HC Deb 28 July 1853 vol 129 cc890-913

Order for Committee read.

House in Committee.

The CHANCELLOR OF THE EXCHEQUER

Mr. Bouverie—The three Resolutions which I have laid upon the table will not require from me any lengthened statement. The first Resolution, I may say, explains itself. It is simply to enable me to make provision to charge upon the Consolidated Fund the sums which the public will be bound to pay in the month of January and the month of April next under the notices which have been given according to the statute passed in the present Session of Parliament. At the same time I shall be quite ready to enter into any further explanation of that Resolution which may be desired by any hon. Member. With respect to the second and third Resolutions, they will require a few words of explanation. The second Resolution provides that the South Sea Company may be permitted, within a time to be limited— To commute, if they shall think fit, such portion of the capital stock of the Company as stands in the names of the Accountant General of the Court of Chancery of England and Ireland respectively, and of the Accountant in Bankruptcy in England, and likewise such portion as stands in the names of trustees and others disabled from voting in the general Court of Proprietors of the said Company. As respects such portion of the stock as stands in the names of the Accountant General in Chancery and the Accountant in Bankruptcy, the reason for permitting to commute is probably sufficiently obvious to the Committee. It is because they were precluded from acting on the provisions of the late Statute, and it was thought unfair that they should be permanently deprived of any opportunity such as that which was afforded to private parties, or at least to persons who were masters of their own acts; whereas these were under the control of the Courts of Chancery and Bankruptcy. The reason of the postponement of the provision intended to operate in the case of those who were under the control of the Court was, that it was hoped it might be possible, even during the present Session, to introduce a measure which should have made a more extended alteration in the law with respect to Chancery and Bankruptcy accounts. The great mass of business, however, that has come before the House of Commons, has made it impossible for it to carry such a measure, and rendered it inexpedient, under the circumstances, to oppose it. That being so, I do not think it will be right, especially as a discussion took place upon this subject in another place, where a desire was expressed that some opening should be made for persons who had investments in the names of the Accountant General in Chancery and the Accountant in Bankruptcy, that it would be right to allow their case to remain entirely without provision until next year. But besides the stock that is held by the Accountant General in Chancery and by the Accountant in Bankruptcy, we propose to make a further provision in respect of such portion of South Sea Stock as held by trustees, or is otherwise held in joint names. The reason for that provision I will shortly explain. Those parties are the holders of more than a moiety the South Sea Company's Stock; but by law they were disabled from giving are vote upon the question whether the South Sea Company should commute or should take money for its stock. The consequence of this course was, that the question whether the South Sea Company should commute, or whether it should take money for its stock, was decided by the representatives of the smaller portion of the property. It was not, however, on account of that which might, perhaps, be called a technical anomaly, that the proposition would have been made if we had had reason to suppose that the cases of the sole holders of stock and of the joint holders were analogous. In point of fact, it is far otherwise. The joint holders are persons who, if they were paid off in money, would, in almost every case, be compelled immediately to reinvest. Being paid off in money, there fore, would be extremely inconvenient to them, and it would be a very hard case upon them that they should be subject to be so paid off in money without having had the opportunity or determining whether they would commute or whether they would not. And I may state that information has come to me from authentic sources that the generality of those trustees, or a large portion of them, were actually desirous to effect a commutation; but that, not being competent in law to take part in the proceedings of the Company, they were unable to give effect to their desire. I propose, therefore, to reopen the power of commutation for those parties—that is to say, for the joint holders of stock, being principally trustees who hold the stock of the South Sea Company. Besides those two classes of holders—namely, those whose stock stands in the names of the public accountants, and those who may be regarded as trustees—I propose by the third Resolution to make another provision founded upon a similar principle, but relating to a subject altogether new to the Committee, except to such Members of it as may possibly have paid attention to a private Bill now passing through this House. The fact was the South Sea Company has long, I believe, entertained a project for undertaking the office of voluntary trustees for all such parties as might be inclined to avail themselves of its services in private trusts, and charging a commission for those services. During the present year the resolution to pay off their stock has brought that intention on the part of the Company to a head; and the consequence has been, that after consulting the proper departments of the Government, they have introduced a Bill into Parliament, which is at present going through its stages, to enable them to become and to act as trustees on behalf of all persons who are inclined to avail themselves of their services. One of the clauses of that Bill requires that a certain guarantee fund, of not less than 300,000l., shall be kept by the Company in the public securities. That being so, it is obviously convenient that the South Sea Company should continue to hold in some public security by way of commutation, rather than that in respect of its stock it should be paid off, and be compelled to reinvest. In point of fact, about 2,500,000l., or more, may