HC Deb 11 April 1854 vol 132 cc878-906
THE CHANCELLOR OF THE EXCHEQUER,

having laid on the table a paper relating to the income and expenditure of the country for the year, said: Mr. Speaker, I have to move that this paper, containing an account of time income and expenditure of the country for the year, do lie upon the table; and it was my intention to have made a statement in some detail with reference to the subjects that are included in the notice that appears in my name in the paper to-night, which is as follows:— To make a statement respecting the Revenue for the year now closed, the condition of the Public Balances, and the condition of the Unfunded Debt. But the right hon. Gentleman opposite the Member for Buckinghamshire (Mr. Disraeli) has to-night moved for further information on a variety of points connected with these subjects, and I therefore think that, so far as the matter of argument is concerned, or matter with respect to which there may be a difference of opinion, I shall do well, as far as I am a party concerned, to postpone all observations, and to defer all topics of that nature. It is therefore, Sir, my intention to confine myself entirely to a statement of what may be called a statement upon matters of fact, and my reason for making that statement at the present period is, that in the first place I have not yet had an opportunity of presenting to the House a complete account of the income and expenditure for the past year; and in the second place, because it is exceedingly important at this moment of alarm and excitability, that the public should be put in possession of authentic information upon those points. It is therefore, Sir, my intention to give the House that information; but considering the nature of the discussion in which we have passed the principal portion of this evening, I shall endeavour to be very brief in the particulars which I have to lay before the House. Sir, there has been, as I have no doubt hon. Members must have observed on examining the accounts of the revenue of the country which were published on the 6th of April, a more favourable return of the revenue than I had given the House reason to expect on the 6th of March. There is an improvement in the revenue on the 6th of April, as compared with the estimate which I made on the 6th of March, of no less a sum than 749,000l. But it must not be supposed that so considerable a difference in the amount of the revenue is to be accounted for by any substantial change in the circumstances. I spoke to the House at a period of increasing uncertainty, attending the collection of the income tax in Ireland and the extended income tax in England, as to the precise period when the money would be brought into the Exchequer, on account mainly of the new circumstances which that department of the revenue had to encounter. However, Sir, that department has been enabled to abridge greatly the amount of arrears which I then thought it safe to estimate as likely to be carried over to the present year. There is no difference as to the ultimate receipt of the money—the difference is only as to the time and the manner in which it arrives at the Exchequer. But the difference between the receipt of the income tax as estimated on the 6th of March, and the actual amount received on the 5th of April, is 417,000l.

Another portion of the difference to which I have referred occurs under the head of the Customs revenue. The Customs revenue has been subjected to an exceptional movement on account of the anticipated reduction in the tea duties. The effect of that reduction was necessarily to diminish to a great extent the entries of tea brought into the Custom-house for payment of duties during the past quarter. I therefore debited the past quarter with a great loss on that account. A portion of that loss, however, has been recovered, because parties were anxious for considerable deliveries of tea on the morning of the 6th, and, in order to ac- commodate them, a certain portion of the duties payable on the 6th were actually received on the 5th of April, and the amount was brought into the revenue of the quarter to which indeed it properly belonged, but which it would not otherwise have realised. These are the two main causes, and they are the only ones to which I shall refer to account for the excess of revenue on the 5th of April, as compared with that which I anticipated on the 6th of March. The House will perceive, on an examination of the balance-sheet, that it presents an excess of income over expenditure on the year ending 5th of April last, of no less a sum than 3,524,000l. The excess of income over expenditure for the last year—the year ending the 5th of April, 1853—was 2,460,000l. The estimate which I made with respect to the excess of income over expenditure on the 6th of March, 1854, was 2,854,000l., but that excess has been increased, in consequence of the receipt of money between that period and the 5th of April, but on which it would not then have been safe, and which I was not warranted in admitting into my calculations. This gives me an opportunity of observing that one among the many elements of uncertainty—though we are warranted in exercising confidence within certain limits—arises altogether from the present imperfect system of keeping the public accounts. if the balance-sheet of the present year had been framed in precise accordance with the balance-sheet of the last year—if the same sums had been paid out of the Exchequer for the purposes of supplying the Paymaster General's account for Supply service, the surplus of revenue over expenditure would have been less on the balance-sheet by full 500,000l., and therefore, in comparing the surplus of the present with the surplus of the past year, the House would do well to estimate the surplus at 3,000,000l. instead of 3,524,000l.

It may be asked, why is this difference—why not give the sum in the same manner as it was given last year? Sir, the reason is this—that under the authority vested in the Treasury by this House, a certain amount of Exchequer bills, to the amount of 500,000l., was issued at the former period; and under a fiction of law—for I cannot call it less, it is, in fact, a series of fictions of law—according to the manipulation, if I may so call it, by which that operation is conducted, you have no choice to bring them back to the Exche- quer account, which would be the rational course of proceeding; they can only be issued to the Paymaster General, passing by the Exchequer altogether. It therefore happened that 500,000l. stood to the credit of the Paymaster General which would have been deducted from the Exchequer, if Exchequer bills had not been issued at the period. The House will, therefore, understand that, in comparing the surplus of the present with the surplus of the past year, 500,000l. ought to be deducted from the surplus of this year, and that the real surplus for the year may be fairly and safely stated at 3,000,000l. I think, Sir, the House will be of opinion that this is a satisfactory result, so far as they have yet seen, with respect to the indications it affords of the trade and industry of the country, and of the condition of the people, though there is necessarily a contraction, or, at any rate, a retardation in its increase, in consequence of political events, and of the obstacles to trade both in the Baltic and in the Black Sea. It is a more satisfactory result still, if it be borne in mind that the sums which I anticipated I should receive in the year from the increase of taxes have been much less than I anticipated. Last year you remitted taxes in round numbers to the amount of 2,600,000l.; you at the same time laid on taxes which ultimately, no doubt, will be productive to a large amount. But while 2,600,000l. have been given in relief of taxation, the additional taxes laid on last year had only brought into the Exchequer, on the 5th of April, the sum of about 700,000l. The remission of taxes has been in full operation, while the substituted taxes have only partially been brought into play; therefore, speaking in round numbers, while you have remitted 2,000,000l. of taxes more than you have laid on, you have a surplus of 3,000,000l. on a comparison of the income with the expenditure. That is all which I think it necessary to state with respect to the revenue for the past year.

