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Navy Five Per Cents

Volume 6: debated on Monday 25 February 1822

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The House having resolved itself into a Committee on the Navy Five Per Cent Acts,

said, that the resolution to which he was about to call the attention of the House, was founded, in its principle, on a transaction which had always formed the subject of panegyric with the writers on the state of England, as one of the greatest proofs of the resources of this country, of extent of its credit, and of the, power which it derived from the combination of private opulence and public faith—he alluded to the reduction of the four per cent annuities by Mr. Pelham in the year 1749. In introducing the measure which he should now have the honour to propose, it would not be irrelevant to bring briefly before the House the circumstances of the transaction in 1749, to which he should appeal as a precedent. In the year 1737, when sir Robert Walpole was chancellor of the exchequer, it was proposed by sir John Barnard, to invest his majesty with power to raise money by loans at a low rate of interest, at which it could then be procured, to pay off that part of the public debt on which a higher interest was paid. This proposal, then made by sir John Barnard, was not at that time acceded to by parliament. In 1749, however, Mr. Pelham, then chancellor of the exchequer, adopted the idea, and proposed to parliament a plan for reducing that part of the national debt which consisted of four per cent. This description of stock amounted then to 57 millions—at that time a very great sum; so great indeed, that considerable doubts were entertained of the practicability of effecting the reduction. Mr. Pelham, however, persevered, and brought forward his plan; which was finally carried into successful operation. The plan was this, a subscription was opened of the holders of the four per cent stock, and the persons subscribing were entitled to receive three and a half per cent for the next seven years, and three per cent after that period. The period fixed for the subscription was three months, and at the end of that time more than 38 out of 57 millions of stock had been subscribed. The more complete success of this first subscription was prevented by a combination of some of the great stockholders, who were, it was said, encouraged by the political opposition of the day. He gentlemen whom he now saw opposite to him, would, he doubted not, form an honourable contrast to the opposition in the time of Mr. Pelham, and would give their full concurrence to a measure so beneficial to the public interest, and so conducive to the immediate relief of the people. Sir John Barnard at that time published a pamphlet on the plan, which produced a great effect, and in conjunction with the firmness of parliament, completed the proposed plan. The time allowed for the first subscription having expired, a further subscription was opened on terms rather less favourable to the holders of the stock: for Mr. Pelham very properly determined that those who, in the first instance, had refused to accede to a plan so beneficial to the public and so just to the holders, should not be allowed afterwards to avail themselves of the advantages offered. Under this second subscription, about 15,600,000l. was subscribed, and there remained about 3,290,000l. stock, which was repaid in money to the holders. The total of the debt was then only 78 millions; so that 57 millions, the sum then reduced, though smaller in absolute amount than the present five per cents formed a much greater proportion of the whole debt of the nation, than that which it was now proposed to reduce. He said this because he was unwilling to assume a greater credit than he deserved, in comparison with the measure of 1749. Indeed very great credit was due to Mr. Pelham, for the vigour with which he carried through his measure, and because he had set a precedent which afforded great facility to the present operation. Having thus described the operation of 1749, he should now state the particulars of the measure which he recommended to the consideration of the House. Every member must know how anxiously they had looked forward to the reduction of the interest of the higher denominations of stock when it could be done consistently with good faith—how earnestly it had been recommended by committees, as well as by various members of the House—and how it had been foreseen as one of the happiest consequences of the dawning of national prosperity. By the operation which he now proposed, the reduction of the 5 per cent stock, a sum of 1,130,000l. of annual charge would be reduced; and when the reduction of the Irish 5 per cents was added, a relief of 1,220,000l. or perhaps 1,230,000l. would be obtained for the public. The stocks, which now bore 5 per cent interest, were of three descriptions. The first and most considerable was termed navy 5 per cent stock, which, at the commencement, was formed by the funding of navy and victualling bills to the amount of 25 millions, and which had since been increased by the funding of exchequer bills, and the loans raised in it, till it now formed a total of 141 millions. The second description was the Irish 5 per cent stock, which was raised