be said to be embraced within the scope of the second and third Resolutions; and the effect of those Resolutions will be to prevent the inconvenience of unnecessarily launching on the money market in the month of January next 2,500,000l. of money, and thereby producing an artificial and unnecessary redundancy of money to be absorbed again almost immediately by a necessary and obligatory purchase of stock. It is undoubtedly desirable, and also convenient, if that public stock is to be paid off, that the paying off should be restricted to the real liquidation of debt, and that there should be no actual paying off where the liquidation is merely nominal, and the reinvestment will follow immediately. That is the object of the second and third Resolutions. But there is one other point in those two Resolutions on which I must say a word. It may be observed by those hon. Members who have read them that I do not propose to confine the power of commutation under these Resolutions absolutely to the options which were opened under the Statute of the present year; because owing to the great change of circumstance which has taken place within the three or four months since the passing of those Resolutions by the House, the mere reopening of those options might very possibly be offering to the parties only an opportunity, which, in their views, judged and measured by present circumstances, would be quite valueless, and therefore would no take effect. I think that the disposition of the Committee would be to offer to those parties, if any offer at all is to be made to them, something which should be really equivalent to what those options were in tended and believed to be at the time that the former Resolutions were adopted by the House. In the present state of matters, with the uncertainty, partly of political affairs abroad, but especially with respect to the prospect of the harvest a home, it would be very difficult indeed to fix at the present moment upon any modified terms; and, besides, there would be a disadvantage, I think, in reopening the conditions of the late Act of Parliament in reference to the particular stock which it affected. Under these circumstances, it has appeared to me that the best course would be to ask Parliament to enable the Treasury to offer to those parties at it discretion, according to the state of the circumstances when the power shall have been given to it for the purpose, the liberty of availing themselves of the options afforded by the late Act of Parliament; or in case those options should not be satisfactory to the parties under existing circumstances, that the Treasury shall have the power of offering them stock of the description which is commonly called "3l. 5s. per centum annuities, 1844," that is the stock which was created by my right hon. Friend the Member for Cambridge University (Mr. Goulburn) in 1844. It is at present a 3¼ per cent stock, but within a single half year after the date fixed for liquidating the stocks which are the subject of the present Resolution, it will become a 3 per cent stock; and the only difference between it and Consols or Reduced will be, that it is a 3 per cent stock guaranteed for twenty years. That guarantee has considerable value in the eyes of the public, and that circumstance seems to point it out as the most convenient stock to be the subject of commutation in respect of these trustees. Perhaps it may be thought, if an option of this sort is to be given to these trustees, that it should likewise be given to all those who were embraced in the Act of the present Session. Well, but with regard to that, I think the Committee would act more wisely if they were to postpone for a while the consideration of that subject. I think, in the first place, it is quite plain that something is due to those trustees; that at the present moment we have done less for them than we have done for others; and that we ought without delay to do that which will place them upon, as nearly as possible, an equal footing with those who had certain options offered to them for the present year. This will not only be for the interest of the trustees, but for the interest of the public, as identified with the interest of the State, but it will be likewise for the interest of the trading public; because, as I have already stated, it is very advantageous with respect to the money market, and the conduct of trade in general, that we should avoid making an unnecessary redundancy of money in January next. Therefore I think that the reasons against the extension of the proposition at the present moment are conclusive. I think it is obvious that we cannot wisely and prudently fix by Resolutions the terms of commutation in 3¼ per cent stock that ought to be offered to those parties. If we could, the question would be a simple one; but, in the uncertainty of present circumstances, which are varying from week to week, I think that those terms cannot wisely be fixed by Resolution. I have no hesitation, therefore, in asking the Committee, looking at the limited scope of the transaction, to entrust the Treasury with the discretionary power of fixing the terms with regard to these particular parties, because the whole amount at issue is comparatively trifling; but I should feel great scruples in asking the Committee to authorise the Treasury to fix at its own discretion the terms on which an extended operation of the commutation might take place. For that rea- son, therefore, I am not prepared to propose any extension of the discretionary power beyond the narrow and limited sphere which I have referred to at the present moment. The wise course for the Committee to pursue, I think, will be this: Let us avail ourselves of the experience which we may gain by our dealing with these parties during the present autumn. We shall then be in a position to consider, at the opening of the next Session, what terms may deliberately, and with a fair prospect of success, be offered to the holders of stock generally, over a wider sphere, if the House should then be disposed to entertain the question. For these reasons, I think it wise to make the very limited and narrow proposition which I make to the Committee at the present moment, and to confine that proposition strictly within those limits. The right hon. Gentleman concluded by moving the first Resolution.

