Star.
London, England, 1830-05-07 00:00:00

FUNDED AND UNFUNDED DENT.

Lord GODERICH begged leave to preface with a few observa-
tions what he had to say respecting the petitions with which the
house hail been occupied. At the same time he hoped that he would
be forgiven for taking up the time of the house on account of the
Importance of the subject at all times, but to which present circum-
stances attached a more than ordinary Interest. It could not be denied
that the national debt wu a subject of vast importance when it was ta-
ken into consideration that it absorbs half the amount of all the tummy
produced from taxation, and that to this pressure it has been owing
that the system of taxation has been so oppressive and burdensome
upon all classes. It was a subject which required peculiar attention
at the present moment on account of the many erroneous opinions
which unhappily were but too prevalent with regard to the national
debt and its operations, and which induced people to look upon it
as an intolerable nuisance, which it would be almost praheworthy
to lay violent hands upon—a proceeding which he, and, he trusted,
every other noble lord, would feel disposed to look upon in a very
serious light. There was no part of his Mesty's speech delivered
at the opening of the present Session which had more forcibly at.'
tracted his (Lord Ooderieh'aj attention than the last paragraph.'
Public faith ought to be maintained, and any deviation from this
principle the noble lord would look upon u an act of very great
injustice. But the view taken by many persons respecting the
public debt arises not from its actual pressure upon society, but from
an erroneous opinion taken of it, which represents that nothing has
been done since the termination of the late war towards its reduc-
tion; that it Is an act of injustice to pay in a metallic currency that
which was contracted in a depreciated currency ; that the public ere.
ditor alone benefited from the present state of things, and was ex-
empt from the injuries which were so severely visited upon every
other class; that it wu impossible to go on under such a
and keep faith at the same time with the public creditor. Ace:airele as-
sertions are to be heard at public meetings, are set forth in the
daily papers, are to be met with in various publications, and even
are to be found in some of the petitions laid on the table of that
house. (Hear.) But the noble lord maintained these to be enure
in fact, and, with the permission of the house, he would state his
reasons for so thinking:—lag As to the amount of the national
debt, and that it experienced no reduction since the termination of
the war; it was stated that forty millions only had been reduced.
This was an error; it ought more properly to be sixty millions—
But the great fallacy was the assumption that the national debt was
a capital debt ; no such debt existed from the state to the public
creditor. A common debt implies that, while it is competent for the
debtor to relieve himself from the debt, it was equally competent
for the creditor to demand principal as well as interest. But with
respect to the national debt, the public creditor cannot claim the prin.
cipal ; all he can demand is an annuity in the shape of interest,the only
contract entered into by the government being to pay a certain annuity,
terminable or otherwise. The only question then was, the pressure
this charge entails upon the public; and therefore the next thing to
be taken into consideration is its annual amount now, and what it
was when at its highest. In taking this into consideration be main-
tained that the amount of reduction was much greater than common
opinion seemed disposed to allow it to be. The year in which the
debt, both funded and unfunded, was highest, was in 1818. Sines
that year, down to 1829, a reduction in annuities, the amount of
Exchequer Bills, and interest on the funded and unfunded debt,
amounted to two millions and a half. The subject would be im.
perfectly understood, unless the house would take into conside-
ration the measure which will come into operation next year ;
be meant the reduction of the Four per Cents. (Hear.) A great
clamour was raised about the injustice of this measure, but he could
see no injustice in it. The condition of the original five per cents.
in 1822, was, that they were liable to reduction. If the govern-
ment used any inauenee to raise the price of stocks in order to bring
about the present reduction, it would not only be unjust, but, in his
opinion, betray a want of common sense, which be could not attri-
bute to the members of it ; therefore he was firmly persuaded that
no such attempt bad been made on their part. In 1829 the saving
in exchequer bills was 878,0001 This added to the saving effected
by the reduction of the four per cents. and the funding of exchequer
bills, would produce, even after paying the dissentients to the ma.
sure, a saving equal to a reduction of MO millions of the national
debt. If any one, in 1816, said that the reduction in 1890 would
amount to so much, he would be looked on us visionary. The noble
lord thought he had now shown that the opinion that no reduction
had taken place in the national debt since the expiration of the war
was an error. As to the point noticed by his noble friend on his
left—namely, the injustice in paying a corrected currency that which
was contracted in a depreciated une be (Lord Goderie.h) asserted
that no such thing was being done. If the average depreciation be
taken at 20 per cent, then the effect of this would be to add 20 per
cent. to the amount of the debt ; or, in other words, it would be ne-
cessary to borrow 20 per cent. more than need otherwise be borrowed.
The noble lord took the amount of the charge incurred during the
years of the depreciation at 17 millions and a half. If Mac:sea
were cared, the only proportion of this assignable to the is-
don was equivalent to 20 per cent. and caused an addition o three
millions and a half to the amount more than it would have been
had not the depreciation existed. The resalt of this is, that throe
millions and a half are all that can be charged upon the debt, and,
instead of thirty-three millions, it would be only twenty-nine. Now,
if the reduction has since taken paler to 29 millions, no part of
the debt can be ebarged upon the depreciation ; but not only has
it been reduced so much, but, in fact, the reduction has been
considerably more. It is, therefore, a fallacy to say than an at-
tempt to pay in a correct currency is impossible. It is as-
serted that the holders of funded property enjoy all the advantages
arising hem low prices, which meat so severely on other classes._
He was no enemy to low prices. Those who sell wish naturally
enough for high prices, while, on the contrary, those who buy are
equally anxious to have them low. The noble lord was a friend to
low priers, and did not grudge the stockholder the full benefit of
them. He thought it hard to make this a ground of Complaint
against them—they had their evil day, arid tradesmen had their
sunshine. (Hear, hear.) All benefit from a low rate of interest,
and none more se than those who are mast clamorous. Mott.
e. were greatly relieved by the high prices of the Funds and the
rat of interest out of them. The noble loud himself found the
benefit of it, and the observation applied to landed property in ge.
neraL W lib respect to the last point which he called the twenties
of the boas* to, that it was impossible for the government to go
on tinder the premium existing at present, and at the same time
keep faith with the public maser, be would observe that if the
real debt was sot lessened while the revenues were repkuly paid,

