Star. — London, England, 1826-02-14 00:00:00

in height, and Jig (Mr. Charles Grant) had no doubt but that tbe - eagerness in the return to con. fidence would be is excessive, approaching to the Same wildness which had existed before. The thin , would be, therefore, to guard against such an occurrence, and ham that the measures alone proposed lON hence, for the future, be to guard the commerce of eke country. The Hoe. Member who had spoken from underneath - the Gallery, had hinted that the =ensure did net profess to feel with the present exigencies. The measure looks at the currency of the country, and is anxious to provide soots cheek to arrest the evil by way of prevention. An Hon. Geetienuus bad been of opinion that there had -been no ever-issue—it was over-trade—(though he thosgbt the one caused the other)—and tome had gone on to say, that the measure was an arbitrary interference an the part of Government; but, nevertheless, be thought the present measure owe of the elemseitary conditions of a free country, and should defend it on the grouse, that it formed part of a firm currency. The Honourable Member concluded, by observing, ibex be sbeald most cordially support the measure, which the state of the country had called for so im peratively. • Sir JOHN NEWPORT said, oo man had denied, nor indeed was it possible any man could deny, the various and manifold evils which flowed from a system tending to create an over issue of paper currency, at all times and in all seasons; and, leaving that part of tha community who were thus tempted to extend their ope. l rations, open to the sudden demands of the most ignorant an i the most timid of that class, who were, of all others, the most easily worked upon by the slightest rumour which the malicious or designing might propagate for' the destruction of h*s neighbours. But even leaving out of the que.tion the temptation afforded for extending the capital of a bank, the poiver of issuing small notes had another and no less injurious effect. Men of small property, or of none, sent forth his notes as a matter of necessity ; and the man of real wealth and undoubted solidity became obliged to fellow their example, as a matter of unavoidable competition. Thus the one evil created the other, sold thus the consequences of the late panic had spread so widely and so fatally. So great, indeed, in his opinion, was the extent of the evil , of such an issue, and so dreadful its results, that if it was put to him, whether there should be an extended and flourishing commerce in the country, accompanied by such a system—or whether there should be no commerce at all, if that system was removed? be would, without the slightest hesitation, declare, that he wished cow merce to be at an' end for ever. Those fears, however, eipressed by some Gentlemen, of the destruction of that country paper issue stopping the progress of cons. nsercial credit, were utterly fallacious—there was more than sufficient of a circulating medium in the kingdom for all the purposes of trade, without having recourse to such a base and artificial creation. Bankers had not any great issues to reduce; they had been obliged to call them in for their own security; the quantity of * country paper in the market was, therefore, com paratively small ; no very great injury could be done to public credit by restraining its return to circulative; and the only question was, whether they should more allow the paper to be spread over the ammo Once more allow every petty provincial banking estab. mama to deluge Its diarist with one pound wow and thin have tl the some mood to go swot spio—oho smog distross—chososoo pasio—tho woe compish4holsso they could dreamily that issue, which most, without the isterfasonce of ti e d meat, emus* prove the destruction of the essavry. Mr. Alderman MEYGATE said, in consequence of the dreadful panic which had - existed, the currency of the country had been at a lbw ebb, and he did not he sitate to say, that for the last filly years the whole sys tem of the currency had been bad throughout. With regard to the measure, his Majesty's Ministers bad is sued a Manifesto, which had gone into the hands of every person, high and low, and its effects were most, objectionable. He thought that there could not be a more abominable system than the circulation of one pound notes. He recollected the first measure on that head being brought fotward by the Ministers in 1793, and must ask why they would now turn round and de stroy what bad been the means of carrying on the war for such a length of time. The Hon. Member reinon .strated on the correspondence between the First Lord of ti.e Treasury and the Chancellor of the Exchequer and be protested as to the possible good that could be effected either by Joint Stock Company Banks or country banks, as long as the paper cutrencypre wails to its present extent. lie rrobated the stamp restriction on the issue of 1L and 2.notes as unconstitutional,besides useless,for Minis ters could not prove,nor trace the late panic of the money market