Page:EB1911 - Volume 19.djvu/287

 to the public credit. Mr Gladstone had also included, as an optional portion of his plan, liberty to holders of the larger 3% stocks to exchange into the new 3 and 2%. Very little advantage was taken of this permission, but the small amount of 2% stock then created has been largely added to in later years by the conversion of stocks of higher denominations held by the national debt commissioners for the savings banks and other government funds.

Little better was the result of a more ambitious attempt made by Mr Childers in 1884. His offer (act 4 & 48 Vict. c. 23) extended to the holders of all the 3% stocks, amounting to more than 600 millions, but no attempt was made to compel acceptance. There was offered in exchange for each £100 of 3% stock either £102 of a stock at 2% or £108 of a stock at 2%, both

irredeemable for twenty-one years. But the amount exchanged into the new stocks was only 22 millions, of which more than one-half was stock held by government departments.

The most important of all the conversions of the British debt was effected by Mr Goschen in 1888. It applied to the whole of the 3% stocks, amounting to a total of £558,000,000, made up as follows: £323,000,000 of consols, a stock which dated from 1752, when it was formed by the consolidation of a number of minor stocks; £69,000,000 of reduced 3% of which the nucleus

was the stock reduced from 4 to 3% by Pelham’s conversion in 1749; £166,000,000 of new 3% resulting from the conversion of 1844. All the three stocks were, and had been for a considerable time, well over par. But for the past few years they had remained in almost a stationary position, relatively to the upward movement shown in the prices of the government 2% stock, and of the stocks of foreign governments, of British colonies and of the leading municipalities. It was clear that the anticipation of a conversion or redemption scheme was weighing down consols. Direct evidence of this fact was afforded by the course of a new 3% stock, the local loans stock, which Mr Goschen had created in 1887. Though bearing the same interest and resting upon the same ultimate security as consols, this stock, which had been made irredeemable for twenty-five years, rose at once to a higher level of price. The opportunity for a great scheme of conversion had evidently come. The risk to be incurred by government in undertaking the liability to pay off such an enormous body of stock, though less in comparison with the resources of the nation than that which Mr Goulburn had faced in 1844, was still very great, and it was rendered more formidable by the fact that holders of consols and of reduced 3% were entitled at law to a year’s notice before their stocks could be redeemed. If that right of notice were to be enforced as regards any large proportion of the stocks, no precaution could adequately guard against the risk Of untoward circumstances arising to affect the operation before the year expired. Mr Goschen proposed to offer to the holders of each of the three stocks an exchange at par into a new stock bearing interest at 3% for the first year, at 2% for the next fourteen years and at 2% for twenty years thereafter, the stock to be irredeemable for the whole of that period, namely till 1923. Acceptance was made compulsory for holders of the new 3%, with the alternative of being paid off at par, as they had no claim to receive notice; but it was made optional for the holders of the other two stocks, and a bonus of 5s.&#x202f;% was offered to them as an inducement to forgo their right of notice. These provisions were duly embodied in the act 51 Vict. c. 2. The terms were accepted by practically all the holders of the new 3% and by the great majority of the holders in consols and reduced 3’s, the amount left outstanding being only £42,000,000. To enable that balance to be dealt with, an act was passed providing for the compulsory redemption or conversion of the outstanding stock at the expiry of the statutory notice. The funds required for this further operation were raised by the issue of treasury bills and exchequer bonds, by temporary advances from the bank and from the national debt commissioners, and by the creation of an additional half-million of the new stock. In the result it was only necessary to find cash for paying off dissentients to the amount of £19,000,000. The final outcome of the whole operation was a saving in the annual charge of interest of £1,412,000, increasing to twice that amount after fourteen years.

The conversion of the consols and reduced 3% was greatly facilitated by the exercise of a power, which the act conferred, to pay to recognized agents, such as stockbrokers, bankers and solicitors, a commission of 1s. 6d.% on stocks in respect of which they lodged their clients’ assents. These agents were thus afforded an inducement to give their clients explanation and advice, without which many of the fundholders would probably not have moved in the matter. The commissions paid amounted to more than £234,000, representing stocks to the amount of over £312,000,000. The government would not again be confronted with this difficulty of having to give long preliminary notice of the intention to convert or redeem a large portion of the debt, as it was provided by the Conversion Act 1888 that the present consols should be redeemable after 1923 on such notice and in such manner as parliament might direct.

