EXCHEQUER BILLS LOAN ACTS. (Hansard, 11 March 1842)

§ The Chancellor of the Exchequer
said, that the subject which he was about to bring before the attention of the committee, was one of considerable importance, but upon which he did not apprehend that any great difference of opinion would prevail. The committee was aware that commissioners had, some years since, been appointed to whom Exchequer-bills were en- 498 trusted with a view to their being advanced for the purpose of carrying on public works upon good security for the repayment of their amounts being given. The object which he had in bringing this subject before the committee was, to continue that system for a limited time, but upon a footing more advantageous to the public. The course had been to make advances on Exchequer-bills, which were sold in the market, and at the end of twelve months, were exchanged by the Government for supply bills; and so they formed part of the unfunded debt of the country The amount of the advance, being subsequently repaid, was carried to the general account of the Consolidated Fund, and the result was, that we went on spending as income the money which should have been applied to getting rid of debt. In 1837, it was proposed, that this system should be put an end to, and that, instead of these bills being converted into supply bills, they should be annually discharged, and the inconvenience of increasing our funded debt thus obviated. The result of this was beneficial in one sense, but had led to other inconvenience; it was this, that these Exchequer-bills became depreciated in the market, and were only taken at par by the commissioners of the national debt on account of the savings banks, and held by them; and at this moment the bulk of these bills were held by the commissioners, and were liable to be paid off in money. He need not state to the House that, under the existing circumstances of the country, the payment of an amount exceeding one million at the end of the April quarter, would be a measure which would produce extreme inconvenience to the public finances. He, therefore, proposed that the commissioners of the national debt should avail themselves of the power which they possessed by law, and should deliver up the Exchequer-bills of this character which they held for the purpose of being cancelled, receiving stock in exchange for it under the provisions of the law as it now stood. Having, therefore, disposed of these bills, the accumulation of which was mainly attributable to the vote of large sums of money for the construction of workhouses in Ireland, it would rest with Parliament to decide what course should be adopted in future. There were two lines which might be pursued. Parliament might, in the first place, say that it would not sanction the continuance of advances of this description; or, secondly, 499 it might mate arrangements to obviate the possibility of similar difficulties again arising. His own opinion, was that the system of making advances for carrying on public works, was one which it would not be wise to depart from, more especially considering that it had been carried on with advantage and profit to the public. From papers which had been laid before the House, it appeared that the repayments receivable by Government would amount to 360,000l. a-year, and, as a sum of that amount would enable these commissioners to continue their advances to applicants upon the scale upon which they had before acted, the proposition which he submitted to the House was, that the money paid in on account of the repayment of the loans already advanced, should be re-advanced upon the proper securities to the parties applying. By this means a constant circulating fund would be provided, which would enable them to provide for the wants of the country with regard to the execution of public works, which would not increase our unfunded debt, and which Parliament might, at any time, put an end to, if it were discovered that the system did not work well. He proposed, that the bill to be introduced to carry out this plan should be in force only for a limited period, and that it should render the works in England, Scotland, and Ireland equally entitled to the advantages of the system, provided their conductors were equally able to give security for the repayment of the money. This was a necessary enactment with regard to Ireland, because it appeared that sums had been granted for the completion of workhouses there, which had been found to be insufficient for the complete fulfilment of the object in view. He believed, that the House would concur in this measure, and that they would be the less disposed to object to it on account of the admirable mode in which the commissioners, who had heretofore managed these advances, had conducted the duties of their department. The public knew the merits of those individuals, and they ought to know also that they had discharged their duties entirely gratuitously. They were persons of consideration, and whose time was highly valuable to them; but they had given up other engagements for the purpose of investigating claims made upon the public; and having done so, the cases were rare indeed of any loss having been sustained by the public. To one, more especially—he meant Mr. Harrison—who had for twenty- 500 five years devoted himself almost incessantly to the public service, and with the greatest advantage, the thanks of the public were more especially due. Having made this explanation of his views, he should propose a resolution to the committee embodying his proposition, which would form the foundation of a bill to be hereafter introduced. The right hon. Gentleman concluded by moving the following resolution. That her Majesty be enabled to direct issues to be made out of the consolidated fund of the United Kingdom of Great Britain and Ireland, to an amount not exceeding 360,000l. per annum, to commissioners, to be by them advanced towards the completion of works of a public nature, for the encouragement of the fisheries, or the employment of the poor, on due security being given for the re-payment of the sum so advanced.

§ Mr. F. T. Baring
expressed his entire concurrence in the views of the right hon. Gentleman, and his approval of his proposition, which appeared to be nearly exactly similar to one which had been before him while he was in office. He must also express his cordial concurrence in the observations of the right hon. Gentleman with regard to the services of Mr. Harrison. He believed, that the public was much indebted to that gentleman for his eminent services; but the tribute of the public respect came better from the right hon. Gentleman, who was in office, than from him.

§ Mr. Hardy
would caution the Government to discourage over-speculation by its loans, which only produced ruin to the speculator and those trusting to the success of his exertions.