Sitting of 22 April 1853

MINUTES.
PUBLIC BILLS.—1° Hackney Carriages (Metropolis); Entails (Scotland).
2°Taxing Officer, Common Law Business (Ireland).
Reported.—South Sea and other Annuities Commutation.

MAIDSTONE ELECTION COMMITTEE.
MR. HUTTreported that the Select Committee appointed to try the Election Petition for the Borough of Maidstone had determined—
"That George Dodd, esquire, is not duly elected a Burgess to serve in this present Parliament for the Borough of Maidstone.
"That the last Election for the said Borough, so far as regards the Return of the said George Dodd, esquire, is a void Election."
Also that the Committee had agreed to the following Resolutions:—
"That George Dodd, esquire, was, by his agents, guilty of treating at the last Election for the said Borough.
"That it was not proved to the Committee that such treating was committed with the knowledge or consent of the said George Dodd, esquire."
Report to lie on the table.

THE NEW CUSTOMS TARIFF—CURRANTS AND RAISINS.
MR. EWARTsaid, he begged to call the attention of the right hon. Chancellor of the Exchequer to that portion of the Resolutions to be submitted to the House, which proposed that the duty on raisins should be reduced from 15 s. to 10 s. per cwt. By the tariff, as it at present stood, and for some years past, the duty was the same upon currants and raisins; he wished to know whether it was intended to reduce the duty on currants in the same proportion as on raisins?
The CHANCELLOR OF THE EXCHEQUERsaid, that, speaking from recollection, he thought the hon. Member was in error in stating that heretofore raisins and currants had paid the same rate of duty. In 1845, or about that time, when the duty upon currants was reduced, the duty on raisins was not reduced from 15 s., on account of some expectation of a negotiation with Spain. At the present moment the duty of 15 s. upon currants was not above half so heavy as a 15 s. duty upon raisins, and although the duty upon raisins would be reduced to 10 s., it would still leave that commodity paying a higher rate of duty ad valorem than 15 s. would be upon currants. If he were in a condition, in point of revenue, to propose a further considerable reduction of the duty upon currants, he should be happy to do so. Adverting to the present state of the supply, and the shortness of the recent crop, he should not feel confident of any rapid replacement of revenue from any further reduction of duty. There would be an immediate loss of revenue if the duty were to be reduced, such as would not be justified with due reference to the other alterations proposed.

SOUTH SEA AND OTHER ANNUITIES COMMUTATION BILL.
Order for Committee read.
Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."
SIR FITZROY KELLYsaid, it had been his intention to have moved an instruction to the Committee, or to have submitted some other form of amendment under which it would have been competent for him to call the attention of the House to the very important principles involved in this measure, and especially to the great and important objection that it provided for a large increase to the capital amount of the national debt, and also guaranteed.

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payment for a period of forty years of the unreasonable and extravagant sum of 2l. 15 s. per annum, as the income or dividend on the stock proposed to be created. But having understood that some technical or formal objection might arise to that course, and feeling also that he could, consistently with due regard to the forms of the House, call attention to the whole subject in Committee, it was not his intention to oppose the Motion for the Speaker leaving the chair. But when the second clause came under the consideration of the Committee, he should then enter upon the entire subject embraced by the Bill, and state his objections to it.
House in Committee; Mr. Bouverie in the Chair.
Clause 1 agreed to.
Clause 2.
SIR FITZROY KELLYsaid, he would now solicit the attention of the Committee whilst he offered some observations, not merely upon the principle of the Bill, but upon its provisions. The principle of the measure was unexampled in the extent and importance of the interests involved in it, and as a scheme of finance it was unequalled in its magnitude and consequences, involving as it did principles immediately affecting a sum amounting to not less than 100,000,000 l. sterling, and ultimately it might apply to 500,000,000 l., if not to the entire amount of the capital of the national debt. If after the great and brilliant effort of oratory and reasoning with which the House was at once delighted and instructed last Monday, while he, at least, could say he was yet under the wand of the enchanter, he (Sir F. Kelly) now ventured to advance into the wide field of finance which had been opened by the right hon. Gentleman, and upon the very threshold to express his entire dissent from the main principle of the scheme of this Bill, he could assure the Committee that it was not without much diffidence and no slight feeling of apprehension that he did so. But he felt it his duty to call attention to the subject, for the scheme was one of a very peculiar character, full of intricacies and difficulties. To the clear and enlightened mind of the right hon. Gentleman, to an intellect which, like his, rejoiced in complicated subtleties, such a task as he had undertaken might be easy and pleasant; but it must be his (Sir F. Kelly's) duty, with no other aid than a common and ordinary understanding, to endeavour to attract attention to the ex-
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act character of the details of this financial scheme—a scheme which he was bound to say appeared to him replete with perplexities, and abounding from beginning to end with contingencies and uncertainties. He should therefore endeavour to put the Committee in possession, so far as he could, of the provisions of the Bill; and the means by which the Government sought to attain the objects which they had in view—objects, he would admit, excellent in themselves and in nowise objectionable, but which, he would venture to assert, were wholly unattainable by the Bill under consideration. The Bill provided, in the first place, for the extinction and redemption of certain South Sea and other minor stocks or annuities of the value or amount of about 10,000,000 sterling. To this he could have no objection. It was no doubt expedient that these minor stocks should be merged in the larger stock composing the national debt. That object, however, might be attained with the greatest facility, looking at the present state of the money market, by giving the requisite notice and at once paying off the holders, raising 10,000,000 l. for the purpose, in any way that might be deemed expedient. But the right hon. Gentleman evidently conceived that the time had arrived when certain great and important objects, which might have occurred to the minds of other Ministers when in office, but which had never been submitted to Parliament in any distinct or tangible form, might now be accomplished. These objects were three in number. The first in magnitude and importance was to effect a large and substantial reduction in the capital amount of the debt; secondly, the creation of a permanent 2½ per cent stock; and, thirdly, the creation and issue, for the benefit of the mercantile community, and of the public in general, of Treasury or Exchequer bonds, transferable by delivery from hand to hand. If it were clear from the provisions of the Bill that any one of these three great objects could be successfully accomplished, or even a preparation made, or a foundation laid, or the first step taken, consistently with good faith to the national creditor, and the duty which every Minister Owed to the State, of securing a fair and not disadvantageous bargain for the country—if they or any one of them could be accomplished or even commenced without violating the great constitutional principle that the amount of the

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national debt ought not to be increased, unless imperative necessity called for it—the Bill would have received his sincere and cordial support. But after bestowing careful and minute attention upon the scheme, its intricacies, complications, and uncertainties, he had arrived at a strong and conscientious conviction, which he hoped to be successful in impressing upon the Committee, that, as a whole, it was inconsistent, impracticable, mischievous, and unjust—unjust, he meant, because it was unnecessary. To make a large and substantial addition to the capital of the national debt, and to make it under circumstances which led to a reasonable apprehension that the addition would by-and-by be multiplied twenty and even fifty-fold, was surely objectionable; and therefore he felt called upon to oppose the principle of the Bill, unless the right hon. Gentleman consented so far to modify it as to strike out what he should hereafter call alternative No. 2 from the second clause, in order to avoid any increase to the amount of the national debt, and also for the payment of 2l. 15 s. per cent upon the capital created for a period of forty years. He would now proceed to state, not in legal language, but in language intelligible to all, what the scheme of the right hon. Gentleman was, and the three alternatives or bargains which it proposed to the holders of the 10,000,000 l. South Sea and other stock. As originally proposed, the scheme might have embraced 500,000,000 l., but as now proposed it would be limited under the Bill to 100,000,000 l. He would suppose the owner of 100 l. South Sea Stock to come under the operation of the Bill, and to be about to consider in what position he would be placed towards the Government. He might receive 100 l.; that was, he might be paid off at par if he thought proper. Considering that all these were 3 per cent stocks, and that all the 3 per cent stocks of the company were substantially at par, this appeared to be the most obvious as well as the easiest mode of settling with the holder. But the right hon. Gentleman proposed to submit to the option, not only of the holders of the 10,000,000 l. of minor stocks, but of the holders of the 90,000,000 l. of 3 per cent Consols and Reduced Stocks, and it might be to the holders of the whole 500,000,000 l., one or the other of these alternatives. It was important, therefore, to consider these alternatives separately as well as by comparison. But before proceeding further he must ob-
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serve that the right hon. Gentleman had stated—and stated necessarily, otherwise his scheme would at once be suicidal—that his three propositions were equivalents. This, indeed, was the essence of the proposal. So that any one holding South Sea Stock or 3 per cents would find himself in this position, that he might accept either No. 1, No. 2, or No. 3 of the alternatives, according to his interest or his inclination. Now, a great objection he felt was, that whereas these three were represented as equivalents, they were not equivalents, or anything approaching to equivalents; for it would be found on practical experiment, if the Bill were passed, when it was too late to apply a remedy, that the difference between the one and the other, especially between No. 2 and No. 3, was so great that the people would wonder how the House of Commons could possibly have entertained the scheme. Another objection he felt was, that the Government, having the power of accomplishing the three great objects to which he had adverted, instead of proceeding to invite information as to what ought to be the real terms of the bargain, and taking the steps which any Ministry attempting such an operation ought to have taken, had acted exclusively upon their own judgment. Other Ministries had invited tenders to ascertain how the country would take that which they upon the part of the State offered to grant. But instead of applying such a test to the question of what ought to be the terms of this great bargain, the right hon. Gentleman—whose ability and genius he was the last to question or undervalue—had assumed to himself the faculty of all knowledge. The right hon. Gentleman, in framing this bargain, had left himself no option and no opportunity of making better terms; but he had assumed, as if by intuition, that he possessed the required information, and he had drawn his three propositions upon data or principles of his own, in—as he (Sir F. Kelly) presumed to think—entire ignorance as to what would be the extent, if he had invited tenders, to which the monied interest would have accepted the terms. Every holder of 100 l. South Sea Stock or other stock had then the means of converting it into 100 l. sterling; and the question was which of the three other alternatives he would accept. The first was this—that for his 100 l. he should accept a 3½ per cent stock, of which the capital should be 82 l. 10 s.; that was to say, he might receive 82 l. 10 s. capital

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stock for this 100 l. sterling at a dividend of 2l. 17 s. 9 d., guaranteed for a period of forty years. What this alternative might be in connexion with the others, the time had yet not arrived for him to consider. What it was, standing by itself, if proposed by itself, would be a fair subject for consideration. It was one which, even if the Bill had been confined to it, would leave the most experienced and sagacious among them some difficulty in determining. It might well be considered a most important question whether 30,000,000 l. of stock should be created by payments of 100 l., guaranteeing 2l. 17 s. 9 d. for forty years. But it was neither for him nor for the Committee to say whether it was probable any one of these proposals would be accepted. If they should not, if they were so disadvantageous to the public creditor that no one could be found to accept the best of them, then the Bill would fall to the ground a dead letter, the 10,000,000 l. of stock must be paid off, and some other means be found of raising it, and no great harm would be done. But he was not dealing with that case. It must be assumed, in order to deal with the effect of the Bill, that the right hon. Gentleman was right in holding that at least some one of the three alternatives would be accepted by the public creditor. Upon that assumption, looking at the present price of stocks, with the 3 per cents at par, the scheme was just with regard to the 3 per cents, and no more. Looking, however, at the state of the money market, the condition of the country as regarded the precious metals, the state of Europe and the world—all these being practical considerations and elements in the calculations bearing upon the Bill—he did not pretend to say whether any one of the three alternatives, when thrown open to the market, would be accepted. Perhaps one and perhaps another might be accepted, if each stood alone; but he entertained a profound belief that no two would, to any substantial amount, be accepted. The alternative No. 2 was to receive for the same sum of 100 l. sterling, 2l. 15 s. per annum guaranteed for forty years upon a capital of 110 l., as a consideration of the 100 l. The third alternative was to receive 2l. 15 s. per annum for a period which was left in uncertainty—which was to depend upon the pleasure of the Government, ranging from one to ten years, and for the remaining thirty years to have a guaranteed dividend of 2l. 10 s. per annum only, and that upon
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a capital of 100 l. He would for the present pass over No. 1, which might or might not present to the fundholder a bargain he might deem satisfactory; but he could not do so without saying, whatever might be the result of the Bill, that the country was deeply indebted to the right hon. Gentleman for having, by this proposal, for the first time, submitted to Parliament a scheme for effecting a large and substantial reduction of the national debt without any addition to the national burdens. Although he would not pretend to guess, and it would be rash in any man to say, whether this proposal presented an acceptable bargain or not to the stockholder, he could not pass from it without observing that it would undoubtedly effect a national saving of which it was almost impossible to speak in terms of exaggeration, for should the first alternative be accepted by not only the holders of the 10,000,000 l. of South Sea and other stock, but by the holders of the 500,000,000 l. of 3 per cent stock, a saving to the country of nearly 90,000,000 l. sterling in the capital amount of the national debt would be effected, and would be effected without the increase, on the contrary with a diminution, of the annual expenditure of the country. If the holders of the whole 500,000,000 l. of stock would be content, and at once come forward and accept this first alternative, which, as regarded the State, would, perhaps, be a fair, and just, and reasonable bargain, he conceived no measure which any Finance Minister in any country ever effected would approach in magnitude and importance, and in the great and extensive benefit to the country, which would result from such an operation. And why? Because they would then have a reduction in the national expenditure of somewhere about from 700,000 l. to 900,000 l. per annum, and an immediate reduction in the capital of the national debt, as he had already said, of upwards of 90,000,000 l. sterling. It might be true that the guarantee of 2l. 17 s. 9 d. for forty years was for too long a period. It might happen that in five or ten years a reduction of ¼ or ½per cent on the interest of capital might make a difference of millions on these great sums. But however that might be, he rejoiced to think, on the high authority of the right hon. Gentleman, that this bargain was likely to be accepted to a large amount. He would pass from that to No. 2 and No. 3, upon which he felt it his duty to make some observations. No. 2,

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as he had stated, began by adding 10 per cent to the amount of capital of so much of the national debt as was brought within its operation—a sum which, applied to 10,000,000 l. of South Sea Stock, and 30,000,000 l. of 3 per cents, to which the Bill was now limited, would give at once an addition to the capital of the national debt of no less than 4,000,000 l. sterling. If he stood alone upon that objection, he said it was unanswerable and insuperable. A war, or any other great national exigency, might compel the country to submit to an increase of the national debt, and justify them in agreeing to that increase; but he ventured to deny that the smallest increase ought to be made unless in a case of imperative necessity, in which the honour or the safety of the country was concerned; and he should show, from the statements and admissions of the right hon. Gentleman himself, that this—not to use the word wanton—was a perfectly useless and unnecessary sacrifice of 3,000,000 l. or 4,000,000 l., or whatever sum would ultimately be added to the capital of the debt. The argument put forward with all the eloquence of the right hon. Gentleman and of the hon. Secretary to the Treasury, was, that this sacrifice of 3,000,000 l., 4,000,000 l., or even 50,000,000 l., if applied to the whole debt, was well made to secure the inestimable advantage of a 2½ per cent stock. Unless the right hon. Gentleman himself was greatly in error, he might obtain that advantage without the sacrifice—without the guarantee of 2l. 15 s. per cent, on cheaper and better terms, and yet leave the debt at its present amount. It was also said that the addition of 10 per cent to the national debt was really not an evil; and, on a former evening, he was severely taken to task for having treated, or rather having been thought to have treated, the nominal amount of the national debt as so much money in the possession of the stockholder. He had never supposed anything of the sort. He would not for a moment assert that the possessor of 110 l. stock was the possessor of 110 l. sterling. They all knew that 110 l. stock was worth just as much and no more as it would produce by sale in the market, and undoubtedly the holder of that stock was not possessed of 110 l. of money. It was argued that it was immaterial to add 10 per cent to the capital, because it was a mere nominal sum, and the debtor could not call on the State to pay it off. Of course the same argument
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would go to make it immaterial whether the debt was 500,000,000 l. or 1,000,000,000 l. But he said, in the present times, with the present prospects of the country as to the value of money, and as to the rate of interest, to add to any stock in existence or to be created 10 per cent, while the interest was to be 2½ per cent, was to do great injustice to the State and to the people which Members of that House represented. Who could say that the time would not arrive when it would be to the interest of the State to pay off even a 2½ per cent stock? Now this Bill dealt with a period of forty years; and he must remind the House that forty years ago the 3 per cent stock was at 60. Since 1813 the price of 3 per cent stock had increased from 60 to 100, and the rate of interest had been diminished from 5 to 3 per cent. In the forty years now completed, the interest of money in the funds had fallen two per cent. Looking then to the increasing commerce and prosperity of this country—to the vast amount of capital at their disposal—at the great influx of capital from foreign States, where the same confidence as to political affairs did not exist, was it extravagant or unreasonable to suppose, trusted as this country was to an indefinite amount by the whole civilised world, that in the next forty years the interest on the money in the funds might fall from 3 to 2 per cent? Whenever that fall took place, and the time came to pay off the debt, the right hon. Member would find that it was not altogether immaterial whether the debt was 100,000,000 l. or 110,000,000 l., since on every 100 l. they would have to pay 10 l. more than if this operation had never been sanctioned by Parliament. But it was not merely on the increase of the national debt, it was not on the improvidence of the bargain by which the right hon. Gentleman bound the country for the long period of forty years, but by the comparison which he should institute between No. 2 and No. 3 that he rested his great objection to the provisions of this Bill. It was said these were equivalents. Let them take the case, and suppose a gentleman being a holder of 3 per cent stock to convert 100 l. into No. 2, and another 100 l. into No. 3. First, how would be stand as to No. 3? He paid 100 l. or 100 l. 3 per cent stock, which was now the same thing; he received a guarantee for from one to ten years, of 2l. 15 s. per year. He must be permitted to observe that there was great

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perplexity in this matter; that a clear idea of what Government proposed was not to be collected from what had been stated. By a clause in the Bill there was a guarantee—not a fixed guarantee, but an uncertain, shifting guarantee, at the option of the Minister. No period was fixed to which the guarantee was to extend. The Committee were called upon to sanction a bargain entered into by the State without knowing what were the terms, and whether Government were to give a guarantee of one or ten years. He begged to ask, if the right hon. Gentleman possessed the evidence and the basis for the calculation—and if ha did not possess them, he was at a loss to know how the calculations could be made at all—how it was he was unable to tell the Committee whether the guarantee was to be for one, for five, or for ten years. He (Sir F. Kelly), and better calculators than himself, might be inclined to think the commutation exceedingly beneficial if the guarantee was for one or two years, but very disadvantageous indeed if it extended to so large a period as ten years. Turning again to the comparison. What would the gentleman receive upon his 100 l. in No. 3, even with the utmost extent of guarantee which the Government was authorised to give? He would receive for his 100 l. 2l. 15 s. a year for ten years, and 2l. 10 s. a year, and no more, for the remaining thirty years, and now—and until he was paid off, he was going to say for ever, his capital would be 100 l. and 100 l. only. But what would be receive for his 100 l. in No. 2l? He would bring forward 100 l only, as in the other case, but he would receive from the Government a guarantee of 2l 15 s. per cent, on a capital of 110 l Substantially speaking, he would receive only 2l. 10 s. for forty years on No. 3, as contrasted with 2l. 15 s. for forty years on No. 2l In one he would have a capital of 100 l., in the other he would have a capital of 110 l. All he could say was, that if these propositions were identical, if these two bargains were precisely equivalent and the same, he should henceforth have no faith in arithmetic, or in the organs of his own understanding. He hoped the right hon. Gentleman would meet these objections with that fairness, openness, and candour, which belonged to his character, and explicitly inform the Committee upon what principle he could call these two contracts equivalent, one giving 100 l. capital, and 2l. 10 s. interest for forty years, and the
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other giving 110 l. capital, and 2l. 15 s. interest for forty years. He would now proceed to examine the effect of the bonds which were, as asserted, to equalise the two bargains—a subject with which he admitted that commercial men were more familiar than he was. They were told that the issue of transferable bonds—bonds created for the first time—transferable from hand to hand—would be so extensively circulated, and prove so valuable to the mercantile community, that they would make up to the stockholders the entire difference of the advantages or the disadvantages between one and the other bargain; that, in fact, the superior value of transferable bonds would equalise the difference of the two bargains, and make 2l. 10 s. equal to 2l. 15 s. interest, and make 100 l. equal to 110 l. capital. The question he was about to ask was this: would these bonds, to pay 2l. 10 s. interest for forty years, be so valuable to the commercial community that they would be accepted as willingly as the offer of 2l. 15 s. interest, and 110 l. stock? If this were so, then he asked the right hon. Gentleman why he did not stop at No. 3? In no case could injustice be done to the stockholder, for the acceptance of the propositions was optional, not compulsory. Why should the right hon. Gentleman offer 2 i. 15 s. and 110 l. stock, when he could get the same thing done for 2l. 10 s. and 100 l. stock? If this could be done as far as 30,000,000 l. were concerned, why should the operation be limited to 30,000,000 l.? Why should the State be asked to pay 2l. 15 s. and 110 l. when, as the right hon. Gentleman stated, he could effect the same bargain for 2l. 10 s. and 100 l.? If these two bargains were applied to the whole body of 3 per cent stockholders in the kingdom, by No. 3, the State would acknowledge a debt of 500,000,000 l., which, whenever the rate of interest permitted, could be paid off with that amount of sterling money, and the interest during the forty years would be 13,750,000 l., whereas by No. 2 the State would acknowledge a debt of 550,000,000 l. and the interest during the forty years would be 15,000,000 l. So that in the one case they would add to the debt 50,000,000 l. whilst in the other they would not add to it at all; and in the one, as compared with the other, would save in interest in forty years, 1,250,000 l. He believed, therefore, he had not used too strong a phrase when he said it was a perfect delusion to hold out

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these two proposals as equivalent and identical, or that the bonds would create that equivalent. Let the Committee look a little further, to see what these bonds really were. To his utter astonishment, he had almost said consternation, the right hon. Gentleman told the House the other night that these bonds would be so much more valuable than the registered stock as to countervail the difference of bargain between No. 2 and No. 3? Did the right hon. Gentleman remember what he was saying, or the import of his words? Did he mean the House to assume that the preference for transferable bonds over registered stock was worth ¼ per cent on the interest, and 10 per cent on the capital? Did the hon. Member reflect on the value of ¼ per cent per annum when applied on the whole capital debt? Again, he would ask why, if one stock was so much preferred, did the right hon. Gentleman withhold the bonds from the public? The Government had to pay a large sum annually to the Bank of England for the management of registered stock; but with these bonds no management would be necessary, and therefore it could not be on the ground of expense. What he said on a former evening he ventured to repeat now, that there was no real, substantial difference in the value of transferable bonds and registered stock. It was true in this country he was speaking without experience. Financial Ministers of this country had never yet thought fit to issue transferable bonds of the nature of these Exchequer bonds, and it would be a problem difficult to solve, and a question not very easy to answer, why they had not issued such bonds, but for one consideration. Perhaps the right hon. Gentleman would find in this scheme that his Exchequer bills would disappear from the market, and appear before him in a form not very pleasant to his eyes. He might find that, instead of having 17,000,000 l. or 18,000,000 l. of unfunded debt, at 1½ per cent interest, it would be superseded by Exchequer bonds at 2¾ per cent for a certain number of years, and 2½ per cent afterwards. That might be the reason why bonds of this nature had not been issued in this country. But he was at a loss to imagine how the hon. Secretary to the Treasury could state that these bonds would be worth 10 l. per cent more than registered stock, and that the two descriptions would run parallel with each other in the market. True, they had no practical
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experience, but they could move by the light of experience derived from other channels. In France and in Holland and in other commercial countries of Europe, bonds to the amount of millions and millions transferable exactly as these Exchequer bonds, were issued by the Government, and were in circulation in those countries and elsewhere. If the Government wished to know whether Exchequer bonds would be higher in the market than registered stock, the question could be answered by reference to places where Exchequer bonds or similar securities existed. If any one wanted to invest 10,000 l. in Paris, or Amsterdam, or Hamburgh, the broker would ask whether he desired certificates to bearer, or to be registered as the stockholder, and he would find both descriptions at the same price, convertible one into the other. If he wanted to buy French rentes or Dutch bonds at a distance, no doubt they would be ¼ or½ per cent higher for the convenience of transfer; but no substantial difference existed, and it was a perfect fallacy to suppose that these Exchequer bonds would be worth more, except by a mere inappreciable trifle, than the same amount of registered stock, provided they were both issued upon the same conditions. Then how stood this question between the propositions No. 2 and No. 3? The Government brought forward this scheme, and alleged to the public that they might accept 100 l stock in No. 3, or 110 l stock in No. 2, and that they were equivalent; and they told the House—and he presumed the right hon. Gentleman would tell the Committee—that they considered these two stocks precisely identical and of the same value, and that 30,000,000 l. of No. 3 would be as likely to be taken as 30,000,000 l. of No. 2. If that were so, he could only say that the stockholders of this country were in the singular position of knowing no difference between 100 l. and 110 l. stock, and between 2l. 10 s. and 2l. 15 s. interest. Then what would be the result? The consequence would be, not as the right hon. Gentleman facetiously observed, that limbs would be broken in the rush for No. 3, but not until No. 2 was exhausted would No. 3 be accepted, and then only in case the demand for transferable bonds should be large enough to induce the fundholder to submit to what would be a great sacrifice as compared with the advantages obtained under No. 2. Even supposing both stocks were wholly taken up, that would not lessen the gross injustice inflicted on

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the holders of No, 3. He was quite aware of the great importance of the object in view—the creation of a 2½ per cent stock—but he also felt that it was of far greater importance that, unless upon some great national necessity, the capital of the debt should not be increased. He therefore urged upon the Government to at once discard from this clause the proposal or alternative. If they could procure the stockholders to accept a large and substantial amount of stock under No. 1, he would not stop to consider whether the guarantee was of too much money or too long a time (though he believed three or five years hence the Government would probably obtain better terms), because he was of opinion that a great national benefit would be effected, and the amount of the national debt pro tanto would be reduced. With regard to Exchequer bonds he felt, in common with the right hon. Gentleman, the great benefit they would confer on the commercial community; but he would suggest for the right hon. Gentleman's consideration whether by issuing so large an amount he would not drive the whole of his Exchequer bills out of the market. He objected to the Bill, in so far as, if passed into law, it would enable the stockholders to exchange their stock against alternative No. 2; and he called upon the Government to do justice to the public by refusing to complete such a disadvantageous and extravagant bargain, and by trying first what might be done to induce the holders of stock to accept the transferable bonds. By that means they would avoid the necessity of increasing the capital of the national debt, would have time to acquire a larger amount of experience than they at present possessed, and would lay the foundation of a 2½ per cent stock, an object which they deemed of such great national importance. He should conclude by moving that the portion of the clause embodying alternative No. 2 be expunged from the Bill.
Amendment proposed, to leave out from the word "Parliament," in line 22, to the word "Parliament," in line 30.
MR. SPOONERsaid, that every stockholder now of 100 l. stock would be entitled to receive in hard cash 100 l; and what he objected to now was, that at that moment they were going to give to the stockholders, in addition to the 3l per cent which they received, a guarantee of forty years, and in the interim the nation would pay 2 s. 3 d. per cent more than it ought to pay. He objected that the hands of the right hon.
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the Chancellor of the Exchequer should be tied up for so long a period as forty years, and he desired to know how it was that that period had been taken? If the time for redemption had been fixed at a shorter term, it would be much better, and he therefore should propose to the Committee, that twenty years be inserted in the place of forty years.
The CHANCELLOR OF THE EXCHEQUERsaid, if he thought that the proposed guarantee was too favourable to the public creditor, he would at once accede to the Amendment of the hon. and learned Gentleman (Sir F. Kelly); but this was a question of calm, careful, deliberate opinion, and after endeavouring to form the best judgment he could upon it, he was convinced that the guarantee proposed in the Bill was that which the Committee should adopt. The hon. and learned Gentleman opposite appeared to think that no harm would be done by omitting one of the alternatives offered to the holders of stock. He (the Chancellor of the Exchequer) was of an entirely contrary opinion. His view was, that the dignity of Parliament would be lowered by such a proceeding, and that the wisdom of Parliament and of the Government would be exhibited in a somewhat ludicrous and humiliating light, if they came out with offers altogether unequal to the just expectations of the stockholders. An hon. Gentleman (Mr. Laing) near him had given notice of a Motion to limit the amount of stock convertible into the proposed 3½ per cents. He could understand the meaning and object of that Motion, because if their knowledge was limited, it was right they should limit the range of their experiment. All along he had found great difficulty when dealing with this subject, in consequence of the ignorance of the measure which prevailed. The opinions of hon. Gentlemen in that House were all well enough; but those opinions would not help him when he went to the stock market and endeavoured to transact business there. It was, no doubt, very satisfactory to know the opinion of any hon. Member of that House with reference to a subject of such vast importance as the present; but that opinion was as light as a feather in the stock market, and would not, he was afraid, assist him much in his financial operations. But it was important to bear in mind what his proposal really was. They were now about to pay to the holders of 50,000,000 l of 3 per cent stock, either perpetual annuities of 3l per cent

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per annum, or 100 l in hard cash, and that 100 l not taken piecemeal, but at once, after the expiry of twelve months' notice. They were under such conditions at present, that, unless they could amend them, it was perfectly hopeless and impossible to attempt an opperation upon the capital of the debt. There was no man in his senses who would say, either in the present, or in a more favourable, or indeed in any conceivable, state, that at the end of twelve months' notice they would be prepared to pay up the whole of 500,000,000 l of debt. It was, therefore, he came to that House and said, "Let us feel our way gradually—let us proceed upon the principle of varying the terms and conditions on which the public debt is held—let us endeavour to improve them likewise, both as to the rate of interest immediately available, and the plan of subsequent redemption." By adopting that course, they would not subject them, selves to the necessity of paying an enormous sum upon twelve months' notice, but would secure terms which, while perfectly fair to the holders of stock, would relieve the public in part from a heavy annual burden. That was a great object of policy. The terms they offered must be liberal, and he believed it would be far better to offer too much than too little. If they offered too much, their experiment was but limited, and when they came to repeat or extend it, they could contract their terms, and take advantage of the experience they had acquired. On the other hand, if they went into the market and offered too little, he had no hesitation in saying that there would be a reaction highly unfavourable to the scheme. What was the purpose of the alternative before the Committee? It was this—that they should say to the holder of 100 l. of stock, "If you will submit to an annual loss of 2 s. 3 d. upon your dividend, and likewise to the acceptance of 82 l 10 s. of capital stock in 3½ per cents, instead of your 100 l., we will give you a guarantee for a period of forty years." What did the public gain? It gained an immediate remission of about ⅛th per cent upon the interest, and the chance of the redemption of the capital after forty years, at a reduction of 17 l 10 s. per cent. He was far from saying that the public gained a certainty of redemption at the end of forty years for 82 l 10 s. He thought, judging from experience, that in no long time after the period mentioned, an opportunity for redemption would occur; but he would not say it would occur exactly at the end of
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forty years. At all events, however, the public gained ⅛th per cent upon the interest, and after forty years the power of redemption, whenever the financial state of the country would enable them to exercise it. He thought that these were very considerable advantages indeed, and for his own part he would not consider it an improvident transaction if the House of Commons were disposed to act upon the whole public debt upon such terms at the present moment; and undoubtedly he should regard the Minister as fortunate who should be the instrument of effecting such an operation. At the same time he did not object to limit the operation for the present, because it would still be in his power to come back to Parliament and ask leave to extend it. He hoped he had now laid the question clearly before the Committee, and he confidently submitted that no case had been made out for diminishing the guarantee proposed in the Bill. If the stock so guaranteed should be taken up by a portion of the present holders of stock, that would not be considered as pledging that House to offer the same guarantee to the rest of the stockholders. The House in that case would as a matter of course improve the terms offered—improve them, he meant, as regarded the interests of the public—but in the meantime, in order that the scheme might be favourably received and established, it was necessary that a good guarantee should be given.
MR. SPOONERsaid, he wished to know if the present discussion was limited to the South Sea and other minor stocks, or if it applied to the whole of the 3 per cent stock?
The CHANCELLOR OF THE EXCHEQUERsaid, that the clause before the Committee had reference solely to the minor stocks.
MR. SPOONERsaid, that under these circumstances he would not press his Amendment, for, while he strongly objected to tying up the hands of the Finance Minister for so long a period as forty years, still he did not think the minor stocks of sufficient importance to justify his intervention at that stage of the discussion.
SIR FITZROY KELLYsaid, he agreed with the last speaker that it was unnecessary to offer any objection to that part of the Bill which related to the South Sea and minor stocks; but he thought it right to state, for the information of the right hon. Chancellor of the Exchequer, that he