for the service of Ireland, but on the credit of England, which was payable at the exchequer of England, and since the union of the treasuries was chargeable on the consolidated fund of the united kingdom. This stock amounted to 1,400,000l.; and as no conditions as to modes of repayment were annexed to it, it would be included in the present payment. Another species of 5 per cent stock, however, existed, which was now of small amount, though originally much larger, which had been created for a loan negotiated in 1797, and generally known by the name of the loyalty loan, to which peculiar conditions as to redemption were annexed. The holders of this stock being entitled to repayment in money within two years after the conclusion of the ensuing peace, the greater part of them called for their money within that time, after the peace of Amiens, and there remained now about one million of that description of stock. That stock was not included in the present operation, because under the terms of their loan, the holders were not liable to be paid off till three years after the paying off of the navy 5 per cents, and when they were so paid off, they were entitled to demand a transfer into 3 per cents on certain terms (that is to say, at the rate of 133 per cent for every 100l. of their stock). On these accounts, the loyalty five per cent would not be included in the present transaction. The remainder of the 5 per cent stocks was about 142 millions and a half. It was proposed that a commutation should be made of the British 5 per cents into a 4 per cent stock, the dividends on which should be payable on the same days on which those in the 5 per cents were now payable, viz. in January and July. The Irish 5 per cents, however, being now payable in April and October, a quarter's dividend would be paid on the stock into which they would be commuted in July next; after which the half-yearly dividends would be payable at the same time as the other parts of the fund. The holders accepting this commutation, would receive in the 4 per cents an addition of 5l. per cent on their capital, which would produce them an interest of 4s. yearly. By the resolution he now proposed, a relief of 1,140,000l. would be obtained, exclusive of the Irish stock. The House would sec, that all that they had a right to enforce on the holders was payment in ready money, and not a com- mutation into any other stock. Such a commutation must be on their part a voluntary transaction; but, by offering fair and somewhat favourable terms to the holders, there was no probability that they would withhold their consent. It was, of course, essential that the holders should have the fullest opportunity of expressing their opinion; but this opportunity would be as fully given by allowing them to express their dissent, as by calling on them to express their assent, when either in the one way or the other sufficient time were given. The present circumstances differed from those of the time in which Mr. Pelham effected the commutation, though in point of principle, and in an observance of public faith, the plans were the same. In the time of Mr. Pelham, the parties who wished for the commutation, were called on to subscribe, and three months were allowed for them to do so. The vast extent of our colonial possessions, and the manner in which proprietors of British stock were scattered over all the world, would make at present the fixed time of three months inconvenient. In some cases it would be not sufficient, in others it would be more than enough. It was certainly desirable that, while sufficient time was allowed to make an option, the time should not be unnecessarily prolonged. To the public such a prolongation would be attended with inconvenience, by making the benefits indefinite; while, to the persons concerned, it was injurious, by encouraging that spirit of jobbing and gambling which often gave a disgraceful character to the transactions of the money market. His proposition was, to limit, in the first place, the time of signifying their intentions, for persons residing within Great Britain, to the 16th of March. To those who lived out of Great Britain, and in Europe, the time allowed, he proposed, should be three months, say, the 1st of June; and to those who lived out of Europe, twelve months from the present time. With respect to the terms on which the commutation was proposed to take place, at the present market price, the four per cents were at 98. The bonus given was 5l. per cent, so that there was nearly 3l. per cent bonus; for 105l. of stock was nearly equal to 103l. of money. But as the dividend on the four per cents was payable a quarter sooner than the dividend on the five per cents, there was a certain deduction from the benefit; but as a set-off, he proposed that a clause should be introduced to provide that the stock should not be redeemable till 1829. In the way of objection to this plan, it was possible that it might be urged that a proportionate, though small addition, was made to the capital of the debt, to the amount of about 7,000,000l. He had been induced to adopt this course for the following reasons:—There were but two other means by which this alternative could be avoided—the creation of a 42 per cent stock. Now this plan, in the first place, would have postponed for