THE NATIONAL DEBT.

New Zealander, Volume 9, Issue 760, 27 July 1853, Page 3

THE NATIONAL DEBT.

House of Commons. —Friday, April 8. On the House resolving itself into committee on the Consolidated Fund and National Debt Redemption Acts, (Mr. B.mverie succeeded Mr. Wilson Patten as chairman of committees.) The Chancellor of the Exchequer rose to move the series of resolutions of which he had given notice. He was desirous rather to moderate public expectation than to invite attention to the importance of the subject, and would remind the house of the different positions in which the present and former financial operations were undertaken. After referring to reduction transactions effected in former years by Lord Bexley, Lord Ripon, and Mr. Goulburn, ho observed that it was a very different thing to deal, for the purposes of reduction, with stock at 3 percent. A large compulsory operation was now oat of the question. But yet the time had come when it was the duty of tiic government to obtain for the public the utmost value of the admirable securities given for its debt. And it was desirable to provide a basis for future operations, and to lay ground where no ground had yet been laid. There was, no doubt, a choice of difficulties before the house, whose duty it was to deal most jealously with the complicated fences of taxation ; but as it must regard tne Chancellor of the Exchequer as its agent, and must be aware of the effect produced upon the public mind by long discussions between it and its agent, he should ask that the moderate confidence bo pla ed in the government which, if the proposed operation were effected at all, might enable it to bj effected with resolution and promptitude. He was anxious that such operation should go on while parliament was sitting, in order that, later in the session, the government might come back, if need bo, for extended powers. Mr, Gladstone then proce.'ded to explain that his plan was divided into three portions. First, there was the compulsory liquidation of certain minor stocks appe'.ring in the schedule of the National Debt, and chiefly connected with the South Sea Company. These amounted in all to about nine millions and a-half sterling. He assigned practical reasons for interfering with these patriarchal stocks. It was advantageous to have different kinds of stocks, but disadvantageous io have different kinds of stocks which were alike in character. The prices too in those stocks represented a feebler course of business than they would if consolidated. At present they raerely'complicated the debt, without countervailing benefit. The South Sea Company had long purged itself of old stains, but its stocks involved a second and therefore an undesirable system of management. Real economy would bo obtained by the measure, for there would be an actual saving of £25,000 a-year, and by a profitable employment of balances now unnecessarily retained there would probably be a

still greater gain, Secondly, he explained that the government plan involved the issuing of Exchequer Bonds; and, thirdly, the voluntary commutation, dependent on the option of the holders, of the great Throe per Cent, stocks, namely the Consols and the Reduced. These amounted to nearly live hundred millions, and ibeir conversion was the ultimate aim of the scheme, and must he regarded by the committee as the key arch of it. He observed that many people expected that these stocks would in course of events be necessarily reduced, but we ought not to trust to the mere force ot circumstances. People were nvslcd by living after an ago when money was dear, and in an age when money was cheap, and therefore fancied they were travelling down an inclined plane. Hut it was not so, and he would remind the house that public credit had been higher than it was then, for in 1739 the Three per Cents, now at par, wore at 187. In reference to the proposed bonds, he said that they were to be transferable by delivery, were to bear interest at £2 15s. per cent, until, at latest, the Ist September, 1884, and then at £2 10s. for thirty ream, namely, to the Ist of September, 1894, and then to bo subject to_ reduction. The issue was not to exceed thirty millions. Mr. Gladstone then stated the way in which those bonds were to be disposed 01, namely that they were to be exchangeable against Exchequer Bills, against the stocks affected by the resolutions, and"-might-also be sold by government, and the proceeds applied to buy stock foi