Motion made, and Question proposed— That provision be made, out of the Consolidated Fund of the United Kingdom of Great Britain and Ireland, for paying off the proprietors of the Capital Stocks of Old South Sea Annuities, New South Sea Annuities, Bank Annuities (1726), and 3l. per centum Annuities (1751), mentioned in an Act of the present Session, chapter twenty-three, in respect of which Assents to commute shall not have been signified according to the said Act, and also for paying to the South Sea Company a principal sum equal to the amount of the Trading or Capital Stock of the said Company, or the part thereof the Interest or Annuity on which shall not have been commuted or exchanged, according to the said Act, or any Act to be passed in the present Session of Parliament.

MR. DISRAELI

Sir, these Resolutions come rather suddenly upon the consideration of the Committee. I myself, certainly, not having had the advantage of being in the House yesterday, only learnt at a rather late hour this morning that it was the intention of the Chancellor of the Exchequer to call our attention to the consideration of this very important subject. This is to be regretted, because, although these Resolutions apparently have a limited scope, and seem, at first, to be composed with some simplicity, really, if examined, they will be found to involve very important considerations. In the first place, we must recollect that the stocks to the commutation of which those Resolutions particularly refer, form part of a great financial scheme that was brought before the consideration of the Committee, and the results of which were immediately to affect the Budget of the right hon. Gentleman for this year. The right hon. Gentleman estimated that this particular stock, or rather this group of small stocks which the Committee consented the right hon. Gentleman should deal with, would, if commuted, yield an estimated moderate surplus of 25,000l. a year by the operation. But by a larger commutation which he also introduced to our notice at that time, there would have been a saving upon the year, which would have been an element of the surplus of the Chancellor of the Exchequer, of not less in addition than, I think, 75,000l. The whole sum, therefore, which the Chancellor of the Exchequer estimated that he would immediately save by the scheme of commutation, and which saving was an element of his surplus, was not less than 100,000l. The ulterior effects of the scheme, however, which were estimated by the Chancellor of the Exchequer, were of a much larger amount and character. Nor is it indeed surprising that he should have indulged in those estimates, when we remember how great were the dimensions of the scheme which he brought under our notice, and which the House sanctioned. It was not at that time merely the intention of the Government to commute this group of small stocks, but they were to lay the foundation of an irredeemable 2½ per cent stock, irredeemable at least at the option of the holders—and they were also to sanction the circulation of what they were given to believe would be a very popular and current security—namely, Exchequer bonds. Originally when that plan was brought before the consideration of the Committee, the great mass of the public debt was contemplated as to be dealt with by the Government. There were subsequently limits applied to the various stocks; but I do not think that ultimately the suns which the Government intended to deal with was less than 90,000,000l. The Committee would do well to recollect that with regard to the foundation of the 2½ per cent stock, and the production of a very current and popular security in the shape of an Exchequer bond, the plans of the Government have been an entire failure. With regard to the third branch brought under our consideration, the one which was of lesser importance at the moment, and which is now at the end of the Session obliged again to be called to our attention, it is unnecessary for me to describe what has been the fate of that proposition, because the appearance of the Chancellor of the Exchequer before us with these Resolutions to-day is sufficient to show that the calculations on which that plan was framed and formed by the Chancellor of the Exchequer, have been most illusory. To those Resolutions referring to that proposition, I have now to call the attention of the Committee. Of course with reference to the first Resolution, it is unnecessary for me to say that I neither offer nor recommend opposition to it, because it is merely a declaration that the House of Commons will fulfil engagements which the public credit of the country demands. But I think the second Resolution will require considerable attention. In the first place, I very much object, when a proposition has really failed, to these schemes for continuing its operation, and bringing it to bear upon interests that before were not subjected to the option which it offered. It would be a very fair argument to use in favour of that portion of the stock of the South Sea Company which is in the hands of the Accountants General of the Courts of Chancery, or of the Accountant in Bankruptcy, or of trustees, if advantages had been enjoyed by those who were holders of that stock, but were not in that situation—it would be a very fair argument to say that those parties should not be debarred from participating in the same advantages. But what occurs to me is, that it has not been proved that those persons who are under the influence of trustees, or who are in the same position, have been debarred of any advantages whatever. The effect of the proposition as regards those holders of stock who are not under the influence of the Accountants General, or who are not under the regulation of trustees, is, I think, on the contrary, not such as to call upon us, on the principle of impartial justice, to extend the same options to persons who, before that arrangement of the law, were not empowered to avail themselves of that offer, The proposition, in short, has failed as regards the great mass of the funds, and, therefore, having so failed, we should make up our minds to conclude, on the best terms we can, an arrangement which has been so unfortunate: that, I think, would be the simplest and the best course for us to pursue. If we confine our consideration, in the first place, to the project of the right hon. Gentleman, as originally offered with respect to these persons, I do not see any fair prsspect that they would accept the options which have been refused by those whose property is not in trusteeship or in Chancery. I think that the prospect before us whether we look to the state of the harvest, or to the state of our foreign relations, is not so encouraging that we have a right to suppose that the money market would be in such a state in the course of this year, or before Parliament meets again, that those persons whose property is in trust or in Chancery would avail themselves of a new power which it is now proposed we should extend to them, and accept those options which already have been refused by what I should have thought was the larger portion of the holders of the funds at issue. Nor do I think that the right hon. Gentleman, from his tone to-day, anticipates, if the second Resolution had included those persons, that there would have been the slightest chance of any commutation taking place; and, therefore, the right hon. Gentleman introduces a novel element into that Resolution. First of all, he has extended the area of commutation by introducing a new stock; and then he has done that of which I confess I entirely disapprove, and which I trust the Committee will ponder well before they sanction—he has proposed that the power shall be granted to the Government—which is very unusual, if not unprecedented—of concluding at their own discretion the terms on which a proposition of financial commutation shall take place. If the former proposition of the Government on this subject had been successful—if they had shown such an acquaintance with the money market, and such a mastery of the phenomena with which they had to deal as would give them a right to appeal to our confidence—I confess that, as a matter of principle, I should hesitate even then before I would confide to a Government so great a degree of power, the possession of which by them I do not consider at all necessary. But I have a right to consider whether the antecedents of the