← Autodidact Archive · Original Dissent · Bardamu

Thread 9050

Thread ID: 9050 | Posts: 2 | Started: 2003-08-15

Wayback Archive

Bardamu [OP]

2003-08-15 13:36 | User Profile

Check out how a search for Nationality comes up.

[url=http://40.1911encyclopedia.org/N/NA/NATIONALITY.htm]http://40.1911encyclopedia.org/N/NA/NATIONALITY.htm[/url]

NATIONALITY

have command of sufficient funds for the purpose of paying off the stockholders, or should be able to raise those funds by borrowing at a rate of interest lower thvn that borne by the stock. Any circumstances which might tend to raise the price of the stock above par would also assist the government in raising its redemption money on more favourable terms. When the amount of stock to be dealt with is large, the raising by a fresh loan of the amount required for redemption would occasion great disturbance. A more convenient method is the conversion of the existing stock to a lower rate of interast by agreement I with the stockholders, whose reluctance to accept a reduction of income is overborne by their knowledge that the power of redemption exists and will be put in force if necessary. The opportunity for conversion may be looked for when the price of a redeemable stock stands steadily at or barely abo\:e par. Observation of the movements in the price of other securities will serve to show whether this stationary price represents the real market value of the stock, or whether that value is subject to depression owing to an expectation of the stock being converted or redeemed. Accordingly, the course of prices of other government stocks which are free from the liability to redemption, of the stocks of foreign countries and the colonies, and of the large municipalities, must be watched by government in order to determine, first, whether the conversion of a redeemable stock is feasible, and, secondly, to what extent the reduction of the interest in the stock may be carried.

The credit for the first measure of conversion belongs to Walpole, though it was carried through by Stanhope, his successor as chan

cellor of the exchequer. In 1714 the legal rate of interest

17 . for private transactions, which had been fixed at 6%

in the year of the Restoration, was reduced to 5 by the act 12 Anne, stat. 2, c. 16, But the bulk of the national debt still bore interest at 6%, the doubtful security of the throne and the too frequent irregularities in public payment having hitherto precluded any considerable borrowing at lower rates. Walpole saw that the first reluirement was to give increased confidence to the public creditors. Three acts were passed dealing respectively with debts due to the general public, to the Bank of England and to the South Sea Company. Three separate funds—the general fund, the aggregate fund and the South Sea fund—were assigned to the service of the several classes of debt, each of these funds being credited with the produce of specified taxes, which were made permanent for the purpose; and it was further provided that any surplus of the funds, after payment of the interest of the debts, should be applied in reduction of the principal. Such was the success of this measure that, in spite of the reduction of interest from 6 to 5% which was also enacted, the passing of the acts was followed by a rise in the price of stocks. A curious preliminary to the introduction of these measures was the passing of a resolution by the House of Commons, which invited advances not exceeding 1/2600,000, to be repaid with interest at 4% out of the first supplies of the year. The result showed that the time was not ripe for such a reduction of interest, as only a sum of 1/245,000 was offered on those terms. A further resolution was then passed, substituting 5% as the rate of interest, and the whole sum was at once subscribed. Besides accepting the reduction of interest on their own debts, the Bank of England and the South Sea Company agreed to assist the government by advancing 4~ millions at the reduced rate, to be employed in paying off any of the general creditors who might refuse assent to the conversion. The assistance was not required, as all the creditors signified assent. The debts thus dealt with amounted altogether to about 253/4 millions, and the annual saving of interest effected (including that upon a large quantity of exchequer bills for which the Bank had been receiving over 7%) was 1/2329,000.

\Valpole had a further opportunity of effecting a conversion in 1737. In the meantime much of the 5% debt had been reduced to

4% by arrangements with the Bank of England and th~

1. South Sea Company, and further borrowings had taken

place at that rate and even at 3%. In 1737 the 3% stood above par, and Sir John Barnard proposed to the House of Commons a scheme for the gradual reduction of the 4 %. As a financial measurt the scheme would doubtless have succeeded; but Walpole, moved apparently by consideration for his capitalist supporters, opposec and for the time defeated it. A scheme on similar lines was carriec through by Pelham as chancellor of the exchequer in 1749 and em bodied in the act 23 Geo. II. c. I. By that act holders of the 4~ securities, amounting to nearly 1/258,000,000, were offered a con tinuance of interest at 4% for one year, followed by 31/2 % for sever years, during which they were guaranteed against redemption, witi a final reduction to 3 % thereafter. It was necessary to continw the rate of 4% for the first year, as any objecting stockholderi could not be paid off without a year’s notice. Three months wer, allowed for sivnifvin~ assent to the pro0osal. At first it was viewec

