HC Deb 14 April 1891 vol 352 cc485-532

Considered in Committee.

(In the Committee.)

Clause 1.

Amendment proposed, in page 1, line 13, to leave out the word " fifteen," and insert the word " ten."—(Mr. Keay.)

Question proposed, "That the word 'fifteen' stand part of the Clause."

(2.45.) MR. SEXTON (Belfast, W.)

I think the Committee are rather unfortunate to-day in the attendance of Ministers. It was very inconvenient to discuss the last Bill in the absence of the Attorney General, and as this Amendment ultimately concerns the Department of the Chancellor of the Exchequer I had expected to find the right hon. Gentleman present.


He is in the Library, and will be here in a moment.


The clause as it stands is justified on the solitary plea, that the Government desire to create a Stock that shall be worth par value; but the Chancellor has not explained why the Government consider themselves underan obligation to give a Stock worth more than par value to the Irish landlords. Hitherto the Irish landlords have been the worst enemies of this country, and have brought nothing to it but trouble and disgrace, and I think they ought to be content to receive a Stock which stands on a level with any other class of funds whatever. The Government ought, I think, to have had regard for the present as well as for the future. It is abundantly clear, however, that they apprehend a depreciation in the value of Stock hereafter, and that they believe that 2¾ per cent. will be of no higher value in years to come than 2½ per cent. now. It is somewhat curious that in this Bill provision should be made for 2¾ for 30 years, while the best class of Government Stock stands at 2¾ per cent. for 12 years only, and then falls to 2½ per cent. The result will be that this particular kind of Stock will run considerably over par value before it comes to be redeemed. I have no wish to dogmatise, but I should like to submit two or three principles which ought to have some bearing on the case. In fixing the rate of interest on this Stock I think the Government are bound to consider the interests of the tenants, the fundholders, and the community. The tenants have suffered grievously and long from the policy of the State, and they are now entitled to such encouragement as the Government can give them. Such encouragement should be to place the annuity which they will have to pay at the lowest possible figure. The amount of interest to be paid to the. stockholders measures the annuity which is to be paid by the tenant to the State, and if the Stock is issued at 2½ per cent. the tenant would be let off for a less annuity than 4 per cent. Therefore, I contend that we are acting unfairly to the tenant, while, at the same time, we are giving to the landlord too high a rate of interest. Then, again, I say that the Government ought also to consider the interests of the fundholders, and it is certain that Stock at 2½ per cent. will depreciate if a higher rate of interest is to be paid on this particular description of Stock. My contention is that you will depreciate the property of every man who has invested his money in the funds, and that the Irish landlords are not a class in whose interests you ought to inflict such a blow upon the fund-holders. So far as the community are concerned, their interests will be best regarded by stimulating the creation of a peasant proprietary, and it is manifest that this can only be done by exacting a low rate of interest—that, in fact, the lower the interest the better will be the security. Possibly the Government may be inclined to accept a compromise upon the question. The right hon. Member for Wolverhampton (Mr. H. H. Fowler) has outlined one that is certainly deserving of consideration. What he asks is that we should not give the Irish landlords a better class of Stock than any other class of public funds, but simply as good a Stock, to be converted in 1903 to a Stock yielding dividends at the rate of 2½ per cent. I am disposed to think that if the Government are prepared to consider that proposal favourably, a lengthened discussion may be avoided.

(2.54.) MR. J. MORLEY (Newcastle-upon-Tyne)

I think it would save the time of the Committee if the Amendment were withdrawn and the discussion were taken on the Amendment of my right hon. Friend the Member for Wolverhampton, which raises a broader issue than is involved in the Amendment before the Committee.

MR. CHANCE (Kilkenny, S.)

Before that is done 1 think it is essential to know from the Chancellor of the Exchequer in what manner the Land Commissioners are to deal with this clause. They may deal with it in either of two ways. They may assume when authorising an advance that the Stock is worth par, or that it is to be taken at its market value: and the difference between the wo might be a very serious one, because the landlord would get the benefit and not the tenant. I see no distinct direction to the Land Commissioners as to how they are to deal with the clause; and as the Bill is of a complicated character, I should like to have an explanation from the right hon. Gentleman.

MR. LABOUCHERE (Northampton)

I think it would be convenient if my hon. Friend the Member for Elgin (Mr. Keay) were to withdraw his Amendment in favour of that of the right hon. Member for Wolverhampton, because the latter really places the Stock precisely in the same position as the present Two and Three Quarter per Cent. Consols.

(2.56.) MR. KEAY (Elgin and Nairn)

Under the circumstances, I am quite prepared to withdraw the Amendment; but before I do so, I think I am justified in complaining that for the third time the Government have absolutely refused to reply to a question which is essential to the consideration of the facts of the case. I find in Hansard a report of the speech of the Chancellor of the Exchequer when he brought forward his Conversion scheme. My Amendment recommends a Two and a Half per Cent. Stock, and in 1888 the right hon. Gentleman defended himself against proposinga Two and Three Quarters per Cent. Stock in consequence of the mere present price of a Two and a Half per Cent. Stock being 96. He said that he must look to the price of the Stock for 50 years to come, and the estimate which the public and he himself had formed as to what that price must be. The right hon. Gentleman was totally wrong in talking of 96 as the future value of the Two and a Half per Cents.: and so far as a Two and Three Quarters per Cent. security is concerned, the value of it would be a good deal more than par.


I did reply upon that point last night, and it is quite unnecessary that I should re-state the whole position.


The right hon. Gentleman did reply to one of the points I urged last night; but to the main point he made no reply at all.


The hon. Gentleman is mistaken; I did reply.


Will the right hon. Gentleman tell the Committee what he believes the future value of British credit based upon a Two and a Half per Cent. Stock will be?


The point was whether or not in the course of years a 2½ per cent. conversion would stand in the same position as Consols. I hope the hon. Gentleman will withdraw his Amendment without further discussion.


I would willingly give way if the right hon. Gentleman would make any real reply. But what does he say?—


Order, order ! I must warn the hon. Member that it is in the power of the Chair to put a Member to silence, and he is now laying himself open to a charge of tedious repetition in pressing an argument which he has announced his intention to withdraw.


I only wish I could get the chance of pressing my argument. I was endeavouring to quote Hansard in order to show what the view of the right hon. Gentleman was in regard to the value of the securities. The right hon. Gentleman said that he did not think we should secure the advantage to which the State was entitled if he were to convert the Stock into a permanent Two and Three Quarter per Cent. Stock, yet this is what he is now going to do for the Irish landlords. The right hon. Gentleman went on to say that the Stock ought to be reduced to 2¾ for a term of years, and then descend automatically, without any further action of Parliament, to 2½ per cent. That is what I maintain ought to be done in this case. It has been somewhat doubted whether or not these securities will be at par when they reach 2½ per cent. What does the right hon. Gentleman say? He says, " I will assume, but I will not grant, that the new Stock will not be above par." What, then, must be his estimate of what the price of a Two and Three Quarter per Cent. Stock will be, which is practically to be perpetual. [The CHANCELLOR of the EXCHEQUER dissented.] The right hon. Gentleman shakes his head. I quite admit that it is to be redeemable at 30 years, and that that fact diminishes the value of the Stock; but the right hon. Gentleman, speaking of the Two and a Half per Cent. Stock created by the right hon. Gentleman the Member for Edinburgh (Mr. Childers), stated that it had been most valuable to the Exchequer, and that he was desirous of securing the same advantage for the taxpayers of the country from the new Stock which he himself proposed to create. The right hon. Gentleman, in refusing to admit that 2½ per cent. is the future value of Stock at par, places himself on the horns of a dilemma. If, on the one hand, he confesses that 2½ per cent. will form a par security in the future, he thus cuts the ground away from under his feet in regard to the creation of a Two and Three Quarter per Cent. Stock for the Irish landlords. On the other hand, if he believes that Two and a Half per Cents. will be, as at present, at a discount, he must be prepared to admit that he has deceived a considerable number of innocent widows and orphans who took the " Goschens," as they are called, at par on his representations. The right hon. Gentleman said last night that it was necessary to keep the Stock in this way simply that it may be earmarked; but I fail to see how that affects this Amendment at all. It might be earmarked by calling it " Land Stock," or it might be printed on pink paper in order to show its sporting character. On these grounds I venture to say that the reply which the right hon. Gentleman gave last night was insufficient to establish a case for the rejection of the Amendment.

(3.15.) MR. GOSCHEN

I and the Committee generally agreed with the suggestion of the right hon. Member for Newcastle (Mr. J. Morley) that this discussion should be taken on the Amendment of the right hon. Member for Wolverhampton, but 1 did not know that the penalty we should have to pay for the conception would be to hear the whole speech of the hon. Member for Elgin repeated over again. Nor did I ever, throughout the whole of my Parliamentary experience, find an hon. Member who was as anxious as the hon. Gentleman is that the last word should be given to his opponent. He always seems to think that every argu- ment he employs must be replied to. I can assure the hon. Gentleman that it would be a rather novel proceeding to take stock of every argument which an hon. Member is pleased to address to a Committee, and for the hon. Member to threaten to report Progress if each of them is not answered seriatim. I did reply to the hon. Member last night, but only briefly, because I was anxious to save time. The point which he raised was why this Stock should have a higher rate of interest than Consols, and I pointed out that small separate Stocks never commanded so high a price in the market as the great Stocks of the country. I prefer, however, to give the fuller answer which the case requires on the next Amendment, which stands in the name of the right hon. Member for Wolverhampton.

(3.18.) MR. KEAY

I do not think that I deserve the strictures of the right hon. Gentleman; I have raised no objection to anything that has occurred on the other side of the House except that distinct questions, which were undoubtedly germane to the issue before the Committee were not noticed or replied to. I beg now to withdraw the Amendment, but in doing so I wish to remind the Committee, that up to this moment the right hon. Gentleman has not said a word in reply to the one essential question whether or not this new Stock at 2½ per cent. is, in his opinion, to represent Stock at par value generally in future time?