Government are such as ought to entitle them to the confidence which they claim on tins subject. Looking at those antecedents, I cannot say, but I should hardly think, that the right hon. Gentleman or his Colleagues will prefer any claim for that unusual confidence on the ground of the success of their financial operations. Certainly, as far as I can form a judgment on this important subject of the commutation of the public funds, I do not think that their success has been such as that they can look back to it themselves with unlimited or unalloyed satisfaction or self-gratulation. The project, when first brought before us, was of very large dimensions. Before any discussion hardly could take place upon it, it was greatly altered and modified. The limitations which were proposed to the various kinds of stock which were brought under our consideration, varied from day to day, and the measures were hurried through this House because we were told that there was such eagerness to accept the commutation that we must waive our right of criticism—[The CHANCELLOR of the EXCHEQUER: Oh, no !] I certainly understood so from various Members of the Government, and I muse appeal to the Committee, and to those who are present, whether that was not the conclusion at which they also arrived? I confess, then, that I am rather surprises at the interruption of the right hon. Gentleman when I recalled to the recollection of the Committee the fact that I believe on discussion upon those important measure took place upon the principal occasions on which discussions do generally occur. On all those important stages, such as the second or third reading, upon which discussions do occur, none did take place, am the only debate of importance which I can recollect was upon an occasion when an important debate upon measures of the consequence seldom does occur. The debate which then arose took place because the right hon. Gentleman, no doubt animated by a high sense of duty, moved the second reading of the Bill at past midnight; and it now arises, upon another occasion, on which the right hon. Gentleman certainly offers some apology to the Committee, at a time when no one could expect that it would have been brought forward. It is not in my power to speak except generally upon this point, because as I said before, the question come very suddenly under our consideration; but feel confident that I am correct in the main in the representations I am making and that all those hon. Gentlemen who have taken an interest in this particular question can bear witness to the truth of what I am stating. I was pursuing some arguments, however, which the interruption of the right hon. Gentleman diverted me from. I think I was impressing upon the Committee two points: first, that is most unwise to extend to any Ministry the power of entering at their discretion into bargains of this kind; and secondly, I was, not I trust in language offensive to the right hon. Gentleman, reminding the Committee, and I thought I was only fulfilling my duty in so reminding them, that the antecedents of he present Government with respect to this question are not such as should make their case an exception to the rule which I ventured to impress upon the attention of the Committee. I think that we ought to resist such a discretion as they now ask for. Why is it to be granted? The right hon. Gentleman has made a proposition of a financial commutation, and has brought in a measure which has not succeeded. Well, it appears to me that the wisest course would be to conclude and to close that business as soon as possible. These persons must be paid, and they must be paid in money. Let us know what is the cost of the transaction. Let us learn that, instead of the "moderate saving of 25,000l. a year" (which I think were the very words used by the Chancellor of the Exchequer), there is to be a certain loss. Let us understand what that loss will be; and we shall then be better acquainted with the state of our finances. But, because the Government has made a proposition, and has brought forward a measure, and has carried a measure, which has turned out, as they were warned it would turn out, to be perfectly illusory and inefficient, it appears to be most unwise that at the end of the Session we should be patching up that scheme, entering into new speculations founded upon the same, as I think, erroneous and imperfect data, and asking the House of Commons to grant a power to the Administration which, when Parliament shall be prorogued, must leave the state of our finances, to a certain degree, in a condition of uncertainty and doubt. I said that the Government were warned of what would be the effect of their propositions. I shall not refer to any word that I said myself upon that subject, for I never have any wish to exaggerate the importance of anything that I may say in this House upon any subject; and the right hon. Gentleman may tell me that in any criticism which I offer I may have been influenced by those party feelings that are sometimes reprobated by Ministers when they think it convenient. But let me remind the Committee that my hon. Friend the Member for Huntingdon (Mr. T. Baring), no mean authority upon such a question, and not a Gentleman whose judgment can be supposed to be warped by too strong a feeling of political connexion—my hon. Friend took occasion to express his opinion to the House upon the whole of the financial propositions of the Ministry. He said, that in all these affairs you ought to consider, in the first place, the time; and, in the second place, the mode. He thought that the time was unfavourable for such propositions; and even if the time were favourable, he thought that the mode by which the end was sought to be attained, was extremely perplexed, unsatisfactory, and complicated. I think, though I speak from memory, that that is not an unfair account of what fell from the authoritative lips of my hon. Friend the Member for Huntingdon, with respect to the financial scheme of the right hon. Gentleman. Well, Sir, I say, therefore, that the right hon. Gentleman was fairly and thorougly warned of the result of his propositions. A return which I hold in my hand, places that result generally before the Committee. There is no 2½ per cent stock really established. We were informed that it was a great disadvantage to have a number of small stocks in the market, and we were told that we ought to have a 2½ per cent stock which should be in everybody's hands. Now, the fact is that if there is any 2½ per cent stock, it is in nobody's hands, because nobody has accepted these options, except some unfortunate persons whose property was in trust or whose consent has been given by their agents, in their absence, and in total ignorance of the nature of these transactions Then, inasmuch as the Government cannot bring their 2½ per cent stock into the market on the terms in which they purchased it, without incurring considerable loss, of course that 2½ per cent stock is limited, as its amount never appears. My hon. Friend the Member for Huntingdon said, that the time was unfortunate whet the right hon. Gentleman proposed his financial Resolutions. Well, Sir, the time was unfortunate. The right hon. Gentleman set about reducing the rate of the public interest in a falling market; and that brings me to the consideration of an important point, which mast not be lost sight of when Resolutions of this kind an brought before our notice, and that is, the state of the unfunded debt of the country at the present moment. It appears, from a return which I moved for, and which is on the table of the House, that that unfunded debt has been reduced to the amount, in round numbers, of 3,500,000l,; that in consequence of the reduction of the rate of interest on Exchequer bills, the Chancellor of the Exchequer had, in the month of June last, to meet from the public balances Exchequer bills to the amount of about 3,500,000l. He paid, I think, as well as I remember, about 3,170,000l. out of his balances at his bankers; about 360,000l. or 370,000l. he was relieved from by the commissioners of savings banks, and some small amount, I think 50,000l. or 60,000l., was discharged by liquidating a corresponding amount of the public debt. In round numbers, 3,500,000l. of Exchequer bills had to be liquidated in consequence of the Chancellor of the Exchequer's reducing, I think most imprudently, the interest upon that species of security—