I now come to another question, with respect to which it is desirable that the House should possess full information—I mean the state of the public balances; and here I would sedulously avoid referring in the way of defence or of discussion to the mode in which the present state of the public balances was brought about—my only object is to provide the House with trustworthy, clear, and accurate information. On the 5th of April, 1853, the balance in the Exchequer was returned at 7,859,000l. On the 5th of April, 1854, the balance in the Exchequer was returned at 2,778,000l., thus showing a decrease in the balances of the Exchequer of 5,081,000l., or in round numbers something over 5,000,000l. Then it is right you should perceive, Sir, how this reduction in the balance has been brought about. The public funds have been applied this year over and above the ordinary methods of expenditure under the following heads and to the following extent:—8,048,000l. of the funded debt has been paid off; 716,000l. has been paid away in advances under the head which is commonly known as advances to public works, over and above the ordinary repayment of advances which is usually set down under that head, and this amount of 716,000l. does not indicate or belong to any extended scheme of public works, but it has arisen out of the Metropolitan Advances Act of last Session, being a mere transfer of the money, and having nothing to do with public works that have been performed. Besides this, the unfunded debt has been reduced between April, 1853, and April, 1854, by the sum of 1,718,000l.; so that the reduction of the debt and the payments we have made amount together to 10,482,000l. I have shown that out of this 10,482,000l. above 5,000,000l. represent the decrease in the balances of the Exchequer. But besides that, there is an amount of 1,274,000l. of new stock created by the Commissioners for the Reduction of the National Debt in respect of Exchequer bills which they had purchased and cancelled, and there was likewise the sum of 420,000l. altogether of new debt arising out of the issue of Exchequer bonds. Putting, therefore, together the diminution of the public balances with the new funded debt which has been vested, it amounts to the sum of 6,775,000l., against the sum of 10,482,000l. of which I have already spoken. The remainder, the sum of 3,707,000l., is chiefly to be accounted for—I do not say altogether accounted for—by the application of the surplus revenue to the balance in the Exchequer as it appears in the balance-sheet, where the exact sum so applied is stated at 2,778,000l.

Now, it is desirable that I should make a statement to the House with reference to the manner in which that balance is brought up to the amount necessary to cover the charge on the quarter that has just gone by, and which must be liquidated during the present quarter. That amount of charge consists mainly of the interest on the permanent debt, and on the terminable annuities to which the sum in the Exchequer is to be applied. The fund now in hand, as will be seen by the account published on the 6th of April, amounts to 2,778,000l. In point of fact, according to that statement so published, the proportionate amount of deficiency bills required to meet the charges on the late quarter, and which fall to be liquidated during the present quarter, is 5,852,000l. And it is not unnatural that there should be some uneasiness in the public mind—deluded, I must say, and mystified as they are by the system in which the public accounts are kept—when they see such a formidable amount set forth as required, under the name of deficiency bills, as 5,852,000l. It is a very large, it is an enormous sum, when it is considered that it is all required at once, to make up a deficiency. Here, however, I must say that the amount of deficiency bills is not quite so large as is here stated, owing to a certain deduction to which it is liable; and the actual amount of deficiency bills brought to charge in April, 1854, would be more correctly stated at 5,472,000l. I must say, however, that does not make any very material difference. 5,472,000l. is a very large sum of money to have the ugly word "deficiency" attached to, and I do not wonder that Gentlemen who are not aware of what these figures really do mean should be astounded at the demands that seem thus to be made by the Government upon the Bank of England for its temporary accommodation. But I wish the House to understand what this accommodation really is, and if they will follow my statement they will find that this nominal amount bears no rational relation to the sum actually demanded.

It is to be observed, Sir, in the first place, that in April, 1853, when the balances in the Exchequer were extremely large, there was an apparent amount of deficiency bills to the amount of 1,407,000l. But on every day of that quarter during which this charge was put against the public, there was a large amount of public money actually in the possession of the Bank of England. The amount of deficiency bills was then 1,407,000l.; it is now 5,852,000l., showing an excess for the present year of 4,445,000l. But of that sum of 1,407,000l. of deficiency bills last year, the greater part never was charged against the public, the sum of 300,000l. only being chargeable with interest. The House will naturally wish to know how it is that these figures and this statement of the deficiency bills, and of the accommodation received from the Bank of England, though put forth to the world with such apparent authority, do not really indicate anything like the state of our accounts with the Bank, and consequently do not tell the truth, but leave the public to draw a false inference. Sir, I think it is material to state these facts, because I find that even the best informed persons out of doors believe that the amount of the deficiency bills, as published on the 6th of April last, represents, or nearly so, the amount of accommodation given by the Bank of England to the Government, for the way in which this amount is calculated is this:—It is generally supposed that the whole charge which has accrued during the past quarter against the public—which the public is liable to pay, and which it will be called upon to pay out of the income of the present quarter—will be an effectual charge at the commencement of the quarter. Though it is demonstrably certain, experience in this case is a surer guide than even demonstration—that that charge will not or cannot become effectual at the beginning of the quarter, but that a large proportion of the money assured as necessary will remain in the Bank till the calls upon the public have been overtaken by the growing revenue of the new quarter. That, Sir, is the way in which the discrepancy arises; and I do not wonder when Gentlemen hear of the great amount of accommodation which the Government requires from the Bank of England during the currency of the present quarter, that their minds are led away with the notion that the sum of 4,000,000l., 5,000,000l., or 6,000,000l. is the amount actually required. Sir, the real amount is very different.