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should raise the very same question when they came to consider the guarantee for forty years to the 30,000,000 l of stock. He coincided in the opinion expressed by the right hon. Gentleman opposite, that it would be better to offer too much than too little; still, he thought the terms proposed were too liberal, and when the proper time arrived he would submit a Motion to the House upon the subject.
The CHANCELLOR OF THE EXCHEQUERsaid, they were now dealing with the clause which related exclusively to the South Sea and other minor stocks; but it appeared from the statement of the hon. and learned Gentleman opposite, that while he would not object to the 40 years' guarantee in regard to those stocks, he intended to raise the question when the Committee came to consider the more important portions of the scheme. He only desired to point out to the hon. and learned Gentleman that it would be better to discuss the point in connexion with the question he had himself raised with respect to the 2½ percent stock. The course hitherto pursued had been in strict accordance with established and constitutional usage. Although the Resolutions of the House had no effect in point of law, yet, with regard to the commutation and redemption of stock, the course of proceeding had always been that the Resolutions of the House were acted upon by the parties whose duty it would be, under the Act of Parliament, to give the requisite notice of the redemption. Accordingly, acting strictly upon that principle, Mr. Speaker had communicated to the holders of stock the Resolutions at which the House had arrived. Now the Resolutions ran in these terms—that the holders of minor stock should give notice within a given period of their intention to claim such and such stock in lieu of what they now hold. Their right, therefore, to give such notice had certainly been in existence for a considerable number of days, and although he was not in a condition to say whether any such persons had given such notice, or whether they had even formed an intention to do so, yet he felt himself some doubts and scruples about any interference at all with the terms upon which the House had declared its intention to deal with those minor stocks.
SIR FITZROY KELLYsaid, he was much astonished at what had just fallen from the right hon. Gentleman. He had understood that some proceeding had been allowed to take place in that House with
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regard to the notice given to the holders of South Sea and other stocks, and he had asked whether the assent to the giving of that notice implied any assent or sanction to any one of the three alternatives embraced in the Resolutions. He then understood the Chancellor of the Exchequer to answer very satisfactorily that the only notice the House was called upon to sanction was the notice under the Act of Parliament that the stock would be redeemed. Now, if that notice had gone further, and if it had tended to raise expectations on the part of the stockholders that any one of these three alternatives would be open to them, he must say he thought it was very unwise to introduce such an intimation into the notice until one or more of the alternatives had received the direct sanction of the House. With regard to the 10,000,000 l of South Sea Stock, he was perfectly content with the alternative No. 1, and the guarantee for forty years, but he could not consent to alternative No. 2, which involved, even as to these 10,000,000 l., an increase of the national debt.
MR. HUMEsaid, that it was a somewhat serious matter if the assent which had been given to the Resolutions by the House was to bear the interpretation now put upon it by the right hon. Gentleman the Chancellor of the Exchequer. For his own part, he would have objected to the passing of the Resolution the other night if he had not understood that it was a mere matter of form. This was certainly the first time he had ever heard that Resolutions which were laid upon the table bound the House to any course of proceeding. With respect to the general question, he strongly objected to increasing the capital of the national debt, though the plan now proposed might be safely tried, he thought, as an experiment. He had no objection to a reasonable amount of security being given, and unquestionably there was much truth in the remark of the right hon. Chancellor of the Exchequer that, in order to secure the establishment of the stock, it was necessary to offer superior terms.
The CHANCELLOR OF THE EXCHEQUERsaid, that both the hon. and learned Gentleman (Sir F. Kelly) and the hon. Member for Montrose (Mr. Hume) had entirely misapprehended him. He never intended to convey the idea that the House had pledged itself to pass the three alternatives embraced in the Bill. What he did say was that legal notice had been given

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by an officer of that House to the holders of the minor stocks, that certain Resolutions had been adopted by the Committee and reported to the House, so that the parties in question might have time to form their judgments on the subject. That did not bind the House to anything.
MR. SPOONERsaid, he would withdraw his Amendment.
The CHANCELLOR OF THE EXCHEQUER: I regret, Sir, to find, after the very kind manner in which the hon. and learned Gentleman (Sir F. Kelly) has referred to me, and after the favourable terms in which he has spoken of the Bill, that his objections to the scheme are of such a broad and sweeping character. I was at a loss for some time to understand to what part of the plan his objections applied. At one time it appeared as if his objections were limited to the question of the 2½ per cent stock; while at others he described the whole scheme as being impracticable, inexpedient, and unjust. I am bound to say that I think the objections of the hon. and learned Gentleman do really go to the root of the Bill. I think his remarks have been dictated by certain commercial and politico-economical views, which undoubtedly are at variance with mine. The hon. and learned Gentleman appears to think it is perfectly safe to assume, and to act upon it as a practical principle, that we are going to create a great revolution in the value of money. He refers to a state of things forty years ago, when he says the value of money was 5 per cent, whereas it is only now 3 per cent. He infers, therefore, that the value of money will continue to fall, as heretofore, as if the process had been in steady and continuous working from time immemorial. But what is the use of going back only forty years? If you go back at all, you should go a little further. Go back more than 100 years, when, as I stated on a recent occasion in this House, the value of money was less than 3 per cent, and when 3 per cent stock sold in the London market for 106 l and 107 l Well, that is a most vital fact, and if circumstances had not changed with us, I think the Bill before the House would be a very unwise one. But circumstances have changed, and the fact that the value of money stood at such a rate forty years ago should not deter us from proceeding with the measure now upon the table.
The hon. and learned Gentleman spoke in very vivid and glowing terms of the
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growing wealth and prosperity of the country. I was surprised and delighted to hear these expressions from the lips of the hon. and learned Gentleman, for I have been under the impression, for some considerable time past, that the hon. and learned Gentleman entertained very different views of the state and prospects of the country, and that he occasionally indulged in such prophecies as only the most melancholy imaginations could conceive with regard to the results of our present mode of commercial legislation, under the influence of which he says England is not only careering along the road to ruin, but has nearly reached the goal. I am glad the hon. and learned Gentleman has seen cause to change his views, though I am afraid he is likely to fall into the other extreme, for he looks not only for the increasing prosperity of the country but likewise for a considerable, continuous, and permanent decline in the value of money. He proposes to legislate upon that consideration, and finds fault with us for giving a forty years' guarantee, by which he thinks we shall cheat ourselves out of a great deal we should otherwise have. I need not say that these are not the views upon which the construction of this Bill has been based. We acknowledge that there is a tendency to depreciation in the value of money, and we seek to avail ourselves of that tendency; but we do not go the length of the hon. and learned Gentleman in his prognostications of the continued fall in the value of money until it reaches a point much below what it is at present; and we think that schemes of a speculative and illusory nature would be injurious to the country and unworthy of Parliament. The hon. and learned Gentleman spoke for some time in a manner which I could not follow; but I presume his remarks were pointed to the improvement which would be made in the scheme by the omission of one of the alternatives. Now, I think if Parliament were to send me into the money market with a maimed and impracticable scheme in my hand, it would be one of the most unwise things it could possibly do, discreditable to itself, injurious to the public, and destructive of the proposed plan. The discredit to myself I should regard as nothing; but to put the public in such a position before its creditors, I could not but regard as a most unfortunate circumstance. Whatever the Committee decides upon, I do trust it will define to itself clearly the

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object it proposes by this Bill. If it does not approve of that object, let it reject the Bill altogether; but if it does approve of it, then I hope it will not stint us of the means necessary to the attainment of the object in view. Again, the hon. and learned Gentleman has expressed his dissent from the entire principle of the Bill, and has spoken of the ruinous and extravagant rate of interest, 2l 15 s., which we are about to guarantee; and he has likewise referred to the expediency of not increasing the capital of the national debt. These are points upon which I will trouble the Committee with a few remarks farther on; in the meantime I will notice another observation which has fallen from the hon. and learned Gentleman, who insisted that the scope of this measure is to be extended hereafter, and that, if possible, it is to be applied to the whole of the 500,000,000 l of debt. Now, here the hon. and learned Gentleman entirely misconceives my position. He says that because I ask you to give me power to operate to the extent of 30,000,000 l. of the 3 per cent stock, that I may be enabled to ensure the establishment of a 2¾ per cent stock, it therefore follows that when that stock shall have been exhausted, I shall come and request you to authorise me upon the same terms to create more stock. Now, that is an entire misapprehension of the object of this Bill. The object of the Bill so far as regards the 2½ per cents is entirely different. It is to give terms to secure the establishment of the stock, but having established the stock, you may then improve the terms; and so far from asking power to create more stock upon the same terms, I should say, without being able to anticipate the precise course events will take, that it would not be proper to give the same guarantee. The stock once established, you will have standing ground upon which to take up your position in order to extend and increase your financial operations, and you will be in circumstances to create additional stock upon terms more favourable to the public as well as more favourable to the creditor.
The hon. and learned Gentleman has occupied a considerable length of time by frequently reiterating, but not thereby materially strengthening, the assertion that the three proposals, or options, offered to the public creditor are not equivalents, and he accuses me of having said they were equivalents. Now, the hon. and
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learned Gentleman ought to know perfectly well that when we speak of equivalents in this matter, we do not mean equivalents simply and solely according to arithmetical calculation. Considerations of convenience enter into price; considerations of security enter into price; and we can put into figures the value of a forty years' guarantee, and the value of the power of transferring public securities by an easy and inexpensive mode. When I stated that these things are equivalents, I meant to speak with the submission and the hesitation which every man ought to entertain with regard to his own judgment; but the hon. and learned Gentleman speaks positively on the point, and says there is a very large difference in actual money in favour of the 2½per cent, and against the 3½ per cent. Proceeding by arithmetic alone, no doubt he was right; but I, of course, consulted actuaries on the point on which the hon. and learned Gentleman is so decided, and the answers I received showed a different opinion to that of the hon. and learned Gentleman. I asked, for example, what was the value of 110 l. new 2½ per cent stock, irredeemable for forty years; and the answer was 91 l. 13 s. 4 d. I also asked what was the value of 82 l. 10 s. in the new 3½ per cents, irredeemable for the same period; and the answer was 96 l, 5 s., the 3½ per cent stock being estimated by the actuary at 4l 11 s. 8 d.—in hard money at the present moment—more than the 2½ per cent stock. This 3½ per cent stock, which is supposed to be so absurdly inferior in value that it cannot, according to the hon. and learned Gentleman, be for a moment put in competition with the 2½, is estimated more highly by the actuary of whom I speak. In considering these equivalents, there are, it should be remembered, a great variety of elements which we ought to take into consideration. Some of these elements are certain, some uncertain, and we can only be guided in regard to them by the light of experience. The hon. and learned Gentleman is not satisfied to treat this question, as most people of experience in money matters treat it, as a matter of great difficulty, about which all prospective opinions should be pronounced with great hesitation. He says that this is demonstrated, and that that is demonstrated; and tells us that it is perfectly monstrous, if you can secure the circulation of bonds at 2l 10 s. for forty years, you should give the holder of stock 2l 15 s. and then 110 l The hon. and

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learned Gentleman said, "Why not stop at these bonds—you may immortalise yourself by issuing 500,000,000 l. of Exchequer bonds?" That is the proposition he demonstrated to himself so clearly. I am repeating the words of the hon. and learned Gentleman, who said, "These Exchequer bonds are capable of being floated, or they are not; if they are not, why found expectations upon them? if they are, why not convert the whole of the 3 per cents into them?"—
SIR FITZROY KELLYexplained that he had only recommended trying them as far as they could.
The CHANCELLOR OF THE EXCHEQUER: The hon. and learned Gentleman never intimated that there was the slightest difference between the practicability of issuing 20,000,000 l. of them, and the practicability of issuing 500,000,000 l. Now, there is a difference, and though they may be useful up to a certain point, and obtain a given price up to that point, we have to ascertain that point and that price by experience. I have, for that reason, only asked your authority to issue them to a limited amount, for to take unlimited power would be to discredit them in the first instance, and would look as if we intended to flood the market. When, however, you have ascertained the wants of the commercial community, you can conduct your future operations accordingly. But the hon. and learned Gentleman goes further, and says it is perfect folly and absurdity to suppose there is any difference in the value of 50 s. annuity proceeding from registered stock, and Exchequer bonds bearing 50 s. interest. He says there is no appreciable difference; the prices of those two things—50 s. secured on Exchequer bonds and 50 s. on registered stock—would be identical. There again I think he forms his conclusions with a degree of positiveness which would have surprised me if he had dedicated his life to these questions, instead of devoting it to the engrossing labours of his honourable profession, of which he is so deservedly distinguished a member, and in which he has justly acquired so much eminence. It appears to me, on the contrary, that though we cannot at the present moment tell what the value of these funds will be, it is reasonable to suppose that there will be a very considerable value attaching to these Exchequer bonds, from their convenience, over and above what registered stock would have to a certain class of holders. The hon. and learned
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Gentleman complains, also, that it is not definitely fixed in the Bill on what terms these bonds are to be issued. It appears to me that it would not have been right to fix that. Our duty is to issue, on the best terms that we can; and it was impossible for me to have formed a rational computation beforehand. If I had endeavoured to compute the terms on which they were to be issued, I should have put them too high or too low; the only course was to ask, within reasonable limits, for a discretion when the time came, because we shall then be in a position of fuller knowledge, and shall enjoy fuller means of judgment, than it is possible that we can at the present moment. The hon. and learned Gentleman says it is an object of great importance to create a 2½ per cent stock, but that an object of still greater importance is not to increase the capital of the debt. I am not so sanguine as to hope, by any wholesale and permanent reduction in the value of money, to reduce the debt; but I would readily go this length—that it is most desirable we should introduce into our financial system a stock bearing a rate of interest which, in case the value of money should be subject to favourable alterations, would form a basis for extended operations. I beg the Committee to perceive that they could not make sure of a 2½ per cent stock by means of Exchequer bonds; if we could have done so I never would have troubled you with a 2½ per cent stock, but would have been perfectly satisfied. But the hon. and learned Gentleman must remember that the question of all was whether the bonds should, or should not, be at the expiration of forty-nine years redeemable or not at the option of the holder. If you could get out the bonds irredeemable, then the experiment would have substantially and completely succeeded. Then you would have a substantial basis for the 2½ per cent stock. You would then have standing ground from which to work more extended operations. But it is impossible for any man to say at this moment whether he can do that or not, and I would not advise you to give up the chance of doing it. What I recommend is, do not trust to that chance. This is the reason why Government proposed this 2½ per cent stock, and not at all because they highly estimated the increased nominal capital of the debt. And to this question, the increase of the capital debt, I will now address myself.
It has been always a matter of regret to

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me that this House has shown apparently an almost complete indifference on the subject of increasing the capital of the debt; but I propose to it at present a moderate increase of the capital debt, and ask the Committee to give the Government power to increase the capital to a very limited extent. This is not because I think it an indifferent matter, but because I and my Colleagues thought the price worth paying for the attainment of a great object of public policy. Our proposal will not merely bring about a reduction of the rate of charges, but an object of public policy will be gained by the establishment of such stock. Let us see, then, whether the House of Commons is prepared to lay down the principle that under no circumstances will it consent to increase the capital of the debt. Will the House of Commons bind itself to borrow always at the current rate of interest, and under no circumstances to increase the capital of the debt? If the House of Commons be ready to adopt that principle, and to adhere to it with firmness, I must confess I think, notwithstanding the temporary inconvenience, the House would have adopted a very wise and patriotic determination, and I should be most unwilling to make any proposal which would stand in the way of such a resolution. The hon. and learned Gentleman has said there is a great constitutional principle involved in our not increasing the capital of the debt; that it is a great constitutional principle not to increase the capital of the debt by borrowing at a rate of interest lower than the current rate of interest. Where did the hon. and learned Gentleman find this great constitutional principle? I must confess myself astonished at the facility with which hon. Gentlemen on convenient occasions (it did not require the ingenuity of the hon. and learned Gentleman to do it) manufacture particular opinions, and declare their maintenance involved great constitutional principles. I think the question of increasing the capital of the national debt is one which involves the exercise of prudence and discretion; but to say it involves a great constitutional principle is, in my opinion, putting it on very novel and much too high grounds. What have you been doing for the last twenty years, and what has the hon. and learned Gentleman been doing? for during a portion of that time he has sat in this House, has heard questions involving this great constitutional principle decided, and large financial operations per-
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formed, without once raising his voice against them, though they caused an increase in the capital of the debt. Here is a list of operations since the Peace, in every one of which there was a systematic and habitual increase of the capital of the debt. In April, 1826, they funded 8,000,000 l. of Exchequer bills, 4 per cent, at 100 l., adding 560,000 l. to the capital of the debt. In 1829 they funded 3,000,000 l. of Exchequer bills, at 101 l. 10 s., adding 45,000 l. to the capital of the debt. In August, 1839, they funded 4,900,000 l. Exchequer bills, at 109 l. and a fraction, and added 490,000 l. to the capital of the debt. In 1841, they funded 5,000,000 l. Exchequer hills, adding 605,000 l. to the capital of the debt. In 1832–3 they converted no less than 150,000,000 l. of 5 per cent stock, adding a capital to the debt of 7,500,000 l. So late as 1847, in the presence of nearly every man now in the House, 8,000,000 l. of money were borrowed, and 720,000 l. was added to the capital of the debt. In 1848, 2,000,000 l. of stock was created, adding 140,000 l. more to the debt. So that on the whole there has been within the last few years no less than 10,060,000 l. added to the capital of the debt; and this addition, too, be it remembered, was not to secure a great object of policy, but simply with a view to the reduction of annual charges. So far, therefore, from addition to the capital of the debt being regarded as a perfect monstrosity, it has taken place quietly as a matter of course, and certainly without exciting serious opposition, though the object then in view was only a small and limited saving in the annual charge. For my own part, no alternative has been shown to me which would gain the object of establishihg a 2½ per cent stock, except the creation of a 2½ per cent stock at a premium. Suppose, instead of my coming down to the House with the scheme I have developed, I had asked the House to authorise me to go into the market and offer 2½ per cent stock for what it would fetch, it would in that case have been quite open to the House to object to a plan which would have had the effect of increasing the capital of the debt.
SIR FITZROY KELLY: Not if there was a guarantee.
The CHANCELLOR OF THE EXCHEQUER: If I had asked the House to authorise me to into the market and sell 100 l. 2½ per cent stock for what it would bring, my opinion was that such a step would increase the capital of the debt a

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great deal more than would this proposition, for I should not be able to get 100 l. for it, and must have sold it for its market value. The value in the market would not come so near 100 l. as 100 l. was near to 110 l., so that that would increase it, not merely by 10 per cent, but by considerably more. One plausible proposition was, that instead of offering to the holder of 3 per cents his option of conversion into 3½ or 2½ per cents, let the Government offer him 50 l. of the one and 50 l. of the other for his 100 l. 3 per cents, and then there would be no increase in the capital of the debt, but rather a small diminution; and, moreover, there would be a 2½ per cent stock, if the operation succeeded. I am, however, afraid that it would not succeed, and therefore I have submitted my scheme with the view of offering different advantages which might suit different parties. In point of fact we must take it either in meal or in malt. If you think it an object of policy to establish a 2½ per cent stock, you must be prepared to pay the price for it—an equivalent price. There is no way to create a 2½ per cent stock but that which I propose, namely, stating plainly, "We give you an amount of stock over and above 100 l.—we give you a premium on the stock over and above 100 l." Either we must do that, or else take the 2½ per cent stock into the market and sell it for what it will bring—a plan which, as I have already said, would increase the nominal capital of the debt more than I propose. This is the plan, and that the alternative. Proceeding on the assumption—an assumption borne out by those who are conversant in these matters—that 2½ per cent stock brought into the market would not sell for ten-eleventh parts of 100 l., it is quite clear that if it sold for any less, it would add, in so far, to the capital of the debt. I know but one way in which both these objects can be obtained: first, the creation of a 2½ per cent stock; and, secondly, the prevention of any increase to the capital of the debt. I might say that inasmuch as South Sea and other minor stocks might be converted into 2½ per cent stocks, if it were only the question of amount, I had no objection to reduce the whole sum of 2½ per cents to 20,000,000 l., instead of 30,000,000 l. The main question, as I have stated, is, whether the Committee will, on any consideration, agree to the augmentation of this nominal capital of the debt. In my opinion there is only one way to deal with it. We must
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elect between abandoning altogether the 2½ per cent stock, and the adoption of this mode of proceeding, to devote to the purpose of the reduction of the debt the annual saving made by the establishment of a 2½ per cent stock. If the Committee chooses to determine that that annual saving shall be so devoted, it will be in its power entirely to prevent any increase, real or nominal, to the capital of the debt. Under the proposed plan the 2½ per cent stock will be dealt with in the market according to the dividend paid upon it; the holder of the stock will have nothing to do with its redemption, it will stand there as 2½ per cent stock. You will provide that in respect of every 3l. now payable by the Bank to the holders of Consols, that sum shall be commuted to 2l. 15 s.; the other 5 s. will be payable to the Commissioners for the Reduction of the National Debt, and these 5 s. will be applied to the purchase and cancelling of stock, thus completely but gradually extinguishing the nominal capital you now propose to add. Another plan has been proposed, namely, that instead of offering 2½ per cent stock at once, we shall offer stock which for ten years shall be 3 per cent; for ten years more 2¾, and for ten years more 2½; but this operation extended over a period of thirty years will not attain the object I have in view in the establishment of a 2½ per cent stock. If I adopt that plan, I must surrender my policy. Now, if the Committee create a 2½ per cent stock, at the rate of 110 l. for every 100 l. Consols, to an extent of 30,000,000 l., and 5,000,000 l. more of minor stocks are converted, that will give us a total of 35,000,000 l. of 3 per cent stock commuted to 2½. The addition to the capital of the debt as it stands on paper would be 3,500,000 l.; the saving in the annual charge would be 87,500 l.; the annual application of 87,500 l. to the purchase of Consols throughout the whole period of forty-one years, supposing you take one year with another, good and bad times, as they came, and 3 per cents always at par, would cancel each year 87,500 l. of Consols. The interest of the Consols so cancelled would be 2,625 l. In the first year then you would save on the new stock created 87,500 l.; you would buy Consols with it, and the cancelling of the Consols would effect a saving of 2,625 l. The same amount would be saved the next year and the next, the succession rising gradually by forty-one equal steps to the full annual saving of 87,500 l., which it will be seen

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amounts to 3,587,500 l., the sum wanted. In other words, stock to the amount of 3,587,500 l. would be cancelled. By this plan, though the saving at first will be insignificant, yet it would grow rapidly with the amount of stock cancelled, until it reached the full amount; and at the end of the term there will not be a farthing of nominal capital added to the debt. Thus, by making a sacrifice of the full benefit of the annual saving, and postponing it for this purpose, you will prevent the slightest increase at the expiration of the prescribed period to the nominal capital of the debt. If any plan could be suggested which would carry out the policy we have in view in a manner more entirely free from exception than this, I should be most happy. But no such plan has been suggested. All the plans which have been suggested to me are liable to one fatal objection or other. Either they are plans which nobody could act upon, or they are plans which would not secure the creation of the 2½ per cent stock which I aim at, or plans that would postpone the creation of that stock. If the Committee concur with me in thinking that it is important to create a 2½ per cent stock, I venture respectfully to submit this mode of proceeding, by which you will ensure the creation of that stock. You will by that mode ensure its creation immediately. The operation of the reductions you provide for will not complicate that stock, but will be entirely a separate matter. Your substantial objects will all be gained if the enjoyment of the annual saving shall be postponed. But the policy will be established, and the capital of the debt will not be increased by one farthing. That is a plan which I hope will remove the objections of the hon. and learned Gentleman. If there is any further explanation which I can give, and if I have not succeeded in explaining the matter fully, I shall be happy to do so. My desire is, that the Committee should act in the matter with its eyes open. I can only say that it will be a great satisfaction to me—not a reluctant concession wrung from me—but it will be a great satisfaction to me if the House of Commons is prepared for the future to lay down the principle that it will not consent to any augmentation of the public debt. No one will adopt that principle with greater eagerness than myself. You will never find on my part a disposition to flinch from it. And I now give a test of my sincerity, by tendering a plan which, although its first effect will be to put on paper, cer-
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tainly, a nominal increase of the debt, will entirely remove that increase at the expiration of the period already mentioned.
MR. T. BARINGsaid, that under any circumstances he must express his objection to the adoption of a plan which involved the probability or possibility of an increase of the nominal amount of the national debt. He did not think the present circumstances of the country justified such an increase. In his opinion, unless there was a strong ground for increasing the debt, it ought not to be attempted. The right hon. Gentleman the Chancellor of the Exchequer had referred to several cases in which the national debt had been increased—at one time for the funding of Exchequer bills, at another time, shortly after the Peace, to relieve by conversion the charge upon the debt, and subsequently to raise loans for the relief of the West Indians and the relief of Ireland. He did not deny that strong cases might not render it necessary to add to the national debt—such, for instance, as the case of the slave-holding colonies, and the necessity of an advance to relieve the people of Ireland from starvation. He believed that it might be necessary at times considerably to increase the debt in order to relieve the country from certain burdens. Nay more, after any great effort of the country—after a war which involved this country in great cost for national purposes—the country might think it desirable by a commutation or increase of the debt to relieve the taxpayers of the present day. But the present circumstances of the country did not come within any one of those cases. Nay, the right hon. Chancellor of the Exchequer had told the Committee that there was no similarity between the operation which he now proposed, and any of the cases to which he had referred. Was the country in such a state of distress as to require a relief of this description? Hon. Gentlemen opposite declared that the country had never been in such a state of prosperity—that its burdens had never been so light—that it had never been better able to meet its engagements. Was there any reason, then, for adding to the principal of the debt, and casting an additional burden on posterity to relieve the country at the present moment? He agreed with the right hon. Gentleman that it was a legitimate desire to diminish the burden of the debt, if it could be done in a proper manner, by the reduction of the interest of that debt. He was not so sanguine as some Gentlemen

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seemed to be, that we were approaching the time when there would be a permanent and continued reduction of the current rate of interest; and the whole question turned on that. If the right hon. Gentleman was not convinced that we were in the road of the permanent reduction of interest, he could not be right in proposing a measure involving that reduction. There were two points which must have suggested themselves to the Chancellor of the Exchequer: first, was this the proper moment to reduce the interest? and, secondly, was the mode proposed by him the right one to effect the object which he had in view? With respect to the first point—as to the suitableness of the time selected for the operation—he should differ from the right hon. Gentleman the Chancellor of the Exchequer, with considerable distrust however in his own judgment, because the right hon. Gentleman, by his almost intuitive knowledge of financial questions, and by the special opportunities which he possessed of obtaining accurate information in regard to such questions, must necessarily be the person best qualified to decide on the most favourable moment for carrying out the object which he had then in view. But he (Mr. Baring) would nevertheless confess that he saw symptoms which led him to doubt whether the present period was exactly the one for introducing a 2½ per cent stock into the market. It was true that the right hon. Gentleman might have been encouraged in that undertaking by the success which had attended his reduction of the interest on Exchequer bills to 1½ per cent. But he (Mr. Baring) did not feel sure that that latter operation was not a hazardous one; and he could not help thinking that the right hon. Gentleman might in the month of June find it very difficult to maintain that low rate of interest on those bills. He need not remind the right hon. Gentleman that if his present proposal should not prove to be successful, it would be much better it had never been made; for it would then have the effect of needlessly unsettling men's minds, and giving a stimulus to all kinds of schemes which no one could regret more than the right hon. Gentleman himself. [The CHANCELLOR of the EXCHEQUER: Hear, hear!] Whether that was or was not the right moment for the adoption of such a scheme, he must bow to the decision of the right hon. Gentleman. But then came the question—was the mode which he had selected the best he could have chosen? Now, without wishing to
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say anything derogatory to the knowledge and the talents of the right hon. Gentleman, he must confess that when the Resolutions first came into his hands, be was at a loss to understand what the right hon. Gentleman intended to do. They contained a little of everything. The first Resolution seemed to be framed for the purpose of reducing the debt, the next for increasing the debt, and the third for leaving the debt just where it was. The right hon. Gentleman said he wished to consult people's tastes. Now, he (Mr. Baring) doubted whether, in financial questions, the Chancellor of the Exchequer ought to do otherwise than form his own opinion as to his own object, and carry it into effect by the most simple propositions. But in the present case he considered the right hon. Gentleman's propositions far too complicated. He ought to have made up his mind whether it was worth while to increase the debt for the purpose of diminishing the interest, and simply to have made that proposal—or he ought to have proposed a reduction of the nominal amount of the debt, by a guarantee of the existing interest, or nearly the existing interest. The right hon. Gentleman proposed, under these circumstances, and with an increase of the principal of the debt, to issue a 2½ per cent stock. To that proposal he (Mr. Baring) had a very strong objection, because it involved an increase of the national debt without a strong or valid reason. The right hon. Gentleman said he was disposed to reduce the amount of 2½ per cent stock to 20,000,000 l. Now, the more the right hon. Gentleman reduced the amount of stock, the more limited he would make the market, and the less likely would he be to succeed in his operation. The price of the stock would depend entirely upon the market, and a too limited amount would counteract the object which the right hon. Gentleman had in view. The right hon. Gentleman said if the Committee would agree to it he was willing to apply the sum which he would save in the shape of interest to the creation of a sinking fund, which would provent the future increase of the capital of the debt. Now, he (Mr. Baring) was very much afraid that in moments of distress and pressure the sinking fund would be destroyed, and that the debt would be permanently increased. He should also remind the right hon. Gentleman that there was one point which he seemed to have omitted from his calculations. In his financial statement on Monday evening, he had reckoned on a saving

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of 100,000 l. from the proposal then before the Committee; but that saving could not be effected if the reduction of the interest on the debt were to be applied to the creation a sinking fund. That was a point of some importance, as the right hon. Gentleman had allowed himself, in his financial statement, a surplus of only 493,000 l. Of that sum 200,000 l. was derived from casual sources; and as he would diminish the remaining 293,000 l. by a sum of 100,000 l., he would have a surplus of only 193,000 l. derived from permanent items of taxation. It appeared to him, therefore, that that was a state of things which it would not be desirable to establish. The right hon. Gentleman had suggested a number of plans of his own, and had promised to take into consideration a number of others which had been suggested to him. His plan appeared to be a complication of schemes—a most ingenious puzzle; and he did not think they would be able to understand what they were required to vote upon. With respect to the third proposal of the right hon. Gentleman—the proposal for the issuing of a number of transferable bonds—he should say that he could see no objection to such a scheme, although he believed it would be impossible to decide at present whether the right hon. Gentleman would find for those bonds as great a demand as that which he anticipated. The whole success of the scheme depended on this—were the people holding stock so frightened at the danger of reduction—did they anticipate so permanent a reduction in the rate of interest that at a year's notice they would convert their 3 per cents into a fund bearing a less interest? He was totally at a loss to understand the calculations of the actuary to whom the right hon. Gentleman had referred, because, if he meant to say that 110 l. stock, bearing 2½ per cent, was only worth 91¾l., it was absurd, if 3½ per cent stock at 82 l. 10 s. was worth 97 l. The right hon. Gentleman thought the bonds would bear an extraordinary value on account of the power of transferring them without any formality beyond that of passing them from hand to hand. But it had been stated that the very same kind of commodity existed in France and Holland, and bore about the same value as ordinary stock. Why, then, should any difference exist here? He thought they would circulate in competition with the debentures of first-rate railway companies, which gave a higher rate of interest with undoubted security.
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The right hon. Gentleman said they would be easier to borrow upon than other commodities. Now he (Mr. Baring) doubted that assertion. Men borrowed on those commodities which were most easily saleable, and he believed that a man would be able to borrow more easily upon the old 3 per cents than upon transferable bonds. As to the difficulty of transferring stock for the purpose of obtaining temporary loans, every one knew that it was of no importance at all. The right hon. Gentleman imagined that he would find great markets in Liverpool, Manchester, and Leeds; but the transactions in such towns were very much guided by the London prices, and the facility of the electric telegraph rendered the transfer most easy, wherever the bonds might be. He considered the plan of the right hon. Gentleman too complicated. But his great objection was the unnecessary increase which it would cause in the national debt. He did not think such an increase at this particular time at all justifiable. Whatever might be the talents of a Chancellor of the Exchequer, he did not think the Committee ought to follow him in making such experiments. His belief was, that while we ought to be economical in our expenditure and chary in our taxation, we ought not to indulge in that worst of all extravagances—the increase of our liabilities and engagements; we ought not, in attempting to create a market for 2½ per cents, to commit ourselves to an increase of 10,000,000 l.—to an amount originally proposed without any limit. But whether the amount should be 10,000,000 l. or 50,000,000 l. the principle was the same; and he should regret to see a British Parliament, and a Committee of the House of Commons, hold up to the world that in the time of our prosperity we were disposed, under no emergency, for no very great result, to sanction a principle which he considered most objectionable, he had almost said dishonest.
MR. W. WILLIAMSsaid, that if the right hon. Chancellor of the Exchequer now succeeded in breaking down a portion of the 500,000,000 l. of 3 per cents, he would be enabled, at no very distant time, to effect possibly a reduction of the remainder. He (Mr. Williams) could scarcely imagine a state of things in which the funds would be sufficiently high to enable a Chancellor of the Exchequer to effect a reduction of interest on the whole of that amount. If the right hon. Gentleman