I wish the Chancellor of the Exchequer would answer the question whether, in making advances to the landlord, the Land Commissioners are to be bound to treat this Stock at its par value or to deal with it at its market price?


The Land Commissioners will take all the circumstances of a case into their consideration, and will see whether the State is secure on the terms on which the advance is granted. Whatever is the price of the Stock, that would have some influence on the number of years' purchase the landlord would take.


Then am I to understand that where the Stock is perceptibly below par you are really requiring the tenant to pay somewhat more than 4 per cent.? Is that so?


If we were to give the landlord Stock very much above par he would have to take so much less himself, or to give less favourable terms to the tenant. If you depreciate the value of the Stock you will render the progress of land purchase in Ireland on reasonable terms more difficult.

Amendment, by leave, withdrawn.

(3.22.) MR. H. H. FOWLER (Wolverhampton, E.)

I beg to move to insert, after " capital," the words— " Until the first day of June one thousand nine hundred and three, and thereafter yielding dividends at the rate of two pounds ten shillings per cent. per annum. I am afraid that it will be necessary to repeat, although I shall do so very shortly, what has been said already. The Amendment which has just been withdrawn was virtually to give the Irish landlord a Stock inferior to English Consols, whereas the Chancellor of the Exchequer proposes to give the Irish landlord a Stock superior to English Consols. My Amendment proposes to give to the Irish landlord a Stock that shall be the same as English Consols, and the words of the Amendment are taken from the original Conversion Act. The Chancellor of the Exchequer stated last night, and has repeated to-day, that the Government wish to secure an even field between the landlord on the one side and the tenant on the other. That is my justification for the Amendment. I have no wish to attempt to cut off any portion of the value of the purchase money by giving the landlord something less than its par value; but, at the same time, I have no desire to give him anything more. The object of the Bill is to encourage the principle of purchase, and it provides the means by which that is to be effected. If the landlord is entitled to receive £100 or £1,000, as the case may be, we are bound to give him what is equivalent to that, and nothing more. The Chancellor of the Exchequer says he is anxious to give the landlord par value, and what I say is that if the conversion scheme is founded on a right basis it is founded on this principle: that the creditor of the English Government is entitled to receive 100 sovereigns for every £100 of debt he holds. In lieu of these 100 sovereigns, I propose to give him Stock which, for 12 years will bear 2¾ per cent. interest, and which for the remainder of a certain period will stand at 2½ per cent. The right hon. Gentleman says that is equivalent to £100. If it is not so, a gross injustice has been done to fundholders. What the English fundholder was told, both by his broker, by the English Government, and by the experts, was that in the probable future state of the English Money Market, the Government Stock would bear interest, first at 2¾ per cent and then at 2½ per cent. and that such Stock was worth £100. Upon that basis the conversion proceeded. The Stock stands now at 96.


We are not to deal with the temporary value. I do not press that part of the argument.


I appreciate the force of that remark. There is a practical admission that this Stock will be,worth £100 to the Irish landlord. The Chancellor of the Exchequer meets the proposition I make in two ways, if I understand him aright. He says that a small Stock does not command as high a price as a large Stock. I do not like to question the authority of the right hon. Gentleman, but I am bound to say that experience, and especially that of; an English railway, points the other way. A small Stock, where there are a limited number of people selling, will command a higher price than a larger Stock. If the Chancellor of the Exchequer is right, why not give the Irish landlords Consols? I think the argument of the hon. Member for Northampton (Mr. Labouchere) last night was unanswerable. Why say to the Irish landlord, "We are going to give you Stock; we believe that the market will be a limited one, and we therefore give you a higher rate of interest in order to compensate you." That interest must come out of the pocket of somebody—either the State, the tenant, or the public. Then why not give the Irish landlord Consols at once? The right hon. Gentleman says, " If you do that you will interfere with another part of my scheme. I want to earmark the new Stock "; but my rejoinder to that is that it is simply a question of professional book-keeping. I am not urging this from the point of view of depriving the landlord of a penny of his purchase money, nor do I wish by my Amendment to improve the terms for the Irish tenant. I believe the terms given under the Bill constitute a boon of great magnitude, and one which Parliament is not called upon to increase. Out of the £4 payable by the tenant on every £100 of the advance, £2 15s. is applied to the payment of interest, £1 is payable to the Sinking Fund, and 5s. is paid into the Local Taxation Account, with a specific enactment in favour of the appropriation of the sum for the benefit of Irish labourers' cottages. To this extent there is an endowment of Irish local taxation, and, as has been pointed out, the 5s. in the £4 represents a total sum of £75,000 a year. The effect of my Amendment would not be a reduction to the Irish tenant: it merely provides that when the interest on the land comes down to £2 10s. per cent. there will be 10s. per cent. to pay to the Local Authorities. Thus Irish local taxation will be strengthened and British credit will be used for the benefit of the community at large. I wish to know why, in paying this specific purchase money, there is to be given to the Irish landlords for £100 what is worth more than £100? Why should the Irish landlords be placed in a better position than that in which the deserving English middle class were placed by the conversion scheme? In that case the contention was that £2 10s. paid annually by Government was worth £100. I am afraid I have to some extent gone over ground already traversed, and, now, I put this proposition before the Committee as one of purely financial opinion, not mixing it up in any way with the rights and wrongs of Irish landlords or Irish tenants. When a hundred sovereigns are paid to an Irish landlord, why should not this be subject to the same conditions as when English creditors of the State were paid in Two and a Half per Cent. Stock?

Amendment proposed, In page 1, line 14, after the word " capital," to insert the words " until the first day of June, one thousand nine hundred and three, and thereafter yielding dividends at the rate of two pounds ten shillings percent. per annum." —(Mr. Henry H. Fowler.)

Question proposed, " That those words be there inserted."

(3.35.) MR. GOSCHEN

I appreciate the tone in which the right hon. Gentleman has spoken. I also appreciate the way in which the right hon. Gentleman and others have spoken of the conversion scheme. I wish to make it absolutely clear that, in my opinion, this Two and Three Quarter per Cent. Stock will be about par, and nothing more. This is the conscientious view of the Government, though it may prove to be erroneous. The right hon. Gentleman very fairly asks why the Stock should not be equal to Consols if the terms are the same; and the right hon. Gentleman is of opinion that a small Stock always commands a higher price than a large Stock. That view may be right with regard to Railway Stock but it is not right with regard to Public Funds. A large Stock suits the market best, because of the rapidity of the transactions. Consols are used, not only for investment, but as the basis of loans which are constantly taking place. Therefore it has happened that in the Public Funds no smaller Stock with the same guaranteed security has ever been equal to Consols. The Government have accordingly, in all good faith, come to the conclusion that the Stock to be issued in connection with the Bill would not be equal to Consols. The right hon. Gentleman next asks, very properly, why Consols were not given in these circumstances. I feel confident that if the Government had proposed to issue Consols a totally different set of arguments would have been brought against the scheme. Having regard to the future, I have felt that the country ought to have clearly and constantly before it what the proposed operation is, and that the operation should not be mixed up with Consols. I wish to keep before the public eye how from year to year the Stock has either decreased or increased, and I believe, therefore, that the best plan is to keep the Stock, like Local Loan Stock, as a separate operation. I have held the same view with regard to all Stock which is represented by assets; and I have always been of opinion that the proper financial measure to take is to separate that Stock on which there is to be repayment from that on which there is not to be repayment. At all events, the right hon. Gentleman will admit that the Government in these two matters have not acted hastily, but on a settled policy. Then as to the value of the Stock. Hon. Members have argued as if the Stock in question were a Stock of 2¾ per cent. for 49 years. But there are conditions under which the Stock is redeemable in 30 years; and, of course, if this Stock should be at a premium 30 years hence, any Chancellor of the Exchequer would borrow money at the rate of 2½ per cent., and would pay off this sum. The difference between this Stock and Consols is that Consols at 2¾ have 14 years to run, and the stock created under the Bill has 30 years to run at 2|. I do not myself believe—though I should be glad if the contrary were to prove true—that the Stock will stand high. If it does, it will facilitate transactions between landlord and tenant, but it is in no such expectations that the Stock is created. I wish to point out to hon. Members who are sincerely desirous of passing the Bill, this fact: Supposing the Government were to give to the landlords a Stock which during the next few years was 4 or 5 per cent. below par, an impediment in the way of purchase would be set up. [Mr. T. M. HEALY: No, no. It does not matter to the tenant.] Hon. Members must see that the offer of the landlord to the tenant will depend upon the revenue which the landlord will be able to derive from the Stock.

MR. T. M. HEALY (Longford, N.)

That depends on the Local Land League.