I have thought it my duty to refer to this matter, not so much in a pecuniary point of view as in order to dispel what I conceive to be at this moment a very mischievous and injurious misapprehension—I have thought it my duty, having first taken advice, that it was legally competent for me so to do. I have thought it my duty to regulate the issue of the deficiency bills with some reference to the actual demands upon the Bank, that is to say, to apply them to the particular purposes of the public service on the selfsame principle on which every other payment of public money is applied—the principle of meeting each particular amount with a particular estimate. By the adoption of that course the total amount of deficiency bills actually chargeable to the public yesterday is diminished from the formidable statement as it stands in the papers before the House, namely 5,852,000l., to the more moderate statement of 2,808,000l. The sum of 2,808,000l. represents the amount of deficiency bills actually chargeable against the public yesterday. I am not able to state the actual amount to-day. It is not greater; I believe it is less. And, Sir, it must not be supposed that the deficiency bills have thus been reduced in amount by unduly starving the public accounts, or by running the risk that when persons came with their just claims upon the Treasury, they should receive for answer, "No effects;" because, when the business at the Bank terminated yesterday, there was in its possession money to the amount of 679,000l. Therefore the accommodation which the Government received from the Bank yesterday—and I take yesterday because I believe it represents the maximum charge brought against the Government for the quarter—the accommodation received from the Bank yesterday was 2,808,000l., which, deducting the sum of 679,000l., amounts to the sum of 2,129,000l. Sir, my opinion is this, though I do not mean to enter into any defence of that opinion, that if we were now at peace—if we had not a growing expenditure—if we did not run the risk of an expenditure which may possibly grow with greater rapidity and with greater uncertainty than in ordinary times—I do not at all think that this sum of 2,129,000l. would of itself be an extraordinary amount of accommodation which the Government had to receive from the Bank, when you look at the extent of the quarter's revenue, and the mode in which it has accumulated at the commencement of the quarter. But though I state that opinion with reference to ordinary circumstances, I do not state it with reference to the present circumstances, which are undoubtedly extraordinary. It must be obvious to every one that it is desirable to take security against chances which, at other times, it would not be necessary to calculate. I speak, therefore, of this 2,129,000l. as an amount to be progressively reduced, as I doubt not it will be without the smallest difficulty. What I wish to impress upon the House is, that the sum in question represents the actual amount of accommodation afforded to the public by the Bank, and that the sum of 5,842,000l., which appears in the quarterly account, really has reference to no actual transactions, either in the disbursement of money or in the amount required. [Mr. DISRAELI: You do not mention the sum required for the public service.] I beg your pardon; I thought I had done so. My object has been to show that the nominal amount of deficiency bills which appears in the quarterly statement represents the difference between the amount of requirements and the balance actually in the Exchequer on the 5th of April, and that the amount of accommodation from the Bank, which really is an accruing and approaching charge, is given in the same statement as if it were an actual charge. There is another point which I do not recollect to have ever been brought under the notice of this House; but I refer to it at this moment because it has been noticed out of doors; and I do not wonder at the sensitiveness of the public mind upon the subject. It has been supposed that these enormous and unusual demands made by the Government not only embarrass the Bank, but that they also go to reduce the amount of capital actually available for commercial purposes. If we were going on from year to year with the expenditure exceeding the income, which it was necessary to make up by deficiency bills, or even if it should be found necessary to issue deficiency bills in consequence of this House not having provided adequate funds to meet the public expenditure, I can understand that, pro tanto, the effect would be to withdraw from commerce some portion of those resources on which commercial men rely for carrying on their transactions; then, but under no other circumstances, I can understand that the country would be liable to suffer inconvenience. But there never was anything not only so erroneous, but so ludicrously erroneous, as the statement that, in the present instance, the demands of the Government have withdrawn from the general purposes of the London money market either that large sum for deficiency bills to which I first referred—that is, those fictitious bills, or this small sum for deficiency bills which is now active, or any sum whatever. The exact contrary is the case. The truth is, the large disbursements of the Government, the paying out into the money market from the balances, every farthing of which, when paid into the money market, is available for all the purposes of the money market, constitutes a customary operation. On the 10th of April we were deficient to the extent of 2,129,000l. This is an actual accommodation. But on the 5th of April 2,000,000l. were paid in the money market; consequently there is a difference of 129,000l. But those 2,000,000l. were not lost, they were not consumed by the excess of expenditure over income, for they were paid to the holders of stock. What did those people, the holders of stock, do with the amount? They did not tie the money up in napkins and put it away. I apprehend they passed it to their bankers, or other persons, and so it got into commerce again, or they purchased other stock with it. This was the course which this money took; and it was just as available for the purposes of the money market, when the holders paid for this stock, as it would be by remaining in the balances in the Bank of England. This, Sir, is the case with the present quarter. But I must look back to the last quarter; and what then took place? 6,000,000l. were paid in the same manner out of the Government funds in the Bank into the money market, and thus added to the loanable capital of the country. The whole amount thus added to the loanable capital of the country, by payments from the balances and by deficiency bills, was, in round numbers, about 8,000,000l.; while the whole amount taken on accommodation, and therefore withdrawn from the commerce of the country, was 2,129,000l. I therefore hope I may consider that the state of the facts—for this is not a matter to have recourse to argument upon—disposes of any notion that these operations of the Government in the liquidation of stock have withdrawn from commerce any portion of the funds which would, under ordinary circumstances, have been at its disposal. I shall entirely refrain on the present occasion from going into any such question with regard to the state of the balances as respects their bearing upon the operations of last year. I shall reserve these subjects, although there are points which it may be necessary to open at a future time—I say I shall reserve them altogether, and I shall confine myself to those matters which are simply matters of fact, and which do not constitute in any sense either an apology or a defence of any measures which have been undertaken by the Government.

But there is another point to which I shall very shortly refer, because it touches upon a matter that is in some degree supposed to be a question of good faith. It has been an idea of some persons that there was a certain compact made in the year 1844—not written, but understood—between the Government and the Bank of England; and, of course, I am not at all intending to state that this idea is propagated or countenanced by the Bank of England—under which demands for deficiency bills were not to be made upon the Bank of England under the charter then granted. Now, Sir, of this unwritten compact no trace whatever is, to my knowledge, to be found; but there is to be found, not the trace of a written compact, but a written compact itself, very full and express in its terms, and it is that which I will state. The matter was fully discussed between my right hon. Friend the Member for the University of Cambridge (Mr. Goulburn) and the then Governor and Deputy Governor of the Bank of England at that period; and the understanding, in express words, to which they arrived, was this—that if, on the one hand, there was a diminution of the public balances below what they then usually were, the Bank were to have a claim, in that respect, against the Government; but if, on the other hand, there was an increase in the public balances above what they had usually been, then the Government were to have a claim against the Bank for the share of profits arising from the custody of this deposit. Of course, if it were the other way, the Bank would have a claim upon the Government for interest. Upon a future day it will be my duty to go more at large into that subject, because there are matters of considerable importance connected with it; but I do not propose to do so at this present time. What I propose to do now is simply to refer to this compact; and I think I have shown that the presumption upon which my right hon. Friend Mr. Goulburn and the Government acted upon the one hand, and the Governor and Deputy Governor of the Bank upon the other, was this—that the public balances, and consequently the deficiency bills which are the correlatives of the public balances, were to remain in future time as they had been at that time.

