HC Deb 08 March 1844 vol 73 cc729-55

House a Committee on the Three-and-a-Half per Cent. Annuities Acts.

The Chancellor of the Exchequer

The subject, Sir, which it is my duty to submit to the House is one which will be acknowledged by every one to be of very considerable importance. It involves the dealing with a large amount of the public debt. It is calculated to produce a great annual saving of the charge which the public incur on account of that debt; and if the House should be pleased to agree to the Measure which I shall submit to it, that Measure will tend, in my opinion, to raise the character and the power of this country by evincing the fact of her great resources, combined with a strict application of honour in the discharge of her national engagements. If I were for the first time calling upon the House to deal with a subject of this importance, I might think it necessary to enlarge upon the motives which justify me in making such a proposal as that which I am about to submit to the House. But I am not the first financial Minister of this country who has had to perform the pleasing task of recommending a similar arrangement to the House, and the principle upon which this arrangement proceeds is one so universally acknowledged by Statesmen of the greatest financial ability, and by men of every shade of political opinion—it has been so frequently recommended by Committees of this House, and so frequently acknowledged and confirmed by Parliament, that I feel myself relieved from the necessity which, upon such an occasion, might otherwise be imposed upon me of showing to the House the correctness of the principle upon which I ask it to proceed. My task is of a different nature. The propriety of thus affording relief to the public being acknowledged, the duty that devolves upon me is to satisfy the House that the time has arrived, and that the circumstances are favourable for accomplishing a reduction of the interest on the National Debt, which will produce a great public annual saving. It is in the discharge of that duty, then, that I now present myself to the House, and I beg their attention for a short period while I state to them the grounds upon which I conceive it to be trig duty to propose, and upon which I trust the House will think it their duty to concur in, the Measure which I shall submit to them. The proceeding I am about to recommend to the House, is to deal with a very large amount of debt—an amount of debt absolutely larger than any with which Parliament has ever been called upon to deal. It is a sum amounting to little less than 250,000,000l. of the National Debt. If it be considered relatively in its proportion to the whole amount of the debt, I cannot say that in that respect the amount is unprecedented, because when I look back to the first occasion on which a reduction of the annual interest was proposed to the House of Commons, by Mr. Pelham in the year 1749, I find that that Minister had to deal with a sum inferior in amount to the present, but with a sum which, compared with the existing debt of the country at the time, amounted to more than one-third of the whole amount of the then debt of the country. But, even at that early period, that able Minister, relying urn) the character and credit of the country, and upon the disposition of all its inhabitants to contribute to its true welfare, carried his arrangement into effect, without any difficulty, and with universal applause. I have alluded to the magnitude of the present operation, because I think that upon an occasion of this sort it is fitting that the House should have the whole case fully before them, and that in considering the circumstances under which the arrangement is to be made, they should be fully aware of the interests which are at stake, and which must form, in the eyes of every reflecting person, a main element in the consideration of the subject. I say, Sir, that the time has arrived in which this operation can be effected with safety and security to the public, and I think I may add, with every reasonable chance of success. In the first place I may, in proof of the reasonableness of that belief, allude to the general opinion of the country for some time past, that it is now the duty of the Government to undertake some operation of this kind. No man can have paid any attention to the organs of public opinion without seeing, in the midst of very varying views as to the course that ought to be pursued, one uniform expression of opinion that the time was not distant at which the interest on the debt would be susceptible of reduction. And that opinion thus generally expressed is confirmed by an attentive consideration of the present state of the money market of this country. I believe that there never was a period in the history of this country at which the amount of capital seeking employment was greater than it is at the present moment. That abundance of capital has resulted from various causes. It has been in a great degree the result of the large amount of capital which the industry of individuals in this country has in a series of years accumulated, and which has created an amount of wealth greater than prevails in any other country in the world. It is also owing, in a great degree, to that general discredit of foreign securities, and that uncertainty which has attended the payment of interest upon those securities, which has made British capitalists unwilling to invest their money in that way. It has been increased also by that confidence in the firmness of our securities, which has brought to this country not only the capital of her own children, produced on her own soil, but which has drawn to this great city the capital of other nations, seeking for that capital a safe investment. The evidence, indeed, of that abundance of capital is to be found in the prices which our securities bring at this moment, and in the interest which those securities afford to those who have invested their money in them. At the present moment Consols bear an interest of a little more than 3l. 1s. per cent., and Exchequer Bills produce the owner an interest scarcely exceeding 2l. 4s. per cent. And although if we look to private securities it must be admitted that the rate of interest to be derived from them is greater, as it naturally must be, than that derived from the public securities, yet having to deal with public securities, we are justified in referring rather to the value of those securities in the market than to the value of loans made by private individuals. But notwithstanding this favourable state of the money market at the present moment, it may, perhaps be said, that there are circumstances which should lead us to think that this abundance of money, and this facility of acquiring loans, are likely to be of a temporary character. But, Sir, when I look around me, and see the good understanding which prevails between this country and all Foreign Powers—when I see the continued influx into this country day by clay of capital from other countries, when I observe the revival of trade, of industry and of commerce in all parts of the world, when I see that the disturbing causes of war and tumult which had existed in distant countries are now effectually removed—and when above all, I recollect the energy and the industry of my countrymen in improving the opportunities which this altered state of circumstances affords—I cannot anticipate any reduction in the amount of capital to be employed at home, which should forbid the attempt, which I call upon the House to make, of relieving ourselves from a great annual charge. Sir, there is another essential element in the consideration of the period at which it may be proper to make changes like the present, and that is the