Achievements of The Ministry

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London, Tuesday, April 12, 1853

The best thing perhaps that can be said in favor of the Coalition Ministry is that it represents impotency in power at a moment of transition, when not the reality, but only the appearance of government, is possible, with evanescent old parties and not yet consolidated new ones. The "administration of all the talents," what has it accomplished during its first quarter's trial? Two readings of the Jewish Disabilities Bill and three of the Canada Clergy Reserves Bill[1]. The latter enables the Canadian Legislature to dispose of a certain portion of the proceeds of the land-sales hitherto reserved exclusively for the benefit of the favorite churches of England and Scotland. When first laid before the House by Lord John Russell, it consisted of three clauses, the third clause repealing the enactment by which the consolidated fund was charged to supply the deficiency, if in any year the Canada land-sales could not produce £9,285. This bill had been carried through a second reading, but on the House going into Committee[2] upon it (March 18) Lord John suddenly moved the withdrawal of his own third clause. Now, if the Canadian Legislature were to secularize the Clergy Reserves, about £10,000 per annum would be taken out of the pockets of the British people for the maintenance of a sect thousands of miles away. The Radical Minister, Sir W. Molesworth who disclaims all ecclesiastical endowments, appeared himself to have become a convert to Lord John's doctrine "that British Colonies were not to be freed from the incubus of the Established Church, except at the cost and risk of the British people at home."

Three Radical resolutions were proposed during the first quarter's trial. Mr. Collier moved the abolition of the Ecclesiastical

Courts, Mr. Williams the extension of the legacy and probate-duty to real property, and Mr. Hume the extinction of all "strictly protective" duties. The Ministry, of course, opposed all these "sweeping" reforms. But the Coalition Ministry 'opposes them in quite a different manner from the Tories. The latter resolutely announced their decision to resist the "encroachments of Democracy." The former actually do the same, but do it under the pretence of attending to reform measures more carefully. They live on reforms, as the others lived on abuses. Apparently eagerly engaged in reforms they have contrived a perfect system of postponing them. One day it is "advisable to await the result of an impending inquiry." Then "a Commission has just been appointed and nothing can be done till it has given its decisions." Again "the object is just under the consideration of the Government," who expect not to be interrupted in their lucubrations. Next, "the subject deserves the attention of the House when a fitting opportunity shall occur." "The proper season has not yet arrived." "The time is not far distant when something must be done." Particular measures must be postponed in order to readjust entire systems, or entire systems must be conserved in order to carry out particular measures. The "policy of abstention" proclaimed on the Eastern question is also the Ministerial policy at home.

When Lord John Russell first[3] announced the programme of the Coalition Ministry, and when it was received amid general consternation, his adherents exclaimed, "We must have something to be enthusiastic at. Public education shall be the thing. Our Russell is breeding a wonderful Education scheme. You will hear of it."

Now we have heard of it. It was on the 4th of April that Russell gave a general description of his intended Educational Reform. Its principal features consist in enabling the municipal councils to levy a local rate for the assistance of existing schools in which the Church of England doctrines are required to be taught. As to the Universities, those pet-children of the State Church, those chief opponents to every reform, Lord John hopes "that the Universities will reform themselves."[4] The malversation of the charities destined for educational establishments is notorious. Their value may ay be guessed from the following:

"There are 24 of £2,000 a year and under £3,000, 10 of £3,000 and under £4,000, 4 of £4,000 and under £5,000, 2 of £5,000 and under £6,000, 3 of £8,000 and under £9,000, and single ones of £ 10,000, £ 15,000, £20,000, £29,000, £30,000 and £35,000 a year each."

It needs no great sagacity to conceive why the oligarchs living on the malversation of these funds are very cautious in dealing with them. Russell proposes:

"Charities are to be examined into, those under £30 per annum in the County) Courts, those above by the Master of the Rolls. But no suit in either of those Courts is to he instigated without the permission of a Committee of the Council appointed for the purpose."

