Commons Sitting of 8 March 1822

BANKS OF ENGLAND, AND OF IRELAND.
Mr. Maberlysaid, that the papers for which he was about to move, were necessary to show the high rate, of

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interest paid to the Bank of Ireland, when contrasted with that paid to the Bank of England. While the Bank of England received only 300 l., or 340 l.; for every million of debt which it managed, he understood the Bank of Ireland received 2,000 l. upon the same sum. He then moved for an account of the total amount of debt due to the Bank of Ireland, funded and unfunded, of the periods when contracted, and of the rate of interest paid for the same.
Mr. Grenfellsaid, he had always understood, that the Bank of Ireland, so far from receiving 2,000 l. for every million of debt which it managed, absolutely received nothing.
Sir J. Newportreminded the House, that when the charter of the Bank of Ireland was renewed in 1808, one of the conditions was, that it should lend to the public 1,000,000 l. at the rate of 5 per cent. interest, and that it should thenceforward manage the public debt gratuitously.
Mr. Pearsesaid, that no comparison could fairly be made between the conduct of the Bank of England and that of Ireland. The practice of contrasting the charges made by the one with those made by the other, was extremely invidious. While the Bank of England had a specific engagement for managing the national debt, and whilst it lent its money to the government at 3 per cent., the Bank of Ireland was enabled to lend its money to the same quarter at 5 per cent. If that difference of interest were taken into consideration, the balance would be found to be much in favour of the Bank of England. it mattered very little, whether it was in the shape of management, or of a higher rate of interest that the respective Banks received their emoluments. If the Bank of England were to receive the same interest, on the motley which it had advanced to government, as the Bank of Ireland did, its emoluments would be more than 2,000 l. for every million of debt it managed. Besides, the Bank of England had given large premiums to the public on various occasions when its charter had been renewed, whereas the Bank of Ireland had given nothing, but had entered into terms with government: indeed, in the last 30 years it had paid upwards of 4,000,000 l. in the shape of premiums. He had said thus much, because he felt strongly the insinuations thrown out against the Bank of England Though
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a director, he had no great personal interest in the profits of the Bank; for, to confess the truth, he had not much more Bank stock than was necessary to give him a qualification. Indeed, upon seeing the effects of the war, he had made it a point of honour not to increase his stock beyond the amount which he possessed upon first entering into the direction. The hon. member for Portarlington had, upon a former occasion, asserted, that the directors had scarcely ability enough to perform the duties with which they were intrusted; but he (Mr. P.) preferred the opinion of the proprietors of Bank-stock, who elected them annually, to all the theories of modern philosophers on the subject. Neither theory nor speculation would do for the management of the affairs of the Bank of England; and he would say then, what he had often said before, that those who had been intrusted with the management of them, had never been influenced by any thing, but the most honest and honourable intentions. During the long war in which the country had been engaged, the Bank, though it had made frequent advances to government to enable them to pursue it with energy, had never lost either its credit or its character; and those gentlemen who had been recently across the water, could bear witness, that the credit and character of the Bank was at the present moment in the highest estimation among the nations of the continent.
Mr. Ricardosaid, that whenever the conduct of the Bank was brought before the notice of the House, he should think it his duty to speak of it as he thought and felt. With regard to the directors, he was willing, at all times, to give them full credit for honesty of intention; but he could not help thinking, that they had at different times involved the country in. considerable difficulties. He persisted in saying, that the Bank restriction act which was passed in 1797, might have been unattended with detriment to the country, had the directors known how to manage their own concerns. But, not knowing how to manage them upon true principles, they had issued a quantity of paper so large as to depreciate its own value; and to recover from that depreciation, the country had found it necessary to undergo a painful process, which had been the cause of a great part of the present distress. Even since the year 1819, the Bank had committed a great error in