state of the Revenue and the Expenditure of the country. I feel, Sir, what I am sure every Member who has turned his attention to this subject must feel, that a state which has not means adequate to defray its current expenditure by the resources it raises within the year, is not in a condition satisfactorily to deal with the debt which it may have to discharge. Its powers of dealing with any such subject are necessarily curtailed by the necessity of providing for the daily or the yearly service; and it must be compelled to forego advantages which, under a different state of things, it might be right and expedient that it should claim. I am happy to say, Sir,—and in saying it I am aware that I pay the highest tribute to the energy and the vigour of the House of Commons which I am now addressing—I am happy to say that by their exertions in the year 1842, and the determination which they evinced to place the Revenue of the country on a footing adequate to meet every exigency of the public service, they have placed themselves in a situation in which they may congratulate themselves that the Revenue of the country does somewhat more than equal its annual Expenditure. And they have thereby reaped the advantages which a firm adherence to the principle upon which they have acted is sure to give; that is, the effecting not a temporary reduction of the annual expenditure but a permanent reduction of that charge which bears most heavily upon the country. Sir, I have said that the income of the present year will, so far as I am at present enabled to calculate, more than suffice to meet the charges of the year. So far as we have had experience of the two last quarters this has been shown by documents already before the House; and the House will observe, moreover, in those documents this additional circumstance of congratulation, that not only have we before us the prospect of meeting every current expense but it will be found on a reference to that Paper I have a short time since had the honour to lay on the Table of the House, that whereas at the commencement of the year the balance in the Exchequer was about 1,400,000l., that balance was raised at the end of the last quarter to 4,700,000l. And every one must be conscious what great facilities for any important financial operation must be derived from that improvement in our situation, which, although far from making the Exchequer altogether independent of advances from other quarters, has, nevertheless, a direct operation on the amount of those advances and by diminishing interest on them gives greater energy and power to those to whom the Administration of the Financial Affairs of the country is confided. I am happy to be also enabled to state to the House, that speaking from the information which I now possess, there are no Deficiency Bills of the Bank unsatisfied. We are at this period of the quarter free from the incumbrance of those advances which have on former occasions been made by the Bank of England for the purpose of enabling the Government to meet the demands of the public service. I can state further to the House, that since the 5th of April last it has not been necessary on any one occasion to apply to the Bank for advances in anticipation of the Supplies voted by Parliament—a proceeding authorised by a Resolution of the Committee of Ways and Means, and which has under less favourable circumstances been essential to the carrying on of the business of the country. So far, therefore, as these floating incumbrances are concerned, which, however useful and advantageous in themselves, cripple the efforts of a Government in undertaking arrangements like the present, I can assure the House that from these incumbrances we are at the present moment free. I would also point the attention of the House to this circumstance, that the amount of the Unfunded Debt is one which, considering the great resources of this country, is of a very limited description—less, indeed, than on many antecedent occasions. After deducting the Exchequer Bills which are to be defrayed from the money to be derived from the Chinese contributions, the amount of the Exchequer Bills in circulation is between 18,000,000l. and 19,000,000l. only; they bear an interest, as I said before, not exceeding 2l. 4s. per cent.; and they are on this day at a premium in the market of 3l. 13s. per cent. Looking, therefore, at the whole state of our financial position—considering the wealth, the growing wealth, of this country, and its consequent accumulation of capital—considering that there is every prospect, humanly speaking, of a continuance of friendly relations between this country and Foreign Powers—considering that the Revenue has recovered from that temporary difficulty under which it had so long laboured—considering that we are free from those incumbrances of the unfunded or floating debt, which on former occasions had embarrassed the country, I think I have made out a case to the House which shows that the time has arrived at which it is the duty of those who have charge of the financial affairs of the country to make an attempt to reduce the interest upon the National Debt; and that moreover this is a time at which every reasonable man will admit that an attempt of the kind may be made with the greatest prospect of success. Sir, the debt with which we have to deal on this occasion amounts, as I before stated, to nearly 250,000,000l., and consists of four several kinds of stock. In the first place the stock of Three-and-a-Half per cent. originally created in 1818, was the foundation of the stock of this description amounting to 10,000,000. The next head of stock is the Reduced Three-and-a-Half per Cents, being the stock first established in the year 1760, and originally a Four per cent, stock, subsequently increased at different periods by several other loans and the funding of Exchequer Bills, but reduced in the year 1824, when the Earl of Ripon was Chancellor of the Exchequer, to Three-and-a-Half per Cent.; that debt amounts to 67,500,000l. The next stock is the New Three-and-a-Half per Cents. being the stock originally funded in the year 1784 at Five per cent., but which has, from the gradual progress of the growth of capital in this country, and the confidence entertained in its resources, undergone two several reductions; one in the year 1822, when Mr. Vansittart was Chancellor of the Exchequer, and the other in 1830, when I had the honour to hold the office I now fill, when it was reduced to Three-and-a-Half at which it has ever since remained. This stock amounts to 157,000,000l. The last stock is the one called the Old Three-and-a-Half per Cent. Stock, originally an Irish Stock, created in 1787, under various Acts of the Irish Parliament, from time to time augmented by additional sums that were added, making it amount to 14,600,000l. The amount of all these Stocks is 249,600,000l., or, in round numbers, nearly 250,000,000l., as I at first stated. It might certainly have been legally correct to have dealt separately with these several branches of Three-and-a-Half per Cent. Stock; but I conceive that principle, in itself legally correct, would have been in itself essentially unjust. I did not think it becoming in a great country like this to take advantage of one or two particular branches of Stock of smaller amount, and call on the proprietors who had invested their money in those funds to submit to a reduction which, from the smallness of the Stock, might more easily have been effected than on the whole. I, therefore, felt it my duty to bring a measure before the House, recommending, that the same rule should be applied to the whole, and that the reduction of interest should be made at once on all. With respect to these Stocks which I have