to the issue of small notes by country Bankers. With respect to Country Banks, however plausible the proposed change might be in theory, he feared its init. fectiveness in practice would convince their most ardent supporters of its-speculative hollowness. Members were led away by mese theory; he would wish that they would now attend to the practical results of experience unsupported by favourite systems; be would wish the Members of his Majesty's Government would take the sense of—not authors (unfortunately on Political Eco nomy they were too numerous), but men of practice, on , the expedsency of the measures intended to be put in effect by them in relation to the currency ; he did .sot say this in the spirit of hostility to the present Administration— by no means. He had supported them when it was not ptapuier to do so, that is, w hen he did not.get a vote fur so doing, but on the contrary, lost the countenance of some of his Iriends. The truth was, Ministers could net proceed t , i their present c neer with the milistont of our national debt, the very interest of which it was almost impossible to pay—tire heavy taxes—pension &c. &c. without a paper currency, and when the Right Honourable Gentleman (the Chancellor of the Ezeheqeer) proposed the modification and ulti roate change in the present system in two years, he should have previously paved the way, by the adoption of measures which would have, if possible, relieved the public burdens and respect the rights of private bankers. He maintained that in the present state of affairs nothing permanently beneficial could be effected by the Governaient in the way of a restrictive Bill on the issue of small notes, or a Bill which forced the re sumption of cash payments. Though in fact laughed as bp the House in 1819, on the passing of the Right Honourable Gentleman opposite (Mr. Peel's) Bill, he Alderman Heygate both in the House and out of doors, Ead protested against its expediency, and had prognos ticated its consequences, unfortunately so fatal to the country. It way Absurd in the extreme :to charge the issue of smell notes of IL and 2L with the recent calm. males, whose sources lay higher, where his Majesty's Ministers could not be ignorant of their existing, there fore were culpable in not at least warning the country of the fatal result of their adoption. There were 004 three periods of distress so the records of the country at all analogous to that now experienced, namely, those of 1720. 1793, and 1797 ; in all of which IWO were no issues of one and two pound notes, coosupwitly them could not en these occasions be any deer, broUght against the then bankers for their indis:rimi mate issue of small notes. The Honourable Gentleman, i Ocularly as he had the honotr. Ing by the acquiescence of the late Honourable Member for Pot tarlington (Mr. Ricardo). As to the policy of those prificiples, ycleped free trade principles, he (Alderman Heygate), begged to remark, that they began at the wrong end. They should have given us the Reces series of life cheap before they attempted the decisive changes in relation to the commerce of the country they did ;—the repeat of the Corn Laws would have given us these necessaries at a. low price ; and consequently as free trade was the cant of the day—the repeal of the existing restriction on the importation of foreign corn should have been adopted. He agreed with what fell from the Right Honourable Gentle man opposite (the Chancellor of the Exchequer) in relation to the Bank of England monopoly, the establish ment of Joint Sock Coinpany Banks, and the demand• ing of satisfactory security from country bankers, ,though be doubted, if the expected results would follow the intended changes of the country bank system. He alluded to the understanding that existed between the Bank of England and the Government; the former, in the first place, lent them money ; the latter gave them a charter of monopoly; and afterwards advanced the Bank Excequer Bills to the amount of 6,000,0001. for which, no doubt, the Government must get a proper in terest. He again reprobated the free trade system,though he begged leave to be understood as an admirer of the policy. The policy we had abandoned was a safe one,and brought to the test of experience. That on which we were now entering was uncertain, and left us, at the commencement of our career in it, in no very enviable state of prosperity. He hoped, in conclusion, that the Right Honourable Secretary fir Foreign Affairs, whose high talents the House and the country acknowledged , sad admired, and Mee heart be (Alderman Ifrygete) knew to be ' as Nadas Ma talents were great, mid direct his talents and Ms Moderns towards replacing as in thas course of policy in which ws - bad Mime thriven, - and the adoption of which was required by eke best interests et the country. Mr. Secretary PEEL did not intend to deny that commercial embarassments existed, and to a very con siderable extent : to none were they a subject of deeper regret than to himself. If the House should be