Karl Marx 

The New Financial Juggle; or Gladstone and the Pennies 

The People's Paper. 
Nr. 50, 16. April 1853 

The New Financial Juggle; 
or Gladstone and the Pennies. 

Ourreaders know, to their cost, and have learned, to the tune oftheir pockets, 
that an old financial juggle has imposed a National Debt of £800,000,000 on 
the people's shoulders. That Debt was chiefly contracted to prevent the 
liberation of the American colonies, and to counteract the French Revolution 
of the last century. The influence of the increase of the National Debt on 
the increase of the national expenditure, may be gathered from the following 

tabular analysis:— 

1. National Debt. 

£. 

When Queen Anne succeeded to William (1702) 16,394,702 
When George I. ascended the Throne (1714) 54,145,363 
When George II. began his Reign (1727) 52,092,235 
When George III. assumed the reins 
of Government (1760) 146,682,844. 
After the American War (1784) 257,213,043 
At the end of the Anti-Jacobin War (1801) 579,931,447 
In January, 1810 (during the Napoleonic War) 811,898,082 
After 1815 about 1,000,000,000 

2. National Expenditure. 
When Queen Anne succeeded to William (1702), 
all expenses, including the interest of the 
National Debt amounted to 5,610,987 
When George I. ascended the Throne (1714) 6,633,581 
When George II. began his Reign (1727) 5,441,248 
When George III. assumed the reins of power (1760) 24,456,940 
At the end of the Anti-Jacobin War (1801) 61,278,018 

The New Financial Juggle; or Gladstone and the Pennies 

3. National Taxation. 

Queen Anne (1702) 4,212,358 
George 1. (1714) 6,762,643 
George IT. (1727) 6,522,540 
George III. (1760) 8,744,682 
After the American War (1784) 13,300,921 
After the Anti-Jacobin War (1801) 36,728,971 
1809 70,240,226 
After 1815 about 82,000,000 

The People well know, from personal pocket-experience, what is the 
weight of taxation resulting from the National Debt—but many are not aware 
ofthe peculiar forms under which this Debt has been contracted, and actually 
exists. The "State," that jointocracy of coalesced land and money mongers, 
wants money for the purpose of home and foreign oppression. It borrows 

money of capitalists and usurers, and in return gives them a bit of paper, 
pledging itself to pay them so much money in the shape of interest for each 
£100 they lend. The means of paying this money it tears from the working 
classes through the means of taxation—so that the people are the security 
for their oppressors to the men who lend them the money to cut the people's 
throats. This money has been borrowed as a debt under various de- 
nominations—sometimes to pay 3 per cent., 372 per cent., 4 per cent., etc., 
and according to that percentage and other accidents the funds have various 
denominations, as the 3 per cents., etc. 

Every Chancellor of the Exchequer, with the exception of the Whigs, as 
not onlythe working classes, butthe manufacturers and landlords also, have 
to pay a portion of this interest, and wish to pay as little as possible, tries 
accordingly, in some way or other, to alleviate the pressure ofthis incubus. 

On the 8th of April, before the Budget of the present Ministry was brought 
forward, Mr. Gladstone laid before the House a statement of several resolu- 

tions dealing with the Public Debt—and before this statement had been made 
the "Morning Chronicle" announced that resolutions of the utmost im- 
portance were to be proposed, "heralded by rumours of great interest and 
magnitude." The funds rose on these rumours; there was an impression that 
Gladstone was going to pay off the National Debt. Now, "what was all this 
bother about?" 

The ultimate aim of Mr. Gladstone's proposals, as stated by himself, was 
to reduce the interest on the various public stocks to 2V2 per cent. Now, in 
the years 1822-3, 1824-5,1830-1, 1844-5, there had been reductions, from 
5 per cent, to 472, from 472 to 4, from 4 to 372» from 37 to 3, respectively. 
Why should there not be a reduction from 3 to 272? 

Karl Marx 

Now, let us see in what manner Mr. Gladstone proposes to achieve this 
end. 

Firstly. He proposes with respect to certain stocks amounting to 
£9,500,000, chiefly connected with the old South Sea Bubble, to bring them 
under one single denomination, and to reduce them compulsorily from 3 per 
cent, to 2’/, per cent. This gives a permanent annual saving approaching to 
£25,000. The invention of a new general name of various stocks, and the 
saving of £25,000 on an annual expense £30,000,000, does not merit any 
particular admiration. 

Secondly. He proposes to issue a new financial paper, called Exchequer- 
Bonds, not exceeding the amount of £30,000,000, transferable by simple 
delivery, without cost of any kind, bearing interest at 2’/, per cent., up to the 
lst of September, 1864, and then 2V2 per cent, up to the Ist of September, 
1894. Now this is simply the creation of a new financial instrument for the 
comfort of the monied and mercantile class. He says "without cost," that 
is, without cost to the City Merchant. At the present moment there are 
£18,000,000 of Exchequer Bills at [V2 per cent. Is it not a loss to the country 
to pay | per cent, more upon the Exchequer Bonds than upon the Exchequer 
Bills? At all events the second proposition has nothing to do with the re- 
duction of the National Debt. The Exchequer Bills can circulate only in Great 
Britain, but the Exchequer Bonds are transferable as common Bills, there- 
fore it is a mere measure of Convenience to the City Merchants, for which 
the people pay a high price. 