enumerated, there is some difference in the circumstances in which they stand. With respect to three of them, they are absolutely at the disposal of Parliament; there is no guarantee existing to prevent Parliament from paying them off, or from offering a reduction of interest; no conditions which interfere with dealing with them in any way most expedient for the public. But there is one head of this Stock—namely, the Three-and-a-Half per Cents. of 1818, which stands in a somewhat different situation. When that Stock was created, the condition on which the holders of it advanced their money to the public was that they should have three benefits given them—first, a guarantee of interest up to April, 1829, a guarantee which, having been fulfilled, does not enter now into the consideration; another, that they should have six months' notice before any reduction or redemption of Stock; thirdly, that they should not be paid off in sums of less than 500,000l. at a time. In any arrangement, therefore, which I may submit to the House on this subject I am sure I shall carry the House along with me in adhering, to the letter, to the engagement then given, and in dealing with this stock in some way so as to produce a deduction in the annual interest, yet, in effecting that diminution, observing strictly, and to the letter, every existing engagement. Sir, if I look to the precedents for conducting operations of this description, I shall find at different times various modes of proceeding adopted. Advantages have been given to holders of a higher stock to induce them to accept a certain amount in a lower stock in many different forms. Sometimes these advantages were immediate, sometimes deferred; sometimes they were given in the shape of a pecuniary bonus, augmenting the capital of the debt; sometimes in augmenting the interest for a limited period; or sometimes—very frequently—nay, I may almost say the general advantage given has been by a guarantee against a further reduction for a cer- tain period after the reduction has taken place. Many plans, as the House, no doubt, is well aware, have been put forward in the organs which inform the public as to the best mode of effecting the present reduction; but I think the House will agree with me in thinking that they have only three courses open to them of dealing with stock of this description with a view to reduction. The first would be to give to every holder of 100l. in the Three-and-a-half per Cent. Stock an equivalent amount of Stock in the Three per Cents., adding thereby to the capital of the Stock created. Another plan very much entertained by the public, and on which much has been said in favour, is to create a Two-and-a-Half per Cent. Stock, and give the holder of every 100l. in the Three-and-a-Half per Cents. such an amount of the Two-and-Half Stock as shall produce an interest of 3l. per cent. per annum. The third plan agitated was to reduce them to a Three per cent. Stock through the medium of a Three-and-a-Quarter per cent. Stock, the object of all being to reduce the interest of Three-and-a-Half per cent. to Three per cent., the advantage in point of interest to the public being intended to be the same, but the mode by which it is to be effected being different according to the different Stock in which the change is to be made. It is impossible to deny that in each of these plans some advantages are to be found, and I doubt not that there will be found advocates of all these plans among those who will discuss the proposition which I am about to make. I think that before I state the plan which I wish the House to adopt, it would be right I should lay down the principles on which in reviewing these several plans, my decision had been guided. I think it my duty, as agent for the public debtor, to endeavour to secure to the public the greatest possible advantage which can be secured consistently with that due regard for the creditor which fairness and a sense of justice require. My first duty is undoubtedly to the public, whose servant I am; but I feel it is perfectly possible to reconcile that duty with the regard due to the interests of the individuals who have lent their money to the public. Another principle on which I am determined to act is this, that I do not think it would be just to purchase great present advantages to the country at the expense of burthens to be sustained by those who come after. I think with respect to debts incurred in cases of war, it is quite legitimate that posterity should bear their share of those burthens by which the Empire has been extended, or the liberties of the country, which they are hereafter to enjoy, preserved; but to incur additional debt in times of peace, and thus burthen those who are to come after us, with a view of obtaining a greater immediate relief for ourselves, is a course which I do say I myself reprobate, and I am sure, when I mention it, that I shall meet the general concurrence of those who hear me. Such being the principles on which I propose to act, and in which, I trust, the House will concur, I have to apply them to the plans which I have mentioned. It must be obvious to the House that if the Three-and-a-Half per Cents. are to be reduced to Three per cent., by giving an amount of Consols, it would be essentially necessary in that operation, as was done in 1822, to give a certain bonus in the Three per Cents, for the purpose of ensuring the conversion. Considering the present price of the funds and the necessity of endeavouring to secure the conversion, the country would have been obliged thereby to create an additional capital debt of from 10,000,000l. to 12,000,000l., the immediate result of which, to the public, would have been a saving of between 800,000l. and 900,000l. a-year. With respect to the second plan, to create a Two-and-a-Half per Cent. Stock, and give an equivalent in that so as to make it produce Three per cent, per annum, the augmentation of the capital of the debt must have been increased by such a plan not by 10,000,000l. but by 50,000,000l., and although the saving by that arrangement to the public would have been 1,200,000l. a year, yet on the principle which I have laid down, I do not think that saving would justify or compensate for an addition to the mass of our debt by a capital of 50,000,000l. to be paid hereafter; for, however, at the present moment, it may, in the opinion of some gentlemen, be a matter of utter indifference what may be the amount of a debt which already amounts 700,000,000l., and with respect to which persons may entertain very little prospect of ever paying it off, yet when we come to consider that a great nation like this may hereafter be engaged in wars and beset with difficulties, and under a necessity which might oblige it to recur to the money market of the country for the means of supporting those wars without ruin to the people, and to secure the preservation of the State, if we then weigh what would be the effect of 50,000,000l. or 60,000,000l. additional debt at such a moment, whatever may be their desire to effect an actual immediate saving of expense to the public, we shall see that to march on in such a course would be fatal to the permanent interest of the country. I, therefore, think it my duty altogether to discard these plans for procuring a large annual saving to the public by increasing the capital of the debt. The other plan then remains to be considered, which is to reduce the Three-and-a-Half per Cents. to Three per Cents., through the medium of a Three-and-a-quarter per cent. Stock. The result of that arrangement in the first instance, will, undoubtedly, be a diminished annual saving to the public; but against that is to be set the consideration that no increase of capital debt will