§ Order for Second Reading read.
§ Motion made, and Question proposed, "That the Bill be now read a second time."
1480§ MR. COURTENAY WARNER (Staffordshire, Lichfield)said this Bill was an example of the injury a Chancellor of the Exchequer could accomplish by upsetting the finances of the country. There were two objections to the Bill. One was that it was bad finance; and the other was that it upset the entire financial world by the issue of Treasury Bills at the present period. Immediately the Resolution on which 1481 the Bill was founded was introduced, Consols fell to eighty-seven; but when it was' announced that Exchequer Bonds were to be issued, and that only about £6,000,000 would be required, an improvement in the financial situation at once occurred. He would move that the Bill be read that day three months.
§ MR. WHITLEY (Halifax), in seconding the Amendment, said it was very desirable that the House should have a clear statement as to the exact position of the floating debt. As far as he could make out, the amounts referred to in the Bill as authorised by various Acts to be raised by terminable annuities, which the right hon. Gentleman now proposed to take power to raise by Exchequer Bonds, represented a total of nearer £28,000,000 than the £10,000,000 recently mentioned. The amount authorised but not vet raised under the Naval Works Act was £14,800,000; under the Military Works Act £10,580,000; under the Public Buildings (Expenses) Act £1,600,000; and there were also various other smaller items. He believed it was a fact that the net result of the borrowing during the current year would be that the National Debt would be £2,500,000 larger at the end of the year than it was at the beginning. That was a very serious condition of affairs two years after the close of the war, and one which ought to make the House pause before granting these extended powers to the Chancellor of the Exchequer. He had given the right hon. Gentleman private notice of the Questions he desired answered; therefore it was unnecessary to detain the House at greater length.
§
Amendment proposed—
To leave out the word 'now,' and at the end of the Question to add the words 'upon this day three months.'"—(Mr. Courtenay Warner.)
§ Question proposed, "That the word 'now' stand part of the Question."
§ MR. STUART SAMUEL (Tower Hamlets, Whitechapel)asked whether there was any special reason for Exchequer Bonds being mentioned as the form in which the money should be raised. Exchequer Bonds were extremely unpopular in the City, and were not accepted on foreign money markets. 1482 Treasury Bills, on the other hand, were an extremely popular form of investment. On previous occasions the Chancellor of the Exchequer had taken a discretion as to the manner in which he should raise money, and there appeared to be no advantage in fixing Exchequer Bonds as the form to be adopted in this case.
§ MR. SYDNEY BUXTON (Tower Hamlets, Poplar)complained of the House having to discuss at so late a period of the session and at such an hour of the night an important Bill involving a totally new policy with regard to capital expenditure. He feared that the enabling of the Chancellor of the Exchequer to raise capital sums more easily would tend to increase the pressure put upon him to incur capital expenditure. In his Budget speech the right hon. Gentleman said he was doing his best to curtail capital expenditure as much as possible, but inasmuch as the amount had been reduced only from £10,000,000 to £9,250,000 his efforts had not achieved any very substantial result. Last year the net reduction of debt amounted to under £1,000,000, but this year there would actually be an addition of about £2,500,000, and, worse still, the £9,250,000 would be borrowed at a higher rate of interest than was being paid on the £7,000,000 that would be paid off. He could only express his profound regret at this large capital expenditure.