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its eagerness to provide gold. That error they confessed themselves, when they offered to lend government 4,000,000 l. Such an offer he took to be a specific confession of error, inasmuch as it was a declaration that they had amassed more gold than was necessary, and by so doing had aggravated the evils under which the country suffered. As to the plan of the Bank lending 4,000,000 l. to the government, he viewed it with some degree of fear, because the directors had convinced him by their conduct that they did not know what they were about. If they thought they could issue either 4,000,000 l. of gold coin, or even of paper, without withdrawing the gold coin from circulation, they were mightily mistaken. He was quite sure that the currency could not absorb it, and therefore it must go abroad.
Mr. Gurneysaid, it was perfectly well known to all who heard him, that while the Bank of England conducted their own affairs they went on very prosperously; and that it was only when they were interfered with by theorists and speculators that they experienced any thing like distress.
Mr. Monckagreed, as to the mischief which the Bank had occasioned to the public, but could not concur in thinking that they did not know how to manage their own affairs. Did the House recollect the advantage which the Bank had taken of the Restriction act? That act, when it was passed, was by no means intended to be permanent. Its duration was limited to three months. But it was found so convenient to gentlemen in business, to the merchants and manufacturers, and to the Bank of England, that great reluctance was expressed to repeal it. It was continued, therefore, during the war; and although its duration was limited to six months after the return of peace, so unwilling were the Bank to return to cash payments, that nothing short of the positive declaration of that House could have induced them to do it. At the time of the restriction, the whole amount of the Bank paper in circulation was eight millions. But during the war, they raised that amount to thirty-three millions. By this conduct, the paper was depreciated 25 per cent as respected gold, and 50 per cent. as respected other commodities. Now, what did the directors do during the suspension of cash payments? They lent their money right and left to government
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in that depreciated currency; and now, in consequence of the resumption of cash payments, the Bank received in good hard money, what they had lent in worthless and depreciated paper. The result, therefore, proved, that they knew perfectly well how to manage their own affairs. In 1797, Bank stock was 120 per cent; it had now risen to 280. But that was not all. In the course of that time, they had given to the proprietors three or four bonusses of 5 and 10 per cent. Three or four years ago an act was also passed, allowing the Bank to add 25 per cent. to their capital. Was there ever an instance of any merchant, or body of merchants, making so immense a profit in so short a space of time? And let it be remembered, that it was made at the expellee of the country.
Mr. T. Wilsonreminded the hon. gentleman, that what he called a superfluity of paper-money had raised the price of corn and of rents. It was difficult to say, if the restriction on cash payments in 1797, had not taken place, how affairs would have gone on. Certain it was, that the war could not have been maintained with the energy which brought it to so successful a close; and some of the gentlemen opposite would assuredly not have enjoyed the high rents which they had been receiving. The Bank had invariably conducted themselves throughout the contest in conformity to the wishes of government [hear, hear!]; and with a view to the best interests of the country.
Mr. Manningdeclared, that when the Bank restriction of cash payments had been enacted, it had been enacted for only a limited period. Parliament had, however, thought fit to continue it, notwithstanding a resolution of the court of directors, expressing their wish and power to resume payments in specie. He should abstain from any invidious comparison between the Banks of England and of Ireland; but this he would say, that though nothing was charged for the management of the Irish debt, yet the difference between the interest at 5 and at 3 per cent was an advantage of 32,000 l. a year to the Bank of Ireland. If the Bank of England were allowed the same rate of interest that the Bank of Ireland was, it would willingly transact the national debt without any charge, since it would gain 40,000 l. a year by the exchange.
Mr. Grenfellassured the hon. rector (Mr. Pearse) that he had not

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meant any thing personal in any observation he had made, the directors had repeatedly told him that they had no personal interests to serve, and be fully believed them when they told him so. But, nevertheless, whether they were influenced by personal motives, or by the oaths which they took to the Bank proprietors, to promote their interests to the utmost, the effect had been the adoption of measures fatal to the interests of the country, and productive of enormous profits to the Bank. From the time of the erection of the Bank into a public corporation, down to the year 1797, which was about a century, the whole amount of the profits had never exceeded 7 per cent, and such a thing as a bonus had never been heard of. Now he stated, as a Bank proprietor, that from the year 1797 he had always received 7 per cent upon his capital. That, however, was the least part of his profit. He declared—and he challenged any Bank director to contradict the declaration—that, from the year 1797 down to the present time and during all the continuance of the war, by the advantages arising from the restriction act, from the public balances, and the high charge for the management of the public debt, the property of the Bank had increased and improved to the enormous sum of 30,000,000 l. sterling. That statement he challenged the whole court of directors to deny. The hon. director opposite had taken great credit for the services which the Bank had rendered the government during the war. That the Bank had always been ready to advance money to the government, he did not doubt; but it was owing to the restriction act that they were enabled to do so. Besides they had never advanced a single sixpence without being very handsomely paid for it. He had now been a member of parliament twenty years; and during that time he had voted against every motion for the continuance of the Bank restriction act. But, from 1797, down to 1819, never had one Bank director voted along with him. On the contrary, they had, one and all, up to the very last hour, fought hard to prevent the resumption of cash payments. It was, therefore, a mockery to say that the Bank of England had always shown an anxiety to resume its payments in specie.
The motion was then agreed to.