a considerable time the advantage to the public from the commutation; for instead of 1,150,000l. a-year, only 700,000l. could, in the first place, be gained. The advantage to the public by the reduction of 4 or 500,000l. a-year was so great, that it seemed to him worth while to incur, for the sake of it, an inconvenience rather technical than real. In the second place, the stock fixed at that per centage must have been made irredeemable for a long period, as otherwise the prospect of another and a speedy reduction would have made holders unwilling to accept that species of stock. The other mode to which he had alluded, of carrying this object into effect was, to grant certain portions of long annuities by way of premium, in addition to so much stock, at a lower interest. The objection to this plan was, that a considerable portion of the fund was held in trust, and that trustees would be unwilling to take securities which would only continue for a limited number of years, and without any capital annexed to them. He would now return to the reasons which had induced him to prefer the mode of taking the option of stockholders by an expression of their dissent, rather than of their assent. In the first place, assuming that the advantages held out to the stockholders by the proposed transfer were so great that comparatively but a small number would wish to remain in the 5 per cents, it was evident that it would be much more convenient to call upon the minority than the majority for the statement of their will. The other mode would, indeed, be attended with great inconvenience, because the 5 per cent stock was divided amongst a large number of, holders. He believed the number of individuals holding that stock exceeded 100,000. Of these persons, 50,000 possessed each lees than 1,000l. stock. The committee would easily imagine the inconvenience that would result from calling on this prodigious number of persons, supposing, as be did, that nearly all of them would consent to the proposed arrangement, individually to signify their approbation of it. He proposed, that the greatest possible convenience should be given to those who dissented. A plan had therefore been concerted that would combine facility and accuracy; a printed form in a few days would be ready for circulation at the Bank, which might be filled up by the party himself, or by a person authorized by power of attorney. Dividends were received either by the actual holders of the stock, or by a person acting under a power of attorney; and the power might be extended to the purpose now in view. He apprehended that it was most equitable that the parties signifying dissent should be paid off in the order of their dissent: their names would be regularly entered in a book at the Bank, in the regular order in which they might be paid on the 5th July. He said the 5th of July, because, although there was no objection on the part of the public to complete the payments on that day, for parliament could direct as it pleased upon the subject, it did not seem at all likely that the number of dissentients would be so great as to render any further instalment necessary. Upon this point he should have further to explain himself, when the period for declaring the option had expired. It would then be requisite for him to submit to the house the mode in which the money for that purpose should be raised; and it might then be determined whether it should or should not be all paid in one clay. On the authority of the 26th Geo. III., c. 31, he affirmed that parliament possessed the power to direct at what period, and in what manner, any payments should be made. That statute expressly referred to the payment of stock at par; and it provided that any stock above par might be paid off at any time and in any manner parliament should determine: it provided further, that stock under par should be purchased in the market for the sinking fund. No difficulty would arise out of the circumstance, that the payments were to be made by the commissioners: any fund parliament might appropriate to the purpose would be paid into the hands of the commissioners for the redemption of the national debt, and applied by them to the object now under consideration. He had now shortly stated the mode adopted by Mr. Pelham: he had also mentioned the mode now intended to be pursued: he had pointed out the difference between the two plans, and had assigned, as he thought, satisfactory reasons for those variations. It now only remained for him to recall the recollection of the committee to the advantages which the public would receive from this transaction: he trusted that it would be deemed in no respect inferior in principle and superior in amount to the operation effected by Mr. Pelham. Under the latter, the public ultimately obtained a relief to the extent of 570,000l., but until the lapse of seven years, it did not exceed 285,000l. In the present instance, the reduction of burthen would be to the extent of 1,150,000l., exclusive of the Irish five per cents, amounting to about 90,000l. The whole would be left open to farther reductions at the end of seven years: the new fund now created might then be paid off. At what time, and under what circumstances, parliament might make s farther reduction of the public burthen by paying off other