with disfavour, and both the Bank and the East India Company opposed it. But the pens of the government pamphleteers were busily occupied in showing the advantages of the offer, and at the close of the three months acceptances had been received from the holders of nearly 1/239,000,000 of the stocks, or more than two-thi,ds of the whole. A further opportunity was afforded to waverers by a second act (23 Geo. II. c. 22), which allowed three months more for consideration; but for holders accepting under this act the intermediate period of 31/2% interest was reduced from seven years to five. These terms brought in an additional £15,600,000 of stock; and the balance left outstanding, amounting to less than 33/4 millions, was paid off at par by means of a new loan. The annual saving of interest on the stock converted was at first 1/2272,000, increasing to

1/2544,000 after seven years. -

For nearly three-quarters of a century no further conversion was attempted. In that period the total debt had been increased tenfold, and the practice of borrowing in times of war by the issue 1 2 of an inflated capital, bearing nominally a low rate of

interest, prevented recourse to conversion as a means of reducing the burden after peace was restored. But in 1822 Mr Vansittart— who four years earlier had effected a conversion in the opposite direction, turning 1/227,000,000 of stock from 3 into 31/2%, in order to obtain from the holders art advance of 1/23,000,000 without adding to the capital of the debt—was able to deal with the 5%. These stocks amounted to £152,000,000 out of a total funded debt of 1/2795,000,000. The prices at which the chief denominations of government stocks stood in the market in the early part of 1822 indicated a normal rate of interest of more than 4 but considerably less than 41/2%. ‘In these circumstances, to propose the conversion of the 5 % stocks to 41/2 % would probably have been futile, unless the new stock were guaranteed for a long period, as holders would have stood in fear of a speedy further reduction. Nor could the government hope to succeed in a reduction to 4%. Mr Vansittart’s plan was to offer £105 of stock bearing 4% in exchange for 1/2100 of 5% stock, thus adding slightly tolthecapital of the debt, but effecting a large annual saving in interest. These terms were highly successful. Holders of nearly 1/2150,000,ooo accepted, leaving less than 1/23,000,000 of the stock to be paid off, and the annual saving obtained was 1/21,197,000. The new 4% stock was made irredeemable for seven years (act 3, Geo. IV c.9).

There were, however, other 4% stocks, amounting to 1/276,000,000, which were not secured against redemption. Two years later, the conditions being favourable for their conversion, the act

5 Geo. IV. C. 24 was passed, offering holders in exchange :824. a 33/4 % stock, irredeemable for five years.’ The offer was accepted as regards 1/270,000,000, and the remaining 1/26,000,000 paid off, the annual saving on interest being £381,000.

In 1830 the guarantee given to the 4% stock of 1822 had expired, and the stock stood at a price of 1023/4. Mr Goulburn decided to attempt its conversion without delay, and accordingly by

the act II Geo. IV. c. 13 hoiders were offered in exchange

for each 1/2foo of the stock, either £100 of a 31/2% stock, irredeemable for ten years, or 1/270 of a 5 % stock, irredeemable for forty-two years, these two options being considered of approximately equal value. No difficulty was found in securing assent. Over 1/2150,000,000 of the stock was converted, almost wholly into the 33/4% stock; the balance of less than £3,000,000 was paid off, and an annual saving of 1/2754,000 in interest was the result.

It was again Mr Goulburn’s fortune to carry out a large and successful conversion in 1844. At that date the ,funded debt was made up of 3% and 31/2% stocks in the proportions of

about two to one, the only other denomination being the 1844. trifling amount of 5 % stock created in conncxion with the conversion of 1830. The price of 3% consols ranged about 98, and that of the new 31/2%, created in 1830, about 102. A reduction straightway from 31/2 to 3% was not to be looked for, but it was hoped to ensure that reduction ultimately by offering 33/4% for the first few years and a guarantee against redemption for a long term. Accordingly the holders of the several 33/4% stocks were offered an exchange to a new stock bearing interest at 33/4% for ten years and at 3% for the following twenty years. ,Practically the whole of the stock, amounting to 1/2249,000.000, was converted on these terms, only £103,000 being left to be paid off at par. The immediate saving of interest was 1/2622,000 a year for ten years, and twice that rate in subsequent yea’rs (acts 7 & 8 Vict. cc. 4 and 5).