The permission of a committee is necessary to institute a suit in the Imperial Courts to redress the plunder of the charities originally destined for the education of the people. A permission! But Russell, even with this reservation, feels not quite sure. He adds:

"If the administration of a school is found to be corrupt, nobody but the Committee of Council shall be allowed to interfere."

This is a true Reform in the old English sense of the word. It neither creates anything new, nor abolishes anything old. It aims at conserving the old system, by giving it a more reasonable' form and teaching it, so to say, new manners. This is the mystery of the "hereditary wisdom" of English oligarchical legislation. It simply consists in making abuses hereditary, by refreshing them, as it were, from time to time, by an infusion of new blood.

If everybody must confess that the Jewish Disabilities Bill was a little attempt at establishing religious tolerance, the Canada Reserves Bill a little attempt at granting Colonial Self-Government, the Education Bill a little attempt at avoiding public education, Gladstone's financial scheme is, undoubtedly, a mighty little attempt at dealing with that giant monster, the National Debt of Great Britain.

On the 8th of April, before the promulgation of the budget, Mr. Gladstone laid before the House of Commons a statement of several resolutions dealing with the public debt, and, before this statement had been made, The Morning Chronicle had made a special announcement that resolutions of the utmost importance were about to be proposed, "heralded by rumors of great interest and magnitude."[5] The funds rose on this rumor. There was an impression that Gladstone was going to pay off the National Debt; but on the 8th of April, the moment the Committee met for deliberation on these resolutions, Mr. Gladstone suddenly altered them, and in such a manner as to divest them both of "magnitude and interest." Now, let us ask, with Mr. Disraeli, "what was all this pother about?"[6]

The ultimate aim of Mr. Gladstone's propositions, as stated by himself, was to reduce the interest on the public stocks to the standard rate of 2½ per cent. Now, in the years 1822-23-24-25, 1830-31, 1844-45, reductions were made from 5 per cent. to 4½ per cent., from 4½ to 4 per cent., from 4 to 3½ per cent., from 3½ to 3 per cent. respectively. Why should there not be a reduction from 3 per cent. to 2½ per cent.? Mr. Gladstone's proposals are as follows:

Firstly. With respect to various stocks amounting to £9,500,000, and chiefly connected with the old South Sea bubble[7], to bring them under one single denomination, and to reduce them compulsorily from 3 to 2¾ per cent. This would give a permanent annual saving approaching to £25,000. The invention of a new common name for various stocks, and the saving of £25,000 on an annual expense of £30,000,000, is certainly not to be boasted of.

Secondly. He proposes the issue of a new financial paper called Exchequer Bonds, not exceeding in amount £30,000,000, transferable by simple delivery without costs of any kind, bearing interest at 2¾ per cent up to Sept. 1, 1864, and then 2½ per cent up to Sept. 1, 1894. Now this is merely the creation of a new financial instrument limited in its use by the wants of the monied and mercantile classes. But how can he keep £18,000,000 of Exchequer Bills at 1½ per cent in circulation, with Exchequer Bonds at 2 per cent.? And is it not a loss to the country to pay 1 per cent more upon Exchequer Bonds than upon Exchequer Bills? Be this as it may, this second proposition has at least nothing to do with the reduction of the public debt.

Thirdly and lastly. We come to the chief object, the only important point of Gladstone's resolutions, to the 3 per cent. consols and the 3 per cent. reduced, amounting together to a capital of nearly £500,000,000. Hic Rhodus, hic salta![8] As there exists a Parliamentary provision forbidding these stocks to be reduced compulsorily, except on twelve months notice, Mr. Gladstone chooses the system of voluntary commutation, offering various alternatives to the [option] holders of the 3 per cent. stocks for exchanging them at option with other stocks to be created under his resolutions. They are to have the option of exchanging every f 100 of the 3 per cent. stock in one of the following ways.