Then the question arises, what was the state of the public balances, and what was the demand for deficiency bills at that time—namely, at the time when this ar- rangement was made between my right hon. Friend (Mr. Goulburn) and the Bank? If I were to construe, as I might if I were pressed in argument, this to mean that the amount of deficiency bills was to be measured by what they had been for a year or a couple of years before the time of that compact between the Government and the Bank, I really should appear almost to prove too much; but what I propose to do is this: I propose to take the two quarters immediately preceding the arrangement between the Government and the Bank. I think that is fair. I take them as a measure of the usual state of the public balances, and of the usual demand for deficiency bills, because they present the largest balances and the smallest amount of deficiency bills of any for a long time. In the quarter ending January 5, 1844, the amount of deficiency bills issued—and I am not now dealing with the years of distress of 1842 and 1843—was 5,462,000l.; the amount issued in the quarter ending April 5, 1844, was 3,967,000l. Compare these amounts with those in 1854, which is supposed to be so remarkable a case. Well, Sir, then I find that in the quarter ending January 5, 1854, the amount of deficiency bills issued was 3,711,000l., and that the amount issued in the quarter ending April 5 was 5,472,000l. The average of the two quarters in 1854 is 4,591,000l.; in 1844 it was 4,714,000l. Certainly the two averages are very near to one another; but the amount of deficiency bills issuable at this moment, taking the average of the first two quarters, is but a trifle less than it was in 1844, when my right hon. Friend (Mr. Goulburn) entered, on the part of the Government, into this compact with the Bank.

I pass on now to state a very few facts with regard to the unfunded debt. This is a question upon which it had been my intention to have treated more at length, because the differences between the right hon. Gentleman (Mr. Disraeli) and myself as to the reduction of interest upon Exchequer bills do not, I think, refer to the commendations or the censures on the Ministry or the Government for particular transactions. If they did that, I should regard them as of little consequence; but they refer to certain principles of administration, by which principles, I must confess, I intend, and am prepared, to abide. But I shall pass entirely by that discussion. My object at the present moment is merely to state the condition of the unfunded debt. The amount of Exchequer bills authorised to be issued in 1853 was 17,743,000l.; the purchase and liquidation of the Exchequer bills of the June issue reduced the amount by nearly 4,845,000l. That it will be admitted upon all hands would have realised to the public a very great advantage; but it has been almost wholly lost in consequence of the necessary reissue, first, to pay off the holders of non-assenting stock; and secondly, with the view of keeping up the public funds to meet the demands occasioned by increased expenditure for the purposes of war, and in anticipation of the taxes which have been granted this year. The amount of Exchequer bills has, therefore, increased from the minimum of last year 12,897,000l. to 16,025,000l., at which they stood at the end of last quarter. Besides, since the last quarter the Treasury have issued a certain portion of the Exchequer bills authorised by Parliament to be issued under the last Act; so that at the present moment the amount of Exchequer bills may be stated generally to be 16,600,000l. The total amount authorised by Parliament to be issued is 17,774,000l., so that we are at present short of the maximum which we have power to issue to the extent of 1,174,000l. I am bound to say that some portion of that amount may be issued from time to time as the exigencies of the public service may require; but I have no present reason to expect that I shall have any further demand to make upon Parliament for Exchequer bills during this present Session. I may also say I have no present reason to expect I shall have occasion to issue the whole amount authorised by the Act already passed.

There are, however, a few words which I have yet to say, immediately relating to the subject of the unfunded debt, in regard to which I wish neither to give credit or discredit, or praise or censure, to any particular Government. It is a matter in which we have a common interest, and one in which the Legislature and the Executive can have no other interest than that which they take in a sedulous adherence to the general principles upon which the finance of the country is maintained, and upon which the most careful provision is made for meeting every demand upon the Exchequer. I think it is not unsatisfactory, I must confess, to look at the present state of the public credit. About a week or a fortnight ago there was something prevailed which could not be designated panic, perhaps not even alarm, but which certainly was apprehension. No people, I believe, in the world have so much self-command, or so much knowledge of their own public affairs, as the people of this country; but still we are all flesh and blood, and in times of trouble and disturbance men's imaginations are active, and they sometimes fail to take a calm view of their own position. Let us, however, look at the matter as it now stands, and I think the best way of estimating the condition of the public credit at this moment is to do two things—first, to compare the price of our public securities with what the price of the corresponding securities is in the most favourably situated foreign country; and, in the second place, to compare them with what they have been in this country itself in former times. I will, therefore, compare the state and course of public credit in this country at the present moment with what it was last year; and then I shall see how the relation between our public credit now and twelve months ago stands, when it is compared with the public credit of France now and twelve months ago. On the 1st of April, 1853, the French three per cents were at 79f. 25c.; on the 1st of April, 1854, they were at 62f. 60c. There was thus a falling off upon the French three per cents amounting to 16f. 65c. or nearly 21 per cent. Now I will take English Consols. On the 1st of April, 1853, they stood at 99⅞; and on the 1st of April, 1853, they stood at 86¼. There was thus a falling off of 13⅝, or about 14 per cent of decline in the value of these great securities in England as compared with the decline of 21 per cent in a country which is not a poor country, not an ill-organised country, but which, on the contrary, possesses the greatest money market in Europe, after England. Then I compare the present price of Consols with what it has been in former times; and now the House will recollect that we are in the midst of a European war, that we have a force of 60,000 men on foot, and that we have extra armaments for the purpose of that European war. I do not propose to go back—which might, perhaps, fairly be done; at any rate, I do not propose to refer to them—to years of war as a standard of comparison. Even as compared with years of peace, the present state of the public funds is not altogether devoid of materials for satisfaction and congratulation. Of course I do not mean to look at the funds, and public stocks, at the state at which they have been of late years. I look back for the last twenty years. There are six of these years, although they were six years of peace, in which the price of Consols has gone lower in the midst of peace than it has now gone in the midst of war. Two of those years are years which are least material to the comparison, for they are the years 1848 and 1847. The year 1848 was a year of peace for us, though a year of war fur the Continent; and 1847 was a year of famine. The closing price of Consols last night was 88¼. In the year 1848 Consols stood at 88¼; in 1847 they stood at 79⅝; but in the other four years, which were years of peace in the strictest sense, and not years of extraordinary distress, Consols went down lower than they were last night, when we were in the midst of a European war. In the year 1841 they went to 87½; in 1840 they went to 87; in 1836, which was a year of great prosperity upon the whole, Consols went to 86¾; and in the year 1834, which was a year of uniform prosperity, they went to 87¾. Therefore it appears that in times of peace and prosperity you have not been able to keep up the price, and you find it at a point equal to that at which it now stands, in the midst of great expenditure and of menacing prospects.