It will depend upon whose influence is supreme in Ireland at that time; but I notice that, according to the hon. Gentleman, the Land League is to be continued after the next General Election; and that, if right hon. Gentlemen opposite should succeed to power, the Local Land League is to have the same power as in earlier days. The Government have not regarded the matter from that point of view. Supposing, as an extreme case, we were to give the landlord paper that was worth, say, 9 or 10 per cent. Surely hon. Members must see that that would have the effect of preventing sales from taking place. The landlords are free to act in this matter—whether to sell or not to sell, and it is not as if the tenants had to agree to buy or not. Therefore the placing of British credit wholly at the disposal of the guarantee will the more easily enable the purchases to take place. The lower we place that credit the less use we make of it—that is to say, the lower the Stock the less likely we shall be to attain the object in view, the more we shall hinder the operation of the Bill, and the less able will the tenants be to get terms from the landlords. What the Government wish is that the landlord should be in such a position that he can and will sell, and hon. Members will remember that, as matters stand, the land revenue of the landlords will be considerably reduced after this Bill is passed. In many cases the landlord will not get more than half the gross rent he now obtains; and if we still further gave him Stock which will be 5 or 6 per cent. below par, shall we not again diminish the return he will get? We shall be removing from him the inducement to sell, and the reduction will be no advantage to the landlord or the tenant. The Government are not placing any loss upon the State by putting 2¾ into the Bill. With regard to any advantage to the Local Authorities, that must rest on the general desire of hon. Members opposite whether they wish to lessen the temptations to sales between landlord and tenant in order to increase the amount to be paid to the locality. What the Government desire is that the Bill should work, and we believe the rate we have fixed will make it work. In those circumstances, we are of opinion that anything that would tend largely or seriously to diminish the amount of Stock, as we have put it, would be an impediment to the working of the measure, would be a disadvantage to the tenant, and would confer no advantage on the taxpayer. I understand it is now the feeling in all parts of the House that the benefit accruing from the Bill should go only to Ireland in one form or another, and, that being so, it becomes a question between the tenants and Local Authorities of Ireland. It appears to the Government that the inducements both to the tenants to buy and the landlords to sell, large as they are, ought not to be diminished by any change in the framework of the Bill.

(3.53.) COLONEL NOLAN (Galway, N.)

There is one point which arose last night, and to which I attach more importance than the Chancellor of the Exchequer has given it. I say, emphati- cally, that the higher the interest on the Stock the better it will be for the tenant. That I take to be beyond argument. For my own part, I object to any money going to the Local Authorities; and I intend to move an Amendment exempting small holdings from contributing to any fund, even for the labourers. It is an elementary principle of finance that it is better to issue at par than below par. I am quite aware that some States pursue a contrary policy, but not, I think, those whose credit stands high; and though Pitt did the same thing in days gone by, I think it is now acknowledged he made a blunder. I repeat, that to issue the Stock below par would be a disadvantage to the tenants.

(3.57.) MR. SYDNEY BUXTON (Tower Hamlets, Poplar)

I do not intend to pursue this subject at length, but I desire to say a few Words with reference to the statement of the right hon. Gentleman. The chief argument of the Chancellor of the Exchequer is that the landlord, in selling his land, will look to the revenue—to the interest he will receive on the capital—in order to see how far he will be recouped for the rents he gives up. I believe, however, that the landlord will look rather to the capital value of the Stock than to the actual interest he will receive, and that it will be his desire to hold the Stock, whether it is Land Stock or Consols. He will look at the price at which he can sell the Stock rather than at the actual revenue it brings in. Nobody at present can tell what the value of the Land Stock will be; and I should have thought an Irish landlord would prefer to have Consols offered him rather than a Stock of which he does not know the value.


Judging from precedent, the value of the Stock will stand between the price of the Local Loan Stock and the price of Consols.


The right hon. Gentleman's interposition shows, at all events, that no one knows what will be the price of the Stock. The landlord would prefer a Stock of which he knows the price. I think the right hon. Gentleman ought to remember that half of those who take the Stock will desire rather to sell it than to hold it, and if there are a large number of sales of a small Stock like this, which is not very negotiable, it will be likely to put the price down below what it would if it were a large Stock, like Consols. The Chancellor of the Exchequer somewhat naturally wants to keep all these arrangements in reference to Land Stock separate from our great National Debt, and to that extent I think we all agree with him. But, as the right hon. Gentleman the Member for Wolverhampton pointed out, that after all is simply a matter of book-keeping. The interest on the Stock will have to be found through the National Debt Commissioners, just as in the case of Consols, and it is simply a question of book-keeping, and not a matter of real practical importance. The question for us is whether it is worth while charging this Stock with the extra ¼ per cent. in order to keep it distinct from Consols, when we believe it would be better if it were put into Consols. The hon. and gallant Member for Galway (Colonel Nolan) said he would not be a party to anything which would go to benefit the locality at the expense of the small tenant. The Chancellor of the Exchequer said this is a matter simply between the tenant and the locality. I think it is to be remembered that, as far as the English taxpayers are concerned, we wish to get the locality the largest possible interest in the repayment of the fund. We want to do what the right hon. Gentleman the Member for Mid Lothian did in his Bill, and make it to the interest of the locality to see that the tenants pay their debts to the State. We therefore think it will be of advantage to the taxpayers as well as of advantage to Ireland itself that the locality should have such an interest in the re-payment. The Government do not give us the real reason why they oppose this proposal; the fact is that they do not want it to appear to the public at large—as it would if they simply issued Consols—that the English taxpayers are practically guaranteeing the interest to the landlords. That is the real reason why they decline to accept the Amendment. It seems to me that the financial arguments used by my hon. Friend and others have been entirely in favour of issuing one large Stock instead of these little un-negotiable Stocks.

(4.5.) SIR W. HARCOURT (Derby)

I only rise to notice one remarkable-statement made by the Chancellor of the Exchequer. He spoke of the disadvantage under which the Stock would be1 placed if it went down to £5 or £6 below par. That is his estimation of a Stock which would rest exactly on the same footing as his own Consols. I suppose, then, that is his estimate of the future of Consols.


The right hon. Gentleman was not in the House when I pointed out the difference.


Of course, I know the right hon. Gentleman pointed out that one Stock was larger than another. That may have a small effect, but it will only be a small one. The right hon. Gentleman, in order to support the proposal he has made, talks about the Stock being 5 or 6 below par.


I do not think the right hon. Gentleman would wish to misrepresent me. I simply made an. assumption for the purpose. I never suggested that the Stock would be 5 or 6 below par.


Then let us get rid of the assumption for the sake of argument. The assumption was used to support an argument, and if the assumption disappears the argument disappears with it. I saw an article a few weeks ago in the Economist criticising the financial ingenuity of the Chancellor of the Exchequer and his extreme love of creating a quantity of new Stocks. It seems that now, to the great heavenly body of the National Debt, the right hon. Gentleman is adding a number of satellites to revolve round it. It seems to me there is very great inconvenience in this multiplication of accounts. The great object of the original Consolidated Fund was that there should be one great Stock, and that the National Debt should be one single item, as far as possible, in which the country would have to deal. I congratulate the right hon. Gentleman on his great success in the creation of the Stock which is now Consolidated Stock of the United Kingdom, by his conversion scheme, but that he should follow that up by immediately creating a new Stock on different terms is, I think, an unfortunate experiment in finance. These are the financial considerations which, I think, weigh against this proposal. But the hon. Gentleman who has just sat down pointed out another. You may argue as you please as to what terms shall be made between the landlord and tenant, but there is this intelligible thing which will be known to everyone, namely, that the Stock you have offered to the Irish landlord in respect of this great experiment of purchase, is a Stock of higher value and at a higher rate than Consols. That will be a fact perfectly understanded of the people. I regard that as a great objection in a proposal of this character, and, therefore, I shall certainly vote for the proposal of my right hon. Friend.


I do not wish on this question to speak in anything of a Party spirit, but I am bound to say I regard this as a fad of the Chancellor of the Exchequer, that may cost the country £75,000 per annum. The right hon. Gentleman the Member for Wolverhampton put the thing clearly. He said he was not entering into the question of whether the landlord would profit or whether the tenant would profit. He simply asserted that it was the business of the Chancellor of the Exchequer to get the money in the cheapest manner possible. When the right hon. Gentleman the Chancellor of the Exchequer rose, he tried to drag a quantity of red herrings across this trail, and we have for some time been discussing the position of the landlord and tenant—a very interesting question, no doubt, but not the point raised by the right hon. Gentleman the Member for Wolverhampton. Why does the Chancellor of the Exchequer want this separate Stock? He says he wants it in order that this money should not be mixed up with the general debt of the country, but should remain before the eyes of the country? Well, is it worth while to tax the people £75,000 per annum, in order that this fund should remain before the eyes of the country? It will be really a most costly spectacle.


I do not understand where the hon. Member gets his £75,000.


I get it as the amount which would accrue after, say, 14 years. To anybody but the Chancellor of the Exchequer—who deals in millions —£75,000 a year is a very handsome sum, which we could save. The whole reply—I cannot, with all respect to the Chancellor of the Exchequer, call it an argument—of the right hon. Gentleman was this fancy and fad of " keeping the matter before the eyes the public." He said last night, and again the first thing this afternoon, that it is necessary to keep this Stock separate in order to carry out the objects of the Bill. He has given that up now. He knows perfectly well that it is really a question of book-keeping. You always keep the Stocks separate, as between the Land Commission and the Exchequer, and you may keep them separate, as between the the public in their relations as buyers and sellers of this Stock. I hope the House will stand by what has been said by my right hon. Friend the Member for Wolverhampton, and will vote with him, putting aside all questions of where the money is to go to, unless the Chancellor of the Exchequer can give us some more valid reason for making this separate stock.

(4.19.) MR. SEXTON

The Chancellor of the Exchequer, in his otherwise clever speech, has left the question of the future value of this Land Stock in rather a vague condition. I should have expected him to deal with it more precisely. He believes, because the Stock will be what he calls a small and separate Stock, that it is not likely to stand on a parity with Consols. But it will not be a small Stock. Some day it will be £30,000,000. I would point out that Two and a Half per Cents. are small Stock, relatively to Consols, but that does not prevent Two and a half per Cents., though a¼ per cent. lower than Consols, being close to Consols in market price. It does not, therefore, appear that the smallness of the Stock is a reason against its having a high value. As to the question of separate Stock, why need it be separate? I see no reason why this Land Stock should not be merged in Consols. The right hon. Gentleman points out that there are no assets against Consols, whereas there are assets against these Stocks. But that is a question of book-keeping. The main question before the Committee is not that of assets, but the liability of the country to the stockholder. This Stock will be held by a great many persons, for the Irish landlords will, generally, be ready to invest in it, and I say, therefore, that from the largeness of the amount and the plurality of the ownership it will command the largest price corresponding with its value, and I conclude that the Land Stock in future years will be of more value than Consols. I say that that is a Stock you have no right to give to the Irish landlords, because, by doing so, you will be inflicting a wrong on the whole of the country. The hon. and gallant Gentleman the Member for Galway has assured me that I shall have his vote if I can extract from the Government a promise that the amount of the savings will be given to the Irish tenant.


