§ The House having resolved itself into a committee of ways and means, to which the Balance Sheet, and the Annual Accounts of Public Income, of Public Expenditure, and of Consolidated Fund were referred,
The Chancellor of the Exchequersaid, it was not his intention to trouble the committee at any length in prefacing the motion he was about to make for the last grants to be called for this session. It was, however, the usual practice at such a period to enter into a kind of recapitulation of the state of our expenditure as provided for in the committee of supply, and also to explain to parliament the nature of any increase, and the manner in which such increase was to be provided for. The House bad already voted for the service of the year sums to the amount of 18,275,270l. viz. for the Army 7,440,945l.; for the Navy, 5,762,893l.; the Ordnance, 1,410,044l.; Miscellaneous Services, 2,611,388l.; there was also the interest of Exchequer bills amounting to 1,050,000l.; making, in all, the sum of 18,275,270l. There had also been voted in a committee of supply, two sums of 15 millions each, being thirty millions, to pay off a portion of the Exchequer bills outstanding in 1824. These Exchequer bills amounted to 34,031,000l. of which, of course, 4,031,000l. remained to be provided for. He would shortly state to the committee, how he intended to provide for them. The House had already granted an annual sum of three millions 590 on the articles of sugar, malt, foreign and British spirits. The naval and military pensions amounted to a sum of 4,620,000l. There had been received from the East India company, on account of the annual half-pay of troops in India, a sum of 60,000l.; there was a small surplus from the Ways and Means of 41,537l. One hundred thousand pounds had been received back from the commissioners of public works, and 50,000l. as contributions from official salaries, under an order in council, he believed, of 1822. This was a sum contributed by the great officers of state, who gave up a sum of ten per cent, upon their salaries, thus following the example of his majesty, who had been pleased to give up 30,000l. from the civil list. These contributions had been carried, not to the consolidated fund, but to the Ways and Means of each year: so that it was not necessary that they should be voted in a committee of Ways and Means. These several sums made a total of 7,781,597l. The surplus of the consolidated fund he took to be 106,000l. after paying all incidental charges. And he would tell the committee how he got that surplus in the present year. The estimate of this year's revenue was 51,265,000l. To that sum he added the portion of the repayment made by Austria upon her loan, say 1,422,500l., and also another item of 222,000l. received from Ireland as outstanding public money, which had been repaid. This made a total revenue of 52,970,500l. The whole of this sum was not, however, to be carried to the consolidated fund, as there were to be deducted from it two sums; first, three millions, applicable to the supply of the year, and also a sum of 1,200,000l.; which he took to the loss of revenue, owing to the repeal of taxes. This sum was made up partly by loss of revenue, and partly by the repayments which it was found, necessary to make on the reduction of duty in the silk trade. Perhaps it was as well that he should take that opportunity of stating to the committee, that the total sum paid in consequence of the alteration of those duties was 500,000l. He admitted that this sum was greater than he had contemplated; but he felt satisfaction in stating, that it was much below that stated by the opponents of the measure, in. order to terrify, him and the gentlemen who did him the honour to support him, out of the adoption of a measure of sound policy 591 and practical utility; and it gave him much satisfaction to reflect, that that measure was calculated to produce as much general benefit to the country as its mest sanguine supporters could have anticipated. It was a subject of congratulation to the committee, that a measure involving, as it did, many conflicting interests, had passed the House without any difficulty; and it was much to the credit of the persons whose interests were more immediately interfered with, and whose prejudices were naturally the most difficult to overcome, that their opposition to it was conducted in the most orderly and respectable manner; in a manner, indeed, which must always entitle them to the attention of parliament, whenever their affairs might come under the consideration of the House. He repeated, it was matter of congratulation that they had effected so important and so triumphant an alteration at the expense only of 500,000l. and he was sure that parliament and the country would not think such a sum of money, so applied, ill laid out, when they looked to the advantages which it conferred upon the silk trade, as well as the community in general.
