so far doubtful as to have made this
kind of insurance prudent.

_For the benefit of the expert, I give Mr. Gladstone's further
observations on this highly technical matter:--_

I have other remarks to offer. I write, however, from memory. Three
millions of the L8,000,000 were paid in exchequer bills. The difference
between L100 and the price of consols at the time may, in argument at
least, fairly be considered as public loss. You say it was 90 or 91. We
could not, however, if the operation had not taken place, have applied
our surplus revenue with advantage to the reduction of debt. The
balances would have been richer by L5,000,000, but we had to raise seven
millions for the services of the year 1854-5. Now, as I am making myself
liable for the loss of half a million of money in repaying the South Sea
Company, and thereby starving the balances, I am entitled to say on the
other hand that the real loss is to be measured by the amount of
necessity created for replenishing them, and the charge entailed in
effecting it. This I think was done by the exchequer bonds: and beyond
all doubt a large saving was effected to the public by raising money
upon those bonds, instead of borrowing in consols at 84 or thereabouts,
which I think would have been the price for which we should in that year
have borrowed--say, at 84. The redemption price, _i.e._ the price at
which on the average consols have been in recent times redeemed, can
hardly I think be less than 95, and may be higher. There was in 1854 a
strong combination in the City to compel a 'loan' by bearing the funds;
and when it was defeated by the vote of the House of Commons, a rapid
reaction took place, several millions, as I understand, were lost by the
'bear,' and the attempt was not renewed in 1855, when the loan was, I
believe, made on fair terms, relatively to the state of the market.

THE REFORM BILL OF 1854

_Page 491_

In cabinet on Wednesday Lord John Russell opened the question of the
Reform bill, stated the prospect of defeat on Sir E. Dering's motion,
and expressed his willingness to postpone the measure until the 27th
April. Lord Palmerston recommended postponement altogether. Lord
Aberdeen and Graham were averse to any postponement, the latter even
declaring his opinion that we ought at the time when the Queen's Speech
was framed to have assumed the present state of circumstances as
inevitable, and that