Lords Sitting of 3 May 1853

MINUTES.
PUBLIC BILLS.—1a Chimney Sweepers Regulation Act Amendment.
2a Burghs (Scotland); Charitable Trusts; Cathedral Appointments.
Reported.—Lunacy Regulation; Lunatic Asylums; Lunatics Care and Treatment.
3a South Sea and other Annuities Commutation.

CHARITABLE TRUSTS BILL.
Order of the Day for the Second Reading read.
The LORD CHANCELLORmoved the Second Reading of this Bill, and said, it was he must confess, in his opinion, a scandal on the country that it should fall to the lot of any one in the year 1853 to propose the second reading of a Bill like the present, the object of which was to establish the means of efficiently administering and rendering useful the charitable trusts of this country. But so it was. This subject had been so often before their Lordships' House and the other House of Parliament, that he should deem it an unwarrantable waste of time if he went into any great detail as to what had already been done, or the course which legislation had taken, in connexion with this matter. It would be sufficient for him to call attention to the fact that it was now fast approaching forty years—considerably more than thirty-five years—since his noble and learned Friend (Lord Brougham), who was so much distinguished for his zeal and ability in reference to this subject, directed the attention of the House of Commons to the abuses, first of the educational chari-
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ties, and afterwards of the charities generally, throughout the kingdom. After one or two Motions, it was in 1818, that his noble and learned Friend first obtained an Act of Parliament which constituted the original Charitable Trusts Commission. It was supposed that the labours of the Commissioners appointed under that Act, of whom there were fourteen, eight of whom were paid, would be terminated in the course of two years. Their powers, in the first instance, were limited to educational charities, but afterwards they were extended generally to all charities; and it soon became perfectly manifest that it was a very delusive idea to suppose that the inquiries of the Commissioners could be concluded in that period. The Commissioners made several reports, and it was not unworthy of notice that so long ago as 1820, they made a report, in which they pointed out to the attention of the Legislature and of the country, that until some cheap and expeditions mode of dealing with the abuses of charities was instituted, all inquiry on the subject would be idle. The Commission to which he had referred continued its functions under Acts of Parliament until they terminated in 1830; but in the following year his noble and learned Friend (Lord Brougham), who was then on the woolsack, obtained another Act of Parliament, by which the Commission was renewed and continued to prosecute its inquiries until 1834; when that Commission also expired. In 1835, Parliament and the country being anxious to bring the matter to a close, a new Commission, consisting of not less than thirty members, was appointed, who had the duty imposed on them to terminate their labours in two years. They, consequently, investigated all, or nearly all, the charities in the country, not previously reported on, and their labours concluded in 1837. These various Commissions, from first to last, made no less than thirty-two reports, accompanied by a mass of evidence which would take almost half a lifetime to master. Their reports and evidence were contained in closely printed folio volumes; and he need hardly say that a work so voluminous carried with it the destruction of its own object, for the practical effect was that no person ventured even to look into it. Nevertheless, summaries of the evidence, and the reports of the Commissioners without the evidence, being more readable, the attention of Parliament was called to the subject, and after the lapse of two or

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three years, several attempts at legislation founded on the reports were made. It was quite unnecessary to give a minute description of all those attempts. He believed that the first attempt to introduce a Bill founded on the reports of the Commissions was made by a right hon. Friend of his (Sir G. Grey), in the other House, somewhere about 1840, but it ended in nothing being done. Then the Government of the late Sir Robert Peel took up the subject, and his noble and learned Friend who then held the Great Seal (Lord Lyndhurst), introduced a Bill on the subject in their Lordships' House in 1844, which, however, did not pass; and in 1845 the same Bill—at least, it was very much the same —was again introduced in their Lordships' House, through which it passed; but it was not taken up by the other House. In 1846 another Bill was introduced, but was not prosecuted to a successful issue; and there ended the attempts at legislation on the part of his noble and learned Friend (Lord Lyndhurst). The late Lord Cottenham, who succeeded to the woolsack, introduced a Bill on the subject in 1847, differing in some material respects from the measure of Lord Lyndhurst, which, not passing, was renewed in 1848, again in 1849, and again, he believed, in 1850. These frequent and ineffectual attempts at legislation, led, however, to the constitution of a new Commission, not like the former Commissions, which were composed of paid and professional members, but one under the sign manual, directed to several noble Lords—one of whom he saw opposite, who had rendered eminent service to his country, and to other Members of Parliament— a Master in Chancery, and barristers, who were instructed to look into the matter and the reports already made, and which from their voluminous character were too extensive for individual inquiry. In the course of the inquiries made by the Commissioners he had previously referred to, it must not be understood that they did nothing but make reports. Such a notion would constitute a very inadequate idea of the services rendered by them. They reported from time to time specific cases of abuse, to which the attention of the Attorney General was directed, and in 400 instances the Attorney General had prosecuted for abuse, and regained great sums for the benefit of the charities. Neither was the usefulness of these proceedings to be measured merely by the number of cases in which the Attorney General actually
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interfered, for the natural effect of their interference led to right being done in many other instances where under other circumstances the evil would have passed uncorrected. Still much remained to be done; for it was idle to talk of proceeding in the Court of Chancery as to the great bulk of these charities. It had been ascertained pretty accurately that the institution of proceedings in Chancery on the subject of a charitable fund which did not yield more than 30 l. a year, would necessarily absorb the whole of the capital—from 600 l. to 1,000 l.—even if the parties prosecuting were successful. Therefore, though the Commissioners had done essential good with respect to the larger charities, yet the main mass of abuses, which consisted of abuses of the smaller charities, was perfectly irremediable by any existing means, and unless some other plan could be suggested. The number of charities to be investigated was stated at no less than 28,840: whether that was the whole number in the kingdom might be matter of doubt, but he would take it at that amount. It would be matter of surprise that of those 28,840 charities 22,760 were charities below 30 1. a year. Combining that with the statement he had previously made, the result was that not fewer than 22,760 charities were practically without the pale of the law—that there was no tribunal which practically was calculated to deal with them. That being so, the Commission to which he had last alluded —the one instituted under the sign manual —made a report on the subject eminently characterised by good sense, recommending that there ought to be not only a cheap mode of settling all matters connected with such trusts judicially, but that there ought to be some permanent, efficient, responsible body which should have the superintendence of them, and be placed in such a situation of authority that their control might be relied on. In pursuance of this report of the Commissioners, which was made in 1850, the Government in 1851 introduced a Bill embodying very many of their recommendations. That Bill was brought in by a noble and learned predecessor of his, not now in his place from illness (Lord Truro), and, after being read a second time, was referred to a Select Committee, where it underwent a long investigation, and received several material Amendments which were adopted by their Lordships, who passed the Bill, and sent it down to the other House of