induced to disfavour the measures of his Right Honourable Friend the Chancellor of the Exchequer ' they would be holding them responsible for events which they did not cause. So deeply was be impressed with a sense of their necessity, that he would exhort the House to pay diligent and immediate attention to the footing on which the currency now stood. Wis it prudent to let it continue in its , present state, when they looked to the effects of the system of private banking for the last thirty years. He was astonished that the Honourable Gentleman who last spoke miuld construe the language 4. his (Mr. Peers) Noble Friend, at the head of the Treasury. and of his Right Honourable Friend the Chancellor of the Extheqaer, as directed against indi viduals. When they attributed public disasters to rash pecuniary transactions, fostered and encouraged by the existing system of many country banks, he had no hesitation in advocating those sentiments. lf, indeed ) insteAd of such language, they had employed ciao terms used by the Honourable Gentleman himself, such as abominable ono— --•erable plans—it might have been highly objectionable. The Hon. Gentleman seemed to impute to Ministers an intention to blacken the cha racters of individual country Bankers. He (Mr.Yeel) was willing to give them full credit for honourable feeling ; but yet he must reserve leave to reprobate the system. There were at this day no less - than 800 country bankers. lu the year 1793, it was matter of astonishment to Mr. Macpherson that there had then been so large a num ber as 288 bankers issuing paper, which was the cir culating medium of the country, by which the poor were paid for their labour. Against that system he would deduce the most powerful arguments from the facts disclosed by those who were its most strenuous advocate. The • Hon. Gentleman, who last spoke de precated the charge against the over-issues of private bankers, on this ground, that no private banker was aware f the public injuiy to which he might contribute is the course of his accommodations to the individuals with whom he dealt, inasmuch as he could not possibly know what excess had already been committed by other bankers in their issues. And could any stronger reason be advanced against the system than this very one, which was urged in its support ?—Again, it• was stated by the Hon. Member for Staffordshire, that bank notes had a nausea tendency to increase in proportion to the rise of prices. Was not this another very strong argument against the principle of the system ?—And might not the Honourable Gentleman with great truth have added, that as prices fell, there was a correspond ent tendency to contract the issue of bank notes?— Their effect was to stimulate in excitement, and to sink with depression : thus reversing the beautiful principle in mechanics, wt.ereby the contraction of one part is compensated by the expansion of another. The argu ments iu favour of the sy stem, availing anything, should go to its indefinite extension even after the expiration of ten years. Yet how melancholy would be the situation 'of a poor labourer who had accumulated a little sum by his toil, on pre►enting at a Savings Bank the one or two pound note of a bank which bad failed. It was not designed wholly to impute to bank issues the specula tions in which men engaged ; it was only meant that such issues had a tendency to excite speculation. It was easy enough to attack the measures proposed by his Hon. Friend the Chancellor of the Exchequer, and to say that it was no remedy for the evils which it was designed to meet. But the fact was, it did not profess to be a remedy.. The Hon. Member for Taunton had said, that the House was on fire, and that they were bound is provide for the safety of those who were trembling in the garrets. Yet the only ladder—the only measure of relief which he bad proposed was liable to the same objection as tbat,which he said went only skin deep. His proposal was to make silver the legal standard. It was certainly deserving of grave consideration ; but before its adoption, it would be necessary that the mea sure should be well reviewed, in order to prevent fluctu ations, that men who bad contracted for gold might be enabled to pay in silver. By the restoration of a gold currency we approached nearer to a conformity with the system of our ancestors. The effects of the modern system were obvious enough in the failures of Country Banks which occurred in later years. In 1810 there were 26 failures-- I In 1411 . . . 4 In 1614 . . • 19 • 1612 . . . 17. 161 J . • • - 14 . 11115 • . . • IS 1414 . • • 57 ,sad 1n OW lest crisis there were 76 failures. 