The CHANCELLOR OF THE EXCHEQUER

The amount was 3,100,000l.

MR. DISRAELI

Well, 3,100,000l. out of the balances of the Exchequer. I think that we ought to know, especially when a discretionary power is asked by the Minister which will permit him to enter into pecuniary bargains for the commutation of stocks while Parliament is not sitting, what has been the effect of that reduction of the unfunded debt. I think we ought to know what is the state of the balances in the Exchequer. I think we ought to know, in fact, what is the balance at the Government bankers'. Those are points which I think the right hon. Gentleman ought to communicate. I think he ought to tell us—

The CHANCELLOR OF THE EXCHEQUER

Have you not seen the balance sheet?

MR. DISRAELI

Yes, I have seen the balance sheet; but there are many things in balance sheets which are not known to the world, and which, I think, ought to be mentioned in discussion. Many persons do not see balance sheets, and in a popular assembly, when we are touching upon subjects of this nature, it is quite legitimate to take the opportunity of bringing, and frequently bringing, the most salient and important facts before the public in general. I thought it possible that the right hon. Gentleman would have favoured us with some observations upon these points, and that he would have contradicted me in my statements if I were erroneous in my recollection. But there is one point which we shall not find even in the balance sheet, and that is the intention of the Chancellor of the Exchequer with regard to the unfunded debt in future, and especially in the interval during which that important power is sought to be exercised by the Government; in fact, I will not say "interval," because, if I understand the Resolution correctly, the Government are asking to be entrusted with unlimited discretionary power. Unless I mistake the language of the Resolution, they are at all times to be entrusted, so far as these funds are concerned, with the power of making bargains on the part of the public with respect to the commutation of stock. Then, I want to know, during that time, what are their views? I do not want to bind them to any specific pledge; but what are their views, with regard to the interest that will be paid upon the unfunded debt? The unfunded debt is now reduced by a very large amount—to an extent which I should myself suppose, but of course the Chancellor of the Exchequer can inform us—somewhat inconvenient to the transaction of the public business of the country. 3,500,000l. of Exchequer bills cannot well be taken out of a market—and a market where Exchequer bills do not at the present moment pay an interest which keeps them at that rate at which the Chancellor of the Exchequer ought to feel comfortable—without, I should think, considerable inconvenience. I say, then, that such a transaction violating the principle on which the unfunded debt ought to be managed, cannot take place without seriously affecting the Minister who has the discretionary power of fixing the terms on which the commutation of any stock is to occur. That, therefore, is a subject on which I think we ought to insist on some explanation from the Minister before we proceed with the consideration of the second Resolution. The first Resolution is, I believe, the only one at present before us. If I am right in my interpretation of the first Resolution, I should not think that any one would offer any opposition to it. But I have felt bound to make some comments upon the second Resolution, which I hope are not altogether unworthy of the attention of the Committee. I think they ought to consider, in the first place, whether, this plan having failed, it is expedient in any way to continue it; and, in the second place, if it be expedient in any way to continue it, whether it is wise to increase the area of commutation by bringing in a new stock, and then leaving to the Minister, who has failed in his original project, the unprecedented power of settling the terms on which future commutations shall take place. These are the principal points which strike me on reading these Resolutions.

SIR HENRY WILLOUGHBY

said, he would not discuss the second Resolution until it should be put from the Chair; but he should be glad if the Chancellor of the Exchequer could inform him what would be the extent of the charge upon the Consolidated Fund arising out of the proposed plan?

The CHANCELLOR OF THE EXCHEQUER

said, that it was not very easy to answer the question of the hon. Baronet without answering at the same time the speech of the right hon. Gentleman (Mr. Disraeli). If the hon. Baronet meant by the "charge" the loss which the country would suffer, and which the right hon. Gentleman had spoken of as a certain loss, without at all putting his authority in competition with that of the right hon. Gentleman, he ventured to say that there would be no loss, but a considerable gain in consequence of the operation of the plan as it stood at the present moment.

SIR FITZROY KELLY

said, he wished to know what amount would be required to pay off those persons who assented to the commutation of the South Sea Stock?

The CHANCELLOR OF THE EXCHEQUER

said, that the total amount which might have to be provided for upon the 5th of January would be 6,100,000l.; and the total amount, assuming that the trustees affected by the second and third Resolutions accepted the commutation, would be in round numbers about 3,500,000l. or rather less. The maximum amount therefore would be 6,100,000l.; and the minimum amount 3,500,000l.

SIR FITZROY KELLY

wished to know whether the 6,100,000l. was arrived at after deducting all that was commuted already into new stock?

The CHANCELLOR OF THE EXCHEQUER

Certainly.

MR. W. WILLIAMS

said, that although the right hon. Gentleman opposite (Mr. Disraeli) had characterised the plan of the right hon. Gentleman the Chancellor of the Exchequer, so far as it had been carried out, as a failure, he contended that no human wisdom could have foreseen the events which had taken place since that proposition had been submitted to Parliament. Whatever want of success there had been in the measures of the Government, he did not attribute it to any deficiency of talent in the right hon. Gentleman.