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Parliament. Unfortunately, however, this occurred at too late a period of the Session to admit of the Bill passing through that House, and nothing was done with it then. One of the first acts of the Government in the succeeding Session of 1852 was to reintroduce the same measure in the House of Commons, which was done by the Attorney General. On that occasion the Bill was read a second time, he believed without discussion, a request having been made and complied with that the principle of the measure should be discussed on the Motion for the House going into Committee. But in the meantime a change of Government took place; the new Attorney General, Sir F. Thesiger, however, took up the Bill, moved that it should go into Committee, and, in a very able and lucid statement, explained what were its objects. From some cause, however, with which he (the Lord Chancellor) was unacquainted, the Bill was dropped, and did not pass. It now, therefore, became the duty of the present Government to take up the subject again. In doing so the Government claimed very little credit for originality. Some change it had become necessary to make, for this reason:—The judicial machinery proposed by the former Bill provided that the case of charities under 30 l. should be dealt with by the County Courts; from 30 l. to 100 l. by the Masters in Chancery; and above 100 l. by the Court of Chancery. Some change was forced on them, however, because the office of Master in Chancery, as a tribunal, was abolished. As regarded the Board of Superintendence proposed by the Commissioners, the recommendation was that it should be a Board consisting of two or three paid and unpaid Members. Now, in considering the change it had become necessary to make in the judicial tribunal, the Government took it into their serious consideration whether a useful change might not be made also in the constitution of the Board; and, on both these subjects, the one being a change called for by necessity, and the other a change desirable but not the result of necessity, he would state to their Lordships what the present Bill proposed. In the first place, they must consider what would be the duties of the Board. The duties of the Board would be to exercise a general superintendence over all the charities of the kingdom, at no expense whatever to the smaller charities; indeed, be might say, at no expense to any. One of the most efficient modes— and that, perhaps, on which practically
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everything would turn—for making the plan efficient, would be to make it the imperative duty of the trustees of every charity to keep regular accounts of all their receipts and expenditure, be the sums great or small; and annually to deposit a copy of them with the clerks of the County Courts, and another copy to be submitted to the Board in Loudon, where they would be always accessible to inspection. This provision of itself, he apprehended, would have a most material effect in preventing abuses. And, when he said "abuses," he thought it right to state his belief that nine-tenths of the abuses that existed were the result of ignorance. He believed that when accounts were regularly rendered, and the attention of all parties concerned drawn to the nature of the expenditure, the greater part of these abuses would be corrected. The Board would also be called on to perform a function that would be exceedingly useful, and which had been recommended by the Commission. It often happened that the trustees who administered the funds of charities were at a loss in particular cases how to act; and it was proposed that they should be at liberty, without expense, and merely by writing to the Secretary of the Board, to obtain in such cases the advice of the Board as to what they should do, which would indemnify them till corrected by the judicial tribunals. He did not mean to say that this was a course absolutely free from difficulty; but, considering the nature of the case, and that it was impossible to have an actual legal investigation, there was at least some advantage in arriving at an approximation to a removal of the evils, and he believed that for such a purpose this would be found an essentially useful provision. He was the more inclined to think this from what he had been informed on the best authority, that endless letters were now received from persons asking what they ought to do in certain given circumstances, but which letters there was no competent authority to answer. There was another function which the Board would have to exercise that he regarded as also one of the greatest importance. It was proposed that they should have the power of directing legal proceedings to be instituted; and, what was of not less importance, of forbidding them to be instituted. Gross abuses had arisen in many cases from parties not being called to account; and there had also been abuses not less gross, leading to results not less ruinous to the charities, from the insti-

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tution of proceedings. It was no new tiling that proceedings of this kind should he under the control of a public Board, and of a Government Board, because in form they never could be instituted without the sanction of the Government—that was to say, the Attorney General—though it was no contradiction to say that the Attorney General had no adequate machinery for investigating whether a man was acting for the benefit of a charity when he instituted proceedings, or whether they might not have been dictated by some low professional person, who wished to make again of the matter. It was proposed, therefore, that the Board should have control over all legal proceedings—that none should be instituted without their sanction—and none ended without their approval. The Bill contained another clause to which he attached great importance—it applied to a class of cases, in which it was most important that all who had the management of trust property should have the power of dealing with it in the same manner as individuals. Cases often arose in which the interests of a trust required that the trustees should have power to build houses, to exchange land, and sometimes to purchase and to sell land. In some cases trustees were invested with this power, in others not. Where there was no power in the trustees to do these things, it was sometimes necessary to apply to Parliament at a great expense—never less, he believed, than 600 l. Now it was proposed that in all these cases this Board should have the power of authorising the trustees to do that which under their ordinary powers they would not have the power to do, and for which consequently they would otherwise have to apply to Parliament to acquire power to do. All these were powers that were proposed to be conferred upon the Board as it was constituted by the former Bill; and on that part of the case he did not anticipate there would be any real difference of opinion. The present Bill proposed to give to the Board powers that were not given to the Board as constituted by the Bill of 1851, and to these it was possible some of their Lordships might have an objection. In the first place, many of these charities, though they were covered by the name of "charities," were anything but beneficial to the recipients. There were none of their Lordships who had made the least inquiry into such matters who had not heard the greatest complaints made of the nuisance created by what was called "a charity"
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in a town where it existed. The reports made on this subject were rife with this sort of cases, and it would be idle and pedantic in him to call their Lordships' attention to many of them; but he might mention one or two instances. There was a village on the confines of Radnorshire in which there was a charity called "Jarvis's Charity," of 3,000 l. or 4,000 l. a year, where the fund was appropriated to provide meat, drink, and physic for the poor, with an express prohibition against the trustees devoting any part of the funds to building. In consequence of the existence of this charity, cottages had become exceedingly numerous in the neighbourhood, a large influx of inhabitants from the neighbouring villages took up their residence there, and the amount of immorality, vice, and profligacy which prevailed was frightful, so much that the charity had become an intolerable nuisance. Proceedings were instituted in order to get rid of the nuisance. The case was brought before the Court of Chancery; but that Court having no power to legislate on the subject, all that they could do was to execute the trust according to the will of the founder, and sanction an application to Parliament for the purpose of getting a portion of the fund devoted to the building of schools and the education of the poor of the parish. In the town of Macclesfield and Sandbach certain funds of a charity were devoted to almshouses, and others to schools. The school fund was not sufficient for the purpose, and the almshouse fund was more than was required, and, as in the former case, great abuses were the consequence. Here, again, the Court of Chancery authorised an application to Parliament for an Act to enable the parties to devote a portion of the alms fund to the erection of schools. Now, in the case of a great charity, there were the means of setting matters right; but in the case of the poor charities such means did not exist. What was urgently required in such cases as these was some mode of dealing with the property, instead of going through this expensive process, the great expense of which prevented the smaller charities from effecting desired improvements. The Bill, therefore, proposed to give to the Board the power of dealing with the charities in four instances, namely, first, where the object of the charity had wholy failed, and it had become impossible to carry it into effect; secondly, where the object itself had not failed, but where it had failed of doing what might be supposed to have been the

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intention of the founder, or tended to the encouragement of pauperism or immorality; thirdly, where two or more charities existed for somewhat similar purposes, but the funds of neither were sufficient for its own object, but when united they might do good; fourthly, where in the case of charities which had been founded above sixty years—it was not proposed to touch modern charities—it was found that the result expected was totally inadequate to the funds applied to it; in each of these cases it was proposed that the Board might sanction a different application of the funds, with, however, some necessary safeguards. First of all, if the trustees who had the management of a charity concurred with the Board in thinking that the alteration was necessary, then the Board might frame a new scheme for the application of the funds to useful instead of injurious or useless purposes. The new scheme in which both thus concurred would be laid before both Houses of Parliament; and if neither House, by resolution, objected to it within three months, then the scheme was to have the same power as if authorised by Act of Parliament; if, however, the trustees did not concur, all the Board could do was to lay their scheme before Parliament; and then, instead of a private Bill being introduced at great expense, Parliament was authorised to interfere if it thought fit, by a Public Act. He could not but think that this was a power that should be lodged somewhere, even at the risk of giving too great a power to some one-body; but, unquestionably, it was a power which should be in the hands of persons whose conduct would be before the public, and whose motives were not likely to be called in question. It was with that view that, in conferring these high privileges, the Government thought the Government itself should he responsible for any advice given; and instead, therefore, as was proposed in the Bill of 1851, of having two paid Commissioners and two unpaid, it was proposed to make the Board a branch of the Government, including in it the Lord President of the Council, and other Members of the Cabinet—one or more of the latter to be Members of the House of Commons—and three Members of the Privy Council, who should appoint two legal gentlemen of high attainments, upon whom of course the more laborious part of the business would devolve, to be inspectors; and they were also to appoint another legal gentleman of standing to be their secretary. In the former
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Bill it was proposed that the expense of the Commission should be defrayed by levying a small tax on all the charities; but when the matter came to be investigated it was found that the collection of such a tax would be attended with enormous difficulties. There were not fewer than 13,000 charities under 5l. a year— there were many thousands under 2l. a year; and what kind of machinery would it not require to collect a tax that in some cases would amount to only a penny or twopence a year? And it would be unfair to expect that the larger charities should bear all the expense. The Government, therefore, having considered the matter, had come to the conclusion that, considering the great benefits which would be conferred upon the community by the better management of charitable trusts, it would probably not be too much to say that the expense, which would not be more than 5,000 l. or 6,000 l a year, should be paid out of the public exchequer. The two legal Members of the Board should go into the country and make inquiries on the spot in every case which required investigation. It was also proposed that the two gentlemen connected with the Board as Inspectors should be deputed to visit different towns and report upon charities, as occasion required, for the purpose of bringing justice home at once to the door of the different charities. It might be objected that the clauses of the Bill relating to this part of the subject would invest those officers with inquisitorial powers. But we had to deal with a choice of difficulties, and it was not likely that more inconvenience and danger would result from the exercise of these powers than from leaving matters as they were; and as the results of these inquiries and the reports of the inspectors would be made public, and submitted to Parliament, he apprehended that no objection could be taken to this portion of the Bill. And now, with respect to the judicial tribunals for dealing with the charities. The present measure adopted the provision contained in the last Bill for giving the County Courts jurisdiction over all charities not exceeding 30 l. in amount. The County Court Judges were, he believed, zealous and learned persons, and, with the safeguards provided by the Bill, no real mischief was likely to arise from intrusting the Judges of the County Courts generally with this new jurisdiction. The former Bill proposed that all charities above 30 l., and up to 100 l., should go before a Master in Chancery,

