§ The House having resolved itself into a Committee of Ways and Means, and the Account of Naval Stores having been referred to the said committee,
The Chancellor of the Exchequerrose. He said, that much as he regretted to fatigue the House with that which he had to bring forward, at a period when, from the lateness of the hour, it might be inconvenient to them to give it that attention 1099 which it demanded, he was sure the House would see the propriety of not postponing it to a future day; and he must confess that he felt the less inclined to postpone it, as it would not be necessary for him to trouble the committee at any very great length. He was of this opinion, because, in the first place, he had reason to hope, that the practical measures which he should recommend were not such as were likely to call forth opposition—were in fact, as it appeared to him, as little liable to objection as any that had ever been brought forward; and, in the next place, the House came to this subject with more information on it than they usually possessed previously to the opening of the budget. At the commencement of the present session their attention had been called to the state of the finances of the country in the Speech from the Throne; and in consequence of the recommendation so made to them, one of the earliest proceedings of the House had been, to appoint a committee to inquire into the revenue and expenditure of the country. The reports made by that committee would enable him to spare those whom he had the honour to address, the trouble of listening to many dry statements of account which it would otherwise have been his duty to press on their attention. He should frequently content himself with reference to those reports, which he was sure would afford the committee more satisfaction than any imperfect statement he could offer of his own.
The consolidation of the English and Irish exchequers had added the financial concerns of Ireland to those on which he had been accustomed to address them, and he could assure the committee that a very considerable portion of official labour had been directed, since January last, to incorporate the accounts of Ireland with those of England. Those of the former country had never been brought forward in a similar form before. The arrangement, however, which had at length been made, would bring them under the consideration of the committee in a more convenient and uniform manner than that in which till now they had ever been submitted to them. This had been effected partly by official diligence, and partly by the act of the House itself. In what he had last said, he alluded to the directions given by act of parliament for the clearing up of all accounts, and discharging all outstanding balances between the English 1100 and Irish exchequers to the 5th of January last, and for cancelling all grants on the consolidated fund, which had not been realized on that day, and which, as the House was aware, were not likely, in the present state of the revenue, to be realized within any moderate period. The consequence was, that from the 5th of January last, a new account was opened for the consolidated treasuries, and the technical distinctions which had till now existed between them, were no more. At the same time, the arrears and deficiencies which for many years had encumbered the accounts of the united kingdom had all been discharged and made good, and a new account had been opened from that day, which would bring the finances of the empire under the view of parliament in a simple and intelligible form.
The committee appointed by that House to inquire into the expenditure and income of the country had not encumbered their Report * with a statement of the various distinctions of consolidated fund, war taxes, and other details of parliamentary appropriation, but had on the one side set down the whole amount of the finances of the country, and on the other the sum total of its expenditure. He regretted to state it appeared by that Report that the deficiency in the revenue of last year, as compared with the year preceding, and which deficiency parliament would have to provide for by other means, amounted to 10 per cent, in that proportion of the public income which was collected in England, and in Ireland there had been a falling off to the amount of 20 per cent, on the whole revenue. In a country where the accumulation of capital was so inferior to that which had taken place in this, and whose agricultural interests had been so greatly promoted by the consumption of the war, it was not a matter of astonishment that its agriculture should be greatly depressed at the termination of a war like that which had just concluded, and that when exposed to the additional pressure of a most unfavourable season, part of its population should be reduced to great distress.
Notwithstanding the unpleasant circumstances to which he had just referred, the means by which he proposed to meet the supplies of the year, were, he thought, of, a nature perfectly unobjectionable, and amply sufficient. In the usual form, he
* See this Report in the appendix to the present volume.1101 should first go through the supplies required in the present year, and then state the ways and means to meet them.Army (including 1,500,000l. for extra-ordinaries, and exclusive of troops in France, 9,030,000l.
For 1816, it would be remembered the total sum granted on account of the army, amounted to 10,809,737l.
The grant last year on account of the navy (exclusive of the grant for the reduction of the navy debt) amounted nearly to 10,000,000l. (It was more exactly stated 9,964,195l.)
In the present year the grant required for the navy was 6,000,000l. exclusive of a grant of 1,660,000l. for the reduction of navy debt.
To the grant of last year a very considerable sum might also be added, as in 1816 there had been paid off 2,000,000l. of the navy debt. The sum appropriated to this purpose had been taken from the unapplied money remaining in the exchequer from the grants of 1815. The whole sum, therefore, which had been applied to the service of the navy in the last year, amounted to nearly 12,000,000l.
The ordnance created in the present year a charge of 12,213,000l.