NAVY FIVE PER CENTS BILL.
Mr. Lushingtonmoved the order of the day,
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for further considering the report of this bill.
Mr. Tierneyobserved, that there were so many important considerations arising out of the present question, that it was extremely desirable that the discussion should be conducted in the presence of the Chancellor of the Exchequer, who was at once best acquainted with, and most responsible for, the arrangements upon this subject. He need not say, therefore, that he much regretted his absence, as well as the cause of it. As to the power of parliament to pay off the 5 per cents, they being declared, by an act of the 37th of the late king, irredeemable until 25,000,000 l. in some other description of stock should be redeemed and paid off. A doubt, therefore, might present itself with regard to the conditions on which the holders of the 5 per cents had subscribed to purchase their annuities. When this point was first started, he had been strongly inclined to think it amounted to very little; but, the more frequently he had read the clause, the more he had reflected on its import, the clearer was his conviction, that it was a case which parliament was bound to consider. The language of these different acts expressly provided, that whatever amount of exchequer bills should be funded from time to time, and whatever operations should be carried in the 4 and 3 per cents, the 5 per cent annuities should continue irredeemable, until the period when 25,000,000 l. of other stock should be paid off. It might be difficult to decide upon the meaning of this clause; but at least it was drawn up in terms that ought not on this occasion to be passed over sub silentio. It did not become the House to give this question the go-by: it deserved parliamentary notice, before they pronounced so severe a sentence on those who, on the faith of former acts, had invested their property in these 5 per cent annuities. He knew it would be said, that the clause in question referred to the purchases of the commissioners for liquidating the national debt. But, large as might be the sum already redeemed by the sinking fund, it was not paid off; on the contrary, it had only shifted hands. It was not at the disposal of parliament, in the sense understood by the act of 1797. The principle of compound interest upon which the sinking fund had been first established was, indeed, broken in upon; but the words "redeemed and paid off" remained ambiguous. The question was full of diflicul-

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ties, and was entitled to serious consideration. When Mr. Pelham proposed his measure, its object was stated to be "to pay off a certain description of stock, in conformity with the terms on which it had been purchased." The great difficulty in the execution of Mr. Pelham's plan arose from the large quantities of stock held by some of the great companies, and amongst them; by the East India company. They held 4,200,000 l. of which 1,000,000 l. was in the 3 per cents, and they contended, that-they held this latter on the legal condition, that the 4 per cents should not be reduced unless a similar proceeding took place with regard to the 3 per cents. When the objection was brought forward, the attorney-general of that day expressed his-opinion, that the House was bound to interfere by a resolution; and he himself submitted one that might have the effect of deciding the point. It was declared by the House, that notice was equally due in both instances. He mentioned this circumstance in order to show that the measure was considered in every light; that no important objection was passed over; and that no man interested was left with-out a distinct understanding of the course that was to be pursued. He was not now offering any opinion on the true interpretation of the clause he had cited; all he wished was, to prove the necessity of coming to some judgment respecting it. The chancellor of the exchequer had greatly surprised him by saying, that in the preparation of his scheme he had closely followed the example of Mr. Pelham. Now, he (Mr. T.) had read all the documents he could find on the subject of Mr. Pelham's plan, and he must declare that he was acquainted with no two things more dissimilar, than that plan and the project under discussion. The history of the former proceeding was briefly this. The king's speech on opening the session laid a foundation for the measure, by recommending a new arrangement of the interest payable on national debts, "strict regard being paid to public faith and private property." This language was deemed so essential, that it was afterwards introduced and made part of the bill for carrying his majesty's recommendations into effect. Mr. Pelham's bill likewse provided, that every holder of 4 per cent stock should have the option of receiving 3½ per cent for seven years, and 3 per cent at the expiration of that period. No threat was made use of, no inducement was brought
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forward of an indirect nature, Mr. Pelham relied on the good sense of the subscribers; and when it was remembered what was at that time the state of the money market, that commerce was eminently flourishing, and that the 3 per cents were at 101, a fairer proposition could hardly have been submitted. Yet, with all these advantages, it appeared to Mr. Pelham, that justice to the holders of the four per cents required that they should not be subjected to a compulsory process without sufficient notice, and that they ought to be let down gradually. He (Mr. T.) did not assert that the chancellor of the exchequer's proceeding was against law; but he maintained, that every holder of 5 per cent stock should have the means of knowing, and time for reflecting on the terms, on which it was proposed to him either to accept a lower interest, or to take back his capital. When he considered who many of those individuals were upon whom this measure was to operate, he saw additional reason for granting every possible indulgence; and, putting the mildest interpretation on the conditions to which the subscribers originally referred.—By the plan of Mr. Pelham, a period of three months was allowed to the stockholders for consideration, and within that time a great many acceded to the terms; but others rejected them. The minister did not happen to be in vogue in the city; and amongst those who held out were the Bank, the East India company, the South sea company, and other corporations. Let the House, however, consider what followed. When these great bodies altered their opinions on the subject, and intimated, after the lapse of the three months notice, their readiness to accept the proffered terms, the chancellor of the exchequer of that day said, "No, you have thought proper to hold out, and are not entitled to the same conditions as those who decided within a given period; instead of the seven years, during which they have acquired a claim to an additional half per cent interest, you shall receive it but for five years; at the end of which the full reduction shall take place." Now, he (Mr. T.) could perceive nothing hard or unfair in this part of the transaction; and the difference between it, when viewed altogether, and the proceeding now before them, was as marked as the difference between light and darkness. By this proceeding, a stockholder if he did not express his dissent between the 4th and the 16th of

