HC Deb 24 February 1824 vol 10 cc437-44

On the motion for going into a committee on the Austrian Loan Convention,

Mr. Hume

begged to ask a question respecting the state of the Russian loan, as we were now to accept of a composition from the emperor of Austria. The government of Russia had borrowed three millions from this country, which he believed had been employed to prepare for war with us. We had continued to pay the interest on that loan at 5 per cent., but were still told, that we should be indemnified. Now, what he wished to know was, whether there was any probability of repayment; because if there was not, this debt should be consolidated with our other debt, and the interest reduced like that of our other securities. If we were bound to pay that money, we should not at least be bound to pay 5 per cent for it when the interest might be reduced to 3½

The Chancellor of the Exchequer

said, he would readily answer the hon. member if it were possible. Only a short time ago this subject had attracted his attention, and he had looked into the acts and treaties relative to it. But, after doing so, he was not prepared to say how far there was a possibility of executing the purpose to which the hon. member had alluded.

Mr. Baring

said, that the engagement, relative to this loan, was a contingent engagement. The debt had not been contracted, as was stated by his hon. friend to make war on this country; but for a purpose which he probably would approve of as little. It was money, borrowed by the empress Catherine, for the subjugation of Poland. Russia had a number of old out-standing debts in Holland, and we had undertaken to pay one quarter, and the Government of Holland had undertaken to pay another, on the contingency of Belgium remaining attached to the Netherlands.

The House having resolved itself into a committee,

The Chancellor of the Exchequer

said, that hitherto the loan to the emperor of Austria had been kept separately from the other 3 per cent consolidated annuities. As, however, a treaty had been entered into to annul the liability of Austria for this debt, in consideration of an advance of 2½ millions, it would not be necessary to continue this arrangement any longer. If the committee, therefore, sanctioned the terms of this convention, the distinction between this and the other parts of the public debt would cease, and the Imperial annuities would be consolidated with the other 3 per cents. He would now move, 1. "That the sum of £.2,500,000 having been agreed to be paid by the emperor of Austria in full discharge of the loans guaranteed by the said acts, the separate accounts of the annuities called Imperial annuities, granted by the said acts, shall cease and determine; and the said annuities shall be deemed part of the Funded Debt of the United kingdom, and shall be consolidated with the three pounds per centum consolidated annuities, payable at the Bank of England." 2. "That the commissioners of his Majesty's Treasury of the United Kingdom of Great Britain and Ireland be authorized to issue and pay, out of the consolidated fund of the said United Kingdom, such a sum of money as will be sufficient to discharge the discount at the rate of 5l. per centum per annum, on payment of the said sum of 2,500,000l. before the respective periods stipulated for the payment thereof."

Mr. Hume

said, he was not prepared to support a resolution for sanctioning the terms agreed to by government. The committee was told, that Austria had consented to advance 2½ millions to this country; but, by the mode in which the payments were made into the Exchequer, the receipts would fall considerably short of that amount. Hence there was not only an unfair diminution of our just claim, but even an unfair reduction below the amount actually stipulated for. Why, he would ask, were the contractors, Messrs. Reid, Rothschild, Baring, and Co. to receive 5 per cent for their discounts, when other persons were only receiving 3½? Why had such a preference been given to them over others—a preference which would cost the country upwards of 50,000l?

Mr. Herries

replied, that by the papers on the table, the character in which the contractors stood towards the Government would be seen, and it would be made manifest, that government did not negociate with them as parties proposing to advance a loan to this country. In offering the terms agreed to, they had acted as the representatives of the emperor of Austria, for the payment of such a sum as he was disposed to grant. The rate of discount, in case of the immediate advance of the whole sum, was as much a part of the original contract as the amount of the contribution itself. They submitted certain conditions to the Treasury, of which this rate of discount was one, and Government had no option, but to accept or reject the whole. It was not in the power of the Treasury to give less than 5 per cent, as the contractors would not receive less. The Treasury had no option. The terms were offered as a whole. They had been accepted; and he would answer the second question of the hon. member by slating, that the whole sum had been paid into the Treasury, and it only remained to pay the discount agreed on.

Mr. Hume

expressed himself not satisfied with this explanation. It was not stated in the paper laid before the House, that a bargain had been made with certain contractors, but that a treaty had been concluded with the emperor of Austria. No doubt could remain on this point; for the chancellor of the Exchequer had repeated it last night, and made it the foundation for uttering a very handsome eulogium on the generosity and honesty of the emperor of Austria. It was not stated that a bargain had been made in London with certain contractors, but that our Ambassador at Vienna had concluded a certain treaty with the minister of the emperor. But, the right hon. gentleman now said, that we had made only a bargain with certain contractors, whose offers we were obliged to accept. In the correspondence which he held in his hand, he saw a certain letter from the right hon. gentleman, accepting the offer of the contractors; but he did not see in it when that offer was made, nor what the terms were [Mr. Herries observed across the table, they were contained in a Treasury minute]. Then he (Mr. H.) would say, that one or other of the official papers was not correct. We either contracted to accept 2,500,000l. or some ether sum. If this was the contract, the chancellor of the Exchequer should have received this sum in advance, if it was to be paid in advance, on the same terms as it might have been had from other persons. The chancellor of the Exchequer had no right to give 5 per cent when he might obtain money for 3½, or even less. A compact of this kind could not have been forced on the Treasury; and he expected that some explanation would now be given.