There is only one other point of comparison which I will take, and that is the price of Exchequer bills. I propose here to institute the same comparisons with the corresponding documents in France called Bons du Trésor, as I did in the case of Consols. It is a very simple statement, and the House will at once comprehend it. On the 1st of April, 1853, Exchequer bills in England were at 1½ per cent, and on the 1st of April, 1854, they were at 3 per cent; that is to say, there was an increase of 100 per cent on the rate of interest. On the 1st of April, 1853, the French corresponding documents bore a rate of interest varying, according to the terms for which they had to run, from 1½ to 2 per cent, up to 3 per cent. The mean rate of these three rates was 2¼ per cent. On the 1st of April, 1854, these documents stood at from 4½ per cent to 5 and 5½ per cent. The mean of these rates is 5 per cent. Therefore, whilst you increase from 1½ per cent to 3 per cent, or at the rate of 100 per cent, the French increase from 2¼ to 5 per cent, or at the rate of 122 per cent. I have shown, therefore, taking the country which, upon the whole, is the one which can most fairly be referred to, not merely that the rates of interest payable in this country are lower than they are in France—and if that were all it would be very well—but that the rate of interest at this moment, compared with what it was twelve months ago, has undergone a smaller increase in this country than it has, taking corresponding periods, in France. This is the whole of the statement with which I think it necessary to preface the Motion I am making. I hope I have confined myself, and strictly confined myself, to matters of fact. I certainly might have had much more to say, but which I have gone by, upon some of the subjects on which I have touched, especially the question of the issue of deficiency bills and the understanding with the Bank. As to the arrangement with the Bank, I may have more to say at a future time. With regard to the question of the interest upon Exchequer bills, no doubt occasions may arise when we may again debate the very important question of the principles upon which that portion of the debt ought to be managed. For the present, I have shown to the House that the state of the revenue during the past year, all circumstances being taken into consideration, has been manifestly satisfactory; that the demand made by the Government upon the Bank for accommodations, although it has been a demand which it would be desirable to contract and reduce, yet is not a demand which need inspire any person with alarm or apprehension; and with regard to commerce, no contraction of its resources has taken effect in consequence of any operation of the Government under the law; that with regard to the unfunded debt, its extent is moderate, and likely so to continue; and with regard to public credit, that it is in a condition with regard to which we may feel satisfied and thankful, when we consider the difficult and menacing circumstances in which both this country and the whole of Europe is at present placed. Having said this much, Sir, I will only beg to move that the balance-sheet be laid upon the table.

MR. DISRAELI

I quite agree, Sir, with the right hon. Gentleman the Chancellor of the Exchequer that a Motion for placing the balance-sheet upon the table is not a very convenient one for raising a financial discussion. Of course it is a great disadvantage to follow the Chancellor of the Exchequer under such circumstances; for he, as the Finance Minister, has information which must be unknown to us until the paper is in our hands, and we can only obtain from him a statement of some leading facts to guide our judgment. I think, therefore, it is convenient, as a general rule, that the House should not be led into a financial controversy under such circumstances. It certainly was not my intention to have made any observation whatever on this occasion had it not been for the Motion put upon the paper by the Chancellor of the Exchequer. I accept his version of that Motion, however; and, therefore, I shall entirely avoid any controversy upon the system of finance which he has explained. With regard to the returns for which I have moved, I can assure the right hon. Gentleman that it was not with reference to the present Motion. They are, I should say, a continuation of returns which I moved for in the early part of the year, in order that the House and myself might be in possession of authentic information when—if I thought I was justified in so doing—I should bring before the House the condition of our finances. They had not, therefore, the least reference to the present Motion. I shall confine the few observations I am about to make entirely to matters of fact; but there are one or two points in the statement of the right hon. Gentleman which I do not think I ought to pass unnoticed. As regards a matter of fact, I beg to remind the House, in vindication of myself, that the right hon. Gentleman's own statement to-night has fully justified a statement I made in some observations which followed his financial statement on the 5th of March—first, as to the probable amount of the balances in the Exchequer at the end of the financial year; and secondly, as to the amount of deficiency bills which he would require for the quarter. On that occasion I said that, so far as I could form an estimate, it appeared to me that the balances in the Exchequer on the 5th of April could not exceed 3,000,000l. The right hon. Gentleman on that occasion said, "I have the misfortune to differ from the right hon. Gentleman; I think the balances will be 4,000,000l." I would beg to remind the House that my estimate was not an indiscreet one from which the right hon. Gentleman had the misfortune to differ. Although I was not prepared with the data which the right hon. Gentleman has at his command, yet the returns he has now placed upon the table show that the balances in the Exchequer are not more than 2,800,000l. This shows that my estimate was, of the two, the most correct, and that it did not deserve the sceptical reproof of the right hon. Gentleman. Now, what was my estimate of the amount of deficiency bills? I said that, so far as I could form an estimate, it appeared to me the right hon. Gentleman would require about 6,000,000l. of deficiency bills. The right hon. Gentleman questioned the accuracy of that statement, and said the deficiency bills for the quarter would, in his opinion, not be more than from 4,000,000l. to 4,500,000l. I said 6,000,000l., and it now appears that the actual amount is 5,852,000l. I think, therefore, that I was more correct than the right hon. Gentleman on this, the second point. Now, there is one other point upon which the right hon. Gentleman did not touch, but upon which I should like to have some information. I collected from the right hon. Gentleman, when he last spoke on these subjects, two or three weeks ago, that there were certain bills charged upon the Consolidated Fund, but I do not remember that he has made any reference to those bills on this occasion.

THE CHANCELLOR OF THE EXCHEQUER

The bills to which the right hon. Gentleman refers are called "Consolidated Fund bills." They are bills met by the Bank, but they are not held by the Bank. They are met by public money, through the Commissioners of the National Debt, and not by accommodation from the Bank. The amount is 750,000l.