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March, this present month, was to be assumed as having assented. To him this seemed a most barefaced proposition. He was not himself a holder of 5 per cent stock, and had, therefore, an interest with the community at large to the extent of such degree, (and he feared it would be a small one) as this measure should operate to reduce general taxation. But he thought it most unfair to treat the public creditor in this manner. He was called on to give a direct negative; or in failure of so doing, was to be held to answer in the affirmative. If he did not say "no," he was to be concluded as saying "ay," and was to find himself all at once a subscriber to a new stock. Let them consider, too, what effects must be produced in Ireland by this proceeding, as it was now framed. The Irishman was to be subjected to a new and different process. There was a clause which involved Irish debentures bearing 5 per cent interest, within the operation of the bill; these debentures being only a species of currency, and purchased, as exchequer bills might be, for temporary convenience. The holders of them, who might never have intended to purchase stock at all, would now find suddenly that they had become subscribers to annuities at 4 per cent. How was the Irishman to signify his disapprobation of the measure, or prevent this conversion of himself into a fundholder? He could not communicate a shake of the head by the telegraph; and yet, unless he could devise some method almost as rapid, his dissent might be too late. It was not his intention to treat the subject ludicrously; and what he had just said was, he believed, fairly illustrative of the precipitation with which it was attempted to push forward this undertaking. It constituted, in his opinion, a serious grievance to the proprietors; and this was not lessened by the observation that it was the only way of bringing the business to an end.—He had heard compliments paid to the chancellor of the exchequer on the dexterity he had displayed in the conduct of this measure. His surprise was considerable at hearing compliments of this kind, and at finding that the "dexterity" of a chancellor of the exchequer in money matters should be deemed a fit subject for applause. It seemed to him very obvious, that the twelve days proposed by this arrangement were much too short a period to satisfy all the demands of justice, and all the exigen-
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ces of the case. Parties conversant in money transactions, and quick in the discernment of their own interest, might form a sound judgment immediately; but, in other cases, the deduction of 16 s. from 5l. must form so serious a loss as to inspire the utmost apprehension and alarm. Suppose a poor woman subsisting on an annuity of 40 l. in the 5 per cents, and at present, by the aid of that provision, enjoying comparative case and comfort. This deduction of 16 s. from every 5l. might reduce her to comparative wretchedness, and deprive her of all that comfort which was her bare allotment before. How could an individual so situated be expected in a few days to make up her mind on a question that was to decide her future happiness? Yet if she hesitated—if her anxiety led her to consult too many of her friends and neighbours on the course which it was most adviseable for her to pursue—the time limited might elapse, and she would no longer have a discretion to exercise.—But there was another ground of objection, and it appeared to him quite unanswerable. They were informed by the king's speech, on opening the session, that negotiations were pending between other countries, which might eventually lead to a disturbance of the peace of Europe. As he could not believe the House was inclined to take any advantage of the stockholder, he alluded to this subject as affording one proof that the time assigned was not sufficient for reasonable purposes. The passage to which he alluded was that respecting the situation of Turkey and Russia. What was now the relative situation of those powers? The speech said—"My endeavours have been directed in conjunction with my allies, to a settlement of the differences which have unfortunately prevailed between the Court of St. Peters burgh and the Ottoman Porte, and I have reason to entertain hopes that these differences have been satisfactorily adjusted." Was it too much to ask for a month or two, in order to know the result of these negotiations? If it should be peace, no injury could be done to either party; but if war were to follow, the proprietors of the stock in question might complain most justly that they had been swindled. To some delay they were entitled; and as the season was advancing, a moderate delay would probably suffice. Neither had parliament yet come to a final determination with regard to the