funds, it was not for him to anticipate. All he could say was; that it mainly depended upon the firmness and resolution of parliament. He ascribed the benefit this day opened to, the House entirely to the firmness parliament had displayed in preserving the public faith inviolate. He took no credit to government, excepting as the organ of the will of parliament, as the agents of the representatives of a free and generous people. The resolution of parliament to support the sinking fund, the stability of public credit, the confidence reposed by the stockholder in the national council that the public faith would be preserved at any hazard, had induced the public to accept terms, from which they might have shrunk with apprehension without this guarantee on the part of the great council of the nation. The operation of this day would sufficiently point out the necessity and the wisdom of adhering to the same steady undeviating course. At the same time, it was in the highest degree satisfactory to ministers to be enabled to give the public the relief which had been held out on a former night in the speech of his noble friend (the marquis of Londonderry.) In the confidence that this great operation would be completed, he (the chancellor of the exchequer) had proposed to the house the re-enact- ment of the annual taxes without the addition of the extra malt-tax: government would now proceed with confidence to give the public, and especially the agriculturists, the benefit of the remission of that duty; knowing that by so doing they broke in upon no principle of public credit, but preserved a full surplus for the sinking fund. Having gone thus far, he, perhaps, should not be wasting the time of the committee if he proceeded to answer a question that might be put to him. He should probably be asked why, under the strong feeling of the importance of an operation of this kind, the opportunity had not been taken in the year 1818, when, for a certain period, the funds were even higher than at present? To that question he was bound to give a distinct answer. It must be obvious that, on the conclusion of peace, ministers had two great objects in view which presented serious obstacles: the one was the restoration of the currency; the other the reduction of a part of the charge of the public debt. Until the currency of the country was reestablished, the stability of public credit could not be depended upon, and the bargain with the stockholder could not be equitable on both sides: no security could have been given as to the effects the change in the currency might produce. In point of fact, this change had produced some important effects. From the high price the funds obtained in 1818, they fell back most rapidly; and consequently, a heavy and inequitable loss would have been thrown upon the public, had any such operation been then contemplated. Until the restoration of cash payments, nothing could be offered to guard against dangers of this kind; but when once that great object had been accomplished; when that important remedy had been applied; it then became ministers to take the earliest opportunity of consulting the public interest by the reduction of the charge on the debt. Never was there a time when that reduction could be more opportune and acceptable. He looked upon this operation as a sequel and consequence of the resolution of the house in 1819, by which it was determined to support a sinking fund of 5,000,000l. It was the first fruit of the resolution of Thursday night last—"That this House sees with satisfaction that by the operation of this surplus, connected with a reduction of the interest on the five per cent. stock, a diminution of taxes may be immediately effected, thereby affording to the people, within the current year, the first advantages of that relief from a part of their present burthens, which was held out to the country in the resolution aforesaid, as one of the beneficial effects to be derived from the application of a surplus of 5,000,000l. The right hon. gentleman then moved his first resolution as follows: "That all and every person and persons, bodies politic and corporate, who now is or are, or hereafter may be, interested in, or entitled unto any part of the national debt, redeemable by law, which now carries an interest after the rate of five pounds per cent per annum, and is usually known by the name of navy five per cents, or by the name of Irish five per cent. annuities payable at the bank of England, and who shall not signify his, her, or their dissent, in the manner hereinafter mentioned, shall, in lieu of every 100l. of such five per cent. annuities, receive and be entitled to, the sum of 105l. in a new stock, to be called the new four pounds per cent annuities, and to carry an interest after the rate of four pounds per cent per annum, and so in proportion for any greater or less amount of such five per cent. annuities; and that the dividends thereof shall be payable half-yearly, at the Bank of England, upon the fifth of January and the fifth of July, in each and every year:—and the first half-yearly dividend on the said new four pounds per centum annuities shall be payable on the fifth day of January, 1823; and that the said new four per cent annuities shall not be liable to be paid off until the fifth of January, 1829."