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and all above 100 l. before the Lord Chancellor. No good reason was apparent for maintaining this distinction, and therefore it was now proposed that all cases above 30 l. should go before the Master of the Rolls or one of the Vice-Chancellors, at Chambers, without any information, bill, or petition, who was to be at liberty, in any case of extraordinary importance, to direct a bill or petition to be filed for the purpose of bringing the matter under the jurisdiction of the Court itself. He had now stated the chief provisions of the measure; and if their Lordships should read it a second time, he would, in accordance with a suggestion made on a former evening, move that it be referred to a Select Committee when the details might be fully considered and discussed.
Moved —That the Bill be now read 2a.
The DUKE of CLEVELANDwas understood to say that he considered the Bill was a decided improvement upon the former measure, and that the noble and learned Lord was entitled to the thanks of the House for having introduced it.
The EARL of CHICHESTER, as one who had taken a great interest in the question, also expressed his thanks to the Lord Chancellor for having brought in so very important and practical a measure as that which was now before the House. The noble and learned Lord had correctly stated that the greater part of the Bill was precisely the same in principle as the Bill which two years ago passed their Lordships' House; and he might remind their Lordships that the Bill was, in fact, the Bill prepared by the Charity Commission, with some very slight alterations, and which was afterwards brought in by the Government of the noble Earl opposite (the Earl of Derby). He certainly thought, however, that the proposed change in the constitution of the Board was a great improvement on the former measure; and though large powers were proposed to be given to the Board by the Bill, which were not contemplated by the Charity Commission, still the reasons given by the noble and learned Lord for conferring such powers appeared to be valid and sound; and the question was one rather of prudence and policy than of principle. He hoped the Bill, in all its principal enactments, would receive the sanction of their Lordships.
LORD BROUGHAM, after complimenting the noble Earl who spoke last on the diligent attention which he had always be-
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stowed on this important matter, of which he had great official experience, said he entirely concurred in the opinion which had been expressed, believing it to be the most useful measure that had been introduced on the subject. There were one or two points with respect to which he entertained doubts, that might be removed by further explanation. Discussion in a Committee would probably reconcile all differences of opinion. It was his bounden duty, as having presided over the celebrated Committee of the Commons, to concur in the testimony which the noble and learned Lord had borne to the value of the Commissions of 1816℃18, appointed by the Acts passed at the instance of that Committee. No man could have traversed the country in any direction during the last forty years and not see, rising before his eyes, monuments to the importance of their labours. It would be erroneous to estimate the beneficial results of the labours of those Commissions merely by the 400 cases which they caused to be brought into Chancery for investigation, because, in a multitude of other instances, the mere apprehension of inquiry led to the discontinuance of abuses, and the revival of charities gone into disuse. In justice, however, to the trustees, he was bound to express his firm belief that in a great majority of cases the abuses arose not so much from corruption, from wilful diversion and misapplication of the funds, as from negligence, ignorance, and carelessness: this was particularly the case as regarded the smaller charities. He had the greatest confidence that the provisions of this Bill would meet all such cases, and he trusted it would receive the sanction of their Lordships.
LORD ST. LEONARDSwould hesitate long before consenting to give the Board the powers which the Bill proposed to confer upon them. Up to this moment such powers had never been intrusted to individuals in this country. The constitution of the Board itself appeared to be objectionable—it was to be constituted in point of fact by the Government for the time being. Either the Board would exercise its power upon all matters brought before it, when they would inevitably become party questions, or the business would be left to the two barristers, who were to become the working and influential men of the Commission; and undoubtedly these great powers were not such as could safely be committed to any two men. Among other things, power was given them to

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alter the application of a failed charity, whatever might be its amount. Now, the first question which arose with respect to a failed charity was whether the property should go to other charities, or revert to the donor. It was worthy of consideration whether it would not be expedient to appoint a Board to determine these questions, so as to render it unnecessary to apply to Parliament in each case; but such a Board, to obtain public confidence and respect, must be very differently constituted from the Board proposed to be established under the present Bill. One word in regard to the misapplication of charity funds. It appeared to him that in a vast number of cases of small charities the trustees had been guilty not so much of breach of trust as of errors of judgment. This opinion was founded on his experience as a member of the Charity Commission; for he was a member, although, by some accident, his name did not appear in the Report.
LORD BROUGHAM: Because you never attended.
LORD ST. LEONARDS: I beg my noble Friend's pardon. I attended more frequently than he did.
LORD BROUGHAM: Oh dear, no!
LORD ST. LEONARDS: I attended regularly, almost every day, but I never saw my noble and learned Friend there, except on the first day.
LORD BROUGHAMsaid, his noble and learned Friend appeared to be gifted with a faculty for the possession of which he had never before given him credit—namely, the imaginative. His learned Friend had drawn extensively upon his imagination when he said that he attended to the Commission every day, but never saw him there; and he (Lord Brougham) must acknowledge that he was also in error in supposing that his noble and learned Friend had never attended, for, on consulting with a Member of the Commission now below the bar, he was reminded that an arrangement had been made by which he and his noble and learned Friend attended on alternate days. Under these circumstances, it appeared that they were now both in the wrong; and their Lordships would perceive it not only natural, but unavoidable, that he and his noble and learned Friend should never see each other at the Commission, because, from the arrangement made, it was impossible they could both be present at the same time.
EARL TALBOTsaid, as the law stood
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at present, the funds of any charity were mulcted one way or another of no less a sum than 200 l. on the appointment of fresh trustees for its management; and on such occasions there was a sum of 25 l. paid to the Attorney General, who had nothing to do in the matter. He hoped the noble and learned Lord on the woolsack would introduce a provision into the Bill to remedy that inconvenience and expense.
The LORD CHANCELLORsaid, there was a special provision in the Bill to meet the objections of the noble Earl.
Bill read 2a, and referred to a Select Committee.