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sinking fund; and all would admit that, whatever it was, it must necessarily influence the price of stocks. Unless this were the case, their late discussion had been a mere waste of time. Here was a complicated question; and those who were to exercise a judgment upon it should be enabled to exercise it discreetly. They ought to know whether a fund of 5,000,000 l. was to accumulate at compound interest or not; for this was an issue that might constitute a different value of the funds. Again, Mr. Pelham paid off his dissenters at once; but by the new mode, they were to be taken numerically, the payment to take place as parliament should hereafter provide. But, would not the inevitable consequence of such an arrangement be, that those who were inclined to dissent, would postpone that step till the last hour? He did not touch on these details in order to raise captious objections: he took his stand upon a broad principle, that there was a necessity for allowing more time for the execution of this measure. Interest at 5 per cent was to continue payable till the 5th of July; the expence would be the same, and he could imagine no good reason for hastening its progress. Unless ministers felt that some serious event was likely to intervene, which would induce people to refuse their subscription to the new stock, he could not conceive the motive for such precipitation. On the subject of the previous redemption of 25,000,000 l. of other stock, he thought the House should express some opinion. Did the noble lord believe in those statements of our growing prosperity which he had recently brought forward? If he did, the country would gain, rather than lose, by the delay recommended. If the noble lord did not, and if the whole was a fallacy intended to help on a system of management, and promote the seduction of decoy ducks, if our prosperity was rather on the decline than otherwise, and this was an artifice designed to conceal or repair it, such considerations might furnish sufficient reason to the noble lord for this proceeding, but he did not envy him the enjoyment of it.
Mr. Lushingtonsaid, that on the question of legal competency, the answer was immediate and satisfactory. By the 53rd of the late king, it was declared, that the 238,000,000 l. then standing in the names of the commissioners of the sinking fund, should he considered as so much stock
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redeemed and paid off. One very material advantage of the proposed arrangement was, its departure from the plan adopted by Mr. Pelham. A reference to the history of that period would show that great difficulties arose from the delay which was then allowed. The question then simply was, whether the proposed terms were consistent with good faith, and with the principles of justice. For every 100 l. 5 per cent stock, 105 l. 4, per cent stock was offered; or the holder had the option of receiving his capital. It was impossible that any great length of time could be requisite for deciding on a question like this. For those who were absent and at a distance, ample time would be given; but delay to those at home would only furnish a more extended opportunity for gambling and speculation.
Mr. Ellicesaid, the declarations of the House in the year 1813 were now represented as conclusive with respect to the act of the 37th of the late king; but at that period government was desirous of altering the amount of the sinking fund, although they were now told, in 1822, that an immense amount of the 3 per cents had been paid off since 1797. If the act meant a bona fide reduction of the 3 or 4 per cents to the amount of 25,000,000 l., then was the 5 per cent proprietor entitled to expect that a measure of this kind should be first applied in that direction. The right hon. gentleman had said, that for three years previous to Mr. Pelham's reduction, the stocks continued high. At present, it could not be said they were long in such a state; nor did the existing condition of Europe at all resemble that in Mr. Pelham's time. Mr. Pelham gave several months for consideration, but the present chancellor of the exchequer only allowed 16, or more properly speaking, 12 days, and gave as his apology for that shortness of time, the singular reason, that if longer time were allowed, it would give rise to individual speculation. Let the House look at the situation in which particular stockholders were placed by the shortness of notice. Suppose the case of a holder residing in the north of England or Scotland; he has only time to transmit his decision at once, so as to reach town within the specified period, and he writes to his agent upon, the first intimation of the terms, not to dissent. Suppose that, before the time, arrives for actual closing, he receives in-