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could succeed in operating on any considerable portion in the first instance, they might hope at no distant time for some such operation as that by which the right hon. Member for Cambridge University (Mr. Goulburn) had effected his conversion in 1844. It might be said that even if the right hon. Gentleman succeeded with 100,000,000 l., there would still be 400,000,000 l. to attack. But then it should be recollected that a vast proportion of that amount was in the hands of parties who could not become dissentients. Taking the proposition of the right hon. Gentleman as a whole, and so ultimately to reach the remainder of the debt, it was in his opinion the interest of the Committee to support it.
MR. LAINGsaid, that the subject under discussion was reduced to a simple issue, namely, whether it was or was not desirable to create a 2½ per cent permanent stock, to serve as a barometer to test the public credit. If so, it was necessary to pay a price to effect the operation, and the only question was how that price was to be paid. The object of the Chancellor of the Exchequer was the most economical mode of purchasing it. If he were to sell 2½ per cent stock in the market at a discount, or borrow the money, he would certainly increase the national debt by a much larger sum than it was now proposed to do. The only remaining question was whether we would pay the price which the operation would cost, or throw it on posterity. It was contended by the hon. and learned Gentleman (Sir F. Kelly), who opened the debate with so much ability, that the new stock would present such superior advantages, that no one would be found to take Exchequer bonds. In this opinion he did not agree, for it was the opinion of all the practical men with whom he had conversed on the subject, that Exchequer bonds would be more in demand than any other kind of stock offered by this conversion, and that it would command a higher price, and would become the favourite stock of the two. Although he did not think the present was a convenient time for settling the conversion of the whole debt, yet he believed it was favourable for laying the foundation of a siege which might lead to a successful capitulation. If by this experiment they were enabled to lay the foundation of a conversion, he thought they might ultimately be in a position to effect a considerable reduction of our national burdens.
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He was of opinion, that although the discoveries of gold in Australia and California might produce a revolution in financial affairs, still he did not think they would effect such a change that money would never be dear again. It was quite possible that in ten or twelve years we might find ourselves in one of those cycles of prosperity, when we might be enabled to effect a very considerable conversion of the public debt. If so, much credit would be due to the Chancellor of the Exchequer, who had the boldness and confidence to propose such important changes.
CAPTAIN LAFFANsaid, that, however desirable it might be, even on a small scale, to create the 2½ per cent stock, and let it go into the market, yet it appeared to be completely settled that the advantage was not to counterbalance the greater disadvantage, in fact and in feeling, of adding to the nominal amount of the debt. He must confess he felt some surprise at the statement of the right hon. Chancellor of the Exchequer, that when the first and second propositions were submitted to an actuary, he had declared that the comparative value of the two propositions was, that the 110 l. stock paying 2½ per cent, redeemable forty years hence, was worth 91 l. 13 s. 4 d., and the 82 l. 10 s. stock paying 3½ per cent, also redeemable at the same period, was worth 96 l. 5s. 8 d., being equal to 4l. 11 s. 8 d. in favour of the 82 l. 10 s. 3½ per cent stock. He (Capt. Laffan) was at a loss to find upon what calculations these conclusions were drawn, because, from a calculation he bad made by the ordinary rules of mathematics, he had arrived at a different result. If the right hon. Gentleman had stated the nature of the case which had been submitted to the actuary, then the Committee would have had an opportunity of forming a better estimate as to the correctness of the conclusions he had drawn. From calculations which he had made, he found that 91 l. 13 s. 4l. was the same stock which represented a perpetual annuity of 2l. 15 s., and that 96 l. 5s. 8 d. was the stock which represented a perpetual annuity of 2l. 17 s. 9 d., therefore the question submitted by the Government to the actuary must have been, what was the value of a perpetual annuity of 2l. 15 s., and of a perpetual annuity of 2l. 17 s. 9 d. Consols, being in both cases at par? There was only one other point to which he wished to refer, and that was with reference to the price at which the Government were to issue

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Exchequer bonds. He found on looting to the 32 d clause of the Bill that no sum was named at which the Chancellor of the Exchequer was to issue them, and this was a point on which the Committee ought to have some information.
MR. J. B. SMITHsaid, he thought the right hon. Chancellor of the Exchequer had very properly availed himself of the present opportunity of abundance of money and the prosperity of the country to make an effort for the reduction of the interest on the national debt. The only question was, as to the best means of doing so. As to the first proposition, of offering 3½ per cent upon a stock of 82 l. 10 s., he saw no objection to that scheme, and he thought the right hon. Gentleman might have gone further in the same direction. He thought the time was come when they ought to make some effort for reducing the capital of the debt, and extinguishing it, if possible. He believed the public were prepared even to make some temporary sacrifice in order to gain that important object. As to the second proposition, that of the 2½ per cent stock, he had an insuperable objection to the increase of the capital of the debt. But the right hon. Gentleman proposed to capitalise the difference between the 2l. 15 s. he proposed to pay, and the 3l. we were paying now. He approved of that proposition, and he thought the right hon. Gentleman might carry the principle further, and by extending the period to ninety-one years, he might convert the whole into terminable annuities. But the whole question was so important that he thought a Committee should be appointed to try and discover some scheme by which the debt could be reduced with advantage equally to the creditor and to the nation. With regard to the 2½ per cent scheme, he certainly was in favour of the plan now proposed, that the difference between the 3 per cent stock and the 2½ should be capitalised, so that at the end of the forty years the nominal capital would be extinguished. He was happy to see that the right hon. Gentleman had seen the folly of his predecessors in adding to the capital of the debt, and he was therefore surprised he had fallen into the very course which he had himself deprecated. With regard to the Exchequer bonds, he thought it would be a most useful description of stock; but it was impossible to state whether they would circulate beyond a limited extent, until it was known whether at the end of
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the forty years they were to be payable at the option of the holder or of the Government. He was strongly in favour of their being payable at the option of the Government; but he would prefer having a Committee appointed to consider the whole question.
MR. J. A. SMITHsaid, he was glad to hear the observations of the hon. Gentleman who last addressed the Committee. He could not help thinking, little as he agreed with most of what had fallen from the hon. Member for Huntingdon (Mr. T. Baring), that there was too much truth in his observation that that House had been too indifferent to the subject of the reduction of the debt. He regretted that more had not been done in that direction, and that more attention had not been paid to the subject of terminable annuities. He cordially agreed with the hon. Gentleman the Member for Stockport (Mr. J. B. Smith), that the public would gladly submit to some temporary sacrifice in order to obtain the benefit of having the debt reduced at some fixed period. Let hon. Gentlemen consider that the keystone of the operations by which the right hon. Gentleman the Chancellor of the Exchequer proposed to get rid of the income tax in 1860 was the falling in of an amount of terminable annuities at that period, and they would see the full importance of this question. With regard to the subject before the House, he regretted that the hon. Member for Huntingdon, whose intimate acquaintance with the subject was so well known, had not alluded to one particular point on which the whole importance of the 2½ per cent stock depended. It was known to the hon. Gentleman, and to every one acquainted with the subject, that it was of the utmost importance to begin the creation of a 2½ per cent stock. Unless that were done, the conversion of the debt into a lower description of stock would be prevented, or at least would be considerably delayed. He appealed to the right hon. Member for the University of Cambridge (Mr. Goulburn) for the confirmation of this opinion, that it was of the utmost importance, in reference to the reduction of the annual charge, that a 2½ per cent stock should be created. If this experiment succeeded, it would be open to the Chancellor of the Exchequer, in case the present prosperity and case in the money market continued, to go on with a further reduction of stock at 107½, or 110 l. for every 100 l.; for though he was

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not so sanguine as some hon. Gentlemen, yet he could not deny the possibility of a further reduction in the value of money, and he thought it was the duty of the Government to be open to take the advantage of it. And, therefore, though he agreed in all that had been said respecting the impropriety of adding to the nominal capital of the debt, still, as he regarded this as a step in the right direction, he could not but cordially wish the experiment all success.
MR. HUMEsaid, he had heard with much satisfaction the statement of the right hon. Chancellor of the Exchequer, and he hoped he had put that statement on record in the form of a Resolution—that on no occasion should loans be raised lower than the current rate of interest, so as to add to the capital. On every occasion that the Chancellor of the Exchequer referred to, where that had been done, his voice had been raised against it. But the question now before them was, whether this ¼ per cent, which was to be raised by the transaction, should be established as a sinking fund. He confessed a good deal of his objections were removed if that were done. He had no objection to the first proposition before the Committee, that of the 3½ per cent stock; and he would willingly see that carried to any extent, and he would very gladly see a large portion of the debt converted into terminable annuities. With regard to the sinking fund of the ¼ per cent, one might say what did they gain by it? Why, they admitted this—the establishment of a 2½ per cent stock; and he thought the experiment was worth the risk.
MR. WILKINSONsaid, they had before them two propositions. The one was a good bargain for the stockholder, but a bad one for the public; while the other was a bad bargain for the stockholder, but a good one for the public. It did not require much forethought to know which of them the stockholder would prefer. He did not think that the creation of a 2½ per cent stock was of so much advantage as some hon. Gentlemen supposed; and with regard to the Exchequer bonds, if these were not redeemed at the option of the holder, he was afraid they would not float. Upon the whole, he thought it was yet too soon to attempt a conversion of the debt.
MR. J. B. SMITHsaid, he wished to ask if the right hon. Chancellor of the Exchequer had any objection to lay on the table the calculation of the actuary which
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he had read to the Committee, with the question on which it was founded? He could not help thinking that it must have been founded on some mistake.
The CHANCELLOR OF THE EXCHEQUERsaid, he quoted the answer of the actuary in answer to some observations of the hon. Gentleman opposite. His object was to show that there were elements in the calculation which were not reducible to figures, and he said that in what was reducible to figures, if the premises were so and so, then the results would be so and so. But the actuary did not undertake to calculate the risk of redemption from one year to another, as that must depend upon questions of war or peace—upon the case and prosperity of the country, or the reverse. He had only to say, in answer to the question of the hon. Member for Montrose (Mr. Hume), that he was prepared to bring up a clause which would give effect to the proposition he recommended.
MR. DISRAELI: Sir, when this question came before us first in the shape of a Resolution, as it is now in the shape of a Bill, the general impression was that Her Majesty's Government were about to deal with the great body of the public debt. That was the general impression. The sum that was to come under the immediate or contingent operation of the measure, whether in Consols or other denominations of stock, would be about 500,000,000 l. sterling, and there can be no doubt that when that impression first went abroad it was very startling. The subject was one of immense interest—as, of course, the unlimited conversion of the national debt must be considered, and if even on a limited scale, it is still of considerable importance. The popular idea on this subject is, that, at some happy moment, the Minister might reduce the rate of interest, if not altogether immediately, yet partially, and ultimately, to the rate of 2½ per cent; and no doubt the effects of that operation would be considerable. Let the Committee bear in mind what the effect would be. Instead of paying, as we do now, the sum of 15,000,000 l. sterling a year, we should save 2,500,000 l., and we should only pay 12,500,000 l. a year, and of course the country would anticipate from that operation the great and beneficial effects which would accrue from such a reduction of the national burdens. Now, let us see what will be the saving gained by this proposition of the Government. The plan has been slightly

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altered since I entered the House, but perhaps the Committee will allow me to read the sketch I made upon the proposition as it originally stood. I take the 30,000,000 l. 3 per cent Consols to be converted into new 110 l.; I take the 30,000,000 l. of the New Exchequer Bonds, and the 440,000,000 l. to be converted into capital at the rate of 82 l. 10 s. per 100 l., making altogether 500,000,000 l., for which we now pay 15,000,000 l. interest per annum. If the plan of the Minister be completed—and I presume to impress on the Committee that it is of the utmost importance in the consideration of these financial projects that we should consider them as complete—the effect would be this, that 30,000,000 l. at 110 l., paying interest at 2l. 15 s., would amount to 866,000 l. in round numbers; that 30,000,000 l. of Exchequer bonds at 2l.15 s. would be 825,000 l.; and the 440,000,000 l. with interest, 2l. 17 s. 9 d., would be 12,705,000 l., making altogether interest to the amount of 14,396,000 l. Now, deducting that from 15,000,000 l., which we are now paying, there would be an annual saving of 600,000 l. in round numbers. If the result were that these Exchequer bonds should displace Exchequer bills, there might be a considerable loss. But I will not take that as the probable or even possible result. If, then, the plan of the Government be carried into full effect, the result would be that this amount of annual charge would be guaranteed for forty years; that for all that time there could be no possible action on the debt, with the exception of a slight reduction on the Exchequer bonds; so that, with that exception, for forty years there could be no greater reduction than this 600,000 l. a year.
Now, I beg the Committee, before they decide on this proposition, to follow me while I put before them, as briefly as I can, some notes I have made of preceding operations on the national debt, and contrast the amount saved to the country by preceding operations with the project of the right hon. Gentleman now placed before us. In 1717, when the first conversion of the debt was made by Sir Robert Walpole, he dealt with dividends amounting; in round numbers, to 1,500,000 l.; the amount of dividends now to be dealt with is 15,000,000 l. The saving effected by Sir Robert Walpole in that 1,500,000 l. was 324,000 l. a year. The saving now to be effected upon 15,000,000 l. is only
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600,000 l. a year. That is an important consideration—one on which the Committee will not deem it inexpedient to reflect; and there was no specification in the Act of 1717 for any guarantee of the interest, which is an important point in all our calculations. If, then, you contrast the project of the right hon. Gentleman the Chancellor of the Exchequer with the plan of Sir Robert Walpole in 1717, it is clear that we do not by the present plan effect an arrangement that is nearly half so beneficial to the country. There was a further reduction of debt from 5 to 4 per cent in the 1st of George II. By it a saving of 340,000 l. a year was effected—more than half of the saving which is now proposed to be effected—and in this case, also, there was no guarantee. I am anxious to impress this fact upon the Committee, because the guarantee is here one of the most important elements in our calculation. Now I will take the conversion of debt which occurred in 1749, and which was effected by Mr. Pelham. He reduced the debt from 4 to 3 per cent, and the saving in that case was 565,000 l.; nearly as great a saving as will be effected if the whole of the present project be carried into effect. I believe that Mr. Pelham did give in this instance—I am speaking from memory—but I believe he did give a guarantee of seven years; but still that was a very limited guarantee in comparison with the guarantee of forty years to which our attention is now called. In all these conversions, then, the terms contrast favourably with those to which our attention is called by the present Minister. We approach now to more modern times—to the year 1822, when Mr. Vansittart effected a reduction of interest from 5 to 4 per cent. Let us see the capital with which he dealt, the saving which he effected, and let us consider the saving which is now proposed to be made. He had to deal with a debt of 159,000,000 l., and the saving which he effected amounted to 1,200,000 l.—that is to say, double the amount which Her Majesty's Ministers pretend by their present project to save. The consideration then given was a bonus of 5 per cent, making 4,400,000 l.—a sum not much differing in amount from that which the right hon. Gentleman has given as an alternative; and the guarantee in this case, though it occurred so recently as 1822, was only for seven years. The Committee will observe that in all these conversions of debt, from

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the first effected by Sir Robert Walpole to the last in 1822, the terms and the results were extremely different from those now under our consideration. If you look to the guarantee—and it is most important you should look to the guarantee—you find that it is limited, that it was given with hesitation, and that its termination was within the immediate experience of the generation that dealt with the operation. In 1824 a further amount of the capital debt was dealt with equal to 76,000,000 l., and the saving effected was about 400,000 a year—a considerable sum, especially when you contrast the capital dealt with, with the amount of 500,000,000 l., upon which a saving of only 600,000 l. is to be effected. The guarantee in 1824 was only for five years.
The Committee will observe that, with the experience amounting to nearly a century in these financial conversions, the Legislature acted with respect to guarantees with so much caution, and with such a deep persuasion of the responsibility of undertaking such an engagement, that before that period the guarantees never exceeded seven years, and that in 1824, after the financial experience of the French revolution, and of Mr. Pitt, the only guarantee given was for five years. These are important facts for the Committee to bear in mind, because, although it may not at first sight seem that a guarantee is an engagement of so much importance, it will ultimately be found to be a considerable element in all these arrangements. In 1830 there was a conversion effected, which was the first of those great operations which will ever render the name of the right hon. Gentleman the Member for the University of Cambridge (Mr. Goulburn) memorable in the financial history of this country. The right hon. Gentleman then dealt with a capital of 153,000,000 l. and effected an annual saving of 750,000 l. a year, and the consideration given was a guarantee of 3¼ per cent for ten years. An option was also given of 70 l. of a 5 per cent stock—an arrangement somewhat similar to the proposition of the first alternative of the present Chancellor of the Exchequer—and it is a remarkable circumstance that the amount of that stock subscribed for did not exceed the small sum of 500,000 l. In 1834 there was a small reduction, to which I will not further allude than to say that the principle of a guarantee was again applied, but only for six years. In 1844 there was the great reduction effected by
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the right hon. Member for the University of Cambridge. A capital was then dealt with of nearly 250,000,000 l.—half of the large amount which is—I will not say now under our consideration—but which forms the subject of our speculative anxiety. The consideration given was a guarantee of 3¼ per cent for ten years, and of 3 per cent for twenty years after, that is to say, that after the year 1854 there was a further guarantee for twenty years at the rate of 3 per cent; but in that great and successful operation the united guarantee only reached to thirty years.
Let me now place before the Committee the remarkable circumstances which contrast that period with the present. In 1844, when the right hon. Gentleman made those conversions, Consols were at 3l. 1 s. per cent interest, Exchequer bills were at 2l. 4 s., the balance in the Exchequer was 4,700,000 l., the floating debt was between 17,000,000 l. and 19,000,000 l., the capital, as I have previously stated, dealt with by the right hon. Member for the University of Cambridge was250,000,000 l., the immediate saving was 600,000 l., and the ultimate saving 1,200,000 l. a year. What is our position now in these respects? Instead of Consols being at 98½, they are above par; Exchequer bills, instead of bearing 2l. 4 s. per cent, now bear only 1l. 10 s. 5 d.; the balances of the Exchequer are, instead of 4,700,000 l., nearly double that amount; while the floating debt is actually lower at present than in 1844. Notwithstanding that the Chancellor of the Exchequer is thus dealing with the debt under so much more favourable circumstances, he only effects a saving of 600,000 l. upon 500,000,000 l. of the debt, and this too with a guarantee which will prevent him from operating on that large amount for forty years. What are the general circumstances of the country which can induce the Committee to authorise an arrangement which appears on the surface so improvident and so limited in its results as that which I have contrasted with all the operations which have preceded it? Is the rate of interest higher? Is the country less prosperous than at those times? The interest upon our floating debt is lower; the balances in the Exchequer are greater, the interest of money is lower, yet the right hon. the Chancellor of the Exchequer proposes an immense financial operation, which, if you pursue it to its possible termination—and unless it effects such results it is scarcely worth the

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discussion it is undergoing—only contemplates a Saving to the country of 600,000 l. a year for forty years. What I also object to in the propositions before the Committee is, that the right hon. Gentleman has himself settled the terms upon which these operations, possibly of so great an extent, and which influence so greatly the circumstances of the time, should be made. In my opinion it is the duty of a person in the position of the Chancellor of the Exchequer, wishing to effect such an object, rather to throw upon the public creditor the responsibility of offering terms which might be agreeable to him, than to come down to this House and peremptorily say, "These are the terms which I lay down, and these are the terms only which I can accept." The right hon. Gentleman says, "You may impugn the validity of my reasoning, and the position which I have adopted with respect to this question; but I have a sovereign object to obtain—I want to establish a 2½ per cent stock." I think the hon. Member for Lambeth (Mr. Wilkinson) touched that point in a proper manner. Nothing can be more important than a 2½ per cent stock, if you can obtain it by legitimate means, and if a 2½ per cent stock is the natural consequence of your financial condition. But there is nothing magical in a 2½ per cent stock, A 2½ per cent stock can be created and established at any time, if you choose to pay for it. If this is to be a factitious result, an artificial consequence, there is no Finance Minister, even in a time of war, when money is scarce and interest is high, who could not create a 2½ per cent stock, if he chose to do so. The question, of course, for the Committee is, what are the terms by which it is proposed this costly consequence may be best accomplished? I freely admit that it is the first duty of a Minister of Finance to consider the question of the interest of the public debt; and I think it is highly to the credit of the right hon. Gentleman that he has given all the energies of his able and creative mind to this subject. But the right hon. Gentleman knows full well that there is no great originality in attempting to deal with such a subject. The question is, how to deal with it at the right time, and to be able to deal with it in a manner in which you may effect your ultimate purpose. Now, the right hon. Gentleman has in this instance been ingenious, but premature. It is totally impossible, by any combination, however clever, by any device, however complicated
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and ingenious, to make the public creditor take a lower rate of interest than the state of the money market will authorise. It is quite impossible to suppose that you can succeed in digging "pitfalls" and making snares for the public creditor. There is not a more crafty creature in existence than the public creditor. You may give him all the alternatives which an ingenious mind can conceive, but the public creditor has a test for the value of his debt, and he will go to Capel Court, and will there find out exactly what his money is worth in the market. This brings me to a point which I think the Committee ought fairly to consider before it agrees to any of these proposed arrangements. You may rely upon it that all indirect attempts to deal with the public debt—I will not say will always fail, but will always be difficult, and that your arrangements as a general rule, on that subject, should be simple. If the state of the money market is such that you can deal directly with the rate of interest, it is unnecessary for us to enter at all into the subject; but if, from particular circumstances—the amount of the debt which you propose to act upon, and the artificial safeguards which surround it—you do not consider yourself justified in acting directly upon it, and must act indirectly, there is no more legitimate means, if you wish to establish a 2½ per cent stock, than by going fairly to the public and saying, "We want to establish a 2½ per cent stock, what is the guarantee in the present state of the money market, with 3 per cent as the established rate of interest, which you would require from the country for the establishment of this stock?" That is a simple proposition which the country would understand. It is possible that they might ask from you a very long guarantee, for aught I know longer than even forty years; but then you would be in a clear position of considering whether it was expedient, wise, and politic to grant such a guarantee; and that brings us to the important question of what are the prospects as to the rate of interest of money in this country; I will not now enter into any speculations on this subject; it is a question which has engaged the attention, not only in this but in other countries, of some of the deepest thinkers and profoundest political economists and inquirers into monetary matters who have, perhaps, ever flourished. But no one can deny that there are new phenomena in the present day with respect to

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these subjects which no previous Minister of Finance had ever had to deal with. When the right hon. Gentleman the Member for the University of Cambridge (Mr. Goulburn) proposed his great financial scheme, he knew what was the probable amount of the precious metals in the world. He knew pretty well what had been the cycles of commercial prosperity and adversity to which reference has been made this evening, he had naturally considered in all its ramifications, and all its possible results and bearings, the important question of terminable annuities. What are the present circumstances? Is there anybody who can calculate the present amount of the precious metals in the world, or what it will be in forty, thirty, twenty, or even ten years hence? The question of terminable annuities, to which the hon. Member opposite (Mr. J. B. Smith) has given in his adhesion to-night, while he at the same time recommended that the whole subject should be referred to a Select Committee—no great compliment, by the way, to the right hon. Gentleman the Chancellor of the Exchequer—has assumed a very different character in the estimation of some of the most important thinkers since the metallic discoveries; and it has become a question whether we should deal with that willingness with which we should have done ten years ago, with the conversion of the national debt into terminable annuities. My opinion is, that the country is not prepared to make any sacrifice at all upon the subject: it is rather disposed to watch what may be the consequences of these important changes which are rapidly and daily occurring. I will not presume to give an opinion upon the subject. All I ask the Committee to do is to remember that we are living in the midst of great changes, and that before these great changes took place the most successful Chancellor of the Exchequer never contemplated the guarantee of interest beyond twenty years, and that now, in the midst of phenomena which are perplexing our profoundest thinkers and most experienced statesmen, and agitating the hearts and exciting the hopes of nations and communities, we are called upon to enter into a guarantee for forty years at a rate of interest for a conversion which, if carried into complete effect and if perfectly fulfilled, will save only to the country 600,000 l. a year. Under these circumstances I think I am only doing my duty when I entreat the Committee to pause before they sanction
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this operation. I will not go into that important question, which greatly interests the public mind, and which has already greatly influenced the Committee, namely, whether we ought to increase the capital of the national debt. I do not think there are two opinions on the subject. Why, then, do you do it? What are we to gain by it? Are you in war—or in danger? Is Ireland starving? Is there a famine in the land? Are there any of these conjunctures, exigencies, or emergencies which might authorise you to do that which philosophy might condemn, but which the strong necessity of life must force you to adopt? The Committee is asked now to consent to increase the national debt merely for a financial caprice, and in order to gratify a laudable humour, but still for nothing which is either peremptory or urgent. This point has been so well urged by others that I do not press it. What, however, I do press upon the Committee is the absolute necessity of considering the nature of the guarantee—that that guarantee may be even of greater importance than the rate of interest itself—and that this is not the time when a guarantee of forty years fixing the rate of interest should be made. With these grave objections to the measure, I do not think the Committee are taking a very unfriendly part towards the Government if they ask them to pause, in order to reconsider the Resolutions. What has taken place with respect to these Resolutions since they were first introduced into this House? There have been already five important changes made in them. The right hon. Gentleman came down to the House, and, taking us somewhat by surprise, gave notice for a Committee to consider the Acts relating to the public debt. We all remember the excitement that was produced by that announcement. The Resolutions were circulated on the following day. In the first alternative the Resolution was as it now appears in the Bill before the Committee. The second Resolution, which was to establish this great desideratum of a 2½ per cent stock, was of an unlimited character, and would have extended to the whole debt. Great consternation, therefore, prevailed on the subject of the second alternative. The leading journal of the day announced to the country that there was a proposition to increase the national debt by the amount of 50,000,000 l. When we came down to the House to consider these Resolutions, by the courtesy of the hon. Member the

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Secretary to the Treasury, a second edition of the Resolutions was put into my hands, while he informed me, at the same time, that there were a few trifling alterations proposed to be made. Upon casting my eyes over the amended Resolutions I saw that the very subject which had agitated the City of London, and had created such consternation, had disappeared, and the second alternative was to be limited in its operation. I do not say the limit was not wise, discreet, and proper; but surely, irrespective of the fact that it is always as well to have time to consider Resolutions of this character, the very fact that before we had had any opportunities for considering them, so great an alteration should have taken place, was some reason why ample time should have been given not merely for the House, but for the Government, to consider the Resolutions to be submitted. In addition to the first proposal, of limiting the 2½ per cent stock to 30,000,000 l., another great change has now been introduced, by which the 3½ per cent stock has been limited also to 30,000,000 l. The circumstances of this alteration, however, have been satisfactorily explained by the Chancellor of the Exchequer—at least satisfactorily to me—and we may therefore say that this is the first night of the Resolutions being discussed. I understand, also, that there has been a third proposition made to-night, namely, that in order to meet the great objection felt against the consequences of the second alternative, namely, the increase of the national debt, an amount of 3,000,000 l. or 4,000,000 l. should be funded for the purpose of forming a "sinking fund." On such a proposition two considerations very naturally occur. In the first place, is it wise that there should be a "sinking fund" established upon such a principle? Are we, in 1853, to be borrowing with one hand, in order to pay with the other? Is it, in an age of financial reform, that you are to re-establish such a sinking fund? There is also another important consideration—when such announcements are made without notice, what effect will such a sinking fund have on the financial estimate offered by the right hon. Gentleman the other night? The hon. Gentleman the Member for Huntingdon (Mr. T. Baring), who always addresses this House with that authority which his great talents and experience command, called the attention of the Committee and the country to the financial consequences of the sudden change—a change not announced when the House met this evening, but in the heat of
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debate. My hon. Friend called attention to the financial consequences of the change, to the consequences on the surplus—for we have a surplus—of 460,000 l. We have 460,000 l., 100,000 l. of which is formed by a possible saving of interest of the public debt if this plan of 2½ per cents is adopted.
The CHANCELLOR OF THE EXCHEQUERwas here understood to remark, that the surplus was derived from the whole operation of his scheme.
MR. DISRAELI: Whether the amount of saving was on the whole, or on only part, of the propositions, the result is the same so far as my argument is concerned. How the right hon. Gentleman's surplus is made, from what source it is derived, and how formed—if it is only 460,000 l.—I cannot congratulate him on it, for I recollect the time when such a surplus would not have been received with much satisfaction. But we have already three important changes in an important measure, which by an unusual ebullition of temper on the part of the noble Lord (Lord J. Russell), and an unintentional mistake on the part of the right hon. Gentleman, we are not allowed to discuss. Not only has the limit of the 2½ per cents been placed at 30,000,000 l., and a similar limit placed upon the 3½ per cents, and a sinking fund been proposed, but a fourth proposition had been made to-night, by which the 2½ stock was to be limited to 25,000,000 l., and not to 30,000,000 l. as at first proposed. I do not say that these changes are not wise, discreet, and proper, but I think they show clearly that the scheme has not been sufficiently matured, and that there has not been given to the subject that consideration, that large devotion of time and thought, which becomes a question of this nature; and that when a Minister of Finance and his Colleagues deal with so vast a question as the public debt, and deal with it unnecessarily, it is just as well that the proposition which they put before the Committee should show some better evidence of consideration and of care. All I want to do is this—I do not want to make unnecessarily a party division on the subject; but I ask the right hon. Gentleman not to precipitate this question, and to give it further consideration, and not to let us be forced to vote on the Amendment of my hon. and learned Friend (Sir F. Kelly). What is that Amendment? It is one which says virtually that in all these changes and conversions of the public funds,