I spoke of a promise from the Opposition.


I am afraid I must throw back the overture to the hon. and gallant Gentleman. At the present moment—and I hope this is only a temporary condition of things—the hon. and gallant gentleman is in a better position for obtaining pledges from the Government than I am.


I said the Opposition.


The Front Opposition Bench are not in a position to give effective pledges in reference to this Bill, and I must assume, therefore, that the hon. and gallant Gentleman's observations were directed to the Government. The hon. and gallant Gentleman has got in this subject, it appears to me, considerably out of his depth. He has made tonight one of the most extraordinary proposals I ever heard. He has actually laid down the principle that the higher the interest you give the landlord for his Stock the better it will be for the Irish tenant.


Provided he pays 4 per cent.


The hon. and gallant Member should remember that the chief figure in measuring the interest is the amount paid to the stockholder. The inference to be drawn from the hon. and gallant Member's speech is, that if the State pays a high interest to the landlord, the landlord's sense of equity is so nice that he will extend the benefit to the tenant.


I never said anything of the kind.


That was the inference I drew from the hon. and gallant Member's speech. The Bill fixes the 'annual value of the holding. What will be the position of the transaction? The landlord will endeavour to get as many years' purchase as he can. I do not think that the rate of interest on the Stock or the price of the Stock in the market will have any material influence on the price of the holding. The annual value of the holding will be determined by the Bill, and the landlord will try to get as much as he can, no matter what may be the interest on the Stock or the value of the Stock in the market. It is clear, therefore, that the price of a farm will be determined by figures other than the value of the Stock; and if you tell me that if the landlord gets 6 per cent. on the Stock, he will be disposed to sell his farm to the tenant for half the money he would have wanted if the interest he had got had only been 3 per cent, I say the statement is monstrously absurd. I say the lower the interest on the Stock, provided the landlord accepts the Stock at all— and he will accept it if it is Consuls— the better it will be for the tenant. And why? For a reason lucidly stated by the Chancellor of the Exchequer—that the State makes no profit in the case. The annuity of the tenant is measured chiefly by the interest of the stockholder. If this amendment is carried one of two consequences will follow. Either the annuity of the tenant will have to be reduced from £1 to £3 15s., which I should hail as a great boon, or else the county percentage which goes to local uses, either relief of rates or erection of labourers' cottages, will have to be increased from 5s. to 10s. for every £100 lent under the Bill. I should prefer that the annuities of the tenants, should be reduced, because I think the main interest of all classes in Ireland is to stimulate transactions under the Bill. At the same time if I were defeated in that I should be glad to see the relief given in the other direction; but I challenge my hon. and gallant Friend to say that in either case the acceptance of the Amendment would not be followed by a distinct advantage.

(4.25.) MR. SHAW LEFEVRE (Bradford, Central)

I should like to know what would be the real nature of the Stock. One Stock will amount to £30,000,000, created from time to time, but all of the same kind, and redeemable in 30 years. Is that so, or will there be a fresh Stock created, whenever a fresh purchase is effected, redeemable in 30 years from the date of the purchase? There is a difference according to the meaning attached to the language adopted. In the one case the purchasers, five or six years hence, will get paid in a Stock of somewhat less value than those who are paid immediately on the passing of the Act. On the other hand, if a new Stock is to be created, redeemable at the end of 30 years after purchase, there will be a creation of separate kinds of Stock in respect of which there will be different prices. Which of these two systems does the right hon. Gentleman propose to adopt?

(4.26.) MR. GOSCHEN

It is intended that there shall be one Stock, and I think the right hon. Gentleman will see how extremely important it is that there should be one Stock, so as to enable transactions to take place as between bankers and others. Ultimately it will be a large Stock, but for some time it may be a small one; but whatever arguments hon. or right hon. Gentlemen may bring against it, everyone seems to me to agree that there should only be one Stock. I had not omitted to consider the question. The Stock may be higher or lower, but however that is it will adjust itself to the purchases. If it is lower the landlord will ask for more years' purchase; if it is higher the tenant will have so many less years' purchase. Our desire is that it shall be as near as possible at par. I cannot go beyond this and enter into prophecy, a responsibility which no Chancellor of the Exchequer ought to undertake.

(4.28.) MR. W. E. GLADSTONE (Edinburgh, Mid Lothian)

The Chancellor of the Exchequer has now explained to the House clearly what the character of this Stock is to be; and, unquestionably, as between the one alternative and the other, I should think he has taken the right one—but still one which lands him in enormous difficulties. The first difficulty that arises is this: The Chancellor of the Exchequer, of course, sees that the value of this Stock will vary according to the number of years for which the higher rate of interest has to run certain. Where it is to run certain for 30 years, the value of the Stock will be higher; where it is to run for 20, 10, or 5 years the value of the Stock will be materially lower. The meaning of that is that the landlords of Ireland are to receive for their property different rates of compensation from the State.


Not from the State, but from the tenant.


The Stock in which the landlords are to be paid will be of different values in each succeeding year. It will be of a continually descending value. But the Chancellor of the Exchequer says it will not come from the State, but the tenant. What has the property of the tenant got to do with the Stock? Does the right hon. Gentleman mean that the Land Commissioners, in fixing the number of years purchase that each estate is to be worth, are to take into view this sliding scale? The doctrine of the sliding scale is so perplexing and confusing that I can hardly understand it to be the intention of the Government to adopt it. Are the Land Commissioners to say, " This estate would have been worth 18 years' purchase if the landlord were to be paid in a Stock that had 30 years to run at £2 15s. per cent.; but as he is only going to be paid in a Stock that has 15 years certain to run it is worth 20 years' purchase." The number of years' purchase which an estate is worth ought to be governed by a fixed and certain standard, and ought to have no reference whatever to the change of interest.


Order, order! The right hon. Member for West Bradford has asked a question, and the answer has been given. The question does not arise on the Amendment whether the reduction will be made 12 or 30 years hence.


The whole subject is a very difficult one, but I have no doubt that you are quite right. I think, however, that you will find that the result of this discussion will be to show that it is a mistake altogether to create these differences of Stock. If we are going to have these estates bought by the Irish occupiers, the only mode of proceeding is to give the landlords a Stock created in the way suggested by my right hon. Friend, or a Stock which is equivalent to Consols in the market. Whatever course may be pursued, I am quite certain that there must be some time or other when this matter will have to be fully discussed, because it is most relevant to the purpose of the Bill. The right hon. Gentleman opposite must see that he has presented most serious dilemmas to the Committee, and has afforded no solution of them.


The right hon. Member for Mid Lothian has suggested that the Government introduce a fresh complication in fixing, as he said, the price of purchase by the Land Commissioners. But the Land Commissioners do not fix the purchase at all; they merely ratify the purchases which are made.


There is a standard of approval.


There is no standard whatever. All that the Commissioners have to do is to see that the purchase is such that satisfactory security is obtained by the State. That ought not to be in any way regarded as applying to the number of years' purchase, and all that the Commissioners have to look to is to see whether the security is sound.


; Surely the answer of the Chancellor of the Exchequer is a fallacy. What is it that the Land Commissioners do? They determine what is a fair and safe bargain between the landlord and tenant. The number of years' purchase as well as other matters will have to be considered. Therefore, if, in consequence of the Stocks varying in price, the price agreed upon between the landlord and tenant varies, why, of course, the judgment of the Land Commissioners is based upon that bargain so made. The main argument which the Chancellor of the Exchequer used with reference to the variation at future periods in the value of this Stock, cuts from under him the whole ground upon which he has based his objections to my right hon. Friend's proposal. The Chancellor of the Exchequer said it was quite true that this Stock at future times might vary in value, but that in time the parties would accommodate themselves to that variation in value. If that be the case, why should they not accommodate themselves to the present value of Consols? Every argument, therefore, which the Chancellor of the Exchequer has used is in favour of the right hon. Gentleman's Amendment. All that part of the argument which relates to the creation of Stock to bear par value disappears. If the Stock is now at par value, it is quite plain that it might be something below par value next year. [" No, no."] I do not understand the hon. Member saying " No." If the number of years for which the interest is granted affects the value of the Stock, then, as the number of years diminish, the value of the Stock must diminish. I should have thought that anybody who understood the elements of the question would have understood that. My right hon. Friend the Member for Mid Lothian observes that it is a perpetually descending scale. [" No."] There is no use in saying " No." The hon. Member might just as well say "No " to the proposition that twice two make four. It is quite plain, and the Chancellor of the Exchequer does not deny it, that 10 years hence the Stock must be of less value than it is now, because there will be only 20, instead of 30, years' value attaching to it, and so it will go on from time to time, and we will have, as the right hon. Member for Mid Lothian said, a sliding scale established. The argument of the Chancellor of the Exchequer is that all parties should accommodate themselves to the alteration in the value. Why should they not accommodate themselves to the value of Consols now? The whole answer of the Chancellor of the Exchequer is practically in support of the Amendment.

(4.40.) The Committee divided:— Ayes 144; Noes 209. — (Div. List, No. 130.)