be created, with this additional advantage, that there will be a future further reduction of the debt, which will secure, in due time, an increased advantage in point of annual revenue, an increased advantage so much the more valuable, because although it may not be brought to apply so immediately to the resources of the country, yet the country will receive the full value of the reduction, without any countervailing disadvantage. The plan which I shall propose to the House is, that every holder of Three-and-a-half per cent. Stock, shall receive a like amount of Three-and-a-quarter per cent. Stock, on which interest at the rate of Three-and-a-quarter per cent. per annum shall be paid until the 10th of October 1854, giving ten years during which Three-and-a-quarter will be payable on the Stock in question. I further propose, from and after that date, that the interest to be paid shall be at the rate of Three per cent. only, and that this Stock so being at Three per cent. shall be guaranteed against any further reduction for twenty years from and after that period, and the Stock, therefore, will remain at Three-and-a-quarter per cent. until October 1854, and from that date until the year 1874 at Three per cent. per annum, whatever may be the improvement in the market or whatever reductions may be applied to other portions of the National Debt. [Interruption, occasioned by many Members leaving the House.] I can hardly expect further attention at the hands of the House. The arrangements will be made in the mode in which similar arrangements have been made before, by allowing all persons, for a limited time, to express their dissent from the terms offered. With respect to that branch of Stock to which I have before alluded—namely, that of 1818, the proceedings will be different. I shall call on the House to resolve that that Stock shall be paid off at the date at which it is now legally liable to be paid off, unless the proprietors of the stock shall consent to accept the terms offered. The periods fixed will be those which have been fixed in analagous cases of reduction. In the instance of the three greater Stocks, the time allowed for dissent will be to the 23rd of March for England; for Europe to the 22nd of June: and out of Europe, to the the 1st of February, 1845. Under these arrangements, if I should succeed in carrying them into effect, the immediate saving to the public, beginning the 10th of next October, will be a sum of 625,000l. a-year; and in the year 1854, when the other reduction comes into operation, the public will farther have the benefit of a saving of 625,000l. a-year more, making a total saving of 1,250,000l. a-year, without any disturbance of the public interests or any augmentation of capital, and without resorting to any of those expedients which ought not, and which would not be justified by the situation of the country, and moreover, without throwing the bur-then on those who may come hereafter. I trust I have clearly explained to the House, the principles on which I intend to act. There is another important point connected with these arrangements which I think it necessary to state to the House, It is well known to those who have paid any attention to the finances of the country, that hitherto there has been considerable inconvenience experienced, an inconvenience affecting both the currency and credit of the country, from the great inequality of the payment of the interest of the debt which takes place at the different quarters of the year. At the present moment the amount of debt on which interest is paid in January and July amounts to nearly 534,000,000l., while the amount of the debt on which interest is paid in April and October is only 215,000,000l.; and this inequality necessarily produces great fluctuations in the issues of notes as the means of effect-Mg the payments. It is an inconvenience to the public interest and affects all the monetary transactions of the country. I have, therefore, thought it my duty in making the arrangements with respect to the general interest of this debt, to take the opportunity of equalising the payment so as to make them of nearly the same amount at the different quarters of the year, and I propose, for this reason, that the new Stock, part of which is now paid in January and July, and part in April and October, should, on and after this arrangement, be paid only in April and October, the parties whose dividends become due in July receiving a quarter's dividend in October; so that the whole debt, under the new arrangement, may start on the 10th of October. The consequence of the arrangement will be, that in the January and July quarters in future, the amount. of the debt on which the interest is paid will be 373,000,000l., and in April and October 376,000,000l., making as equal a division as, under the circumstances, can be accomplished, and thereby tending I believe sincerely, most materially to benefit the general interests of the country by equalising throughout the year the different payments and receipts. Sir, I know not that it is necessary for me to make any further explanation to the House of the objects which the resolutions which I shall put into your hands are calculated to carry into effect. I, therefore, in conclusion, can only say, that if it shall be my good fortune to carry through with success this measure of relief to the public from a great present burthen and from a future burthen equally onerous at the expiration of ten years, it will be to myself the most gratifying circumstance of my life that I have been enabled on two several occasions, in the year 1830 and in the present year—to recommend to Parliament measures with respect to reductions of the national debt, which meeting their approbation, and approved of by them, will, I believe, meet with the general approbation of the country. However I may feel a personal gratification with regard to this question, it is still more satisfactory to believe that this House will he the instrument for procuring for the country the great advantage of that reduction of the annual charge which is the contemplated result of the arrangements now before the House. But, great as this gratification will be, there is one still higher, which I feel, both as a Minister of the Crown and as an Englishman, and it is this—it will give an irrefragable proof of the extent of the resources of this country, and furnish to other nations an example of the benefits which result from a strict adherence to national faith, and the maintenance of the public credit, with the full knowledge that such an adherence will never fail to reap its reward. We in this country have had to struggle with great difficulties. We have been engaged in arduous contests. There have been moments when the minds of the bravest among us have quailed, and given way to little shout of despondency, reflecting on the difficulty of upholding the interests of the country, agitated by the pressure of taxation on those around us. But in times like these, we may well thank God that it never entered into the breast of Parliament to abandon the sacred principle of national faith. If we bore our burthens—heavy and sore as they were—it was under the confidence that honesty is the best policy. And now at a returning period of peace and tranquillity, we feel and we give to the world an example from which they may learn, that if in times of difficulty and danger they will look upon the maintenance of the public credit to be, as it is, the power and the strength of a country, the time may come when with universal approbation they may be enabled to afford real relief to their subjects, and to stand high among the nations of the earth. The hon. Gentleman concluded by moving the following resolutions:

  1. "1. Resolved, That all and every person and persons, bodies politic and corporate, who now is or are or hereafter may be interested in or entitled unto any part of the National Debt, redeemable by law, which now carries an interest after the rate of 3l. 10s. per centum per annum, and known in Ireland by the several names of 3l. 10s. per Centum Old Stock and Government Debentures, Irish 3l. 10s. per Centum Reduced Annuities, and New 3l. 10s. per Centum Annuities and Government Debentures, and known in Great Britain by the several names of 3l. 10s. per Centum Reduced Annuities, and New 3l. 10s. per Centum Annuities, the dividends of which are paid either at the Bank of England or at the Bank of Ireland respectively, and who shall not signify his, her, or their dissent in the manner hereinafter mentioned, shall for every 100l. of such 3l. 10s. per Genuine Annuities, or Government De- 743 bentures, receive for every 100l. of such 3l. 10s. per Centum Annuities or Government Debentures, 100l., in a new Stock, to be called '3l. 5s. per Centum Annuities,' which said Annuities shall continue to be paid at the rate of 3l. 5s. per centum per annum until the 10th day of October 1854; and from and after that date the said Annuities shall carry interest at the rate of 3l. per centum per annum, which said last-mentioned Annuities shall not be subject to reduction until from and after the 10th day of October 1874; and the dividends or interest of the said '3l. 5s. per Centum Annuities,' and 'New 3l. per Centum Annuities,' shall be paid and payable at the Bank of England, or at the Bank of Ireland, on the 5th day of April and the 10th day of October in each and every year; the first half yearly dividend on the said '3l. 5s. per Centum Annuities' shall be payable on the 5th day of April 1845; and that the said 3l. 5s. per Centum Annuities,' and the 'New 3l. per Centum Annuities,' respectively, shall be free from all taxes, charges, and impositions, in the like manner as the said 3l. 10s. per Centum Annuities.
  2. " 2. Resolved, That the Interest and Dividends payable in respect of the said '3l. 5 s. per Centum Annuities,' and New 3l. per Centum Annuities,' shall be charged and chargeable upon the Consolidated Fund of the United Kingdom of Great Britain and Ireland.
  3. " 3. Resolved, That all and every person and persons, bodies politic or corporate, who shall not, within the period commencing on Monday the 11th day of March 1844, and ending on Saturday the 23rd day of March 1844, both days inclusive, signify his, her, or their dissent from accepting and receiving a share in the said '3l. 5s. per Centum Annuities,' and 'New 3l. per Centum Annuities,' in lieu of his, her, or their respective shares in the before-mentioned 3l. 10s. per Centum Annuities or Government Debentures; in the manner hereinafter directed, shall be deemed and taken to have consented to accept and receive the same; Provided always, That if any proprietor or proprietors of the said 3l. 10s. per Centum Annuities shall not be within the limits of the United Kingdom at any time between Monday the 11th day of March 1844 and Saturday the 23rd day of March 1844, both days inclusive, but shall be in any other part of Europe, it shall be lawful for such proprietor or proprietors to signify such dissent at any time before the 2nd day of June 1844; and if any such proprietor or proprietors shall inn, at any time between the 11th day of March 1844 and the 2nd day of June 1844, be within any part of Europe, it shall be lawful for him, her or them to signify such dissent at any time before the 1st day of February 1845, such proprietor or proprietors proving to the satisfaction of the Governor or Deputy Governor of the Bank of England, or to the Governor or Deputy Governor of the Bank of 744 Ireland, according to the Bank in which his Annuities of 3l. 10s. per centum may be placed end the Dividends and Interest payable, his, tier, or their absence from the United Kingdom or out of Europe, as above specified, and that his, her, or their share or shares of such 3l. 10s. per Centum Annuities stood in his, her, or their name or names respectively on the 23rd day of March 1844, in the books of the Governor and Company of the Bank to which he shall signify his dissent; Provided, that such proprietor or proprietors, so absent from the United Kingdom or out of Europe, shall signify such his, her, or their dissent within ten days after his, her, or their return to the United Kingdom.
  4. "4. Resolved, That provision shall be made for paying off such proprietor or proprietors of any of the said 3l. 10s. per Centum Annuities before mentioned as shall signify his, her, or their dissent from accepting and receiving any share in the said '3l. 5s. per Centum Annuities,' and New 3l. per Centum Annuities,' in lieu thereof.
  5. " 5. Resolved, That all persons, bodies politic and corporate, possessed of any part of the before mentioned 3l. 10s. per Centum Annuities, and who shall desire to signify such dissent as aforesaid, shall, between the 11th day of March 1844, and the 23rd day of March 1844 both inclusive, by themselves, or some agent or agents for that purpose duly authorised, signify to the Governor and Company of the Bank of England, or to the Governor and Company of the Bank of Ireland respectively, in which their Capital Stock of 3l. 10s. per Centum Annuities may be placed, such dissent in writing, under his, her, or their hand or hands, together with the amount of his, her, or their respective shares in the said 3l. 10s. per Centum Annuities, and which said dissent shall be entered in a book or books, to be opened and kept by the said Governor and, Company of each of the said Banks for that purpose, and numbered in the order in which his, her, or their dissent shall be receive by the said Governor and Company of either of the said Banks; and in case of any transfer of such shares, or any part or parts thereof, after such dissent, the part or parts so transferred shall be entered in the said books under the same numbers as were fixed to such shares when the dissent was so signified; and every such dissentient proprietor or proprietors, or his, her, or their assigns, under such transfer, shall be paid off in such order and at such periods and in such manner as Parliament may direct.
  6. "6. Resolved, That every proprietor or proprietors of the said 3l. 10s. per Centum Annuities, the Dividends and Interest on which are payable the 5th day of April and the 10th day of October, shall receive the Dividends due thereupon for the half year up to the 10th day of October 1844, and no longer; and every proprietor or proprietors of the said 3l. 10s. per Centum Annuities, the Dividends and Interest on which are payable on the 5th 745 day of January and the alt day of July shall receive the Dividend due thereupon for the half year up to the 5th day of July 1844, and shall also receive one quarter's Dividend thereon up to the 10th day of October 1844, and no longer; and the several before mentioned 3l. 10s. per Centum Annuities shall be paid off or converted into 3l. 5s. per Centum Annuities, and New 3l. per Centum Annuities in manner aforesaid, from and after the 10th day of October 1844; and no transfer of any of the before mentioned 3l. 10s. per Centum Annuities to or from the books of the Governor and Company of the Bank of England, or to or from the books of the Governor and Company of the Bank of Ireland shall take place from and after the 6th day of March 1844.
  7. "7. Resolved, That all executors, administrators, guardians, and trustees, may signify such dissent in respect of such shares of any of the said 3l. 10s. per Centum Annuities, for the holding of which their names are made use of respectively; and all executors, administrators, guardians, and trustees, not signifying such dissent, shall be deemed to have assented as aforesaid, and shall be indemnified in respect thereof.