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and reduction of the public interest, it is not wise, expedient, or politic, to increase the capital account of the public debt in this country. If there is a division I must vote for the Amendment, for the sake of the principle which it enunciates, and which I think is a sound and salutary one. But I say at the same time I hope to be prevented from that division, by the right hon. the Chancellor of the Exchequer telling us—and it is no great condescension—that he will give to this subject more time and more thought than it has yet apparently received.
MR. GOULBURN: Sir, I must return to the right hon. Gentleman the Member for Buckinghamshire my thanks for the complimentary expressions he has used towards me respecting my conduct when in office. I fear that I shall make but an unworthy return, for it will be my duty, in commenting upon his speech, to use that freedom of speech which is the privilege of hon. Members of this House in the discharge of their public duty. The right hon. Gentleman began his speech by telling us what was the state of public opinion upon the subject of the reduction of the national debt. He told us that there prevailed among the public a general opinion that we could at once deal with 500,000,000 l. of debt, and effect a great reduction of interest. I will not dispute with the right hon. Gentleman whether that is a correct view of public opinion upon the subject; but I will say, whatever public opinion may be, if it is in error upon subjects of this kind, it is our duty, as representatives of the people, to bring the matter so fairly before them in our discussions as to correct their errors by our superior knowledge, and afford to the people, what they are always ready to accept, accurate information as to what is our true financial situation. In this I think the right hon. Gentleman has failed. The right hon. Gentleman thought it right to consider the proposition of my right hon. Friend as a measure which was absolutely complete; and he made a statement of what, in his opinion, would be the very limited results of it. He stated what my right hon. Friend was to save by these arrangements—that he would save so much of annual interest upon 30,000,000 l. of Exchequer bonds, and so much on 30,000,000 l. of 2½ percent stock, and upon the remainder when the conversion of 440,000,000 l. of 3 per cents into 3½ per cents should be carried; and then he triumphantly exclaimed, "a saving of 600,000 l. only in
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annual interest!" The right hon. Gentleman must have forgotten that he was sitting by the side of my hon. and learned Friend (Sir F. Kelly), whose argument has been, that what we were to seek to obtain was a reduction of the capital of the national debt. If in this view 440,000,000 l. of the present debt is to be converted into 3½ per cent stock at 82 l. 10 s. per cent, the right hon. Gentleman ought to have stated the reduction of capital by that operation as one of the financial results of the scheme, in order that the Committee might have had before it, not merely the amount of annual interest that would be saved, but the amount of capital that would be reduced—an advantage which I should have thought the right hon. Gentleman would be one of the first to admit. But the right hon. Gentleman, anxious to depreciate the value of the measure of my right hon. Friend, endeavoured to do so by contrasting the saving of annual interest which it would effect with that effected by antecedent measures of a similar nature, and he began with the Administration of Sir Robert Walpole. He told us that Sir Robert Walpole, upon a limited amount of debt, the interest upon which was 1,200,000 l., effected a reduction of 300,000 l. The right hon. Gentleman's own statement ought to have shown him he was making a representation which could not be applicable to the present case. The whole sum, he said, which Sir Robert Walpole was dealing with was 1,200,000 l., and he effected a saving of 300,000 l., or one-fourth of the whole. Now, how was that effected? Why, in Sir Robert Walpole's time the debt was paying 6 or 7 per cent interest, and when you reduce from 6 or 7 per cent to 5 or 4, of course you make a larger saving than when you reduce the interest from 3 per cent to 2½. The same principle applies to some of the succeeding reductions to which the right hon. Gentleman adverted. There were reductions from 5 per cent to 4, and from 4 to 3½; and if you are to suppose, and the country is to be led to suppose, that as you advance in the reduction of the debt you can in each succeeding stage realise the same actual amount of saving, I say, so far from correcting public opinion, the right hon. Gentleman is disseminating through the public a most grievous cause of error and general dissatisfaction. Let us put the most favourable case. Let us suppose the interest of the debt reduced to 1 per cent, and hon. Gentlemen wish to make a fur-

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ther reduction. Do you expect you could make a saving of 2 or of 1 per cent? It is an absurdity. I say, therefore, that the contrast of the right hon. Gentleman as to the actual amount saved in each case is not only fallacious, but that it cannot escape without the public being convinced of its error. Then the right hon. Gentleman, in order to contrast former measures with that of my right hon. Friend the Chancellor of the Exchequer, came down to the period at which Mr. Vansittart, afterwards Lord Bexley, effected a reduction. He admitted that Lord Bexley did at that time give a guarantee to a certain extent; but he told us—what I was surprised to hear from a right hon. Gentleman who bad filled the office which he has filled—that Lord Bexley never increased the capital of the public debt by the measures he proposed with a view to reduction of interest. Why, in the year 1824, Lord Bexley gave 138 l. 3 per cents for every 100 l. 5 per cents, thus increasing the public debt—not by a trifling sum, but by no less than 38 per cent—upon the whole of the operation. So far, then, as the case of Lord Bexley goes in opposition to my right hon. Friend, put in its most exaggerated form, the reductions which he proposes will fairly bear comparison.
MR. DISRAELI: I was referring to, and I mentioned, the amount of the bonus given by Lord Bexley.
MR. GOULBURN: I am referring to the operation of the year 1824. Then the right hon. Gentleman came down to the period in which it was my own fortune to effect a large reduction of the debt under circumstances peculiarly favourable to such an operation; and he states that a guarantee was given at that period, that there should be no further reduction until a certain period had elapsed, but that it was comparatively short as compared with that which my right hon. Friend now proposes. Now what I have already stated as to the reduction of interest, applies to the question of guarantee. As you advance in the reduction of interest on the debt—that is, as you require those who have a smaller interest to make a considerable sacrifice—you must offer them some corresponding advantage in order to induce them to accept the terms you propose, for if you propose to make any considerable reduction, without some corresponding advantage of this sort, you will fail in the operation. I believe that if in 1844 I had not given the
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protection of thirty years' guarantee to the holders of the 3½ per cents from the period at which the Bill passed, the measure I introduced, which Parliament was pleased to sanction, and which was so successful, would probably have been a failure. But there are particular reasons, it is said, why guarantees are objectionable; and I will admit, for the sake of argument, they are. But there are circumstances why the guarantee until the year 1894 carries no apprehension in the mind of any man who calculates rationally as to the probability of the future. Take the proposition of my right hon. Friend the Chancellor of the Exchequer. Suppose he said the whole 500,000,000 l. ought to come under the arrangement, which I do not think he apprehends as likely to take place; but suppose it does take place, and the stock is irredeemable until 1894, and there are then 500,000,000 l, of stock upon which you can operate—will that interefere with the reduction of the national burdens? Quite the reverse. In the year 1874 you have 250,000,000 l. which will, at that time be released from guarantee, and upon which you may reduce the interest with advantage, because having such a sum to deal with it will be much easier to manage than it would be upon the enormous amount of the total sum. Having the advantage, under the arrangements of 1844, of 250,000,000 l. open to reduction in 1874, it is no disadvantage that the remainder of the national debt should not be redeemable till 1894, and that you may then deal with it without twelve months' notice The right hon. Gentleman (Mr. Disraeli) stated that there is a great resemblance between the present period and that when the last reduction was effected; but I am sure he will give me leave to dissent from that proposition. In the two cases in which I dealt with the public debt, I had to deal with a debt which with the exception of a small portion, was entirely open to reduction without any notice whatever. I had nothing to do but to signify to the public the terms which the Government were prepared to take, and to ask those who dissented to state the fact of their dissent. There was no difficulty, therefore, when the proposition was made, as to the moment at which it could be adopted; the public debt did not run any hazard during the intervening period which might arise from an altered state of the country; from apprehensions of war, or disturbances abroad, or anything which

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might disturb financial arrangements. But at the present period we stand in a totally different situation. We have this 500,000,000 l. of debt upon which we are anxious to reduce the interest. Upon the Consolidated Annuities we are bound to give the holders twelve months' notice; and as my right hon. Friend has said, "Where is the Minister who will dare, in the present state of the world, to say that, twelve months after such a notice being given, he will be prepared to redeem 300,000,000 l. of debt?" The Reduced Annuities stand upon a different footing. Here you are obliged to give six months' notice of reduction; but he must be a bold Minister who would undertake, this day six months, to say that the state of our monetary condition would enable him to effect the reduction. The difference between the two positions, then, is this—that in 1844 the Government had the power of free action without the risk of intervening circumstances, whilst at this moment they have no power of action at all beyond that of holding out such terms as the public may be willing to accept, from time to time as circumstances may render it advisable. This is the justification of the measure brought in by my right hon. Friend. He did not urge it as a measure to effect larger reductions in the national debt upon the moment; but he said, and said truly, "There is in the present state of the monetary transactions of the world, a prospect of the terms which the Government can hold out, of the holders of the irredeemable debt transferring their claims into a debt which may become redeemable being accepted; and I will recommend the House to adopt my proposition." And in putting forth that proposition my right hon. Friend was justified in offering a variety of propositions, any of which holders may accept. It is quite true, as the right hon. Gentleman the Member for Buckinghamshire says, there is no more wary animal than the gentleman upon the Stock Exchange; he is able to calculate accurately the chances of profit he may derive from one stock or another, and he will probably outwit the public in the particular bargain which he makes. But, on the other hand, these gentlemen, wary as they are, are of different classes, and the stock which suits one individual may not suit another; and there are advantages unconnected with pecuniary profit which will make one or other of the stocks acceptable to the public. This is also a justification of the measure
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of my right hon. Friend. Shackled as he is, unable to compel the reduction of interest with respect to those who hold in the 3 per cents Consols and in the Reduced, he has no alternative but, by yielding some advantage, to induce them voluntarily to accept either one alternative or the other. The right hon. Gentleman (Mr. Disraeli), concurs with those who have expressed the opinion that it is of the highest importance to establish a 2½ per cent stock. The question then is, what is the price it is desirable to pay for an advantage of this description? Some Gentlemen have said they did not see the particular advantage of it. But I think it must be apparent. To myself it comes with the strongest force, because if there had not been a 3½ per cent stock when I effected the reduction of the 4 per cents, I should have been embarrassed with greater difficulties in the execution of the measure than I actually found. The question then is, is the price which my right hon. Friend proposes, of 10 per cent upon the capital to be created, more than the advantage he is likely to derive from the creation of 30,000,000 l. of 2½ per cent stock? My right hon. Friend has suggested, if it be thought inexpedient to increase the capital of the debt, that the object may be easily accomplished by an arrangement which, while it gives 2l. 10 s. per cent to the public creditor, would place in the hands of the Commissioners for the Reduction of the National Debt the surplus interest which would more than replace the capital which the public might be called upon ultimately to redeem. Whether it will be the pleasure of the Committee to adopt that suggestion or not, I will not say. If you take the whole interest there is an increase of surplus which will render a larger sum available for the reduction of the national debt, the saving upon the particular debt being in addition to the surplus from which debt is to be redeemed; but do you wish to have a separate account upon the 2½ per cent stock alone, my right hon. Friend has no objection. This will, therefore, obviate the feelings of those who, frightened at a name rather than a reality, are anxious to avoid anything like an increase to the capital of the national debt. But the right hon. Gentleman (Mr. Disraeli), says my right hon. Friend has been premature in his proposition; that he ought to have waited for some future and more favourable period when he might have effected a greater reduction. I wish the right hon. Gentleman

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had prefigured the period at which he thought it safe that the Chancellor of the Exchequer might give the six or twelve months' notice that stockholders in the 3 per cents would be paid off. If you cannot designate such a period, the sooner you give them the option of converting their stock voluntarily, the better for the country. It has also been objected by the right hon. Gentleman that changes have been made in this measure during its progress. I am aware it is easy where alterations are made to inculpate those who made the original proposition; but I am quite unable to judge of what is the utility of going into Committee at all if it be not to receive suggestions; and, if they are not inconsistent with the principle, and do not interfere with its action, to adopt them. The notice of the limitation upon the 3½ per cent stock did not affect the principle of the Bill. So it was with the sinking fund of 2½ per cent. This was far from infringing on the principle of the Bill, or affecting its operation. The right hon. Gentleman concluded by adverting to the smallness of the surplus provided by the Budget; but he will permit me to say I did not expect such an observation from such a quarter. At all events my right hon. Friend has this advantage, that his surplus is derived from legitimate sources. It is not derived from the application of funds which do not form part of the revenue of the country. I shall sit down by expressing my confidence in the experiment which my right hon. Friend is about to make. I trust the Committee will sanction it, for by accepting it they will, in a greater or less degree, be laying the foundation for future reductions of the national debt.
SIR JOHN PAKINGTONsaid, that after the able manner in which the subject had been discussed, it would be presumptuous in him to detain the Committee for more than a few minutes. He wished to advert, however, to what had fallen from the right hon. Gentleman the Member for the University of Cambridge (Mr. Goulburn), and he was the more desirous of doing so because he agreed with his right hon. Friend (Mr. Disraeli) in attaching the greatest weight to whatever fell from the right hon. Gentleman on financial subjects. The right hon. Gentleman (Mr. Goulburn) had hardly acted fairly in reproaching his (Sir J. Pakington's) right hon. Friend (Mr. Disraeli) for having omitted to state the bonus which Lord Bexley offered to
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the stockholders. His right hon. Friend had mentioned the bonus of 5 per cent which Lord Bexley gave in 1822, when dealing with the large sum of 159,000,000 l. But what was the amount in question when the 38 per cent was given? Why, only 1,000,000 l. With that view he should refer to what fell from the right hon. Gentleman the Member for the University of Cambridge in 1844, when he proposed his most important operation in reducing the 3½ per cents. The right hon. Gentleman now said he thought the Chancellor of the Exchequer right in submitting to Parliament and the country several alterations, but that was not the course pursued by the right hon. Gentleman in 1844. On referring to the speech of the right hon. Gentleman he found the plan of the 2¼ per cent stock, now produced by the Chancellor of the Exchequer, as nearly the same as possible under the different circumstances of the case. The very same plan now proposed for the forcible reduction of the 3 per cents was then suggested by the right hon. Gentleman as one of the possible plans in reducing the 3½ per cents. The right hon. Gentleman said—
"Another plan, very much entertained by the public, and on which much has been said in its favour, is to create a 2½ per cent stock, and to give the holder of every 100 l. in the 3½ per cents such an amount of the 2½ per cent stock as will produce an interest of 3 per cent per annum."—[3 Hansard, lxxiii. 737.]
At another part of his speech the right hon. Gentleman said—
"Another principle on which I am determined to act is this—that I do not think it just to purchase present advantage at the expense of burdens to be sustained by those who come after. I think with respect to debts incurred in case of war, it is quite legitimate that posterity should bear their share of the burdens. But to incur additional debt in times of peace, and thus burden those who come afterwards, with the view of obtaining greater relief for ourselves, is a course which I say I myself reprobate, and I am sure when I mention it I shall meet with the general concurrence of those who hear me."—[3 Hansard, lxxiii. 737.]
The right hon. Gentleman then mentioned that the amount of additional debt in that case would be 50,000,000 l. As the Chancellor of the Exchequer introduced this scheme, the addition to the debt would have been just the same; but one of the many modifications was to limit the issue to 30,000,000 l., and now he understood that it was to be still further reduced to 25,000,000 l. Whether it was to be 30,000,000 l. or 25,000,000 l. at first, he

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understood the scheme was put forward as an experiment to be further extended, supposing it proved acceptable to the public. The right hon. Gentleman the Member for the University of Cambridge, in the same speech said—
"A great nation like this may hereafter be engaged in wars and beset with difficulties, and, under necessity, obliged to recur to the money market to support so large an expenditure, and whatever desire there may be to effect an immediate saving, I say that to march on in such a course would be fatal to the permanent interests of the country."—[3 Hansard, Ixxiii. 738.]
He thought no language so strong had been used on this occasion on that side of the House. The right hon. Gentleman, as he understood, distinctly said, in 1844, that the principle which the Chancellor of the Exchequer now adopted was a principle which he then declared he must reprobate, and to march on in such a course would be fatal to the permanent interests of the country. Such being the plan of the Chancellor of the Exchequer, he could not help claiming the opinion of the right hon. Gentleman the Member for the University of Cambridge. He understood the right hon. Gentleman held a different opinion to-night, and believing it fair to choose between the opinion of 1844 and the opinion now, he was glad to find his views supported by so high an authority as the right hon. Gentleman.
SIR FITZROY KELLYsaid, he wished to set himself right on certain points adverted to by the right hon. Gentleman the Chancellor of the Exchequer; but, first, it was essential to notice an incidental point which had arisen with reference to the statement of the right hon. Gentleman on Monday night. He certainly understood the right hon. Gentlemen to say on that occasion that there would be a saving of 100,000 l. by the operation of the Bill. Of course he did not imagine, nor did he know that any one imagined, that the right hon. Gentleman sought to identify that particular sum of 100,000 l. to be saved with 100,000 l., part of the surplus anticipated in the present year. But, if he understood the statement of the right hon. Gentleman, the deduction of 100,000 l. from the credit side of the Government account would reduce by 100,000 l. the surplus anticipated, and would reduce the receipts of the Exchequer during the whole period this operation remained in force. And now, if he understood correctly the statement of the right hon. Gentleman, the 100,000 l. would
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not be entirely taken away, but would be reduced by a sum of 87,000 l. a year, supposing the substitution of one plan for the other, as the right hon. Gentleman had to-night agreed. The right hon. Gentleman had also appeared to imagine that he had entertained and expressed a very strong opinion as to the early probability of a reduction of interest on the capital of the country. He begged to say he had not presumed to express—he could hardly venture to say he had formed—any conclusive opinion on that subject. But that there was a general and extensive, and perhaps a well-founded expectation in the mercantile community, and in the public mind, that a very considerable reduction in the interest of money would shortly take place, was conclusively proved by the very ingenious and exact calculation of the right hon. Gentleman himself on a former occasion, by which it appeared that the mere guarantee of the 3 per cent stock, which existed and was payable for twenty years, was worth some 3l. on every 100 l. If the assurance of 3l. per cent interest remaining unchanged for twenty years was worth 3 per cent, it was not extravagant to anticipate a great change would shortly take place. The proposal of the right hon. Gentleman mitigated, but did not entirely remove, the objections, to which all the Committee seemed to have acceded, on the increase in the capital amount of the debt. That plan still left wholly unaffected one great objection—that an undue and extravagant amount of interest, and for an unreasonable period of guarantee, was proposed by this bargain. And on this point he appealed to hon. Members opposite, who seemed occasionally to assume the special office of guardians of the public purse, if they could sanction the proposition of the right hon. Chancellor of the Exchequer. The right hon. Gentleman charged him with having expressed himself with undue confidence in the expression of his opinions. If he had done so, with a single exception he regretted it; and that exception, from which he did not at all feel disposed to shrink, was in expressing his belief that no man having 100 l. to invest in one or the other of these proposed stocks, would invest it for the receipt of 2l, 10 s. interest with a capital of 100 l., if he could obtain 2l. 15 s. with a capital of 110 l. The right hon. Gentleman had entirely misapprehended the observations he had made on the subject of the transferable bonds, seeming to suppose that he had expressed an

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opinion that the bonds might be issued to an unlimited extent; what he said was the very reverse—that he believed none of the bonds would be accepted by the public, so long as anything remained to be accepted under the two other alternatives offered by the Bill. The right hon. Gentleman still persisted in arguing that there was something in the nature of these transferable bonds that would confer so great a value on them as to make the propositions No. 2 and No. 3 identical, and had omitted to notice his statement, confirmed by his hon. Friend the Member for Huntingdon (Mr. T. Baring), that in all the countries where similar bonds existed they were precisely at the same price and of the same value as registered stock. Upon what ground, therefore, the right hon. Gentleman could imagine that when he should issue these bonds they would be at a premium of some 10 per cent, to say nothing of the difference of interest below stock of the same character, he was at a loss to imagine. He felt that every object the right hon. Gentleman had in view could be effected without resorting to this proposed extravagant bargain, and without increasing the national debt. If the right hon. Gentleman was correct in believing that these Exchequer bonds would be accepted by the public, the state of the money market, and the credit of the country, must be such that he could obtain at least 30,000,000 l. at 2½ per cent; and the only question would be, whether the guarantee was for a sufficiently long period of time. If the state of the money market was such that he could issue 30,000,000 l. of transferable bonds at 2½ per cent, he might make the experiment of creating a 2½ per cent stock by the issue of Exchequer bonds, placing them on the same footing as in other countries, where they were convertible at the pleasure of the holder, into registered stock, and registered stock was convertible into these bonds, at the pleasure of the holders. Insomuch as he understood the Chancellor of the Exchequer still persevered in the second branch of this clause, namely, that part which proposed to create a 2½ per cent stock upon capital of 110 l. and guaranteed interest for forty years of 2l. 15 s.; and inasmuch as, independently of the objection that it would increase the national debt, that appeared to him a bargain most unjust, and most extravagant as against the State; and in favour of the public creditor, he should oppose the clause and divide the Committee upon it.
Question put, "That the words proposed to be left out stand part of the clause."
The Committee divided:—Ayes 234; Noes 175: Majority 59.

List of the AYES.

A'Court, C. H. W.

Egerton, Sir P.

Adair, H. E.

Ellice, rt. hon. E.

Aglionby, H. A.

Elliot, hon. J. E.

Alcock, T.

Emlyn, Visct.

Anderson, Sir J.

Esmonde, J.

Anson, hon. Gen.

Evans, Sir De L.

Atherton, W.

Evans, W.

Baines, rt. hon. M. T.

Ewart, W.

Ball, J.

Fagan, W.

Barnes, T.

Feilden, M. J.

Beckett, W.

Fergus, J.

Bell, J.

Ferguson, Col.

Berkeley, Adm.

Ferguson, Sir R.

Berkeley, hon. H. F.

Ferguson, J.

Berkeley, hon. C. F.

Fitzgerald, J. D.

Bethell, R.

Fitzgerald, W. R. S.

Biddulph, R. M.

Fitzroy, hon. H.

Biggs, W.

Forster, M.

Blackett, J. F. B.

Forster, C.

Brand, hon. H.

Fox, W. J.

Brocklehurst, J.

Freestun, Col.

Brockman, E. D.

Gardner, R.

Brotherton, J.

Gibson, rt. hon. T. M.

Brown, W.

Gladstone, rt. hon. W. E.

Browne, V. A.

Glyn, G. C.

Bruce, H. A.

Goodman, Sir G.

Bulkeley, Sir R. B. W.

Goulburn, rt. hon. H.

Burke, Sir T. J.

Grace, O. D. J.

Butler, C. S.

Graham, rt. hon. Sir J.

Byng, hon. G. H. C.

Gregson, S.

Cardwell, rt. hon. E.

Grenfell, C. W.

Caulfeild, Col. J. M.

Hanmer, Sir J.

Cavendish, hon. G.

Harcourt, Col.

Chambers, M.

Hastie, A.

Chambers, T.

Hayes, Sir E.

Chaplin, W. J.

Headlam, T. E.

Charteris, hon. F.

Heard, J. I.

Christy, S.

Heathcoat, J.

Clay, Sir W.

Heathcote, G. H.

Clifford, H. M.

Herbert, H. A.

Clinton, Lord R.

Herbert, rt. hon. S.

Cockburn, Sir A. J. E.

Hervey, Lord A.

Cocks, T. S.

Heywood, J.

Coffin, W.

Heyworth, L.

Collier, R. P.

Hogg, Sir J. W.

Compton, H. C.

Howard, hon. C. W. G.

Corry, rt. hon. H. L.

Howard, Lord E.

Cowan, C.

Hume, J.

Cowper, hon. W. F.

Hutchins, E. J.

Craufurd, E. H. J.

Hutt, W.

Crossley, F.

Ireton, S.

Crowder, R. B.

Jermyn, Earl

Currie, R.

Johnstone, J.

Dalrymple, Visct.

Johnstone, Sir J.

Bering, Sir E.

Keating, H. S.

Divert, E.

Kershaw, J.

Drumlanrig, Viset.

Kinnaird, hon. A. F.

Drummond, H.

Laing, S.

Duff, G. S.

Langton, H. G.

Duff, J.

Lawley, hon. F. C.

Duke, Sir J.

Legh, G. C.

Duncan, G.

Lewis, rt. hon. Sir T. F.

Duncombe, hon. W. E.

Lindsay, hon. Col.

Dunlop, A. M.

Locke, J.

East, Sir J. B.

Lockhart, A. E.

367

Lovaine, Lord

Russell, F. C. H.

Loveden, P.

Russell, F. W.

Lowe, R.

Sadleir, J.

Luce, T.

Sawle, C. B. G.

Mackie, J.

Scobell, Capt.

MacGregor, J.

Scully, F.

M'Taggart, Sir J.

Seymour, Lord

Mangles, R. D.

Seymour, W. D.

Manners, Lord G.

Shelburne, Earl of

Massey, W. N.

Shelley, Sir J. V.

Matheson, A.

Smith, J. A.

Matheson, Sir J.

Smith, J. B.

Maule, hon. Col.

Smith, rt. hon. R. V.

Miall, E.

Smyth, J. G.

Milligan, R.

Smollett, A.

Milner, W. M. E.

Stafford, Marq. of

Milnes, R. M.

Stanley, hon. W. O.

Molesworth, rt. hn. Sir W.

Stapleton, J.

Moncreiff, J.

Stirling, W.

Monsell, W.

Strutt, rt. hon. E.

Moreton, Lord

Stuart, H.

Morris, D.

Talbot, C. R. M.

Mulgrave, Earl of

Thicknesse, R. A.

Mure, Col.

Thompson, G.

Murphy, F. S.

Thornely, T.

Norreys, Lord

Towneley, C.

Norreys, Sir D. J.

Vane, Lord H.

O'Brien, C.

Vernon, G. E. H.

O'Brien, P.

Villiers, rt. hon. C. P.

O'Brien, Sir T.

Wall, C. B.

O'Connell, M.

Walmsley, Sir J.

O'Flaherty, A.

Warner, E.

Osborne, R.

Wellesley, Lord C.

Otway, A. J.

Wells, W.

Palmerston, Visct.

West, F. R.

Patten, J. W.

Whalley, G. H.

Pechell, Sir G. B.

Whatman, J.

Peel, Sir R.

Whitbread, S.

Peel, F.

Wickham, H. W.

Pellatt, A.

Wilkinson, W. A.

Phillips, J. H.

Williams, W.

Phillimore, J. G.

Wilson, J.

Phillimore, R. J.

Winnington, Sir T. E.

Pilkington, J.

Wise, A.

Pinney, W.

Wood, rt. hon. Sir C.

Pollard-Urquhart, W.

Wortley, rt. hon. J. S.

Ponsonby, hon. A. G. J.

Wrightson, W. B.

Portal, M.

Wyndham, W.

Power, N.

Wyvill, M.

Pritchard, J.

Young, rt. hon. Sir J.

Ricardo, O.

Rich, H.

TELLERS.

Robartes, T. J. A.

Hayter, W. G.

Russell, Lord J.

Berkeley, C. G.

List of the NOES.

Adderley, C. B.

Beresford, rt. hon. W.

Arbuthnott, hon. Gen.

Blair, Col.

Archdall, Capt. M.

Bowyer, G.

Arkwright, G.

Brady, J.

Bagge, W.

Brisco, M.

Baillie, H. J.

Brooke, Sir A. B.

Baird, J.

Bruce, C. L. C.

Ball, E.

Buck, L. W.

Baldock, E. H.

Buller, Sir J. Y.

Bankes, rt. hon. G.

Butt, G. M.

Baring, T.

Butt, I.

Barrington, Visct.

Cairns, H. M.

Barrow, W. H.

Carnac, Sir J. R.

Bateson, T.

Chelsea, Visct.

Bentinck, Lord H.

Child, S.

Bentinck, G. P.

Christopher, rt. hon. R. A.

368

Clinton, Lord C. P.

March, Earl of

Clive, R.

Mare, C. J.

Cobbett, J. M.

Masterman, J.

Cobbold, J. C.

Maxwell, hon. J. P.

Codrington, Sir W.

Miles, W.

Conolly, T.

Michell, W.

Coote, Sir C. H.

Mitchell, T. A.

Cubitt, Mr. Ald.

Montgomery, H. L.

Davison, R.

Montgomery, Sir G.

Devereux, J. T.

Moody, C. A.

Disraeli, rt. hon. B.

Moore, G. H.

Dod, J. W.

Moore, R. S.

Duncombe, hon. A.

Morgan, O.

Dunne, Col.

Morgan, C. R.

Egerton, W. T.

Mullings, J. R.

Egerton, E. C.

Muntz, G. F.

Emley, Visct.

Murrough, J. P.

Evelyn, W. J.

Naas, Lord.

Farnham, E. B.

Newark, Visct.

Fellowes, E.

Newdegate, C. N.

Floyer, J.

Newport, Visct.

Follett, B. S.

Noel, hon. G. J.

Forbes, W.

North, Col.

Forester, rt. hon. Col.

Oakes, J. H. P.

Forster, Sir G.

Ossulston, Lord

French, F.

Packe, C. W.

Freshfield, J. W.

Pakington, rt. hn. Sir J.

Gallwey, Sir W. P.

Palmer, R.

Galway, Visct.

Peacocke, G. M. W.

Gaskell, J. M.

Percy, hon. J. W.

Gore, W. O.

Potter, R.

Graham, Lord M. W.

Prime, R.

Greaves, E.

Repton, G. W. J.

Greenall, G.

Robertson, P. F.

Greene, J.

Rolt, P.

Greville, Col. F

Sandars, G.

Grogan, E.

Smith, W. M.

Gwyn, H.

Smyth, R. J.

Halford, Sir H.

Somerset, Capt.

Halsey, T. P.

Spooner, R.

Hamilton, Lord C.

Stafford, A.

Hamilton, G. A.

Stanhope, J. B.

Hanbury, hon. C. S. B.

Stanley, Lord

Henley, rt. hon. J. W.

Stephenson, R.

Herbert, Sir T.

Sullivan, M.

Hildyard, R. C.

Swift, R.

Hotham, Lord

Thesiger, Sir F.

Jocelyn, Visct.

Thompson, Ald.

Jolliffe, Sir W. G. H.

Tollemache, J.

Jones, Capt.

Tomline, G.

Kelly, Sir F.

Tudway, R. C.

Kendall, N.

Turner, C.

Kennedy, T.

Tyler, Sir G.

King, J. K.

Vance, J.

Knight, F. W.

Vane, Lord A.

Knox, hon. W. S.

Vansittart, G. H.

Lacon, Sir E.

Verner, Sir W.

Laffan, R. M.

Villiers, hon. F.

Langton, W. G.

Vivian, J. E.

Lennox, Lord A. F.

Vyse, Capt. H.

Lennox, Lord H. G.

Walcott, Adm.

Leslie, C. P.

Walpole, rt. hon. S. H.

Liddell, H. G.

Whiteside, J.

Lockhart, W.

Whitmore, H.

Lucas, F.

Williams, T. P.

Lytton, Sir G. E. L. B.

Wodehouse, E.

Macartney, G.

Wyndham, Gen.

MacGregor, J.

Wynn, H. W. W.

M'Mahon, P.

Wynne, W. W. E.

Maguire, J. F.

Yorke, hon. F. T.

Malins, R.

TELLERS.

Mandeville, Visct.

Mackenzie W. F.

Manners, Lord J.

Taylor, Col.

Clause agreed to; as were also Clauses 3 to 31 inclusive.
Clause 32.
CAPTAIN LAFFANsaid, he begged to ask whether the right hon. Chancellor of the Exchequer, would have any objection to insert in it a provise that no issue of these bonds should take place under par?
The CHANCELLOR OF THE EXCHEQUERsaid, he thought it would be better not to insert such a proviso, but to leave the matter to the discretion of the Government. At the same there was no doubt it would not be desirable to issue these bonds much below par.
MR. T. BARINGsaid, that if there was an impression that these bonds would be issued under par, it would have an unfavourable effect upon the subscription.
MR. GLYNsaid, that he had no doubt these bonds were likely to be exceedingly popular, though no doubt they were open to objection, arising from the risk attendant on the transfer of a document payable to bearer, as many of them might eventually get into the hands of trustees, who would naturally object to hold documents which did not give them that security for which, as trustees, they bad a right to look. He thought it would be desirable that a power should be given to trustees to have these documents written up as stock on handing them into the Exchequer.
The CHANCELLOR OF THE EXCHEQUERsaid, that the Bill would give not only to trustees, but to all persons who held these bonds, the power to convert them into stock whenever they pleased.
Clause agreed to; as were also the remaining clauses of the Bill.
House resumed; Bill reported.