there would be • national bankruptcy. But the contrary was
the case—whlle the government reduced the debt at also re-
duced taxation, and still there was no reduction io the receipts.
During the Rye years succeeding 1817, the customs' and excise sere
lees than in the year 1829. In 1827, the amount ease :hat ot
last year by $ smell sum. me does not prove a felling off in
the revenue. Notwithstanding the difficulties we had to encoun-
ter. our resources are unimpaired, and we are far distant from any
thing approaching • national bankruptcy. The amount of the re.
ceipts last year was something less than the average of the last
four; still this was no cause of alarm, net should turn, on that
account, lose their fortitude. He would beteld, perhaps, that the
revenue was Min off now (hear. hear) ; but it betrayed great
shortedglitedness to feel alarm on account of a falling off in a smgte
quarter; ft is the average which ought to be looked to. Parliament
ought to reducemory unnecessary expose. The noble duke et the
bead of the government had certainly applied the pruning knife. lie
had • word or two to say 'tomtit% exchequer bilis, because that
was a species of public security much so taf er. and to use a
common phrase, of es ticklish a nature that it would not he prudent
to retain so large a portion of them in the market. The present
price was about 78; and be therefore thought that it would he ad-
visable to come to some arrangement with the bank, before the
charter wee renewed, to have as many of them paid of as pos.
Bible. If this were medals, he was convinced that. Is case or toy
emergency, the difficulties of Government would be aggravated by
having such a large amount of floating security in the market. It
was not necessary for him to state the details, or enter further
into the subject at present, than merely au that this sort of
security ought to keep within the narrowest bounds meisible ;
arid if that were riot date, very great danger might be anticipated.
This dangerner2ol:,t arise from a variety of causes, one of which only
be would . 1 a run were to be made on the savings
banks. Gorertunent, in order to meet such a contingency, must
issue an additional number of Exchequer • Bills, and thereby
add to the already great amount in circulation. (Hear, hear.)
Last year some arrangement of this kind woe made' and he hoped
it would be persevered in, because he was convinced that such a
course might be successfully adopted for the purpose of reducing the
debt. This was nearly all that lie had intended to say on the sub.
ject ; and he had found it necessary to make this statement, in order
to remove imprtesins which were no: only unjust, but most inju-
rious In then cot.seritteoces. If what he had stated was correct—and
he had every masugggp believe he was zocrect.—.the °sentry was not
in a situation at wMch they ought be at all alarmed. nor was there
any ground for those gloomy views which were entertained in some
quarters, respecting the pressure of the tattonal debt, even great as
it was--(hear). lie had looked at the subject not only as it r...
fared to our internal prosperity, but as connected with all cue
relations with the rest of the world ; because, if we were to hoht
the desponding language used by certain enters and speaker.,
it might Ivad to serious consequences se regarded our foreign
relations. Looking, however, at the question in this de.
spending point of view, he was well convinced that we soul.!
not, even for many years' purchase, be driven front our purpose,
or be forced to give to other powers means by which they
might successfully assail us olt the ground on which the
country now stands. He was convinced that the influence
of "England depended in a great measure on the confidence
entertained by other powers of her honesty, integrity, and good
faith, and that It remained with the government to place her in a
situation in which she could not be MCC N.sfully assailed by any
foreign power. If, however, any attempt thould be made to drive
the government from that course of honour and good faith which she
had so long maintained ; if any attempt should be made to derange
the present system, and drive us into any thing like a breach of
public faith; he was fully convinced that those who made the at-