MR. WILKINSON

said, that grateful as he was to the Chancellor of the Exchequer for his scheme of finance generally, he must say, in justice to Gentlemen op- posite who objected to this part of the plan, that the result had been the failure which they expected and predicted. What his hon. Friend (Mr. Williams) had said with reference to the occurrence of events which could not be foreseen, was no doubt true; but, nevertheless, there was very little difference in the prices of stock now compared with what they were when the right hon. Gentleman brought forward his scheme. The mistake into which the Chancellor of the Exchequer had fallen was, that he had made an attempt to pay off the interest on the debt at a time when the market rate would not properly allow it. He thought the right hon. Gentleman should only ask for leave to raise money for the particular purpose for which it was now required, and not ask for such extensive powers as were involved in these Resolutions.

SIR FITZROY KELLY

said, that in agreeing to the first Resolution he could not accept the statement of the Chancellor of the Exchequer as to the amount that would be charged upon the Consolidated Fund. According to the best calculation he could make, the amount to be paid off would be between 9,000,000l. and 10,000,000l. About 2,000,000l. had been already paid off, so that the entire sum would be somewhere about 8,000,000l.; but, whether it was 6,000,000l. or 8,000,000l., the faith of Parliament was now pledged to pay off the stock at par, and on this ground only he would offer no opposition to the Resolution.

SIR HENRY WILLOUGHBY

said, he would like to know the exact amount that would fall on the Consolidated Fund. So far as he could make out, it would be 9,500,000l., but the right hon. Gentleman called it 6,100,000l.

The CHANCELLOR OF THE EXCHEQUER

said, there was no practical difference between them. He now asked the Committee to make arrangements with respect to payments due on the 5th of January next. He did not ask them to make arrangements with respect to payments that would become due at a period after the meeting of Parliament next Session. These the House would consider when the proper time came. There was a portion of payments due on the 5th of April, in addition to what were due on the 5th of January, and that portion constituted the difference between the hon. Baronet's statement and his own. That difference was about in round numbers 2,000,000l. The maximum amount, as he had previously stated, payable on the 5th of 6,100,000l.; the minimumamount payable was 3,500,000.

Resolution agreed to.

The CHANCELLOR OF THE EXCHEQUER

said, he would now propose the Second Resolution.

Motion made, and. Question proposed— That the South Sea Company shall be permitted to commute, within a time to be limited, all or any part of the Annuity or Interest on their Trading or Capital Stock, payable in respect of shares in such stock standing in the names of the Accountant General of the Courts of Chancery of England and Ireland, respectively, and of the Accountant in Bankruptcy in England, and in the names of Trustees and others disabled from voting in the General Court of Proprietors of the said Company, into or for any one or more of the stocks and securities authorised to be created and issued by the Act of the present Session, chapter twenty-three, and the 3l. 5s. per Centum Annuities, and New 3l. per Centum Annuities, created under the Acts of the seventh year of Her Majesty, chapters four and five, commonly called and known as 3l. 5s. per Centum Annuities (1844), such commutation into or for the said stocks and securities authorised to be created and issued by the said Act of the present Session, to be upon the terms and subject to the conditions upon and subject to which the like commutation was authorised under the said Act, and such commutation into or for the said 3l. 5s. per Centum Annuities (1844), to be upon such terms and subject to such conditions as the Commissioners of Her Majesty's Treasury may see fit to offer, provided that the assent of the said Company to any such commutation shall be signified to the said Commissioners of the Treasury within such time as may be limited by such Commissioners for that purpose.

MR. J. B. SMITH

said, that in consequence of the Resolutions not being in the hands of Members earlier, he was not so fully prepared to speak on them as he might otherwise have been. He was satisfied, however, that the second Resolution was very objectionable. In the first place, as the right hon. Gentleman opposite (Mr. Disraeli) had said, an option was given to the holders of South Sea Stock of converting it into other stocks, which they had already had the option of doing, but which they had refused. Where was the use of making this offer a second time? [The CHANCELLOR of the EXCHEQUER: That is not so.] Was it not so? Then, this was a consequence of not having had time to consider the Resolutions previously to their being called upon to speak on them. He had understood that they were to have the option of accepting the 2½ per cent stock, and that failing, the Treasury were to have the power to make a bargain with them to accept 3½ per cent. He objected altogether to leaving it to the Treasury to make a second bargain with parties who had already had an opportunity of accepting one. How could they tell whether the holders of this stock would accede to any proposition of the Government? Suppose they did not accept it, they would be in a position to dictate their own terms. It appeared to him that the principle was a false one, that when they made an offer to the holders of stock, and they refused that offer, the Government should be bound to pay them off in the way now proposed. The Government, it was clear, must now get the money in the best way they could. About 3,000,000l. of Exchequer bills had been paid off, and there remained 6,000,000l. to be paid. Now, if the right hon. Gentleman would issue Exchequer bills to that amount, he might have to raise the interest, perhaps, from 1d. to 1¼d. a day, but even that would be a better measure than he had proposed, as it would be only temporary. He protested, however, altogether against the principle of making second bargain with parties who had had the option already of taking a particular course. The parties knew well that when they refused in one case they would obtain better terms in another; and was it likely, in such circumstances, that with respect to the 500,000,000l. of public debt with which they had to deal, they would have any chance of making really good terms? He should therefore feel it his duty to vote against the second Resolution.