cancelling of Exchequer bills. At some length j he explained his reasons for thinking that these bonds won’d be popular, especially in the provincial stock markets and with foreigners, and said that he regarded them as commercial and trading securities. In regard to the third division of his subject, he asserted, in answer to objections which might be urged, (hat posterity would by the proposed arrangement be placed at no disadvantage relatively to the circumstances under which we ourselves were placed, but would find that we had made an absolute reduction of the , debt. He then said that by the intended scheme i those to whom commutaticn was proposed might effect it by receiving new stocks which it was destined to create, namely, a New Three aiul-a-Half per Cent, or a New Two-and-a-Half per Cent. But an objection had been raised that there would he a great and a disadvantageous rush upon the latter stock, and to this he deferred, and had therefore, (in a reprint of the resolutions,) proposed to limit the issue of the Two-and-a-Half'per Cents, to thirty millions, to be allotted according to priority of application. He agreed that it was undesirable to increase the nominal capital of the debt, and the utmost possible addition would lie three millions. A basis would thus be laid for a permanent and irredeemable Two-and-a-Half per Cent. After stating that it was not proposed to bring the Chancery and bankruptcy funds under the operation of the resolutions, except in regard to the m'nor stocks which had been mentioned—but indicating, at the same time, the possibility of those funds being placed on a totally new footing, more advantageous to those concerned, as well as more economical to the nation—the Chancellor of the Exchequer concluded a most audible, clear, and lucid statement, which occupied about an hour and three quarters, by placing in the hands of the Chairman resolutions for carrying out the above proposals, leaving it to the committee to decide whether it would at once proceed with them. The first resolution being put, Mr. Hume complimented Mr. Gladstone on the exceedingly clear statement which he had made, and characterised his proposals as a step in the right direction. Mr. W. Williams prof -sod himself disappointed with the proposed scheme, being opposed to an increase of the debt. Mr. Henley said that this was av. large scheme, and involved a proposal to give a government the power to deal with an enormous amount of funds, and therefore he thought that it was desirable that the committee should not lie asked to come to an immediate decision. He commented upon the fact that the New Two-and-a-llalt' per Cents, were founded upon a ground admitted to be objectionable, that of increasing the debt. He doubted the justice of commutation according to priority of application. Mr. Ellice expected that every facility would have been offered in aid of a scheme which was the commencement of a most beneficial course. He expressed bis acknowledgments to Mr. Gladstone for having been the first to grapple with such a subject Alderman Thompson thought that the boldness of the scheme required that it should] receive calm and impartial consideration. Mr. J. B. Smith concurred in thinking that time should be taken upon this important question, and he asked the Chancellor of the Exchequer to consider whether the period had not come for reducing the National Debt, Sir Fitzroy Kelly contended that it was a delusion to hold that any option was offered between the new securities, as no man in his senses could hesitate ■which to choose. Mr. Wilson argued, in reply, that the security depreciated by the preceding speaker was the same as that which all men were ready to accept as an Exchequer Bill, and he pointed out other alleged fallacies in the argument of the latter. Mr. Spooner advocated delay, without which ho must vote against a scheme which had been imperfectly explained. Mr. Macgregor expressed bis opinion that the resolutions, taken as a whole, would give the greatest satisfaction to the country. Mr. Wilkinson concurred in Sir F, Kelly’s argument, and urged that delay should take place. Mr. Lai ng opposed delay, as the amendment announced that night had removed nearly the only objectionable part of the plan. The first resolution being road, Mr. Di rack urged that no farther progress ought to be made that night. Lord John Russell thought that such desire ought to have been expressed earlier. But all possible objections bad been already made to the propositi* ns, and indeed a bitterness not usually imported into a dry question bad been manifesto. He thought it most desirable that the Chance 11or of the Exchequer should obtain leave to brii g in the necessary bill. Mr. Disraeli reiterated the objection that the amended resolutions had only just been in the hands of members. The mere leave *to bring in a bill might not be objectionable r but if it meant thr.t that a solemn assent was to be given to the scheme, he must divide. He then proceeded to make some observations on the propos’tions, remarking that these had prevailed an impression throughout tl e country that the Chancellor of the Exchequer was going to pay off the National Debt. After entering into some calculations as to what would he the ultimate gain to the public it the unamended resolutions had been carried out, he declared that the question no longer wore the features of magnitude and interest it possessed when they woke that morning, lie dwelt upon the restrictions which had been imposed upon the great plan, and demanded what we were going to do—“ what was all this pother about ?” The real object government now seemed to have in view would better have been achieved by funding Exchequer Bills, as thereby a normal state of iunds might lie produced. The propositions did not profess to do much, and he thought would do less. They might be assented to, but he thought the country ought to know that no important reduction of the interest of the National Debt was to be mode. More complicated and ingenious machinery for achieving a small end had never been devised. After a few words from CaptJn Laffan, the resolution; were read as follows : 1/^KatjQSTcapital trading stock of the CorpoGovernor and Company of Merchants of Great Britain trading to the South Seas and other parts of America, and for encouraging the fishery, which is called and known by the name of South Sea Stock ; the capital stocks of the £3 per centum annuities, called and known by the name of the Old South Sea Annuities and by the name of the New South Sea Annuities : the capital stock of the £3 per centum annuities, created by an Act passed in the 12th year of King George L, intituled “ An Act for granting to his Majesty the sum of £1,000,000, to be raised by way of lottery,” called and known by the name of the Bank Annuities 1726 : and the capital stock of the £3 per centum annuities, created by an Act passed in the 24th year of King George 11., intituled “An Act for granting to his Majesty the sum of £2,100,000, to be raised bv an-

