§ THE CHANCELLOR OF THE EXCHEQUERmoved that the House should go 619 into Committee to consider the following Resolution, which stood on the paper:—
That it is expedient to create a charge on the Consolidated Fund of the United Kingdom of Great Britain and Ireland in respect of the sums due to Savings Banks and Friendly Societies, and to provide for the payment of interest thereon to the Commissioners of the National Debt at 3 per centum per annum; and, also, to make provision out of the said Consolidated Fund, or by Exchequer Bills or Exchequer Bonds, for any difference which may now or hereafter exist between the assets in the hands of the Commissioners for the Reduction of the National Debt in respect of Savings Banks and Friendly Societies, and the liabilities thereon; and, also, for the interest no such Exchequer Bills or Exchequer Bonds.
§ MR. HENLEYsaid, he must put it to the right hon. Gentleman whether it was decent at that particular period of the Session, and under the present circumstances, to make a motion of this kind, from the terms of which it was not very clearly to be ascertained what were the scope and object of the right hon. Gentleman's intentions. It was a Resolution which affected many thousands, nay, he might truly say, millions of the people of this country, and he (Mr. Henley) considered it by no means fair to bring on a motion like the one now before the House without due notice to that the Opposition side of the House. The right hon. Gentleman proposed to deal with the important circumstances of the Savings Banks when Parliament was supposed to have come together for an object entirely different. He must therefore beg to ask the right hon. Gentleman, before Mr. Speaker left the Chair, to state to the House what was the urgent necessity or the reason at all that should induce him to bring on at such a time and in such a mode, such a question. They had heard a great deal, at former times and in former years, of tampering with Savings Banks money, and of Stock-jobbing with those funds; and really and truly, if they were to have this kind of motion thrust upon the country in that way, it was difficult to suppose that there must not be some object of the kind in view. He put it to the right hon. Gentleman, if he chose to persist in the motion, whether be should not give some statement to the House before Mr. Speaker was called upon to leave the Chair, in explanation of what his object was, and what was the necessity that the matter should be brought on at that period of the Session of Parliament, when it was impossible that it could receive the consideration 620 which it ought to receive, and when it was impossible for any Member of Parliament —however anxious he might be to do so — to communicate with the parties who were immediately interested in the matter.
§ THE CHANCELLOR OF THE EXCHEQUERI believe, Sir, that in moving that you should leave the Chair without any statement from myself, I pursue the course which is uniformly taken on all questions of Finance. The principle on which the House provides that on matters of Finance there shall be a preliminary Committee rests upon the very same maxim of good sense which dictates that the first statement on a question of Finance should be made in that Committee, because, if the Minister should make a statement before Mr. Speaker leaves the Chair he might as well introduce a Bill; and the object of the preliminary Committee is that there should be the freest possible discussion on the first stage of that measure of Finance. For that reason I made the motion; and you must perceive that it is more convenient to the House to make the statement before the Committee that commits the House to nothing, and where I can make any explanation that is necessary, than that I should make the statement, contrary to all rules of precedent, and to the convenience of the House. To me it is the same thing which course I pursue; of course, when Mr. Speaker leaves the Chair I shall explain to the Committee the measure I mean to propose.
§ After a short discussion, in which Sir H. Willoughby and Mr. Spooner objected to the necessity for then bringing forward the question,
§ MR. HENLEYsaid, that if they were not called upon to vote on the Resolution he could have no possible objection to Mr. Speaker leaving the Chair.
§ THE CHANCELLOR OF THE EXCHEQUERThe motive I have in view is, simply and singly, the convenience of the House, and when we go into Committee it will be for hon. Members to judge whether they shall take any Vote now or go into a discussion. If it should then be the sentiment of the Committee that I should postpone the Vote, I shall have no objection to do so.
§ House then went into Committee, Mr. Bouverie in the Chair.