MR. JOHN M'GREGOR

said, he thought the hon. Gentleman who had just spoken, was very greatly mistaken as to the operations that would take place under this Resolution. As to a bargain having been made before, it should be recollected that that bargain was made under peculiar circumstances. At the time the Chancellor of the Exchequer proposed his measure to the House, the funds were rising, and the greatest unanimity was felt with regard to those measures both in London and elsewhere; and to his knowledge great sums had been transferred into the bankers' hands for the purpose of taking advantage of them. But soon after, political matters on the Continent, and other questions, gave a different tendency to the money market, and, though money was abundant, the same desire for investing did not exist as at the time when the right hon. Gentleman proposed his measures. Now, looking at the whole of the financial measures of the Government, and looking at the prospect of a not favourable harvest, he thought this Resolution was by no means either unwise or impracticable, and he should certainly vote for it. Unless they gave a discretionary power to the Chancellor of the Exchequer in these matters, his hands would be so tied up that he would be unable to do the best that his judgment suggested.

SIR FITZROY KELLY

said, the first Resolution had been allowed to pass on his side of the House without objection; but the right hon. Gentleman the Chancellor of the Exchequer would perhaps permit him to suggest that the language of that Resolution extended to a remoter period than he had intimated, and that it included the 5th of April well as as the 5th of January, to which he intended to limit its operation. Perhaps, therefore, the right hon. Gentleman would so far modify the terms of the Resolution as to make it accord with the statement which he had made. With regard to the second Resolution, he felt it his duty to oppose it in every possible way. He would also take an early opportunity of bringing under the notice of the House the question involved in the Act of Parliament which had already been referred to. He begged, however, to call the attention of the Committee to the real question involved, which was, whether Parliament would confer on a body who stood in the situation of trustees for those who had no power to act, or even to speak for themselves, the power to meet the views of the Government in such a manner as to sacrifice very largely the interests of those for whom they acted as trustees? He thought the right hon. Gentleman could not have fully considered the extent of the matter. The parties were not free agents. The Company, as trustees, were to have power to commute, and the holders were to be consulted as free agents. The Committee were called upon a few hours' notice to confer on the South Sea Company the power of commuting certain stocks, and stocks standing in the hands of the Accountants General; and if these stocks were not the property of parties who had the misfortune to have their affairs in the Court of Chancery or Court of Bankruptcy, he did not know to what stocks the Resolution applied. If they applied to these stocks, then he was satisfied the Committee ought never to agree to the second Resolution. But, whatever the class of persons to which the stocks might refer, he opposed the Resolution on the ground that it was not just or right to convert stocks in the way proposed without the consent or sanction of the pro- prietors of that stock. What was the history of their legislation on this question There were certain stocks denominates small or minor stocks, involving somewhere about 10,000,000l., with which in the early part of the Session they were asked to deal, and it was declared by the Chancellor of the Exchequer to be expedient that those stocks should be paid off. Accordingly, the consent of the House was given to a Bill to enable the Government to cancel those stocks, and this in spite of the warning voice of the hon. Member for Huntingdon (Mr. T. Baring) and others, that the moment chosen for this operation was a most unfortunate one. He could no blame the Government for events that had since occurred, and which probably they did not anticipate. At the moment, too when the scheme was proposed, the market was perhaps a rising one; but during the progress of the measure through the House things occurred that suggested some doubts whether the moment chosen by the Government for effecting their object was a right one. However, the Bill was passed, and the consequence was that the right hon. Gentleman had to pay off every 100l. stock with 100l. sterling, stock being at the time above par, while at this moment the same stock was not worth more than 98l. or 99l. in the market. So that of the 8,000,000l. to be paid off in January, there was a loss of at least for 2 per cent, because the right hon. Gentleman had chosen a wrong time to make this operation. But, passing to the other provisions of the Bill, which were now applied to an altogether new case, he would say that if the right hon. Gentleman had contented himself, when the Bill was brought forward, with the payment of the South Sea and other minor stocks, and to raising a sufficient sum for that purpose, little observation would have been necessary then, and none would been required now. But the right hon. Gentleman, who seemed to have the idea that he was destined to carry out some gigantic measure of finance, involving sooner or later the extinction of the whole national debs of the country, proposed to add to his scheme a project of creating a 2½ per cent stock, 3½ per cent, and Exchequer bonds. The right hon. Gentleman, instead of confining his operation to the paying off of a certain amount of national debt, in a certain way, and raising money to pay off that portion of the debt, took upon himself the impossible task of determining not the exact, but the fair value in the market of three new and untried stocks. The two stocks were complicated in their conception, and the new Exchequer bonds had not yet been tried. The right hon. Gentleman, instead of ascertaining as had always been adopted by the Minister of the day in similar cases, their value by tender, took upon himself to fix the value himself. At the time, some hon. Members on his side of the House ventured to tell the right hon. Gentleman that if his proposal were accepted, it would bring about a losing and disadvantageous bargain for the public, should stocks be above par; if not, then the whole scheme would fall to the ground, because it would not be accepted. It was pointed out at the time that mischief would ensue if such elements of disturbance were introduced into the money market. He would not repeat the arguments by which the opposition to the measure was supported; he would only just ask the Committee to see the practical result of the operation. It was impossible to say, if the funds had remained about par, as they were when the Bill was brought forward, what might have been the effect of the 2½ per cent stock on the public, He was inclined to think that a larger sum—not 40,000,000l., but about 20,000,000l.—would have been accepted by the public; but the amount taken had been so insignificant, in consequence of the funds falling, as to be scarcely worth a consideration. Those who had accepted the 2½ per cent stock had done so, because they trusted too implicitly to the statements of the right hon. Gentleman; and with regard to the other stocks, the small portion that had been taken, he would leave the right hon. Gentleman to say in what position those parties were now placed. He hoped the right hon. Gentleman would tell the Committee what he thought the 100l. of these stocks worth now? If the new holders were to sell, what would they get for this change? Such, then, was the entire failure of the scheme—such the condition of these new stocks, that the stocks were now unheard of in the market; they were a dead letter in the market, and their very existence was ignored. He was sure that the owner of 100l. sterling of these new stocks could not obtain more than 93l. in the market. In consequence, therefore, of holding out to the public that 100l. of the new stock was worth as much as 100l. of the old stock, the right hon. Gentleman had induced many to buy the new stocks, and trustees to buy for others, and thus to lose 7 per cent. And why did he allude to this? Because by the present Resolution the same vicious and losing principle was to be compulsorily extended to another class of stockholders. There was no means of knowing from the words of the Resolution to what particular class of stocks, and to what amount, it was limited. It was clear, however, there was a class of persons who under the Act recently passed had no power to convert their stock. But the meaning and effect of the Resolution was, that the holders of stock in the hands of the Court of Chancery and Court of Bankruptcy were to have their stocks arbitrarily commuted. He now came to another part of this Resolution, with regard to which he thought the Committee were entitled to some explanation. Government invited other classes of trustees to sacrifice the property of their cestuique trusts by this newly proposed stock. There was now one class of persons, whose stock being in the name of the Accountant Generals in Chancery or Bankruptcy, could not be converted. But the South Sea Company were now to be permitted to commute it, and those persons were to receive not 100l. sterling, but 2½ per cent or 3½ per cent stock, or Exchequer bonds—the per cent fetching only 93l., the 3½ per cent 91l., and the Exchequer bonds 90l. That was all they were to receive for 100l. Was that the way to deal with persons who could not help themselves? Would Parliament be a party to such an act of obvious injustice? And whether the parties were small holders or large, few or many, the Resolution was neither more nor less than to give a power to the South Sea Company to compel parties to commute one stock for a stock of less market value, He thought the right hon. Gentleman ought to have explained his views more clearly when he brought forward his Resolutions, for certainly at this moment he could not fully comprehend their purport and probable effect. There was, it was true, another option—that the holders were to have the value, which value was to be hereafter fixed, of the 3¼ per cent stock. So then, that class of persons who had lost eight or nine per cent in taking the 2½ per cent stock, were to be compelled to put up with their loss. But in order to induce the new class of victims to come forward, the advantage was offered of giving them the option of the money price of the 3¼ per cent stock. He objected to the Resolution, first, on the ground of the con- verting of good stocks into 2½ and 3¼ stock, or the Exchequer bonds, being an attempt to induce persons to incur a loss, and at the same time to conceal that loss from them. The proposal was unbecoming on the part of Government, as it in effect confiscated a portion of the property of those who might be induced to accept the proposal. He should oppose every stage both of the Resolution and the Bill which gave the South Sea Company the power of converting into this stock. He objected also to that part of the clause in which the Government claimed the confidence of the House with regard to the terms they would be able to effect. As to the 3½ per cents, he admitted that the calculation of the right hon. Gentleman was as nearly correct as it could be under the circumstances; but he saw nothing to induce him to leave to the judgment of the Government the amount to which the holders of this stock were to be compensated.

