cellor of the Exchequer in his financial | however honestly and scrupulously such a operations. That was the ground on power might be exercised, it must by its which the Committee had recommended indirect influence be injurious to the credit that some limit should be placed on the of the country. powers of the Commissioners for the Re- MR. GLADSTONE: The hon. Gentleduction of the National Debt; for those man opposite has proposed a Resolution to Commissioners meant, after all, nothing limit, in a particular point, the powers of more than the Chancellor of the Ex- the Chancellor of the Exchequer as the chequer. Now, he said it was the duty guardian of a very large mass of publie of the Committee to represent what was money placed in his hands, and to provide the view which they entertained upon that that no funding of Exchequer bills held by subject. They might, as the right hon. the Commissioners of Savings' Banks be Gentleman had stated, have been totally made for the future without the special auundeserving of any attention on the part thority of an Act of Parliament. The disof the House; but they had only performed cussion which I have heard leaves upon my their duty when they had recorded their mind the impression that, whatever may be opinion as to the propriety of continuing the merits of the particular transaction unthe powers vested in the Chancellor of the der review, the reasons for adopting which Exchequer. He agreed with the right have not as yet been fully stated, the whole hon. Gentleman that the Motion before subject is one on which it would be in expethe House would not carry with it the dient for the House to come to any practical weight which would be desirable. It would conclusion, unless it were founded upon a be a mere Resolution which no Chancellor more thorough investigation of the subject of the Exchequer would be bound to follow; than has yet taken place. It is quite plain and the proper mode of effecting the pro- that the powers of the Chancellor of the Exposed object would be to pass an Act of chequer, as the keeper of the public money, Parliament which, during its progress are enormous. I don't hesitate to say that, through the House, would afford an oppor- in my opinion, they require review and retunity of fully discussing the whole ques- consideration, and that in some important tion. He confessed it had always appeared particulars they ought to be limited. Unto him to be a most objectionable arrange-doubtedly, however, if there be any one ment that any man should have the power point of special danger to the public created secretly, without the cognisance of the by those powers, it is not that which is public, and without that notoriety which raised by the Motion of the hon. Gentleman; was essential for the credit of the country, but it is the power which the Finance of transferring the unfunded into the funded Minister possesses of creating new public debt, and thus throwing a mass of funded debt by the funding of deficiency bills, or, in debt upon the market without notice. That other words, of meeting deficiencies in the was a power which he had no doubt had revenue of the country from year to year always been conscientiously exercised by by the creation of new debt, without the the Chancellor of the Exchequer, and authority of Parliament. That is an enorwhich at times must be a source of con- mous power, and it is not merely speculasiderable convenience to that Minister; tive in its character; but it is a power which but he did not think that convenience was has been used in a manner highly detria sufficient compensation for a proceeding mental to the public interest; and if the of so irregular a character as that of en- House is to go into the matter at all, it trusting any man with the power of secretly should direct its attention to that, which is adding to the funded debt. He did not by far the more serious part of the subject. say that the transfer of Exchequer bills With regard to the more limited question into Consols was an increase of the debt opened by the hon. Gentleman opposite, I of the country; but it was, at all events, agree that that also deserves the attention an increase of one portion of that debt of Parliament, and that the state of things without giving any notification upon the at present established by law is not altosubject to the public. They had by that gether satisfactory. For the most part I system a sort of mill into which Exchequer concur in the views and observations of bills were thrown, and from which they the right hon. Gentleman the Member for came out funded debt, and that process Radnor (Sir George Lewis.) At the same could be carried on to any extent that time, I think that the House has not had might suit the convenience of the Chancel- sufficiently under its view the various lor of the Exchequer. He believed that, questions that are involved in these great

THE CHANCELLOR OF THE EXCHEQUER: Sir, I will recall the attention of the House to the question really before it. I will not enter into collateral questions, which are, no doubt interesting, but really do not concern the Motion of the hon. Gentleman. His Motion is,

a consideration of further and fuller mea- | plaint had frequently been made by gensures on the subject; but the House does tlemen representing the Government, that entertain a certain amount of jealousy of that interest was excessive; but such a these operations; in the City of London, complaint could not be put forward if the also, the operations of the Chancellor of capital in that case were judiciously inthe Exchequer are regarded with consider- vested, and in that way the depositors had able jealousy, because they interfere with an interest in the mode in which the Chanthe regular transactions in stock, and the cellor of the Exchequer dealt with their House would be exercising its constitutional money. jurisdiction if, by some special organ, it as sumed a periodical review of all operations of this kind. It is well worth the consideration of the House whether it should not make some provision that would prevent it depending on any individual Member inviting attention to the subject-whether there should not be some regular and fixed machinery by which operations of this kind could be brought under the consideration of Parliament, and regulated beforehand. It would be dangerous to say that the Chancellor of the Exchequer shall not exercise this power, because the advantage of an operation might be lost by the necessity of making an application to Parliament; but it is quite another thing to provide the means of a more rapid submission of the operation to the audit of the House of Commons.

MR. W. WILLIAMS said, he had brought this subject under the attention of the House when the hon. Member for Portsmouth (Sir Francis Baring) was Chancellor of the Ex chequer. If the House did its duty, it would not allow this Act to remain on the Statutebook. Such powers ought not to be intrusted to any Chancellor of the Exchequer, and he had never known them exercised without the public sustaining a loss by it. He trusted, therefore, the hon. Member would withdraw his Motion, and bring in a Bill to repeal the existing Act.