CATHEDRAL APPOINTMENTS BILL.
EARL GRANVILLEhaving moved the Second Reading of this Bill,
The BISHOP of SALISBURYsaid, he wished to state on what grounds he was able to give his assent to the second reading of this Bill. He looked upon it, in conjunction with other measures, as a means of effecting what, he trusted, would be a wise and effectual reform in our cathedral establishments. He had long and earnestly desired to see such a reform brought to pass, and had, according to the humble measure of his ability, lost no opportunity of advancing it. But in speaking of the reform of our cathedral establishments, he wished to guard himself against being supposed to concur in the views of those who represented these institutions as labouring under a degree of corruption with which they were not chargeable, or as being in the possession of wealth which it was altogether a mistake to suppose that they possessed. The instances of gross abuse occasionally brought before the public were merely the dying embers of a bygone system, the recurrence of which was now effectually guarded against by efficient legislation. For example, he thought he might now say that the evil of pluralities, and with it that of non-residence, was absolutely abolished in the Church. With respect to the allegations as to the great wealth of our capitular establishments, he would remind their Lordships that a former Act, passed in Her present Majesty's reign, took from them so large a part of their revenues, that he was satisfied that what remained would be barely adequate for the support of those objects for which our cathedral bodies were instituted, and which, he was sure, their Lordships would desire to see carried out far more efficiently than they

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were now. Nevertheless, he was ready to admit that those institutions stood in need of a full and comprehensive reform. Looking upon them as great institutions for promoting the worship of Almighty God, and for diffusing the blessings of a religious education, and endowed for those purposes with large revenues, he admitted that the Church did not find those great results flowing from them which might have been reasonably anticipated, and of which he thought they were capable under a better administration. For himself, he cheerfully tendered his thanks to the noble Earl opposite (the Earl of Derby) for the Commission of Inquiry into the institutions in question, which was issued at the instance of the Government of the noble Earl. For if further inquiry into this subject was needed—and he held that it was—a Commission was the best mode of obtaining it; and he thought that the present Commission was constituted in such a manner as to command general confidence. The former Commission of ecclesiastical inquiry was said to consist too exclusively of members of the episcopate; but that objection had been avoided in the Commission which had been recently issued, and which comprised, among its members, men carefully and wisely selected from the episcopal bench and the capitular bodies, who were capable of giving a great deal of important information touching the subject-matters of their investigation. It also included noble Lords of this, and hon. Gentlemen of the other House of Parliament, of undoubted attachment to our Church, men fully alive—some of them too much alive, he might sometimes think —to the supposed defects in her institutions. He trusted, therefore, they might expect from a Commission so constituted a careful, searching, and, he would even add, a severe inquiry, a calm and deliberate consideration of the information they might obtain, and comprehensive and effectual— and to be effectual they must be bold—recommendations of reform. It would not be suitable for him now to go in detail into the nature of the reforms which he hoped to see introduced; but one or two leading points he might refer to. And, first, he would suggest that there should be a constant residence of all members of capitular bodies at their cathedrals, and that those persons should be forbidden to hold benefices for the cure of souls at a distance therefrom. This was no new opinion on his part. It was a view he had advo-
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cated fifteen years ago; and which he had put in practice on the only opportunity he had ever had of exercising patronage of this kind. The only residentiary stall which had ever been at his disposal, now twelve years ago, he had given on the express condition that the holder of it should reside constantly at the cathedral, and not take other and distant preferments with it. And the result of that appointment had entirely fulfilled his best hopes. The gentleman in question, the Rev. Walter Kerr Hamilton, had, for twelve years, exhibited a model of what the resident Canon of a Cathedral might be, bringing into it a new spirit, effecting in it many practical reforms, and being himself as constantly and earnestly engaged in the duties of his calling as any clergyman in a laborious parochial charge. He would also name a careful consideration and development of those institutions for religious education which were more or less found in connexion with those cathedral establishments. He would name, too, a full investigation into the state of all parishes of which capitular establishments held the impropriate tithes —a matter which he thought was greatly overlooked in the former inquiry, but which lay at the foundation of any satisfactory reform. For, himself, and he trusted also for the members of the Church at large, he might say, that though there were many things in the former Act of Cathedral Reform they could have wished otherwise, and which they had been obliged at the time to oppose, they nevertheless did not wish now to interfere with what the Legislature had already done, but to look upon the provisions of the former Act relating to those institutions, as past and done, and with which it would not be wise to interfere. He considered it to be the duty of the present Commission to repair the omissions of the former one, and to recommend in what manner the funds—he would say the very moderate funds—now remaining to the cathedral bodies might be employed most for the advantage of the Church. And he believed the capitular bodies themselves would not be unreasonably opposed to the carrying into operation of such recommendations as a Commission constituted as he had stated might make. Those bodies might think they had not been over-tenderly dealt with, and might therefore not be altogether disposed to look at further legislation with respect to themselves in so favourable a light as their Lordships might wish; but if his feeble voice

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could reach any among them, he would earnestly entreat them to look favourably at any proposition coming from the quarter he had named, even though such a proposition might in some respects be distasteful to them, remembering that they were bound to make those institutions efficient in the greatest possible degree for the high and holy purposes for which alone they had been constituted in their established state, and entrusted with the revenues committed to them. He might be permitted to say, that the capitular body with which he was connected were prepared to view this subject in the same light in which he himself looked upon it, and to give their co-operation to a wise and well-considered reform, based on the principles which he had endeavoured to sketch out to their Lordships. They had shown this, first, by giving the most full and accurate information in answer to the inquiries addressed to them — information which would supply all that could be needed in this respect as regarded this chapter; and, secondly, at a meeting of the dean and chapter, which he attended at their request, they resolved unanimously to make suggestions to the Commissioners respecting their own body, calculated to carry out such views as he had now expressed. He was sure, therefore, that the Chapter of Salisbury would give their assistance for such an object; and he had good hope that such would also be found to be the case with other capitular bodies. And it was in this hope that he the more readily gave his assent to this Bill.
Bill read 2a.

THE LUNACY BILLS.
On the bringing up the Report of the Amendments on the Lunacy Regulation Bill, the Lunatics' Care and Treatment Bill, and the Lunatic Asylums Bill,
LORD ST. LEONARDSrose to remind the House of the objects severally contemplated by these measures. By the first—the Lunacy Regulation Bill—the proceedings before a Commission of Lunacy would be much altered. Instead of a party being put in every case to the expense of suing out a separate commission, for the future a general commission would be issued by the Lord Chancellor, under which the Commissioners would act in each particular case. The old mode of carrying back the inquiries as to when the party became a lunatic, was altogether dispensed with by this Bill, unless the Lord Chancellor should see occasion to direct those
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inquiries in a particular case; and dispensing with this inquiry, which, in a great majority of cases, was a very unnecessary one, would be a great saving to the estates of lunatics. The expense of obtaining grants from the Crown would be also done away with, and power would be given to the Lord Chancellor to make an order which should operate as a grant. Powers would be given to Masters to act in certain cases without waiting for orders and petitions to the Lord Chancellor; and orders by the Lord Chancellor, which led to delay and to very great expense, were done away with. Still great caution was exercised with a view to preserve the power of the Lord Chancellor, and due care was also taken that parties should have opportunities of objecting to any orders proposed to be made by the Masters. After the Masters had made their report, all difficulty was cleared away as regarded the present practice, which rendered it necessary to have petitions to the Lord Chancellor, references to the Master, and orders upon those references. One very great source of expense in these cases had been the inquiry as to next of kin, and the attendance of next of kin. The Lord Chancellor, therefore, had power given him by this Bill to dispense with that inquiry, where he thought it need not be extended, and to direct which of the next of kin should attend the proceedings. In that way great expense would be saved, great celerity given to the proceedings in lunacy, and in very many cases the Lord Chancellar would be able to make an order without the assistance of either solicitor or counsel, thereby saving a vast expense. Care was taken that there should be sufficient visitation of lunatics under the care of the Court; and then the Bill proceeded to enact very useful provisions in regard to the administration of their estates. It very often happened that the lunatic possessed but a small sum of money, and in those cases power was given to the Lord Chancellor to deal with the principal for the benefit of the lunatic; for instance, the lunatic might have relatives or friends who would be willing to undertake the charge of him on the security of these funds, and provision was made to enable them to do so under conditions imposed by the Lord Chancellor. The head of a family might be suddenly striken with insanity, and the family would find themselves unable to meet their immediate exigencies; yet at that moment there might be a great deal