1. They may exchange every £100 of 3 per cent stock for an Exchequer Bond of the like amount, bearing interest at the rate of 2¾ per cent until 1864, and then at the rate of 2½ per cent until 1894. If the whole of the £30,000,000 Exchequer Bonds at 2½ per cent. should thus replace £30,000,000 of 3 per cent there would be a saving in the first ten years of £75,000, and after the first ten years of £150,000-together £225,000; but Government would be bound to repay the whole of the £30,000,000. In any case this is not a proposition to deal largely with the public debt.

2. The second proposal is, that the holders of stock shall obtain for every £100 in 3 per cent £82 10s in new stock at 3½ per cent., which shall be paid at the rate of 3½ per cent until the 5th January, 1894. The result of this would be to give a present income to the persons accepting the 3½ per cent stock of £2 17s 9d, instead of £3. Here then is a reduction of 2s. 3d. annually in every £100. If the £500,000,000 were all converted upon this proposal, the result would be that instead of paying as at present £15,000,000 a-year, the nation would only pay £14,437,500, and this would be a gain of £562,500 a-year. But for this small saving of £562,500 Parliament would tie up its hands' for half a century and guaranty a higher interest than 2 4-5 per cent. at a time of transition and of utter uncertainty as to the future standard rate of interest. On the other hand, one thing at least would be gained for Mr. Gladstone. At the expiration of 40 years, he would not be troubled with a 3 per cent stock, being defended, as now, by a twelve months' notice. He would only have to deal with the 3½ per cent. stock redeemable at par by Parliament. Gladstone proposes not to fix any limit on his 3½ per cent stock.

3. The third proposal is that the holders of every £100 3 per cent should receive £110 in a new stock of 2½ per cent until 1894. When Mr. Gladstone introduced his plan in the House of Commons on the 8th April, he had not limited the amount (the 2½ per cents.) to be issued. But Mr. Disraeli having pointed out that, contrasting this proposal with the two other modes proposed, every man in his senses would choose the conversion of £ 100 into 2½ per cents., and that by the conversion of the whole £500,000,000 3 per cents into the new stock, the country would gain on one side £1,250,000 per annum, but be saddled on the other side with an addition to the capital of the public debt of £50,000,000, Mr. Gladstone on the following day altered this proposition and proposed to limit this new 2½ stock to £30,000,000 By this alteration the whole of the third proposal loses its significance with respect to the public debt. The capital of that debt would be augmented only by £3,000,000.

Here you have "one of the most important and gigantic financial proposals that has ever been brought forward."[9] There exists perhaps in general no greater humbug than the so-called Finance. The most simple operations on the Budget and the Public Debt are clothed by the adepts of that occult science in an abstruse terminology, concealing the trivial maneuvers of creating various denominations of stocks the commutation of old stocks into new ones, the diminishing the interest and raising the nominal capital, the raising the interest and reducing the capital, the installing of premiums, of bonus, priority-shares, the distinct ions between redeemable and irredeemable annuities, the artificial graduation in the facility of transferring the various descriptions of paper in a manner which quite bamboozles the public with these detestable stock-jobbing scholastics and frightful complexity of details, while the usurers obtain with every such new scheme an eagerly seized opportunity for developing their mischievous and predatory activity. On the other hand, the political economist finds in all this apparent intricacy of commutations, permutations and ombinations, not so much a matter of financial policy as a simple question of arithmetic or of mere phraseology.

Mr. Gladstone is certainly a master in this sort of financial aIchymics, and his scheme cannot be better characterized, than in he words of Mr. Disraeli:

"More complicated and ingenious machinery, to produce so slight a result, appeared to him never to have been devised by the subtlety and genius of the most skilful casuist. In St. Thomas Aquinas[10] there was a chapter that speculated upon the question of how many angels could dance on the point of a needle. It was one .1 t he rarest productions of human genius; and he recognised in these resolutions something of that master mind."

You will remember that I stated that the end of Mr. Gladstone's plan was the establishment of a "normal" 2½ per cent. stock. Now; in order to achieve this end, he creates a very limited 2½ per cent stock and an unlimited 3½ per cent. stock. In order to create his small 2½ per cent stock, he reduces the interest by ½ per cent, and gives on the other hand a bonus of 10 per cent for the purpose of accomplishing that reduction. In order to rid himself of the difficulty of the 3 per cent., being "defended" by a twelve-months notice, he prefers legislating for the 40 years next to come, and in conclusion he would, if successful, bereave two generations of all possible fortunate chances in their financial affairs.