DOCKYARD APPOINTMENTS AND PROMOTIONS—MR. STAFFORD.
SIR BENJAMIN HALLsaid, he would now beg to nominate the Select Committee on Dockyard Appointments: namely, Sir Benjamin Hall, Lord Seymour, Lord Hotham, Sir Henry Ferguson Davie, and Mr. Beckett.
MR. NEWDEGATEsaid, he must protest that the course taken by the House in this matter was extremely unfair, and calculated to establish a most mischievous precedent. The whole case stated by the hon. Member for Marylebone had been sifted by a Committee of that House already, as it related to his hon. Friend, the late Secretary to the Admiralty (Mr. Stafford),
370
whose public character and whose private honour had been so grossly impugned by the Times newspaper, on the evidence given before the Committee appointed to try the Chatham Election Petition, which evidence that Committee had subsequently denounced as perjured. Both the noble Lord opposite and the First Lord of the Admiralty had completely exculpated his hon. Friend from the imputations which had been so shamefully cast upon him in the Times, so far as his honour was assailed. Yet, notwithstanding that vindication, and after the House had agreed to the appointment of this second Committee, the Times had ventured to publish another article, as grossly as before impugning the character and the personal honour of his hon. Friend. Thus, in the first instance, the Times had attempted to dictate to a tribunal appointed by that House, and sworn to decide according to the evidence adduced before them; and now, again, that journal sought to prejudge the case, even before the nomination of the Committee which it was proposed then to nominate for the purpose of further inquiry. He had felt it to be his duty to call the attention of the House to this conduct on the part of the Times, because, while he desired not to ignore the power of the public press, when properly exercised, he wished to note that conduct as a flagrant abuse of the privileges of the press. As to the Committee, the nomination of which was now proposed, he must remark, that here was a case which had been already tried by a tribunal duly appointed by the House, which had taken evidence on oath. Much of that evidence, so taken, the Committee had denounced as of the worst character, yet now the House had appointed another Committee, before which the same evidence would be received, and before which the calumnies against his hon. Friend, who, before the previous Committee had been checked by the fear of the consequences of perjury, would be renewed and exaggerated, the fear of perjury being removed by the absence of power on the part of this second Committee to examine upon oath. A feeling of delicacy, of false delicacy, on the part of the late Government, and a similar feeling on the part of the present Government, had prevented them, though satisfied that the imputations against his hon. Friend were unfounded, from courageously objecting to the appointment of this second Committee; and thus a tissue of calumnies would, without fear of consequences, be brought before that

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Committee, by witnesses not worthy of credence, against his hon. Friend, and find their way to the records of that House. He feared there was no remedy for the evil now, if the House would not reconsider its determination to appoint this Committee; but, as an independent Member of the House, and as a Member of the Chatham Election Committee, he felt it to be his duty to declare his opinion of the injustice of this proceeding.
MR. STAFFORDbegged to say that, so far from regretting the appointment of this Committee, he rejoiced at it, and he should go before the Committee, constituted as the hon. Baronet proposed, with the most entire confidence that he should fully absolve himself upon the charges that had been made against him.
The Committee was then appointed with power to send for persons, papers and records.
The House adjourned at a quarter after Twelve o'clock till Monday next.

MINUTES.
Took the Oaths.—Several Lords.
PUBLIC BILL.—2a Clergy Reserves (Canada).
Reported.—New Forest Deer Removal Act Amendment.

CLERGY RESERVES (CANADA) BILL.
Order of the Day for the Second Reading read.
The DUKE of NEWCASTLE: My Lords, in moving the Second Reading of the Canada Clergy Reserves Bill, I have some doubt and hesitation as to whether or not I ought to trespass on the attention of your Lordships at any great length, remembering that we have had already two discussions on this question, one of them at considerable length; but inasmuch as there are now present many noble Lords who were absent on that occasion, and as I cannot but believe there are some of your Lordships who have not studied the whole of this question of the Canada clergy reserves to such an extent as would enable you, in my belief, to arrive at a satisfactory conclusion in reference to the Bill now before your Lordships, I hope I may be excused if I venture to trespass upon your Lordships' time, although it shall be as shortly as possible, in order to explain to you the history of this question from its first commencement; to show how in my opinion, but one view has been taken of this question by successive Governments; and, lastly, to point out the reasons and arguments which I think will induce your Lordships to assent to the measure which Her Majesty's Government proposes. My Lords, I am afraid that your Lordships

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will be alarmed at anything like an historical statement on this occasion; yet, I apprehend, without it it would be impossible for you to appreciate the merits of this question, or to understand our present position with respect to it. My Lords, I may say so long ago as the year 1776 an Act was passed—called the First Constitutional Act of what was then denominated the province of Quebec—in which after recognising the rights of His Majesty's recently acquired Roman Catholic subjects, a clause was introduced which provided that His Majesty might make provision out of the receipt of his accustomed dues and rights for the encouragement of the Protestant religion and the maintenance of the Protestant clergy. It would appear, my Lords, that no action was taken immediately on this provision; at least I cannot discover that anything was done; but in the year 1791 a message was sent from the King to both Houses of Parliament, suggesting that they should provide for those objects by making an appropriation of lands; and in the course of that year, 1791, Mr. Pitt introduced a measure into the House of Commons, which became law, and by which one-seventh of the waste lands in the colony were appropriated for the maintenance of the Protestant clergy. My Lords, these so-called clergy reserves continued for a period of fifty years, notwithstanding frequent objections were raised within the colony, and, subject on one occasion at least to considerable alterations at the hands of Parliament, they continued until the Act of 1840 passed. A provision was introduced into the Act of 1791, which provided that the Provincial Legislature might have power to alter and repeal the provisions of that Act. I mention this circumstance thus early in my statement, because upon it will hinge a great many of the subsequent transactions, and to a certain extent, though not by any means exclusively so, the arguments which I am about to adduce to the House in reference to the present measure. The power thus given to the Provincial Legislature by the Act of 1791, has always, until a comparatively recent date, been considered to be unlimited. Now, until the year 1817 this Act remained without any open hostility on the part of the population of Canada; in fact, the Act was nearly inoperative, the Protestant clergy deriving little if any advantage from it; but in 1817 I find the first open demonstration of hostility to the system of the clergy reserves, in the shape of a Motion for
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the purpose of alienating one-half of the reserves so made. In 1819, two years subsequently, a new circumstance took place. Then, for the first time, a claim was put forward, small indeed in itself, but nevertheless a substantive claim, on the part of the Presbyterians, for a participation in those reserves, hitherto considered the exclusive right of the episcopalian clergy of the Church of England. Upon that claim being made, the Government of the day thought it their duty to place the matter in the hands of the law officers of the Crown, of whom my noble and learned Friend whom I see opposite (Lord Lyndhurst), being then the Solicitor General of the Crown, was one; and the noble and learned Lord did, with his Colleague, give an opinion on the case so submitted to them, by which it was established that the Presbyterian Church, coming under the denomination of Protestant clergy, were entitled to a share of the reserves. In this same year—an important year, as it concerned this matter—the House of Assembly appears to have become more jealous of these reserves, and various inquiries were made of the then Government as to their amount, and the circumstances of their position. From this time, for a period of twenty years, a constant struggle appears to have gone on between the clergy, or rather the members, of the Church of England on the one hand, and the members of the Church of Scotland on the other; for the opinion of the law officers in favour of the Presbyterians, to which I have referred, having never been carried into effect during the whole of that period of twenty years, the Episcopalians had maintained exclusively the enjoyment of those reserves. My Lords, I find that up to this period of 1824 the clergy reserves, as I stated just now, of an anterior date, were of little comparative value, and were almost entirely absorbed in the expenses attending their management. I find that in 1819, when that opinion was taken, the available fund amounted to only 700 l.;and they dwindled in subsequent years to a very considerable extent, until in 1822 they only produced 150 l. In consequence of this continued struggle between the rival Churches, and of the comparative valuelessness of this enormous amount of property, a proposal was introduced for the sale of those reserves. That proposal, accompanied by other suggestions which wore not so successful, was carried out by a measure introduced by Mr. Wilmot Horton in 1827,

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and supported by the noble Earl opposite (the Earl of Derby), then a Member of the House of Commons, who stated on that occasion that the facts which he had observed during his then recent tour in the United States and in Canada had conclusively established that there was there a universal opinion against the maintenance of the clergy reserves. I venture to hope, when I quote the words used by the noble Earl on that occasion, that he will not suppose that I do so for party purposes. I only do so simply because they show the universal feeling which then prevailed, and which I have reason to believe has continued to prevail, to a very considerable extent in regard to this question to this day. I find the noble Earl said in 1827—
"The short acquaintance he had recently had with the provinces of Canada enabled him to state, that whatever might be the differences of political and party feeling in that country—and there was no place where party feeling ran higher—no person entertained a difference of opinion as to the pernicious tendency of the clergy reserves. When Mr. Pitt brought forward the Canada Bill in 1791, he distinctly specified that the arrangement then made must be subject to such modifications as might afterwards he deemed expedient. The experience of thirty-five years had demonstrated, not only the inconvenience, but the absolute mischief, which resulted from that arrangement. The appropriation of clergy reserves in Canada had operated as a serious obstacle to agricultural improvement. The making of roads, an object of so much importance to the colony, was checked by this arrangement; for, as every man was obliged to make roads through his own estate, where these reserves occurred, the progress of road-making was either arrested, or the burden thrown upon the owner of the contiguous land.…In giving his unqualified approbation to the measure proposed, he must be understood as being perfectly aware of the nature of the property allotted to the Church, and of being as sensible as any man of the monstrous absurdity of attempting to support what was called the Established Church, but which, in fact, never would be established. The present sale he understood to be for the improvement of the remainder of the lands given to the Church; and as such it had his approval. It left, too, the question respecting the propriety of such grant precisely where it was; for the Act of 1791, under the authority of which it was made, remained just as open to revision or amendment after that sale as it was before."—[2 Hansard, xvi. 586.]
In the year 1826 an Address from the House of Assembly of Canada was sent to this country, requesting that the clergy reserves might be appropriated for the purposes of education, and that no more waste lands should be allotted for the purposes of the clergy. A similar Address was presented in the year 1829, and I need not say without effect. A new party now
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appears upon the scene. I allude to the period when the members of the Scottish Church first came in for a participation in this fund. In 1828 the Wesleyan Methodists first put in a claim, and they stated their reasons to be, that while no other Protestant Dissenters had a right to participate in those reserves, yet that they had a special claim; and although the Government of the day did not acquiesce in that claim, so far as the clergy reserves were concerned, yet their acquiescence in the then state of things appears to have been ascertained by a money contribution, from what source derived I am not certain, but which appears to have been satisfactory. I wish at this period of my statement to point out to your Lordships the successive progresses of public opinion in reference to this matter—how the desire of the Canadian people being neglected led on to fresh demands, and how upon each successive refusal and neglect to agree to those demands, fresh claims were made in each subsequent year. In 1824 the demand was that the clergy reserves should be no longer appropriated to the members of the Church of England, but should be equally divided among all religious denominations in proportion to their respective numbers in the colony; but in 1826 the application was that the clergy reserves should no longer be appropriated to the purposes of the various denominations, but to the purposes of education and public improvement; and in 1828, the first two demands being neglected, the, agitation took the shape of a demand that the clergy reserves should be entirely appropriated to secular purposes. I find that in 1831—this struggle having been constantly proceeding, the House of Assembly on the one hand demanding, in one form or other, material changes in respect to the clergy reserves, and the Legislative Council, on the other, invariably resisting those changes—an alteration took place, and the House of Assembly, failing to attain its objects through the instrumentality of its own Legislature, applied to the Imperial Government, with the view to procure these objects. It is singular enough that in this year, when they came to that determination, the Government at home, it appears, partly resolved on the abandonment of the clergy reserves, not, seemingly, in deference to the opinion of the Legislature of Canada, but in consequence of a Committee of the House of Commons which sat in 1828, and which, having recommended

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such a measure, had made an important report on this and other subjects. In consequence of that report it appears that the Imperial Government proposed that a measure should be passed to enact that those reserves should revert to the domains of the Crown. But in what form was it proposed? I find that, not merely on that occasion, but on every other, every successive Colonial Secretary appears to have looked on this question as one which was to be legislated upon, not by the Imperial Parliament, but by the Colonial Legislature. Did the Secretary at that time (Lord Goderich), having advised the total abandonment of the clergy reserves, proceed to introduce a measure into this House for that purpose? By no means. In a despatch dated 21st November, 1831, addressed to Sir John Colborne, Lord Goderich says—
"In order to accomplish effectually the designs which I have explained in the despatch already referred to, it will be necessary that so much of the statute 31 Geo. III., c. 31, as relates to the allotment and appropriation of lands for the support of the Protestant clergy within the province of Upper Canada, should be repealed by an Act to be passed by the Council and Assembly in exercise of the authority committed to them for that purpose by the 41st section of the Act. The Bill if so passed must be accompanied by an address from the Legislative Council and Assembly, desiring that it may be 'transmitted to England without delay, for the purpose of being laid before Parliament previously to the signification of His Majesty's assent thereto.' A simple repeal of this part of the Act of 1791 would give birth to some questions of an embarrassing nature, the discussion of which it is very desirable to preclude. The questions which I anticipate would be, 1st, whether the reserves already made would vest in His Majesty absolutely, or would be held by him upon any trust for the benefit of the Protestant clergy; 2dly, whether the leases granted by the corporation for managing the reserves would be still subsisting; 3dly, whether the rent reserved on those leases would be payable to His Majesty or to the corporation; 4thly, whether the money already raised by sales, under the Act of 1827, would remain applicable or not to the purposes expressly declared by that statute. It might be suggested, as a further doubt, whether the corporation would continue in existence, and whether the powers of sale given by the Act of 1827 were to be exercised any further. The solution of those questions is, however, obvious; the corporation could not survive the extinction of the object for which it was erected; the power of sale could not be exercised after the subject of sale, viz., the clergy reserves, had ceased as such to exist. To meet, however, still more effectually the two last-mentioned questions, you will, as soon as the Act shall have been introduced into the Assembly, intimate to the clergy corporation that it is the express desire of His Majesty's Government, that until the Bill shall have finally passed into a law, or shall have been finally rejected, they do abstain from
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granting any more leases of the clergy reserves; I cannot doubt their ready compliance, and am most reluctant to reason, even hypothetically, on the contrary supposition. But as it will be necessary to prevent improvident leases, which, in the haste and excitement of the moment, might be made, you will, in the unfortunate contingency of the corporation persisting in making them, direct the Attorney General to take such measures as may be best adapted to bring to trial the validity of the charter itself. I apprehend that the result must be to ascertain that it is void in point of strict law. But it is impossible to deprecate such a controversy too earnestly, or to contemplate it at all, except as an extreme remedy in a case of extreme importance. Whenever the Act shall have been finally passed, the continued existence of the charter would be of no practical importance, though it would be on the whole desirable that the charter should be then surrendered. With regard to the continuance of the power of sale under the statute 7 & 8 Geo. IV., c. 62, you will immediately signify to the officers employed under that statute His Majesty's commands that they do abstain from acting any further in execution of it after the 30th June, 1832, and that during the half-year from January 1st to that date the sales to be made should not exceed in number of acres the number actually sold in the preceding half-year. The difficulties which might oppose or partially frustrate the execution of the designs of His Majesty's Government being thus obviated, it remains to consider what provisions the proposed act of Assembly should contain. First, then, it should be enacted, that so much of the British statute of 1791 as relates to the appropriation of the clergy reserves should be repealed. But as it is unnecessary, and would be highly inconvenient, to repeal so much of that Act as relates to the erection and endowment of parsonages, it will be fit, in order to obviate the possibility of mistake, that the precise words upon which alone the repeal is to operate, should be quoted in the repealing act. Secondly, to remove all doubts as to the effect of the repeal, it should be expressly provided that the reserved lands should immediately vest in His Majesty, and be held by him, his heirs, and successors, in the same manner in every respect as if the provisions to be repealed had never been enacted. Thirdly, the leases granted by the clergy corporation should be declared to be as valid as though the repealing Act had not been passed; but the tenants should be required to attorn to His Majesty, and to pay their rents to him, or to the receivers of his land revenue in the province. Fourthly, all sales effected and all acts done under the statute 7 & 8 Geo. IV., c. 62, should be declared as valid as though the repealing Act had not been passed. Fifthly, the only additional provision, the necessity of which I can anticipate, would be an enactment declaring that henceforward no grant of lands, wherever made, shall be deemed invalid or ineffectual, by reason of the absence of a specification of the clergy reserves appropriated in respect of such grant. With reference to future grants, this, of course, would be superfluous; but it might obviate some inconvenient doubts as to the effect in future of past neglects of this part of the Act of 1791. A provincial statute, embracing these provisions, and neither exceeding nor falling short of them in any material respect, would, I apprehend, effectually set at rest all the questions respecting

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the clergy reserves to which I have adverted in my accompanying despatch, except in the possible, but, I trust, very improbable, event of either House of Parliament addressing His Majesty to withhold his assent. That, however, is a contingency against which no security can be taken, and upon which it could answer no practicable purpose to speculate. It remains to consider what steps should be taken, in order to bring this question fairly under the notice of the two branches of the provincial legislature. For that purpose, it will be fit that they should be invited to the consideration of the question by a message from His Majesty."
Lord Goderich appears to have been so convinced that this was not a matter for the Imperial Parliament, but rather for the Colonial Parliament to legislate upon, that—although in those days it appears to have been the practice to keep the colony entirely in leading-strings—he not only sent a form of message to the Governor, in which he was to recommend the Bill to the notice of the local legislature, but he actually sent out a draft which he was to propose to the legislature; and in that draft Bill I find a clause that the land heretofore appropriated in those provinces, for the support and maintenance of the Protestant clergy, and remaining unsold, should revert to His Majesty, as of his original estate, and should be absolved from the trust purposes for which it had been appropriated. I would wish to remark upon this despatch, that here we have the first step, showing how little value is to be attached to the complaints which were made by the right rev. Prelate near me (the Bishop of Exeter) on a recent occasion, that this was an infraction of vested rights, and that it constituted a breach of faith. But what can the right rev. Prelate say of the course taken by Lord Goderich and every Colonial Secretary, except that there was no attempt to legislate through the instrumentality of the Imperial Parliament? In consequence of this despatch from Lord Goderich, the Governor, Sir John Colborne, sent the message he was directed to send; but legislation was stopped by the prorogation of the Canadian Parliament, which took place almost immediately. My Lords, how different is the course we are called on to take now. In 1831, we find the Colonial Parliament was invited (for these are the words used by Lord Goderich) to consider this question and to legislate upon it; and we now in 1853 are engaged, not in discussing the question whether we shall abandon the whole system of the Canada clergy reserves, but whether we in 1853 shall give
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to the Colonial Parliament power to do, inter alia, what we in 1831 invited them to do. I have said, no consequences arose from this despatch of Lord Goderich, and the struggle continued as heretofore; but in 1835 the Legislative Council appears to have become alarmed at the state of the contest which continued in the colony, and they in that year for the first time addressed the Imperial Government, requesting them to interfere in reference to this much-vexed and long-mooted question, That address was answered by Lord Glenelg, who was then Colonial Secretary, in a despatch dated the 5th of December, 1835; and he repeated the same views as had been expressed by his predecessor in office as to the colonial nature of this question, and the unconstitutional character of attempting to legislate by the Imperial Parliament on matters affecting the local concerns of the colony. He said—
"The chief practical question, then, which at present demands consideration is, whether His Majesty should be advised to recommend to Parliament the assumption to itself of the office of deciding on the future appropriation of these lands. There are two distinct reasons, both of which appear to me conclusively to forbid that course of proceeding. First, Parliamentary legislation on any subject of exclusively internal concern, in any British colony possessing a representative assembly, is, as a general rule, unconstitutional. It is a right of which the exercise is reserved for extreme cases, in which necessity at once creates and justifies the exception. But, important as is the question of the clergy reserves in Upper Canada, yet I cannot find in the actual state of the question any such exigency as would vindicate the Imperial Legislature in transferring to themselves the settlement of this controversy. The second ground on which I think myself bound to abstain from advising His Majesty from referring this question immediately to Parliament is, that the authors of the Constitutional Act have declared this to be one of those subjects in regard to which the initiative is expressly reserved and recognised as falling within the peculiar province and the special cognisance of the local legislature, although its ultimate completion is no less distinctly made to depend, in addition to the ordinary submission to His Majesty, on the acquiescence of the Imperial Parliament. It is not difficult to perceive the reasons which induced Parliament in 1791 to connect with a reservation of land for ecclesiastical purposes the special delegation to the Council and Assembly of the right to vary that provision by any Bill which, being reserved for the signification of His Majesty's pleasure, should be communicated to both Houses of Parliament for six weeks before that decision was pronounced. Remembering, it should seem, how fertile a source of controversy ecclesiastical endowments had supplied throughout a large part of the Christian world, and how impossible it was to foretell with precision what might be the prevailing opinions and feelings of the Canadians on this subject at a future period, Parliament at once secured the

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means of making a systematic provision for a Protestant clergy, and took full precaution against the eventual inaptitude of that system to the more advanced stages of a society than in its infant state, and of which no human foresight could divine the more mature and settled judgment."
That showed that up to this date in the year 1835, every Colonial Secretary was still under the impression that by the Act of 1791, the power of the Colonial Parliament to legislate was unlimited. Lord Glenelg proceeded to say—
"I think, therefore, that to withdraw from the Canadian to the Imperial Legislature the question respecting the clergy reserves would be an infringement of that cardinal principle of colonial government which forbids parliamentary interference, except in submission to an evident and well-established necessity."
There is a subsequent despatch from Sir George Grey, dated the 29th December, 1837, but it is much to the same effect, and I am unwilling to inflict a long statement upon your Lordships. I will, therefore, hurry over this historical sketch that I have ventured to lay before your Lordships. I will not refer to successive documents of the same description, or quote the words of the Earl of Gosford, the Earl of Durham, or Lord Sydenham. The same story is to be found in them all, both in reference to the clergy reserves and the mode of dealing with them. From this very ominous volume, that was laid on your Lordships' table in the year 1840, I will merely quote one more despatch; it is from my noble Friend Lord John Russell, and is dated the 7th September, 1839, the year before the Act was passed which I now propose to deal with. He said—
"Parliament delegated to the local legislature the right of appropriating the clergy reserves, and the effect of the Bill is to retransfer this duty from the local legislature to Parliament, with a particular restriction. I am advised by the law officers of the Crown that this is an unconstitutional proceeding. It is certainly unusual and inconvenient. Her Majesty cannot assume that Parliament will accept this delegated office; and if it should not be so accepted, the confirmation of the Bill would be productive of serious prejudice and of no substantial advantage. It would postpone indefinitely the settlement of a question which much concerns the welfare of the provinces to bring it to a close; besides, I cannot admit that there exist in this country greater facilities than in Upper Canada for the adjustment of this controversy; on the contrary, the provincial legislature will bring to the decision of it an extent of accurate information as to the wants and general opinions of society in that country, in which Parliament is unavoidably deficient. For all these reasons Her Majesty will decline to give Her assent to this Bill."
I ought to have said that this was in
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answer to a further address from the Colonial Legislature calling upon the Colonial Secretary to apply to Parliament to arrange this matter for them. My Lords, I have now shown what the views were of successive Secretaries of State for the Colonies on this subject. In the year 1840, for the first time, the two Houses in Canada came to a decision upon this subject, and a Bill was at last passed for the settlement of this question. The two Houses at length agreed, under the governorship of Lord Sydenham, to send to this country a Bill for the Royal assent. That Bill was prepared under the 42nd clause of the Act of 1791, and was laid upon your Lordships' table with the view that at the expiration of thirty days from that period, no address being made to the Crown respecting it, it might receive the Royal assent. Unhappily, a question was raised, not by a noble and learned Lord in this House, but by one whose legal acumen has very often pointed out defects in Acts of Parliament before—I mean a right reverend Prelate near me (the Bishop of Exeter); and he raised the question as to whether the Colonial Legislature had not exceeded their powers, and in truth that which every successive Colonial Secretary had believed to be their right, and each successive Assembly of Canada had believed also to be its right, and that which I believe every lawyer in this country who had looked to the question up to that period had believed to be indisputable—a question was raised as to whether the Act of 1791 enabled the Canadian Parliament to deal retrospectively with the clergy reserves, as well as prospectively with regard to the appropriation of fresh lands. My Lords, on this question being referred to the Judges, they decided that the Canadian Parliament had not the power, and had no right, to pass the Bill; and although it was absolutely necessary for the Parliament and Government of that day to acquiesce in that decision, yet I think your Lordships will agree that it was no little hardship upon that colony, after the course successive Governments had taken, and the belief so long existing, and this constant struggle respecting the subject, that when at last the two Houses had been brought to agree, then the authorities of this country should step in and say, "We have been all wrong; you might have spared yourselves these many years' contests; we might have spared ourselves all the despatches that are contained in these books; we might

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have spared all our constitutional law, and you all your struggles. We find that such a right did never exist; and now that you agree, we must step in to differ with you." The result of that decision was, that the Government of the day, feeling that it was absolutely necessary to settle this question, and that no alternative remained, brought in a Bill to a great extent, although not absolutely, embodying the provisions of that Bill which had been agreed upon by the two Houses of the Canadian Legislature in the preceding year, That Bill was introduced into the House of Commons, and subsequently passed through both Houses, though very materially altered in its progress;—especially as regarded the relative proportions to be received by the respective denominations of Christians, considerable alterations were introduced. Well, my Lords, I am not going to deprecate the spirit of compromise that admitted those alterations to be made, but I do not think we have a right to complain of the colony because it has not been accepted, when a Bill was passed in a final form, in no degree agreed to by them, and in many respects opposed to their wishes. So far from a universal acquiescence being given to the measure, as stated in this House on a former occasion, we had at that time received from Lord Sydenham, the Governor of Canada, an intimation that this compromise would not be conclusive, that the Canadians would never be satisfied with it, and that at some time after the question would be raised, and this unhappy controversy would be renewed. But even if this had not been the case, and if it had been accepted by the Canadians at the time as a settlement, what right should we have now to consider them bound by that settlement, or to say that what was suited to the circumstances of Canada in 1840, is entirely suited to her circumstances in 1853? Have no changes taken place in that country since then? Why, nothing hardly remains the same. The increase of population has been enormous—I believe the population has been nearly if not quite doubled within that period—and the progress in material wealth and civilisation has more than kept pace with the increase of the population. The relative proportions of the religious denominations within that country have been materially changed—because it is not as in a settled country, where families follow the individual belief of their parents. In that country a large immigration has taken place from various parts, and of
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course the denominations of Christians are in a constant state of mutation, and fluctuations occur from year to year. I say then, my Lords, that the circumstances of Canada are as different now from what they were in 1840 as it is possible to conceive; and though it may be an interruption of my statement for a single moment, let me point out the state of extraordinary prosperity, peace, and contentment, except on this one subject, which that colony now enjoys. We now hear nothing of the question of annexation, and I think I am bound to say that we hear nothing of it in consequence of the course of government that has been pursued towards that colony for several years past. I say that a wise policy has been maintained both by the Government at home and by that able man my noble Friend Lord Elgin, who has acted in accordance with and trader the directions of that Government. My Lords, we hear nothing now of annexation; the Canadians justly believe themselves to be the inhabitants of a country that requires not to be annexed to any other; but, moreover, they do not desire another change that was touched upon in this House, but which I hope will never be seriously mooted—I mean that of independence. I believe, my Lords, that independence would be as injurious to Canada as annexation. I believe in that colony there is as strong a feeling of loyalty towards the Government and towards this country as in any other part of Her Majesty's dominions, either colonial or at home; and if you wish to maintain this feeling—if you wish to maintain this great and important colony as a portion (I will not call it a dependency, but an integral portion) of this great empire—if you wish so to maintain it, you must pursue the policy that has been followed for several years past. You must not now take a retrograde step, especially on this one point in which her dearest interests are involved, and on which men in all countries feel more keenly than on any other. I defy any noble Lord, however eloquent, to show that we should make this an exceptive case; if we wish to maintain this portion of our empire in its present temper, loyalty, contentment, and peace, we must follow out the policy that has been pursued, and not depart from it by refusing to give that assent to this Bill which I am now about to ask your Lordships to grant. What is the difference between the opponents and supporters of this Bill? Is there any Member of your Lordships' House who will deny the neces-

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sity for making an alteration in the Act of 1840? Does any one pretend that no alteration whatever is to be introduced into it? Most undoubtedly if there be any of your Lordships who entertain that opinion, the noble Lords opposite are not the parties to do so, for it was distinctly recognised by the Government that preceded the present that alterations were necessary, and the only question appears to have been, by whom were those alterations to be effected? I have already on a former occasion, quoted a passage from the despatch of Sir John Pakington on the 22nd of April last year, and I feel it to be so important that I shall quote that passage again. He says—
"That while it appears to Her Majesty's Government that in the distribution authorised by the Clergy Reserves Act, 3 & 4 Vict., of the proceeds of the sales of reserved lands, no ground is left for reasonable jealousy, or complaint of undue favour to particular religious denominations, they think it possibly may be desirable, on account of the changes that may be effected in the character of the population, either by extensive immigration, or other causes, that the distribution in question should, from time to time, be reconsidered."
Well, my Lords, what is it that the present Government propose? An alteration, undoubtedly, in the Act of 1840; but do we propose that measure which some noble Lords and others in the country have expressed so much apprehension of—do we propose any measure for secularising those reserves? By no means. ["Hear, hear!"] The right rev. Prelate cheers me, and I know what he means; he is about to introduce the old argument, that though we are not going to secularise them we are about to put out of our own hands, and into the hands of the Legislature of Canada, the power to secularise them. Most undoubtedly we are; and if you can show any case for retaining a privilege in the hands of the Imperial Legislature which until the year 1840 we believed to belong to the Colonial Legislature, and which by right belonged to the Colonial Legislature as much as any other question affecting their local concerns—unless you can prove that, no prospect you can hold out to me—even if you can substantiate it, of secularisation of the reserves by the Canadian Parliament, ought to justify you in refusing to do that which you believe to be an act of right and justice to the colonists of Canada. The present measure is a simple one, and its object is to hand over the decision of this question to those to whom it rightfully belongs. I, certainly, for one,
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will not anticipate what the Colonial Legislature will do if you pass this Bill, because I stand distinctly on the question of right and justice, and we have no right whatever to enter upon that other question. At the same time, if I were expressing my own individual opinion, I would say that I am not without hope that the Canadian Parliament will treat this question in the same spirit that your Lordships would do, and that if you pass this measure now there will not be—I will not say a desire on the part of any of them, but—a unanimous decision, or a decision by a majority of the Colonial Legislature, for the secularising of those reserves. That is a matter of mere individual opinion; I put it forward as nothing more, but I say there are grounds for a just confidence in them on this question. I see that the noble and learned Lord opposite shakes his head; but I know of nothing that has passed, at least, that would indicate any foregone conclusion on the subject, or indicate a determination on the part of the Legislature or Assembly of Canada to do more than to acquire the powers which I say the Government is prepared to give them, and which I hope your Lordships will assent to. My Lords, what was the Resolution that was passed, on the Address by the Legislative Assembly on July the 1st, 1851? The address, asking for the power to legislate on this question, was passed by a considerable majority; but there was a further question raised on this subject, and an attempt was made to decide then what should be done with those reserves. A Motion was proposed by Mr. Mackenzie that those reserves having been originally bestowed upon the Protestant clergy, and a portion of them having been diverted from that purpose and appropriated to the Presbyterian Church, future religious tranquillity would be secured by a final diversion of those reserves from all ecclesiastical and Church purposes, and by their application to a general system of education, whereby persons of all religious creeds would alike profit by them. Here then, was the question of secularisation distinctly raised; and though I do not mean to say the division on that question indicates the exact state of opinion upon it, it leads me to form an opinion that the members of the Canadian Parliament are not yet prepared to take that final step, the resolution having been negatived by a very considerable majority. As I have said before, I will not enter upon the consider-

