§ The CHANCELLOR OF THE EXCHEQUER
said: I am about to take a course irregular in point of form, but necessary, in order to enable me to take, on Monday next, a step which I think it most desirable should be taken in the present state of the monetary concerns of this country; and I hope the feverish anxiety that prevails, not only in the metropolis, but in the country generally, will justify me in occupying, for a short time, the attention of the House, to state as precisely as I can what are the intentions of Her Majesty's Government. I need hardly state to the House that this subject has occupied the anxious consideration of the Government. My noble Friend and myself more especially have received from day to day numerous deputations and representations from various parts; we have been in constant, I may say hourly communication, with those parties whom we believe most able to afford accurate information and the best advice on the state of the money market, and the steps it might be necessary to take in consequence. The complaints and representations which have been made to us may be classed in two great divisions. Parties coming up from the country have urged that various steps should be taken, either directly by the Government, or by the Bank of England, guaranteed by the Government, all of which, when sifted, amounted cither to a repeal or a suspension of the present law by which the currency of the country is regulated. Now, Sir, I do not wish at the present moment to raise any discussion on that point—there will be another occasion when that question may 529 fairly be raised, if hon. Gentlemen choose. All that I think it necessary for me to say on the present occasion is, that this is a course which Her Majesty's Government are not prepared to adopt. Now, Sir, having made this declaration, I think it is only right I should state, that consistently with the maintenance of that law, we consider it most desirable that every facility should be given which can be legitimately and legally given to the public, and with that view that no demand on the part of the Government should be made which should possibly interfere with the accommodation to be given on good private securities to the extent the Bank may think itself justified in giving. It is just a week since I stated that I believed at that time the necessity for the stringent measures adopted by the Bank had ceased. I certainly was misunderstood when I was represented to have stated that the danger was over, for most un-undoubtedly I never used any expression that could bear that interpretation. I said, not as a matter of opinion, but of fact, that the necessity for stringent measures had ceased. In point of fact, on the two previous days the Bank had relaxed the stringency of its course; and it has, from that time forward, been enabled from its improved condition to continue giving facilities to the country within reasonable and moderate bounds. The last return shows a very much improved condition. Since last Saturday the Bank has received 400,000l. in gold and silver bullion, and the circulation of the country has been increased, nearly that amount of notes having been issued in exchange for gold and silver. Of course, I cannot interfere with the discretion which the Bank may think proper to exercise; but, so far as Government securities are concerned, it is desirable to place them in a proper condition, that they may be as available as they usually are for the purposes of those who hold them, and also to put the Exchequer in such a condition as to enable us to the utmost of our power to dispense with that extent of aid and assistance which, on all former occasions of quarter day, with a single exception, has been afforded to the Government by the Bank. Certainly, it does appear that the description of Government securities which at the present moment labour under the greatest depression are Exchequer-hills; and considerable anxiety exists as to the course Government will take as to that description of securities. I think it therefore desirable, al- 530 though the usual time for making any announcement on the subject has not arrived, with a view to calm the anxiety which prevails, I think it right to state to-night, that I shall, on the proper day, the 18th of May, give the usual notice for the exchange of Exchequer-bills, subject to the usual conditions. I think it, however, indispensable to raise the interest on Exchequer-bills, now far below the current rate given on other securities with which they compete; and, from the day in June on which the exchange takes place, the interest on all Exchequer-bills—whether exchangeable then or in March—will be at the rate of 3d. per diem. It is well known that it has been usual for the holders of Exchequer-bills to borrow money on depositing their bills; but considerable difficulty prevailed as to this mode of raising money during the late pressure. I am happy, however, to state that the Bank has, within the last few days, found itself in a condition to make advances of money on Exchequer-bills. It was made known to the brokers that the Bank was prepared to do so, and it has had no difficulty in complying with the whole demand made upon it to-day to the extent of 170,000l. The Bank is prepared to make these advances, not for any lengthened period, for that probably might let loose the rein indiscreetly; but it has advanced money on Exchequer-bills for short periods, and that accommodation to the public the Bank is in a condition to continue. With regard to the Exchequer, it certainly is exceedingly desirable that it should not he under the necessity of calling on the Bank to make large advances, unless indispensably necessary, which I hope it will not be, for the next quarter. That must, however, depend on the moneys paid into the Exchequer. Although the payments into the Exchequer have, during the last fortnight, partaken of the general monetary depression, I am happy to say that my right hon. Friend the Chairman of the Board of Customs informs me that for the last few days the payments have resumed their usual course. From other sources I learn that money matters in the city of London are much easier, and that the extremity of the pressure has passed off. The mode in which I propose to put the Exchequer in funds is by offering an inducement to those who have contributed to the loan to pay up their instalments. I have reason to believe that, in all probability, many of those who are contributors to the loan will be 531 disposed, on the allowance of discount, to pay up the whole or a portion of the instalments between this and the 20th day of July. What I propose, therefore, to do is, on Monday next to move that the House do resolve into a Committee, when I shall submit a resolution to authorize, by Act of Parliament, an advance of interest, by way of discount for prompt payments on the loan. Any person who shall pay up previously to Friday, the 18th of June, any portion of the instalments due subsequently to the day of payment shall receive discount at a given rate, calculated from the day on which the payment is made, up to the day on which the instalment is due—that is to say, if anybody pays up early in May the June instalments, he will receive a months' interest; if he pays the July instalment on the same day, he will receive two months' interest; if the August instalment, three months' interest; and so on. I have reason to hope that a considerable sum of money will be paid up in this way. Of course, on the amount so paid will depend the condition of the Exchequer; but, from what I hear, I have great hopes that the balances in the Exchequer will enable us next quarter to dispense with the usual assistance from the Bank. The right hon. Gentleman concluded by giving formal notice of the course, as stated above, to be taken on Monday next.