said, that before he proceeded to remark upon what had fallen from the right hon. gentleman, be was anxious to put one question to him: upon the answer his (Mr. Ellice's) conduct would entirely depend. He begged to ask if it were probable or possible that the determination of government, so distinctly stated by the chancellor of the exchequer on the subject of the dissent of the proprietors of 5 per cent stock, would undergo re-consideration?

said, he considered the plan suggested by ministers on the whole the best, and he saw no reason, founded upon the convenience or the advantage of the parties concerned, to alter any part of it.

was much indebted to the right hon. gentleman for the clear answer he had given, although it would oblige him to state some objections to the proposition before the House; which he was the more reluctant to do, as he felt equally anxious with every other member, that the country should be relieved by a reduction in the rate of interest, whenever it could be effected on terms consistent with public credit and good faith. But he was afraid the present scheme was of a very different description; and, above all things, be did not expect to have beard it compared with Mr. Pelham's plan in 1749. That was distinguished in all its pants by openness, candour, and fair dealing; while the present was characterized by crookedness, trick, and artifice. He wished to God the right hon. gentleman had the benefit of such Advice in his transactions with the city, or that House the benefit of such counsel from its representatives, as Mr. Pelham had derived from that upright distinguished person, sir J. Barnard. They would scarcely then have heard, that a fair way of dealing with the public, in such a transaction was, by borrowing money from the Bank to reduce, artificially and temporarily, the proffered rate of interest; and, under that delusion, and the various difficulties thrown in the way of trustees and other stock-holders, by the shortness of time, and especially by requiring their dissent, compel them to accept of any terms that might be offered. Among the various difficulties and objections attending the transaction, not the least were those applicable to that part of the scheme that related to paying off numerically those persons who should express their dissent. How was it to be ascertained which letter of dissent was first delivered? The property of individuals, after the delivery of the letter, was likely to be affected by the situation in which he stood in the list. Suppose he (Mr. E.) happened to be the first, and wished to sell his stock, where was he to find a buyer? The first question asked would be, in what order are you on the list of dissentients? Other difficulties presented themselves: if two trustees differed in opinion as to assent or dissent, how was government to deal with them? Which was to be considered as binding the other, and binding the party beneficially interested in the question. It was proposed to extend the period for persons residing abroad; this was open to every kind of abuse: and, again, what provision was to be made where one of two or three parties were absent and the others present? In short, difficulties of this description met us at every step, and were all to be ascribed to a deviation from the plain, straight-forward course pursued on the former occasion, to which the right hon. gentleman had ventured to advert in opening the present proposition. Had there been the slightest resemblance in the two plans, all sides of the House would probably have concurred in securing the advantages anticipated, and unanimity would have contributed both to the success of the measure, and to the satisfaction of parties interested. The House must also consider, in the present instance a capital of 7 millions was to be added to the public debt, exactly in the same manner as if the amount had been borrowed in the market, and of course no advantage could really accrue, until the saving in interest exceeded that sum. A period of 7 or 8 years, calculating compound interest, must elapse, before any saving could be calculated upon. The interest of money had certainly been declining; and if ministers were so confident, as the noble marquis had expressed himself, of the continuance of peace and the permanent prosperity of the finances, why not have offered, as in the previous case, the option of a gradual reduction? Suppose 5 per cent had been continued for next year, 4½ for two following, and the rate had only been then reduced to 4 per cent. The country would have saved one half of the proposed bonus; and be put it to any gentleman conversant