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formation, from whatever cause, which leads him to alter his opinion, the distance at which he is placed leaves him without alternative. Not so the stockholder in town: he has up to the last hour to notify his decision to the Bank. He had heard a great deal of the saving which would be effected by the bill. Now, he would contend, that the actual saving to the public at the end of eight years would be only 1,000,000 l. The country had to pay 7,000,000 l. for reducing the rate of interest to 4 per cent. Work that calculation as they pleased the result must be as he had stated. If it had been proposed to reduce the 5 per cents in such a way as to allow two years for holders to enter their decision, and to make the terms still more unfavourable to them in rate of interest, such a course would have enabled the parties affected by it to reduce their expenditure, and this bonus for sudden decision would have been saved to the public. If the noble marquis was so clear in his view of the progressive advance of public credit, why hurry such a measure as this? The fact was, that the plan was intended to avoid incurring the displeasure of the country gentlemen. In every view he could take of it, he thought it would have been better to have adopted a measure which had a greater resemblance to that of Mr. Pelham.
Mr. Grenfellsaid, that so far from thinking the plan unwise either in its principle or machinery, he was convinced, from the best consideration he could give the subject, that it was a fir and just one. The first question propounded by his right hon. friend was, "Are we, in point of law and good faith, competent to reduce the rate of interest, until we have actually extinguished 25,000,000 l. of the public debt?" To this he should reply, that the measure in 1813, effectually removed the legal difficulty alluded to, and made it competent for them, in point of law and good faith, to execute the proposed measure. A great deal had been said of Mr. Pelham's bill in 1749. Now that measure appeared to him to have as little connexion with the real question at present, as any other which could well be thought of. They had nothing to do with Mr. Pelham's bill. The only question for them to consider was, whether, consistently with law and good faith, they were competent to entertain such a proceeding as this. He should say "Yes;"
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and, approving as he did, both the principle and the details of the bill, it should have his hearty support. When he stated his general acquiescence, he was bound at the same time to say, that he had a slight objection to the appearance of hurry in binding parties to an assent or dissent. His hon. friend was for a long delay, on the ground that if the state of the country were as improving as it had been represented to be, the public would, in the end, make a better bargain. Be that as it might, he should merely reply, that he for one, was ready to act now; nor should he regret his early acceptance of the terms now offered, if in the result he found that something more might have been gained by procrastination.
Mr. Tierneysaid, he had made no objection to the principle of the measure; but had merely objected to the mode of carrying it into effect.
Mr. Huskissonthought, there could be little doubt, indeed, that the plan was consistent with the principles of public faith, and of law. With respect to the right of paying off the five per cents, the right hon. gentleman opposite had alluded to a clause in the 37th of the king, which stated that the five per cents were not to be paid off until 25 millions of the national debt should be redeemed. The words of that act, he was willing to say, would admit of various constructions; but one construction, he thought, could not, with any appearance of reason, be put upon them. It could not be contended that the condition would not be fulfilled until the debt, as it stood in the year 1797, should be reduced by 25 millions. It might perhaps be argued, that, if the government borrowed with one hand to pay off debt with another, though debt might be nominally reduced, the condition would not be fulfilled, because in fact the country, whilst it was paying off debt in one way, would be increasing debt in another. But the country had bonâ fide paid off 25 millions of debt by the redemption of the land tax. Unless, therefore, gentlemen were to contend that the country at the present day was bound to reduce the debt by 25 millions below what it was in 1792, when it amounted to 230 millions; or that any bona fide reduction of the debt did not amount to a redemption, it was plain that the condition, as stated in the act, had been fulfilled, and there could be no doubt but that parliament had a right to