(4.51.) MR. KEAY

The Amendment which I now propose to move is in line 16, To leave out from the word "after," to the word "redemption," in line 20, inclusive, and insert " for the purpose of paying off the whole of the Land Stock at or before the expiration of the time at which the purchase annuities hereinafter mentioned will cease. The general object of this Amendment may be said to be of the same character as that of the last, namely, to endeavour to secure that the landlords do not get a Stock which will come to a premium, and thus injure the interests both of the British taxpayer and of the Irish tenant. The object of leaving out the words is to prevent the landlords from obtaining an undue premium upon their Stock, compared with what is got by the general creditor. I object to the 30 years, and want to leave that provision out, because I am anxious that there should be prompt and immediate reduction of the liability on the British taxpayer, whom I want to see relieved as speedily as possible. What I propose is that there should be, either by annual drawings or otherwise, a prompt and early application of the Sinking Fund to the diminution of Stock. I do not know the object of the 30 years' clause, unless it is to command a premium on the Stock I have mentioned. I hold that the only object is to give the landlords at once 30 years' enjoyment of the higher rate of interest of 2¾ per cent. If it is not for that purpose, what is it for? Judging from what has transpired in the Debate, the Chancellor of the Exchequer believes that in this 2f Stock he has got a par Stock. He is aiming at a par Stock, and that is why he is giving the enjoyment of this interest for 30 years. But in order to ascertain the full significance of this 30 years' clause, it must be read along with Clause 7, Sub-section 2, towards the end of the first part of the Bill. That clause provides that if the Land Stock should be, in the opinion of the landlord, undesirable, he may exchange it for Consols; and if he does not consider the exchange desirable he may stick to the 2| Stock. I hold that the benefit of the alternative is given to the landlord, and to the landlord alone, who will be in a position to enjoy the 2¾ Stock at a premium for 30 years. If the Stock is to remain on the border line of par, naturally it will be likely, as do other Stocks, sometimes to go below par. Why does the Chancellor of the Exchequer put in 30 years, then? Surely to retain it at par the best way would be to make it redeemable at once, or within a year or two. But I say the only reason that can be attached to its being made a 30 years' Stock is that it may have the capacity of going to a premium, otherwise the right hon. Gentleman would be very sorry indeed, for the sake of his landlord friends, to put in the 30 years clause, if he were frightened that the Stock would come to a discount. Now, the words proposed to be added by my Amendment simply secure that there is a direction in the Bill that none of the Stock shall be left outstanding in the 49th year. I do not know whether the Government will consent to this, but I hope they will. All the annuities are to be paid into the Treasury in 49 years, and they furnish the interest at 2¾ per cent., and cease at the end of that period. That seems a very good reason for putting a direction into the Bill that the Stock itself shall be compulsorily paid off by the end of the 49th year. There is another argument, namely, that the Government themselves thought it necessary to put this very clause into the Land Purchase Bill of last year. I do not see how they can refuse to accept the Amendment, which is simply a copy of Clause 5, Sub-section 2, of their own Bill of last year.

Amendment proposed, page 1, line 16, to leave out from " after," to " redemption," in line 20, inclusive, and insert— " For the purpose of paying off the whole of the Laud Stock at or before the expiration of the time at which the purchase annuities hereinafter mentioned will cease." — (Mr. Keay.)

Question proposed, "That the words 'And after 30 years' stand part of the Question."

(5.2.) MR. GOSCHEN

The hon. Member has divided his Amendment into two parts — the words to be omitted and the words to be inserted. He wishes in the first place to omit words which settle the whole process and method by which the transaction shall take place. It is impossible to omit these words and to leave everything vague. In the next place, the hon. Member has put a sense upon the word " redeemable " which I do not think it will properly bear. "Redeamable" means that the State has the power to redeem, but not that the State shall redeem. The hon. Member says that if the Stock is not redeemed in two years it must remain at par. Not at all. It depends upon whether it is likely to be redeemed or not. The State ought never to engage to redeem large sums at a certain date when it does not know precisely how things may stand at that date. I do not think the hon. Member will object to my passing over in silence that part of his argument which relates to the 30 years, because after all it is only a modification of the contention we have been arguing over all the afternoon. I do not say there is much to object to in his words, but the whole tenour of the Bill is that the redemption -will take place within 49 years, and, in the case of Stock above par, within 30 years.


The hon. Gentleman has used an argument which seems to me a strange one after the discussion we have had this afternoon. It is said that after a certain time these particular ear-marked annuities would be converted into Consols. The right hon. Gentleman has been fighting that point all the afternoon and telling us it was impossible to issue this Stock in the form of Consols because he wants to keep it separate. I hope the right hon. Gentleman will explain the discrepancy between his argument and this provision of the Bill.

(5.5.) MR. T. M. HEALY

I was going to raise the same point. If it be the case that there is a provision in the Bill which will enable the Stock to be exchanged into Consols, what becomes of the right hon. Gentleman's argument?


If the hon. Member will turn to Clause 7, Sub-section 2, he will see that, within limits fixed by the Treasury, there is power given to the National Debt Commissioners to take the Stock in lieu of Consols. That is totally different from putting the whole of this into Consols. If applications were made for the exchange of moderate amounts no doubt the National Debt Commissioners would exercise their option.


The right hon. Gentleman has not answered the question. We want to know what now becomes of the argument about keeping before the public this separate Stock. Supposing the National Debt Commissioners exchange any of this stock for Consols, pro tanto that amount disappears.


Perhaps the right hon. Gentleman will allow me to explain. It would not disappear at all, but the National Debt Commissioners would have so much less Consols and so much more Stock.


It is "all persons" and not the National Debt Commissioners.


It is the National Debt Commissioners who are to have the power. It is not a power of cancelling Stock or changing one Stock for another, but a power of investment. The two Stocks will remain entirely separate.

(5.8.) MR. W. E. GLADSTONE

We understood from the previous statements on the Bill that the landlord was to have no option of conversion into Consols. Now, if I understand it rightly, the case is different. The National Debt Commissioners will give Consols in exchange for the Stock created under this Bill when they find it agreeable to their own convenience, so that of course the landlord's option becomes a qualified and conditional one. If I understand the matter rightly the National Debt Commissioners do not necessarily hold such large amounts of Consols as to have great quantities disposable for the purpose of enabling landlords to exercise that option. Therefore, it will have to be understood that it is not a free option but one qualified and conditional according to the state of the investments of the National Debt Commissioners.

(5.10.) MR. GOSCHEN

The right hon. Gentleman is perfectly correct. If I am not out of order I will read the clause: "All persons, including the National Debt Commissioners, shall have the like power of investing in the Land Stock as they have in Consolidated Annuities, and the National Debt Commissioners shall also, within the limits fixed by the Treasury in communication with them, give on application Consolidated Annuities in exchange for an equal nominal amount of the Guaranteed Land Stock. That is to say, the Treasury may say, they will take £5,000,000 or £7,000,000 of the Stock. Of course, for the State, it would be a good investment. I am glad to say the amount of Consols held by the National Debt Commissioners is extremely large—something like £60,000,000. This is a power that would be exercised with very great caution by any Government, but the probability is that the Chancellor of the Exchequer of the day will think it would be very desirable that a portion of this Stock should be held by the National Debt Commissioners.


Would the National Debt Commissioners have power to sell this Stock like any other of their investments?




There is one question I should like to ask. The clause says— "The National Debt Commissioners shall also, within the limits fixed by the Treasury in communication with them, give on application Consolidated Annuities in exchange for an equal nominal amount of the Guaranteed Land Stock. But who are they going to give it to? Who wants it, and why is the exchange going to be made? I suppose the person who gives this Stock to the National Debt Commissioners and gets Consols in exchange for it expects to get some advantage. I do not understand what the nature of these transactions is. What is to be the interest of the persons who take part in these transactions?


We are really discussing Sub-section 2 of Clause 7; but I will answer the right hon. Gentleman. I do not know what the interest of the persons may be, but the matter amounts to this: that, considering that this Stock bears a guarantee of 2¾ per cent., the National Debt Commissioners can never do wrong in giving Consols in exchange for it. I think the clause shows the bona fides of the Government. It shows that we do not believe that this Stock will be so much above par. I submit, however, that any further discussion on the subject ought to be taken on Clause 7.

(5.15.) MR. T. M. HEALY

I do not think the Chancellor of the Exchequer would do well to try and shut out this discussion.


It is quite irregular to go on discussing the meaning of Sub-section 2 of Clause 7.


Quite so, but the consideration of the words we are now on involves comparative consideration of the value of Consols and the value of the Land Stock. As I understand the Amendment refers to the paying off the whole of the Land Stock. The hon. Member for Elgin and Nairn proposes to leave out the 30 years; in other words he proposes that this shall not be a terminable or redeemable Stock. I submit that opens up to us comparative considerations of the two Stocks.

(5.16.) MR. CHANCE

On the question of order, I should like to point out that if the Bill is allowed to stand as it is the Sinking Fund which would be created would, in the hands of the National Debt Commissioners, be applicable to the redemption or purchase of any of the Government Stocks, but if the Amendment is carried that Sinking Fund can only be applied to the redemption of the Land Stock. If that is so, is it not relevant to consider which Stock would most properly be redeemable, and whether the Committee would be wise or not in depriving the National Debt Commissioners of the power they would have of using the Sinking Fund for the purpose.—


The hon. Gentleman has addressed the Committee under a complete misapprehension.

