§ The report of the committee of Ways and Means authorising the issue of 9,000,000l. of Exchequer-bills, to make good part of the supplies of the year, was brought up.
§ On the question that the resolution be read a second time,
complained of the high interest which was paid on Exchequer-bills, and he begged to call the attention of the right hon. Gentleman opposite to the subject. The Government was at this moment paying l¾d. per day interest on Exchequer-bills, which was equal to 2.¾ per cent, per annum. At the same time 861 money was not worth more than 1½ or 2 per cent., and good bills to any amount could be discounted at 1½ per cent. Common tradesmen's bills were discounted at 2 per cent. At this time Exchequer-bills were at a premium of 69s. or 70s., which was equal to 3½ per cent, or a higher sum than the interest of the bills. He thought that was conclusive evidence that the interest was much too high. It was a remarkable circumstance that the right hon. Gentleman the Chancellor of the Exchequer was paying a much higher interest now than was paid during the seven years, from 1831 to 1837 inclusive. Daring that time, 172,000,000l. of Exchequer-bills were issued at l½d. per day, which, together with the deficiency bills, amounting to 148,000,000l., making up a sum of 320,000,000l., were all kept in circulation at an interest of l½d. per day. One half per cent, was paid less then than now, although money was much higher in value at that time than at present. Lord Al thorp issued the bills at 1½d. per day, and his successor, Lord Monteagle, continued the same rate of interest. It was only in July, 1837, when, from particular circumstances, the value of money rose very considerably, and more than 5 percent, was paid for interest, that the interest of Exchequer-bills was raised. At that time the bullion in. the Bank did not exceed 4,000,000l., while at present it was upwards of 12,000,000l. He counselled the Chancellor of the Exchequer, therefore, to issue his Exchequer-bills at a lower rate of interest, and he would find it was much easier to raise the rate, if that were necessary, than to lower it. It would be better still were the Chancellor of the Exchequer to fund all the Exchequer-bills at the present price of consols, and he would save a large sum for interest. The right hon. Gentleman had already saved a sum of 262,000l. in that way; and if he funded all the Exchequer-bills he would save a larger sum. The country might save, too, all the expense of the department for issuing the bills, which amounted to 18,000l. a year, besides sundry other expences. Either the right hon. Gentleman should fund the whole of the Exchequer-bills, or he should reduce the interest to 1½d.; and he might reduce the interest to 1¼d. To continue the present system was throwing away the public money unnecessarily. Perhaps the right hon. Gentleman was afraid of the money dealers; 862 but there was no occasion for apprehension; they would gladly come into his terms. He hoped, therefore, that the right hon. Gentleman would reconsider this question, and issue a fresh notice. He would guarantee the right hon. Gentleman that he might issue any amount of bills he pleased at l½d. per day, and get the money for them.
§ The Chancellor of the Exchequer
observed that he had heard the same observations from the hon. Gentleman before, and the same recommendations. At this period, however, when the arrangements for the year were so far advanced, it was impossible those recommendations could be acted on. The hon. Gentleman had hardly done justice to him when he said that Lord Althorp had reduced the interest of Exchequer-bills, for he (the Chancellor of the Exchequer) had reduced it to the rate Lord Althorp found it at when he came into office. Before the interest could be reduced there was such a variety of circumstances to be taken into consideration, that it was not possible to say beforehand that the interest should be reduced. At the present time, be would repeat, it was impossible to take the hon. Gentleman's recommendations into consideration without disturbing all the financial arrangements for the year.
Resolution agreed to, and a bill accordingly was ordered to be brought in.
On the question that the Order of the Day for the House to go into a committee of supply be read,