§ THE CHANCELLOR OF THE EXCHEQUER (Mr. AUSTEN CHAMBERLAIN,) Worcestershire, E.said the more he listened to the observations of the hon. Gentleman on this subject the more impracticable appeared to be his view of the situation. Many of the works upon which this capital expenditure was to be made had been in progress for some time, and contracts for their completion had been entered into. Such contracts could not be stopped in the middle simply because, on financial grounds, it might be convenient to postpone the operations. In consultation with his colleagues he had agreed that new works not necessary for the completion of those already entered upon or not urgently required for the defence of the country should not be begun under present circumstances, and the money which he had indicated as the 1483 capital expenditure likely to be required during the current year was for works now in progress and for defensive works urgently required. The hon. Gentleman was mistaken in supposing that it would be easier for the Chancellor of the Exchequer to borrow by means of Exchequer Bonds than under the old system of terminable annuities. It was a much more delicate operation, and he had resorted to it only because it was necessary to carry out the will of Parliament as embodied in previous Acts. The Bill authorised the Treasury to raise by Exchequer Bonds any money which they were now authorised to raise under enabling Acts by terminable annuities. The amount which he anticipated would be expended on capital account under those Acts during the present year was £9,250,000, and under the Bill just read a second time power was taken to raise a further £2,600,000 for the purposes of the Cunard Agreement. He could not say the exact amount that would be required for that purpose during the current year, but he did not anticipate that it would exceed £600,000, so that the total to be raised this year would be about £9,750,000 He had reason to believe that from £3,000,000 to £4,000,000 would be available in the ordinary way, and to that extent he would be able to provide for the expenditure by terminable annuities. The balance he proposed to raise by Exchequer Bonds. It was perfectly true that the Bill did not limit the power to raise money by Exchequer Bonds to the current year. The Questions asked by the hon. Member for Halifax in the letter to which he had referred involved a great number of figures, which could be more conveniently given in reply to an unstarred Question. He might say, however, in regard to the price at which recent issues had been made, that the Treasury Bills issued on 2nd July for six months were issued at rates equivalent to £2 5s. 3d. per rent. The Bills issued on the 2nd of July, for twelve months, were issued at an
§ interest of £2 18s. 2d., while Exchequer Bonds were issued during the present month under favourable circumstances at £98 13s. 6d., giving a yield in interest of £3 9s. 9d. The hon. Member opposite had suggested that he should provide for these borrowings by Treasury Bills. There were already nearly £29,000,000 of Treasury Bills outstanding, and they had to rely upon them for financing the Exchequer. He did not think that under the circumstances it would be a wise proceeding to issue a larger amount of Treasury Bills, and they were not suitable for a loan which there was no possibility of paying off when the Bill fell due.
§ MR. RUNCIMAN (Dewsbury)said that by issuing Exchequer Bonds instead of Treasury Bills the country was paying 1 per cent. more. If it was worth 1 per cent why issue Exchequer Bonds? In one of his speeches the Chancellor of the Exchequer drew attention to the enormous growth of local indebtedness and he lectured local bodies for borrowing so largely. His opinion was that corporations like Manchester and Leeds would feel ashamed if their credit fell so low that they had to pay 3½ per cent. interest for their loans, because they only paid 3 per cent at the present time. It was rather a significant comment that when the right hon. Gentleman issued Exchequer Bonds he should have to pay a larger rate of interest than the local authorities whom he lectured for their extravagance.
§ MR. COURTENAY WARNERsaid he did not wish to put the House to the trouble of a division. He had made his protest, and he asked permission to withdraw his Amendment.
§ Amendment, by leave, withdrawn.
§ Main Question put:—
§ The House divided:—Ayes 129 Noes, 32. (Division List, No. 316.)
1485| AYES. | ||
