MR. GLADSTONE'S EXCHEQUER BOND LOAN. No doubt could be entertained
of the full success of Mr. Glad- stone's plan for securing the command of sufficient means, if there existed any machinery for making the public practically under- stand its nature and bearing. The scheme is admitted to be perfectly in accordance with Mr. Gladstone's financial course. The peculiar species of security may be regarded as his invention ; it formed the newest feature in his first proposal as Chancellor of the Exchequer. When he first dis- cussed the question of finance in war-time, he laid down the prin-
ciple of providing as far as possible for the expense of the year by the income of the year : at the same time, that principle was not advanced without a reservation, virtually acknowledging a truth on which we have insisted—that a greater sacrifice may be ex- torted from posterity by crippling the productive means of the present generation than by sparing those means and transmitting some portion of the Burden to future years. We have not yet ar- rived at that point in the monied demands of the state which would require us to consider the necessity for handing down any considerable portion of the burden ; but at the same time there would be an evident inconvenience in suddenly laying the full amount of present and proximate demands upon the current finan- cial year; and Mr. Gladstone falls upon a compromise between the theoretical principle which he laid down, of providing for pre- sent expenditure by present income, and the other principle, of transmitting our burdens to posterity. The intermediate measure is to take a loan for a very limited number of years falling within the generation.
His instrument for taking that temporary loan is the Exchequer Bond; a document passing from hand to hand like the Exchequer Bill; like that also representing sums of money ranging from 1001. to 1000/. ; partaking, however, of the character of permanent Stock, by lasting for more than one year, and by bearing a fixed rate of interest; and resembling Mr. Goulburn's Stock—a very popular species of investment—by bearing an interest guaranteed against reduction for a given term of years. In the particular proposition, therefore, Mr. Gladstone appears to combine his own refined and intellectual view of finance with the results of practical experi- ence ; a combination eminently characteristic of his own mind, and of his conduct as a public man.
The proposal also falls in very well with the actual circumstances of the country. We do not allude simply to the fact that the Chancellor of the Exchequer has taken into account the coincident termination of the Income-tax and of certain annuities which would expire in 1860 ; but we speak of much broader and more general incidents in the state of the country. We are at present enjoying the results of a state of industry and activity beyond all precedent, and developed to an expansion unknown in the history of any country, even of our own. We are therefore in circum- stances to make large contributions towards the war—the most costly of all public courses. The nation has been thoroughly sincere and hearty in its adoption of the war on general principles ; but there is no doubt that a further insight into the turn of events, some practical experience of the demands entailed by war, a better comprehension of the policy which dictates it, and of that further policy which will arise during the prosecution of the war, are need- ed in order to fill the English mind with that thorough conviction, and that full apprehension of public necessities, which would re- concile it to the amount of sacrifice that awaits us. A Stoic in office—if indeed it were possible that a Stoic could be found in so- ciety where he would run a chance of being " sent for"—would no doubt advise her Majesty to lay the worst at once before the pub- lic, and to insist upon a sacrifice "down on the nail." But a practical statesman, acquainted with the somewhat slow process with which the English mind turns from one habit of ideas to another,—remembering, too, that peace enervates the moral sense of necessity even more than it does the physical frame,—would no doubt adopt Mr. Gladstone's course of rendering the transition from peace finance to war finance as gradual as possible, though not affecting any concealment.
There are indeed practical reasons besides those of a moral na- ture. Commerce will have to adapt itself to a state of things with which, recently, in Europe we have not been familiar ; and every- thing which can contribute to make the change gradual will help to palliate the difficulties of the juncture. The plan proposed will have a further advantage : it will prevent Government from being obliged to put the screw upon the tax-collector; also an important consideration, not because we think it desirable to abate that "un- popularity" of the tax-collector which is diminishing under better intelligence, but because the monied transactions of this country, complicated as they are, involving a transfer through many hands, do not brook that sudden extortion of private means for state ne- cessities which breed disaffection and mutiny even in absolute countries. Mr. Gladstone's proposal, therefore, is justified by grounds of state necessity as well as personal consistency. There is one aspect, however, in which his proposal must be Viewed, and which has not been overlooked, but yet, we are con- vinced, is not sufficiently appi eciated by the public. It is the ina51 novation which the measure really constitutes on the somewhat exclusive dealing in Government securities. Hitherto the practice in this country has been to make proposals for a loan to be tendered in large " nuggets " by great capitalists. That plan is extremely suitable to countries where the possession of immense means alone secures the appliances which can render the possession of money perfectly safe. In countries that are very arbitrary in their treat- ment of property, or in those that are very precarious in their finance, it is only great capitalists who can secure for themselves means of readily transferring their wealth from state to state, and tion as of the remaining independent of a local government. In proporwealth is diffused, the command of surplus means exists ; and perhaps there has been at no time in the history of the world a country where surplus wealth has been so widely diffused as it is now in England.
It is curious, that in other states, somewhat differently circum- stanced, the idea of making a direct appeal from the exchequer to the public at large has been put into practice. France has adopted it with great success. The new loan was open to a subscription in small sums, and the subscriptions nearly doubled the amount re- quired. In Sardinia, where the general tendency is one of assimi- lation to English practices, the same expedient has been adopted. It cannot be said that Mr. Gladstone copies this new course, for his idea of the Exchequer Bond was expounded a year ago. But indeed it will be valuable for all who possess money, with- out calling upon them to trade. There is no man who has money at his banker's who might not more conveniently convert his ba- lance into an Exchequer Bond. It would be as good as money lodged in bank. We do not suppose that it would entail the slightest inconvenience. No banker, we imagine, would decline checks of a private customer drawn against a security of the kind: if he required to realize the whole amount, it would entail no onerous ceremony like the transfer of stock. But so long as it lay there, instead of possessing a barren hoard, or permitting the " use " of it for some purposes beyond his own control, the owner would be enjoying his 3 per cent, and would know that his balance was in a state the most constantly available for his own use. No tender can be given in for a less sum than 1000/. ; but ten people with no more than 1001. a piece might club together for the purpose of making a tender in the name of one ; and if their tenders were made even at par, they would enjoy all the benefit which the public can expect, save those nice calculations by which the traders in money between the public and Govern- ment make their profits. If those incidents of the new proposal were known as widely as they deserve to be, and if their force were felt, we have no doubt that the tenders emanating from all parts of the United Kingdom would far exceed the 6,000,0001., and would point out to the Government the existence of stores from which more might be obtained on future occasions.
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