Last year, under the same head, there had been required the sum of 1,613,142l. Here a reduction had been effected of about 400,000l., being about one fourth of the whole. The miscellaneous services would call for a supply of 1,700,000l. including the sums already voted in the present session Last year, the same services had required 2,500,000l. In this instance, therefore, a reduction had been made of 800,000l. The total supply, therefore, that was called for fn the present year, exclusive of the interest of the funded debt, for the expense of the several establishments for 12 months not on the peace establishment, for he was far from thinking we had yet arrived at what might properly so be called, would amount to 18,001,000l., or what, speaking in round numbers, he would call 18,000,000l. It would be remembered, that at the opening of the present session, his noble friend had estimated the expenditure of the year for the services he had enumerated at 18,300,000l. The actual supply called for came below the estimated sum by almost 300,000l. Last year, the grants for the same services amounted to 24,887,000l. The reduction effected in the present year, it would therefore be seen, fell little short of 1102 7,000,000l., being considerably more than one-fourth, and amounting, to very near one-third of the whole. In addition to the 18,000,000l. required for the proper service of the year, a further provision would be necessary on account of the unfunded debt. In the first instance there; was a charge of 1,900,000l. for the interest on exchequer bills the principal of which would be discharged in the course of the present year. This item, though large, the committee would look upon with satisfaction, when they considered how much the improved state of public credit lessened the charge thus incurred in providing for the ways and means of the year. A proper idea of this might be formed, when it was considered that what cost the country almost 2,200,000l. for the service of 1816, would in the present year create but a charge of 1,900,000l. upon an amount of principal considerably increased; and when it was further borne in mind, that a few years ago the same operation would have occasioned an expense of 2,500,000l. The sinking fund on the money thus kept floating as unfunded debt would amount to 330,000l. making a total charge on amount of exchequer bills of 2,230,000l. On winding up the accounts between the English and Irish exchequers an advance had been found necessary in order to clear up all demands on the consolidated fund of Ireland to the 5th of January last, from which period they had started on a new account. This had caused a grant to be called for (in order to make good the permanent charges of Ireland up to that time), of 246,508l. Towards the reduction of the navy and transport debt, a supply was demanded of 1,660,000l. There was thus, it would be seen, anew total of 4,136,508l. to provide for the charges of unfunded debt, or to make good previously existing deficiencies, which formed no part of the supply necessary for the service of the year. The different items and the grand total were as follows:
1103
SUPPLIES. Army (including 1,500,000l. for extraordinaries, and exclusive of troops in France) £: 9,080,000 Navy (exclusive of grant for the reduction of navy debt) 6,000,000 Ordnance 1,221,300 Miscellaneous 1,700,000 Total supply for the service of the year 1817 18,001,300 He had now to call the attention of the committee to the manner in which he proposed to meet the above demands. The first article which he should notice was the annual duties on malt, sugar, tobacco, and some other articles which had been taken at the usual amount of 3,000,000l. The committee were aware that those duties always produced considerably more than the sum of 3,000,000l. charged upon them and that the surplus was carried into the consolidated fund.
Interest on exchequer bills £. 1,900,000 Sinking fund on ditto 330,000 To make good the permanent charges of Ireland to Jan. 5,1817 246,508 Towards reduction of navy and transport debt 1,660,000 4,136,508 22,136,508 He next proposed to avail himself of the ways and means for 1815 and 1816 exceeding the amount of the supplies which remained to be paid out of them. The sum for the former year was 15,749l. and for the latter 1,849,810l. These sums formed what, in the language of the exchequer, was called surplus of ways and means. He did not, however, mean to take credit for them as a genuine surplus, as in fact they became disposable only in consequence of parliament having, since they were granted, made a different provision for great part of the supplies charged upon them; whereby they became applicable to the service of the present year, instead of those for which they were originally provided. The whole, after retaining a sufficient sum to pay the supplies charged on them, amounted to 1,865,559, arising in great part from the temporary excise duties, upon which 3,500,000l. had been granted in 1816, but of which sum only 1,494,592l. had been received on the 5th of April last. There remained, therefore, to be received on that day 2,005,408l., and it was estimated that before the 5th of April 1818 they would produce the farther sum of 1,300,000l. for which, therefore, he should take credit as the next item in the ways and means of the present year.
He should in the next place advert to the amount of the consolidated fund remaining at the disposal of parliament on the 5th of April last. In this case also a surplus had been produced by the recent 1104 proceedings of parliament. A considerable deficiency had accrued in the produce of the consolidated fund on the 5th of January, but that deficiency having been made good by subsequent votes of the House and all grants affecting the consolidated fund having been cancelled by act of parliament, its surplus produce on the 5th of April remained disposable for the service of the present year. The sums now remaining in the exchequer of Great Britain and Ireland and which he should propose to vote on this account amounted to 1,225,978l. or in round numbers 1,226,000l.