114 awn bet of COmanissions of Bank:* *Will Wit Weed emu act identicil with the nitinber of Wham. In MS &ere were but Cotifinindons, though there had been ND failures ; and they ought petliaps to itinploy the *tie proportion in estidfating the recent failures, multiplying the given number. Accordi(tgto this view of the case, could any system be worse? Now let Hon. limen contemplate the effects of the system pur sued in Scotland. In 1819, when Mr. Gilchrist, a Scotch Banker, was examined before a Committee of the House, when asked how many failures he knew to have occurred among the Scotch Bankers ? his reply was, that within his own memory only one failure oc. curred in Scotland, and that the failing Bank had paid immediately a dividend of 14s. in the pound, and subsequently the whole of their debts, a strong pre sumptive proof this that there was something worthy of .imitation in the Scotch system, and something defec tive in ours. The most distressing consideration con. tSected with the latter was, that all misfortunes were sure to be visited upon the lower classes, in consequence of the succession of failures. Those who were losers of large sums might from their easy circumstances be enabled to wait a distant time for a dividend; but the bolder of a 1 or 2 pound note had perhaps Lis whole pro. petty confined to that.very sus), and suck we're the parties who were at once involved in the severest neces sity, and after all received the most inadequate com pensation. He would now advert to the adequacy of the remedy proposed, and finally, he would notice the ob jection nude against the time of its introduction. Some Gentipiavn were of opinion that thtte would be no Joint StocE Banks formed in consequence of the permission of an Act of Parliament ; but to that opinion he could not agree. He was very sure that such a plats could not fail to be brought into action by those Gentleman who were desirous of establishing a better system of things in their own districts, and he felt that they would be actuated more by a sense of the public good which must flow from such a measure, than by any selfish regard to their private interests. One obstacle alone was opposed to so desirable an object, namely, the right of granting a Charter to such Companies, and he hoped that the Bank of England - would con sider the little advantage which it gained by with holding the concession, and the great benefit which such concession would confer upon the country at large. As to the objection that in the marjority of partner• ships at present, the number of partners did not amount to six, it went for nothing. So small a number as six implied personal acquaintance and con fidence between the Members, but that was not ne cesssary in the case of a. Chartered Company. In Scotland one Company consisted of a hundred Mem bers, and another of 75, though neither had charters.— There were but SO banks in all Scotland, though we had 800 here. In Ireland two banks had been formed since the Permissive Act of last Session. With respect to withdrawing the small notes, there would be no great difficulty in procuring a sufficiency of gold to supply the amount of them in circulation. THe average amount of small notes in circulation did not probably exceed six millions.. But he was willing to take 7,000,000 as a maximum ; and even in that case he could not see the impossibility to the country of supplying such a sum in gold. S nce 1819, twenty-five millions of sovereigns had been coined at the Mint. Allowing for- seven or eight millions exported in the interval, there remained seventeen millions now in the kingdom. The prohibi tion of country notes would call forth the gold, which was now hoarded in the coffers of Bankorv, partly as a resource to meet a demand of payment, and partly that they might see their own notes in circulation.— The whole, he thought, might be amply made up in the course of three years. The Honourable Gentleman who had spoken first seemed to think that the same right existed in the country banks to continue their circulation as in the Bank of England ; but he should have recollected that the private banks had no Charter, while the Bank of England bad one for which it had payed to Government. Those who recommended to postpone the question were advocates for uncertainty. Every argument, said the Right Hon. Gentlemas o , which I have heard urged in the course of the debate by the worth Alderaian who spoke last, and by the , other Honourable Gentlemen who have preceded him, has strengthened the conviction of my mind,- that the present moment is expressly the moment for carrying the measure into effect. I am quite satisfied that the question is now ripe; that the quer ion is now or never —(Hear)—but if the House should come to a resolu tion not to carry the measure into effect at present, let it be abandoned ; but if it be abandoned, let it be distinctly understood, that it is abandoned for an in definite time. Honourable Gentlemen have said, that in time of prosperity, whet the effects of the late panic have subsided, the measure might be carried into effect with less danger than it could at present. To that as sertion I would reply, that I could conceive no period at which it would be more difficult to carry such a measure than a period of general prosperity; and whets Honourable Gentlemen connected with country banks assert the contrary, I beg to refer them to what passed in the year 