§ Considered in Committee.
§ (In the Committee.)
§ Clause 1.
§ MR. HANBURYasked what was the exact purport of the Bill? As yet he had not been able to get a satisfactory answer, and he should like to know if he was correct in assuming it was another means of attempting to reduce the deficit? So far as he understood, what had happened in past years was this; the Treasury Chest was kept at a certain amount, but this year—for the first time for many years—they were told that it was not necessary to keep that amount in hand for foreign payments, because, in consequence of the facilities of communication with the different parts of the world through the post and telegraph, payments could thus be more easily made. But there was no distinction in that respect between this year and the last few years, and any Chancellor of the Exchequer hard up for money might have done the same thing that the Chancellor of the Exchequer was doing now. What he wanted was an answer to two plain questions. First, whether, as a matter of fact, the right hon. Gentleman was not borrowing this money in order to reduce the deficit; and, in the next phase, whether the right hon. Gentleman could tell him what special circumstances there were in connection with this Bill which enabled him, as Chancellor of the Exchequer, to reduce the 1281 balance by means of this chest, that were not equally applicable to any of his Predecessors? It might be a very proper thing to do, but if the Chancellor of the Exchequer was really borrowing—about which he thought there could be no doubt—then he should boldly say so. He would ask whether this was not, in fact, a new form of loan to a limited extent? If the right hon. Gentleman said it was, then the matter would be ended; but what he wanted was to prevent the Chancellor of the Exchequer sailing under false colours. The right hon. Gentleman had condemned similar action on the part of some of his Predecessors, and if they found that the Chancellor of the Exchequer was borrowing in this way, then it was only right that he should apply the same condemnation to himself which he had so readily extended to those who preceded him in Office. To put himself in Order he would therefore move the rejection of the clause.
§ Amendment proposed, to leave out Clause 1.— (Mr. Hanbury.)
§ THE CHANCELLOR OF THE EXCHEQUER (Sir W. HARCOURT,) DerbyI put this down as the first Order of the Day in order that hon. Members might have full information upon it. The transaction contemplated by the Bill is one that has been done several times. This Treasury Chest is, in point of fact, the working balance for making payments abroad. From time to time it is found this working balance is more than necessary for that purpose. In 1861 the present Prime Minister, then Chancellor of the Exchequer, reduced the balance. In 1873 the same thing was done by Mr. Lowe, and exactly the same amount of money, £300,000, was taken. At that time the balance was £ 1,300,000, and Mr. Lowe applied the £300,000 to the financial arrangements of that year, and the Bill went through without any observation, it being treated as a mere Treasury matter. If the hon. Gentleman wants to know why it is done this year, I have not the slightest hesitation in telling him; it is because we want money. I have made no secret of that. Money is wanted; this is available for the purposes required; and if hon. Members consider that borrowing, I have no objection to their thinking so.
§ *MR. COHEN (Islington, E.)said, that whatever might have been thought before the explanation of the Chancellor of the Exchequer there could not now be any one in the House who could imagine for one moment that the transaction was one of borrowing, because he apprehended that borrowing contemplated repayment. This was an appropriation out of capital for the purpose of meeting a deficit; it was an experiment the Chancellor of the Exchequer would scarcely call borrowing. The right hon. Gentleman was appropriating £300,000 which belonged to capital in order to meet expenditure which he (Mr. Cohen) should consider ought to be defrayed from Revenue. The money ought to be applied in the same way as the surpluses were taken for the reduction of Debt. He thought his hon. Friend (Mr. Hanbury) would no longer consider it borrowing. It seemed to him that when his hon. Friend made the observation that he was under a misapprehension, and it was now absolutely clear that it was not borrowing, but was, he might almost say, confiscation. But whatever the expression ought to be, it was appropriating towards annual expenditure capital sources, and therefore he wondered that such a financial purist as the right hon. Gentleman should resort to an expedient that was scarcely so justifiable as the system of borrowing for capital expenditure.
§ MR. BARTLEY (Islington, N.)thought this raised a somewhat serious question, inasmuch, as he understood it, all surpluses of this sort were obliged to be applied to the reduction of Debt. The money had arisen out of taxation in former years, and being no longer necessary for the purpose for which it was voted, it ought to go in the reduction of Debt. Therefore, he apprehended, this Bill was really and truly to do away with that provision and to give the Chancellor of the Exchequer the accommodation of £300,000 this year to make up deficiences. That was following the bad precedent of the present Prime Minister in 1861, and he hoped the Committee would be strong on this point and insist that the £300,000 should not be diverted to a wrong purpose, but should go in the reduction of Debt as it ought to do.