nuitics and a lottery, and charged on the Sinking Fund, redeemable by Parliament,’ called and known by the name of the £S per Centum Annuities if 01, shall be paid off and redeemed. 2. That every person, body politic and corporate, who now is, or hercaf ermay be interested in the capital stocks of any of the said X‘3 per centum annuities, who shall, in manner hereinafter directed, give notice at any time on or before Friday, the Gth day of May, 1853, of his assent to receive other government securities in lieu and in place of the said capital stocks of the said Annuities, instead of being paid in money, shall, at the option of the said parties, receive lor every 10°/. thereof 82/. 10s. in a new stock of three-and-a-half per.centum annuities, which said annuities shall be paid the rate of 3/. 10s. per centum per annum until the 6th day of January, 1804, from and after which day the said annuities shall he subject to redemption by Parliament; or for every ICO/, of the said capital stocks of annuities the sum ol 110/. in a new stock of two-and-a-half per centum annuities, which said annuities shall be paid at the rate of 21. 10s. per centum per annum until the sth day January, 189-1, from and ■ after which day t':c saul annuities shall be sub-

iect to redemption by Parliament; or foi sum of 100/. of the capital stocks of the said per centum annuities, an Exchequer bond or like amount, payable to the bearer, and carr} „ i interest at the rate of 'll. 15s. per centum per - I mini, payable half-yearly on the Ist day o x and the Ist day of September in every > ear ’ , the Ist day of Sentember in a year to > e in such bond, and not later that the Ist ber, 1864, inclusive, and thenceforth IK 10scentum per annum, payable half-y cal Jy , manner, until, and including the Ist Sop , * 1894, and thereafter to be subject to ret ei p at par, at the option of the bolder, or at 1 tion of the Commissioners of Her Majesty.» sury, as shall be named in such bond. 8. That the dividends and interest payable on such new 3/. lOspcrcentum annuities, am on new 21. 10s. per centum annuities, and o Exchequer bonds, shall be charged and chaipc* upon the Consolidated Fund ot the Unite vi i 0 dom of Great Britain and Ireland. 4. That the dividends now payable by law on the sth of July and the sth of January mevery VP'T on the said capital trading stoc«c, and on ic said capital stock of New South Sea Annul ics. Annuities 1726, and Annuities 1751, s T“* C( ? n " tinue payable until the oth of January, 18 » in " elusive, and no longer. That the dividends now payable by law on the 10th of October and stli of April in every year on the said capital stoc ' o Old South Sea Annuities shall continue P a J_ a } 0 until the sth of April 1854, inclusive, and no longer. 5. That if the Corporation of the Governor and Company of Merchants of Great Britain trading to the South Seas and other parts ot America, and for encouraging the fishery, shall, at any time on or before Friday, the 3rd day of June, signify to the Commissioners of Her Majesty’s 'treasury their assent to commute and exchange the said capital trading stock, or any part thereof, into any one or more of the said 8/.los. per cent, annuities, new 21. 105. per centum annuities, or Exchequer bonds, the said corporation shall be permitted to make such commutation and exchange upon tho same terms, and subject to the like conditions ns are granted to the person or persons, bodies politic ov corporate, interested in, or entitled to, tile capital stock of 3/. per centum annuities now proposed to be paid off and redeemed, 6. That all and every person or persons, bodies politic, or corporate, possessed of any part of the said 31. per centum annuities, and who shall desire to signify his, her, or their assent to receive the said new 3b 10s. per centum annuities, new 21. 10s. per centum annuities, or Exchequer bonds, in lieu thereof, shall on or before the 6th day of May, 1853, but within the usual hours of transacting business at the Bank ot England, or at the South Sea House, by themselves or some agent or agents for that purpose duly authorised, signify to the Governor and Company of the B uik of England, or to the Governor and Company of Merchants of Great Britain trading to the South Seas, as the case may he, such assc; t in writing under his, her, or their hand or hands, or the hand or hands of his, her, or their agent or agents, together with the amount of his, her, or their respective share or shares in the said 31. per centum annuities, and which said assent shall be entered in a book or books to be opened and kept by the said Governor and Company of the Bank of England, and by the said Governor and and Company of Merchants of Great Britain tiading to the South Seas for that purpose; and in case of any transfer ox such shax-e or shares of such annuities, or any part or parts thereof, after such assent, the part or parts of such annuities so transferred shall be entered in the said book or books separately from tho said 31. per Centum Annuities, in respect ot which no such assent shall be signified; and every such person or pei’sons so assenting, or his, her, or their assigns, or the executors or administrators of such assigns, under any such transfer, shall be entitled for every 100/. capital stock of the said 31. per centum annuities, to 82/. 