1818, when a proposition was made on the part of Government, that the country bankers should give a security for the amount of their issues. I beg to recal the attention of Hon. Gentlemen to the exertions made at that time in opposition to the measures pro posed by Government, exertions so great, that the Government was obliged to abandon—l will admit, to abandon—the measure which had been brought forward. I refer Honourable Gentlemen to that period as afford ing some proof that a time of prosperity was not the only time in which explicit acquiescence in such a mu. sure could be expected. If it be true, as the worthy Alderman has stated, that a sudden and precipitate reduction, to the amount of six millions, has taken place in the circulation of country bank notes, and that gold is flowing ieto the country—then I will say let not such an opportunity pass—let not the opportunity pass when the measure can be effected with less immediate pressure than it could be in a time of prosperity with the country bankers. It appears to me that the time has arrived when we can carry the measure into effect —that we are upon the brink of the river—that the ford is passable, and that if we permit this opportunity of taking our passage to pass by, we shall imitate the folly of the Rustic, who waited on the bank, expecting the stream would pass away— " !action expectet daat Meant menu; at illa LaMar et labstar la mos valuta, smut." Nsy, our *nation will be one of wore dankly, if we sear this opportunity to pow away. If we now hesitate aid postpone the aseasnre, we shall And on our return, A. ymifell Qaenssoper Notas duere rirss." The pose. is now pracdcabk, and I for one am ready to make it but it we ow hesitate. we BOK sbuidon the measure u cue at•: tarty kopeks a and impracticable at a future period. (The Right ' Hut. Gentleman sat down amid load and sentinued cheers). Alderman HRYGATS etplated. Mr. M. ATTWOOD said, whatevet good of al had been produced by the paper circulation was to be as , cribed to the increased circulation of the Bank of Snp,a land. All those enterprifes and nvettradings which were the subject of the Right Hon. Gentleman's obser. rations, were to bedscribed to the measures of Goverivt meat. The paper circulation was forced by Mr. Peers Bill, and from that arose all the ealarnities which fat' lowed. The Session of 1822 commenced with Ministv rial projects for increasing the Sank circulation. It wits first proposed to increase the Bank circulation by bor rowing money ; it was then proposed to lend mosey for the purpose of increasing the Bank circulation ; and out of all theie projects arose the one for raising Money upon a dead weight, and borrowing principal to pay interns . : There were 21 millions of Rank notes in circulation, an it was as clear as that the sun would rise to-mOrrosr that the price of gold woull rise in proportion to the quantity of notes out. The change in circulation pro: duced by the measures of Government effectually ahemd the value of property. It was worth while to see how the price of grain followed that alteration. In 1821, the average price of grain was 435. a quarer, aad he should be glad to know if that wa , not as h;g11 a prize as could ever be obtained for it with a metallic cur rency. As to the change of seasons in a tountry tike this, the argument deduced from that was perfectly nu gatory. The question was not as to quantity, but as to pr;ce. When commodities were at a high price gold disappeared, and was at a high price until the value of commodities was reduced. The Bank of England was the heart and foundation of the money system of this country. When commodities were high, the demand was greater, ant when the price of commodities was reduced by the measures of Government, the demand decreased. The precious metals, like other things, were subject to this standard. Out of the high prices other things, besides speculations, arose. Rents had atiseo from high prices. The population of the country, too, was changed from a population he might say of rebels, into one of the most contented, tranquil, and prospe rous populations is the world —a population full of con. tent and prosperity. The Chancellor 'of the Exche quer had observed upon the favourable state of the Re venue; but was not the favourable state of the Revenue founded upon a paper circulition? The Government should be cautious how it proceeded. Ministers should recollect what had past, and if these recollections did not impart caution nothing cook!. When the notes come to be withdrawn the money engagements of individuals were necessarily cut down to that on which they were founded. By some, means. either by slow reduction or by oudden revolution, all engagements were reduced to the level of notes of the Bank Of England. But the Bank could issue largely with Mr. Peel's Bill pressing on it.— The Bank paper was forced back by the measures of Government, and distress was the necessary consequence. Mr. HUDSON GURNEY said, in a very indistinct tone of voice, that should he not be anticipated, it was his intention to move an amendment to the resolution of the Right Hon. the Chancellor of the Exchequer.