§ THE CHANCELLOR OF THE EXCHEQUERMr. Bouverie, the step which I 621 have proposed to the House that it should take to-day is one which, as I have said, appeared to me to be dictated by a consideration for the convenience of the House, by that test alone I wish it to be tried. It is perfectly true that no financial statement is about to be made on the part of the Government; the statement I am about to make is not a financial statement in the ordinary sense of the term. It is purely a statement with regard to a system of regulation; it has nothing to do with taxes, either with their imposition or alteration; and it has nothing whatever to do with Supply or with the Ways or Means of the Government; it is a matter relating to the administrative department to which I anticipate the ready assent of Parliament, and therefore, so far it is not a financial statement. Now, with respect to the question of bringing it on at the present moment. They had heard much of late years on the subject of the arrangement of business. They had all felt that there were great defects in the mode of carrying on the business, so far as the arrangement and distribution of it are concerned, and different Governments at different times have come under much censure for not contributing, themselves, sufficiently to the expedition and due distribution of business. Now one of the greatest flaws and faults in our mode of proceeding is, that at the commencement of the Session, when we meet for the transaction of business, we are not usually prepared for it, and that many weeks elapse before we come to the discussion of it. What is done in consequence in this short Session? Several hon. Gentlemen have got leave to lay Bills on the table, and not many minutes have elapsed since an individual Member of this House was permitted to lay on the table, on his own responsibility, and to have read a first time a Bill of importance infinitely transcending anything you can attach to this Resolution. My noble Friend the Member for Woodstock (the Marquess of Blandford) has presented a Bill for the entire reconstruction of the episcopal and capitular system, and that Bill has been now placed on the paper for a second reading after the recess. I will now come to the question before us. It is one of those questions that require, under the forms of the House, a preliminary Resolution, but the forms of the House do not permit me to place with regularity or propriety in that preliminary Resolution the explanatory matter and the accompanying enactments which it is absolutely 622 necessary should be before the House in order that it should understand them; and therefore my hon. Friend the Member for North Warwickshire (Mr. Spooner) said, with very great justice, that he could not understand this Resolution. I am not surprised at that declaration; and if my hon. Friend had any experience in legislation relating to matters of finance, and regarding the custody and care of public money, he would know that the technical language in which these Resolutions are framed is language extremely difficult to make explanatory in itself. My object is to give that explanation, if it be according to the view of the House; but if it be not according to the view of the House, then I have nothing to say, for the House is the best judge of what is for its own convenience. My whole purpose is to have the measure printed, and considered daring the recess, so that hon. Gentlemen may he in a full condition to consider its principle with advantage when we meet after the recess. That is my intention; but if the House be of a different opinion, it is the best judge of its own business. Observe what the Resolution is, and it will be made clear to you that this is not a financial statement. The Resolution is simply a Resolution which is necessary by the rules of this House as the foundation of one or mere clauses of a Bill which I shall propose to introduce, but which will contain a number of other clauses, a view of which it is absolutely necessary for the House to have to comprehend the whole scope of the measure. The object of the Bill is to meet various difficulties and objections that have often been felt with regard to the money—commonly called the savings banks money— that at present is held by the Government. That which concerns the management of the savings banks, and the regulation of the rate of interest to be paid to depositors and the nature of the guarantee to be given to depositors, is a most important subject, in which I think Gentlemen in this House feel a deep interest; and it is a subject on which I propose to present another Bill to the House, but that is entirely a distinct matter from the present Resolution, and from that which the present Resolution contemplates. With the interests of savings bank depositors I have now nothing to do, except in this indirect form, that I hope by the Bill to make the title of the depositors in law—(I will not say better in substance, for it 623 could not be better in substance)—but to make it in law more perfect, and to give them a better remedy for asserting their rights. The present Bill has reference to the custody of the money of the savings-banks. The Committee must bear in mind that at the present time there are two modes by which you might receive and manage the moneys of the savings-bank depositors, and of the depositors of friendly societies. You might receive them as their agent, invest them on their account, transact their business for them, and leave to them the risk of loss and the chance of gain on those investments. That would be one mode of proceeding, and unfortunately, from the present state of the law, so much anxiety has been introduced into the subject that a great number of people, and even Members of this House, are still under the impression that that is the mode of proceeding adopted by the law; but the fact is, that the principle of the law, though the application of it is imperfect, is founded upon an opposite mode of proceeding—namely, this, that when you have received the money of a savings-bank depositor you have made a contract with him, not to act as his agent, not to invest the money on his account, and leave him to the risk of loss or chance of gain on such investment, but you have contracted with him to keep his money for him, to repay his money when he wants it, and to allow him a certain amount of interest. That is to say, you profess to manage the deposits as managers or bankers, and while it is in the bands of the State it is the money of the State; but what the savings-bank depositor has a right to expect is, that his money should be rendered back to him when called for, and with a legal rate of interest. Now, the real object of this Resolution is this—to reduce that obligation and that contract of the State with the savings-bank depositor to that simple form which is adopted by every banker. Anybody who has money in a bank understands perfectly well the conditions on which it is held. It is held as money payable on call, with or without interest, as the case may be. What I propose is, that as respects the bulk of the funds received from savings-bank depositors, they shall be held in this country as they are held in other countries, not in the complicated form of stock and other public securities—though