(5.17.) MR. KEAY

The Chancellor of the Exchequer is a very distinguished and experienced statesman, and he is also very ingenious; but I am sorry to say his ingenuity as practised towards myself is directed to not answering the main point of my Amendment. 1 propose to leave out the 30 years. That is of course the gravamen of my Amendment, but the right hon. Gentleman stands up and says " the hon. Gentleman will excuse me for not saying anything about the 30 years," and then goes on to refer to the very innocent words I proposed to substitute for the omission. If the right hon. Gentleman did not put in the 30 years for the purpose of appreciating the landlords Stock above par what was his object? I hold that even we, private Members, humble as we are, are entitled to have the clear gravamen of our Amendments replied to. He says there is no object in giving the landlords the enjoyment of this Stock for 30 years, because it will not go to a premium. It is very difficult for me to get replies from the Chancellor of the Exchequer's own mouth. I have already to day made him answer himself by quoting from his speech last year. I will make the Chief Secretary for Ireland answer him now by quoting from the speech the right hon. Gentleman made in bringing in the Bill of last year. On the 24th of March last year, the Chief Secretary said— The second explanation is that the owners are to be repaid in Government Stock hearing 2¾ interest not payable before 30 years. I am quoting from the Times: I have not the revised version of the speech in Hansard. The right hon. Gentleman went on— "This part of the Bill will be explained more fully by my right hon. Friend the Chancellor of the Exchequer; hut he tells me that in his opinion such Stock is at least as good as Consols, and if any landlord is foolish enough to take a different view there is a provision in the Bill which obliges the National Debt Commissioners to exchange Consols for the Stock.

(5.23.) MR. GOSCHBN

I will reply at once. The hon. Gentleman says I have omitted to answer the point he raised with regard to the 30 years. I stated that the whole of the point which the House was discussing on the Amendment of the right hon. Gentleman the Member for Wolverhampton was that this Stock would bear 2¾ per cent. for a longer period than Consols. Consols are at 2¾ per cent. for 14 years, and the whole point of the discussion on the Amendment of the right hon. Gentleman the Member for Wolverhampton turned upon the difference between the two periods. It is that difference which the right hon. Gentleman the Member for Wolverhampton wishes to remove. The House has been debating that point the whole time, and has come to a conclusion in favour of the provision in the Bill. Therefore, I thought that a reference to that would be a sufficient answer to the hon. Gentleman opposite. With regard to the second point, I do not know how far the report quoted by the hon. Gentleman was full or accurate; but I have no doubt it entirely confirms what I have stated.


Is the House to understand that it is not the expectation of the right hon. Gentleman that this Stock will go to a premium?

(5.26.) MR. T.M. HEALY

The Chancellor of the Exchequer leaves the matter at large as to whether in his judgment this Stock is a better or a worse Stock than the original Consolidated Stock he has converted. If it is a better Stock, why give the landlords more interest? If it is a worse Stock, then it is worse to get 2¾ per cent. than 2½ per cent. In this matter the Government seem to me to be dancing on eggs. They do not know what position to take up.

(5.28.) MR.GOSCHEN

I thought I had made the point as clear as possible. I look upon the two Stocks as very nearly identical in value, though I look upon one as rather superior to the other. The length of time given for the enjoyment of the 2¾ per cent. is in favour of the Land Stock, while, on the other hand, the fact that Consols have always been put on a separate footing and have always been higher than other Stock, reduces the difference between the two Stocks, and I believe, on the whole, that their values will be very nearly identical. When hon. Gentlemen ask me to prophesy what will be the precise value, that is a matter I cannot undertake. I will, however, venture to say that within three years there will not be any divergence in the prices of the two Stocks. It would be forcing the situation to ask me to prophesy what the value of the Stock will be.


What I want to know is, will it be permissible at any time to change Consols into this Stock?

(5.31.) MR. T. M. HEALY

I think the Chancellor of the Exchequer ought to give us some reason for this fancy of his, and he will do so if he is anxious to shorten the Debate. We have heard of fancy franchises, and he is now creating fancy Stocks.


Order, order! That is not the question before the House. The question is whether this Stock is to be. redeemable after 30 years, in accordance with the provisions of the Act of 1888, or whether it is to be redeemable as soon as it has been created under a plan which the Amendment does not reveal.


It appears to me that the whole question of the redeemability of the Stock is involved. I can not, for my part, object.—


Order, order!

(5.32.) MR. SEXTON

I hold that either this Amendment must be accepted or some identical provision be inserted in the Bill later on. My hon. Friend's proposal is that Parliament should indicate that the whole of the Stock issued is to be paid off within the period of the annuity. The whole of this financial scheme is founded upon an arrangement whereby after payment of interest to the stockholder 1 per cent, is reserved for the formation of a Sinking Fund. The information we at present have as to the nature of this Sinking Fund is of a most meagre character, and I think the time has come when it should he supplemented. How soon, I may ask, will the 1 per cent. per annum enable the Government to redeem Stock; and if it is allowed to accumulate, will the Government be able at the end of 49 years to redeem the whole of the Stock?


That is our calculation.


I assumed so. Then what is the actual intention of the Government? At what period do they intend to redeem the Stock? They seem to bind themselves to nothing. The provisions of the Bill in this respect are very peculiar. The proviso is that 30 years after the commencement, and not before, the Stock shall be redeemable. That is to say, the State must not redeem at all for 30 years. Why should the State be put under such an obligation? Why should the Government and this House now attempt to bind the State not to redeem the Stock for a period of 30 years? Let us see how this Sinking Fund is to be created. First, there is the 1 per cent., and the purchaser's assurance money. The average number of years' purchase in Ireland is about 15, instead of 20, so that every purchaser will have to pay about a quarter more than he ought to in the first five years. The result will be that there will be a sum of about £1,500,000 lying idle. Why should it be idle for 30 years? I do not see why that sum should not be devoted to the redemption of the advance. Why should the Government be bound not to redeem for 30 years? I believe that their real reason in this matter is that they want the Stock to have an artificial value, so that the landlords may sell it at a premium. We must resolutely oppose any proposal of that nature, and must secure that the Stock is redeemable as soon as it has been issued. I may point out that there is no provision making it obligatory on the Government ever to redeem the Stock. I can only add that the Government ought in this Bill to bind itself to put this Sinking Fund to its proper use.

(5.36.) MR. GOSCHEN

I think the hon. Member for West Belfast is in error in saying that the insurance money will be applied to the Sinking Fund. It will have nothing to do with it.


I beg the right hon. Gentleman's pardon. If he will refer to Sub-section 4, Clause 7, he will find the words "Sinking Fund, including purchasers' insurance money."


Yes; but that insurance money is not to be applied to the purposes for which the Sinking Fund is created. The Insurance Fund is part of the annuity. I doubt whether this is a proper occasion on which to explain the whole operation of the Sinking Fund. It has been considered wisest to leave to the State the freest possible hand in dealing with this Stock, in the interest of the State itself. I should have no strong objection to the insertion of words making it more clear that the State is absolutely bound to redeem, but we have thought it best to leave a free hand, and the Sinking Fund will be employed by the National Debt Commissioners in paying off the advance in the best manner possible. It must be remembered that a Stock with regard to which there was doubt as to how long it will goon paying 2¾ per cent. is not one which can be held by trustees at all. We wish to make this a Stock which can be held by trustees, bankers and others, and I fear that a provision such as the hon. Member suggests would disqualify it as an investment for permanent purposes. I will, however, consider the question of inserting words with regard to the paying off of the advance.

(5.41.) MR. SEXTON

I shall be glad if the right hon. Gentleman will insert words which will place it beyond all doubt that the Sinking Fund shall be applied to the purposes for which it is proposed now to create it.

(5.42.) MR. MONTAGU (Tower Hamlets, Whitechapel)

If it should occur that the Stock be worth 2 or 3 premium in the market, would it not be well to reserve to the State the option of paying the landlords in cash instead of Stock, paying them, say, £100 in money instead of bonds to that amount?

(5.43.) MR. KEAY

Did I understand the right hon. Gentleman to promise that he would insert words which will have practically the same effect as is arrived at by the Amendment?


(Kirkcaldy, &c.): From all I hear, it seems to me it would have been very much better for the Government to have borrowed the money in Consols and paid the landlords in cash, for then we should not have bad all this trouble about the varying value of the Stock, while it would have been made clear to the British taxpayer exactly what this experiment is costing him.


Order, order! That is not relevant to the Amendment before the Committee.

(5.44.) MR. CHANCE

I think there is one method of redemption to which the Chancellor of the Exchequer could have no objection. He might allow the tenants to tender for Stock at nominal value and thereby extinguish their liability for annual instalments. That surely would not interfere with the market value of the Stock.


Of course, anything which would lead in the direction of the redemption of the Stock would meet with the approbation of the Government. I believe there is an Amendment down which aims at the object suggested by the hon. Member, and which indicates some process of that kind, but I have not yet been able to understand exactly what is proposed. I do not see how it would work.

(5.45.) MR. CHANCE

The right hon. Gentleman has pointed out with some degree of force that the value of the Stock will be interfered with unless people are certain that they will get interest on it for a definite number of years, and he, therefore, objects to a proposal enabling the Stock to be redeemed before 30 years have expired. My suggestion is this, that if a tenant owed £300 in a given year he should be allowed to go into the open market and purchase Stock to the nominal amount of his annuity and tender it to the Government in payment. That would practically extinguish the Stock without interfering with its market value.

(5.46.) MR. SEXTON

May I ask whether the Government are prepared to fix the redemption within a specified period?


I should not like to say anything final as to the redemption until I have had an opportunity of consulting the draftsman. As to the proposal that payment should be accepted in Stock, I do not for the moment see any considerable objection, and I will consult my right hon. Friend as to whether an Amendment of that kind will be acceptable. Of course, if the Stock is below par it will pro tanto delay redemption.

(5.47.) MR. MONTAGU

The right hon. Gentleman has not answered my question.


Order, order! That subject is not relevant to the Amendment.


The Chancellor of the Exchequer has certainly gone some way to meet our objection. The proposal of my hon. Friend the Member for South Kilkenny involved only a small operation, while that made by the hon. Member for West Belfast embodied much larger considerations. I think, in the interests of the country, we ought to have a definite answer on that.


On what point?