The lottery was taken at 250,000l. and though this might appear a larger sum than that of last year, yet, when the whole account was compared, it would be found that the lottery was reduced 50,000l. instead of being so much higher as one third of the profit of the lottery had last year been reserved for Ireland, according to the practice which had prevailed ever since the union, whereas this year the whole estimated profit was carried to one account. The whole amount was therefore taken at 300,000l. in 1816 and at only 250,000l. in the present year. The next item he had to state to the committee was that arising from the sale of old naval stores, the amount of which he estimated for the last year at 400,000l. There was one item more he had to include in the ways and means for the year. It was the arrears of the property tax, of which a considerable sum was due on the 5th of April last. The whole arrear estimated likely to be received in the year ending on the 5th of April 1818, was 1,500,000l. These several items of ways and means amounted altogether to 9,541,537l.; so that there was required to make good the supply 12,600,000l. This he proposed to raise by Irish treasury bills to the amount of 3,600,000l., and a new issue of 9,000,000l. of exchequer bills. Having concluded these statements, he would now recapitulate the different items of the
1105
WAYS AND MEANS. £3,000,000—Annual Duties- £3,000,000 Disposable 1815 15,749 Ways and Means 1816 1,849,810 1,865,559 3,500,000—Excise Duties continued (after satisfying the grant thereon for the year 1816) 1,300,000 Money remaining at the disposal of parliament of the consolidated fund at April 5,1817 1,225,978 The first total of the ways and means which he had stated, namely, the 9,544,537l. might be regarded as the ready money actually in the exchequer, or which would be received in the course of the year; but that was the whole which the ordinary resources offered for covering the expenditure. It was therefore clear, that the above balance of 12,600,000l.was necessary to equalize the ways and means and the supply; and he was convinced that that sum could not be raised in a way more advantageous to the country than that which he had proposed. He should, in the first place, endeavour to explain to the committee how the account of the 3,600,000l. Irish treasury bills stood. The House would recollect that before Easter there had been a grant of 4,200,000l. for repaying certain Irish treasury bills. Upon communication with the bank of England and the bank of Ireland (the whole of the treasury bills being held by them), it was found that the directors of those establishments were disposed to exchange the bills they held for new bills. Two hundred and fitly thousand pounds had however already been raid to the bank of Ireland, and as that body required 5 per cent, interest, it was not thought advisable to renew the whole sum now outstanding, but, to pay off, as occasion offered, such bills as were held by the bank of Ireland. Only a small part of the Irish treasury bills in their hands were however due till December and January next, and it would therefore be time enough to make arrangements for paying them off after the next meeting of parliament. The remaining sum of 9,000,000l. he proposed, as he had already stated, to raise by exchequer bills; and he was the more induced to take this proportion of the deficiency in that way, as the bank of England in its negociations would be satisfied with a more moderate rate of interest than was paid in Ireland. Before the meeting of parliament he could have borrowed 12 millions by an ad- 1106 vance upon exchequer bills from one set of contractors, and on terms which then appeared favourable; but from the appearance of the money market, he thought it better not to avail himself of it, and to take the chance of making a more advantageous arrangement, in which he had succeeded even beyond his expectations. He had indeed found the state of the market such, that by issuing exchequer bills gradually in preference to borrowing in one sum upon the same sort of security, he had saved 300,000l.in annual interest. The power of the money market to take off 9,000,000l.of exchequer bills, he thought could not be questioned, when it was considered, that of the 42,000,000l. previously granted by parliament 27,000,000l. had already been put into circulation in the course of the present session. There were, therefore, only bills to the amount of 15,000,000l. further to be issued. The 9,000,000l. he now proposed to add would make 24,000,000l. and all things considered, he apprehended that there would not be more thrown into the market than could be easily absorbed. It ought at the same time to be recollected, that as the interest had been reduced from 5¼ per cent, to 3¾, there was a saving in that respect of 1½ per cent. From the measure he proposed, he therefore had reason to expect great advantage both to the agriculture and commerce of the country, and he doubted whether it would have been possible to derive equal benefit from any other arrangement. Although the revenue, from causes over which his majesty's ministers could have no control, had fallen short six or eight millions, there had been an evident improvement in our public credit. It might be recollected, that when he addressed the House last year on the financial situation of the country, the three per cent, consols. were only between 62 and 63; at present they were above 74. This was an improvement of twelve per cent, on 62, which, calculated upon 100l. stock, was equal to nearly 20 per cent. The exchequer bills were then at an interest of 5¼ per cent., and were sold at par. Those now in circulation bore an interest of only 3¾ per cent. and on this very day those bills bore 12s. premium. These were circumstances