Mr. Baring

said, that as he was one of the parties interested in the loan, he might venture on an explanation without taking any part in the decision which the House might come to with regard to it. He was independent of any opinion which the House might form as to a bargain made with the emperor of Austria. It was their, the contractors, business to attend to the price of the Austrian funds when the bargain was made. The question had two sides—one political, the other pecuniary. The money was to be paid at London: the political part of the business was regulated at Vienna. Without the discount agreed to, it was not possible, with the amount of Austrian Stock made over to the contractors, for them to make the payments. Their bargain was made, on the understanding that the instalments paid in advance were liable to discount. The discount of 5 percent therefore, was part of the original bargain. The government might accept it or not. There were two parties to every bargain, and the contractors would not have acceded, but on the condition which was now condemned. Austrian Stock it was true, had risen considerably by discharging this debt; but at the time the agreement was made, if 500l. less had been offered, the bargain would most certainly not have been concluded.

Mr. Secretary Canning

bought the hon. gentleman opposite had put a wrong construction on this transaction. Before the treaty was finally concluded, it was necessary to look to the means of payment, and this depended on the facility Austria had of borrowing, which again depended on her credit, the same as it did with all other powers, in the English market. It became the government, therefore, to consider on what terms the sum could be procured in our market. The gentlemen who had contracted to pay it, stood between Austria and England; and it was for this government to consider if the terms they offered were equivalent to the Austrian stock to be given. They had refused to give any larger sum. In agreeing to pay this sum they had made certain conditions; and it was only for the Treasury to accept those conditions, or altogether reject the payment. It was part of the original agreement, in which these gentlemen undertook to pay us so much money, on receiving a certain quantity of Austrian stock, that they should receive discount.

Mr. Hume

said, that the explanations given were not satisfactory. It would have been easy enough for the Austrian government to have given 100,000l. more stock, and then the contractors could have given more money. The emperor contracted to pay 2,500,000l.; but in fact we had not got it. It was too bad, after giving up so much to him, that we were now to give up a large sum to the contractors.

The Chancellor of the Exchequer

replied, that the hon. gentleman seemed to misapprehend the whole course of the business, and to suppose that the treaty had first been concluded at Vienna, and, the bargain made with the contractors after wards. The proposal was, that Austria should pay 30 millions of her stock; but the treaty was not signed until it was ascertained by what means this sum could be realized. The contractors made an offer to advance the money for this stock, on certain conditions. They were to pay it at certain distant periods; and if they paid it before, they were to receive 5 per cent discount. By this bargain we had got a large sum, when if it had not been concluded, the whole might have ended in our getting no money at all, which would have been a great deal worse than the bargain of which the honourable member complained.

Mr. Warre

said, he should like to see the Austrian state paper, in which the emperor acknowledging a debt of twenty millions, had the assurance to propose a composition of two and a half millions. He recollected that when the hon. member for Buckinghamshire (Mr. Smith) brought forward a motion on the subject, the late lord Londonderry, in his peculiar manner, had treated the matter with great indifference, and said that "if we were to turn the whole country inside out, we could get nothing." The right hon. gentleman had been more successful; but what was two and a half millions for art original principal sum of six millions, and its accumulations, for which Mr. Pitt had said we could sue the emperor in his own court? The Austrian finances were said to have acquired such a degree of elasticity from his payment, that there was no knowing to what beneficial results their integrity might lead. He wished to see the state paper in which the emperor of Austria, who had been described as a man of such strict honour and fine feeling, was good enough to offer the payment of half-a-crown in the pound, as a fair liquidation of his debt to this country.

Mr. Secretary Canning

said, that the information which the hon. gentleman wished to obtain was to be found in a long course of correspondence contained in the archives of the foreign office. He did not wish to take credit to himself for what was almost concluded before he came into office; nor was he willing to incur responsibility for a measure which whatever its merits or defects might be, was chief- ly the work of others; but he very much doubted whether, under all the circumstances of the case, acting as an individual, he should have felt himself warranted in making any demand upon A us. tria at all. It was a question, whether, in a court of honour, and as a transaction between man and man, such a claim could be considered binding; nor could he help considering it a little strange, that the only occasion upon which we had ever received one shilling of repayment should have been received with so bad a grace. For his own part, he did not wish to throw any discouragement in the way of such a novel practice. He would tell the hon. gentleman the transaction, which, in his opinion, had weakened our claim upon Austria. If, in private life, a man having a claim on another, and when all hope of getting payment had vanished, should on the settlement of a subsequent account, pay over a balance to him, that debtor would certainly feel himself acquitted of the former transaction. In 1805, to induce Austria to join the coalition against France, a subsidy was granted to her. Afterwards, the Austrians made peace with France, and there being an arrear of subsidy, due to her, this Government paid over that arrear, although she was then at peace, and almost in alliance with France, and we were still at war with that country. If we conceived we had any claim against Austria, that was the time to have made the demand. We should then have kept our claim alive; but, by omitting to do so, we had authorised the presumption, that former accounts were pretty much at rest. He did not say it as a minister, but as an individual he would say, that he should have considered such a payment upon our part to have operated as a bar against any previous claim.

Mr. Hume

was of opinion, that the right hon. gentleman had confounded a loan with a subsidy, in his mode of reasoning, for he (Mr. H.) could see no inconsistency in the payment of a debt which became due to the emperor of Austria by a subsequent arrangement, though his loan was not paid up, any more than he should in the case of an individual who had paid his bill, before he had settled with the other party for his mortgage. He should like to see the account current of this balance struck, and, as far as he was capable of judging, there could be no objection to the production of such an account. Af- ter all the money which they had thrown away with such facility, they owed it to the circumstances of the times to investigate such matters for the satisfaction of the public mind. To come to the mode of payment; the chancellor of the exchequer appeared to him to have misstated the question. He had said, that the bargain made by this country was, to receive thirty millions of foreign stock, but this was a mistake. The bargain was, to receive two millions five hundred thousand pounds sterling, which the contractors were authorised to pay according to the terms of the agreement.—

The resolutions were agreed to.