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of ready money in the house, or a balance at the banker's, which they had no power to touch. In such a case power was given to the Lord Chancellor to deal with that money for the present exigencies of the family. In cases where a man became a lunatic, being at that time a partner in business, power was given to direct a sale of the partnership property, and make proper dispositions for winding up the partnership. Without going further into the details of this Bill, he trusted that the slight sketch which he had given to their Lordships would convince them that it would be found quickly and prudently to administer the law in respect to lunatics, and would provide for many cases which, as the law now stood, were in an unsatisfactory position. He would now pass on to the next Bill—that relating to the Care and Treatment of Lunatics. By it great care would be taken of the pauper lunatics of the country, who would not be treated as insane without sufficient evidence and without sufficient caution, and visitation was provided for to an extent which was never known before. Last Session a Bill was proposed to be introduced by a noble Lord to provide for such a case as that of Mr. Feargus O'Connor; but there was an objection to some of the provisions of that Bill, and it was accordingly postponed at his (Lord St. Leonards') suggestion, he being at that time in office. The provisions of that Bill were now, with proper cautions, introduced into the present Bill, and great care was taken to prevent the mischiefs which would arise to persons themselves whose minds, as in the case of Mr. Feargus O'Connor, were no longer in a sound state, from wandering about to their own manifest injury, and to the danger of the public at large. Provision was made by this Bill for protecting such persons, taking care, at the same time, that no man should be restrained or deprived of his liberty without due caution. The third measure—the Lunatic Asylums Bill — was an amendment of the Act called the Shaftesbury Act. By that Act five unpaid Commissioners were appointed, and six paid Commissioners, of whom three were medical men and three barristers. That arrangement was still retained; but a great many difficulties, which had occurred in the administration of the law under that Act, were corrected and amended, after an experience of some years, in the Bill now before their Lordships, and particularly one difficulty was
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met which had led to very great inconvenience. It very often happened that when a person became a lunatic, it was impossible to get at once two medical men, as required by law, to certify, so as to enable that person to be legally taken care of. This Bill therefore provided, carefully and cautiously, where necessity required it, for the admission of such a person upon the certificate of one medical man; but then it required, as it ought to require, that within three days after that person had been put into confinement, two other medical men should certify the propriety of his being confined, and should give their own reasons for that opinion, distinguishing what they themselves had observed as the ground upon which they had formed their opinion, from what had been communicated to them by other persons. One great check was provided by this Bill in regard to persons who had not been found lunatics under any inquisition, but who were detained in asylums under certificates. Power was given to the Lord Chancellor, after the alleged lunatic had been confined one year, to require from the person detaining him, or at whose instance he was detained, a general account of the property of the lunatic and its administration; that would show at once whether there was any improper motive for his detention, whether he was placed there for the improvement of his health, or in order that others might enjoy his property. The Bill did away with the exception from visitation which had hitherto been extended to Bethlehem Hospital. It was due to the governors of that institution that he should state publicly that they had not raised the slightest objection to the introduction of such a provision in the Bill; and that showed they were not afraid of the consequences which would result from the working of such a provision, and that they were willing the hospital should be visited and examined thoroughly, like all the other asylums in the country. He had now only to call the attention of Her Majesty's Government to a duty which he thought peculiarly devolved upon them— that of introducing a measure for providing generally for the criminal lunatics of the country. The law at present did not stand well upon that subject. With such a law as they had a right to expect, the administration of the law relating to lunacy in this country would be placed, he would fondly believe, upon a better foundation than existed in any other country in Europe. But, first, it was absolutely ne-

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cessary that provision should be made for the care and maintenance of criminal lunatics. If that were done, he had reason to believe that the expense would be much less than it was generally supposed would be incurred. The country was now at considerable expense in that respect, and One asylum in the north and one in the south of England, would be sufficient. It would be particularly necessary to meet, in a most cautious manner, the case of women afflicted after their confinement, who, in a state of aberration of mind, committed— he could not call it a crime, but a deed at which human nature shuddered. As the law now stood, she who ought to be in an hospital, and taken the greatest possible care of, was treated as a criminal, to be tried by the laws of her country; and, if they were to have such laws, as he hoped they were very near possessing, he repeated that it would be necessary to make provision for women of that description.
The LORD CHANCELLOR, lest by saying nothing he should be supposed to dissent from the observations of his noble and learned Friend, wished to state that he had been unable to attend the Committee upon all these Bills; but he had been present when two of them had been considered by the Committee; and it appeared to him that the provisions proposed for reducing expense and delay in legal proceedings, in cases of lunacy, were well calculated to meet the desired end.
The EARL of HARROWBYwas decidedly of opinion that criminal lunatics ought not to be mixed up among the harmless unfortunates of the same description, and said this was often productive of the worst effects.
LORD ST. LEONARDS, as a witness to the truth of the noble Earl's statement, might be allowed to say that when he had visited lunatic asylums, the ill effect of such a system had been constantly stated to him in the strongest possible terms. Those who supposed that persons who were insane were not deeply impressed with things which affected moral conduct, were entirely mistaken. He had frequently heard from persons confined in public asylums complaints of the hardship of being shut up with criminals. He regretted that the noble Earl (the Earl of Shaftesbury), who had devoted so much time and consideration to this important subject, had not been present that evening.
Amendments reported, and Bills to be read 3° on Friday next.

SOUTH SEA AND OTHER ANNUITIES COMMUTATION BILL.
Order of the Day for the Third Reading read.
EARL GRANVILLEsaid, that in moving the third reading of this Bill, he found he stood in rather an awkward position; for, after what fell from him the other night in reply to the remarks of the noble and learned Lord opposite (Lord St. Leonards), he was supposed to have entered into an engagement to make a statement with respect to the Bill, and in reference to all the arguments bearing upon it. It appeared, however, that it would be desirable to introduce some amendments to carry out the noble and learned Lord's suggestions, and that it would be necessary to introduce another Bill for that purpose. The question of the injustice done to suitors in Chancery was under the consideration of the Government. As it was a Money Bill, it was not competent to their Lordships to make any amendments in it. He thought it would be the most convenient course to move the third reading of the Bill, reserving to himself the right of offering any explanations that might be required to those objections which noble Lords might urge against the Bill.
Moved —That the Bill be now read 3a
The EARL of DERBYappealed to the noble Earl, whether he thought the course he proposed was becoming in the present state of the House [alluding to the fact that not above nine or ten noble Lords were present], and whether he really thought they ought to proceed with a question of such immense importance, on which many noble Lords were anxious to express their opinion, without one word being said respecting it since it came down from the other House, or without one opportunity of discussing it having been afforded to them. It might be quite true it was not competent to their Lordships to alter the Bill, but they ought to have an opportunity of considering the principle of it, and it was really turning the proceedings of their Lordships' House—he did not wish to use any language unnecessary strong—but it was giving a character to the proceedings of their Lordships' House which he was sure the noble Earl was the last man to desire, if they took the course he suggested.
EARL GRANVILLEwould have been very anxious to yield to the recommendations of the noble Earl in any other Bill, but the present Bill required that another