The position of the Coalition Ministry in the House, is clearly shown by the statistics of votes. On the question of Maynooth[11] in a large house, it had but the narrow majority of 30. On the Jewish Disabilities Bill (not yet carried through. the third reading), in a house of 439 members, its majority amounted not even to 30 votes. In the Canada Reserves Bill, when Russell withdrew his own third clause, the Ministers were saved by the Tories from their own supporters. Their majority was almost entirely supplied from the benches of the Conservatives.

I shall not dwell on the internal dissensions of the Cabinet, which appeared in the debates on the Canada Bill, in the hot controversy of the ministerial papers with regard to the Income-Tax, and above all, in their foreign policy. There is not one single question to which the Coalition Ministry might not answer, as did Gaysa, the Magyar king, who, after having been converted to Christianity, continued, notwithstanding, to observe the rites of his ancient superstition. When questioned to which of the two faiths he really belonged, he replied: "I am rich enough to belong to two sorts of faith."

  1. A reference to Russell's motion for the "removal of some disabilities of Her Majesty's Jewish subjects", introduced in the House of Commons on February 24, 1853. The motion aimed at granting the Jews the right to be elected to the House of Commons. It passed through the Commons but was turned down by the House of Lords. Marx gave an appraisal of this bill in his article "Parliamentary Debates. The Clergy Against Socialism. Starvation".

    The Canada Clergy Reserves (1791-1840) consisted of a seventh of the revenue from the sale of lands in Canada and were used chiefly for subsidising the Established and the Presbyterian Churches. In 1853 the British Parliament passed a law authorising the legislative bodies in Canada to distribute the funds independently and grant subsidies to other churches also according to the proportion of the population professing this or that religion. When Peel's Bill, introduced on February 15, 1853, was passing through the House of Commons, the members, on Russell's initiative, voted against the clause on the withdrawal of subsidies to various churches in Canada, which were granted in years when their share of the revenue from the sale of lands was below a fixed sum.
  2. In accordance with parliamentary procedure, the House of Commons, when discussing certain important questions, declares itself a Committee of the whole House. The functions of the Chairman of the Committee at such sittings are performed by one of the persons on a list of chairmen who is specially appointed by the Speaker.
  3. February 10, 1853.—Ed.
  4. Here and below John Russell's speech is quoted from The Times, No. 21394, April 5, 1853.—Ed.
  5. The Morning Chronicle, No. 269 22, April 7, 1853 (cf. The New Financial Juggle; Or Gladstone And The Pennies).—Ed.
  6. Here and below the quotations are from Benjamin Disraeli's speech in the House I Commons on April 8, 1853 (The Times, No. 21398, April 9, 1853).—Ed.
  7. The South Sea Company was founded in England about 1712 officially for trade with South America and the Pacific islands, but its real purpose was speculation in state bonds. The government granted several privileges and monopoly rights to the Company, including the right to issue state securities. The Company's large-scale speculation brought it to bankruptcy in 1720 and greatly increased Britain's national debt.
  8. Words addressed to a braggart in a tale by Aesop. He boasted of his leaps on the Island of Rhodes.—Ed
  9. A quotation from the speech of Edward Ellice, M.P. from Coventry, cited by Benjamin Disraeli in his House of Commons speech on April 8, 1853.—Ed.
  10. Thomas Aquinas, Summa Theologica.—Ed.
  11. This refers to the debates on the system of education in the Catholic College in Maynooth (Ireland) in the House of Commons in February and March 1853. The College was founded in 1795 with the support of Pitt the Younger, who secured the granting of considerable subsidies for it by the British Parliament. This policy, pursued in following years also, aimed at winning support for the British Government from the upper strata of the Irish landlords, bourgeoisie and clergy, and thereby causing a split in the Irish national movement.