MR. J. B. SMITHsaid, that he saw, by an advertisement in the Gazette, that notice had been given for the paying off some Exchequer Bills. The interest on Exchequer Bills was now at the rate of 1½d. a day, or 2l. 15s. 7½d. per annum; while the premium on them was 63s. He understood that, from the state of the money market, if they were issued bearing interest at 1¼d. they would command a premium of 40s.; and if the interest was 1d., they would still be at a premium. The question, therefore, which he had to ask the right hon. Chancellor of the Exchequer was, whether the report was true that he was going to renew the Exchequer Bills at 1½d. a day? If so, perhaps the right hon. Gentleman would explain to the House why he was thus about to sacrifice 130,000l. per annum—that being the sum, on the whole amount of Exchequer Bills filed, between the rate at which they might be issued, and the rate at which they were about to be issued.
§ The CHANCELLOR OF THE EXCHEQUERreplied, that it was quite true that he was about to renew these Exchequer Bills at 1½d. per day. It had been suggested to him whether it might not be expedient to renew them at an interest below that rate; but, on the best consideration, he had come to the conclusion that that would not be a desirable course to take. The present was the lowest rate at which Exchequer Bills had ever ran, and he did not think it desirable that the interest on this description of security should be fluctuating, or should go up and down. More than that, he thought such a course as 836 that advised would tend to diminish in the Market the value of the securities, the character and credit of which it was most essential to maintain. The hon. Gentleman would also see that if he (the Chancellor of the Exchequer) were to take this step of reducing the interest further, the tendency would be to promote speculation in this direction in the market; arid, looking to what had taken place on other occasions, in consequence of such speculation, he did not believe that it would be desirable to produce such a result. Hon. Gentlemen might remember how much blame was attributed to the Government of Sir Robert Peel for lowering the rate of interest when the Bank Charter Act was renewed in 1844. In that year Exchequer Bills were 10s. premium more than at present; they rose so high as 79s. premium in the course of the year, and it was not thought advisable to lower the interest, and hence the charges of encouraging undue speculation made against the Government. He had resolved, therefore, not to impair the character of the security, and to prevent over-speculation. The hon. Member, too, had very much overrated the probable loss to the country on the Exchequer Bills.