  8. "8. Resolved, That all and every person and persons, bodies politic and corporate, who now is or are or hereafter may be interested in, or entitled unto any part of the National Debt redeemable by Law, which now carries an Interest after the rate of 3l. 10s. per Centum per Annum, and is usually known. by the name of 3l. 10s. per Ceinum Anunities 1818,' the Dividends on which are payable at the Bank of England on the 5th day of April and 10th day of October in each year and who shall not signify his, tier, or their assent to accept 3l. 5s. per Centum Annuities, and New 3l. per Centum Annuities, upon the terms and in the manner hereinafter mentioned, shall on the 10th day of October 1844 receive the sum of 100l. for every 100l. of such 3l. 10s. per Centum Annuities, 1818, which may be then standing in his, her, or their name or names, and the said amount of capital of such Annuities shall from the said 10th day of October 1844, be considered as cancelled and paid off, and no interest shall from thenceforth accrue, or become payable thereon.
  9. "9. Resolved, That provision shall be made by this House for paying off such proprietor or proprietors of the said 3l. 10s. per Centum Annuities 1818, as shall not signify his, her, or their assent to accept and receive a share in 3l. 5s. per Centum Annuities and New 3l. per Centum Annuities in lieu thereof.
  10. " 10. Resolved, That all and every person or persons, bodies politic or corporate, who shall hold or be possessed of any such 3l. 10s. per Centum Annuities 1818, and who shall, on or before Saturday the 20th day of April 1844, signify in the manner hereafter directed his, her, or their assent to accept and receive 3l. 5s. per Centum Annuities, in lieu of his, 746 her, or their respective share or shares in the said:3l. 10s. per Centum Annuities 1318, shall, for every tool, of such 3l. 10s. per Centum Annuities 1818, receive 100l. in a New Stock to be called '3l. 5s. per Centum Annuities,' which said Annuities shall continue to be paid at the rate of 3l. 5s. per centum per annum, until the 10th day of October 1854, and from and after that date the said Annuities shall carry interest at the rate of 3l. per centum per annum, and shall be called New 3l. per Centum Annuities, which said last-mentioned Annuities shall not be subject to reduction until from and after the 10th day of October 1874; and the said 3l. 5s. per Centum Annuities, and the New 3l. per Centum Annuities, respectively, shall be free from all taxes, charges, and impositions, in the like manner as the said 3l. 10s. per Centum Annuities 1818; and the Dividends or Interest of the said 3l. 5s. per Centum Annuities, and New 3l. per Centum Annuities, shall be paid and payable at the Bank of England, or at the Bank of Ireland, on the 5th day of April and 10th day of October in each and every year: and the first half-yearly Dividend on the said 3l. 5s. per Centum Annuities shall be payable on the 5th day of April 1845,
  11. " 11. Resolved, That all and every person or persons, bodies politic or corporate, possessed of any part of the said 3l. 10s. per Centum Annuities 1818, and who shall desire to signify his, her, or their assent to receive the said 3l. 5s. per Centum Annuities and New 3l. per Centum Annuities, in lieu thereof, shall on or before the 20th day of April 1844, but within the usual hours of transacting business at the Bank of England, by themselves or some agent or agents for that purpose duly authorised, signify to the Governor and Company of the Bank of England such assent in writing under his, her, or their hand or hands, or the hand or hands of his, her, or their agent or agents, together with the amount of his, her, or their respective share or shares in the said 3l. 10s. per Centum Annuities 1818, and which said assent shall be entered in a book or books to be opened and kept by the said Governor and Company for that purpose; and in case of any transfer of such share or shares of such Annuities, or any part or parts thereof, after such assent, the part or parts of such Annuities so transferred shall be entered in the said book or books of the said Governor and Company separately from the said 3l. 10s. per Centum Annuities 1818, in respect of which no such assent shall be signified, and every such person or persons so assenting, or his, her, or their assigns, or the executors or administrators of such assigns, under any such transfer, shall, from the 10th day of October 1844, be entitled to 100l. of such 3l. 5s. per Centum Annuities and New 3l. per Centum Annuities, in lieu of every 100l. of their said 3l. 10s. per Centum Annuities 1818 Capital Stock: Provided always, that if any person or persons holding any such 3l. 10s. 747 per Centum Annuities 1818, shall not be within the limits of the United Kingdom at any time between the 11th and 23rd day of March 1844, both inclusive, but shall be in any other part of Europe, it shall be lawful for such person or persons to signify such assent at any time before the 1st day of July 1844; and if any such person or persons shall not at any time between the 11th day of March 1844, and the 1st day of July 1844, be within any part of Europe, it shall be lawful for him, her, or them to signify such assent at any time before the 1st day of February 1845, such person or persons proving to the satisfaction of the Governor or Deputy Governor of the Bank of England, his, her, or their absence from the United Kingdom, or out of Europe, as above specified, and that his, her, or their share or shares of such 3l. 10s. per Centum Annuities 1818 stood in his, her, or their name or names respectively, or in the name or names of any one or more trustee or trustees, on his, her, or their behalf in the hooks of the Governor and Company of the Bank of England, on the 23d day of March 1844; Provided also, that such person or persons so absent from the United Kingdom, or out of Europe, shall signify such his, her, or their assent, within ten days after his, her, or their return to the United Kingdom.
  12. "12. Resolved, That the Interest and Dividends payable in respect of the said 3l. 5s. per Centum Annuities and New 3l. per Centum Annuities shall be charged and chargeable upon, and shall be issued and paid out of, the Consolidated Fund of the United Kingdom of Great Britain and Ireland, on the 5th day of April and the 10th day of October in every year.
  13. " 13. Resolved, That every proprietor or proprietors of the said 3l. 10s. per Centum Annuities 1818, shall receive the Dividends of the said Annuities due thereon on the 10th day of October 1844, and no longer.
  14. "14. Resolved, That it shall be lawful for the Accountant General of the Courts of Chancery in England and Ireland respectively, and also for the Accountant General of the Court of Exchequer in Ireland, and for the Accountant in Bankruptcy in England, at any time before the 8th day of July 1844, to signify to the Governor and Company of the Bank of England, on behalf of any suitor or suitors, or others interested in any such 3l. 10s. per Centom Annuities 1818, standing in the names of such Accountants General and Accountant respectively, their assent to accept and receive shares in the said 3l. 5s. per Centum Annuities, and New 3l. per Centum Annuities, in lieu of all such 3l. 10s. per Centum Annuities 1818, standing in their names respectively; and the said Accountants General and Accountant respectively shall be fully indemnified against all actions, suits, and proceedings for and in respect of any action, matter, or thing done by them respectively in pursuance thereof.
    15. 748
  15. " 15. Resolved, That all executors, administrators, guardians, and trustees, may signify such assent at any time before the 20th day of April 1844, in respect of such shares of any of the said 3l. 10s. per Centum Annuities 1818, for the holding of which their names shall be made use of respectively, and shall be indemnified for giving such assent in respect thereof; and all executors, administrators, guardians, and trustees not signifying such assent, shall he deemed not to have assented as aforesaid, and shall be paid off accordingly."