MR. HENLEY said, that a statement had been made by his right hon. Friend the Member for the University of Oxford (Mr. Gladstone), in which he could not altogether agree. His right hon. Friend had stated, that in all those transactions no injury was done to the savings' bank depositors, and that they had no interest in that question. Now he (Mr. Henley) was perfectly ready to admit that the savings' bank depositors had the best possible security in the guarantee of the State, and that it did not matter to them how their money was disposed of. But his right hon. Friend should recollect that there was something besides the principal of those depositors involved in the matter, and that was, the interest which they received. A com

"That in future no funding of Exchequer bills held by the Commissioners of Savings' Banks be made without the special authority of an Act of Parliament."

For the last funding of such bills I am responsible, as it was done by my advice. Consequently the hon. Gentleman asks the House to agree to what I must regard as a vote of censure notwithstanding his courteous expressions, for as the House is called upon to legislate in consequence of that operation it implies a disapproval of that operation. I have been called on by the right hon. Member for Radnor (Sir George Lewis) to state why the Government funded an amount of £7,600,000 in Exchequer bills. I will tell the House the reasons that induced me to take that course. In the course of the autumn my attention was very much called to this subject, by complaints on the part of the Commissioners of Savings' Banks that they were losing on the securities in their hands

that they did not receive that interest on them they would receive from another form of investment. It may be said that the Chancellor of the Exchequer and the Commissioners for the Reduction of the National Debt are the same parties, but that is not so. There are two accountsone of the savings' banks, the other the general account of the country. Not wishing to see a loss regularly occurring in the savings' bank account, although it diminished the immediate charge upon the Exchequer, we avoided it altogether by changing the security. But, although that was a reason, I candidly admit it was not the only reason, which induced me to sanction this operation. My attention was called to that to which no person in my position could be insensible,—namely, that a very delicate state of the Exchequer bill market might occur, in consequence of the great

amount of Exchequer bills in existence; yielded them a less interest than they paid and I had to consider what might be the to the savings' banks, received for that a effect if a necessity should arise for placing security which avoided a loss to the fund. so large an amount of Exchequer bills in the And that is the real reason which prevailmarket. I naturally inquired what was the ed with me in sanctioning the funding of reason that the Savings' Bank Commis this large amount of Exchequer bills held sioners were in possession of so unusually by the savings' banks. I believe I took a large an amount of Exchequer bills as course very much for the advantage of the between £7,000,000 and £8,000,000. savings' banks, but in it the Government Perhaps the House would like to know were really not at all interested, because how very rapidly that amount has accrued. these Exchequer bills were not floating At the close of the year 1854 the Com- in the market. They were practically missioners held only £200,000 of Exche- in the possession of the Government. I quer bills. It is very true that they had was obliged to look to the circumstances £1,600,000 of Exchequer bonds, which which had arisen from this rapid increase made altogether of unfunded debt in their of Exchequer bills in the hands of the possession £1,800,000. On the 5th of Savings' Bank Commissioners, and it apJuly, 1855, between bills and bonds the peared that these circumstances had arisen amount was £3,315,000. At the close of in a very legitimate and proper manner. that year the amount was £4,886,000; I do not for a moment question the proand on the 5th of July, 1856, it was priety of the course which occasioned £6,875,000. The amount having reached them, but they arose in consequence of a between £7,000,000 and £8,000,000, it very exceptional and extraordinary state of appeared to me that that was a very things-namely, the occurrence of a war, dangerous state for us to be placed in. to carry on which this House voted that The Exchequer bill market being natu- the Chancellor of the Exchequer might rally from the unsatisfactory character of raise money by the issue of Exchequer the security a very delicate market in bills. Well, that transaction was closed. times of financial pressure, it appeared I looked upon the funding of these Excheto us advisable to fund a portion of the quer bills as a virtual completion of the Exchequer bills to prevent the possibility transaction and I have no hesitation in of our being compelled by the demands of using a phrase used by the hon. Gentlethe savings' banks to sell them in the man opposite,-no doubt it was the virtual market at a moment when there might completion of a loan which the country be a great scarcity of money. Suppose had obtained to carry on the war. such a state of affairs as prevailed at the the transaction was completed legally, and end of the year 1857 had suddenly arisen also most satisfactorily to the Savings' at a time when the Exchequer bills were Bank Commissioners. If the assertion of advertised for payment, the Minister would the hon. Member for Lambeth that Chanhave found that the savings' banks could not cellors of the Exchequer have never intergive him any assistance, inasmuch as their fered in transactions of this kind, except resources would have been entirely ab- for their own benefit, be correct, I can sorbed and clogged by their holding these assure him that at least this transaction £7,000,000 or 8,000,000 of Exchequer was of no advantage whatever to the Gobills. That state of things was very un- vernment beyond the advantage that must satisfactory, not only to the Chancellor of always accrue when funds of this kind are the Exchequer but to the Commissioners in a satisfactory and healthy condition. of Savings Banks themselves. It was This is the real reason why this funding thought necessary to sanction a change took place, and I believe the operation was which would put an end to that system, necessary, and strictly in consonance with but that sanction was not hastily given. the law. I will not touch the various colMy hon. Friend the Member for Hunting- lateral topics which have been introduced don talked of needy Chancellors of the into this debate. I deprecate the adoption Exchequer who availed themselves of these of this Motion. I think the subject could changes for their own benefit; but I would not be dealt with at all satisfactorily by ac impress on the House, and remind him, ceding to it. But I am perfectly willing to that in this instance the change was made admit, as I have admitted on a previous ocfor the benefit of the savings' banks them-casion that the state of our unfunded debt selves, because the National Debt Commis- is by no means satisfactory. I do not think sioners, instead of holding a security which that Exchequer bills, as an instrument of

But