MR. DISRAELI

Very well. Having adverted to these two points—namely, the amount of the balances at the end of the financial year, and the amount of the deficiency bills which the right hon. Gentleman will require for this quarter—and reminded the House of my estimates upon them, I must beg to make but one observation upon what the right hon. Gentleman has said on the subject of deficiency bills. I confess that to me his statement was not satisfactory. The right hon. Gentleman acknowledges that the public requirements exceeded the resources in the Exchequer at the end of the financial year to the amount of 6,000,000l. sterling; "but," says the right hon. Gentleman, "I need not require the whole of that 6,000,000l. immediately from the Bank, for the revenue is coming in, and so I manage to get on." But the right hon. Gentleman can- not conceal from the House or from the country that he shows at that time a deficiency in his resources to the amount of 6,000,000l.; and though he may put off the evil day—though he may use the resources that are coming in, and which may be wanting for something else—still the state of the public treasury is, that he is minus the sum of 6,000,000l.; and that that sum is necessary, absolutely necessary, in order to carry on the public service, up to the completion of the financial year. The right hon. Gentleman treats very lightly, and ingeniously glosses over, this most important subject. I am certain myself that its importance will be continually felt, and that, as this year advances, there will be more than one occasion when we shall be obliged to call the attention of the House to it. I shall, however, follow the example of the right hon. Gentleman to-night, and not enter into any argument upon the subject of the deficiency bills. I will adhere to facts and statements, or, at least, to statements of opinion. But I must say that the views which the right hon. Gentleman has expressed upon this subject are not, in my opinion, the views which are entertained by men of business. I am going to read a very short extract, indeed, from the evidence given before the Committee upon Commercial Distress in 1848; and the House will not find this wearisome, because it is the evidence of an hon. Member of this House. It is, therefore, as interesting as a speech from that Gentleman. Much evidence that is quoted is that of persons you know nothing about—it goes in at one ear and comes out at the other; but when it is the evidence of a brother Member, and a Member of all authority upon the subject, it is rather entertaining, and very often, like other works, very instructive. Now, I shall not quote the evidence of any gentleman opposed to the opinions of the right hon. Gentleman. I shall quote, upon the subject of deficiency bills, one of his supporters, the hon. Member for Kendal (Mr. Glyn). The hon. Member for Kendal was examined before the Lords' Committee in 1848; and the House, I trust, will let me read two or three questions, with his answers to them, on that occasion:— By the returns before the Committee it appears that in October, 1841, there was a demand for 4,800,000l.; in October, 1842, for 4,900,000l.; in October, 1843, for 3,700,000l.; in October, 1844, for 2,500,000l.; and in October, 1845, for 829,000l. Subsequently to that, the Exchequer balances becoming full, that demand ceased; but supposing that in October, 1847, there hail been a demand upon the Bank of England for advances for the public service to the extent of three or four millions, what would have been the consequence of such an advance in the then state of the reserve? His answer was:— Either the Government must have been refused, or the directors must have limited the commercial discounts in order to meet the demand of the Government, or they must have sold stock to draw in the notes, and advanced them again upon deficiency bills. The examination went on:— It is unnecessary to pursue the consequences of refusing the demand of the Government, which would have been the refusal of the means of paying the dividends; but, passing to the second alternative, what do you conceive would have been the consequence of limiting the commercial accommodation, at that period, to that extent?—There would have been an enormous increase to the pressure. It would have been almost the ruin of the commercial world to have refused discounts then. If two millions had been the amount of the deficiency bills, I do not think the stock market would have borne the sale of two millions of securities at that time; at any rate, it would have occasioned almost equal pressure as the refusal of discounts, and a great depreciation in Government securities. That period of pressure was relieved by the issue of the letter of Lord John Russell and the Chancellor of the Exchequer. Do you consider that the effect would have been the same with respect to commercial credit if the letter had been issued, not for the purpose of relieving commercial pressure, but in order to obtain an advance for Government purposes?—I think it would have been a dangerous experiment for the Government to have issued a letter for the purposes of Government; they would not have had much sympathy on the part of the public. Then, in the event of circumstances happening which, either by increasing the expenditure of the country, or by limiting the revenue of the country, would have the effect of reducing the balances in the Exchequer, is there not, as a consequence, an impending necessity of harrowing upon deficiency Bills to pay the dividends?—Certainly. Then, in the event of any circumstance reducing the banking reserve to the extent to which it was reduced in October last, do you see any mode of extrication from that difficulty at such a period?—Not any mode of relief from that difficulty upon an application made by Government to the Bank at any such period. I conceive Government might have been relieved by a loan. Says the right hon. Gentleman the Chancellor of the Exchequer, "You had in 1844 and 1845 almost an equal amount of deficiency bills to that for which I am now calling on the Bank." But what was the state of the balances in the Exchequer in 1844 and 1845? Were they at 2,800,000l.? No, they were much more considerable than they are now. I want to show the House that here is an opinion which ought, I think, to influence them on the subject of the Government borrowing upon deficiency bills. The right hon. Gentleman himself does not advocate habitual borrowing upon deficiency bills. All these cases to which this evidence refers are cases of but occasional loans; but the right hon. Gentleman is now an habitual borrower upon deficiency bills, and at the same time he tells you, "If you ask me whether 4,000,000l. or 4,500,000l. is a sum that ought to be taken from the Bank quarter after quarter, I must unhesitatingly answer, no." Now, I want to know what prospect there is of any change in the position of the right hon. Gentleman? But the appeal of the hon. Member for Kendal was not the only one. I was myself a Member of the Committee on Commercial Distress in this House. We had before us a very great authority on this subject—one of the principal partners in the most eminent house of Baring and Co.—the most eminent house in England—I mean Mr. Bates. And what did Mr. Bates say at page 183 of his evidence? Why he attributed the panic of April, 1847, to the Bank being called upon to advance heavily on deficiency bills. Now, I want the House to consider this. Are we at this moment in circumstances which would allow us to suppose that emotions of panic may not occur again? What would produce panic but those terrible events that we are almost hourly expecting? The right hon. Gentleman says, already there has been, if not a state of panic, at least a state of great apprehension. If there is any military disaster, or if there should be treachery upon the part of those we consider our allies, if circumstances occurred to turn the course of exchange against us, you would have renewed and perhaps aggravated apprehensions. With the prospect of an European war, and, as we have been informed to-night by a great authority, with the prospect of a protracted war, do you think it advisable that the Government should be habitually doing that which Mr. Bates, the very highest authority upon the subject, tells you produced the panic of 1847—namely, the Government borrowing upon deficiency bills to the amount of 2,000,000l.? This is the point which I wish to impress upon the House—that I cannot assent to the opinion of the right hon. Gentleman the Chancellor of the Exchequer, so far as the balances in the Exchequer are concerned, and the mode by which they are replenished, namely, by habitual loans on deficiency bills. I cannot give my assent to his view that such a state of things is one upon which the country may be congratulated. I think if the right hon. Gentleman pursues that course, he will find himself ultimately in a state of great difficulty; and I would much sooner that, during the recess, he should devise some means by which he may put an end to the necessity of borrowing habitually on those deficiency bills; and then, when the next discussion takes place upon finance, which is to be of a more controversial nature than that of tonight, the right hon. Gentleman the Chancellor of the Exchequer would be in a more satisfactory position, and would be able to inspire the country with more confidence than he certainly can do upon the present occasion.