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ation of what the Canadian Parliament may do when your Lordships shall have restored to them that which I believe they ought never to have been deprived of; but you may look upon it as an axiom that you can have no better defence against the abuse of power than responsibility; and when you throw upon the Canadian Legislature a share of the responsibility, you will have taken at once the only security you have a right to take, and the best security you can have, against any undue or improper use being made of the powers you confer upon them. I need not refer to the despatch of Lord Elgin on this subject, nor to the despatches of the noble Earl near me, when he was Colonial Secretary:—but how stands the question at this moment? In what position are we now placed, and how does this question come before us? There have been two Addresses to the Crown on this subject from two distinct Assemblies; one address was agreed to by the Legislative Assembly shortly before a dissolution; the other address was agreed to by the Assembly immediately succeeding; thus representing the feelings of the people of Canada after the result of a general election, at which this question had been specifically raised. You have those two Addresses before you, urging upon you to hand over to the Colonial Parliament the power of legislating on this question, and to divest yourselves of that power which they feel to be at variance with their rights. My Lords, practically, the Canadian Parliament had this power in the infancy of the State; the right existed in the infancy of the State, and was supposed to continue up to the year 1840; and now, in the mature age of this colony, will you hesitate to give them that power which nobody wished to deprive them of before, through an apprehension that they will be disposed to abuse it? My Lords, you have abandoned the finality of the Act of 1840, as I have shown by the despatch of the late Government; and I say, when you have abandoned the finality of the Act of 1840, there is no reason on which you can base your refusal to pass this measure through a fear that the Canadian Parliament would abuse the powers conferred on them. My Lords, if you say that is a reason for refusing to pass this Act, the same reason might have retained in the hands of the Colonial Office every power that has been conceded to our colonies on every principle that was sound and good. Was there, I ask you, any ap-
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prehension, when you passed the Act of last year, handing over to New Zealand the administration of the lands of that colony, that there would be any abuse of that power? No doubt, in the first instance, there might be an abuse of it; but is that a just and sufficient reason to refuse doing what is just and right? Well, just so it is in the present instance; the refusal to grant this power on account of its possible abuse by the colonists of Canada is equally untenable as an argument against the concession; and I can see no reason but one based upon that abstract principle which at any rate was abrogated in 1840, and which I believe is maintained by a right hon. Friend of mine in the other House of Parliament—I can see no other reason but this abstract principle, the want of power in all Parliaments to deal with a question of this nature—on which you can refuse to pass the Bill now before you; and if you refuse to pass it upon that ground, the objection will equally apply to the power of the Imperial and of the Colonial Parliament—we, under such a principle as that, have no more business to legislate upon it than the Canadian Parliament, to whom you refuse the power. When Sir John Pakington, in the despatch I have read to your Lordships, stated that the late Government was willing to entertain the question, and proceeds to say that any proposals that were made for the redistribution of the reserves, Her Majesty's Government would be willing to entertain, I must say, it appears to me that no greater violation of the principle of colonial freedom was ever propounded by a Colonial Secretary. By acting upon that principle, you will say that you admit that there are things which it is right should be done within the province of Canada; you admit the present state of things is unsatisfactory, and that an alteration may take place; but you say to the Canadians, "If you will submit those proceedings to us—if you will make your recommendation—we, keeping you in leading-strings, will decide whether we think it is right to do those things for you or not: you shall not do them for yourselves; we are the judges; we will exercise a discretion for you, and legislate for you if we think fit, and if not, let it alone." What becomes of the question of the public faith after this? My Lords, of finality I think we have long ago disposed; but there is another question I would like to ask, and that is, what becomes of this argument that has had such important weight with

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many out of doors, and some of your Lordships—the argument which is based upon the supposition that we are bound to maintain the rights of the Church of England? My Lords, is there on this question any longer subsisting what I may call a Church-of-England party?—and I will go further, and ask if it be possible to maintain that there is even a Protestant party? The noble Earl (the Earl of Winchilsea), whose feelings are always excited, and properly so, by that subject, shakes his head; but if he looks to the past history of this subject, he will find that it is impossible to say that there is any argument which can be called the Protestant argument any longer to be maintained. The Act of 1840 actually did that which it is now proposed to repeal; it actually endows the Roman Catholic Church. The noble Earl to whom I have just now alluded spoke on another subject on Monday last; he spoke with holy horror of the wickedness of Her Majesty's Government, and certain Members of your Lordships' House, in supporting an institution of an anti-Protestant character; but I would remind the noble Earl that the Act of 1840, which it is proposed to repeal by what is called this anti-Protestant measure, specially provides that a portion of those reserves should be given to the Roman Catholic Church. ["No, no!"] I believe I am wrong in saying "specially provides;" but by the Act there is power so to appropriate them; and since the passing of the Act that appropriation has been made. The Act of 1840 entirely altered the position of those clergy reserves, and power was given to grant a portion of them to the Roman Catholic Church. From that period the Roman Catholic Church has derived very considerable advantage from them; and a sum of 1,160 l. has been regularly paid to the Roman Catholic Church during the whole of the intervening period. What then becomes of the Protestant argument? You are complaining that we are sacrificing the Protestant character of those reserves, and passing a Bill of a most anti-Protestant character, because we are repealing a measure under which the appropriation of a portion of them to the Roman Catholic Church is to be made. You can no more maintain the anti-Protestant character of this Bill, than the right rev. Prelate can maintain (I shall leave him to consider the answer he received on a former occasion from a right rev. Brother) that this Act is an act of sacrilege; for after the appropriation that took place in 1840
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we now propose to give to another body the power that we did not hesitate to exercise ourselves. My Lords, I sincerely hope that it is unnecessary for me on this occasion to enter into any discussion or argument on the question of the relative numbers in the Canadian Parliament by which this measure was supported and opposed. The Secretary for the Colonies in the late Administration (Sir John Pakington) dwelt upon it on a former occasion when the question was before us; but I feel, my Lords, that such an argument strikes at the root of all representative government. I feel that it will be impossible to maintain such an argument as affecting Canada without looking to it as affecting our own House of Commons; and there are few of your Lordships, I believe, who will agree to a proposition to attach an enormously preponderating weight to the opinion of the Member for the West Riding of Yorkshire or of the city of Manchester, over the opinion of the Member for the borough of Droitwich or the borough of Midhurst, in the Imperial Parliament. Few of your Lordships will agree to such a proposition, and it was a bad argment for any one to put forward, but more expecially for one who had held the important office of Under Secretary for the Colonies. My Lords, I hope another argument will not be used, namely, an argument that is founded on an analysis of the votes as regards the religion of the Members by whom this measure was carried. If you do so, you will adopt a most dangerous course. If you come to the decision that the Roman Catholics in the Canadian Parliament have no right to vote on a question affecting the clergy reserves, you must equally come to the conclusion that Roman Catholic Members of your Lordships' House have no right to vote on such a question as came before you on Monday last. Both the arguments are equally dangerous and equally untenable; and from the deep interest I feel, both officially and individually, in the welfare and peace of Canada, it was with the most sincere pain that I found them urged by some of the opponents of this Bill. In regard to this question, those Roman Catholic Members of the Colonial Legislature have not, up to the present time at any rate, voted on a question that interests their Protestant countrymen in any greater degree than themselves. They voted that a measure of colonial freedom should be passed; their Protestant countrymen believe also that it ought to pass; and any

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opinion beyond that they have not professed. We are told that the Roman Catholic endowments in Canada will stand in a very different and a more advantageous position than the Protestant endowments if this measure should pass. I maintain that will not be the case. I say that if you pass this measure the clergy reserves will stand precisely on the same footing as the Roman Catholic endowments. In the first place, my Lords, there is a great misunderstanding with respect to the endowments of the Roman Catholic Church. Those endowments mainly consist of tithes, and with respect to those tithes the Canadian Parliament have already the power to legislate on them—as much power as they will have to legislate on the clergy reserves if you pass this Bill. With reference to the other large branch of what may be called endowments in the nature of charitable and educational establishments, we have already seen how insecure their tenure is if the Legislature of Canada wish to alter it. I quoted on a former occasion a case where, in spite of treaties, and of an Act of Parliament which was passed subsequent to those treaties, so little secure was their tenure supposed to be, that they willingly surrendered any security they had, and accepted from the Government of the day a colonial ordinance as their only title and security. With this single fact before you, can it be considered that we are dealing with the clergy reserves in an unfair or partial spirit by giving an advantage to any other Church in that country over the one to which the majority of ourselves belong? A petition was presented just now by a most rev. Prelate (the Archbishop of Canterbury) from a most distinguished Prelate of Canada, the Bishop of Toronto, and he stated the substance of that petition, which was already on your Lordships' table, in the form of a letter addressed to me. I have read that letter with the attention which anything coming from that eminent individual deserves; but I must say that I have been struck with astonishment at reading this letter, having had previous opportunities of observing the great powers of mind of that eminent man—his great ability—his clearness of argument—his logical acumen—I say I have been astonished, in reading this letter, to find that, however able it is in many respects, there is, throughout the whole of it, an absence of that continuity of argument, and of that logical deduction, that I never saw wanting in any other of
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his productions. There is hardly one sentence in that letter which does not contradict that which precedes it, or which is not at variance with that which succeeds it. The right rev. Prelate tells you at one time that we are placing the Church of England in an inferior position to the Church of Rome; and he uses some words in the force of his zeal which I am sure the amiability of his disposition must have subsequently led him to regret. In a subsequent part of his letter, however, he appeals to those very Roman Catholics, and calls upon them to assist in the common cause; nay, more, he points out in two distinct passages of the letter that the Roman Catholic endowments stand upon a weaker foundation and are in a worse position than the clergy reserves will be, even if you pass the present measure. I rejoice, therefore, that your Lordships are in possession of this letter, with respect to which I have on several occasions had anxious inquiries from the right rev. Prelate near me (the Bishop of Exeter), who was so desirous for its publication that he sent it to a newspaper called the English Churchman before it was received at the Colonial Office. [The Bishop of EXETER made an observation.] I really did not look at the date of the paper. I saw it there a day or two after I received the letter. I presume, therefore, that the right rev. Prelate can explain how this letter addressed to the Colonial Secretary—a public document—was published in a newspaper before it was laid on the table of your Lordships' House. I rejoice, however, as I have already said, that this letter is in the hands of your Lordships; because, long as it is, I will appeal to any of your Lordships who have given it a candid perusal, whether the balance of the argument it contains is not against the position of the right rev. Prelate, and in favour of the view taken by Her Majesty's Government, so far as equal justice to the various religious denominations of Canada is concerned. We have been frequently told that we should take an example in this matter from the course pursued by the United States in a similar case: and that the Canadian Parliament are now anxious to do what the United States never attempted to do, and certainly never did. We are particularly told to look at the State of New York, whose regard to public faith is put in prominent contrast with the assumed desires and intentions of the Canadian Legislature. My Lords, I be-

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lieve that the two cases are not at all parallel, and that in cases really parallel the comparison would not hold good. But I am ready to take the case as it has been stated. I think I have a right to deduce from the circumstances as they are presented to us, an important argument in favour of the Bill now before the House. What is the cause that the State of Now York has never endeavoured to confiscate, as it is called, these endowments of the Episcopal Church of England, which was established at the time of the connexion of that colony with this country? It is because in these days we dealt with the State of New York in a different manner from that in which noble Lords are now calling upon us to deal with Canada. The Government of those days did not, by imperial Acts of Parliament, endeavour to fetter the State of New York with reference to this endowment of the Church of England. We did not say, to use the words of the late Colonial Secretary, "If you want alterations, appeal to us; we will make them if we think fitting;" but we left them a free action in this matter; and as we left them, and as we trusted them in other cases, we placed confidence in them as to this; we did not say to them, "You are unworthy to be trusted on that most important matter, the management of affairs connected with the maintenance of your religious establishments." On the contrary, we said to them, "Everything connected with your local concerns shall be upon the same footing, whether it relates to the State or to the Church;" and we see the results. The spirit of confidence which we displayed towards the State of New York, was rewarded, as I believe a similar display of confidence towards Canada with respect to these reserves will be. You trusted the people of the former province; and, as we are now told, they have maintained unimpaired and unsecularised these establishments, which date from the time of their connexion with this country. I believe that if, upon the passing of this measure, of which I feel confident, these reserves are secularised, that the cause of that secularisation will be to be traced to the mistrust shown by this country and its Legislature. I think it is greatly to be lamented that this question has remained open so long as it has done; but of this I feel sure, that if you leave it open much longer, when at last this power is yielded, there will be such a spirit of acrimony existing, that so pitted against
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each other will be the various sects of Canada, that confiscation or secularisation—whichever you please to call it—will be the certain and inevitable result. I feel that I have trespassed upon your Lordships' time a great deal too long; but before I conclude I must allude to one other matter, although it is perhaps hardly germane as regards your Lordships' House. When this Bill was first introduced into the other House of Parliament, it contained a third clause, and I think it right to explain both the reason of the omission of that clause, and the position in which the subject now remains. When this Bill was prepared, I felt that, inasmuch as we were repealing that provision of the Act of 1840 which placed in the hands of the Imperial Parliament all questions affecting the future distribution of the clergy reserves, it was desirable that, as that Act contained a clause guaranteeing under certain contingencies a provision from the Consolidated Fund, that clause also should be repealed, although it was hardly possible that the case contemplated by it could ever arise. I was of this opinion because I desired to make the measure as complete as possible, and not to leave anything open for future discussion or debate. At the time, however, that the Act of 1840 was passed, I was not, I believe, in this country, and certainly I was not in town, and I was not, therefore, aware that that guarantee had originated in an arrangement made between the Government of the day and the most rev. Prelate who then occupied the see of Canterbury. Upon the subject being brought before the Government, we came to the conclusion that, inasmuch as apprehensions, however fallacious, were then and might still be entertained that the fund might, under possible circumstances, fall short of the 10,000 l. and odd then allotted to the two Churches, and as, by the alteration of the law now proposed, by which the future management of this fund was transferred from the Imperial Government to that of Canada, this point might not remain in precisely the same position as before—it was incumbent upon us—in order that there might be no misunderstanding or misapprehension as to good faith having been kept in a matter of this kind—to take care that, whatever might be the effect of the altered provisions of the Bill, we should not specifically and by enactment repeal that guarantee to which the two parties concerned in this matter had formerly agreed.

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That was the reason why the clause was omitted. I do not wish to conceal from your Lordships that subsequently to the omission of this clause it has been estabblished, so far as the opinion of the law officers of the Crown goes, that the measure which I am now about to ask your Lordships to read a second time, does in itself do away with the effect of this guarantee, inasmuch as it does away with the conditions on which it was based. That no doubt is the fact; but at the same time I certainly see no reason to regret that the clause, inserted in the first instance, was subsequently omitted from the Bill, inasmuch as we still maintain that provision for a deficiency in the fund, for which, and for which alone, this clause was inserted in the Act of 1840. Now, my Lords, I have arrived at the conclusion of the statement which I have felt it to be my duty to make in proposing the second reading of the Bill. But I must in conclusion entreat your Lordships that you will not—as I feel confident that you will not—hastily refuse a second reading to a Bill which is so earnestly desired by a great majority of that important community now living within the province of Canada. I trust that you will not now enter upon a controversy with that colony which I feel confident cannot long be maintained. I trust that you will not now refuse a second reading to this Bill, unless you feel that you can conscientiously and firmly, year after year, refuse those appeals to you which certainly will be again and again renewed—unless you feel a thorough confidence in any arguments which may now be brought forward in opposition to this Bill—unless you feel that your position is so strong that you can maintain it—unless you feel that right and justice are with you, and not with the colony—unless you feel that you can consistently persevere in the struggle when once you have embarked in it. I trust that—unless such be the case—you will not enter upon a course which I believe cannot be ultimately successful. My Lords, before I conclude, having thus addressed myself to your Lordships collectively, I would address myself with all respect, but with all earnestness, to the right rev. Bench. I would most earnestly exhort and pray them not to engage the Church of England in a contest of this kind. I would earnestly implore them not to yoke her with an opposition to the independent action of a colony. I know well what must be the result of such a struggle—colonial
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freedom will in the end prevail—but I fear that, however short the struggle, the Church of England in the colony will not remain in its present high position. I believe that the Church of England would be worsted in the contest, and that, instead of, as now, from the purity of her doctrines, the zeal of her sons, and the assistance of their fellow-countrymen here—making a progress in the colony which gladdens the hearts of Churchmen, a spirit of animosity against her will be aroused in all the opposing sects, and that even some of her own sons, disgusted with the struggle, would not, perhaps, remain faithful to her as they are now. I appeal, then, to the right reverend Bench, not thus to check the vigour—to a certain extent new-born—which is now to be seen in the Church of England in Canada, but to leave the colonists of this empire to arrange their own Church affairs. I ask, then, and I ask your Lordships generally, to vote for the second reading of this Bill, which does not militate, as I in my conscience believe, against any of these sacred rights that the right reverend occupants of that Bench are bound to protect, and which, if passed—and especially if passed by a large majority of your Lordships—will give religious peace and contentment to that important portion of this mighty empire—to the inhabitants of a colony which is rising day by day into increased importance.
Moved—That the Bill be now read 2a.
The BISHOP of EXETERrose to move as an Amendment, that the Bill be read a second time that day six months. He had heard with the utmost astonishment the extraordinary inaccuracies which pervaded the whole of the noble Duke's statement of the law affecting the question; but having heard those inaccuracies, he had ceased to feel some of the astonishment he should otherwise have done at the arguments he had used in urging this question on the House. The noble Duke had argued that the colonists had uniformly had the same power as that which it was now proposed to give them; that practically the Colonial Legislature had had that power since 1824; that it had been always recognised as belonging to them, and that Lord Goderich had invited them to use it; but he confessed that he heard with amazement the noble Duke state that if this Bill passed, the Colonial Legislature would have no more power over the clergy reserves than they now had over the Roman Catholic endowments. It

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was with utter amazement that he had heard such a statement from such an authority. Why, the very contrary was the fact. The Roman Catholic endowments would still be protected. Under the Constitutional Act of the 31 Geo. III., which would be absolutely annulled for ever as related to the clergy reserves, if their Lordships passed this measure, the Roman Catholic endowments would still be protected. Would the noble Duke the Secretary for the Colonies deny that this would be the case? At present, if the Colonial Legislature should send over a Bill to this country for putting the same termination to the Roman Catholic endowments as this measure would give them the power of doing unconditionally with regard to the clergy reserves, it could not be carried into effect without the consent of both Houses of Parliament. The Bill must remain thirty days upon the table of their Lordships' House before it obtained the Royal assent, and an address to the Crown against the Bill would get rid of it altogether. But that would not be the case if the Colonial Legislature chose to exercise the power which this Bill proposed to give them in dealing with the property of the Church of England; and their Lordships, therefore, would never have the power of interfering to prevent the secularisation of these reserves, in case such a proposal should be made. Were their Lordships, then, to be told that the two cases were the same? The provision in the Act of 31 Geo. III., was framed in such a way that, unless any Bill upon this subject had the concurrence of both Houses of Parliament, it would not become law. It was not necessary, according to that Act, for the House of Lords to inquire what the other House was doing—joint action was not necessary. The House of Lords, therefore, had at all times the power of saying it should not be lawful. This Bill, however, took away this protection, and thus striking as it did at the root of the sacred interests of religion, he trusted that that House, which was specially entrusted with the guardianship of those interests, would not suffer it to become law. Would the noble Duke, when this Bill went into Committee, undertake to introduce such a provision as would render correct the statement he had made, that the case of the Roman Catholic endowment was the same as that of the clergy reserves? Would he introduce a provision that the House of Lords and the House of Commons should have the power of stopping the secularisa-
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tion of these clergy reserves if the Canadian Legislature should think fit to pass such a measure? If he would not, where was the public faith? He (the Bishop of Exeter) contended that the Colonial Secretary was pledged as a man either to take that course, or to abandon the ground upon which he rested his case. The noble Duke smiled; but if he (the Bishop of Exeter) had made such a statement, and had argued that a Bill ought to pass because the Colonial Legislature would have no more power over the clergy reserves than they had now over the Roman Catholic endowments, and then was told he was utterly mistaken, and that it would take away altogether the clergy reserves from the protection of each House of Parliament, leaving still the Roman Catholic endowments under that protection, he (the Bishop of Exeter) should feel it his bounden duty to introduce such a provision as that he had suggested. He did not pretend to judge of what the noble Duke owed to his own honour. But he would say, for himself, that if he had made that statement for that purpose, he should feel himself bound to consent to the introduction of a provision which would make the measure accordant with the statement advanced by him, and to which he had attached so much importance. The noble Duke had spoken about the exclusive right of the Colonies to legislate upon matters of strictly colonial interest, in terms which certainly astonished him. He spoke as if the Colonies had an absolute right to this, and this was certainly quite consistent with the language used in his despatch, where he undoubtedly went the whole length of affirming an absolute right in the Colonies to legislate in all matters of purely domestic concern. He there said—
"The Government are fully satisfied that no such sentiments of regret for the possible secularisation of these reserves would justify the Government or Parliament of this country in withholding from the Canadian people, through their representatives, the right of dealing as they might think proper with strictly domestic matters."
There was not a word here of those interests which the Legislature of 1791 felt it to be their duty to guard; everything was left to the mercy of the Colonial Legislature. But the principles here laid down were not those of the law of England. Speaking in the presence of so many learned Lords, he ventured to say, not one of them would assert he was incorrect when he stated that the Imperial Legislature had an absolute right to legislate on every mat-

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ter whatever on which the Colonial Legislature had a right to legislate also. The best way of dealing with such matters was to exercise mutual consideration and forbearance. He was glad to find he had touched a spring which vibrated in the feelings of so many noble Lords. The authority on which he laid down the proposition that the Imperial Legislature had a right to pass laws for the Colonies, was, in the first place, that of a very great man, who, though not equally authoritative on all points and all matters, still had great and deserved weight attached to his opinions on constitutional government—he meant Mr. Burke. At the time when he had not differed from his former political friends, and when he was in the fullest career of what were deemed the most liberal constitutional principles, in his great speech on American Taxation, Mr. Burke said—
"I look on the imperial rights of Great Britain, and the privileges which the Colonies ought to enjoy, under those rights, to be just the most reconcileable things in the world. The Parliament of Great Britain sits at the head of her extensive empire in two capacities—one as the local Legislature of this island, providing for all things at home, immediately, and by no other instrument than the executive power; the other—and I think her nobler capacity—is what I call her imperial character, in which, as from the throne of Heaven, she superintends the several inferior Legislatures, and controls them all, without annihilating any. As all these provincial Legislatures are co-ordinate to each other, they ought all to be subordinate to her. It is necessary to coerce the negligent, to restrain the violent, and to aid the weak and deficient, by the plenitude of her power. She is never to intrude into the place of others while they are equal to the common ends of their institution."
A more correct and accurate description of the rights and privileges of the Colonial and Imperial Legislatures could not be drawn. It was, to be sure, eighty years ago since it had been spoken, and it might be, though he doubted it, that we had grown wiser as well as more liberal since that time; but, even supposing Mr. Burke's authority not to carry weight with it now, he could refer to the opinions of another very excellent man—one of the most upright and excellent this country ever produced, and well known to many around him—the late Sir Samuel Romilly. Mr. Wilberforce had moved for leave to bring in a measure to afford some protection to slaves in the West Indian Colonies, but had been met by assertions on the part of the planters that we had no right to interfere in the internal affairs of the Colonies—just, in fact, as the noble Duke near him said we had no right to
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legislate for the Canadian Church. In reference to that notion and assertion, Sir S. Romilly, in his diary—and, therefore, the record of his opinion was all the more satisfactory and valuable, as he had written his thoughts in the quiet of his own room—said, writing under the date of June 13, 1815—
"Wilberforce made his Motion for leave to bring in a Bill for establishing a registry of slaves in the plantations. The Motion was opposed by several persons who have an interest in West India property. They said the attempt to carry such a measure was likely to produce very alarming consequences; that the British Parliament's right to legislate as to the internal concerns of the Colonies was disputed, and such an act as this could not but excite the greatest jealousy and alarm on their part; and they hinted that it might produce open resistance. Lord Castlereagh said he should not object to bringing in the Bill, if it were merely to be printed and suffered to stand over to the next Session. The right of the British Parliament to pass such a law could not be disputed; but it was very inexpedient to do it if the Colonial Legislatures could be prevailed on to pass such Acts themselves; and, in the hope that they would, he suggested the expediency of postponing the measure to another Session. This suggestion it was thought prudent to adopt, and Wilberforce said that if permission were given to bring in the Bill, he should merely bring it in, have it printed, and take no further step at present. A great deal has been gained by this debate. It is of great importance to put an end to the notion entertained, or at least professed by the planters, that their Colonial Legislatures have the sole and exclusive right to make laws to regulate their own internal concerns."
Again, on June 19, 1816, he said—
"Much was not said in the course of the debate on the question of the right of the British Parliament to legislate with respect to the treatment of the slaves in the West India Islands. Something was said on it by Brougham and something by myself, but very little by any other Member. But, though I did not think it expedient to enlarge upon it, I own that I feel a great deal of indignation when I hear the colonists endeavouring to revive the political controversy which preceded the American war."
In addition to that authority he had implied in it the opinion of Mr. Wilberforce, which was certainly very valuable on such a subject; but now he would cite the express authority of Mr. Wilberforce himself, who, in his diary, writing under the date of May 3, 1816, said—
"The same views I pressed on Lord Bathurst, who assured me that he had told the West Indians, frankly, he would next year pass a registry Bill if the Colonial Assembly would not do it."
That great and good man, just forty-eight hours before his sainted spirit fled for ever, exclaimed, that he felt thankful and happy that England had purchased the liberty of those unhappy slaves, even at the cost of

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20,000,000 l. He lived to see all his cherished hopes accomplished—all his best hopes realised; and it was one of the most affecting incidents of our history to look into the last scenes of his life, of whom it might well be said that he was— Felix non vitœ tantum claritate sed etiam opportunitate mortis. Here, also, he had the authority of his noble and learned Friend (Lord Brougham), whose greatest glory it was to have been associated with Romilly and Wilberforce in their efforts to improve the condition of the slave. The Colonies had made every effort to stave off those proposals and to neutralise their efforts; and their Lordships would recollect the Act by which the Colonial Legislature proposed to punish the murder of a slave—or rather to legalise it—by a fine of 18 l., and the noble efforts by which that illustrious triumvirate forced an amendment of that measure; and the noble and learned Lord then exposed, as it deserved, the monstrous it equity of pretending to make a law which was to punish the murder of a slave, by a provision that would absolutely neutralise its declared object. And so year after year these three men—with the addition of Mr. Buxton—struggled almost alone for the protection of the slaves,—contending for the right of the British Parliament to interfere in colonial affairs. This still continued to be recognised as the duty of the British Parliament and the people, by many Members of both Houses, and especially by that party in the Legislature which succeeded to the Government in 1832, and in 1833 introduced into Parliament the noblest enactment to which the assent of the Legislature was ever asked. When, in 1833, the question of slavery engaged the attention of the Home Government, and the British Parliament accomplished the most noble act of generosity ever performed by any legislative body, in voting a sum of 20,000,000 l. as compensation to the slaveholders of the West Indies, the Jamaica House of Assembly sent a committee of its members to this country with a protest against the proceedings of the Imperial Parliament, which was read in the other House by Sir Richard Vyvyan. Their instructions ran as follows:—
"They are to protest in the most decided manner against any interposition by Parliament in their internal affairs. The Assembly of Jamaica are always ready, on the invitation of the Crown, to discuss the measure of emancipation, compensation being first provided by Parliament, but they will not yield their legislative rights, except
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to violence, which their confidence in the justice of their fellow-subjects will not permit them to apprehend."
This document was officially signed by Richard Barrett, the Speaker of the House of Assembly of Jamaica. The noble Earl opposite, then Mr. Stanley, and Secretary of State for the Colonies, stated to the deputation most distinctly that it was the intention of Government to carry out the measures of Parliament, and—if possible, with the concurrence of the House of Assembly—to effect a complete extinction of slavery, and that such extinction must form the basis of any representation to which the Ministry could consent to yield. The deputation declared that they had no power to consent to, or authority to propose, any such plan. In a subsequent speech Mr. Stanley said—
"It was in consequence of the vain efforts which had been made to induce the Colonial Assembly to act in accordance with the express wishes of Parliament and the country on the subject, that they felt it necessary to legislate upon the great leading principle embraced in the measure, leaving the local details, which could not be filled up here, to be filled up by the different local Legislatures. Without, then, refusing to the local Legislatures the settlement of that which properly belonged to them, when we had forced the great leading principles upon them, their last hope of preventing the freedom of the negroes would be removed. To them was left the filling up hereafter of the details of that great outline which we now feel it our duty to mark out for them at once and for ever."
Here, then, were instances of most marked and memorable interferences of the Legislature of this country with the local Legislature of Jamaica, and that interference approved of by the people. Was there anything more sacred in the local Legislature of Canada than in the local Legislature of Jamaica? The latter had existed for 200 years, and was really in such a state that it might be considered entitled to be intrusted with legislative power as far as possible. The first question to be looked to in considering the proceedings of the Colonial Legislature was, were they or were they not repugnant to the Act of Parliament of 1791? When that Act was made, the Colonial Legislature of Canada had full powers given to alter and amend its provisions to suit the circumstances of the colony. All that the spirit of the Act required was that there should be a bonâ fide provision for the support of the Protestant religion, "which," said the statute, "shall be maintained henceforth and for all time to come." And this was a principle the

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Colonial Legislature were not to infringe. This was the ground on which he took his stand when he asserted the right of the Imperial Legislature to meddle with the acts of the local Legislature. He asserted, then, on the authority of Burke, of Romilly, of Wilberforce, of Brougham, of the noble Earl opposite, and finally of the Parliament of Great Britain itself in 1833, that the Imperial Legislature had a right to deal with all the acts of local and Colonial Legislatures. These were great names, but he would quote still another. In 1837 Lord John Russell brought in certain Resolutions [see 3 Hansard, xxxvii, xxxviii], the sixth of which was as follows:—
"That the legal title of the American Land Company to the land holden by the said company by virtue of a grant from His Majesty, under the public seal of the said province, and to the privileges conferred on the said company by the Act for that purpose made in the fourth year of His Majesty's reign, ought to be maintained inviolate."
A right hon. Baronet who was now a Member of the Government (Sir Wiliam Molesworth) denied the right of Parliament to interfere with the Colonial Legislature, whereupon Sir G. Grey said—
"The right hon. Baronet had denied the right of the House to interfere in the way proposed. How then had Parliament ventured to strike off the fetters of 800,000 slaves in the West India colonies?"
The right hon. Baronet was not the only one of Her Majesty's present Government who held those opinions; but he might refer to another, whom he should always honour, however he might differ from him. Mr. Gladstone, the Chancellor of the Exchequer, on the 10th of June, 1839, made use of the following words:—
"He concurred with those who laid it down as a general principle regarding the control which the Imperial possessed over the Colonial Legislature, that that control was supreme. There could not be a shadow of doubt that Parliament had maintained and exercised that control. It was a matter not to be questioned that it formed part of the duty of Parliament to watch over, to correct, and to control the Legislatures of our West India colonies. He agreed, further, that as a general rule it was expedient, it was prudent, it was in accordance with equity and justice, that Parliament should leave the ordinary business of legislation to the Colonial Legislatures, and that Parliament, exercising a control over itself, should not permit itself to interfere or to meddle with affairs of everyday occurrence, but should rather reserve itself for great and worthy occasions." [3 Hansard, xlviii. 119.]
He did not mean to say that he had the same confidence in the authority of Mr. Gladstone as he had in that of those who
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had always maintained the same opinions on this question. He felt that the authority of that right hon. Gentleman was considerably damaged by such variance of opinion; he must therefore be content to receive him as a neutral. Let it not, however, be supposed that he charged the right hon. Gentleman, or those who had concurred in his former views, and who were now acting with him, with inconsistency. It would be unfair to expect that men, after the lapse of 14 years, should always continue to hold exactly the same opinions on any particular question. Nevertheless, seeing that there was this difference between the opinions they formerly entertained, and those which they now espoused, he was entitled to say that either they were wrong then and right now, or that they were right then and wrong now; and at all events they should have some consideration for those who could not come to the new conclusions so easily and rapidly as themselves. His right rev. Friend (the Bishop of Oxford) had, in a former discussion in that House, denied the right of the Imperial Parliament to exercise its authority in this matter, and had used arguments the effect of which was to strip the memory of his illustrious father of that renown which he had earned by his untiring labour in the cause of the oppressed slaves of our Colonies against the enactments of the local Legislatures. If his right rev. Friend's principle were sound, the name of William Wilberforce, who, through such unexampled toils, pains, disappointments, and mortifications had at length attained the one object for which he lived, instead of being revered as the great and holy champion of the negro's rights, ought rather to be stigmatised as the oppressor of the planter. He (the Bishop of Exeter) had on a former occasion frankly and candidly stated his views, both in reference to the Act of 1840 and the Bill now introduced, and for so doing a right hon. Baronet a Member of the Government had taken upon himself to style him in the other House of Parliament "a pest to his diocese," by reason of his great legal lore. Now, he really did not pretend to any great legal lore, though he should most heartily rejoice to possess it. Be this as it may—let the right hon. Baronet assail him, if he pleased, for his legal lore. He was sorry to say that he could not recriminate; on the contrary, he must frankly admit that the right hon. Baronet had showed himself as innocent of all knowledge on this subject as the merest