it may be necessary to retain a portion of them in that form—but in a state in which every man will understand what he has 624 given, and what he has a right to—that is, in the state of a deposit with the public. In assimilating the practice to that of other banking establishments, I do not say the Resolution proposes the adoption of the precise conditions on which money is given to them, but I speak merely of the form, and I thus seek to get rid of the very great and mischievous misapprehension which pervades the country, that savings-bank depositors are liable to suffer by the fluctuation of the public stocks, that being a misapprehension which I may anticipate with confidence is a very great evil. It is exceedingly to be desired that we should give to the savings-bank depositor, not only the best title, but the clearest and most effectual title in law that in practice we can devise. That is the object I have in view, and that object will be promoted if, instead of taking the money of the savings-bank depositor and putting it into the form of stock, which he confusedly thinks is attended with risks, we make him understand that the money he gives he has a right to get back, with a certain—that is a legal rate of interest. It is impossible for me to convey to the Committee the same view that I could convey to the House if I had the Bill on the table, but I point out the main objects of it, which are to bring into a clear and desirable form the obligations of the State to the savings-bank depositors. I shall venture now to refer to another point. I have stated on former occasions that powers unnecessarily large over this great mass of public securities have been vested in the Commissioners of the National Debt—that is, practically, in the hands of the Chancellor of the Exchequer —and I now propose by this Bill to limit the exercise of those powers. Those powers will continue in force with regard to so much of stock and public securities as the National Debt Commissioners may continue to hold, but so far as regards the great mass of the assets, that will be represented by an open asset credit, and the movement of those funds up and down will cease to be dependent on the will of the Finance Minister. They will then move upwards and downwards entirely according to the money received from the depositors or the money drawn by them, but the will of the Chancellor of the Exchequer will have nothing whatever to do with them. I hope, therefore, that the views of the hon. Baronet opposite (Sir H. Willoughby) will be met by the measure I propose to submit to the House. One effect of the Bill will be 625 this, there will be this advantage—and not a slight advantage—which will be obtained by the substitution of a simple charge on the Consolidated Fund for a great mass of public securities—there will be a considerable saving of public money, and there will be the further advantage that we shall thereby do something towards relieving the exceedingly great accumulations of payments on the quarter days. One of the objects of the measure is, that the interest payable on those deposits, instead of being paid on the four quarter days as at present, will be paid, on the contrary, at a more convenient period, namely, the 20th of November, the middle of the quarter, the best time to pay it, and thus relieve the pressure on the quarter day. Another point is this—at present, unfortunately, the statement of your National Debt account is not a true and accurate statement, because in that National Debt account you appear to be indebted in respect of savings banks only in respect to the amount of stock that happens to be held by the Commissioners; but that is not the real amount of the debt—the real amount of the debt is their liability to the savings bank trustees, which consists of the whole money received, with the legal interest that has accrued. It is a great public object that we should make the statement of that debt veracious and accurate, and by the Bill that I propose to introduce, founded upon this Resolution in its most important parts, I shall provide for the statement of the balance of the assets and liabilities of the National Debt Commissioners once a year, which will be immediately after the 20th of November, so that when I give a statement it will be a statement, as nearly as may be, accurate and conclusive. I have stated to the Committee how much I desire them to understand the nature of my object at the present moment. My object has been to present to the House a measure for which I most confidently anticipate their full and most unqualified approval in its general scope and object. I wish to be able to put this measure into the hands of Members at once, that they may have an opportunity of considering it during the recess. I shall, in addition, move tins Bill in the House, and ask the opinion of the House on the principle of it, at the most convenient time after the recess, namely, at a period before the financial statement is made, and when you will have the best opportunity of considering its merits. But you are the best judge of what will be for 626 your own convenience, and I leave the matter in the hands of the Committee. The right hon. Gentleman then placed the Resolution in the hands of the Chairman.
§ SIR HENRY WILLOUGHBYIf it be intended to report progress without coming to any discussion upon the Resolution, my observations will be very short.
§ THE CHANCELLOR OF THE EXCHEQUERWithout a preliminary Resolution I cannot bring in a Bill. My desire is to lay the measure before the Committee, and to give the hon. Baronet and others the most convenient opportunity of considering the measure during the recess, so that they shall be fully able to discuss the principle of it after the recess. Of course, I cannot do that without the Resolution, and whether the Committee shall think fit to negative the Resolution, and to thrust over the further consideration of the question until it is jostled by a hundred other subjects, at a later period of the Session, is a matter for their consideration.
§ MR. DISRAELII trust that the Committee will assent to the proposal of the right hon. Gentleman the Chancellor of the Exchequer. It is quite impossible that we can have before us the scheme of the Government without tins preliminary operation. I am glad to find that the right hon. Gentleman has directed his mind to the subject of savings banks, and I think the step he is taking is of great importance. Without pledging ourselves to support the measure, I will say that I think it must be for the interest of the public, and agreeable to the Committee, that the Resolution should be passed.
§ MR. HENLEYsaid, that the right hon. Gentleman the Chancellor of the Exchequer had stated what he had never heard stated before, either in that House or out of it, namely, that there was a difficulty in the law as to the claim of depositors in savings banks, which would prevent them from getting their money back in full tale and weight, with interest. The right hon. Gentleman, it was true, added that the depositor would have no difficulty in that House in recovering his money, because the depositor might rely on the good faith of Parliament.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, he had not intended to make the statement ascribed to him.