Mr Gladstone’s only attempt at the conversion of’ the debt was made in his first year as chancellor of the exchequer. His primary purpose was to extinguish some small remnants of 3 %

stocks which stood outside the main stocks of that de- 1853. nomination. The act 16 Vict. C. 23 offered to holders of these minor stocks, amounting altogether to about 93/4 millions, the option of exchanging every 1/2100 for either 1/282, lOs. of a 33/4% stock guaranteed for 40 years, or 1/2110 of a 23/4% stock guaranteed for the same period, or else for exchequer bonds at par. In the result stock to the amount of only about 1/21,500,000 was converted, and the remaining 1/28,000,000 had to be paid off at par, with some apparent loss of capital, as the current market price of the 3 % was less than par. The failure was largely owing to the fact that, between the initiation and the execution of the scheme, the train of events leading up to the Crimean War had become manifest, with unfavourable resulti

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 34 and 24%. Very little advantage was taken of this permission, but the small amount of 24% 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 47 & 48 Vict. c. 23) extended

1884 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 23/4% or £108 of a stock at 24%, both irredeemable for twenty-one years. But the amount exchanged into the new stocks was only 22 millions, of which more than onehalf 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%

1888 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

1. 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 2I % 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 twentyfive 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 he 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 23/4% for the next fourteen years and at 24% 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 55. % 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 Is. 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 consuls should be redeemable after 1923 on such notice and in such manner as parliament might

direct. (W. BL.; E. W. H.*)

See Leroy-Beaulieu, Traijé de la Scie’ice des Finances; Rau,

Fznanz’ivissenschaft; M’Cullnch, 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 INTERNATIONAL LAW, PRIVATE) for the status of membership in a nation or state (for the conditions of which see STATE, ALLEGIANCE, NATURALIZATION, ALIEN), 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.

Would you support this site by donating $2 to keep it going?

DISCLAIMER: PLEASE READ - By printing, downloading, or using you agree to our full terms. Review the full terms by clicking here. Below is a summary of some of the terms. If you do not agree to the full terms, do not use the information. Since this information is from 1911 it is outdated and contains many OCR errors (typos). It is for research purposes only. The information is "AS IS", "WITH ALL FAULTS". User assumes all risk of use, damage, or injury. You agree that we have no liability for any damages. We are not liable for any consequential, incidental, indirect, or special damages. You indemnify us for claims caused by you. This site and its contents are © 2002 by PageWise, Inc.

Ed Toner

2003-08-15 14:18 | User Profile

Also there: 1911 Encyclopedia

[url=http://77.1911encyclopedia.org/N/NE/NEGRO.htm]http://77.1911encyclopedia.org/N/NE/NEGRO.htm[/url]

" ..............a heavy massive cranium with large zygomatic arches, flat nose depressed at base, &c. But in one important respect, the character of the hair, the white man stands in closer relation to the higher apes than does the Negro. Mentally the negro is inferior to the white. The remark* of F. Manetta, made after a long study of the negro in America, may be taken as generally true of the whole race: " the negro children were sharp, intelligent and full of vivacity, but on approaching the adult period a gradual change set in. The intellect seemed to become clouded, animation giving place to a sort of lethargy, briskness yielding to indolence. We must necessarily suppose that the development of the negro and white proceeds on different lines. While with the latter the volume of the brain grows with the expansion of the brainpan, in the former the growth of the brain is on the contrary arrested by the premature closing of the cranial sutures and lateral pressure of the frontal bone.3 This explanation is reasonable and even probable as a contributing cause; but evidence is lacking on the subject and the arrest or even deterioration in mental development is no doubt very largely due to the fact that after puberty sexual matters take the first place in the negro's life and thoughts. At the same time his environment has not been su;h as would tend to produce in him the restless energy which h,as led to the progress of the white race; and the easy conditions of tropical life and the fertility of the soil have reduced the struggle for existence to a minimum. But though the mental inferiority of the negro to the white or yellow races is a fact, it has often been exaggerated; the negro is largely the creature of his environment,

1 This point has been fully determined by P. A. Brown (Classified tion of Mankind by the Hair, &c.), who shows conclusively that unlike true hair and like true wool, the negro hair is flat, issues from the epidermis at a right angle, is spirally twisted or crisped, has no central duct, the colouring matter being disseminated through the cortex and intermediate ............"