But to return: there were these two sums of 3,000,000l. and 1,200,000l. making 4,200,000l. This sum, deducted from the revenue already stated, left a sum of 48,767,500l. Now, the charge on the consolidated fund was 38,057,000l. leaving a surplus of 10,650,500l. For the appropriation of this sum he now meant to propose a vote to the committee, as part of the ways and means of the present year. He had already stated, that there remained 4,031,000l. of outstanding Exchequer bills of 1824, to be provided for. The way he thought it most advisable to provide for the liquidation of these bills was to avail themselves of the consolidated fund, in such a way as to produce an equal number of Exchequer bills, but at a less expense than if they were to vote 34,000,000l. of Exchequer bills in the ordinary way. Gentlemen who were in the habit of attending to the subject, well knew, that whereas the charge on the consolidated fund would not accrue until the quarter day, yet there was a portion of the accruing money continually coming in during the quarter, which, if not paid out, or applied in some other way, would accumulate without advantage. Therefore it was, that by an act passed two sessions 592 ago, government was authorized to avail itself of the growing produce of the consolidated fund, provided such sum did not exceed six millions. The charge on the consolidated fund being at present reduced in consequence of the simplification of the sinking fund, there was no necessity for having recourse to this growing produce; and, therefore, what he had to propose was, that the 4,031,000l. of outstanding Exchequer bills of 1824, should be provided for out of this growing produce. It might be said, that this was only substituting one kind of debt for another—one set of Exchequer bills for another. But, as the Bums thus taken were to be paid back by the receipts of the next quarter, it was clear, that the interests for a year could not accumulate, and therefore the business would be transacted at a less annual expense than if the same sums were issued in the ordinary way. In this way he meant to provide for all the outstanding Exchequer bills, leaving a small surplus of 155,000l. for the year. This was all he felt it necessary to state with respect to the votes of the year. He had stated, that two votes of 15,000,000l. each, Exchequer bills, had been granted: the fact was, that only one vote had passed; the other he then held in his hand.
It was quite unnecessary that he should now offer any observations upon the trade or commerce of the country; the principles upon which both were established were now well understood, both in that House, and out of doors; it would be a waste, therefore, of the time of the House to enter into that subject. There was one point, however, to which he felt it his duty to call the attention of the committee—he meant the plan which he had announced in the early part of the session for reducing the four per cents. He had then stated, that the intention of government was, that the holders of 100l. four per cents should receive 100l. three and a half per cent, not redeemable for five years to come. He had stated at the same time, that those who dissented from this plan should he paid off by a given day one-third of their stock. And he had added, that it was his intention to introduce a clause into the bill, giving to the Treasury the power of paying off the remainder of the stock of those who dissented, within six months from the notice of such intention. He did not then think it prudent that government should undertake to pay at one time more than one-third of the 593 whole amount, which was 75,000,000l.; as, if the assents should turn out to be small, it would not be easy to discharge the claims of those who dissented, though there could be no difficulty in paying 25,000,000l. But he had stated, that in the event of a large proportion of the stockholders assenting, then it would be desirable, that upon giving an additional notice, they should be empowered to pay off the whole demands of those who dissented, as soon as possible. And when he found that the number of assents bore a great proportion to the whole body of holders, he felt it necessary to state, that all the dissents should be paid off on the 10th of October. The assents at present amounted to 68,000,000l.—a most satisfactory proof of the strength of public credit in this country, and also the most convincing argument, to shew that the measure itself was one which met with no obstacle in its execution. It was not easy to say what the amount to be paid on the 10th October would be. At present, the deposits amounted to 7,000,000l., but by a clause in the bill, there still was an opportunity afforded the parties of assenting to the measure.—He now came to the mode in which this sum of 7,000,000l. was to be provided for. It appeared to him, that the most natural, easy, and obvious mode would be, by the issue of Exchequer bills, at a moderate interest, upon which a word by and by. Exchequer bills were the most useful security, and were in great request; they were at the same time the most simple and easy course by which such a sum could be raised. The obvious effect of this would be, to add 7,000,000l. to the unfunded debt of the country. And if this were to be a permanent addition, he should not hesitate to pronounce it an unwise course of proceeding; for though Exchequer bills were in request, and were a useful and convenient security, still it was the duty of government to take care that this species of floating debt did not go to too great an extent; because, if any cause of sudden and unexpected expenditure should arise, much difficulty would be encountered, unless that species of debt were kept within due bounds. He thought, therefore, that if they applied Exchequer bills to the payment of this 7,000,000l. it would be necessary to reduce the amount of these Exchequer bills with all despatch, and with that view he meant to charge the interest and principal of those Exchequer bills upon the sinking 594 fund. It was clear, the effect of this would be, that so much of the sinking fund would not be applicable to the reduction of the national debt, and that pro tempore, so much of its power would be suspended. And as he thought it the duty of the House to preserve that fund in its full force, instead of cancelling this stock of seven millions, it would be better to transfer it at an interest of three per cent into the hands of the commissioners of the sinking fund; thus constituting it a portion of the redeemed debt in their hands. So that the powers of the sinking fund would not, in fact, be less than if applied to the actual reduction of the national debt. The rate at which he proposed that these seven millions should be paid from the sinking fund was at one million per quarter; so that it would take seven quarters before it was paid. It might be said, that this was paying off the sum of seven millions with less rapidity than was desirable. He maintained the contrary. It was impossible to apply the whole of the sinking fund, which consisted of five millions, to this single object. The sinking fund was applicable, not merely to the reduction of the national debt, but also to the liquidation of the life annuities. Besides which, there had been, in 1824, a sum of 519,000l. charged upon it. There were other demands also which the sinking fund had occasionally to meet. Such, for instance, as the unclaimed dividends; which, though applicable to the purchase of stock, the commissioners were obliged to pay to the claimants when they applied for them. So that a certain sum must necessarily be retained at all times in their hands for this purpose. He thought, therefore, that taking one million per quarter to meet these Exchequer bills was as large a sum, as, under all circumstances, it would be expedient to apply to them.