Now, finally, we come to the only important matter—to the 3 per cent, 
consols, and the "3 per cent, reduced," amounting together to a capital of 
nearly £500,000,000. 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 vari- 
ous alternatives to the holders of the 3 per cent, stock for exchanging them 
at option with other stocks to be created under his resolutions. The holders 
of the 3 per cent, stocks shall have the option of exchanging each £100 3 per 
cent, in one of the three following forms:— 

1.—Semi-Exchange, every £100 of the 3 per cent, with an Exchequer bond 
for the like amount carrying interest at the rate of £2 15s. until 1864, and 
then at the rate of £2 10s. until 1894. If the whole of the £30,000,000 of 
Exchequer bonds at 27, per cent, replaced £30,000,000 of 3 per cents., 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 the Government would be bound to repay 
the whole of the £30,000,000, after forty years. In no respectis this a proposi- 
tion dealing largely, or even at all, with the National Debt. For whatis a saving 
of £225,000 in an annual expense of £30,000,000? 

The New Financial Juggle; or Gladstone and the Pennies 

2.—The second proposal is, that the holders of stock shall retain for every 
£100 in 3 per cents., £82 10s. in new stock of 3V2 P *' cent., which would be 
paid at the rate of £3 10s. per cent, until the 5th of January, 1894. The result 
of that would be to give a present income to the persons accepting the 3V, per 
cent, stock, of £2 17s. 9d., instead of £3—reduction of 2s. 3d. on the interest 
of every £100. If the £500,000,000 were all converted under this proposal, 
the result would be that, instead of paying, as at present, £15,000,000 per 
annum, the nation would only pay £14,437,500, and this would be a gain of 
£562,500 a year. But for this saving of £500,000 Parliament would tie up its 
hands for half a century, and grant higher interest than 2 four-fifths per cent, 
at a time of transition and of utter insecurity of every rate of interest! One 
thing, however, would be gained for Gladstone—at the expiration of forty 
years there would be, in the place of the 3 per cent, stock being now defended 
by twelve months' notice, a 2>7, per cent, stock redeemable at par by parlia- 
ment. Gladstone proposes not to fix any limit on that 3'/, per cent, stock. 
3.—The third proposal is, that the holders of every £100 3 per cent, shall 
receive £110 in a new stock of 2'/, per cent, until 1894. When Mr. Gladstone 
first introduced his plan in the House of Commons, on the 8th of April, he 
had not limited the amount of the new 27, per cent, to be issued, but 
Mr. Disraeli having pointed out that, contrasting this proposal with the two 
other ones, every man in his senses would choose the conversion of £100 
3 per cent, into £110 2V, per cent.; and that by the conversion of the 
£500,000,000 3 per cent, into the new stock, the nation would gain on one 
side, £1,250,000 per annum, but be saddled on the other hand with an addition 
to the Public Debt of £50,000,000, Mr. Gladstone, on the following day, 
altered his proposition, and proposed to limit the new 2V, per cent, stock to 
£30,000,000. By this limitation, his proposal loses almost all effect on the 
great stock of the Public Debt, and augments its capital only by £3,000,000. 
Now youknow "one of the most important and gigantic financial proposals 
that ever has been brought forward." There exists, perhaps, in general, no 
greater humbug than the so-called finance. The simplest operations relating 
to the Budget and the Public Debt, are clothed by the adepts of that "occult 
science" in abstruse terminology, concealing the trivial manceuvres of creat- 
ing various denominations of stocks, the commutation of old stocks for new 
ones, the dimmishing the interest, and raising the nominal capital—the raising 
the interest and reducing the capital, the instalment of premiums, bonuses, 
priority shares—the distinction between redeemable and irredeemable annu- 
ities—the artificial graduation in the facility of transferring the various 
papers—in such a manner that the public understanding is quite bamboozled 
by these detestable stock-jobbing scholastics and the frightful complexity 
in details; while with every such new financial operation the usurers obtain 

Karl Marx 

an eagerly-seized opportunity for developing their mischievous and preda- 
tory activity. Mr. Gladstone is, without any doubt, a master in this sort of 
financial alchemy, and this proposal cannot be better characterised than by 
the words of Mr. Disraeli:— 

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

You willremember that we have stated thatthe ultimate end of Gladstone's 
plan was the establishment of a "normal" 2V2 per cent. fund. Now, in order 
to achieve this end, he creates a very limited 2V2 per cent, fund, and an 
illimited 3V2 per cent, stock. In order to create his limited 2V, per cent, stock, 
he reduces the interest by a half per cent., and augments the capital by a 
bonus of 10 per cent. In order to rid himself of the difficulty of all legislation 
on the 3 per cents, being defended by twelve months’ notice, he prefers 
legislating for half a century to come; in conclusion, he would, if successful, 
cut off all chance of financial liberation for half a century from the British 
people. 

Every one will confess, that if 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 Resolution a 
little attempt at avoiding National Education—Gladstone's financial scheme 

is a mighty little attempt at dealing with that giant-monster, the National Debt 25 

of Britain. 
CM. 

5