with what was now passing out of doors, whether a great proportion of the parties interested, particularly the more numerous, who did not so much calculate the ultimate profit or loss of the transaction as the effect of the immediate reduction on their domestic arrangements, would not hare been more or equally contented? The precipitation with which it was intended to force through the measure, discredited the transaction, and the professions of government. A fortnight was only given to the holders of 150 millions of stock, some of whom resided in distant parts of the country, to consider the terms proposed, and how their dissenting to them might affect the various family arrangements dependent on property, so great a change in the income from which, they had probably scarcely contemplated, before their immediate decision is required. Why all this unaccountable and unnecessary precipitation? The deduction was only to be made on the January dividends. Was the revenue likely to fall off, or the state of public credit to decline, before January? According to the statements of ministers, their expectations were directly the reverse. On the contrary, they had heard sanguine anticipations of a further advance in the price of the funds, enabling government also to reduce the 4 per cents. Mr. Pelham did not in this manner profess his confidence in the progressive advance of the financial and commercial prosperity of the country, which alone justified the transaction then, or can justify it now, and then turn round immediately and belie his professions, by saying that "although I believe this, and that our foreign arrangements will guarantee a lasting peace, I will not trust any thing beyond a fortnight." Had the pending dissensions between Russia and the Porte any influence on the otherwise almost unintelligible anxiety with which this measure was pressed forward? But he would acquit ministers, in the present instance, of any intention to defraud the public creditor; for no other term could be applied to the transaction, if they had really any apprehension as to the result of these negotiations.—To return to the plan itself, the right hon. gentleman says he sees no difference to the stockholder, in requiring from him a dissent rather than an assent. Why not then allow him the choice, that he may judge for himself? It was essential also, in finally determining on this measure, to look at the effects which had been already produced, first, by the rumours of the intention of ministers, and then by the communication of them to the public. Somehow or other it did very oddly happen, that certain influential individuals on the stock exchange, who were supposed to have the ear of the right hon. gentleman, and who very shrewdly guessed what was about to take place, had been more busy than usual, previous to the meeting of parliament, in their speculations to raise the funds. It was notorious, that enormous loans, to the extent of many millions, as any of the bankers in the House could inform them, had been specially borrowed on the security of stock purchased with this object. These gentlemen had exercised a very clear foresight on the present occasion. The funds in which they had made their purchases naturally rose on the declaraion of the noble marquis in the commencement of the session, and the 5 per cents, declined. The holders of 5 per gents, consisting in a greater proportion of small annuitants, and persons whose necessities and limited means compelled them to look for the greatest possible extension of income, alarmed at the threatened reduction, crowded the transfer offices at the Bank in such numbers to sell out their little pittances, that it was scarcely possible for several days to get through the business. The powers of attorney provided to persons in the country of the same class were in equal proportion, and the small sums brought to market in consequence, of from 100l. to 1,000l., fell into the hands of the great speculators, who were possibly further gifted by some spirit of divination as to the bonus to he offered by the chancellor of the exchequer. The quantity, however, sold even exceeded their calculations, and the interest of money had consequently nearly doubled in a short period in the market. All this might apparently lead to difficulties not exactly contemplated by the right hon. gentleman, or the Bank, when they so readily consented to a further advance of 4 millions. The property thus sold out had been forced into foreign funds; which was proved by the great advance in all foreign securities, entirely disproportionate to any in our own, after even all the