which proved the manifest advantage of the system he had pursued, and now proposed to continue. But it was not in the money market only that the beneficial influence of that system had 1107 been felt. A proportional improvement was experienced in every description of property in the country. Large sums had already been sold out of the funds, and applied in aid of the landed interest, in purchases of real property and advances upon mortgages. Similar accommodation had been afforded to the commercial interests of the country by the increasing facility and cheapness of discount. Another most important improvement in the situation of the country had taken place since his last financial statement in the virtual resumption of cash payments by the bank. When he had suggested that the bank might be enabled to pay in specie in the course of two years, his statement was received with ridicule and incredulity. The suggestion which he threw out had, however, been completely realized; for the payments in cash had been for every practicable purpose resumed. He could not but congratulate the House and the country upon the removal of the doubts and alarms which had been entertained on this subject. None of the evils which had been so profusely foretold, had occurred; and this great change had been accomplished without any shock or danger to public credit. Those who had with regret anticipated these mischievous consequences, he was sure would now join with him in rejoicing at the state in which our country was now placed. The notes of the Bank of England had even during the restriction been preferred to those of every other bank in Europe. What then must be the effect of the removal of that restriction? A third circumstance to which he could not but call the attention of the committee with peculiar satisfaction was that, with regard to the public debt, the expectations he held out last year, had been more than realised. He had stated an expectation that it would be reduced at least 3,000,000l.: the balance of debt repaid exceeded this sum. The amount paid in 1816 had been stated by the committee on finance at 9,400,000l.; but from this sum it might be fair to make a deduction of 6,000,000l., which formed part of the loans raised for the service of 1815, but which had not been paid into the exchequer till 1816; so that the actual balance discharged was 3,400,000l. This was most satisfactory; but it was not all, for since the 1st of November 1815, at which time the national debt stood at its highest amount, 32 millions of capital 1108 stock had actually been purchased up. If, instead of borrowing exchequer bills, he had funded capital stock, it would have been impossible to have operated a reduction of the debt to the same extent. Whether there would be an equal diminution of debt in the present year as in the last, was what he could not pretend to assert. He did not wish to state a positive opinion on the subject; but he estimated that, with some addition to the 12,600,000l. he had already mentioned, he might have to borrow altogether about 14,000,000l., and that it was probable there would be paid off about 16½. There might, therefore, be a diminution not of 3½ as in the last year, but probably of 2½ millions.
200,000—Lottery 250,000 Old stores 400,000 Arrears of property tax received or to be received between the fifth of April, 1817, and 5th April 1818 1,500,000 9,541,537 Irish treasury bills 3,600,000 Exchequer bills 9,000,000 12,600,000 22,141,537 With the improvement of our finances, he looked forward to a speedy improvement in the internal comfort and prosperity of the country [Hear, hear!]. He did not consider this expectation un-reasonable. A great part of the public distress arose, not from any derangement in our domestic affairs, but from the general state of Europe. At a time when all over the continent many were struggling for the mere necessaries of life, it was not to be expected that there could be a great demand for our manufactures. This country fortunately had not been reduced to so low a state as some others had, but we could not expect to escape without sharing in the general calamity. If, however, Providence blessed us with a favourable harvest, he should confidently hope to see a steady restoration of our revenues and our former prosperity. He had taken the liberty of stating this much, merely to impress on the recollections of the committee, that even under the unfavourable circumstances of the last year, all the benefits which he had held out as likely to result from the plans he had proposed had been more than realized. He anticipated a still more sensible improvement; but he sincerely trusted that the country would never find it necessary to resort to any of those desperate and dangerous remedies which some persons had thought it proper to recommend. It was alone upon the firmness of parliament and the loyalty of the people, that the security of public credit and the restoration of national prosperity depended. He had now only to state, that he estimated the amount of the interest of the exchequer and treasury bills necessary to meet the supply at 450,000l.and he contemplated that that sum would be saved by the re- 1109 duction which had taken place in the interest of unfunded debt since the last session of parliament. Thus the public would be subjected to no new charge whatever. He concluded by moving, "That, towards making good the supply granted to his majesty, there be issued and applied 'the sum of 15,749l. 15s. 2d. 'remaining in the receipt of the exchequer 'of Great Britain of the surplus of the 'grants for the year 1815.'"
The several resolutions were agreed to; and, after a short conversation, the chancellor of the exchequer, at the suggestion of Mr. Tierney, deferred the consideration of the report till Tuesday next.