WAYS AND MEANS—INTEREST ON EXCHEQUER BILLS. (Hansard, 26 March 1852)

§ MR. HUME
said, that he wished to know at what rate of interest the Exchequer bills were to be issued. He believed that these securities at present bore too high a rate of interest, considering the value of money in the market, and indeed that the interest should have been reduced on the occasion of the last issue, by the late Chancellor of the Exchequer.

§ MR. G. A. HAMILTON
said, that the rate proposed was 1½d. per day, which was the rate adopted by the late Chancellor of the Exchequer, and which he believed was the lowest rate they had borne for more than a century.

§ MR. HUME
said, that money was never known to be procurable at so low a rate as at present; and he was sure that if these bills were issued at 1d. a day, which would give an interest of 1l. 10s. 5d. per cent, they might be circulated to the full extent which the Government desired. He did not see why Government should not obtain the full advantage of the present abundance of money.

MR. ALDERMAN THOMPSON
said, that he quite agreed in the opinion that Government should obtain money at as low a rate as they could; but at the same time he did not think that the rate of interest on Exchequer bills should vary according to the variations of the value of money in the market, because the greatest possible inconvenience would arise from these fluctuations. Nothing could be more inconvenient than to have Exchequer bills at a discount, or even at par. He thought the late Chancellor of the Exchequer was perfectly right in not reducing the rate of interest on Exchequer bills at the time referred to by the hon. Member for Montrose (Mr. Hume), because, although the money market had certainly been easier since, and it had turned out that he would have been right in lowering the rate of interest, still the operation would at the time have been attended with considerable risk, which 193 he thought the Government were quite right in not running. The rate of interest on an Exchequer bill, which was issued for twelve months, could not be compared with that on a bill of exchange, which had only sixty or ninety days to run. It might be convenient to a capitalist to advance money on the latter class of securities but not on the former, because he might want his money within a limited period. He thought it was, therefore, wise in the Chancellor of the Exchequer not to run the risk of having Exchequer bills pressed on him, or having a great amount of revenue paid in them, perhaps at a time when there was no great sum in the Exchequer. It was a great point not to allow the public securities to sink below par. Money, indeed, was now at a low value, and was likely to remain so, for there were large masses of it in the City of London for which there was no employment.

§ MR. HUME
wished to know that if money was so low, why should not the nation benefit by the circumstance? Exchequer bills were now at a premium of 70s., and he contended that the country should not continue to borrow money at a rate of interest at which these securities actually bore a premium amounting to a year and a quarter's interest.

§ MR. SLANEY
said, that such was the abundance of money that it was with the greatest difficulty that large capitalists could get 2 per cent for it, and the smaller capitalists had hardly a chance of getting any investment at all, in consequence of the existence of laws which prevented capital seeking investment in our own country.

§ MR. G. A. HAMILTON
would suggest that, considering the importance of the subject, the discussion upon it should be postponed to a subsequent stage.

§ MR. HUME
said, he would allow the Resolution to pass, but he should again call attention to the subject upon the bringing up of the Report.