In the course of the session, he had been several times asked, what he meant to do with respect to the interest of Exchequer bills, and the hon. member for Taunton (Mr. Baring) had advised him to reduce their interest, as a preliminary step to the reduction of the four per cents, in order to make it less advisable to the holders of that stock to withhold their assent, under the speculation of investing their money when they might be paid off at par in Exchequer bills. Had he done this, and had the number of dissents obliged him to issue a larger number of Exchequer bills than was originally 595 contemplated, their interest must rise, and this would not, perhaps, be a fraud upon, but certainly an injustice to those, who had originally agreed to the reduction of the four per cents. When Exchequer bills were at a premium of 57 per cent it was not likely that they could let them go on at so high a rate of interest. He had always thought that the time would come, and he now thought that that time was come, when it became expedient to save the public a portion of the expense arising from the interest on Exchequer bills. This was at present the case; for though he intended temporarily to increase the number of Exchequer bills, he intended to provide gradually for their extinction. It was proposed that a reduction of four millions of Exchequer bills should take place; after which the next issue should be at a lower rate of interest. They were now at 2d. a day; and he flattered himself that in consequence of the flourishing state of our commercial relations, and the demand for this sort of floating capital, they would bear a reduction of a half-penny. This, if carried into execution, would afford no relief during the present year, as the interest we were paying was on the bills of last year. But next year some saving would be made, provided it was found that the market would bear the proposed reduction of a half-penny. This alone would make a saving of 230,000l. on 30,000,000l. of Exchequer bills. There would also be a saving on Exchequer bills by a transfer of 4,000,000l. to the consolidated fund.—He did not know that he had any thing further to offer to the committee. He had gone over the various subjects connected with the supply and expenditure of the country; he had explained the nature of the reduction about to be made in the four per cents, and the means by which those who dissented from that measure were to be paid off. He should be most happy to give any hon. member any explanation in his power upon any of the subjects to which he had alluded, and in conclusion had only to move, "That the sum of 15 millions be raised by Exchequer bills for the service of the year 1824."
§ Sir Henry Parnellsaid, he approved of the financial arrangements of the chancellor of the Exchequer. He thought he had acted with great advantage to the public in making use of his means of reducing taxation, in reforming our fiscal and commercial regulations in preference 596 to the repealing of direct taxation. Tin's course would lead to increased productions and increased wealth; and afford new resources for the future reduction of taxes. He begged to acknowledge the readiness with which the chancellor of the Exchequer had attended to the applications of the manufacturers and merchants of Ireland for the repeal of the whole of the Union duties. In his opinion, this single measure was calculated to produce a very extensive improvement in the condition of Ireland. As far as a trial had been made of a partial repeal, it had been productive of great advantages. But although a great deal had been done this session in the way of reforming our commercial system, it was necessary to bear in mind, that the measures about silk and wool and bounties were at least but half measures. He did not believe the right hon. gentleman could have done more respecting the silk trade. But it was right to have it understood, that no final settlement had been come to; that what was done was only a beginning; and that it would be the duty of parliament to persevere until this trade was placed on a footing of perfect freedom. The duties which had been fixed upon thrown silk, were particularly objectionable: for though the repeal of all duty on raw silk, may make it appear that our manufacturers had their raw material free of duty, as long as any thrown silk was imported, the duty upon it, would operate as a tax upon English thrown silk; because the price would be regulated by the price of the imported thrown silk. Until this duty was wholly repealed, the English manufacturers would be under a disadvantage, as compared with French manufacturers; and this alone would contribute to prevent them from coming successfully into competition with them. In respect to the proposed duty on wool of 2d. a pound on exportation, this would be 20 per cent on low-priced wool, and operate as a prohibition of exportation. What had happened concerning the timber trade, shewed the necessity of revising every recent arrangement. This had been so settled that we paid 3 or 400,000l. a-year more for timber than we ought to do, and yet we hear of no change being intended. But the branch of our finances which was in the least satisfactory state, was the public debt. It was absurd to suppose that a sinking fund of 5 millions a-year could ever be effectual in reducing 800 millions besides, we had 597 not a surplus of 5 millions, but one under four, according to the Balance sheet of the right hon. gentlemen: if the extraordinary receivers payments are deducted. He thought it was incorrect to call this surplus a sinking fund; its proper name was a surplus or reserve