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child. He would not bandy invectives with this Ministerial personage; but he would give their Lordships one instance by which they might judge of the wisdom as well as of the learning of which he was possessed. The right hon. Gentleman had told the House of Commons that "the law of England abhorred perpetuity, and had always looked upon every measure that had a tendency that way with hostile eyes." Now, in commenting on this position, he would not refer to any recondite authority—to Bracton, for instance, no, nor even to Coke, or Hobart, or Vaughan. He would content himself with referring to an authority, which was on the shelves of every Englishman who possessed a library, and was familiar to every tolerably well-educated gentleman in the land. He would refer to Blackstone as an authority on this subject, who said, "A third attribute of the King's Majesty is his perpetuity. The King never dies." Such is the abhorrence of perpetuity of the law of England. Blackstone afterwards says, "The law had wisely ordained that the parson, quatenus parson, shall never die, any more than the King, and that the present incumbent and his predecessors who lived seven centuries ago were in law one and the same person, and what was given to the one was given to the other also." So much for this precious maxim of our laws—abhorrence of the perpetuity of Church endowments. But what did the right hon. Baronet think of corporations? Was not the very essence of a corporation perpetuity? at least it had been so held by every juridical or philosophical writer from the compilers of the Pandects down to this day. Let the right hon. Baronet get out of that difficulty if he could. But it should be remembered that this opinion of the right hon. Baronet was not given privately, but was expressed in the presence of other Ministers of the Crown; and yet not one of that right hon. Gentleman's Colleagues thought fit to rise and repudiate such a monstrous doctrine. It appeared in these days that Conservative progress and Radicalism, if not identical, were closely and intimately allied. Who would have expected to see this alliance so portentously illustrated, when, at the beginning of last December, the noble Earl (the Earl of Aberdeen)—whom he cordially believed to be the soul of honour, who never yet uttered a word which he did not conceive to be truth, or give expression to a principle which he did not feel—being called upon to state the principle of the
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Government he was engaged in forming, said it might be defined, in one word, to be that of Conservative progress? Surely we had advanced a pretty long way when we had got to the destruction of religion in our Colonies; for he said we had got to the point of destroying the provision for religion in the Canadian Colonies, if the noble Earl's plans were to be adopted by the House. The noble Earl said that endowments were quite a different thing from religion. He (the Bishop of Exeter) entirely agreed with him; but though different things, they were to be combined, so that one should assist the other. He begged to commend to the noble Earl's consideration the authority which declared that "Kings were to be the nursing fathers of the Church, and Queens its nursing-mothers." He said the dictates of that divine authority clearly pointed out that it was a duty incumbent on every State to sustain religion by endowment, or by temporal provision. They knew that men could not do without such temporal provision. The aristocracy of this country could not be maintained without their broad lands; and the Church must have its modicum of support, or it could not proceed in the discharge of its spiritual functions. The noble Earl assented to that; and, in assenting to that, he did no more than declare his assent to the principle of the British constitution; for it was a fundamental principle of the constitution that the Church should be an established and endowed Church in this country. The compact between the Sovereign and the people, expressed in the coronation oath, bound the Sovereign to maintain the endowments of the true religion, not only in England and Scotland, but also in the territories thereunto belonging. Were they to be told, then, that religion and endowments were not only not the same, but entirely disconnected? He did not mean to say that no religion could exist without endowments, but he did say that, according to the ordinances of Providence, no religion could be effectively maintained in any country without a proper provision for its ministers. He should not scruple to avow the conviction he deeply and earnestly felt, that if their Lordships passed this Bill, they would, not by themselves but by others, be guilty of sacrilege, and sacrilege was one of those sins, not only most awful in its offence against God, but most awful in its results to the individual or the nation who com-

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mitted it. He entreated their Lordships to bear in mind the terrible end of that Assyrian tyrant who dared to use the sacred vessels he had taken from the temple of Jerusalem for his impious revelries. It was in a hall gorgeous as their own, and in the proudest hour of his royal grandeur, when he was feasting with a thousand of his nobles, that words were seen on the wall, written by an unearthly hand, which told him that he had been weighed in the balance and found wanting—that his kingdom had passed away from him; and on that very night the fairest and greatest monarchy in the world ceased to exist. The right rev. Prelate concluded by moving, as an Amendment, that the Bill be read a second time that day six months.
Amendment moved, to leave out "now," and insert "this day Six Months."
LORD LYTTELTONsaid: This question is so important with reference to those principles of colonial freedom which I have occasionally ventured to advocate in this House, that I hope to be excused for addressing your Lordships. I conceive that the question for us is to be decided on those principles alone. Whether these clergy reserves are, or were, in themselves a good thing, is a question which, certainly not being a Canadian, I would not presume to decide positively; but as well as I can judge, I should be disposed to answer it in the affirmative. That they in a great measure disappointed the intentions of those who established them, is quite true. What those intentions were, is by no means so clear as may perhaps be supposed by those of your Lordships who have not happened to look at the imperfect records of the debates of 1791. But whatever they were, it is certain they were, to a great extent, disappointed. That, however, I should attribute to mismanagement and error. Land appropriations, especially for religious purposes, after the example of all European countries, have been made in several of our colonies. In the colony with which I am myself connected—in several of the Australasian colonies—in the West Indies, and in others, such appropriations have been made, not without success. I would not go further than this. I do not say that they are necessarily the best system. It is for the governing body to decide whether they shall maintain the institutions of religion in that or in some other manner. Whether the governing body shall abstain altogether from making any such provision, is another question. I have no hesitation
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in saying that a governing body does not do its duty which does not see to the maintenance of the ministers and the offices of religion. But the question here is, what is the governing body? Now I would first consider this question in the general and abstract way, without adverting to the circumstances which are supposed to fetter the discretion of Parliament in dealing with the matter. When we say that this is a point which, as being entirely local, is not for us, but for the Canadian Legislature, to decide, we are told that, if so, we had as well give over everything to them, and leave the connexion of Canada with England as that of Hanover was till a recent period. This view proceeds upon an entire neglect of that great principle which I am not aware that the noble Earl (the Earl of Derby) has everadmitted—which I know the noble Earl below (Earl Grey) always combated—but which the right hon. Gentleman (Sir J. Pakington) admitted in theory, in his recent despatch to the Australian colonies, while accompanying it with doubts, which I believe to be unfounded, as to its practicability—which has been allowed, though, I confess, in rather too cold and reserved a manner to please me, by the present Under Secretary for the Colonies—which has been set forth more ably and fully than by any one else by the present Chief Commissioner of Woods—and which I hope to hear enunciated on a fitting opportunity by my noble Friend (the Duke of Newcastle)—namely, that it is possible, once for all, to discriminate between subjects of imperial and of local interest. I am not going into that general subject. But this I say, that no such division ever could be made by any one, that would not include the question of religious endowments among subjects strictly local; and if, as such, it is a matter for the local Legislature to decide, it is one which not only they should be allowed, but which they should be called upon, to decide. I say this because I observe that in a despatch of Lord Glenelg's it is said that in case of the Canadian Parliament desiring that the question should be settled at home, there would be no objection to its being so. I am not so sure of that. The objection would no doubt be diminished; but on the whole I should be inclined rather to agree with Lord Durham and with the several Secretaries of State to whom my noble Friend (the Duke of Newcastle) has referred, that Parliament ought to have declined to undertake to settle the

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matter. According to this, I should say that the Act of 1791 was wrong in this respect; and I should say the same of the Act of 1840, though, no doubt, after the strong expressions of Lord Sydenham, and other Governors of Canada, and the entreaties of the Canadian Legislature, that Parliament would settle the matter instead of themselves, it was at least an excusable error. That such questions were left to the colonies in the early days of our colonial empire, is quite certain. I suppose that if ever there was a time when the Church of England at home was in a palmy state, and most guarded with exclusive rights and privileges, it was in the time of James I., the early days of Charles I., and Charles II.; and yet in those very days, Maryland was given over to the Roman Catholics, Pennsylvania to the Quakers, New England to the Puritans, and, somewhat later, I regret to say, New York to no religion at all, as far as public provisions were concerned. This appears to me the general case for the Bill. The Colonial Legislature may do wrong in such a matter; but Parliament does not undertake simply to prevent their doing wrong, but their doing wrong only within certain limits, within which this case does not fall. I will now advert to some objections taken, not from the history of the case, but from the nature of the case. The awful word sacrilege is used; and so awful a thing that is, that I would not lightly say—I would not deny, but I would not lightly say—that in case of a Colonial Legislature proposing to do, or doing, what could be clearly and irrefragably shown to be a sacrilegious act, it might not be the duty of Parliament to interfere, having the power to do so. But I am prepared to contend that the alienation of Church lands is not necessarily sacrilege, but is to be decided to be so or not according to circumstances, and by the discretion of the governing body. A legitimate instrument in reasoning is the putting of an extreme case; and if it is so when the extreme case is only a possible one, I presume it is still more so when it is one which has actually happened. I will take the case of this country. According to the most learned authorities, there was a time when of the whole soil of England not less than one-fourth—according to one of the most learned of them, Sir H. Spelman, I believe it is said that nearly one-half—six-thirteenths I have seen it reckoned—was Church land. I say nothing of the man-
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ner in which that land may have been alienated; but is it possible for any one to contend that the whole of it was for ever to remain so appropriated, under the awful penalties denounced by the right rev. Prelate? I can quote a still higher authority—one to which all your Lordships will defer, and especially the right rev. Bench—that of Bishop Butler. Bishop Butler was once consulted by a scrupulous-minded owner of alienated tithes—a kind of property to which some at least of your Lordships will not readily admit that the guilt of sacrilege necessarily attaches. It is evident that the case of tithes is the strongest that could be named; and as to this, too, Bishop Butler stated his opinion to be that they could not be held essentially inalienable, but must follow the discretion of the governing power, and the course of law. Well, we are referred to the coronation oath. The words of that oath are to this effect, that the Sovereign shall maintain all the rights and privileges of the bishops and clergy which they now have, or shall have, by law. These are very large words. I shall content myself with observing that if they are to be held to mean that no part shall be touched of the temporalities of the clergy in any part of the Empire—and this is a question not of degree, but of principle—they prove a great deal too much. What has happened in another colony—South Australia? There, as in this case, there was a legal provision for the clergy which the local Legislature could not touch, and Parliament had reserved to its own control. Parliament gave up this power, and the first use which the South Australian Assembly made of its liberty was to sweep away all religious endowments whatever, and fall back on the voluntary principle. I regret this; and I may observe, in passing, that, like almost every one else, I hope that the Canadian Parliament will preserve these appropriations. It is only for the sake of argument that I assume that they may secularise them, as the extreme case, which, of course, any lesser case would follow in the way of inference. I say we may disapprove of what South Australia did; but I never heard any one say that the coronation oath would compel its disallowance, or any other obligation on this country such as has been referred to. Now, to advert to these more prominent objections to this Bill, relating to the history of the case; and, first, to that which is undoubtedly the weakest of them all, that the Act of 1840 was a final measure.

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I must say that this objection appears to me to proceed upon as great a confusion of thought as can be imagined. How is it possible that the essence of an Act of Parliament can be that it should be final? The Act itself says nothing about its being final, except in its preamble, which recites that it is desirable that the question should be finally settled. Could any rational being doubt that for a moment? But that indicates nothing but the wishes and intentions of its framers. No Act can be final in the sense here contended for. We may speak of the Act of Settlement, of the Roman Catholic Relief Act, or other great statutes of that kind, as final measures; but that is because we are looking back upon them—and the course of events has proved them to be so—as having been accepted by the country. In this case the Act was not a final one, because it has failed to prove so—because it has not been accepted as such by those whom it concerned. A doubt is thrown over this question by the peculiar way in which it is said that the faith of the Crown, or of Parliament, or of the country, is pledged to the maintenance of those appropriations; and I am willing to admit that this is the only colourable plea for opposition to this Bill. But I conceive that it, too, is founded on a fallacy—the fallacy of supposing that public faith can be pledged to an institution as it can be to individuals. No one doubts the latter case, or that that faith should be maintained at all hazards. But the distinction is one which has always been held. Public measures are passed, and the vested rights of individuals, and of them only, are always provided for. The present is a similar case; and the case of the Australian Church Acts, to one of which I have already referred, is, in principle, quite the same. Then we are threatened with certain consequences. It is said that this measure will endanger the principle of all religious endowments, in this country and elsewhere. Ireland, I apprehend, is at the bottom of many of the fears and forebodings on this question. Now, the question ought not to be complicated by the importation into it of remote and uncertain possibilities like this. Strictly speaking, the case does not arise; for I have denied that the Imperial Parliament would itself be the agent in this matter, as being out of its proper sphere. But, besides, the two instances are quite different. The ground of this Bill is, that the sense of the people of Canada, expressed through their legiti-
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mate organ, may be opposed to religious endowments. In this country the great majority of the people are in favour of such endowments, and upon that they rest; and we may be very sure that if ever the sense of the people becomes opposed to them, it will be a very vain attempt to try to maintain them. We are appealed to on behalf of the churchmen of Canada. I, for one, refuse for a moment to listen to that appeal. Who are these churchmen of Canada? As setting themselves against their fellow-colonists on a question of internal policy, and which is to be decided by their collective voice, we do not know who they are. As an individual, I know them well; and I believe that in all our colonies the members of our Church are as the salt of the land, and to them I look far more than to all others for the perpetuation of our institutions throughout our Empire. But as a Member of Parliament, and for the present purpose, I do not know them. Still less can I admit the appeal, which, to me, I must say, is an offensive one, urged by those who call themselves the loyal party in Canada. No party has a right so to address us, as distinguishing themselves from their fellow-subjects. The colony, as a whole, has a right to look to England for protection, for acts of grace, and of munificence; and I recognise no other organ by which it can address us, but the legitimate constitutional one which we have given to it. My Lords, these colonies are bound to us by the strongest, and at the same time, if I may so speak, the most sensitive bonds of affection and of pride. Not, indeed, a little—a great deal would be required to destroy those bonds; but a little will impair and weaken them, as a very little, a very few words, will strengthen them, and draw them closer. I was told the other day, and I heard it with the greatest interest and pleasure, by an hon. Member of the other House of Parliament, that, in an interview he had with some leading Canadians, he used the very simple expression, in speaking of our North American provinces, "the Transatlantic portion of the British Empire;" but he told me that the expression, simple as it is, was dwelt upon again and again by those men with the greatest delight, on account of their hearty recognition of their equal rights as our fellow-subjects. Upon this principle our early colonies were founded. Unhappily, this country did not long adhere to it; but the charters of those colonies are an imperishable record of the

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principles of their first foundation. We lost the best portion of them because we abandoned those principles. Almost within the memory of all of us those principles have been revived and acted on, in some good measure, with the happiest results. The opposition to this Bill invites us to a signal act of retrogression in that course, in the case of the most flourishing, the most free, the most attached of our colonies. I have no fear that this, any more than the other House of Parliament, will countenance that opposition.
LORD ST. LEONARDSsaid, that the House should first ascertain how the question of these clergy reserves really stood. The Bill before them insisted upon what was directly contrary to law and practice. Both on its introduction and on its third reading in the other House, the Under Secretary of State had overlooked that fact; and so also had the right hon. Gentleman the Chief Commissioner of Woods and Works, who was more conversant with the details of colonial policy than the arrangement made by the Statute law with regard to those reserves. The first Act relating to those ecclesiastical endowments was dated so far back as 1774. That Act provided that the Roman Catholics of Canada might exercise the rites of the Romish religion, and declared that their church should retain all its revenues, that is to say, their tithes, and to receive their accustomed dues so far as they were in the hands of Roman Catholics, and except in so far as those tithes were payable by the Protestant occupiers of the land. The same Act provided that the rest of those tithes, that is, the portion of them arising out of lands in Protestant hands, should be at the disposition of the Crown for the benefit of the Protestant clergy. There it stood; and since that time the rights of the Roman Catholic clergy had never been disturbed. In 1775 and in later years the Crown issued instructions by way of letter to the Governors of those colonies directing them to dispose of the lands—they would not permit the Roman Catholics to receive the tithes of lands occupied by Protestants—and these lands were to be appropriated for the maintenance of the clergy of the Established Church within the lower Province; that was complied with, and so the matter stood till the Constitutional Act of 1791, and that their Lordships knew was intended as a great constitutional settlement. It failed because the colony had not shown a disposition to receive a constitution like
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that country. That Act did not justify the statement of the noble Duke (the Duke of Newcastle) and his Colleagues: it simply recited the Act of 1774, and the letters issued by the Crown, and then directed that, as regarded the tithes, the subject of that Act, they should be liable, subject to that Act of Parliament, and subject to the letters, to be dealt with by the Governor in Council, and with the assent of the Crown, under the restrictions thereinafter contained. It then proceeded to recite the message from the Crown, stating the desire of the Crown to form a perpetual fund or provision for the Protestant clergy of the province. In order to provide that fund, it gave power to the Crown, that in respect of such allotments there should be an appropriation of one-seventh, and that as regarded all future allotments there should also be one-seventh set aside to be called the clergy reserves. The effect of that was a power given to the Crown to make this a perpetual provision—out of what? Out of the Crown's own land—out of the Crown's own revenues—not the property of any man or body of men, but property which by law, by right, and by the constitution, belonged as fully to the Crown as the property of any Peer of that House belonged to him. In no other way could the colony acquire that right except by a grant from the Crown. Could there be a wiser thing if it were right at all to provide for religion, than that the Crown, out of its own domains, should make that grant? Undoubtedly, as the plan was subsequently carried out, it was a bad one, and from that had arisen all the difficulties that had ensued, and which had made the question the burden and the pest of the country. The reservation of the land had had a bad effect, wherever the country had been allotted and brought into cultivation—the reserve land remained a waste, a bar to every improvement, and a burden to the country:—it was not saleable, and the clergy had no means of cultivating it. The Constitutional Act provided for the creation of rectories, and some forty were established of little value—not more than 39 l. each on an average—and although great efforts had been made to get rid of them these efforts had hitherto failed. The House should now consider how the case stood under the Act of 1791 as to the power of the Crown, as to the power of the clergy, and as to the power of the Imperial Parliament. The Act of 1791, by Section 41, gave to the colony—the Governor and

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Council and Assembly—with the assent of the Crown—the power of repealing or altering the provisions then made respecting the clergy reserves and the erection of rectories, but "under the restrictions thereinafter provided." The noble Duke (the Duke of Newcastle), and others who took his view, omitted to go on and look into these restrictions. There was this provision in Section 42, that if any Bill should pass the Canadian Legislature which should affect the Act of 1774, or the tithes, or the clergy reserves, or the rectories, or the ecclesiastical establishment, or its rights, the consent of the Crown should not be given by the Governor, but the Canadian Legislature should present to him an address praying him to send the Bill to this country to be laid before the Imperial Parliament, and the Imperial Parliament might exercise its discretion upon the matter. Section 42, therefore, gave to either House of Parliament not only the control over the Colonial Legislature, but over the Crown; it was a veto upon the power of the Crown. So important was it thought by our ancestors to preserve the religious establishment, that they would not give the Crown the power of making any alteration in these endowments. Could any other safeguards have been devised than those which were adopted? and were all these to go for nothing? His (Lord St. Leonards') object had been to show how the matter then stood, and to contradict the statements that, under the Act of 1791, the Colonial Legislature had the power of dealing with these reserves. Now, it was said that if Parliament passed the Bill now before it, it would place the Protestant clergy on the same footing with the Roman Catholic: that he entirely denied. And what had been done under the Act of 1791? The Crown desiring the establishment and support of that religion and that Church, the existence of which in Canada some now seemed disposed to deny, proceeded to create the Canadas into a diocese, and bring them in communication with the archiepiscopal see of Canterbury; and the letters patent expressly referred to the clergy reserves, and based upon them the foundation of the see of Quebec. He had told their Lordships how the matter stood as regarded the tithes of the Roman Catholic and the Protestant Churches. The Roman Catholics had never been disturbed in their rights; but in 1823 the Provincial Legislature, upon the ground of provision having been made by the clergy reserves for the Protestant
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clergy, abolished the tithes as far as they were concerned, taking advantage of the provision which Parliament was now asked to place at the mercy of that Legislature. The Act of 1791 did not attempt to stop legislation; there was no attempt at finality—no attempt to say "this shall remain for ever;" but, legislation being allowed, certain checks were provided against the abuse of that power, so as to preserve the clergy reserves at all times as a provision for the Protestant clergy. But it was found that there was inconvenience arising from the dispersed state of the reserves, and the impediments to agricultural processes and improvements, and an Act of Parliament was passed in 1827 giving power to the Crown to direct a sale of the reserves, directing that a proportion of one-fourth of the proceeds should be applied to the improvement of the remaining portion, or wholly for the purposes for which the original reserves were appropriated, and for no other use, or intent, or purpose whatsoever. If the recognition of the Colonies, if the sanction of the Imperial Parliament, if the power of the Crown, and the consent of the Crown were to be of any avail, how could any title stand more secure? If it were the title of a private individual, and not of the Church, it would be felt to be so monstrous a violation of right that no man in that House would endure that it should be questioned. It might be all very well now to proceed to strip the victim, but the appropriation of the spoils, he would venture to say, would be a more troublesome task; and he was satisfied that if the Bill passed, it would create more difficulty, and dissension, and animosity in the Colony, than almost any other measure that could be framed, In 1839 the Colonial Legislature passed a Bill in order to clear up doubts as to the disposition of the clergy reserves; they then vested them in the Crown, and absolutely discharged the Colony from all trust and responsibility beyond the general purposes of public worship and the spread of Christian knowledge. At that time the Canadian Legislature, so far from desiring to have a control over the funds, resolved to place their disposition in the hands of the Crown. The Crown refused to accept the disposition of those funds; Lord John Russell intimating his opinion that it was not within the Constitutional Act to do so. The Act, therefore, fell to the ground. In 1840 another Bill was passed by the Canadian Parliament, authorising the sale of all the Canadian re-

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serves, and appropriating one-fourth to the Protestant clergy, one-fourth to the Scotch Church, and the rest to the other Christian denominations. The question then arose whether the Canadian Government, even with the assent of the Crown, had the power of passing that measure. This point was submitted to the Judges, who pronounced that they had not; and that they had assumed a right over the reserves which they did not, in fact, possess; and, in his opinion, the decision pronounced by the Judges was strictly conformable with the law and the constitution. Now, if ever there was a compact entered into by any nation to preserve the property of a Church, it was the compact of the year 1840 which followed. There was an anxiety to meet the wishes of the Canadian Legislature, which was not then to be pacified except by a sacrifice of part of the rights of the Church. The then Archbishop of Canterbury was a party to the arrangement, and all the great men of the day were called in; and they agreed at last to carry a measure as nearly as the law laid down by the Judges would permit, which should meet the view of the Canadian Parliament; and upon the consent of the Church, given by the Archbishop, an Act was passed. What followed? It was anticipated that, the proceeds being so small, there might not be enough derived from the reserves to provide even the most moderate stipends for the clergy. The Consolidated Fund was, therefore, pledged by the Imperial Parliament as a guarantee to make good to an amount specified what the clergy reserves to be allotted to the English and Scottish Churches might at any time fall short of. Could the Canadians say that was not a benefit—to put an end to a controversy, and have an absolute provision for the clergy of the two Churches there? If a third party came in, as the Imperial Parliament did, and gave such a guarantee, could it be said this was not a compact binding upon all parties? The Act of 1840 began with the Act of Union, which repealed all the provisions of former Acts of Parliament relating to the Governor and Council; but the parts which were repealed in no respect affected the reserves of the clergy. It then went on to provide how new laws should be made, and in what manner the Royal assent should be given to those laws; and Section 42 of that Act happened, singularly enough, to contain the very thing which the 42nd section of the Constitutional Act of 1791 contained.
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It was to the effect that in case any Bill were passed by the Canadian Legislature touching the Roman Catholic tithes or the Protestant clergy reserves, or anything relating to ecclesiastical establishments, the Royal assent should not be given to the Bill until it had lain on the tables of the two Houses of the Imperial Parliament for thirty days; and if either House refused its concurrence in the measure, and addressed the Crown upon the subject, the Crown was restrained from giving its assent thereto. The fact was, therefore, that the power still remained with the Imperial Parliament to stop altogether the action of the Canadian Legislature in dealing with these reserves. The noble Duke had told their Lordships that at present they were maintaining a law which provided for Roman Catholic establishments. But it was no such thing. The Act of 1840 simply provided that, out of the reserves to be sold under the Act of 1827, the obligations of the Crown to any religious denominations should be performed in the first instance. Well, it turned out that one of these obligations was an annual payment of 1,600 l. to the Roman Catholic clergy in Canada, in consequence (said the noble Duke) of their having lost some tithes; but they had lost no tithes, so far as he (Lord St. Leonards) was aware of, except those which they did not gain by the Act of 1774; and that Act gave them all the tithes of their co-religionists, but not of the lands occupied by Protestants. The noble Duke had said that chap. 78 had no connexion with the Act of Union; but that was not so. They were two parts of the same transaction. Now, the Act directed the reserves to be sold, and it made this distinction in consequence of the opinion of the Judges that the reserves sold or to be sold under the Act of 1827 should go thus: two-thirds to the Protestant clergy and one-third to the Scotch Presbyterian Church; but as to the rest, to be sold under the Act of 1840, the Church of England was to take two-sixths, the Church of Scotland one-sixth, the remaining half to go for purposes of public worship and religious instruction, according to the discretion of the Governor in Council. While defending the interests of the Protestant clergy, he would strenuously oppose any attempt to destroy the rights of the Roman Catholics. The Under Secretary for the Colonies, in the other House, intimated that the Government was not indisposed to get rid of

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the 44th section of the Act of 1840, which was as much to say, "While we are pre pared to destroy the rights of the Protestants, we are equally ready to destroy those of the Roman Catholics." Now, he ventured to think that the Government would not dare to take this course—first, because it was wrong; and, secondly, because the Roman Catholics would not submit to it. The noble Duke had said over and over again that this Bill would place the Protestant clergy on exactly the same footing as that on which the Roman Catholic clergy now stood. That was a gross mistake. Pass this Bill and you empowered the Canadian Legislature at once to deprive the Protestant clergy of their property; but it could not deprive the Roman Catholic clergy of their property without sending a Bill over to this country for that purpose, which must lie on the tables of Parliament for thirty days, and might be disallowed by the Crown at any moment within that period. Would their Lordships sit quietly by and see the rights of the Protestant clergy destroyed, while those of the Roman Catholics were preserved? Would such conduct be becoming in a Protestant Legislature? He perfectly understood the propriety of maintaining the rights of the Roman Catholics; but whilst he was ready to maintain those rights, he was equally prepared to maintain the Protestant clergy in their rights. Let it be remembered that, by the Act of Union of the two provinces, the Roman Catholics were enabled to vote upon the question of these Protestant clergy reserves; and that, by their means, a measure had been passed by means of their votes for committing the property of the Protestant clergy to the care and protection of the Canadian Parliament. Now, after the taste of the first fruits which would have been acquired by the destruction of the Protestant clergy reserves, and an end was put to the payment of tithes to the Protestant clergy, did they suppose that the Canadian Legislature would be long before they helped themselves to the Roman Catholic tithes, and the Roman Catholic endowments as well? In the course of the discussion respecting this measure, much had been said about finality. As regarded human affairs, generally speaking, he could not understand the applicability of the word; but this, at least, was certain, that men who entered into a contract were bound to adhere to it. The law might reverse it, but no one who was
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a party to it could do so without violating the principles of morality. If human arrangements were not to be binding to this extent, what was the use of laws, and what security could there be for property? If ever property was settled finally for a particular purpose, it was the clergy reserves. He must say he had listened with astonishment to the argument which had been addressed to them that night, to the effect that as the Act of 1840 had taken a portion of the property from those to whom it belonged, and given it to others to whom it did not belong, therefore it was a mere question of degree; why not then proceed to take a little more? According to that argument there could be no such thing in the world as a compromise of rights; because all compromises of rights rested upon this basis—that each party to the arrangement gave up something for the sake of quietness and peace, and for establishing and securing future rights; but what could be thought of the morality of those who, having persuaded a person to surrender a part of his rights, should then turn round upon him, and found upon that circumstance a claim to the whole? It had been admitted by a Committee of the Colonial Legislature in 1846 that the Act of Union was intended to be a final settlement of the question, and had been accepted by the Canadian Parliament as such. That the Imperial Legislature might repeal the Act of Union if they pleased, there was no doubt whatever. Nobody disputed their power; but would it be just to exercise that power? On a former occasion he had heard a right rev. Prelate speak of the necessity of giving the Canadian Legislature control over this property as a matter of right and justice. The clergy reserves belonged to them as much as they did to the Canadian Legislature. The property was settled; it never was the property of the Legislature of Canada. If their right followed from the free constitution which was given to them, why was not the right transferred to them when that constitution was granted? He should deeply regret the separation of the colony and the mother country, which had been hinted at; but if the Imperial Parliament yielded up the rights of which they were the sacred repositories, they might depend upon it that the respect entertained for the mother country would cease; and that, instead of more firmly securing the union, they would take the most effectual means of terminating it. One would think,

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from all that had been said in support of the Bill, that its opponents were interfering with the right of the Colonial Legislature. But what was the fact? Why, that the right was not in the Parliament of Canada. The property, he repeated, was settled, and belonged as much to the Protestant clergy of Canada as his (Lord St. Leonards') house did to him. Let not their Lordships he misled by the idea that they were only dealing with the property of a small class. They might rely upon it that the rights of property must be preserved universally, or not at all. The noble Duke had stated that the Act of 1840 withdrew the clergy reserves from the operation of the Constitutional Act of 1791, and that the opinion of the Government was, that they ought to be restored. Restored! What could the noble Duke mean by that? The Act of 1791, as regarded the clergy reserves, was not a Canadian Act, and the question was simply, whether they should now repeal an Act of the Imperial Parliament, and give the clergy reserves to the Parliament of Canada; not whether they should restore to the Canadians a right which they never possessed, but whether they should now take the property of the Church and transfer it to the Canadian Legislature. It was notorious that the Canadian Legislature meant to secularise this property. The right rev. Prelate said on a former evening that he would not be a party to an act of spoliation; but why did he propose to transfer to another hand the power of doing that which he shrank from himself? In conclusion, he called upon their Lordships to reject a measure which violated the principles of justice and morality, and set a precedent for subverting the rights of property, of which there are many persons in this country who would not be slow to avail themselves; but, on the contrary, to protect the rights of the Protestant clergy in Canada, and prevent the passing of a measure which was, in truth, nothing else than an act of spoliation.
The BISHOP of NORWICHwas understood to say that he intended to vote for the Bill, because he regarded it as the fulfilment of the pledge which had been made by the British Legislature to the Legislature of Canada, as to the policy they considered it right to pursue with respect to colonial government—namely, that the colonies should be allowed to regulate their own internal affairs. His main reason, however, for supporting the
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measure was, because he believed he was thereby best serving the interests of the Church in Canada, though he regretted that, in coming to that conclusion, he was altogether separating himself from several of his right rev. Brethren, as well as from many other friends of the Canadian clergy, who believed that he was adopting a course most adverse to the true welfare of the Church. Should the measure pass, what may be the result on the Church in Canada must be left to the Canadian Legislature. They, not the British Parliament, would be responsible. The proper course was, for their Lordships to discharge what they believed to be their duty, and to leave to the Canadian Parliament to discharge theirs. It had been assumed as certain that, if this measure passed, the Canadian Legislature would alienate the clergy reserves; but he thought the evidence was not sufficiently strong that they should possitively assert this. What is said is, that the Roman Catholic members of that Legislature, who had undoubtedly acquired great influence in it since the union of the two Canadas, would use that influence to procure the secularisation of the Canada reserves. This is strongly put forth in a letter written by a right rev. Prelate (the Bishop of Toronto), whose local position as a Bishop of the Church in Canada gave weight to his views on the subject. But the right rev. Prelate, in that same letter, supplies an argument against his view. His words are—"The day would speedily arrive when the same measure would be meted out to the Roman Catholics, when their property-would be disposed of in a similar way." There can be no doubt that the secularisation of the Canada reserves would be contrary to the interest of the Roman Catholic Church. If the Roman Catholics of Canada should use their power to secularise the endowments of the Protestant Church, they could not look forward to their Lordships putting a veto upon any measure which might be passed in accordance with the precedent, for secularising the endowments of their own Church. But he did not believe the Canadian Parliament would commit so unjustifiable an act as secularising the Protestant clergy reserves. We must look, too, to the probable effect on Canada of refusing this measure. The Canadas were in so advanced a state that some time since there was a talk of a movement for annexation or independence; a sentiment of loyalty, however, existed in the colony, which was a surety for the continuance of