See Leroy-Beaulieu, Traité de la Science des Finances; Rau, Finanzwissenschaft; M'Culloch, On Taxation and the Funding System; Hamilton, Inquiry concerning the Rise and Progress of the English Debt; Taylor, History of Taxation in England; Fenn, Compendium of English and Foreign Funds; Dudley Baxter, National Debts, and his paper in the ''Stat. Soc. Jour. (1874).; Sir E. W. Hamilton, Conversion and Redemption'' (1889). And for statistics of national debts see the Statesman’s Year-Book and the Stock Exchange Annual.

NATIONALITY, a somewhat vague term, used strictly in international law (see ) for the status of membership in a nation or state (for the conditions of which see, , , ), and in a more extended sense in political discussion to denote an aggregation of persons claiming to represent a racial, territorial or some other bond of unity, though not necessarily recognized as an independent political entity. In this latter sense the word has often been applied to such people as the Irish, the Armenians and the Czechs. A “nationality” in this connexion represents a common feeling and an organized claim rather than distinct attributes which can be comprised in a strict definition.

NATIONAL WORKSHOPS (Fr. Ateliers Nationaux), the term applied to the workshops established to provide work for the unemployed by the French provisional government after the revolution of 1848. The political crisis which resulted in the abdication of Louis Philippe was naturally followed, in Paris, by an acute industrial crisis, and this, following the general agricultural and commercial distress which had prevailed throughout 1847, rendered the problem of unemployment in Paris very acute. The provisional government under the influence of one of its members, Louis Blanc, and on the demand of a deputation claiming to represent the people passed a decree (Feb. 25, 1848) from which the following is an extract:—

The provisional government of the French Republic undertakes to guarantee the existence of the workmen by work. It undertakes to guarantee work for every citizen.

For the carrying out of this decree, Louis Blanc wanted the formation of a ministry of labour, but this was shelved by his colleagues, who as a compromise appointed a government labour Commission, under the presidency of Louis Blanc, with power of inquiry and consultation only. The carrying out of the decree of Feb. 25th was entrusted to the minister of public works, M. Marie, and various public works were immediately started. The earlier stages of the national works are sufficiently interesting to justify the following detailed account:—

“The workman first of all obtained a certificate from the landlord of his house, or furnished apartments, showing his address, whether in Paris or the department of the Seine. This certificate was viséd and stamped by the police commissary of the district. The workman then repaired to the office of the maire of his ward, and, on delivering this document, received in exchange a note of admission to the national works, bearing his name, residence and calling, and enabling him to be received by the director of the workplaces in which vacancies existed. All went well while the number of the unemployed was less than 6000, but as soon as that number was exceeded the workmen of each arrondissement, after having visited all the open works in succession without result, returned to their maire’s offices tired, starving and discontented. The, workmen had been promised bread when work was not to be had, which was reasonable and charitable; the great mistake was, however, then committed of giving them money, and distributing it in public at the offices of the maires instead of distributing assistance in kind, which might have been done so easily through the agency of the bureaux de bienfaisance. Each maire’s office was authorized to pay every unemployed workman 1.50 frs. per day on production of a ticket showing that there was no vacancy for him in the national works. The fixed sum of 2 francs was paid to any workman engaged on the public excavation work, without regard to his age, the work done or his calling The workman made the following simple calculation, and he made it aloud: ‘The state gives me 30 sous for doing nothing, it pays me 40 sous when I work, so I need only work to the extent of 10 sous.’ This was logical

“The works opened by the minister of public works being far distant from each other, and the workmen not being able to visit them all in turn to make certain that there were no vacancies for them, two central bureaux were established, one at the Halle-aux-Veaux under M. Wissocq, the other near the maire’s office in the