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deal with the five percents in the manner proposed. The hon. member for Coventry had stated, that in the course of eight years, the saving to the country, would amount but to a million. Undoubtedly, if they looked but to the nominal amount of the debt, the hon. gentleman might entertain that view of the question; but looking to the burthen which was actually upon the country, the first effect of the Measure would be, to diminish that burthen by a sum of 1,200,000 l. forthwith. With respect to the complaint, that sufficient time had not been given to creditors to express their dissent, the House would bear in mind, that the public, since the resolution of his right hon. friend had been moved in that House on the 22nd of February, had been put in possession of the plan. And, after all, what had the creditor to decide upon? The proposition was this—either to pay off the creditor his full demand, or to give him 105 l. in the four per cents; in fact, whether he should take his 100 l. or accept of What was better. Had there been more time given, it would have led to unfair speculations. The right hon. gentleman had desired the House to wait for the result of the negotiations between Russia and Turkey. But, if the country was not to off a part of its debt, bearing a high rate of interest, until the state of Europe should be entirely settled, they would lose every chance of redeeming their debt. Every public event was likely to affect, more or less, the state of public credit. He thought that sincerity and good faith marked the whole plan of his right hon. friend. The parties had nothing to complain of; they advanced their money to the state on the express understanding, that at a certain period that debt was likely to be paid off. The terms that were offered was the amount of their debt in money, or a security which was more advantageous. The legislature was only doing that, which, on every principle, they were bound to do for the benefit of the country.
Mr. Williamssaid, he had his doubts as to the question of law, and thought that the mode of executing the plan was one which would violate good faith. The five per cents were established under the 24th of the late king; arid the clause of that act expressly stated, that the five per cents should not be redeemed until 25 millions of the public debt should be first paid off. He thought the Words of
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the act were plain. He could not be supposed to, have his judgment warped on this question, since, except as a trustee, he was not in the remotest degree concerned in the five per cents. For himself, he confessed, he was, to that hour, ignorant of the precise terms offered to the creditor: he did not know whether he was to be paid off in one month, or in 20 years. It was true the right hon. gentleman had stated, that the person who might express his dissent, might receive 100 l. in money; but at what time he was to receive it was not stated, and ambiguity prevailed on that head throughout the whole plan. He could not help thinking that the public creditor was most unfairly treated, because terms were put upon him which he might consider illegal; which he might look upon as injurious; and of which however he was compelled to accept. He held in his hand two documents; they were dissents, which were yesterday presented at the Bank of England. The first stated, that the party gave notice, in pursuance of the resolution of the House of the 23rd Feb., that he declined accepting of four per cent stock, and he required the payment of his money. The words were in pursuance of the resolution of the House, and under that notice were written the words "That he did not require the payment of his money according to the terms proposed, nor to any other terms than those of the the 24th of Geo. 3rd under which he had purchased." The House would scarcely believe that the cashiers of the Bank refused to receive that notice. The next document was a notice from a trustee; it was worded according to the printed form. The words "I require payment of 100 l." were struck out. That notice was also delivered to the cashier, and he refused to receive it. Here it was clear that the holders of 5 per cent stock were not allowed to express their dissent. By what right bankers took upon themselves to construe an act of parliament, to decide the law in their own way, and to prevent the party whose property was interfered with from expressing his dissent, he could not determine; but it was clear that he was driven to accept of terms hick he might consider disadvantageous—which he might look upon as illegal. A greater breach of public faith he thought had never been committed. If the chancellor of the exchequer had pursued an opposite course, and had created a five per cent stock,