Will the Government bind themselves in the matter of the redemption? They seem to be proceeding under the idea that they are sailing under the flag of the Ashbourne Act. That Act provided for an advance of £10,000,000, and when that sum has been re-paid the operation is entirely done with. You are, however, now using the framework of the Ashbourne Acts to involve the British taxpayers in altogether new liabilities. It is proposed that the Stock shall not be redeemed for 30 years, although £20,000,000 out of £30,000,000 may have been paid off. The money is during that period to be dammed up like a financial river, and will not go to redeem the Stock. The reason the Chancellor of the Exchequer has given for that is that he does not like to offer his friends, the Irish landlords, a Stock of precarious value, which this Stock will be if unascertained portions of it are subject to redemption at any moment. Of course, he does not say that in so many words, but he hints at it. He says he will give the holder of the Stock an absolute guarantee of non-extinguishment for 30 years. What in the meantime is to become of the money which the tenants are re-paying? The whole thing hinges upon the proposal in Clause 7, by which the National Debt Commissioners and the Treasury.—


Order, order! Clause 7 has nothing to do with the point before the Committee. As I have already explained, the sole question is whether the Stock shall be redeemable at the end of 30 years under the Act of 1888, or whether it shall be redeemable at once, in a method as yet unexplained.


I appreciate the point, Sir. My object is to prevent this money being dammed up in the pockets of the National Debt Commissioners, and to provide that there shall be some blood-letting arrangement.


Order, order !


It is clear to my mind, and I am sorry I cannot make it clear to other minds that the meaning is —


Order, order !


Well, I will drop that, and simply ask for a distinct statement from the Government as to when the Stock will be redeemed?

(5.54.) MR. KEAY

As I understand the concession of the Government to be of a substantial nature, I am prepared to withdraw my Amendment.


There must be no misapprehension on this point. My observations were confined to the point raised by the hon. Member for West Belfast. I distinctly hold the view that the first £30,000,000 shall be paid off within the 49 years, but I cannot undertake that the re-issues shall be paid off within the same period. I promise that words shall be placed in the Bill indicating that view.

(5.55.) MR. SEXTON

I agree that there must be no misunderstanding. It seems to me that the right hon. Gentleman is over cautious. He admits the 1 per sent. will enable all the advances to be redeemed within the 49 years, but when we ask him to bind the State by this Act to redeem, he says he will consider the point.

(5.56.) MR. GOSCHEN

I am anxious to safeguard myself. My promise is that the intention of the Government that the original advance of £30,000,000 shall be paid off in the 49 years, shall be indicated in the Bill.

(5.57.) MR. SEXTON

That is sufficient. Of course, I did not expect the right hon. Gentleman to go further. He says he will see how this object can be secured, and that promise means he will do it.

(5.58.) MR. KEAY

I think the right hon. Gentleman hardly understands his own Bill, for it provides for the possible cancelment of all Stocks when the annuities cease, as also did his Bill of last year, from which my Amendment is taken. I do not see any difference between the right hon. Gentleman's intention and my wish as expressed in the Amendment. Therefore, I ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

(6.0.) MR. CONYBEARE (Cornwall, Camborne)

The Amendment I propose to move is the omission of the words— "After 30 years from the commencement of this Act, and not before," and subsequently I have an Amendment to omit the reference to the "National Debt Conversion Act, 1888." So my proposition is that the clause should run— " Such Stock shall be a Capital Stock, consisting of annuities yielding dividends at the rate of £2 15s. per annum on the nominal amount of the capital, payable by equal half-yearly payments on June 1 and December 1, and shall be redeemable at par by yearly drawings to an amount equal to the capital value of the sinking fund for the same year. There is, first, the intermediate Amendment to line 16, and these, I may say, are alternative proposals. There is something to ' be said in favour of annual drawings, and without now entering upon a lengthened argument, I put forward the Amendment as it stands, and it may be deemed worthy of discussion.

Amendment proposed, in line 16, to leave out from the word " after " to the word "before," in line 17 inclusive.— (Mr. Conybeare.)

Question proposed, ." That the words proposed to be left out stand part of the Clause."


I thought this was practically disposed of by the Debate we have had. We debated upon the last Amendment whether 30 years should stand, and I think we exhausted the arguments on both sides.


The right hon. Gentleman has not quite caught my meaning. I do not wish to re-argue the question, which I am well aware has been discussed, as to whether 30 years should remain or not, but to get rid of the limit and introduce the alternative proposal of a yearly drawing. As a financier, the right hon. Gentleman is well aware of the fact that national and foreign loans are frequently redeemable in that manner.


I did, in the previous discussion, address myself to the point. It is true the system to which the hon. Member refers is often applied to loans, but it is generally applied to other than first-class Stock, and not to Stock that Trustees can invest in. Nothing can be worse for a Stock to invite investors than that it should be subject to redemption at uncertain intervals. If for no other reason Trustees would not avail themselves of Stock of this character because of the uncertainty and trouble possibly of reinvestment of the funds under their care at short intervals. In no Stock of high class is this considered a desirable method of redemption. The plan the hon. Member has suggested would be of no advantage to the State, nor would it be of any advantage to stockholders themselves, and I trust the hon. Member may not think it necessary to press the Amendment.

(6.5.) MR. T. M. HEALY

It is because of the mathematical precision with which the right hon. Gentleman puts his points that we have urged upon the Chancellor of the Exchequer that he should never have made this distinction between this Land Stock and Consols. I now ask the right hon. Gentleman— and the opportunity presents itself on this Amendment-to explain his position on this point, and why the distinction is made, and to defend the term of 30 years. We have, observed the right hon. Gentleman's' uneasiness whenever reference is made to: the difference between this Stock, and Consols; but we may ask him, why this term of 30 years? Ho has said, and no doubt his contention is correct, that if you have Stock redeemable at a moment's notice, the precarious nature of that Stock reduces its value as an investment; but when you have funded the Stock, why the provision of this term of 30 years?


The hon. and learned Member is wandering wide of the Amendment before us.


I did not intend to wander. I may say my mind remains at anchor upon this point; but I accept your ruling, Sir, that my observations are wide of the Amendment, and will not pursue the discussion.


I admit the force of what the Chancellor of the Exchequer has said as to the position of Loans and Stocks in the market, and have no inclination to waste time with my suggestion beyond saying that I should like to see it adopted in an experimental transaction like this. In reference to the answer of the right hon. Gentleman, I may say that I had not taken the view that this will be a first-class Stock, and I do not see any arrangement by which it could be made a first-class Stock. I should be sorry, indeed, for the Trustees and others who placed their investments in Stock of this kind based on a bogus security. However, that is a question for the protégés of the right hon. Gentleman in time to come. I do not insist on the Amendment. I accept the statement of the right hon. Gentleman, and ask leave to withdraw.

Amendment, by leave, withdrawn.


I presume I shall now be in order in moving my Amendment to leave out " thirty " and insert " ten," and I am not aware that the ground of my Amendment has been covered by any discussion we have had already. The proposal of the Government, we are told, is to establish what they call a first-class Stock in which Trustees and bonâ fide investors may invest their money; and to make it a first-class Stock it is placed in a position better than that of what is usually known as the best first-class Stock for Trustees, namely, Consols. So far as I can judge the effect of the proposal made by the Government, it is to give a higher rate of interest to this than is given to those who invest in the ordinary and more or less depreciated Consols. In order, further, to protect their friends the landlords of Ireland, in order to give them the very best security in their power, they—to use a Stock Exchange slang expression—they " bull" this Stock, raising it to an inflated value, and giving the holders the advantage of selling out at an inflated price. The Chancellor of the Exchequer now proposes that it shall be fixed—that is to say, that it shall not be redeemable until after 30 years from the commencement of this Act. Now, we have here two extremes. In my last Amendment the proposal for annual drawings was pronounced precarious and unsound for a first-class Stock, and the Chancellor of the Exchequer goes, I think, to the other extreme when he proposes that the redemption shall not be until after a term of 30 years. Between these two points of extreme there are, I daresay, many points of agreement. I hold that the term of 30 years is too long, and that it is a long term I think the Chancellor of the Exchequer will admit, and I now propose to limit the period to 10 years, by way of an alternative for yearly drawings, the proposal I made just now. In fixing the term so high as 30 years the Chancellor of the Exchequer is taking a measure which will undoubtedly inflate the Stock he is creating in a manner wholly unnecessary and unfair. Now, the proposal to which I invite the attention of the Committee is to substitute "ten " for " thirty " and I shall be interested to hear from the Chancellor of the Exchequer whether there is any substantial objection to that proposal. If his objection is one of those of the same character as his last, possibly we may approach each other by some figure between 10 and 30, but I think that a shorter term than 30 years is essential in the interest of the public.

Amendment proposed, in page 1, line 16, to leave out the word "thirty "and insert the word " ten."—(Mr. Cony-beare.)

Question proposed, " That the word ' thirty' stand part of the Clause."

(6.15.) MR. GOSCHEN

It is not probable that the whole of the £30,000,000 will be issued in two or three years, and if the period of issue were to approach five years then during five years the holders of the Stock would be uncertain what interest they were to receive. I notice with pleasure the view taken by Irish Members that the Bill is likely to operate pretty fast, there being a disposition among landlords and tenants to avail themselves of the facilities the Bill offers. But still I think the period of 10 years is much too short.


I agree with the right hon. Gentleman, and there is apprehension that the Bill will operate pretty fast and our constituents will be defrauded by the operation of the Bill. But let me explain that my. proposal is that the issue of Stock should be divided into certain quantities, thus,: The right hon. Gentleman may want to issue, say, £10,000,000 this year, and perhaps another £2,000,000 in another year, and so on, and the time would run from the date of each issue. I do not say that provision is made for this in the Bill, but such provision could be readily made. I am not wedded to the term of 10 years; it may be a term of 12 or 15 years or 20 years, but I do think that when, as was said last night, the object is to give the landlords good security at par, there should be an undue inflation of value by fixing this term of redemption at 30 years. However, I survey the question with indifference, and do not press the Amendment.