MR. BARING

said, that he had been much surprised that the right hon. Gentleman the Chancellor of the Exchequer had thought fit to introduce these papers with a long and elaborate explanation, which, so far as he could understand the object, was for the purpose of allaying any apprehension which might exist out of doors. The very notice that the right hon. Gentleman was about to make a statement had produced far more apprehension and excitement in the City of London than anything else had done before, and it was rumoured that there was to be a fresh issue of Exchequer bills, that the right hon. Gentleman was about to introduce a loan, or some fresh income tax. At first all kinds of rumours had been afloat as to what was about to be proposed, and it now seemed that all that was required was to compare the state of the English with the French funds, to show that the English funds were not lower, and the deficiency bills not higher now than they were in 1844—a time, by the way, immediately following the financial effort of the late Sir Robert Peel, by means of the income tax, to correct those evils which he (Mr. Baring) was afraid would very soon again arise in this country. In 1845 the deficiency bills were very little or nothing—that operation of the income tax obviated the evil which it was intended to obviate, and things went on straight and in order. If he had thought that there was any cause for the right hon. Gentleman to remove alarm, he should have been satisfied with the speech which he had made; for, coining from so high an authority, and delivered with the right hon. Gentleman's accustomed ability and talent, it was well calculated to remove any apprehension, if indeed any existed in the country. He confessed, however, that he saw no cause for apprehension with regard to the credit of the country. The public credit could only be damaged by mismanagement; and he trusted after all that had passed that the right hon. the Chancellor of the Exchequer would in his future financial measures exhibit a little more caution than had perhaps been displayed by him hitherto. There was one point, however, upon which he had heard the right hon. Gentleman with great regret—it was where he had urged and laid down as the principle of his system of finance that he was not to provide by means of the incoming revenue for the engagements he had to meet, but to meet those engagements by subsequently accruing revenue and deficiency bills. He perfectly agreed that the Government had a very fair claim upon the assistance of the Bank of England, nay, more, he thought it was the duty of the Bank of England to assist to the utmost of its power whoever might be at the head of the financial affairs of the country, and that for this obvious reason, that not only was the Bank of England the agent of the Government, but it was only by the preservation of public credit that private credit could be maintained or assisted in this country. If there was the slightest hesitation in the maintenance of the public faith, or the performance of public engagements, of course the Government would have the first claim for any assistance that it might desire, and that assistance the Government would be perfectly right in taking. But there were occasions when such assistance could not be sought without injury—occasions such as those to which the right hon. Gentleman the Member for Buckinghamshire (Mr. Disraeli) had alluded, when the Bank might find itself placed in circumstances of difficulty to meet the wants of the Government. It was therefore objected to, not because in a time of prosperity there existed any danger either to the Bank, to public credit, or private aid, in relying upon deficiency bills; but it was because circumstances might arise, which no Minister could foresee, in which that assistance, if demanded of the Bank, might very much interfere, especially under the present banking system, with the necessary accommodation to the commercial community and the maintenance of private credit; it was this which constituted the real danger of relying upon the system of deficiency bills. The hon. Member for Kendal (Mr. Glyn), whose speech had been alluded to, when appearing to advocate the course adopted by the right hon. Gentleman the Chancellor of the Exchequer, added very shrewdly, "The Bill of 1844 ought to be altered." He did not want to enter upon any discussion on that Bill; but this he would say, that if they were determined that that Act should be fairly tried, the Government of the country ought not to rely upon the Bank for aid, while at the same time it possessed only very small balances to meet great exigencies. very feared that the right hon. Gentleman was making this policy the keystone of his financial system; he would warn him, if such was the case, that there might be times when there might occur a check to incoming revenue; and he would then see that, whatever might be the in-convenience of providing beforehand the means of meeting engagements when due, and whatever might be the plausible theory that he could employ the balances of the Exchequer instead of leaving the Bank to employ them, that still great injury might arise in cases which had been referred to, from the adoption of such a system. The right hon. Gentleman appeared to treat lightly the amount of deficiency bills; he stated that it was not 5,000,000l., but only 2,500,000l., which the Bank was called upon to pay. But he forgot the liability there was in the Bank of England; that the Bank was still liable for that larger amount; and that the Bank, acting as it must do under certain restrictions when it had engaged liabilities, must be prepared to meet them whenever the time might arrive for their being called upon to do so. He was so completely at issue with the right hon. Gentleman as to the policy which he was disposed to pursue, and so dangerous did that policy appear to him, that he could not avoid entering his protest against it as an act of policy, and stating that, in his view, it was one fraught with danger to the financial security of the country. Some allusion had been made by the right hon. Gentleman to the decline in the price of the French funds; but that depreciation was caused by the fact that at the time the French Government had strained to the utmost the Exchequer-bill system, and had brought it to such a point that they could no longer by its means meet their wants by borrowing either of the Bank of France or by having recourse to Bons du Trésor, and it was known therefore that the Government must have recourse to a loan in the market. That would be the danger to which the right hon. Gentleman would be exposed if he found that he could not get out his Exchequer bills so easily as he could have floated them if he had not reduced the rate of interest, and if the money formerly invested in them had not been locked up in other securities. He would find that he could not so easily borrow money from the Bank of England, and then he would find that he would be compelled to make a loan, probably at the least favourable moment. He did not wish it to be for a moment supposed, either by the House or the country, that the Government would not be able to borrow without the slightest danger to the borrower or lender, or the future prosperity of the country. He thought that the right hon. Gentleman (the Chancellor of the Exchequer) in his Budget speech had taken a narrow view of the question when he stated, a short time since, that the great debt of this country was an obstacle to borrowing money for the expenses of the war. Let them only prove the war to be a just and a necessary one, and every effort would be made which should be made to meet the necessities and demands of the war. It might be very well to say, so long as they could meet the expenses of the war by taxation within the year that it would be desirable to do so. But when the expenditure might be changed from 2,000,000l. or 3,000,000l. to 20,000,000l. a year, they must recognise the fact that not only could they not raise that sum from direct taxation, but that in point of fact it would be unjust to do so, not only to the present generation, but to future times. To attempt to raise so large a sum at once by direct taxation out of the narrow profit, narrow incomes, or capital of the country, would not be without its effect on posterity—it would drive capital out of the country, diminish and impoverish the resources of the nation, and the effect of these evils would be felt by posterity quite as much as by the present generation. His only anxiety was, that the right hon. Gentleman should well weigh the evils of the conflicting principles. With respect to keeping large balances, if the Government would employ them, as its agent, the Bank of England, did in temporary securities, the Government might do so profitably; but it was notorious that the Government could not do so, and the only safety for the right hon. Gentleman was to be provided beforehand with the means of meeting his engagements, and not to rely too much upon the aid of the Bank of England, or upon the continuance of times of prosperity.