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should be introduced into Parliament on the subject-matter of it, and it would cause great public inconvenience if there were any delay. He was quite ready to make his statement if their Lordships desired it.
After a short conversation,
The EARL of DERBYsaid, that if it were only for the objections of his noble and learned Friend near him, and for the statement of the noble Earl opposite, that it would be necessary to introduce a supplementary Bill, there were reasons enough not to take the third reading till they saw what that other Bill was; at all events, it should be postponed till the House of Lords knew what the measures of Government were.
The EARL of WICKLOWobserved, that if noble Lords were absent, it was their own fault. The Bill was down on the paper for a third reading among the Orders of the Day. They had most likely gone away because they knew no amendments could be introduced.
LORD MONTEAGLEsaid, he must protest in the strongest manner against the argument of his noble Friend (Lord Wick-low), because the usage of Parliament precluded their Lordships from amending Bills of this kind, that their Lordships were, therefore, precluded from discussing them; when, in fact, such measures were frequently of a nature such as, above all others, to require free comment in their Lordships' House. This principle was fully recognised in practice. Let the House recollect the long and important discussions which more than once had taken place in that House upon the Property Tax—a Bill, which, nevertheless, according to usage, their Lordships could not touch. But it also appeared that the noble Earl objected to the present discussion, because the Bill had reached its third reading without debate. He must remind the House what had been the reason of this forbearance. It was a concession made for the convenience of the Government—made with the distinct understanding that the Bill should be considered and discussed on a future stage. In the present instance a most unprecedented course was proposed. The House was called on to pass a Bill without having received one word of explanation from the Government; without an observation of any kind except as relating to some clauses of a purely legal character, not affecting the principle of the Bill. He entreated their Lordships to pause for those explanations which were yet to be given.
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Let the House at least know what it was about to do before it passed a Bill of such great public importance as the present.
EARL GRANVILLEsaid, he had been misunderstood if it was supposed he had made any objection to offer a lengthened statement with respect to the Bill, to the third reading of which he asked their consent. As it appeared to be their Lordships' wish, he would state the objects of the measure. Their Lordships were aware that the public debt of the country was divided into certain stocks—namely, the consolidated annuities, the reduced annuities, and other minor stocks, the South Sea, and other annuities, and it had been for a long time the object of the Government to reduce the interest payable upon this debt. With regard to the 500,000,000 l. of the principal stocks, a great difficulty existed—namely, that under the Acts of Parliament by which the money was raised, notice was required to be given twelve months before the reduction of the interest. Now no Government could undertake to pay such an enormous sum as that twelve months hence, when various fluctuations in the money market might take place. With regard to the South Sea and other small stocks, amounting to about 10,000,000 l., that difficulty did not exist, and the Government accordingly proposed to deal with those stocks. By this Bill three proposals were made for effecting that object: one was by the issue of a 3½per cent stock, and which would be issued at 82 l. 10 s. That would produce a rate of interest amounting to 2l. 17 s. 2d., and would reduce nominally the amount of the debt. The second was to issue a stock at 2½ per cent, which would be redeemable at the end of forty years, for 110 l.; and it was unnecessary to say what improvement would be effected in their finances by having a stock of that description. The third mode of commutation was by issuing Exchequer bonds, bearing, for not more, and possibly for less, than the first ten years, an interest of 2l. 15 s. per cent, and afterwards of 2l. 10 s. per cent. Great advantages were anticipated from the creation of those bonds, as it would no doubt be highly advantageous to trade and commerce that there should be a security like this, passable from hand to hand, and one which persons in foreign countries might keep in their own possession. It was, indeed, said, that as Exchequer bills only bore interest at 1¼ per cent, they would be exchanged into these Exchequer bonds to the disadvantage of the Go-

1033
vernment; but he did not himself think that this contingency was at all likely to occur, because it had always been considered disadvantageous to fund Exchequer bills, nor had it ever yet been done, except when there was a greater increase of interest to be gained than would be the case under the operation of this Bill.
LORD MONTEAGLEsaid, that even after the explanation given by his noble Friend (Earl Granville) he acquiesced very reluctantly in entering upon the discussion of this most important measure, in a House so thin as that he was called on to address, and at so protracted an hour of the evening. Distinguished as his noble Friend was for his clearness of statement, and for that unassuming ability which recommended him at all times to those whom he addressed, he must nevertheless state that the explanation offered on the present occasion failed altogether in justifying either the Bill or the purpose it was intended to effect. He (Lord Monteagle) would have undertaken to prove there were abundant reasons to justify postponement to a future night, if he were not aware from his own official knowledge that great public inconvenience might result from recommending such a course to their Lordships. He was therefore driven to the discussion, though conscious in doing so of being placed under all possible disadvantages. He regarded the Bill as being not only extraordinary from the mode in which it was framed, rendering its discussion peculiarly complicated and difficult, but because it comprehended a novel and most dangerous principle, of which, disguised as it might— and by the use of the word disguised he did not mean to attribute any disingenuousness to its framers—he felt it his duty to make their Lordships and the public fully aware. But of this hereafter. He would first remind their Lordships that the President of the Council had not stated or even suggested any definite advantage proposed to be attained by this extraordinary plan for commuting a portion of the public debt. He had not stated in what way the public credit of the empire would be strengthened by the consequences of the proposed enactment; how our financial operations would be facilitated, or economical reforms would be effected. Nor was it surprising that even with his acknowledged ability he had failed in doing so; for unless endowed with the spirit of prophecy, it was utterly impossible to foretel
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the result in a case where the judgment of the money market could not be anticipated, but was left embarrassed and perplexed by the offer of three conflicting and antagonistic propositions. It was impossible to form even a guess with respect to the ultimate result, unless that of a total failure of the plan. The House and the public were alike in the dark. The present proposition differed from all others which had ever been offered to Parliament for the conversion or extinction of any portion of the public debt. If a loan was proposed to be contracted for, or if a funding of Exchequer bills were recommended, a Minister could at least explain his meaning, defend his measure, and point out its future consequences. But in the present instance we were called on to deal with three different proposals, founded on irreconcilable principles, and unintelligible when taken in combination. It seemed to him to be a new version of the Merchant of Venice, got up at the Downing Street Theatre Royal, and to be represented by Her Majesty's Servants for the amusement of the monied gentlemen of their own and of another religion. The three caskets were proposed to be set out for the choice of the suitors; but in which of them the Treasury Portia was contained, if indeed to be found in any one of them, time only could discover. This uncertainty in regard to its result was one of his great objections to passing this Bill. No one, he thought, would be found to dispute that it was most unwise, he might almost say most perilous, for the Government at any time to interfere gratuitously with the public securities; or to do so at all unless they saw their way clearly, and were able to show to Parliament a well-grounded expectation of some certain or at least highly probable advantage. Public credit ought not to be made, at any time, the subject of rash, unmeaning, or hasty experiment. Stability and repose are the primary elements of public credit and confidence. We seem now, on the contrary, invited to set aside this principle, by meddling with the funds in a manner the most strange, unintelligible, and unprecedented. The uncertainty which the President of the Council had candidly expressed—the three proposals being left to the choice of the fundholders, and to be selected or rejected according to what his noble Friend had most ingenuously called "the fancy of the stock mar ket"—furnished inadequate reasons for legislation in a manner likely to disturb

1035
all classes of public securities—not only the South Sea Annuities, but the 3 per cents, and the whole of the existing unfunded debt. The other House of Parliament had been for many years familiarised with a mode of stating a question, which, from the authority of the great statesman who used it, has almost passed into one of the formulas of Parliamentary logic. "Three courses are open to me," was often the commencement of an able discussion. But the speaker uniformly examined each proposition carefully, and proceeded, by what he called the process of exhaustion, to exclude two, and ultimately to give able and convincing reasons for pursuing the third course. The framer of the present Bill seems to have followed the example of his great master, though in the first operation only. He, too, describes three propositions; but in place of selecting the best he adopts all three, leaving the ultimate decision, not to the Treasury, not to the Houses of Parliament—not to his own high intellect— but to what has been so well and candidly called, by the official advocate of the Bill, "the mere fancy of the stock market." Nor was the uncertainty of the effect of the present Bill, the only objection he felt to its enactment. It was as inconsistent as it was uncertain. The Bill presented alternatives to the stockholder, which, if acted on conjointly, would directly neutralise each other, as affecting the State. For instance, by the creation of 3½ per cents it is proposed to reduce the capital of the debt. By the creation of the 2½ per cents it is proposed to increase that capital. The unfunded debt seems to be considered, in one part of the Bill, as inconvenient, and requiring reduction; whilst, at the same time, the creation of Exchequer bonds assumes a contrary principle Whatever opinion might be entertained upon other parts of the plan, he (Lord Monteagle) had no difficulty in saying, that to adopt the course of increasing the capital of the debt, appeared to him to be contrary to every sound principle of finance recognised by the latest and highest authorities. In order to explain his meaning more distinctly, he would proceed to call the attention of the House to the alternative modes of proceeding, one or other of which might be adopted for the reduction of the national debt. The Treasury might endeavour to pay off principal, or to reduce interest. When the interest at which money had been borrowed by the State continued high, the reduction of the
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rate of interest was in most cases the preferable course. Hence, since the Peace it had been largely and most successfully resorted to. More praise had often been claimed and given for the result of these operations, than the fact of the case warranted. The interest of money, upon the fall of which the reduction of the debt depended, was no more within the control of a Government than the state of the atmosphere; though to profit by a favourable opportunity, and to effect a reduction of interest by a wise and well-considered proposition, did require skill and statesmanship; and he must be permitted to say, in passing, that no one of these successive operations seemed to him to have been more creditable to the Finance Minister of the day than the large reduction of interest effected by his right hon. Friend Mr. Goulburn: that reduction was wisely conceived, and promptly and successfully executed. But at the present time, when the interest of the public securities was low —when the interest upon Exchequer bills more especially had already been reduced below the rate warranted by the state of the money market—when the proceedings of the Bank of England, and the judgment of commercial men, led to the anticipation of a rise in the value of money rather than a fall; above all, when the enormous magnitude of the 3 per cent debt coupled with the contract entered into by the State, to give one year's notice if reduction were contemplated, it did not appear to him that the present was an opportunity when any great saving was likely to be effected by attempts to reduce the interest of the national debt. The other alternative — namely, that of paying off capital, was that which might most fitly be resorted to; but to this the original plan of the Government, in adding 10 per cent to the capital stock created, was diametrically opposed. It is true that, during the progress of the Bill, the House of Commons had induced the Chancellor of the Exchequer so far to vary his plan as to create a sinking fund, intended to extinguish the additional capital which he had himself gratuitously created. In thus escaping from one inconsistency, the Government had, however, by this step, involved themselves in another; for whilst the object of the conversion into a lower stock had been to lessen the charge of the debt, the effect of the new sinking fund was to increase it. A more serious objection, however, remained to be considered. By the present Bill it was pro-