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irredeemable within 25 years, such a stock would be worth, at the ordinary rate according to calculation, from 120 l. to 125 l. money for every 100 l. stock. He would therefore have converted the existing stock into a stock of this description. The idea was not his, but had been suggested in a pamphlet which had been very widely circulated. According to this plan, the operation would have been as follows:—If the existing quantity of five per cent stock was 155 millions, bearing interest to the amount of 7,750,000 l., the nominal capital would be reduced to 129,500,000 l., which would be a reduction of 25,500,000 l. on the capital; and the interest would be reduced to 6,250,000 l., which would be a saving on the interest of 1,470,000 l. This was actually a greater saving than the chancellor of the exchequer proposed by his present plan;, for he only proposed to save 1,270,000 l.; and when it was recollected, that the dividends on the five per cents would be paid at Midsummer, the saving in interest would in reality be only 1,200,000 l., while the capital was increased by 7,500,000 l. This system, if pursued for years, must bring ruin on the nation, and lead to the breach of public faith. The chancellor of the exchequer, in pursuance of his system, had resorted to art and tricks to raise the price of the funds; but what was the consequence? He was now endeavouring to raise the three per cents to 90, in order to reduce the four per cent stock. Did he calculate the loss to the country while this was going on? If there was a real surplus, for nothing else could be called a sinking fund, of 5 millions, it would redeem, when the funds were at 70, 7,142,000 l. of debt; but when the funds were raised to 90, it would take 6,428,420 l. to buy up the same amount of capital; so that there would be an actual loss to the country, by forcing up the stocks, of 1,428,120 l. on the redemption of every 7,142,000 l. of the debt. If, instead of reducing the five per cents to a lower denomination, the three per cents were converted into fives, there might be a reduction of the enormous sum of two hundred millions. Was this nothing? When did the chancellor of the exchequer expect to reduce two hundred millions of capital? They would not then need fear how much the stocks might rise. The measure which he had proposed might be effected on principles consonant with
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justice and good faith; for the stock which be proposed to create would fetch the price he had set upon it. He was convinced the whole system adopted by the chancellor of the exchequer was founded on a false calculation, and that the sooner it was departed from the better.
The Attorney Generalobserved, that his opinion as to the situation in which the House stood in consequence of the 34th of the late king, was very different from that of the hon. gentleman, for according to the opinion of the hon. gentleman, the House would be placed in this situation, that they could never reduce the five per cents until the debt was reduced below what it was in 1784. The question for the House to consider really was, "Had the country paid off 25 millions of debt in the sense contemplated in that clause? It was said by some, that the raising money by loans to pay off debt was a mere juggle that would not satisfy the words of the act. But, it was not by loans merely, but by the redemption of the land tax, that a large sum had been reduced. Besides this, the act which passed in 1813, for cancelling a part of the stock in the hands of the commissioners for the reduction of the debt, recited, that, whereas the 238 millions purchased by the commissioners exceeded the total of the capital of the debt existing in 1786, that amount of public debt should be deemed to be satisfied and discharged, and that so much stock might be cancelled. After this express declaration by act of parliament, that so much of the debt should be deemed to be satisfied and paid off, on that alone he thought they might safely rest, independently of that measure, the redemption of the land tax, which put an end to all doubts on the subject.
Mr. W. Smithsaid, that the idea that raising of loans to buy up stock was a bona fide discharge of debt, was the most absurd that ever entered the mind of man. And this must have been the opinion of Mr. Pitt; for in 1792 the three per cents were about par, so that nothing could have been more easy than to have borrowed money with one hand to buy up a quantity of stock with the other, if that minister had thought this an honest interpretation of the act.
Mr. Monckobserved, that the provision that the five per cent holders should be paid off in the order of their dissent, was unjust, as it tended to create a different

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value in the same species of stock. If, for instance, there were dissentients to the amount of twenty millions of stock, and there was a surplus of five millions applied yearly to pay them off; the payment would not be completed in less than four years, and the part that was first payable would be four or five per cent more valuable than the last. The plan adopted by the French government, of drawing a letter by lot for payment, was more just to the holders, and thereby the stock preserved an equal value in the market. He perfectly agreed with the member for Weymouth, as to the bad effect of the present mode of applying the sinking fund.
The House then resolved itself into the committee, in which verbal and other amendments were made to several clauses, after a good deal of desultory conversation. Upon the clause for limiting the time for dissent to the 16th of March being read, Mr. Denman proposed, as an amendment, to substitute the 30th of March. A conversation of some length ensued; after which the committee divided: For Mr. Denman's amendment 49. For the original clause, 143.

List of the Minority.

Althorp, visc.

Monck, J. B.

Bennet, hon. H. G.

Maule, hon. W.

Bernal, R.

Maberly, John

Birch, H.

Macdonald, J.

Boughey, sir J.

Newman, R.

Barrett, S. M.

Newport, sir J.

Beaumont, T.

O'Callaghan, col.

Bright, H.

Palmer, C. F.

Calcraft, J.

Robinson, sir G.

Coffin, sir I.

Ridley, sir M. W.

Concannon, L.

Robarts, col.

Crespigny, sir W. De

Robarts, A. W.

Campbell, hon. N.

Robertson, A.

Davies, col.

Stanley, lord

Denison, J.

Smith, hon. R.

Ellice, E.

Smith, Robt.

Fergusson, sir R. C.

Scarlett, J.

Grenfell, P.

Tierney, rt. hon. G.

Hutchinson, hon. H.

Tynte, C. K.

Hobhouse, J. C.

Wood, ald.

Hume, Joseph

Williams, W.

James, W.

Wilson, sir R.

Lambton, J. G.

Wyvill, M.

Lushington, Dr.

TELLER.

Martin, J.

Denman, T.