| Agg-Gardner, James Tynte | Balfour,Rt.Hn. A. J. (Manch'r | Bond, Edward |
| Anson, Sir William Reynell | Balfour,RtHnGerald W.(Leeds | Boscawen, Arthur Griffith |
| Arkwright, John Stanhope | Balfour, Kenneth R. (Christch. | Brassey, Albert |
| Arnold-Forster,Rt.Hn. Hugh O | Banbury, Sir Frederick George | Brodrick, Rt. Hon. St. John |
| Atkinson, Rt. Hon. John | Bigwood, James | Butcher, John George |
| Bain, Colonel James Robert | Bingham, Lord | Carson, Rt. Hon. Sir Edw. H. |
| Balcarres, Lord | Blundell, Colonel Henry | Cavendish,V.C W. (Derbyshire |
| Cecil, Evelyn (Aston Manor) | Knowles, Sir Lees | Pym, C. Guy |
| Chamberlain,RtHn.J.A.(Worc. | Law, Andrew Bonar (Glasgow) | Rea, Russell |
| Chapman, Edward | Lawrence, Wm. F. (Liverpool) | Reid, James (Greenock) |
| Cochrane, Hon. Thos. H. A. E. | Lee,Arthur H. (Hants, Fareham | Renwick, George |
| Coghill, Douglas Harry | Legge, Col. Hon. Heneage | Ridley, Hon.M.W. (Stalybridge |
| Colomb,Rt.Hon. Sir John C.R. | Long, Col. Charles W(Evesham | Roberts, Samuel (Sheffield) |
| Compton, Lord Alwyne | Long,Rt.Hn.Walter (Bristol, S | Robertson, Herbert (Hackney) |
| Corbett, T. L. (Down, North) | Lonsdale, John Brownlee | Round, Rt. Hon. James |
| Craig, Charles Curtis(Antrim, S | Lowe, Francis William | Royds, Clement Molyneux |
| Crossley, Rt. Hon. Sir Savile | Lucas, Col. Francis (Lowestoft) | Rutherford, W. W. (Liverpool) |
| Dalkeith, Earl of | Lucas,Reginald J.(Portsmouth | Sackville, Col. S. G. (Stopford |
| Davenport, William Bromley | Lyttelton, Rt. Hon. Alfred | Samuel, Herbert L. (Cleveland |
| Dickson, Charles Scott | Macdona, John Cumming | Samuel, S. M. (Whitechapel) |
| Disraeli, Coningsby Ralph | Maconochie, A. W. | Scott, Sir S. (Marylebone, W.) |
| Douglas, Rt. Hon. A. Akers- | M'Arthur, Charles (Liverpool) | Skewes-Cox, Thomas |
| Doxford, Sir William Theodore | Majendie, James A. H. | Sloan, Thomas Henry |
| Durning-Lawrence,Sir Edwin | Massey-Mainwaring, Hn. N. F. | Smith, Abel H.(Hertford,East |
| Fergusson,Rt.Hn.Sir J(Manc'r | Montagu, G. (Huntingdon) | Smith, Hon. W. F. D. (Strand) |
| Finlay, Sir Robert Bannatyne | Moon, Edward Robert Pacy | Stanley, Rt.Hon. Lord (Lancs. |
| Fisher, William Hayes | Morgan,David J(Walthamstow | Talbot, Lord E. (Chichester) |
| Forster, Henry William | Morpeth, Viscount | Talbot,Rt.Hn. J.G.(Oxf'd Univ. |
| Galloway, William Johnson | Morrell, George Herbert | Thornton, Percy M. |
| Gardner, Ernest | Mount, William Arthur | Tomlinson, Sir Wm. Edw. M. |
| Gordon, J. (Londonderry, S.) | Muntz, Sir Philip A. | Tuff, Charles |
| Gray, Ernest (West Ham) | Murray,RtHn.A. Graham(Bute | Ure, Alexander |
| Green,Walford D.(Wednesbury | Murray, Charles J. (Coventry) | Valentia, Viscount |
| Greene, Henry D.(Shrewsbury) | Murray, Col. Wyndham (Bath) | Walker, Col. William Hall |
| Greene, W. Raymond (Cambs. | Newdegate, Francis A. N. | Warde, Colonel C. E. |
| Gretton, John | Nicholson, William Graham | Webb,Colonel William George |
| Hambro, Charles Eric | O'Neill, Hon. Robert Torrens | Wilson, A. Stanley (York, E.R. |
| Hamilton, Marqof(L'nd'nderry | Palmer, Sir Walter (Salisbury) | Wyndham, Rt. Hon. George |
| Heath, James (Staffords.N.W. | Parkes, Ebenezer | Yerburgh, Robert Armstrong |
| Hermon-Hodge, Sir Robert T. | Percy, Earl | |
| Hope,J.F.(Sheffield, Brightside | Platt-Higgins, Frederick | TELLERS FOR THE AYES—Sir Alexander Acland-Hood and Mr. Ailwyn Fellowes. |
| Hudson, George Bickersteth | Plummer, Sir Walter R. | |
| Hunt, Rowland | Powell, Sir Francis Sharp | |
| Jeffreys, Rt. Hon. Arthur Fred | Pretyman, Ernest George | |
| Keswick, William | Pryce-Jones,Lt-Col. Edward | |
| NOES. | ||
| Boland, John | Higham, John Sharpe | Runciman, Walter |
| Brigg, John | Hobhouse, C.E.H. (Bristol, E.) | Slack, John Bamford |
| Bright, Allan Heywood | Horniman, Frederick John | Sullivan, Donal |
| Buxton, Sydney Charles | Jones DavidBrynmor(Swansea | Thomas,David Alfred (Merthyr |
| Caldwell, James | Jones, William (Carnarvonshire | Toulmin, George |
| Causton, Richard Knight | Kilbride, Denis | Warner, Thomas Courtenay T. |
| Delany, William | Layland-Barratt, Francis | White, Luke (York, E. R.) |
| Elibank, Master of | Lough, Thomas | Wilson, Henry J. (York, W.R.) |
| Ffrench, Peter | M'Arthur, William (Cornwall) | |
| Flavin, Michael Joseph | O'Brien,Kendal(Tipperary,Mid | TELLERS FOR THE NOES—Mr. M'Kenna and Mr. J. H. Whitley. |
| Gladstone, Rt.Hn.HerbertJohn | Mr.Reckitt, Harold James | |
| Helme, Norval Watson | Roe, Sir Thomas |
Bill read a second time, and committed for this day.