Mr. F. T. Baring

would trouble the Committee with but a very few words in reference to the resolutions which had just been submitted. To the various matters introduced very properly by the right hon. the Chancellor of the Exchequer into the early part of his speech, he did not on that occasion think it necessary to turn his attention; he would, therefore, confine his observations to the proposal itself, and it was most gratifying to him to be enabled to say that he had heard that proposal stated with very great satisfaction. He should be sorry if in a question so important and so intimately connected with the public faith, the mere fact of their sitting on different sides of the House should occasion the slightest difference of opinion between himself and the right hon. Gentleman. Of course he confined his observations on that occasion to the principle upon which the right hon. Gentleman's plan proceeded. Whether the terms in which he proposed to carry out the scheme were inadequate to the performance of its duties or not, the holders of the stock would be the best judges, and must decide. The plan, so far as its principle went, and as it had been explained by the right hon. Gentleman, he was bound to say was in many respects most beneficial. The first great advantage of the plan was—that which had been stated by the right hon. Gentleman—that it did not create any additional debt. That in itself was a great public advantage. The Chancellor of the Exchequer had not stated, but it was only fair that he should state it, that the course which the right hon. Gentleman had taken was a very honest one for a Chancellor of the Exchequer to adopt, because he lost that advantage he might have obtained if he had made the reduction of the annual decrease take place immediately. He had however postponed it, though the contrary course would have been most convenient to the right hon. Gentleman—he had postponed the operation of his plan on conside- ration of public faith and public interests. The right hon. Gentleman had not referred to this circumstance, but he felt bound to do so in justice to the right hon. Gentleman. Another advantage was the manner in which the plan would operate on private individuals, who were holders of the stock with which it was proposed to deal. It would come rather sharp upon them if the full reduction of one half per cent. were made at once; but by reducing the interest one quarter per cent. in the first instance and another quarter in ten years hence, they reduced the incomes of private holders in the most convenient mode to them. There was one circumstance connected with this proceeding which had been referred to by the right hon. the Chancellor of the Exchequer, in regard to which he could not forbear the expression of the entire satisfaction and pleasure he felt, viz., that it would hold out not only to ourselves, but to other nations, a great practical lesson, that honesty and good faith, even under the greatest difficulties, had their pecuniary advantages as well as the more important and solid advantages resulting from the operation which such a course must necessarily have upon the good opinion and good feelings of the world. On the detailed plan of the right hon. Gentleman, he could not then, of course, give any opinion; he could only say that he most heartily wished him success.

Sir J. Rae Reid

was gratified at the tone in which the question was discussed, and felt that he should not do his duty towards the right hon. Member for Portsmouth (Sir F. Baring) if he did not congratulate him on the very handsome and liberal manner in which he had expressed his approval of the Government scheme, and he flattered himself that that feeling would be general. He was sure the holders of the Three-and-a-Half per Cents. would be gratified when they were informed of the manner in which the right hon. the Chancellor of the Exchequer proposed to deal with the subject. The plan, under all the circumstances, was, he thought, the most convenient that could be proposed, and he believed it would give almost universal satisfaction. He had once been accused of being a most sanguine individual. He had been accused of making use of a metaphor in speaking of the commercial and manufacturing distress which prevailed two years ago. He had said, that that distress was a mere passing cloud, and that the sunshine of prosperity would soon return. And now what was the state of the case? The bright star of hope was before them, and he was satisfied that ere long the country would arrive at prosperity and success.

Mr. P. M. Stewart

expressed his approbation of the manner in which the statement of the Chancellor of the Exchequer had been made. In the plan proposed, he thought the right hon. Gentleman had exercised not only a sound judgment, but a self-denial, which was highly creditable to him, in not taking advantages which he might have been expected to take. There was, however, one topic in the speech of the right hon. Gentleman which ought not to be passed over without some words of caution. He alluded to that portion of the right hon. Gentleman's speech in which he referred to the prospects of returning prosperity. The right hon. Gentleman could scarcely have forgotten the embarrassments which had followed the prosperity of 1824, and the disappointment of the sanguine expectations of the Chancellor of the Exchequer of that day, who, from talking so much about prospects of prosperity which were never realised, but utterly dispelled by the events of 1826, obtained for himself the Millie of "Prosperity Robinson." He hoped the present Chancellor of the Exchequer would nut allow himself to he misled in a similar way by appearances which might be equally deceptive. The circumstances which had enabled the right hon. Gentleman to propose an arrangement so beneficial to the public creditor, afforded no proof of the prosperous condition of the country to which the right hon. Gentleman had alluded. On the contrary, the present condition of the money market, he thought, was a proof of the falling off of our domestic and foreign trade, by which capitalists were induced to invest their money in the public funds. This it was that had increased the price of funds to such an amount as had enabled the Chancellor of the Exchequer to propose the arrangements behind submitted to.

Sir John Easthope

must apologise to the house for venturing to address to it any opinion of his upon such a question; but he could not refrain from expressing his approbation of the plan which the right hon. the Chancellor of the Exche- quer had propounded, and his cordial satisfaction at the unanimity with which it had been received; though he could not participate in the opinion of the hon. Member for Dover (Sir J. R. Reid), that the proposal would be accepted with delight by the holders of the stock. He congratulated the right hon. Gentleman, the Chancellor of the Exchequer in having proposed a plan which was at once most just, simple, and certain of success. Whether he referred to its justice—looking at the present state of the money market, and the circumstances of the country; to its clearness and simplicity, by being divested of all complexity in the manner in which it was to be carried into effect; or whether in regard to the acceptance which it was, from those circumstances, almost certain to receive in all quarters, he could not doubt that the plan would be perfectly successful. He therefore begged to congratulate the House and the right hon. Gentleman, independently of all party considerations, on his having devised a scheme so just and effective.

