency, compels us to believe will prove
,nlv too accurate. It, is msumid that her MAJESTY'S
Nli nis t eri in ten d—ls t, to suppre,s country note, issued
)3, private and joint-stock banks; 2d, to substitute
:n their place notes of the Bank of. England. This
-zubstitutio7l of one paper for the other, be it observed,
is not a mere equation of currency in which the
public are not concerned; on the contrary, it will be
seen that it involves an absolute paralysis of banking
accommodation throughout the kingdom; a mortal
stagnation of the energy of domestic trade which is
the genuine fruit of that accommodation as at present
conducted ; and a panic consequent on this
new intervention, this additional blunder of the
Premier, the effects of which it is impossible
to calculate in all their intensity or their extent. For,
under the existing system, the accommodation sup-
plied by any local bank must be drawn from-
-Ist, Its actual capital ; 2d, The amount of its deposits ;
3d, The aggregate of its own circulation in notes
Suppose the Government plan, announced by an
" Observer," in operation, and what ensues ? We
entreat the earnest attention of our readers to the
results :

In the first place, the local circulation of the dis-

trict, &c., heretofore supplied by the provincial
bank, is withdrawn—substituted, it is true, by
notes of the Bank of England, but these must be paid
for by the local establishment in hard cash, whatever
be the price of gold in the interim, whatever its ad-
vance upon the Mint price of 3/. 17s. 100. per oz.
It is true, also, that the Bank of England, in con-

formity with an arrangement which they have long
been vainly pressing on the voluntary acceptance of
the local banks, are to pay the latter 1/. per cent. on
whatever amount, after the withdrawal of their own

notes, they may be able to keep out of Bank of
England paper. But it is clear " that the loss to the

public and the power of accommodation thus with-
drawn, previous to such purchase of the new Bank of

England note circulation are exactly commensurate
" with the amount of local notes so suppressed."
In other words, let it be granted that the aggregate
of our circulation in notes may remain much the
same after, as it shall have stood before, the circula-
tion of Bank of England notes, still, the extent of
banking accommodation, displaced and reduced, will
be exactly represented by that of the local notes pre-
viously circulated. Would the reader know what is
the amount of this local circulation, and, therefore, of

this monetary accommodation, at the present mo.

ment ? Just 18,000,0001.! Truly the Premier's
stumbles are costly ones to the empire. He
deranged capital--he hampered industry—he
lowered wages—he heaped additional burdens on
the poor—he took taxation off the rich by his enormous
error of 1819, to an extent almost defying calcula-
tion. lie is about, in 1844, to sacrifice 18,000,0001.
more to the same unquiet and devouring phantom of
ft gold standard-measured currency!
Will he really
.venture on this new and f6arful ex-
wriment ? But that we know he is made of very
►ipteezable inarials,- we migh.' despair of producing
any salutary irap,:es4on on his vanity or his Obsti-
nacy. But we tittle doubt that that powerful
interest in the empire, to whose importunities he has

abandoned so many favourite crotchets—Rothan Ca-
tholic exclusion, Dissenters' Civil Disabilities, an un-

rtformed borougl..niongering representation, &e.—wil

yet scare him from this mad and ruinous purpose of
crushing the local circulation!

It would be a curious problem in a Premier's
psychology to determine, amidst the frightful possi-
bilities which his schemes of monetary legislation
seem likely to call into real existence, what
can be the " ruling passion"—the instinct or the de-
lusion, the caprice or the hallucination—which
can compensate, in his own mind, for the political
guilt or wrong-headedness in which he so recklessly
indulges ? Does he imagine that the people are ena-
moured of his transcendent talents for finance,
through the fascinations of an income-tax, payable
by them in the thirtieth year of peace ? Or that

;heir rural and agricultural tastes have been suffi-

ciently bribed by his sudden transmutation into a