— The amendment would entirely leave out the words "or notes of the Bank of England." This would keep the notes of the Bank of England in circulation; an object of very great importance—because he was wis fied one of the first effects of the measure would be, the substituting country bank notes, as the circulating me. dium, instead of small Bank of England paper. He attributed the foundation of all the errors and calami. ties lately experienced in the monied system to the conduct of the Bullion Committee. In consequence of a Bight Hon. Gentleman who interested himself much on that occasion, bringing in the Bill of 1510, foutided w eras Bevan of a Committee of the Howe, a series of Inconveniences arose, which ended in the general distress of 1821. He was convinced that under what were termed gold prices generally, this country could not hold up Its head in competition with others. Mr. Secretary CANNING—Sir, before I proceed to discuss the very important and interesting subject now under the consideration of the H mse, I beg leave to set myself right with one class of Gentlemen who have been frequently alluded to in the course of the debate— the country Bankers—and to say, that whatever I may offer in disparagement of the preeent system of our cur rency, and whatever opinion I may express as to . the ne cessity of opirating on that currency a speedy and an ef fectual reform, I wish .t to be understood, that it is not my intention in the smallest-degree to impute blame, to in sinuate suspicion, or in any way to treat with the slightest disrespect, that valuable body of men so often alluded to, as the administrators of our currency, such as it now stands. I believe the country bankers to have rendered great services to the nwien, by animating its industry, and providing for the remuneration of its labour ; and if in any instance they have done amiss, I am satisfied their error has resulted from the nature of the system itself, and not from any abuse of the powers which, under it, have necessarily been lodged in their bands. I am desirous of stating this mist distinctly at the out set; as one cannot always le sure, that, in the ardour Of debate, expressions will not escape which may seem to go front the matter to the person. When I speak of the Country Bankers of Ragland, I speak of them as I have often had occasion to speak of the Directors of the Bank of England, as being most respectable in themselves; but respectable as they are, in my judgment it is not fit that they should exercise the prerogative of the Crown; and feeling thus, I throw no slight no blame upon them, when I propose to supply correctives to that system, which, up to this time, it has been their duty to carry into effect. With respect to the fitness of the time chosen to effect this reform, I think it right to say, that I consider this the period when the discussion may be entered upon, carried to a decision, and brought to a practical con clusion, with less isiconvenience than at any other. I say this, because the fair presumption is, that the coun try banks now existing are proved to stand on a more solid foundation than ever was theirs before. They have withstood the storm, which threw weaker fabrics to the earth, and having weathered that, they can have nothing to fear from any new panic, which the existing alarm, extravagant as it is, may bring. My opinion is, that this measure is necessary for the regulation of our currency. 1 felt anxious to clear the ground of the invidious im putations just mentioned, and I now proceed to treat the question with all frankness and sincerity. Toe Hon. Gentleman who spoke from the bench opposite divided the subject most accurately into two parts, and doing so, his speech furnished the best answer that could possibly be made to all the objections urged against the plan of my Right Hon.Friend,by the several speakers who had preceded the Honourable Gentleman. It has been said of it that it is wholly inefficient, that it is mete milk and water, and then it is treated as a most formid able source of evil, and calculated to bring a greater pressure on the country than it can by any means sostairl Both these objections to the plan of my Rt. Hon. Friend cannot her true, but it is very possible for both to be wholly unfounded, and the Hon. Gentleman has :hewn that this may be the case. He ha invalidated the first = entered into a icular esplanstion of the circuits- bet 'o no stances anterior consequent op,thoas periods of db. wore. ms . tress ; which es idea molt to 'beer, that the distress )1,0 7E b e was not casing to: be causes ilVailbed tliy his Majesty's; beett ng Ministers for chewers; revultiOt. - Hoplanted Minuted the sl h e with not paying attention to hif(Alderassin Heygates) *stifi tv, warning as to the evil consequences of their policy, par. of thi bar ticul.rly as he had the honour of being sanctioned by Gen! be Ten bet tlei bee bit Ile the 12 ei CU