Mr. W. Williams

thought, that in the present condition of the money market, the terms proposed by the right hon. the Chancellor of the Exchequer were as liberal as could be expected; but his chief ground for approving of the scheme was, that it made no addition to the capital of the debt. On former occasions, when the interest on the public funds had been reduced, it had been usual to give a bonus to the holders, thus increasing the funded debt. This was a most objectionable proceeding; and he was glad it was not adopted in the present instance. From the commencement of the American war, in 1775, to the close of the French war in 1815, 589,000,000l. had been added to the capital of the debt. He would not make any comment on the course of the Government in bringing up Stock to its present rate, for he did not wish to say anything to disturb the unanimity which prevailed; but he thought the Chancellor of the Exchequer might propose another operation in finance, one which he (Mr. W. Williams) recommended some years ago, which would be attended with great public benefit, viz., a further reduction of the interest on Exchequer-bills, from 1½d. to 1¼d. a-day. At no former time had the premium on Exchequer-bills been higher than it was at present, in proportion to the rate of interest, and there could be no more appropriate time for making the reduction. He must join with the hon. Member who had last spoken, in cautioning the Chancellor of the Exchequer against indulging too far in the opinion that the existing indications of returning prosperity were likely to be permanent. The large quantity of gold in the Bank coffers, as compared with former years, was the consequence, not of the prosperity of the country, but of the recent operations in the gold coinage.

Mr. Alderman Thompson

said, all the great interests of the country were prospering. The trade of the country, both domestic and foreign, was improving in all directions, and the great accumulation of capital in the country he attributed not to the falling off in trade and commerce, so much as to the discredit with which the British public looked upon foreign securities; especially on North American stock, which for many years had been a favourite investment. He thought, too, that the hon. Gentleman (Mr. W. Williams) was mistaken as to the cause of there being so much bullion at the Bank; for it must be remembered that the ten millions of light sovereigns which had found their way to the Bank had been replaced by others of full weight and value. The large amount of capital, therefore, in the country, was in his opinion a consequence of the prosperity of our foreign trade. With regard to the proposition of the right hon. the Chancellor of the Exchequer, he must be permitted to tender his humble acknowledgment of its fairness, so far as regarded the stockholders; and fair also, as regarded the public debtor. He thought the right hon. Gentleman had acted most wisely when he saw the large amount of capital in the country, and the high rate at which the three-and-a-half stock stood, to reduce the interest, and that he had exercised a sound discretion in reducing the Three-and-a-half per cents. to three-and-a-quarter per cent., in the first instance, and to three per cent. at a future period, for if the full reduction were made at once, it would, without doubt, create some discontent and much confusion.

Mr. B. Hawes

said, the first question to be considered in reference to the proposal to reduce the interest on those securities, was whether it were made with justice to, and would meet with the perfect concur- rence of the parties concerned. He thought the right hon. Gentleman had vindicated his plan so far as its justice was concerned. The next question was whether it were a politic measure, and of that he thought there could be but little doubt. There was another part of the scheme which had not been adverted to by those hon. Gentlemen who had gone before him, viz., the arrangement proposed by the Chancellor of the Exchequer for the equalization of the dividends, which he considered of great value. He was addressing many hon. Gentlemen who were intimately connected with monetary transactions, and, he believed they would agree with him that that part of the measure, if proposed by itself, would have been accepted as a measure of great and peculiar advantage. The right hon. Gentleman, then, in introducing his measure had accompanied it by an arrangement which would confer an important and beneficial alteration in the system of apportioning the periodical payments. He fully concurred with what had fallen from the right hon. Member for Portsmouth; and he was quite sure the right hon. the Chancellor of the Exchequer would feel, after the manner in which this proposal had been met on that (the Opposition) side of the House, that whatever discussion might take place, he would be governed by a reference to the public interests only, and not by any wish to throw difficulties in the way of the Government; and he hoped the course now adopted would encourage the Chancellor of the Exchequer to believe that when he should have great and beneficial measures to propose, sound in principle and consistent with justice, no party or factious opposition would be found. Though he prided himself on being a party man, knowing that by combining with a party only could he hope to be of use to his country in that House, still, on matters relating to trade and commerce, or any other subject, when the Government propounded sound principles and acted on true policy, however strong his opinions might be on certain party questions, and however strong his predelictions in favour of the party with which he was connected, he trusted those opinions and predelictions would never operate to induce him to throw any difficulties in the way.

Mr. Warburton

joined in the congratulations which had been expressed at the turn the debate had taken, and at the saving which would result from the proposal when carried into effect. But while they were congratulating themselves that the money market was in a position to enable the Government to effect this operation, it ought to be recollected, that it was by the low rate of interest, which showed the low rate of profit obtained in trading and commercial transactions, which enabled the Chancellor of the Exchequer to succeed— —medio de fonte leporum Surgit amari aliquid.

Mr. Blewitt

was surprised the Chancellor of the Exchequer had not stated how he proposed to pay off the dissentient holders.

Mr. Ricardo

trusted the right hon. Gentleman would be prepared to pay off the Dissentients, should there be any. He approved of the plan the right hon. Gentleman had propounded, but it was possible that there might be some objection on the part of the holders, as the terms offered to them were not so favourable as they had been led to expect. He hoped, however, the right hon. Gentleman would be enabled to carry out the plan as he had proposed it. He wished to know how it was intended to levy the Income Tax on these annuities for the next ten years previous to the final reduction—whether it was to be taken as a permanent annuity, or a terminable one?

The Chancellor of the Exchequer

said, with regard to the Income Tax, it would apply as at present to the whole incomes of the holders; and those who derived their incomes from an interest of Three-and-a-Half Per Cent., would pay on what they received only as they did now on the Three-and-a-Half per Cent. He could not sit down without expressing his strong feeling of the great kindness with which the proposition had been received by the House. At the same time he was bound to say that it was nothing more than he had anticipated. For whatever the party warfare in which they had been engaged—as he hoped and believed for the benefit of the country—he must say that on all occasions where practical measures of this kind were proposed by the Government, the House was always disposed to receive them favourably and to consider them with fairness and attention. He again thanked the House for its unanimity, of which he was the mere sensible when he considered that that unanimity would secure to the public the advantages of the proposition.

Resolutions agreed to. House resumed.

On the Order of the Day for going into Committee of Supply, having been moved,

Mr. Sharman Crawford

presented a petition from Aberdeen, praying that the House, before going into Committee of Supply, should take measures for redressing the grievances of the people, and particularly for securing a full and fair representation of the people at large. The hon. Gentleman then presented similar petitions from Bridport, Darlington, and Galashiels.