efforts of the stock-jobbers. Within a week or ten days French stock had risen 5 per cent, Danish 8, Spanish, Russian, and Prussian 8, or 7, and the bonds of the Columbian republic, which have been within 12 months at 15 and 20 per cent, discount, to par. Would all this produce no alteration in our exchanges, no demand of gold and silver to supply the means of remittance; and was our stock so abundant of these metals as to prevent the least apprehension of an extraordinary and sudden demand for. them having any influence on the measures recently adopted with respect to the currency? Was it so certain that no event of this description, putting out of the question any interruption in the peace of Europe, might not create a great scarcity of money, and oblige the speculators who became possessed of the new 4 per cent stock merely as an article of trade, to force it on the market and duress the funds? and might not a sudden fall prevent the success of the measure—or, if it happened after the holders of 5 per cents had accepted, or rather have been driven into the terms, dissatisfy them with the manner in which their interests had been dealt with in the transaction? The right hon. gentleman had said, if the present opportunity was missed another might not again occur. He was probably right; the country would be worn out and sickened by the repetition of so many juggling and temporary expedients as had been resorted to in our finances since the peace, and at last refuse all confidence to the schemes of the right hon. gentleman. He says the 5 per cents might have been paid off in 1818, when the stocks were at 84, and urges the loss of that opportunity as a reason why he should not neglect the present one. How were the funds then raised to 84? By loans from the Bank, and the issue of a greater amount of paper, than in the extraordinary annals on that account, as well as on others of the war. What are we not now suffering from the unaccountable conduct of ministers and the Bank, with respect to the currency in that year, and the delusion it not only enabled them to practise on the country, but on the committees of 1819, with respect to the extent of the depreciation? He (Mr. E.) had, however, no doubt the right hon. gentleman would accomplish his purpose; and the object he had in view was certainly a proper one, at a fit season, and if obtained in a candid and fair manner; but he could scarcely call the profit to be derived from it a public advantage, if gained at the expense of national credit or character. When Mr. Pelham brought forward his plan, what were his means of ensuring its success? After giving the stockholder the most ample time to consider his offer, stating firmly and candidly his financial prospects and arrangements, for which the country had a right to expect a reduction of the interest, he was enabled successively by the developement of his Means, to make more favourable terms with those who at first held out, and ultimately to pay off the dissentients from the surplus of the revenue. Where was the right hon. gentleman's surplus? It was notorious the consolidated fund, which was deficient 7 millions last year, was this year in a still more deplorable condition, from the addition of 2 millions, since bor- rowed, to add to what was called a sinking fund; much in the same manner as he was now borrowing 7 millions to reduce the interest on the 5 per cents. Why did the noble marquis on the preceding evening leave those 9 millions out of his financial statements? It was rather too large an item to form an accidental omission. Had it, then, been purposely and studiously kept out of view, that an unfair impression of the actual situation of our finances might assist this scheme of his right hon. friend? He would not fatigue the House by going into all the objections that had been raised, or could be stated to the measure. Even legal doubts had been suggested of the right of government to pay off the 5 per cents under present circumstances; but passing by these, the most objectionable points which occurred to him, were the dissent required, and the shortness of time allowed to the stockholders for consideration. Besides, the policy of the proceeding, looking to its obvious tendency to drive capital out of the country, at the moment we were attempting to restore a money circulation was more than questionable. Looking, however, to the proposed object of relief to the country, he would offer no opposition to the immediate proposition of the right hon. gentleman, and opportunities would occur in the future stages of the bill, to enter into farther examination of its details.