§ SIR W. HARCOURTThat would make it necessary to put on another tax. The question of what is capital and what 1283 is not, no doubt, we might discuss at great length. If you have a great windfall on an estate you might treat the timber that fell as capital, but if you were hard up that year you would use it as revenue. The Committee knows very well what has been done in these eases in former times, and I hope they will allow us to have this Bill.
§ *SIR JOHN LUBBOCK (London University)said, the right hon. Gentleman called this a windfall, but he submitted it was no windfall at all. Lot them understand what they were about to do. The Treasury Chest, as he understood it, were certain sums kept abroad to meet expenditure, and the right hon. Gentleman now brought in a Bill to diminish the sum kept in the Treasury Chest; therefore it was not a windfall in any sense of the word. If the Treasury found it was not necessary to keep so large a sum, it was quite right to bring the money home; but having done so, it ought to go in reduction of Debt, and they must clearly understand they were not making both ends meet to that extent, because taking the money out of one pocket and putting it into another could not be called a windfall. The right hon. Gentleman was quite right in bringing the money home, but it ought to go in the reduction of Debt, and not to the Revenue of the year. It was really part of the property of the nation being transferred from one place to another, and to treat it as income was ridiculous, and if his hon. Friend went to a Division he should feel bound to go with him. If they were to understand that merely because £300,000 had been transferred from the Treasury Chest to the Exchequer they were to spend it, he thought that was a matter they ought to protest against.
§ LORD RANDOLPH CHURCHILL (Paddington, S.)I think my hon. Friend behind me and the right hon. Baronet opposite are really financial purists. Of course, it is very easy to lay down the very honourable, strict, and creditable maxim that never must you apply money to one purpose that was intended for another, and for the guidance of the Treasury to pass a cast-iron rule; but when you consider what the action of the Treasury has been during many years in the management of English finances, and how the House of Commons has never been able to detect the Trea- 1284 sury in any fault, you must be careful to give a certain elasticity to the licence and liberty you allow the Treasury in dealing with the financial incidence of the time and the requirements which one year with another may bring. The Treasury is advanced a sum for the purposes of the year. A balance of £300,000 is lying on a deposit, as it were, called the Treasury Chest; it is not wanted for the purposes of the Treasury Chest, but is wanted for the purposes of the year, and if the Chancellor of the Exchequer had not adopted this course what would have been the result? The services of the year would not be fully provided for, and the Government would have to run the risk, at the end of the year, if they did not avail themselves of this, of increasing the Floating Debt by the amount that is required, and I want to know, in these days, whether those gentlemen who object to getting money from the Government at a rate of not more than 2 or 2¾ per cent. will run the risk of this year paying the interest they might have to pay if they increase the amount of the Treasury Debt? It is obvious to anyone that the Government have made a convenient arrangement for the country. If, following the purist rule of the right hon. Baronet, they had not provided for the deficit they would have been attacked in the House of Commons, and if they had put on a tax they would have again been attacked in the House of Commons. They have followed the precedent that has been set by Chancellors of the Exchequer like the First Lord of the Treasury and like the late Mr. Lowe, and they certainly procure money on more advantageous and convenient terms than if they followed any other course. That is financial common sense, and I shall certainly support the Government.
§ MR. COURTNEY (Cornwall, Bodmin)had not intended to take part in the Debate, but it was really important to protest against the language and the attitude assumed by the noble Lord the Member for South Paddington (Lord R. Churchill). He had said before in this House that he knew of no more striking illustration of the immense power of the Treasury than the way in which it had captured the noble Lord and the Chancellor of the Exchequer, both of whom had gone there as enemies 1285 of that institution and had become the most docile disciples. The noble Lord had said that a certain balance (£300,000) had been appropriated by the Chancellor of the Exchequer in order to meet the exigencies of the year. The Chancellor of the Exchequer had treated as Revenue that which was, in fact, part of capital. That was open to objection, and that was the part of the financial purists. In his opinion that ought not to pass without notice, and the hon. Member for Preston (Mr. Hanbury) very properly called attention to what was being done. The noble Lord had said that "you must trust the Treasury; they behave extremely well." He protested against that line of argument, because they wore not dealing with the permanent officials of the Treasury, but with the Chancellor of the Exchequer. It might very well be that the Chancellor of the Exchequer had overridden the scruples of the Treasury, but the right hon. Gentleman knew perfectly well that a very eminent Predecessor of his was once very sharply blamed for conduct like what be now practised. In the famous Budget of Mr. Disraeli in 1852, when he was in great straits to balance his accounts, as other Chancellors of the Exchequer had been, he made a proposal in respect to the Exchequer Loans, which was discussed for two nights, and which was opposed by the present Prime Minister and defeated. What the right hon. Gentleman was now doing was of precisely the same character, and it was quite right that it should be condemned. In this case borrowing was not the only alternative, for the Expenditure might have been cut down or the Revenue raised, and it was not a question of the difference in the interest, as the noble Lord had put forward, but it was a matter of real principle.