1037
posed that Parliament should resort to a new-mode for effecting the conversion of debt. It Was proposed for the first time to issue new securities, called Exchequer bonds, the denomination of which was left uncertain, except that the minimum was fixed at 100 l. But the Bill did not make any provision for the ultimate convertibility of these securities; it was not determined by law, as it ought to have been, how these bonds were to be redeemable, and whether at the option of the Government, or at the option of the holders. The decision was left absolutely to the Treasury. Surely this Was a most indefensible mode of legislation; the least that could have been expected was, that, upon a point like this, the Government should make up its mind, and Parliament should form some definite resolve. The possibility of leaving to the holders of any considerable amount of these securities an option to be exercised forty years hence of requiring the whole amount of their principal to be paid in money, however great the amount of that principal might be, and whatever might be the national exigencies at the moment, was an imprudent engagement into which he did not suspect that the Treasury would enter. But, on the other hand, to leave these securities without any fixed power of redemption at all on behalf of the holders was wholly inconsistent with their credit and circulation. He observed further, that no provision for the payment of interest was made beyond the expiration of the term of forty years, and therefore the proposed Exchequer bonds, whatever might be the apparent engagements under which they were issued, created in reality no legal obligation beyond that of a forty years' annuity. If these observations were correct— and that this objection was felt by others as it was by himself—the attempt to issue these Exchequer bonds was likely to prove an utter failure. He would, however, now reason upon an opposite hypothesis, which was that of the Chancellor of the Exchequer. In place of anticipating failure, he would assume the popularity and credit of these securities, and would therefore reckon on their success. This would, in his judgment, lead to consequences far more dangerous than a failure of the financial project. The most important feature of this Bill was, that for the first time, as he believed, in the modern history of England—at a time, too, when we were free from the pressure of any financial difficulty—Parliament was invited to sanction
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the issue of Government negotiable securities intended to pass by delivery from hand to hand, after the fashion of a circulating medium, which securities were not by law made convertible into the current coin of the realm. The public were consequently left without the only real security against over-issue. It is true that the amount of bills was now limited. He alluded here to the Bill as first introduced. Even in its present state, as amended, there was no restraint to prevent a Minister in times of difficulty or distress from applying to the Legislature for a power to make a more unlimited issue. He sincerely hoped that Parliament might not, by authorising this step, be considered to sanction the issue of Government inconvertible paper. This would be in fact to Set aside an all-important principle, the rigid observance of which had hitherto distinguished England from all other countries in Europe. It is true that the public had been protected by the caution of the House of Commons from permitting an unchecked creation of this new species of debt. The system could not now extend beyond 30,000,000 l.; but within that boundary he apprehended that much mischief might be done, unless the evil of the whole plan Was arrested by its impracticability. The danger of violating a principle, though thus incurred without a motive, would still be great. It seemed, however, that the experience of foreign countries is relied upon as an example and a justification. The very terms of bonds and coupons bespoke their continental origin. These did not reconcile him, neither did he anticipate that they would reconcile the public, to newfangled securities, to be substituted for those which had long Sustained the credit of English finance. He would entreat the House to avoid the risk of being led away by any supposed analogy between these new bonds and Exchequer bills: the former are confessedly irredeemable for a period of forty years, and he had shown that no funds for their redemption are provided even at the end of that time, neither are any funds provided for the payment of future interest when the forty years shall have elapsed; the latter, on the contrary, are Government bills of exchange payable in coin twelve months after issue, or receivable in payment of taxes when come to maturity. Hence no Government could, with any regard to their own interest, deal with these latter securities in a manner inconsistent with the

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public service. Whilst affording to the banker and the capitalist a highly convenient investment, these securities were protected from any considerable depreciation. If the general rate of interest varied, the Government, in relation to such short securities, possessed the means, by making corresponding reductions of interest, either by raising or lowering the interest on Exchequer bills, of profiting by the cheapness of money, or of meeting any pressure upon the money market by raising the interest on these securities. How were such arrangements to be effected with respect to securities of forty years' date? The important advantage he had described would be lost altogether. The public were encouraged to hope that the new bonds would have a permanent and unvarying value, passing from hand to hand, without the expense of brokerage. This was a mere fallacy. The forty years' annuity represented by the bonds must fluctuate with the rise and fall of all other public securities, and the value could only be ascertainable through the medium of the market. Indeed, if the wishes of the Chancellor of the Exchequer could be realised—if these bonds became a species of savings bank investment for the humbler classes—if they were sold at the new provincial stock markets, which it is supposed advantageous to encourage and establish, it might rather be apprehended that these securities would, by reason of the relative weakness of their holders, be more exposed to fluctuation from panic and similar causes than were any other class of the public securities. He had already observed that the prudence of the House of Commons had fortunately imposed a limit upon the issue of the bonds; but this, it should be remembered, merely affected the amount of the bills, and not the principle of the measure; and if the scheme succeeded, he understood it was intended by the Chancellor of the Exchequer to apply to Parliament for an extension of authority for further issues. As the Bill now stood, the Government of England for the first time became bankers and issuers of inconvertible paper. A sanction was also given to one of the most mischievous fallacies for which the currency agitators had long contended, namely, the possible conversion of the capital of the national debt, or of any considerable portion of it, into a circulating medium. This is the same dangerous fallacy which has been lately adopted by the Emperor of the French in the crédit foucier —a system under
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which a part of the enormous mortgage debt of France, amounting to several hundred millions sterling, is proposed to be represented by billets de gage transferable, but not subject to immediate convertibility. Were their Lordships to be invited to follow this example in days of financial prosperity, and it is to be hoped of financial wisdom? It may be said, that the limitation of these bonds to a minimum denomination of 100 l. would be a check against the abuse which he had described. He doubted this. Once establish the principle of inconvertibility, and where was the mischief to stop? The country may be safe in the hands of the present Government, but it was just possible that at some future period, power might pass into the hands of a "Little-shilling" Birmingham Administration. If 100 l. bonds were not found to circulate freely, they might be split into bonds for 50 l, 25 l, 10 l., or 5l. The original Exchequer bills issued by Charles Montague (Lord Halifax), in the reign of William III., were made out for sums as low as 5l. each. There was no calculating the danger of such a system; and the ultimate result might be, that our currency would be exposed to a debasement and depreciation as fatal as that of some of the Continental States. These bonds were, it seems, also recommended upon the ground that, made transferable from hand to hand, without endorsement or other formality, they would become negotiable in foreign countries. He confessed that this result would constitute, in his mind, an additional danger rather than a recommendation. If they circulated abroad, they must necessarily, to a certain extent, be exposed, in addition to home fluctuations of value, to the casualties and panics incidental to a commercial and to a political crisis in foreign States. He was told indeed, and noble Lords were aware from their own experience, that Bank of England notes now circulated freely on the Continent. That was true; but he should like to inquire from the cautious and experienced directors of the Bank of England whether this new continental circulation constituted in their judgment a benefit or an inconvenience? Even if it were considered to be a benefit, it by no means followed because a promissory note, payable on demand in gold at 3l. 17 s. l0½d. the oz., maintained a steady value—that securities, which he had proved to be liable to all the fluctuations of the public funds, would receive the same acceptance, and be entitled to the