entertained considerable doubt as to the policy of the plan, at least so far as it affected persons who had money in the five per cents to an amount less than 1,000l. Of these persons there were upwards of 50,000. There was another objection to this plan, that it would have the effect of increasing the national debt. It would actually add 7,000;000l. to it; and it would take six years to bring us back to the same situation in regard to the debt, in which we now were. The right hon. gentleman had argued upon the principle, that the raising of the funds was beneficial to the country. Now he (Mr. W.) maintained the direct converse of that proposition. Speculators and jobbers might, indeed, be interested in having the funds high; but individuals who depended upon a permanent annuity were interested in a low state of the funds.

said, that looking to all the circumstances of the case; first to the difficulties which necessarily attended the transaction; and next, to the political state of Europe, he could wish that the time for affording an option were extended from the 16th to the 30th of March.

thought the plan very desirable, and the terms proposed by ministers extremely fair. With regard to the time allowed for option, he thought it amply sufficient. But, suppose persons were to purchase stock in the name of others residing abroad, with a fraudulent intention, would they be entitled to the extended term, or would they be obliged to give their answer by the 16th of March?

said, the case supposed by the hon. member would, he hoped, be precluded by some resolutions which would be subsequently read at the table.

said, it would very much facilitate the plan, if such holders of five per cents as assented, could know at what time the transfer to the four per cents was to take place. The question of the dividends might at first sight offer some difficulty, but this difficulty was more apparent than real, because the very same dividend which was given to a person holding 100l. in the five per cents might be given to a person holding 105l. in the four per cents. If this stock were quickly transferred, the natural consequence would be, to raise the price of it in the market; and as persons would be induced to speculate in it from the advantage of a small but quick profit, the operation from this circumstance would be much facilitated. The right hon. gentleman would do well if he explained the mode in which the money was to be paid off to persons who dissented. It was evident that persons having an option, and who were in doubt whether they might or might not have made a bad bargain, would not decide till the latest moment. He should like to know then, if many thousand letters came in on the 16th of March, how these applications were to be disposed of.

said, that however expedient this measure might be, with a view to the reduction of taxation, still if there were a class of persons upon whom it pressed with peculiar hardship, it was incumbent upon the House to mitigate its severity as much as possible. The interest of this fund was not only reduced from five to four pet cent; but a rod was kept over the heads of the holders, and it was liable to be reduced again within seven years. He thought this term should at least be extended to a later period.

wished to know what regulations were to be adopted with regard to trustees.

could not help thinking that the present project of a sinking fund, was the less meritorious, inasmuch as that plan of liquidating the public debt by the, operation of compound interest was abandoned. He wished to know at what time it would be convenient to the right hon. gentleman to take the debate on this subject.

said, he by no means considered the question of abolishing that part of the project of a sinking fund which went to liquidate the debt by compound interest, as decided. It was a question which demanded the most serious attention, and which formed no part of the present measure. It was a question which involved the repeal of many acts of parliament; and he must confess that it appeared to him to be a measure of very questionable policy. As to the question which had been put with regard to trustees, they would be eat powered to act for their principals, and. would be indemnified. The hon. member for Weymouth had expressed some doubt as to the competence of parliament to pay off the five per cents; but it had never before been suggested that the condition imposed by the act of 1784, with regard to the reduction of the five per cents was any other than that parliament should not pay off that fund until 25 millions of the 3 or 4 per cents were paid off or redeemed. But the hon. member seemed to suppose that the national debt was first to be reduced to that amount—a construction which the act of parliament could not bear. As to the hardship with which the transfer was likely to operate upon persons of small property, it should be recollected, that such persons had purchased this stock at a lower rate, and with a larger return of interest, under the express liability of being paid off by government. However much, therefore, they might be objects of commiseration, they had no title to complain; and the inconveniences of their situation would be greatly mitigated by the great reduction which had taken place in all the necessaries of life. Some reasons had been urged for prolonging the time at which holders were to make their option; but the period on which government had fixed, was sufficiently long to enable them to make up their minds on the subject. As to the question, from what fund and in what manner the payment was to be made to such holders as did not assent to the terms? That question could not be answered until the option was made. As soon as the number of persons dissenting was ascertained, he should be ready to submit a plan to parliament, by which they were to be repaid. He could not see the force of the objection of the hon. member for Coventry; namely, that it was more unfair to call for the expression of dissent than of assent. The hon. member had attributed the rise in the price of foreign stocks to the plan now proposed by government; but it should be recollected, that that rise had taken place long before the present plan was promulgated. It was not the plans of government, but the alarms which had been raised in consequence of rumours that the public credit was about to be infringed, which had had the effect of driving large sums of money abroad, and consequently of raising the price of foreign stocks. He doubted not that a contrary effect would take place; and that such sums as had been withdrawn from the country under the influence of a temporary panic would return, when it was known that there was no foundation for such rumours, and that the public credit was fixed upon a secure and lasting basis.

The several resolutions were then put, and agreed to.