§ SIR W. HARCOURTI only rise to protest against the statement of my right hon. Friend that I was the enemy of the Treasury, because I never was the enemy of the Treasury. It is true that during the reign of a particular Secretary to the Treasury, the administration of the Treasury became so unpopular in most of the Departments that there was a feeling against that Body, but that does not exist now. I am, however, obliged to my right hon. Friend for his speech, because he has supported my case, and 1286 has, to use a vulgar expression, "given himself away." The right hon. Gentleman says that the balance should have been reduced, and what he proposes is that, instead of reducing the balance upon which it was not necessary to draw, we should reduce balances every penny of which is wanted. That is the real argument of the late Secretary of the Treasury, and I have never heard a more remarkable argument from an ex-Secretary. The right hon. Member for the University of London (Sir John Lubbock) is desirous of reducing the Debt. I have now a margin of £175,000, and I hope it may be realised; if so, that sum will go to the reduction of the Debt, because it would be a real surplus, and the £300,000 would find its way into the Treasury. Under those circumstances, I hope the hon. Member will not press his opposition.
MR. GIBSON BOWLES (Lynn Regis)said, the prospect of this sum going in the reduction of Debt, if certain things happened, was satisfactory to the Committee. The question now was, however, not that the balance should be reduced—they were prepared to agree to that—but what was to be done with the £300,000, and no doubt it did turn to some extent on the character of the sum the right hon. Gentleman had captured as a windfall. He did not think that was an appropriate description. A windfall was timber or apples blown down by the wind, but in this instance they had got the right hon. Gentleman in the orchard up the tree, after the apples himself. The right hon. Gentleman admitted it; he wanted money, and therefore had gone out to get it. He was a pirate. The animus furandi was ascertained. What they complained of was the allocation of it not to the diminution of Debt, not to the purpose which the wisdom of Parliament had pointed out as a proper destination of any sums of this kind, but to the payment of the inordinate expenses of this year. They said that according to all the sound principles of finance the expenses of the year should be met out of the Revenue of the year, and that the right hon. Gentleman had no right to put his hand in the public till, to go up the public apple-tree, and take the public apple which properly belonged to capital and not to Revenue. That was what they objected to.
§ *MR. FREEMAN MITFORD (Warwick, Stratford)said, the right hon. Gentleman stated that the right hon. Member for Bodmin (Mr. Courtney) had given himself away; but there wore two ways of reducing the balance, one by investment and the other by spending it, and in the present case it appeared to him they were spending it. The Treasury Chest was a matter they had been taught to look on as a sacred thing not to be lightly touched, and if the hon. Gentleman went to a Division he should vote with him.
§ MR. TOMLINSON (Preston)thought that if there was any doubt about the nature of the transaction before, the illustration the right hon. Gentleman had favoured them with as an excuse was enough to convince them. The right hon. Gentleman said that if his calculations were borne out there would be a surplus which would go to the reduction of Debt; but if they should not be borne out there would be a deficiency, and the capital sum would have been diminished by that amount.
§ Question put, "That Clause 1 stand part of the Bill."
§ The Committee divided:—Ayes 230: Noes 116.—(Division List, No. 95.)
§ Motion made, and Question proposed, "That Clause 2 stand part of the Bill."
§ MR. BARTLEYsaid, it would be better to cite the Bill as the Treasury Chest Revenue Relief Bill.
§ Question put, and agreed to.
§ Motion made, and Question proposed, "That the Chairman do report Progress, and ask leave to sit again," put, and negatived.
§ Bill reported without Amendment.
§ SIR W. HARCOURTI move that the Bill be read a third time. I hope the House will agree to this.
§ Motion made, and Question proposed, "That the Bill be now read the third time."—(Sir W. Harcourt.)
§ MR. HANBURYsaid, he was opposed to the Third Reading being taken then Hon. Members knew very little about the Bill.
§ SIR W. HARCOURTThen, Sir, I put. it down for to-morrow.
§ Bill to be read the third time Tomorrow, at Two of the clock.