The Statesman.
London, England, 1823-04-12 00:00:00

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now ? He thought Ministers had not been sufficiently
explicit upon this subject to the House. It was hut rea-
sonable to expect, that when a new species of loan was
created, and considerable deviations made from ordinary
practice, that the probable benefit derivable to the public
from the innovation would have been stated in the fullest
and most satisfactory manner. The greatest silence, on
the contrary, was maintained by the Right Hon. Gentle.
man opt:ostte upon this subject, and the Ilnusewere left
to guess at the probable measure of relief which the plan
niiarht be expected to operate. It was his firm conviction
• that it would produce no good result, and he expected
before be sat down to convince the House that such an
assumption was rot unreasonable. 111 the first place,
suoposing the scheme to be productive of good, it was
only through the breaches of positive law that the bene-
fits were to be approached. By the Statute of William
and Mary the Batik were restricted from jobbing in the
Ftocks, and the first step towards giving their interfer-
erce in this loan effect should necessarily be to repeal
that law. But would it be said that the circumstances
which rendered a prevision of this sort necessary against
the Batik when that Statute was made, did not exist at
the present day It certainly could not; for the objec-
tion had been rather fortified by the great increase of tn.
fuence and capital which the Bank had since acqnired.
Such were the resources of the Bank, that if they were
once allowed to go freely into the Market, they could
model it almost to their pleasure, and at any time raise
or depress the funds two or three per cent. in twenty-four
hours. But this giving the loan to the Bank was a posi-
tive breach of public faith on the part of the Chancellor
of the Exchequer. When this subject vi,s before the
House last year, the Right Honourable Gentleman's pre-
decessor stated distinctly, that if the Commissioners of
the Sinking Fund did not buy op these securities, they
would he brought into market, open to public competi-
tion. lit, therefore, accused the present Chancellor of a
breach of faith, and, indeed, of a departure from the
established practice of the last thirty years, by not
throwing open this loan, like all others, to public cont-
petition.—(dear.)--And Added to all the objections
which might he made to it as a private job, it was,
tinder all considerations, a most improvident bargain for
the public. By a calculation which he (Mr. Hume) had
made, it would appear that on the 10th of October,
1)42.8, which was the period of the loan terminating, the
Chancellor of the Exchequer would have received
11,247,000/. The question to be asked was, what was to
be done with this money—was it absolutely necessary?
It was not wanted towards the remission of taxes, nor was
it calculated to enhance public credit. The Honourable
Member then entered into a calculation to show the ad-
vantages which going into the market, and buying up
Three per Cents. would have over the present scheme of
Long Annuities. He further contended that the loan
was made nitli the Bank upon the most disadvantageous
terms. The stock was bought at 75, whilst the market
was suffering under a temporary depression from the
rnmnurs of a war. If Government had waited for a short
time the Funds would have been up again. The effect
of the bargain which they bad made with the Bank,
would be, that what the latter bought at 171. 3.. 9d.,
they might sell at 201.3+. 7d. If it were probable that
there should be a war, and the Funds continued at 75,
this would not be an unprofitable contract for the pub-
lic, but as peace was likely to continue, there was no
doubt but that the Funds would rise higher than 75,
and in proportion as they rose, so were the public losers
by the transaction. For all these reasons then, but more
particularly because the Chancellor of the Exchequer
bad no right to extend the contract beyond the year for
which he wanted the money, and because be ought to
have left the loan open to public competition, he disap-
proved of the plan, and he trusted the same feeling
would he so general throughout the House, that they
would immediately scout the measure. He concluded by
giving the Amendment his support.
Mr. MA DIMLY expressed his disapprobation of the
lo in principally on the ground of its being given exclu-
sively to the Bank, and the new and dangerous facilities
which such an arrangement would afford to that wealthy
Company in meddling in the money market.
The CHANCELLOR of the EXCHEQUER said, he was
not disposed to go into any general arguments in support
of this measure, but the breach of public faith imputed to
him made it incumbent upon him to say something in his
own justification. The Honourable Member for Aberdeen
had asked why in pursuance of a pledge given by his pre-
decessor, this loan had not been laid open to public compe-
tition in the market, and not given to the Bank exclusively.
In het, it had be-n so exposed last year, and it was not un-
til Government had found that there were no individuals
coming forward to contract for it, that they opened a nego-
esti in with the Bank. Tile loan in itself was too large for
tiny private individuals to undertake, and therefore the
Bunk were properly applied to. But it was not true that
they came in under any peculiar advantages, for all the
proceedings with the Bank were conducted precisely as they
with an Individual, or any class of individuals. There
was threforefore nn breach of public faith, for the terms
upon which the late Chancellor of the Ex.diequer stated that
the loan was to be contracted for had been strictly complied
with.
Mr. M ABERLY observed that the loen had never been
offered in parts to individuals, which was the basis of the
arrangement with the Bank. Hitherto Government had ex-
pressed a wish not to contract for less than the forty-five
years.
The CHANCELT.OR of the EXCHEQUER said, he was
not sure that the loan had been offered from year to year,
but he recoll,cted that no one seemed disposed to take it up-
on any terms.
Mr. BARING thought the inconveniences arising
from the infraction of the statute by which the Bank
were restricted from jobbing in the money market, fur-
nished a strong objection to this measure. It was, in
his opinion, a dangerous innovation, and to be justified
only by the plea of urgent necessity. lie was at a loss
to see the immediate occasion for raising this money in a
way so novel, and indeed se unintelligible. His Hon.
Friend, the Member for Aberdeen (Mr. Hume) had
stated that there would be a loss on the transaction; and
he (Mr. IL) was inclined to concur with him in his con-
clusion. The scheme, even its supporters were obliged
to admit, was founded upon a delusion. The money was
not necessary towards a remission of taxation, and cer-
tainly it could not have the effect of promoting public
credit. First, he (Mr. B.) saw no immediate necessity
far raising this money; and, secondly, lie did not think
public credit so low, that if the money wanted, such a
trick as this was necessary to obtain it. In a country
like this, 54 full of capital, there never could be any dif-
ficulty in raising not two but twenty millions, and the
mode in which this loan proposed to raise it, in itself'
furnished an argument against the measure. From the
candour displayed by the Right Hon. Gentleman, in his
first financial statement, he (Mr. Baring) was led to ex-
pea a more explicit and manly course of proceeding.—
He considered a scheme unwise, and the connection with
the Bank unfortunate. It would seem as if Government
bad made choice of the most unseasonable time for ef-
fecting this loan. Souse two or three months ago, the 3
per cents were up to b 3; but the rumours of an ap-
pre:ldling war bad lately such an effect upon the market,
that they fell to 73. This was the very moment that the
Bight Hon. Gentleman went into the market, and his
bargain with the Bank was made upon the basis of 73,
being the standard price of 3 per Cent. Stock.—(Hear.)
Bait, not content with taking tne Fuds at the greatest dis-
advantage at which they have been for the year, the Chan-
cellor of the Exchequer committed himself to this unfor
tunate bargain for five years. There was something so
exceedingly ridiculous in the whoie scheme, that lie (Mr.
B.) felt souse difficulty in treaties it with gravity. He
wondered how any man could defend such a scheme ; but
he found *that Ministers did not defend it. He really be-
lieved that they me as coavissod of its futility as any