The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-05-25


Gladstone introduced aud carried through Parlia
meat a plan for transforming certain three per cent
capsn socx held by tho National Debt Commissioners
LOT tne savings banks Into the same nominal amount
OF Two and half per cent stock, together with
tefrnabe annntes equivalent in value 10 the rmanen
income TAKEN away by she change son three 70 Two ana
half per cent the time shat this plan
consisted OF two perfectly distinct PARTS oae OF which,
tine change from permanent into termlnsele annuites
was we worthy o. adoption while the second, altering
the Denomination Of the stock from threeao two and half
per cent was gratutoasIy m'ssnievo1s Inc plan was
moved resolution FOR extending TO other savings
banks funds held by the National Dest Commission
On that called attention again to the fact
that the scheme consisted of two separate operations
the one bad, and the other good and when Mr. Clad
glad to lind he le entirely the faulty part though
Tar aware, Parliament was never Informed
Of the change nor was the inconsistency between the
bill aud the resolution which IL founded
discovered. This bill which was passed 1.-THE
Savings Bank Investment Act, 1885," gave authority
no the Treasury 70 transform I'VE millions Of stock held
by the commissioners In idenlically the
that proposed by Mr. Gladstone Thursday with respect
the obligation Of twenty. four millions The scheme
is therefore not new though IL does not follow thai i
good because Parliament sanctioned IL no later than last
March Lst us consider once what il Ia Part OF
the nat onal debt Is obligatO OF twenty
four mii60ns due TO the National Debt Commits
sioners in respect OF Investments mndc BY them Of
The nation pays the Commissioners f720 600 ansasy as
interest on this debt Of twenty -four m0ns the Com
than turn accounting 70 the savass bank
Gadst0ne proposal " that the perpetual annual pay
ment oil &1200o0 shall be transformed It's eqUbva
entan annual payment Of e. 725 000 teraninasing in
1885. Sapposng this werc tho whole OF the scheme,
the effect would b. that the Commissioners would
receiv" The G., 52S 900 annually III 1885, would pay
Of this annual sum as much as might DO demanded
by the eavings Bank Trustees aud would invest the
plus in the open market that At the c6d of the Anne
suppos tho Savings Bank deposits ther Increased
diminished, the CATION Of twenty fosr millions
existing would be entirely redeemed, bst the Com
nase esaosa ns@ ss% sf s sSssi
amount which might DO operated upon as
duced BY chat me by twenty four miiliosa There Is,
however, second part Mr.. Gladseoncs scheme In
stead OF allowing the Commissioners 70 sccumuatetei
reinvestments Of surplus receipts until 1885 before
peating the operation Of conversion he prop 10 do
II every time an investment is made Il was hsre,that
Gladstone spoke Of convert ng the reispestmenss of
the Commissioners into termnable annnses, bat he
did not mention the number Of years thesc annaies
would run He let II TO be in orcod that they
also would terminate in 1885 Il easily seen hat
this could not be his intention Surprising the COM
purchased were converted into annuies coasug in
1885, their capital would always be represented by
undminisnod IN amounI, must in 1854 be represcnted
by single annuity Of twentyfonr millions lasting for
year The charge on the Excneauer on this
ga 900 in 1885. and tho amount OF debt
would be between lou 120 millions Mr.. Gladstone
explained in his supplementary speech that 1t In
tended Ienveslmenis OF the ion.