tempt would be unsuccessful, and we would " laugh them to
scorn." (Hear.)
The Duke ot WELLINGTON said his majesty's government
and the country were greatly obliged to the noble lord for the motion
which be bad brought forward. and the manner be had discussed
the question--(bear.) He would not, however, 'waken the argu-
ments of his noble friend either by commenting on them or by re-
peating them to the horse. In general he concurred with the state-
ments of his noble friend, and he congratulated him on so distinct
and so admirable a statement of the finances of the country. There
was only one part In which he did nut fully concur with hint, and
that was in the few remarks he had made on an equitable adjust.
meat. His noble friend had admitted that the change which
had taken place in the different alterations made in the cur.
rency might be calculated at twenty per cent. It was certainly
true that the depreciation of the currency caused an increase of
.prime; but it was equally true that this increase of price was not
to he attributed to the depreciation of the cu alone. There
Site principle of his noble friend to which he w to allude,
and that was the period at which an equitable adjustment should
have taken place. That should have been made, according to his
proposition, when cash payments were resumed and the Bank rc.
stiletto= were moved; but he would just, in reply to that, call
his noble friend's atrention to what the country had gained since that
time by adhering to good faith with the public creditor. Since that
period, the noble lord must be swan that the country had gained
1,900,0001. ajar, and by the measures which had been adopted
that capital might be said to have been diminished to the amount
of 160 minima It was only naseary to state this, in order to
thew the result of good faith ands good honesty.—(hear, hear,)_
There was another point to which he wished to say a few words—he
meant the unfunded debt. His noble friend had said the amount
was 26,000,0001. ; but it ought to be recollected, that of that sum
there were at least 000,0001. in public works, which consequently
toad not fall under that class, and could not come regularly into
circulation. He might also add, that there might be great difficulty
in the present state of the currency to come to such an arrangement
with the Bank. respecting the unfunded debt, as that alluded to by
his noble friend. He would not, however, put his opinion in com-
petition with that of his noble friend, but he was sure the 'dean.
tages which might be the result of the measures proposed would not
be thrown away on the Chancellor of the Exchequer. He would
conclude by stating, that the measure for the reduction of the debt,
adopted by his noble friend opposite, had been followed by the pre-
sent Government, and he hoped that in the same number of years
there would be a similar result.

Lord STANHOPE was of opinion that one great cause of the dia.
tresses and difficulties of the sountry arose from the alteration which
had taken place in the currency. He, therefore, could not ace what
arrangement could afford relief while prices continued so low and
taxation was so high. The interest of the public debt bad blamed
60 or 70 per cent. and taxation, in consequence of the rise in the
value of money, had increased in a similar proportion. The COMIC
of all the derangement arose from the introduction of a gold cur.
rwq., which was unknown in the country till the poetise of Ile.
Pale BM..

Lord BEXLEY had formed a very different opinion from that
of the noble lord (Stanhope) respecting the currency of the country,
and was convinced that tf any danger was to be apprehended, it
would arise by attempting to recur to the system recommended by
the noble lord, namely, a pow currency.
The Earl of CARNA RYON said a great deal of the compact
of the country wu carried on through means of a paper currency,
and u much of our commercial success was owing to that, he was
convinced that any contraction of that species of circa/Atkin must
necessarily cramp our resources.
The motion was then agreed to.
Adjourned at eight o'clock.
(The house meets tomorrow at ten, to bear appeals, and will ad.
journ at three till Monday.)

HOUSE OF COMMONS-THURSDAT.