§ MR. HENLEYHe would, then, say not another word on that subject. With respect to the question before the Commit- 627 tee he might be excused for not having a very clear understanding of what was intended, because the right hon. Gentleman himself said, he did not intend, on the present occasion, to make a full explanation of his proposal, and it certainly would be very desirable for the House to have the project in black and white before it. He hoped the measure would have the effect of preventing for the future that tampering which, from time to time, if it had not actually taken place, had, at any rate, apparently occurred on the part of various Gentlemen in charge of the public finances, in consequence of the shifting and shuffling of funded property or some other of the public securities; by which, he believed, the property itself had always been diminished, though the depositor was not affected by that operation, because to him the public faith was pledged. He should not object to the passing of the Resolution at the present time, upon the clear understanding that the House was by no means pledged to any principle, before having an opportunity of considering the Bill.
§ MR. H. HERBERTThe right hon. Gentleman the Chancellor of the Exchequer said he intended to introduce two measures, one relating to the management of savings banks, and the other to the custody of deposits. Are we to have two Bills; and, if so, will both those Bills be laid upon the table of the House immediately, to enable us to have an opportunity of judging of both schemes during the recess?
§ THE CHANCELLOR OF THE EXCHEQUERI propose to lay the first Bill on the table of the House to-morrow or next day; but as to the Bill for the management of the savings banks, I do not propose to introduce it until after the recess; but ample time will be given for the consideration of it.
§ SIR HENRY WILLOUGHBYsaid, he thought the right hon. Gentleman had hardly done justice to the annual accounts of the national debt that were presented to the House, for in them the liability of the country was clearly stated. The right hon. Gentleman said it was limited to the quantity of stock held, but there was a distinct column which stated the existing deficiency at the present moment. There were about 36,000,000l. sterling belonging to the savings banks and friendly societies; and on the 20th of November, 1853, taking the stock at the price of the day, there was a deficiency of 2,723,000, and 628 the Committee must be perfectly aware that the public would have to pay the deficiency, whatever it might be. With regard to the principle that had been laid down as to savings banks; he was perfectly aware of the nature of the contract, but then he thought that the right hon. Gentleman must see there was a very important question for the consideration of the depositors, and that was that the amount of the interest depended upon the state of the account. ["No, no!"] Why it was quite clear, and if they referred to the earlier accounts of the savings banks they would see that a much higher rate of interest was then paid, and that now the rate of interest is much lower. The right hon. Gentleman proposed to deal with the money as if it were placed in a bank on call, but in all those cases the interest varied with the interest on money, and they were now called upon to reduce the rate of interest payable to depositors in savings banks from 3l. 5s. to 3l. [THE CHANCELLOR OF THE EXCHEQUER: "No, no!"] The right hon. Gentleman had also omitted one important view of the case. It was intended that the savings banks money should be held by certain Gentlemen upon a solemn trust, but all of them, except the Chancellor of the Exchequer, had ceased to watch over this fund, and it had become an engine of state finance. The trust consequently had been grossly abused. They could not confide in the financial Minister a large sum of money, except under the most complete control of the House, and the strongest provision of the law, and any enactment that would prevent the possibility of abuse would meet his support. What that House should do was, to place the capital of the savings banks in safe hands, in order that it should be looked after. He would ask, why there was any deficiency at all, and why was the right hon. Gentleman obliged to bring in a Bill? How came it that the balance in the account was on the wrong side? Let them take the account from 1817 to 1853, and he would ask why should it be a losing account? The investments were all on a favourable scale; and let them ask any bill-broker what was the state of his account. But the truth was that the deficiency had arisen from the mishandling of the money by the financial officers, who put their hands into a fund that should be considered a sacred trust. He must again complain that the right hon. Gentleman proposed by this Resolution to reduce the interest to 3 per cent.
§ THE CHANCELLOR OF THE EXCHEQUER. I again say, no, no.
§ LORD JOHN RUSSELLsaid he begged to be allowed to interpose a word. If this Resolution were to be made a matter of discussion they had better report progress; but if the Committee would consent to allow the Bill to be brought in, they could then consider it when the measure was fairly before them. That he thought would be the more convenient course.
§ Resolution agreed to: House resumed.
§ THE CHANCELLOR OF THE EXCHEQUERsaid he might perhaps be allowed one word of explanation, as the hon. Baronet (Sir H. Willoughby) seemed to be under some misapprehension as to the effect of what had fallen from him. He wished it to be distinctly understood that the interest payable to savings banks depositors would not be affected in the slightest degree, one way or the other, by this resolution.