fund; and it was only as such, he approved of it; as he never believed, in the event of a war, any government would leave it untouched. In place of this delusion he wished to suggest to the consideration of the House the plan he had mentioned, last session, of endeavouring to reduce the debt by means of long annuities. This plan had been approved of by Mr. Ricardo, and by every one who had given an opinion upon it out of the House. If Mr. Pitt had adopted the principle of long annuities, and borrowed all his loans in them, as one percent on a 100l. will increase to 100l. in 37 years, when the interest of money is 5 per cent, in 1830 the loan of 1793 would be extinguished; in 1831, the loan of 1794, and so on. In each following year the loan of a year of war would be extinguished. The state of the money market might not have enabled him to borrow at 37 years purchase, but if he had been obliged to give 40 or 45 years, the extinction of each loan would have been certain. He was aware that a difficulty might exist in now converting perpetual annuities into long annuities, to any considerable amount; but what he wished to see adopted was, a beginning of an attempt to convert perpetual annuities into long annuities. There would doubtless be many persons who, for the sake of a larger income, would prefer determinable annuities. If only a million and a half a-year were thus invested as a sinking fund, by making use of it to convert perpetual annuities into long annuities varying from 50 to 80 years three hundred millions of debt might be extinguished. As, in the existence of a nation, a large number of years were of little consideration, this principle would operate with unerring advantage to the public interest, and increase public credit by affording a certainty of a great reduction of the national debt.
§ Mr. Humesaid, he agreed in most of what had been said by the hon. baronet. The public would soon find, that the commercial or fiscal regulations would produce great advantage; that the outcry raised against it in the first instance was unfounded; and that the most sanguine anticipations would be realized. Convinc- 598 ed by this experiment, he was satisfied that the chancellor of the Exchequer would, in a short time, remove all the restrictions, which had tended more than any thing else to retard the prosperity of the country. He hoped, that what the hon. baronet had said about timber would meet with attention, for there could be no sufficient reason why the people of this country should be taxed, under the pretence of encouraging a colony, to the extent of several hundred thousand pounds a-year, and be furnished with bad Timber into the bargain. He trusted also, that when the wool question should be brought forward again, ministers would adhere to their original resolution, and impose a duty of only one penny per pound upon export. They could not do justice to their own principle, if they consented to raise it to two-pence, upon the representation of any interested parties. He was sorry to notice several items mentioned by the right hon. gentleman; and one of them was 4,620,000l. for what was called the dead-weight loan. If ever a lesson had been afforded to the House, it was given by this transaction. He had done his utmost to resist it. The fact was this—that ministers had borrowed eleven millions Stirling, to be paid in three per cents at 73 and they had been repaying it at the rate of 78, 86, and 96, losing the whole difference, and which loss he was satisfied would amount to six millions before the whole was completed. This, too, exclusive of all the shame that must attach to the House for sanctioning such a bargain. What was the chancellor of the Exchequer about to do with regard to the sinking fund? What could justify the right hon. gentleman in again endeavouring to complicate that fund, when every body acknowledged that, if persevered in, it ought to be simplified. Why did he transfer the remaining seven millions to the sinking fund; and then taking interest pay it back again quarter by quarter? The intricacy of these transactions would be such, in a short time, that the right hon. gentleman would require an additional office to prevent him from making mistakes. There was another subject on which it was fit that he should make some observations—the vote for new churches. He should be glad to know whether, by bill or otherwise an opportunity would be afforded of taking the sense of the House upon the question? [The chancellor of the Exchequer said, that a bill would be brought in.] 599 Such a proposal was, in all points of view, objectionable. New churches were not at all wanted?; and he thought the House would be of that opinion if an opportunity were afforded of fairly considering the subject. He had never met with a man out of the House, who did not disapprove of the application of 500,000l to the building of new churches. The House had been cajoled into a temporary approbation: but he would take care that a time should come, when it might be ascertained whether ministers would persist in forcing this measure upon the House; and whether the House would venture to support them. He was almost as little satisfied with what had been said regarding the bank of England; and he recommended the chancellor of the Exchequer to read a pamphlet on the subject, by the late member for Portarlington. He was quite convinced that the whole of the million sterling, the sum paid for the management of the debt, and the whole interest of the floating debt might be saved to the country. He hoped, therefore, that ministers would not listen to any proposition for continuing the exclusive privileges