Question put, and agreed to.

(6.19.) MR. KEAY

The Amendment I now have to move is that which appears at the end of the page at line 26. It is better, I think, that I should move the Amendment in the form I propose, because, so far as I know, other hon. Members may desire to introduce Amendments to the same line. I do not quite know what our Irish friends may say to my proposition, but, for my own part, I see no reason to strike out the Guarantee Fund in this place. In the interests of the Imperial taxpayers we think it better to retain it, and that is why I move the Amendment. The object of it is simply to prevent the general assets of the taxpayers of this country from being pledged for the benefit of the Irish landlords, and it is also for the purpose of securing that the Land Stock which they receive will rest, as it ought to rest in our opinion, on what the Chancellor of the Exchequer himself called in his speech of last year "the network of securities provided in the Bill." 1 remember that he was very strong upon this point, for when he followed the right hon. Gentleman the Member for Mid Lothian in Debate on the Second Reading he boasted that the great master of finance did not find himself able to attack this network of securities with which the Bill was surrounded. Now, if there is this excellent network of security I say why bring in the Consolidated Fund? It has been the standing boast from the Treasury Bench that this Guarantee Fund will in itself cover the whole of the advances under this Bill. Well, then, if these securities are sufficient, why, I say, bring in the Consolidated Fund? If, on the other hand, they are insufficient, what, then, becomes of the pronouncement that the British taxpayer incurs no risk whatever? Both of these propositions cannot be accepted; either the public taxpayers have risk, or they have not. If they have not, why this additional security 1 Before I proceed any further, perhaps I may be allowed to refer to a few words in the recommendation contained in the Report of the Royal Commission, which reported upon the working of the Ashbourne Act in 1887, words, I think, very pregnant in the consideration of the Amendment which I propose. The Commissioners say— " It is clear from the evidence that the great majority of the small Irish tenants are not in a condition to meet the risk of fixed rents for so long a period as 15 years. It would, therefore, be prudent without further delay to make provision for revision at a shorter term than 15 years. We therefore recommend that the term should he shortened from 15 to 5 years. Well, now, I ask what is the position of Her Majesty's Government, who, having appointed this Commission, and having received its recommendation, yet in these days—I may almost say in these decades—of falling prices and falling agricultural values, forget altogether this recommendation of their own Commission, and now provide for fixed payments for a period of 49 years 1 I do not want right hon. Gentlemen opposite to suppose that I am founding my argument on the figures of the old rents, as the Commission did. I know they will say—and they have a certain right to say—that they hope and believe that these annuities under this system are very different from the rents of which the Commissioners were speaking. I admit that the immediate necessity of revision may disappear, yet the principle, which the Royal Commission says is enforced by the evidence, is equally applicable to the present case, that principle being that it is impossible for the tenant to accept a fixed rent which he may not be able to sustain in case of a fall in value. There has, indeed, now been added an additional and enormous risk to the Consolidated Fund, inasmuch as this Bill deliberately provides for the wholesale overvaluing of the holdings. The Bill is apparently framed for the purpose of providing that the tenant be steeped in insolvency. Who would ever capitalise the gross value of a lease, or of any fixed property, as is done here, if he wanted the buyer to remain solvent? Suppose one of the right hon. Gentlemen on the Treasury Bench were going to buy an advowson, and the price was to be 25 years' purchase. He would not agree to pay 25 years' purchase of the gross value of the benefice, but would first deduct the outgoings, say for the salary of a curate, and then capitalise the net income of the benefice. This Bill is absolutely unique in proposing to capitalise the gross value instead of the net value of the holdings, and I say that an enormous additional risk is being placed on the Consolidated Fund by this means. We are, fortunately, indebted to the Government for having—tardily, it is true—provided a Return of a most interesting character, as elucidating this important matter. I refer to Return No. 47 of the present year. It must be remembered, in the first place, that the whole of the sales effected under the Ashbourne Acts have been at an average of 19 years' purchase of the valuation. Of course, the great majority of the tenants have been successful up to the present in paying their instalments. But what about the defaulters? The Return shows the number of them, and the ruinous annuities which have been saddled on them in consequence of the extortionate prices at which they have been compelled to purchase their holdings. I have averaged the whole, and find they have paid not 19, but 25 years', purchase. The lesson we must draw from this is that the deliberate overvaluing of holdings and the deliberate misguiding of the Commissioners as regards overvaluing, has the effect of making the tenant bankrupt and consequently of largely increasing the risks -which come on the Consolidated Fund. The right hon. Gentleman the Chief Secretary will remember having produced to the House in his first speech a statement which was certainly very clear and much appreciated by the House, in which he took £100 as the ideal of rental, and said that the £100 would come down to £68 under the scheme of this Bill. When we look at what has actually taken place with the defaulters, what do we find? We find that the defaulting tenants have been charged 25 years' purchase of their holdings, and have, therefore, had to pay a 4 per cent. instalment on 25 years' purchase, which is equal to the whole of the Poor Law valuation of the holdings. This means that these poor tenants, instead of having had their £100 reduced to £68, could have had it reduced in the Land Court to £80, but by purchasing instead of going into the Land Court have had what would have been a judicial rent of £80 raised to £100 for 49 years. I do not -wonder that these men are bankrupt. The deliberate capitalising of the gross value of the holding, instead of the net value, has the effect of almost ensuring their being placed in financial difficulties. I am very anxious to know by what method the right hon. Gentleman the Chief Secretary can explain how the advance out of the Consolidated Fund to pay the dividends and the Sinking Fund payments can possibly be, as it is termed in the Bill, a " temporary advance." The provision is that the dividends and payments to the Sinking Fund shall be paid out of the Land Purchase Account; and if it is insufficient shall, to the extent of the deficiency, be paid as a " temporary advance " out of the Consolidated Fund, and every such advance shall be repaid out of the Guarantee Fund. I have no hesitation in saying that as the different Amendments come up I shall succeed in demonstrating that this clause simply direct? that an impossibility be done. A " temporary advance " must, of course, imply that the Guarantee Fund had the coin, or in a short time would have the coin, in it for the purpose of repaying to the Consolidated Fund the whole of the dividends and Sinking Fund payments to be created by the Bill. I say that even if the Guarantee Fund succeeded at any time in paying off one year's instalment rendered necessary by default, the result would be that the income of Ireland would be correspondingly diminished by the denial of Imperial grants and contributions, and that would tend to cause a recurrence of the default in the following year. But there is a stronger argument. If the Guarantee Fund fails to pay up, the temporary advance becomes more or less permanent, and the Guarantee Fund can be shown to be absolutely, arithmetically, unable to pay up to the Consolidated Fund what is temporarily advanced until after an enormous lapse of time, and until an enormous amount of debt has accumulated. The Chancellor of the Exchequer, replying to a question I put to him in December, laid great stress on the alleged temporary character of the advance from the Consolidated Fund, and he even somewhat lost his temper, and accused me of " suppressing the fact that the Consolidated Fund is at once recouped by the Guarantee Fund." But I say that the whole of the Guarantee Fund is positively insufficient, and, therefore, it is impossible that the Consolidated Fund can have its advances at once recouped, as stated by the right hon. Gentleman. How can the Guarantee Fund at once recoup when it has not the coin in it to do so? Let us look at the figures in the Return presented at the request of the right hon. Gentleman the Member for Bradford and myself, showing the operation of the Sinking Fund. This Return was not all I wanted. For some reason best known to himself the Chancellor of the Exchequer has confined it to 30 years, and has not carried it to 49 years as I desired. But it shows that on the 30th year the annuities due from the tenants amount to £1,845,000. But the whole income of the Guarantee Fund for each year it is also shown will amount to £1,200,000 only. The right hon. Gentleman's own Return, therefore, shows a deficit at once for that single year of £645,000. What does this clause in the Bill say? Why, that the difference, which will be £645,000 on this one year alone, is to be "temporarily advanced" from the Consolidated Fund. Now, suppose that the whole of the £1,200,000, which constitutes the income of the Guarantee Fund, is got in. I will not enter into the difficulty of realising the Guarantee Fund and of denying the Contingent portion's contributions to Ireland. I take it all as cash, and I say the right hon. Gentleman will exhaust his Guarantee Fund. He will have a deficit which the Consolidated Fund will make good. Then how is the "temporary advance " to be recouped? It cannot be done by taking the next year's £l,200,000; assuming always that there is a default, for that will not only all go but the next year's deficit will in its turn appear to the extent of £660,000, and so on every year. Thus, deficits will go on accumulating year by year in the Consolidated Fund, although you sweep off the whole Guarantee Fund every year, and, as a result, at the end of 49 years you will have £13,000,000 or £16,000,000 that has been advanced out of the Consolidated Fund for a period of 19 years. I want to know if the right hon. Gentleman considers that to be a " temporary advance "? I want to know where the words of the right hon. Gentleman the Chancellor of the Exchequer in his reply to me come in—the words in which he said I had suppressed the fact that the Consolidated Fund was at once recouped? Nineteen years is surely a long time for recoupment not to have been begun. The fact is, the Government have solved an extraordinary hydrostatic problem. There is an old saying that you cannot put a quart of water into a pint pot, but the Government have enormously powerful hydraulic machinery at their command. They have actually succeeded in putting the quart of water into the pint pot; and not only so, but the answer of the right hon. Gentleman showed that they are just preparing by this Bill to take it out again. All I have got to say is this: that the network of securities of the right hon. Gentleman will be proved to be only a network in the sense that it is full of holes.

It being ten minutes to Seven of the clock, the Chairman left the Chair to make his report to the House.

Committee report Progress; to sit again upon Thursday.