MR GLADSTONE'S SCHEME FOR REDUCING THE NATIONAL DEBT.

Nelson Evening Mail, Volume XVI, Issue 244, 13 October 1881, Page 1

MR GLADSTONE'S SCHEME FOR REDUCING THE NATIONAL DEBT.

With reference to the Treasury min-i utethat has just been published, setting forth Mr Gladstone's proposals for eonvertiug L 7,107,572, 107,572 of annuities which will expire in 1885 into a new series of terminable annuities, the ' Economist' observes:— " If Mr Gladstone had to find amongst the general public people willing to accept his new annuities in lieu oftheir stock, there would be littlo prospect of his being able to carry out his scheme. But the Government is not dependent upon the public. It is itself the holder of a large amount of stock on account of the savings banks, and 1.20,000,000 of this Mr Gladstone now proposes to convert into annuities. The remaining L 40,000,000 he asks to be allowed to take from the L 62.000,000 or so of stock now standing iv the name of the Chancery Paymaster. To this latter proposal the Lord Chancellor has assented on condition that there shall be a mar-gin of unconverted sefcurit.es left; sufficient to provide for the maximum amount of payments and transfers out of court, which according to experience can possibly be required. The gist of the plan is, that the National Debt Comi missionWs and the Chancery Paymaster will have the book entry of L 60,000,000 of stock now at their _-. credit cancelled^ ! and in .place* of it-will receive an annual payment of L 3,428,000. Of this amount L 1,800,000 represents the annual inter! est on the L 60,000,000, to which thosi on whose account the Government gef curities are held will be entitled, while the remaining L 1,628,000 invested ap 3, per cent, will in twenty-five years amount to .l/ 60,000,000, and thus replace the stock now cancelled. Under this scheme the actual reduction of debt will,- of course, be no greater- nor more rapid than it would be_if L 2,000,000 ojf the amount left free by the expiring of annuities in 1855 were applied year byyear until 1906 to the purchase of stock; The difference is simply in the form and not in the essence of the transaction. But the difference, nevertheless, is a very important one. All our experience has shown that it is almost impossible to induce Pari iameut to provide large yearly surpluses for the repayment oif the debt. If there is at any time an excess of revenue over expenditure, it is immediately made the basis of demands for the remission of this or that taxi, whiqh the Chancellor of, the Exchequer rarely finds himself able to withstand;. When we have a surplus we spend it, and it is the recognition of tbisi weakness that is at the root of such schemes as that which Mr Gladstone now puts forward. What he wishes to do is, so to speak, to hide from us the fact that we haye a surplus. Under his scheme the L 2,000,000 to be applied to the debt redemption will appear in the Budget not as so much free revenue, but as' a debt due to certain annuitants, -the payment of which is not optional, 'but' absolutely necessary. The mouey, therefore, will always be provided, and we shall thus be steadily doing something during the next. twenty-five years' to reduce onr indebtedness, whereas if it were left to Parliament, each year to vote L 2,000,000 for - redemption purposes, the chances are very much against this amount being regularly forthcoming."