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same stability of credit as Bank paper. The contrary rather was obvious. Another matter was entitled to grave consideration — the question of forgery, and the physical durability of the proposed securities. If attempted to be circulated for forty years, of what materials was it proposed to make these bonds? If struck off on paper for the purposes of circulation, he doubted much whether all the ingenuity and machinery of this country would provide a material that would last for forty years. It was suggested that parchment or vellum might be used. Should this course be taken, the protection against forgery, derived from a distinctive paper, would be altogether lost. Also, in proportion to the hardness of the substance on which the impression of the plate was taken off, the liability to its effacement would be augmented, and hence would arise a new risk and liability to forgery. He begged to suggest, as an amending Bill was admitted to be required, that it would be absolutely necessary to add to the existing clause against forgery further provisions against the unauthorised possession of the machinery, tools, or paper, by which the forgery of those bonds could be accomplished. This was indispensable for the protection of the State, and of the holders of these securities. However painful it was to himself individually, to advert to the atrocious frauds committed in his own department by Mr. Beaumont Smith, he felt it his duty to give to the House the results of the experience he had derived from the discovery of those criminal acts. He ventured to forewarn their Lordships that infinitely greater dangers were to be apprehended from the proposed Exchequer bonds, and their coupons of interest, than any which had been found incidental to the manufacture of Exchequer bills. These dangers would greatly augment if these bonds were unfortunately to circulate in foreign countries. The progress of science, and more particularly the art of anastatic printing, greatly increased all the facilities of fraud. Again, he would beg to refer to the directors of the Bank of England, and inquire from them whether they considered that it would be consistent with the safety of their great corporation to render themselves liable for forgeries circulated on the Continent? If the Government of England, by any encouragement, however slight, even by a mere favourable expression of opinion, were to countenance the foreign circulation
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of these Exchequer bonds, he could not help thinking that further dangers would arise —dangerous questions of responsibility would be urged against us by foreigners—and ultimate loss to the public would ensue. It had been said that this Bill was to be received as the commencement of an experiment to try whether in one way or another the Treasury could accomplish the reduction of the 3 per cents. A more tempting bait and a less naked hook must, however, be provided than the present, to give much chance of success. On a former occasion he had been reproved by his noble Friend opposite (the Earl of Derby) for suggesting, on the authority of Sydney Smith, that absolute wisdom was not invariably to be found in the 3 per cents. However that might be, he felt some confidence that, taking into account the enormous magnitude of the stock, and the twelve months' notice required for its redemption, the holders of this class of securities would be found tolerably well able to protect themselves against any undue depression of interest at the hands of the Chancellor of the Exchequer. They were at least much too conversant with practical affairs to be tempted to convert their securities into bonds in the absurd expectation of escaping either brokerage or fluctuations of price. A further financial objection might be urged against the plan of the Chancellor of the Exchequer, still gratuitously assuming, as a possibility, its success in the market. It was proposed to permit the exchange of all Exchequer bills for the new Exchequer bonds. What would be the result of this operation if effected? The former securities amounted in value to about 18,000,000 l. sterling; these bills floated at par, or at a small discount, paying an interest unprecedentedly low, namely, l½per cent. These bills it is proposed to replace by securities paying 2½ or 2¾ per cent interest. By this operation a certain loss must consequently be sustained, which loss should be deducted from any possible gain the Treasury might obtain from other parts of its proposal. The Exchequer bill market, already seriously affected by the recent reductions of interest, would be, in this case, utterly destroyed by the competition of the new hands. Now this he felt to be, if it took place, not only a great financial mistake, but a great financial danger. The abuse of an unfunded debt had, in former times, been most flagrant,

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and in England it was sustained only through the fatal help of a Bank restriction. The same abuse was carried to a still greater extent in foreign countries, and more especially in France—where securities unprovided for might hereafter be found less to deserve the name of a floating than of a sinking debt. But the true principle and practical application of an unfunded debt were so important and so valuable, when wisely used, that such securities could not, with any prudence or safety, be rejected or discarded by the Treasury. Our own history showed us that in great contingencies nations were often called upon to make prodigious and sudden efforts for their own defence. Should such a contingency recur in our times—if we were required to make unexpected exertions—were the demands upon the national resources to exceed the income of the year, if the exigency was not permanent in its character, we might wisely avail ourselves of our credit, and raise the funds required by means of our floating debt. If we should unwisely preclude ourselves from taking a course which may be compared to obtaining temporary accommodation from our banker, in preference to mortgaging our estate, we might hereafter be driven to raise the necessary ways and means by adding to our permanent debt. Not only would this be objectionable upon general principles, as being the creation of a debt more difficult of redemption; but a permanent debt contracted in a time of exigency, would always be raised to a disadvantage, and at an enhanced rate of interest. Should the Chancellor of the Exchequer's measure be successful, and were the money market to be filled with small Exchequer bonds, we might vainly seek to negotiate our Exchequer bills, or should be compelled to do so at a heavy loss. This had been abundantly proved in later times by the injurious competition of railway debentures with the market for Exchequer bills, affecting seriously the circulation of these Government securities. He begged to thank their Lordships for the great indulgence with which they had heard him, compelled as he was to address them at such an inconvenient hour, and at such length. He would willingly have been excused from making these observations; but entertaining, as he did, a strong objection to the principle of the Bill under discussion, as well as to its details, it would have been inconsistent with the duty he
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owed the public from the official station he had formerly filled, as well as from that which he at present occupied, to give a silent vote, or to disguise his opinion. While he disclaimed every unkind feeling towards the framers of the present measure, or any disposition to deal uncandidly with the measure itself, he would not have felt justified if he had not, even at the risk of wearying their Lordships, frankly expressed his opinion.
EARL GRANVILLEwould not be encouraged to occupy the attention of their Lordships by the unmerited praise of one who had so long had experience as Chancellor of the Exchequer. With respect to the options given to the public, the great objection he (Earl Granville) had seen stated in print was, that the Government were doing the most irrational and extravagant thing possible, for it was said that they professed to offer three equivalents to the holders of stock, one of which was so far more favourable to them than the other, that their selection of it was certain. On the contrary, the noble Lord had given the advantage of his great experience and authority to the opinion that those alternatives would be so much the same that the public would be like the lovers who had their choice of the caskets in Shakspeare. He held in his hand a list of several operations of this nature—one of which took place on the 20th of August, 1839; and he was not sure but that his noble Friend held the office of Chancellor of the Exchechequer at the time. By that operation 4,900,000 l. Exchequer-bills were converted into stock at 110 l., 109 l., &c, giving an actual increase to the debt of 490,000 l. [Lord MONTEAGLE stated that it was not the amount to which he had objected.] The noble Lord said it was not the amount that he cared for; but as the principle to which he objected was involved in that operation, the operation of 1839 was open to the same objection. The noble Lord seemed to labour under some misapprehension with respect to the Exchequer bonds, comparing them to bank notes. He said that their Lordships ought to object to the Government issuing an unlimited amount of bank notes when there was no bullion to represent them. There was no bullion to represent those bonds, because it was money which was owing; and the only difference made in respect of the funds was in the machinery by which they were now put in the form of a bond. He did not believe that 18,000,000 l. of Exchequer

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bills would be exchanged for that amount of bonds. Exchequer bills had an advantage which nothing else could have—which was that they were redeemable at the end of the year; and from the fact of their being so redeemable, they had a value in the eyes of a banker which no other security had.
On Question, Resolved in the Affirmative: Bill read 3a accordingly, and passed.
House adjourned till To-morrow.