The CHANCELLOR OF THE EXCHEQUER

said, it was a matter of great regret and concern to him that he had been prevented by circumstances from paying the respect that was due to that House, and he must say the justice that was due to the Government and to himself, by replying on that occasion, and on the discussion of these Resolutions, to an attack which had been made by the right hon. Gentleman opposite (Mr. Disraeli), and by the hon. and learned Gentleman who had just sat down, upon the Government, not with reference to these Resolutions merely, but with reference to an Act of the present Session, and to the whole financial policy taken by the Government. That at this moment was totally impossible. [It was now within a minute or two of four o'clock, the hour of adjournment.] He hoped, however, that it might be possible, in the course of the present evening—if at all in conformity with the rules of the House—to resume that discussion, when he should show his respect to the Committee by replying to the statements to which they had listened. He would only say that he fully recognised the reasonableness of the demand for time to give full consideration to Resolutions like the present; and he might state that he came down to the House at six o'clock on Tuesday, with the intention of announcing these Resolutions for the present day—a notice of two days, being precisely the same notice that was given by the right hon. Gentleman the Member for Cambridge Univer- sity, in 1844, when he proposed to convert 250,000,000l. of stock; but the counting out of the House on that evening prevented him carrying out his intention. He could assure the hon. Member behind him (Mr. J. E. Smith), that he would have concurred entirely with him, if he had been at all correct in the inferences which he had drawn from the Resolutions. The hon. Gentleman said he would never offer new terms to persons who had rejected those which had been placed before them, and in that he entirely agreed with him. [Here the right hon. Gentleman was stopped by the CHAIRMAN, it being now four o'clock, and the sitting was suspended. The House resumed at six o'clock.]