ers ino annuitics terminating In 1905 Dhe effect would
before depend upon whether tn: capitai the Oofn
mssioners increased diminished, but whatever II
might be in 1885 would then be represented by aDnu
mating in 1905 L. therefore, their capital re-
manned as at present, the commissioners would then
be entitled, now, 10 an annuity Of 81 having
twenty years 70 run; and II it had diinised to
bal the annuity would be diminished in the SANG
portion TIE charge the ExcheQuer would from
Il, 725 0C0 In 1867 10 IS 45O, OOO f2537 500 in
amount III debt redeemed would vary from thirty up
forty millions. fhe short result Of the scheme there
for twenty years pay OIL It's creditors by al
II the income tax tails from ak pence four
pence the taxpayer spends the greater part OF hrs gan
SONS increase of harmless luxury and 1t IL thus dis
sipated and gone Mon do not scrupu0nsly take
Of every shilling of income second sounder
argument against reducing debt that the effect OF
the gold discoveries 70 reduce the pressure IT, and
we make great effort produce a slight relief
hereaftsr but this arument though good as Tar as II
goes, can easily be Overstrained. Ii remains 10 be
ssen whether the part cuar plan OF heChsnccor OF
the Exchequer good one. Its great deect that It
certain proportion Of the debt 1t may be that necessity
will compel us u encounter deficits and borrow
Of the old sinking FUND.- in borrowing on hard terms to
pay on easy creditor. II would BE- much. better were
u practicable, TO set aside fixed sum, rsay twenty
eignt even thirty millions, annually for the pay
ant OF Interest and reduction OF principal,
pending, however, ,he redemption Of principal
whenever q time Of difficulty came But the truth Is
that the House OF Commons itself such
course the abatement Of taxes always popular that
unless the process OF redemption be disguised
be maintained And this is the defsOce OF Mr.. Glad.
iosSsd oa1 arose tie result might Dc %iseSieos:,; ut
suit viu be beneficial We must balance the probabilities
OF dhe two events against another, and decide be-
turc is likely to be rcazed and though do
look upon Mr. Gladstone's plan as magical revelation,
We earn sstiy hope It will be adcpteo.
THE LONDON TINES REPORT OF THE "RElsN OF
TERROR" AND SCENES OF "TyMuLr" AND
"Rour'' IN THE cITY-AN ABUSE OF CREDIT
THE CAUSE.
fErouo The ordon T;ras M.vl
anyth ng can justify suspension Of tho Bank Char
ter Act the panic which swayed the city and fro yes
s ssgn u rror was already approaching itsend and
would have speedily ceased had intractOn OF the law
Soxed 10 the bank viii no, be used n bow
ever, be denied that abow Midday Yesterday the tssuu
become q roa, The doors OF the most respectable
banking houses we're beseged, more perhaps by mob
actuated bv the strange sympathy which makes and
keeps mob together than by creditors Of the banks and
throngs heavIng and tumbng about Lombard
that narrow thoroughfsre impossible The excite
ment all sides such ~ has not been witnessed
since sim s Syss, . s.' a, lsaS .c.'d ne rsry cfs
thy compare srith he wodnes Of Yesterday Nothing
had happened since the day before justify such
~ Was everywhere shown The directors OF recently
established joint stock bank, involved to a compara
lively sight amount had thought 1t prudent avoid
was known ana confessed that the assets Of tie com
pany sufficient to meet all It's liabilitics and to
leave considerable surplus Rumors however, like the
false woman In the Laureates legend "ran not among
the noblest names, and left reputation unassaled
Each exaggerated the suspicious Of his neighbor
and until report, at that time unfounded,
circulated In the afternoon that the government had
authorized the bank directors issue the ex.
tent Of 1--WE millions beyond the limit imposed by the
Bank Charter Act seemed the and distrs Of
the commercial world had suddenly become boundless
The statement was bascess, but IL served 70 allay
panic which had no solid foundation Even the
that Messrs Peto and Belts had suspended
payment, with liabilities amounting 70 four millions, did
not revive the panic in its first intensity and the state
ment that the Consolidated Dscount Company and the
Imperial Mercantile Credit Association had stopped
produced little effect Men had begun to reflect on
the nature II the circumstances which inspired thsm
with such bind ALARM and when reason Is
able 10 assert It's claims to attention, It's influence
goes on increasing until IL acquires its accustomed
mastery We are persuaded that had the government
scod ar~ the panic would have subsidized Of ITSELF the
men Of business into the city to-day would have
felt ashamed o. yesterdays madness and w. ex.
psct confidence be speedily restored shall attribute
IL to natural rather than the interference OF
the executive government
What, In fact, had happened that business should
go about panc-siricken that the ordinary OF
credit should be suspcaa, that the Bank of England
ehouh be compelled A. Mere selfdcfcucs advance