10s. of the capital stock of new 3/. 10s. per centum annuities, or to 110/. of the capital stock of the new 21. ]os. per centum annuities, or to an Exchequer Bond of 100/., bearing interest as aforesaid: provided always, that if any person or persons holding any such three per centum annuities, shall not be within the limits of the United Kingdom at any time between the Bth day of May, 1853, both inclusive, but shall be in any other part of Europe, it shall be lawful for such person or persons, to signify such assent at any time before the 30th day of July, 1853; and if any such person or persons shall not at any time between the Bth day of April, 1853, and the 30th day of July, 1853; be within any part of Europe it "shall be lawful for him, her, or them, to signify such assent at any time before the Ist day of February, 1854, such person or peisons proving to the satisfaction of the Governor or Deputy Governor of the Bank of England, or to the Governor of the South Sea Company, his, her, or their absence from the United Kingdom, or out of Europe, as above specified, and that his, her, or their share or shares of such 3/. per centum annuities stood in his, hci, or their name or names respectively, or in the name or names of any one or mors trustees on his, her, nr their behalf, in the books of the Governor & Company of the Bank of England, or of the Governor & Company of Merchant Traders to the South Seas on the 6th day of May, 1853 ; provided also, that such p.rson or persons so absent from the United Kingdom, or out of Europe, shall signify such his/her, or their assent, within ten days after his, her, or their return to the United Kingdom. 7. That every person or persons, body politic or corporate who now is or hereafter may be interested in or entitled to any part of the capital stock of the Consolidated £3 per Centum Annuities, ov of the capital stock of the Reduced £3 per Centum Annuities, payable at the Bank of England, or at the Bank of Ireland, and who shall at any time before the 10th day of October, 1853, signify to the Governor and Company of the Bank of England, or to the Governor and Company of the Bank of Irel nd, by an entry to be made in books to be opened for such purpose, his desire to commute and exchange any or all of the said annuities to which he may be entitled, into any one or more of the said New £3 10s. per Centum Annuities, New £2 10s. per Centum Annuities, or Exchequer Bonds, shall be permitted to make such commutation and exchange upon the same terms and subject to the like conditions as are granted to the person or persons, bodies politic or corporate, interested in or entitled to the capital stocks of £3 per Centum Annuities proposed to be paid off and redeemed as aforesaid. 8. That the Commissioners of her Majesty's Treasury be authorised and empowered to issue*at any time between the oth of April, 1853, and the oth of April, 1854, Exchequer Bonds, payable to bearer, upon the like terms and conditions as hereinbefore described, and after public notice in tho London Gazette, from time to time to sell such Exchequer Bonds, or any part thereof, and

to apply the proceeds in redeeming any part of the capital trading stock or capital stock of annuities now proposed to be paid oil and redeemed or in purchasing and cancelling any Exchequer Bills, upon such terms as the said Commissioners shall think proper, or in purchasing and cancelling any of the Consolidated 3 per Centura Annuities, or Reduced 3 per Centum Annuities, payable at the bank of England, or at the Bank of Ireland, as the case may be. 0. That the interest on such Exchequer Bonds shall be charged and chargable on the said Consolidated Fund. | 10. That no amount of such Exchequer Bonds | shall be issued exceeding in the whole the sum ol | £30,000,000. I After some observations by Captain Laffan and Mr. Malms, and a few words of reply to the former by the Chancellor of the Exchequer. The first resoli (ion was agieed to, j On the second being read, ! Mr. Disraeli protested against it, as fixing t higher rate of interest than would, he believed be maintained for the period therein named. The resolution was agreed to, as was the ro mainder of the series, and the house resumed.