MR. LAING

said, as the House was about to separate for a considerable period, he had heard with great satisfaction the statement of the right hon. Gentleman (the Chancellor of the Exchequer). He fully agreed with the right hon. Gentleman to the extent that great good would be done by disabusing the public mind on the subject of the amount of deficiency bills which would be required. He saw nothing in the existing state of things to call for anything like panic or serious apprehension. With respect to the general principle of whether it was desirable to draw upon the Bank of England even to the amount of 2,000,000l., he entirely agreed with the opinion of the hon. Member for Huntingdon (Mr. T. Baring), that the danger of such a course would be very considerable, and that, even in ordinary times of peace, any advantage to be derived from the small rate of interest, by keeping only a small balance at the Bank would be more than balanced by the danger to the public interests of the country in a time of commercial distress. The right hon. the Chancellor of the Exchequer had not correctly appreciated the effect upon the public market of the recent alteration in the state of the balances of the Exchequer. A sum of 5,000,000l. or 6,000,000l. had been taken from the habitual balances of the Bank, and had been applied in paying off as much of the national debt of the country. If that money had not been buried in the ground, or locked up in another shape, it would have gone to increase the means available for private and commercial purposes. The effect of the alteration was to withdraw 5,000,000l. or 6,000,000l. of money, previously available for commercial and short-date purposes, to the purchase of funds, investments in mortgages, and other securities of a long date. The effect of this was to force up the price of the funds; and, upon the other hand, when accommodation was required from the Bank to meet the deficiency, it augmented the scarcity felt towards the end of the last quarter. The only question which now remained was, what course was to be taken to replace the deficiency in the balances caused by the abortive operation of the right hon. Gentleman in dealing with the funded debt? He (Mr. Laing) went with the right hon. Gentleman in making that experiment, but he believed a mistake had been made by the right hon. Chancellor of the Exchequer, when he clearly ascertained that the course of events had gone against him and the experiment was a failure, in not meeting the payment of the large amount by some pro- posal to convert into "stock," at a small bonus, the funds of the dissentient shareholders who might by this means have been induced to take stock instead of money. There was one golden rule in speculation, which was, that when a person speculated upon any particular event, and that event went against him, then the sooner he got out of the difficulty the better. He was anxious to see an amount of stock created to supply the place of the funds which had been applied under very different circumstances to reduce the debt, and to replenish the balances in the Exchequer. Even at the risk of a temporary loss, he thought it would be advisable speedily to create some new stock in order to place our finances upon a sound and healthy footing, and to prevent our having recourse to a loan at a time when it would be raised probably upon less favourable terms.

SIR HENRY WILLOUGHBY

said, he thought it would be a great improvement in the finance system of the country if the quarter's returns of the whole of the United Kingdom, instead of those of Great Britain alone, were published. In reference to the right hon. Gentleman's statement that the surplus of the financial year just expired was 3,000,000l., he would observe that 1,500,000l. was to be deducted on account of the newly-created three per cent stock and Exchequer bonds. It would be idle, however, for him to enter largely into a discussion on a paper with the contents of which he was not familiar.

THE CHANCELLOR OF THE EXCHEQUER

said, the right hon. Gentleman (Mr. Disraeli) and, still more, the hon. Member for Huntingdon (Mr. T. Baring) had entirely misapprehended, and, consequently, had mis-stated to the House both the language he had used, and the principles and opinions he had expressed. The right hon. Member for Buckinghamshire said, "It won't do for you to be an habitual borrower upon the Bank;" and the hon. Member for Huntingdon declared that he (the Chancellor of the Exchequer) made the use of deficiency bills the keystone of his system of finance. Now, he had never used any such language, and had never done any such thing. What was the truth about his being an habitual borrower? Why, this was the very first quarter he had borrowed at all; and, under such circumstances, it was very hard to be charged with being an habitual borrower. He had been furnished by the Bank with a statement of the amount of deficiency bills issued and brought to charge during the last quarter, and the result of this statement was, that there were only eight days during the last quarter—during the previous quarters he believed there were not any at all—at which the Bank was in advance of the public balances, and upon those eight days the amount of accommodation varied from 29,000l. to 125,000l. The sum of 125,000l. was the largest amount of accommodation from the Bank during the last quarter. There was, therefore, he repeated, no foundation for the statement that he was an habitual borrower—far less that he had made the issue of deficiency bills the keystone of his system of finance. Nothing which lie had ever said, and nothing which he had ever done, bore the slightest correspondence with the statement of the hon. Member for Huntingdon on this point. He had, indeed, said—and this was a matter no doubt open to discussion—that a moderate and limited use of deficiency bills was, in his opinion, a good and prudent practice.

MR. T. BARING

I did not attribute to the right hon. Gentleman the use of the expression that the issue of deficiency bills was the keystone of his financial system. I only said that was the tenor of his argument.

THE CHANCELLOR OF THE EXCHEQUER

How was it possible that any such deduction could have been made from what he had said, when his argument went only to the extent that you might, within narrow limits, go to the Bank for advances which might be taken up within a week or fortnight of the quarter's revenue? The amount of deficiency bills was the result of the extraordinary demands made for the liquidation of stock. But a more important point than this was, that the right hon. Gentleman and other hon. Members were under the impression that a deficiency of this kind, once created, was not to be restored without the use of some extraordinary measure. Now, he might tell the hon. Member (Mr. T. Baring) what, if he might say so, was the keystone of his system of finance. It was invariably to ask this House to provide an income which would more than meet the expenditure of the year. That, in his opinion, was the keystone of finance, and his secondary doctrine was this—that the question of having a large or a small balance at the Bank was a question open to discussion, but it was a matter of no great moment, provided you kept within narrow bounds, and provided you always adhered to the principle of avoiding a deficiency upon the year's account, of avoiding a fictitious surplus, and of having an income which would always more than cover your expenditure. The right hon. Gentleman the Member for Buckinghamshire had stated that he trusted he (the Chancellor of the Exchequer) would devise some means of escaping from his present situation in respect to the public balances during the recess. Now, the statement which he (the Chancellor of the Exchequer) had made to-night was, with the same exception, what he had stated about the issue of Exchequer bills—it was a retrospective statement. He had admitted that, although he did not consider there would be anything inconvenient or alarming in the present amount of accommodation under ordinary circumstances, yet that, under present circumstances, the case was not exactly the same. He admitted that at such a period as this we ought to have a wider margin at the Bank, that we ought to take what in ordinary phraseology was called more elbow-room, with reference to the provision of means for the public service. Upon that subject it would be absurd to enter into a discussion at the present moment. It might, however, be his duty to take a further view of the demands of the public service for the year, and, if he was unfortunately compelled to do so, then would be the time to state to the House the means by which he proposed to place the Exchequer in what he believed to be a safe and satisfactory condition.

Account ordered— Of the Income and Expenditure for the year ended the 5th day of April, 1854, together with the Balances in the Exchequer at the commencement and at the termination of the year, and the amount of Funded or Unfunded Debt created or redeemed in the said year,

The House adjourned at Eleven o'clock, till Thursday, 27th April.