of the bank of England. He feared that some approach towards such an arrangement might be made without due inquiry. The matter ought to be submitted, in the first instance, to the House, and a committee ought to be appointed to investigate facts, and ascertain opinions. Every shilling of interest on Exchequer bill sought to be saved. In the present exuberance of capital for public security, banks upon the plan and system of the Scotch banks ought to be encouraged. How many individuals had been ruined by the failure of country banks. It was optional, indeed, whether people would trust their money to them; but the conveniences of banking were such, that there was no alternative. Every encouragement ought, therefore, to be given to such banks as were established in Scotland not one failure in ten years would then occur; and all those lamentable catastrophes which had so often been witnessed in England would be avoided. If there were any thing in the law of this country to prevent the formation of such firms, the obstacle ought to be removed without delay. With regard to surplus revenue, and the mode in which it ought to be employed, he was decidedly of opinion, that taxation ought to be removed in the first Instance, and the floating debt as much as possible reduced. The productive 600 powers of the country would thus be rapidly increased, and the accumulation of capital, materially aided. When he had said, some time ago, that he should not be surprised to see the 3 per cents at par, he had been told that he was dreaming; but his dream had nearly been verified; and he still hoped to see the whole interest of the debt reduced to 2½ per cent; which in fact would make a reduction of half the amount. Every million of taxes repealed must add to the accumulation of capital, which would do more towards the diminution of the national debt, than any paltry sinking fund of five or even ten millions. Such was the course that ought to have been pursued; but, as it had not been pursued it ought now to be begun. The sinking fund was only something above three millions upon the statement of the chancellor of the Exchequer; and why, instead of adhering to it, should he not publish that he was ready to receive proposals for the purchase of annuities for thirty forty, fifty, and sixty years, two millions each, or any other sum, making provision for the interest? If a commencement were now made upon this plan a rapid diminution of the debt would be effected. He hoped, at all events if the House did not sanction this project, that it would take into consideration the folly and fallacy of applying the sinking fund to the purchase of 3 per cents at 96. Many might think a surplus convenient in case of war; but let it be devoted to taking the floating debt out of the market; and whatever happened, if even a war should arise, money enough could be easily raised, without doing more than increase the issue of Exchequer bills. In conclusion, he protested against the complication about to be introduced, and against the further purchase of three per cents at 96. The first was absurd; and the last a piece of most extravagant folly.
Mr. Robertsontrusted that the chancellor of the Exchequer would not be deterred from pursuing the simple and straight forward measure of a sinking fund; the consequences of which, he was satisfied, would be highly beneficial to the community.
Mr. Whitmoreexpressed his regret, that the chancellor of the Exchequer had been induced to abandon his first resolution regarding the duty upon the export of wool and his hope that he would revert to the duty of one penny per pound, instead of persevering in laying on two-pence in 601 compliance with the representations of the manufacturers. He had a strong conviction that the sum of 500,000l. which had been repaid to the silk merchants and manufacturers, on the stock in hand, was an unnecessary expenditure of the public money. He had at the time, made no objection to the arrangement, because he was aware of the obstacles which were thrown in the way of the application of sound principles. He had felt that price could only be lowered by competition, and that the mere fact of the lowering the import duty on the material of a manufacture would not cause such a sudden increase of the quantity of the manufactured goods, or of the raw material, as to cause any considerable loss on the stock in hand. With regard to the sinking fund, he agreed, that the surplus was not much more than three millions, after deducting those temporary sources of revenue by which its amount in the present year was swelled. In reference to this subject, he could not help pressing on ministers the extreme impolicy of continuing the delusion of the "dead weight," which was not simply useless, but mischievous. He was one of those who thought that there should be, in ordinary times, a surplus revenue raised; and, considering the amount of the whole revenue, and of the debt, he thought three millions was not too large a surplus. Now, the difficulty in which he, and others who held the same opinion, were placed by the delusion of the dead weight was this, that while they were in reality supporting a surplus revenue of only three millions, they seemed to be supporting a surplus revenue of five millions. Every principle of policy, as well as justice, should induce ministers to remove every thing that prevented the proper understanding of the public accounts, and to make them so simple that he that ran might read. He hoped, therefore, that they would take the earliest opportunity to destroy this—the grossest delusion that was ever practised upon the country.
§ The resolution was agreed to.