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the connexion for some time, at all events, with this country. But their Lordships could not ignore what had taken place; and although this measure, if it did not pass, might not exactly be a casus belli, yet its rejection would cause considerable exasperation between Canada and the mother country. And here it was necessary to refer to that part of the Bishop of Toronto's letter in which he said, that, in passing this Bill they were "disgusting the loyal and Conservative party in Canada." But he (the Bishop of Norwich) would wish to know how would the adoption of the contrary course operate upon that portion of the Canadian community which was not held to be so loyal and so Conservative? What would be the consequence to the Church, supposing that a contest was entered upon between the colony and the mother country? What would be the result if, after a time, the Colonial Legislature should have the disposal of these reserves, either by the concessions of the Imperial Parliament, or from other circumstances? The result would, of course, be, that they would exercise their power in a spirit of hostility to the Church, which did not now exist. Having adverted to the possibility of Canada becoming one day independent, he, for one, could not look forward to that event as being necessarily a calamity. He believed, on the contrary, that the wisest policy which this country could pursue towards her colonies was to recognise this prospect, and to deal with them as if they would one day naturally become separate and independent nations. It was not sufficient that we should give our colonies the same laws and the same institutions, civil and ecclesiastical, that we ourselves possessed. We were bound to do more, and gradually to accustom them to control themselves, to legislate for themselves, and to adapt the laws and institutions which they derive from us to their growing and changing wants. But, whether the separation of Canada from the mother country was calamitous or not, he would ask how would the Church gain in case their Lordships exasperated the Legislature of Canada against it by the rejection of the Bill? He had always considered that it was from the original legislation upon this subject that all the mischief and inconvenience attendant on the measure had proceeded. And without meaning to say that the intentions of the framers of the Act of 1791 were not founded in wis-
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dom, still he was bound to say that the measure had been carried out in a manner so mischievous to the colony and to the Church, that, whether the reserves were ultimately to be alienated or not, the Church of Canada would be in a worse position than if the reserves had never been granted. While, then, he admitted the justice of handing over these reserves to the disposal of the Canadian Legislature, he believed that it would be both unwise as well as unjust on the part of that body to proceed to their secularisation; but should they do so, he maintained that though the Church of Canada might not have a legal claim, it certainly would have an equitable claim for compensation upon the Legislature of this country. Upon these grounds, he should give his vote in favour of the Bill now before their Lordships' House.
The EARL of DERBY: My Lords, I should recommend the right rev. Prelate, who has just sat down, to dismiss altogether from his consideration the last topic which he has urged upon your Lordships, and on which he seems not a little disposed to rest the vindication of the vote which he is about to give—a vote calculated, as some of your Lordships earnestly believe, to strip the Church in Canada of its possessions. If the right rev. Prelate imagines that Her Majesty's Government could hold themselves bound to grant an equitable compensation to the Church in Canada—or that the Church in Canada would have a claim upon Her Majesty's Government for any such redress, in consequence of losses arising from the passing of this Bill, then I say, my Lords, that the prudent course for the right rev. Prelate, before giving his vote in furtherance of this Bill, would be to ascertain from Her Majesty's Government—which I suppose he might easily do—how far they will be disposed to answer the sanguine expectations which he has formed of their willingness to grant compensation for any injustice that may be sustained by the Church in Canada from the passing of this measure. And, my Lords, I feel quite sure that the right rev. Prelate's own sense of justice would quite satisfy him, in the event of that answer being of a negative character, that it would be quite impossible in him to reconcile his vote of to-night with a due regard to his conscientious feelings—a vote recorded with the perfect conviction that, though the Bill would entitle parties to an equitable compensation, there was no

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chance of an equitable compensation being obtained. My Lords, I do not rise for the purpose of protracting this discussion; for, so far as the argument against the injustice—against the very nature and character—of the Bill as it has been presented to us by Her Majesty's Government is concerned, the able and the powerful speech of my noble and learned Friend (Lord St. Leonards), has so completely exhausted the subject, that it must have carried conviction to every Member of your Lordships' House, so much so, that I feel any attempt on my part to expatiate on his argument would only weaken its effect. My Lords, my noble and learned Friend has demonstrated beyond the possibility of dispute or cavil that the property, with regard to which we are now about to legislate, never was for one single moment at the disposal of the Canadian Legislature, or in any way subject to its jurisdiction. And, my Lords, to address myself to that point, it is perfectly certain that the clergy reserves, previous to 1791, were the property of the Crown by right of conquest; nor is it in any way a matter of less certainty that they were afterwards appropriated by the Crown for the maintenance of the Protestant clergy; and, to a certain extent, a certain power of dealing with that appropriation was given to the Legislature of Canada, which they could not otherwise have possessed, under the Act of 1791; and all the power which they had ever exercised over those reserves was a power strictly limited, and which was conferred upon them by the Act of 1791. Setting out, then, from the Act of 1791, under the limits and under the restrictions imposed by that Act, which remained in full force until the Act of 1840, whatever power since then the Canadian Legislature possessed over those reserves was strictly and accurately defined. It is, therefore, from 1791—not denying the succession of restrictions upon the inherent power of the Canadian Legislature—that their Lordships must trace the series of concessions made by the Crown and by Parliament, in whom the domain of the reserves rested, to the Canadian Legislature, at their own pleasure, and subject to such restrictions as they pleased. And, my Lords, this view of the case appears to me to decide summarily and conclusively the claim of right—I mean the claim of strict legal right—put forward upon the part of the colony. Well, my Lords, the claim of right having been disposed of, and disposed
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of as I think conclusively and absolutely by the arguments of my noble and learned Friend, the only grounds on which the question can be strictly argued is the policy in regard to these reserves. It certainly, my Lords, might be the policy of this country to grant to the Colonial Legislature still greater power than they have ever been granted as yet: it is the right of the Imperial Legislature to withhold the concession of any greater powers; but it must not be forgotten that in that case the powers which might be conferred—as the powers which have been conferred—are not conceded as the inherent right of the Canadian Legislature, but as the free grant of the Crown and of Parliament. But, my Lords, on the other hand, as I am speaking frankly, I will at once admit that, from the time when you conferred a representative form of government upon Canada—that still more in proportion as that colony advanced in intelligence and in wealth—that still more when its dependence upon the mother country must be considered rather nominal than real—I say, my Lords, that from that date it became essentially the policy of this country to keep a lighter and a lighter hold upon that colony with regard to matters of purely internal concern, and constantly to keep augmenting the degrees of superintendence which she was to exercise over her own affairs. I then say that if any concession is to be made, the extent of such concession is only to be limited, in the first place, by the nature of the interests involved; and next, by the consideration of that faith and honour which are due to third parties, that is, neither the British Parliament nor the Colonial Legislature. My Lords, I cannot admit what has been contended for by some—that the question of the appropriation of these reserves is absolutely a question of local interest alone. Now it appears to me that in this question great Imperial interests as well as great colonial interests are involved. When the Imperial interest and Imperial power are brought to bear upon the Roman Catholic and the Protestant establishments in the colony, I think it is difficult to contend that while the maintenance of Roman Catholic institutions of the colony is a matter of Imperial concern, the maintenance of your own communion and of your own Church in Canada is a matter of exclusively local concern, with which this Parliament has nothing whatever to do. But even in regard to the administration of the local funds for

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the maintenance of the clergy of Canada, I should be desirous, so far as it is possible, to strain the point of strict right for the purpose of meeting what I believe is the anxious wish of a large majority of the people of Canada. For my own part, if I had the responsibility of introducing a measure for disturbing the settlement of the Act of 1840, which was undoubtedly intended to be a permanent and final settlement, I frankly declare to your Lordships that no consideration on earth—not even the chance, if there be a chance, of severing the nominal dependence of Canada on this country—could induce me to take a step which I could not reconcile to my conscience, and which I think is fraught with the most serious consequences hereafter. I would not, therefore, as a Minister of the Crown, think of disturbing the settlement of the Act of 1840. I would, on the contrary, have maintained that settlement as a compact solemnly entered into between this country and the Church in Canada—as a compact which, as a Minister, I was bound to uphold to the utmost of my power. To a certain extent the question, however, has been altered by the position which has been taken by Ministers in respect to it. I cannot shut my eyes to the fact, that, by two succeeding Governments, promises have been held out to give to the local Legislature a greater and more extensive control over those reserves—I cannot shut my eyes to the fact that a large portion of the people and of the Canadian Legislature is anxiously desirous of obtaining that power. I cannot shut my eyes to the fact—and it is an important fact—that in pursuance of the recommendation of Her Majesty's Ministers, the other House of Parliament have sanctioned to a certain extent the principle of this Bill, and have declared their willingness to entrust the Legislature of Canada with power over those reserves. I say, then, that seeing the question thus circumstanced, I am anxious to go to the utmost limit which I feel I can do without infringing those solemn obligations of honour and of good faith which ought to be dearer to us than any other consideration, and which, I trust, will never be disregarded by this Government or the country; but which, if they do disregard, sure I am it will not be long before they repent of it. I have risen, my Lords, now principally for the purpose of saying that in the peculiar condition in which we find ourselves circumstanced, I am anxious to find out the
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possible means of escaping the necessity of meeting this Bill with a direct negative, and to go as far as good faith and honour will allow me in meeting the wishes of Her Majesty's Government. I am therefore prepared to present to you a proposition in Committee, if this Bill should pass a second reading, whereby there will be given to the Legislature of Canada more extensive powers than has been given them by the Act of 1791, but which will, at the same time, maintain inviolable all appropriations that heretofore have been made, not only upon the lives of any individuals, who have a secondary and an inferior interest in the matter, but maintaining as a permanent provision, be it for the Church of Scotland or for the Church of England, all appropriations which, either under the Act of 1827 or under the Act of 1840, have been allotted and solemnly given over, not to individuals, but to trustees, for the benefit of those Churches for ever. Maintaining these appropriations strictly and inviolably—I speak for myself alone when I say that I will waive all the great and serious objections I entertain to this Bill, and which would have prevented me were I a Minister from submitting it to Parliament—if I can obtain from the Government such modifications of this measure as should, at all events, declare that that which has been allotted under the authority of Parliament, by solemn compact, and by an Act under the sanction of the Crown, shall be held as inviolable, be it the property of the Church of Scotland or the Church of England—as if such were the personal property of any of your Lordships. I will not anticipate the arguments which I must necessarily use in bringing this proposition under your Lordships' notice. I am afraid that. I shall have to press this point upon your Lordships at some length in Committee. I make considerable sacrifice of my own feelings while, influenced by a spirit of conciliation, and a desire to meet the reasonable claims of the colonies, I make the present proposition. The colony of Canada claims to view this question as one of simply local interest; but I again repeat, that this question cannot be viewed as one of local interest, but of Imperial interest; for when arrangements have been entered into by the Parliament of England, and when funds have been vested in pursuance of these arrangements and on the faith and honour of the Legislature, to set them aside by the capricious acts of a ty-

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rannical power, in subservience—no, I will not use that word—but in obedience to the unreasonable demands of a local Legislature, and to recall those obligations into which we have entered, cannot be matter of local, but must be of the highest Imperial interest. My Lords, I am anxious to have an opportunity of submitting this proposition to your consideration, should your Lordships be induced to give the measure consideration in Committee. I am afraid, however, my Lords, to cherish the hope and expectation that it would lead to peace upon this question, and not to fresh demands upon us. If my proposition be acceded to, I shall consent to waive my own grave objections to the measure, and consent to the second reading. If your Lordships, however, insist that this measure shall not only be prospective, but that it shall also be retrospective—that it shall violate those engagements which have been solemnly entered into; that it shall in effect plunder parties that are legally possessed of this property—then, I say, that no consideration on earth, not even the dismemberment of the Empire itself, will induce me to make such a sacrifice as to set my hand to a Bill of that description, and to say, "Content." Whatever the hazard may be, to such a Bill I shall say, "Not content."
EARL GREYsaid, though the noble Earl who had just sat down had expressed a willingness that the Bill should pass in a modified form, and, after so important an announcement it was not likely that it would be rejected on that stage, still he (Earl Grey) felt it to be his duty to state the reasons which, in his opinion, rendered it highly desirable that it should pass in its integrity. He felt it to be the more necessary to do so because the noble Earl had not stated whether he intended to vote for the Amendment of the right rev. Prelate or not. He thought no ground had been shown for adopting that Amendment, and rejecting the Bill. The right rev. Prelate had entered into a long and able argument to show that the power of the Imperial Parliament was supreme over all local legislatures; but he used it against a proposition which not one of their Lordships—not even the noble Duke who proposed the second reading, and whose language was open to some misconstruction—had thought of advancing. No doubt Parliament had the right to interfere; but it was one thing to have strict legal right, and another to have justice in the exercise of
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it. The supreme power of the Crown and Parliament should never be surrendered; but it should never be exercised but on imperial questions, and it was unjust and vexatious to use it in reference to merely local questions. He did not think the noble Duke was quite right in saying that if this Bill should pass, the Catholic Church would be left on the same footing as the Protestant Church. He apprehended that if the Bill now before them were to pass unaccompanied by any other measure of legislation, there would be, in strictness of law, this difference between the power of the Canadian Legislature over the endowment of the Catholic Church, and over that of the Protestant Church, that with regard to the former the Provincial Parliament would only possess the power of legislation subject to the condition that any laws they might pass would not be valid until they had been laid for thirty days before the Imperial Parliament, without being objected to by either House; whereas there would be no such restriction as to legislation affecting the Protestant Churches. But practically this difference seemed to him of very little importance, and the supposed advantage to the Catholic Church of no real value. If the Parliament of Canada, after secularising the property of the Church of England, should determine to deal with the property of the Church of Rome, the Bill they might pass would have to be sent over to this country, and to lie on their Lordships' table, and the table of the other House of Parliament, for the thirty days prescribed by law; but there was little chance of either House interfering by address to the Crown to prevent the final confirmation of such a Bill, so that substantially the power of the Provincial Parliament would be as unfettered in dealing with the property of the Roman Catholic as of the Protestant Church. But passing over this minor question, he must express his regret that the noble Earl (the Earl of Derby), who had been for several years Secretary of State for the Colonies, and recently at the head of Her Majesty's Government, had not told them what would be the probable consequences, in his opinion, of rejecting this measure. He begged to remind their Lordships that the right hon. Baronet who lately held the office of Secretary of State for the Colonies (Sir John Pakington) had not sought to conceal his conviction that the rejection of this Bill would involve the greatest risk to the connexion between this country and

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Canada. He (Earl Grey) thought that the House might reasonably have expected to hear from the noble Earl whether he agreed in this opinion of his late Colleague, and what he anticipated as the probable result of the rejection of the measure. For his own part, he (Earl Grey) had endeavoured to trace out step by step the consequences which were likely to follow if the Bill was rejected; and the conclusion he had come to was this, that we should enter on a controversy with the Parliament of Canada, which never could be adjusted except by our concession sooner or later, and which could not remain permanently unadjusted without leading, by a few short and easy steps, to the separation of the colony from this country. It seemed to him beyond all doubt that this was the issue to which things must be brought by the loss of the Bill now before the House. There was in Canada the strongest feeling of injustice as to the existing arrangements; it was not a question of money, but of a great constitutional principle; it was whether or not the Parliament of Canada was to be prevented exercising one of the powers which they said legitimately belonged to them. He had no hope of their giving way on that point; he said more, they ought not to give way upon it. If that was so, how were they to carry on the government of Canada? Their Lordships knew too well to believe that the government of the colony could be carried on in permanent antagonism to the Legislative Assembly. Were they prepared to make the hopeless, he would say the wicked, attempt to govern Canada, in spite of her Parliament and the wishes of her people, by the authority of the Imperial Legislature and by force? No man would be insane enough to make such an attempt; and then there remained no alternative, if they rejected this measure, but to dissolve the connexion. The noble Earl opposite seemed to consider the dissolution of that connexion a light matter. Did he think it would be a light matter to the interests of the Church for which he was so anxious? Would the Church of England or the Church of Scotland be gainers, if by endeavouring to maintain this Act of Parliament, they caused the dissolution of the connexion, and left the Parliament of Canada to deal with the matter, without the slightest control on the part of the Government in this country? It was a quarrel into which we could not enter
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with any chance of success, and from which we could not retire with honour. It was said, that whatever might be the result, even though we should lose Canada, we ought to do what was right. He fully admitted this to be true; if it could be shown that there was any obligation of duty binding upon the nation; if Parliament could not pass the Bill without violating the sacred rules of right and wrong, let it by all means be rejected. But before a course was adopted which even those who advised it did not deny to be likely to lead to so serious a result as the loss of Canada, they ought to be very sure of its necessity. As far as he could make out, two grounds only appeared to be suggested for the rejection of the present measure as one which could not be passed without a violation of the duty of Parliament: first, it was said that it was their duty not to neglect their interest in the religion of our fellow-subjects in Canada; and, next, that there was a compact by which we were bound in honour and good faith to maintain existing arrangements. With respect to the first ground, there was not one of their Lordships who entertained a stronger opinion than he did as to the impolicy of what was called the voluntary principle in matters of religion. Those most in need of religious instruction were generally those least sensible of their wants, and the welfare of every nation was concerned in having some public fund for their due instruction in the truths of religion. But experience taught him that if they forced endowments on a people contrary to their sense of right, they did more harm than good, and he would say nothing had more prevented the Church of Englaed obtaining its proper influence than the injudicious means used to extend it in former days. A right rev. Prelate, in the course of the debate, said, that by passing the Bill they would destroy religion; and several noble Lords, himself among them, having cried "No, no," the right rev. Prelate corrected himself by saying they would destroy religious endowments, as if they were the same thing. But the distinction between the two was obvious; and he (Earl Grey) firmly believed that if the passing of this measure were ultimately to result in depriving the Church of every endowment in Canada, for the real interests of religion it was far better they should pass this Bill. With regard to the second ground—the compact that was said to exist—he

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should be glad to know with whom the supposed compact was made, and who would be injured by the infraction of it? There was no compact, as far as he was aware, with any individual, who could say he was injured by the passing of this Act. The existing holders of the stipends derived from these sources would not be affected by the Bill. The people of Canada would not be injured by it. All that the Bill purported to do was to give a power to the Canadian Legislature which it did not now possess. But he was told that an injury would be inflicted upon the Church of England and the Church of Scotland. He could not help thinking that the noble Lord, through the whole of his speech, had been led into error by making use of the language, "rights of the Church," as if the Church was not a mere abstraction, but was some embodiment capable of possessing and exercising rights. This was a fallacy. The Church, so far as it was a body capable of holding property, was a great national institution—the creature of the governing power in every country, and over which the governing power, whatever it might be, necessarily retained an authority, its existence resting upon its usefulness. The phrase, "property of the Church," was often used, but it was extremely vague language, and when they came to deal with that property practically, they soon perceived a distinction between the property of an individual, and property set apart for great national uses. It was not 400 years ago since the whole of what now constituted the property of the Church of England was enjoyed by a rival Church. Undoubtedly, 400 years ago the Roman Catholic Church was in possession of that property. He knew it was argued that this possession was itself a usurpation, as tithes had originally been set apart for the maintenance of a purer national church, which the Reformation merely restored. He would express no opinion as to how far this argument was well founded in fact, since, at all events, it certainly did not apply to the whole property of the Church. A very large portion of those estates which now constitute that property had been given to the Roman Catholic Church by kings, princes, and great feudal barons, long after that Church had adopted the doctrines and the practices which it still retained, and which Protestants abjured; indeed much of the property was given by the donors expressly for the purpose of having masses
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said for their souls. But in process of time it came to be considered by Parliament that this property ought to be better applied for the benefit of the people, and it was taken away from the Roman Catholic Church, and conferred upon our present Establishment. ["No, no!"] He was at a loss to know what that "No, no" meant. He believed that the property of the Church was dealt with in the manner he had described. But in later times they had done much the same thing. The noble Earl opposite (the Earl of Derby) brought in a Bill in the House of Commons, and which was now law, by which about half the Irish bishoprics were extinguished. They had done something not very unlike it in this country, by establishing a Board of Ecclesiastical Commissioners, who had the power of redistribution of the property of the Church. Now the right to redistribute the Church property argued also the right to apply it to a different purpose if necessary. Would any man say that it would be consistent with a due respect for the rights of property for Parliament to pass an Act redistributing the property of the Members of their Lordships' House? Would it be less an act of spoliation to take the property belonging to their Lordships individually—to make it a common fund, and divide it equally? Would this be less unjust to the owners of large estates than more direct confiscation? It was clear, therefore, that by the measures Parliament had adopted, a distinction had been recognised between the property devoted to the support of the Church, and private property. The truth was—and let them not seek to disguise it from themselves—that the real security of the property of their own Church rested not upon this doctrine of compact, or upon the inviolability of property, but upon the conviction which pervaded the minds of the great majority of the people of England, that they had the highest interest in the continuance and in the welfare of the Church. If this feeling should cease—if by some extraordinary circumstance the whole people of this country should be converted to some different religion—all those doctrines of property and of compacts would not avail for a moment, and the property of the Church would be swept away for ever. If their Lordships thought they could properly, in the present state of Canada, looking at the intelligence of its population and at the general diffusion of education among the people,

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intrust them to manage their own affairs, could they think it fit or decent to say to them that they should not have the power of dealing with public property in Canada as we dealt with public property in this country? Funds derived from the Canadian reserves were the result of the contributions of the Canadian people. It was by the expenditure of capital and labour on the land that the clergy reserves had obtained an appreciable value. The people of Canada, therefore, asked, and fairly asked, that their own Parliament should exercise, with regard to the endowment of the Church in Canada, the same power that the Parliament of England exercised in respect to the endowments of the Church of England in the United Kingdom. But then they were told that this general right of dealing with the Church endowments in Canada was fettered by the Act of 1840—that the Act was a compact which it was impossible Parliament could honestly repeal—and that the Parliament of England was bound by it: against this argument he took a preliminary objection. He utterly denied the right of any Parliament, or of any one generation, to bind succeeding Parliaments or succeeding generations. He was old enough to remember when that doctrine was used very much in resisting Catholic emancipation. It was said that by the coronation oath the Sovereign was placed in a position that forbade him to assent to that measure. He well remembered hearing the brilliant debates in which that question was discussed, and the unanswerable arguments by which that fallacy was entirely and for ever disposed of. It could not for a moment be submitted to, that men in one age, and at one time, should bind those who were to follow them for all time to come, and prevent them from exercising their discretion as they thought right for promoting the public interest. No doubt Parliament was always bound to act with justice towards individuals; but every Parliament, by itself, quite irrespective of what had been done by its predecessors, was at liberty to decide upon all questions of political expediency. So far from the Act of 1840 possessing any extraordinary authority, it really did not carry that degree of authority which most Acts of Parliament possessed. He would just advert to the circumstances under which that Act was passed. In 1840, before the union of the two provinces of Upper and Lower Canada, his lamented friend, Lord Syden-
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ham, who was then Governor General of British North America, considered it necessary that the question of the clergy reserves should be disposed of before that union was effected. He therefore induced the Legislature of Upper Canada, not without considerable difficulty, to pass an Act, for the purpose which was generally supposed to be in strict accordance with the provisions of the Act of 1791. This Provincial Act was laid before both Houses of Parliament, as was required by the Imperial Act of 1791, with a view to its ultimately receiving the Royal assent; but by what he could not help calling the unhappy legal acumen of the right rev. Prelate (the Bishop of Exeter), it was discovered that the Provincial Legislature had exceeded its powers, and that there was a technical objection to their Act, which rendered it impossible that it should be confirmed. The attempt to settle the question by Colonial legislation having thus failed, it was determined that a Bill should be brought into Parliament for the purpose of doing so. But, unfortunately, the Government of that day, during the progress of the measure through Parliament, was induced to assent to changes in its provisions, by which, instead of giving one-half of the clergy reserves to the Churches of England and Scotland, and dividing the rest among the other denominations according to their numbers, as had been proposed by the Assembly of Upper Canada; the whole of the property already sold, and one-half of the produce of the lands which might be afterwards sold, was to be given to the two Churches of England and Scotland, and the remaining moiety of the value of the unsold land left to be divided among the other denominations at the pleasure of the Executive Government. This proposal was made to Lord John Russell on the part of the Archbishop of Canterbury, with whom the late Sir Robert Peel and Mr. Gladstone acted. Lord John Russell adopted it, at the same time not concealing his opinion that the arrangement was an inexpedient one, and that he only agreed to it under the impression that the measure could not otherwise be carried. It so happened that he (Earl Grey) had himself not many months before ceased to belong to the Administration of Lord Melbourne; but having his attention drawn to the subject, he wrote a letter to Lord John Russell, stating the serious consequences which, in his opinion, would result from that arrangement. He told Lord John Russell that if the Bill

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passed in the state then contemplated, very few years would pass away before it would be necessary to bring the whole question of the Church in Canada before Parliament; and he (Earl Grey) strongly urged that the right course to adopt would have been, after reciting in the preamble of the Bill the Colonial Act, to confine the enacting part of it to a single clause, giving effect to that Act. He was aware that such a measure would have encountered much opposition, especially in that House; but he believed that the Government at that time had the means, if it had been prepared to use them, to surmount the threatened opposition. A very considerable proportion of the whole provision for the Colonial Church was derived from the annual votes of Parliament, from which source it had been arranged, in 1832, that the stipends of existing incumbents should be paid for their lives; while the charge on account of the Canadians, previously borne by this country, should positively be put an end to. If the Government had included in the Bill giving effect to the arrangement respecting the reserves which had been assented to in Canada, provisions charging the stipends he had mentioned on the Consolidated Fund for the lives of the holders, at the same time declaring that in the event of this measure failing they would not recommend the usual annual vote to Parliament, he thought it very unlikely that the Bill would have been thrown out; and, at all events, those who were then in the situation of servants of the Crown certainly ought not to have taken on themselves the responsibility of a measure which they knew would give general dissatisfaction in the colony. But the Bill was passed with the amendments he had described; and, so far from its being cordially accepted in Canada, there was, from the moment of its being known, a great opposition to it. A deputation of Wesleyan Methodists from Canada, then in this country on another matter applied to be heard at the bar of the House of Commons against the Bill. That application was refused. His friend, Lord Sydenham, the moment he heard of the alterations contemplated, wrote to the Government his conviction of the impolicy of the measure, and stated that the result which their Lordships now witnessed would not fail to follow. To say that a measure thus forced upon the people of Canada, and upon a reluctant Government in this country, which had not the power to act upon its own
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views—that an Act passed in that manner was to be considered binding for all time to come, was an opinion which he, for one, could not for a moment assent to. He could not dismiss the Act of 1840 without pointing out what a warning it gave of the danger of pushing too far the supposed interests of the Church. Those who thought themselves the only real and earnest friends of the Church possessed at the time, and exercised, the power of preventing the measure passed by the Legislature of Upper Canada from taking effect. If that Act had been allowed to stand, or if its provisions had been embodied in the Act of the Imperial Parliament, he said with the utmost confidence, that the arrangement would have stood undisturbed for ever. It was one freely adopted by their own representatives, and consistent with their own notions of what was fair; and the people of Canada would, he doubted not, have therefore abided by it. But the case was entirely altered when the measure they had themselves agreed to was rejected, and a totally different one was substituted for it; first, any alteration was offensive to the people of Canada; and the measure was also altered in a manner inconsistent with their notions of fairness. By the Provincial Act all the property was divided between the two Churches of England and Scotland on the one hand, and all other denominations of Christians on the other, in a proportion not very remote from that in which the shares would have been allotted had they been allotted according to the numerical proportion of those who were of different persuasions. The Churches of England and Scotland at that time numbered 158,000 members, and the other denominations 174,000, so that there was no very material departure from the principle of equality in assigning a moiety of the property to each of these divisions of the population. But how did Parliament deal with the question? First, half of the Presbyterian body were struck off, because it was said that only Presbyterians in strict communion with the Church of Scotland were to be reckoned as entitled to the share they had with the Church of England. Further, it was said the proceeds of the land sales which had been already authorised were to be held as belonging to these two Churches; two-thirds to the Church of England, one-third to the Church of Scotland; and the result of the arrangement was, that the favoured Churches were dealt with three times as favourably as the

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others, after the local Legislature had been with much difficulty brought to assent to the slightest inequality. From the moment the Act reached Canada, there had never ceased to be more or less agitation. Never was the fable of the "Dog and the Shadow" more completely realised. Clutching the advantage of some slight addition to the annual appropriation in favour of the Church of England, the security of the whole had been sacrificed, and it was now in extreme danger. But even now to reject the present measure, would be to render matters still worse. Different opinions as to vested interests prevailed on the other side of the Atlantic from those which prevailed in this country. If the settlement now tendered were thrown out, and the whole subject came to be discussed in Canada under the influence of the feelings of irritation which the rejection of this measure could not fail to create, did their Lordships think it quite certain that the party which had hitherto been a minority in the Assembly might not be converted into a majority? There were not persons wanting in Canada who were ready to urge on the local Legislature that they were competent to deal with the subject, nor did they want a large amount of popular support. Their Lordships knew by how considerable a majority the Bill had been carried in the other House, where there had not been much difficulty hitherto in passing the annual estimates, providing salaries for a portion of the clergy of North America (on which subject an arrangement had been made a number of years ago, that the payments should cease with the lives of existing incumbents), but where, if this Bill were rejected, the question might be raised on the miscellaneous estimates, whether from that source an indemnity might not be made to the Canadian people. The clause omitted ought not to have been so; but as the interpretation put on the Bill was, that the guarantee was not to take effect unless the funds were deficient which were assigned by law to the Churches of England and Scotland, and that if the law were altered that guarantee would not apply, it was comparatively immaterial that the clause had been omitted. Parliament would never allow the people of this country to be taxed for an alteration made by the Canadian Parliament in the appropriation of those funds. These were the grounds on which he asked their Lordships to pass the Bill, and he would urge upon them before they
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rejected it to consider well the results of such a step. Up to three or four years ago, Canada had been unceasingly disturbed by angry contests. The Government had never worked quietly from 1821 or 1822 till 1849, when the annual discussions respecting the rebellion losses were terminated. The French population till lately was alien in feeling to the mother country, and even a large portion of the population of Upper Canada was disaffected. A very different state of feeling now existed. Their Lordships were told from both sides that Canada enjoyed the most perfect repose and prosperity, that the population was united and loyal to the mother country, and that there was an ardent determination to support the authority of the Crown. Before changing that state of things, he asked their Lordships to consider that the step they were asked to take was directly at variance with that policy by which, between 1846 and 1852, so great a change had been accomplished. He hoped their Lordships would not take a course directly at variance with the policy which had produced those effects, that they would not refuse to give the Bill a second reading, and that they would not consent to any amendment which might prove fatal to the measure.
The EARL of DERBYexplained, that from the statement he had made, it would be seen that as on the one hand he could not consent to adopt the Bill in its present state, so, on the other he was extremely anxious to have an opportunity of calling their Lordships' attention to that modification which he had shortly explained. Though he could not say "Content" to the Bill it its present shape, and though he had no right to make the request of the right rev. Prelate (the Bishop of Exeter), yet he wished to state that if the right rev. Prelate thought the subject deserving of further consideration, it would be for the convenience of their Lordships, and certainly for his own (the Earl of Derby's) satisfaction, that the right rev. Prelate should not press his Amendment to a division, but that he should assent to the second reading, with the understanding that the Amendment should be afterwards considered, and that their Lordships should take what course they thought proper on the third reading.
The BISHOP of EXETERstated that, with that understanding he did not hesitate to say that he should not trouble their Lordships to divide.
The DUKE of NEWCASTLEsuggested that the noble Earl (the Earl of Derby) should lay on the table the exact words of his Amendment.
The EARL of DERBYstated that the Bill had been delivered only on Friday, and their Lordships were called on to discuss it in Committee on Monday next; the time, therefore, was very short; but having seen the print of the Bill from the other House, he had endeavoured to sketch out an Amendment.
The DUKE of NEWCASTLEwas not aware that the Bill had been delivered only to-day. An unusual time had intervened between the first and second reading, the Bill having been read a first time last Tuesday week.
EARL GREYsaid, he had certainly received the Bill several days ago.
Amendment (by leave of the House) withdrawn: Then the original Motion was, on Question, agreed to; Bill read 2a accordingly, and committed to a Committee of the whole House on Monday next.
House adjourned to Monday next.