The Sun. — London, England, 1847-12-04 00:00:00

securities into a market which was not prepared to re ceive them ?—(Hear, hear.) There was in the Bank at that ti me of bullion 7 , 865,0001.; the notes then outstand tag in cir cu l at i on were 21.800,0001.; there was in the nf 4n n k ing department 447,246/. o f b u lli on , an d 1,517,270 t t'tea ; and against thi s the d e posits w er e —private poeits 8,70 0,000 Z, and public deposits, 4,766,000/. The overnment might have been told that within twenty (ltirhoursthe Bank might hare been asked for 2,000,0001. 5 5 f their private deposits ; and if so, they must have r e , rni ten, for they had not the means of meeting it— ketear, hear)—and the only alternative would have been tla i . go into the market in which Exchequer-bills eer e at a discount and the stocks were low.—(Hear.) Ile did not mean to say that they could not have done it a great sacrifice, but what would have been the ruin tla the City if the Bank had gone into the market to sell °°,oo o/. of stock ?—(dear, hear)—and such a state of n Xll was inherent in the working of the Bill of 1844. (o ear, hear.) Those who had discussed this subject , lore the Bill was passed, fully coesidered what might De the effect of the arrangements of the Bill, and there ; ta il not the slightest circumstance which had resulted j_Oru n it that had not been fully prophesied.—(" Hear, .7,ar from Lord G. Bentinck.) Mr. Fullerton very early " Whenever, by the course of trade the stock of bull' eo ton in the Bank shall be reduced to a level nearly i n rr esponding w ith th e amoun t o f i ts no t es i n e i rcu l at i on o °l teess of the 14,000,0001. i ssue d on cre dit— w h en th e r s sury of th e b an ki ng d e p artmen t s h a ll b e ex h auste d, d e n early so, and its means of solvency shall be wholly Pendent on the sale of its securities, then, and not till then pill h ; your exp er im e nt b e f a irly tried."—(Hear. t ell r.) But M r . T oo k e was more accurate in his VrecY• After having stated nearly what Mr. Nerten had done, he said, " This being the ; the directors would not have a moment to e ? l ' a • Upon a demand upon them, under such eiteltrastances, without taking measures for maintaining bat restoring the proportion of their reserve, they must A l mnt their doors g to advances or . discounts.—(Hear.) VW, under certain circumstances, it will operate with a ,e ms of violence on the state of credit which,. as it ,„ to me, these gentlemen have no adequate idea of. kntear, hear.) Before two or three millions of bank ; Q tes could be forcibly extracted, the pressure on the iketerves of the London bankers would be extreme, and ' e Y would call in their loans"—this had actually taken aee - 's—(Hear, hear.) "It would be within the mark to a y that a rate o f di scoun t o f 20 per cen t. wou ld i n h„ -a tlY cases be exacted— (Hear, hear)—and sacrifices of f t ° tals would be made to a great extent ; and, after all, blight be doubtful whether this effort of the Bank t i i e ja rdd be effective in sufficient time. hear.) In h. Q sse, while the circulating department might still be 60 00,000/. of bullion, the deposit department I,,, n nid have no alternative but to stop payment—(Hear, ..t, r d - -5 most absurd and disastrous thing, but too ab tja4" and disastrous to be allowed to take its course ; and teet.Goeernment would be imperatively called upon to in 4kriere and prevent so lamentable a catastrophe. He trlild be glad at another time to go into a more full ex onation of the grounds of the different theories which I: A i tied the opinions of men on this subject—those of Mr. t a i'id and Mr. Norman on the one side and Mr. Fuller , - e a nd an Hon. Gentleman (Mr. Wilson), who entered I l ' fully into the subject a few nights since, and made et r i e , lucid and logical statement on the subject, on the That speech deserved an answer, but he had as L i - "yomard no reply to it. He would, however, confine 1 , -gl a WI to the practical point, and would ask whether it st o - ", s , i n , ci t impossible to maintain the Act of 1844 as it now 4 ‘ as there no apprehension—was there not a possibility,, nay, was there not a probability of the recur :lt:lle°, cf a similar disaster to the one just passed, and t o ; e4 might not end so satisfactorily ? And were they e,, e ave the mercantile world with that apprehension and to e , e , f bre, us thought that her Majesty's Government ought e t 41 E0 some steps pending the inquiry to prevent the 6urre n _ ee of those impending difficulties which were A„ -r ent— for th e y were no t a ccidental—in the but of of 1844. There was no man who had ;abjecten slightly directed his attention to this that must not apprehend the recurrence Possibly of worse times than those they had passed thr oug h. Th ey h a d yet to l earn w h at were the t o " et a of the f a il ures h ere i n di s t an t p ar t s . They had t,,,,re ce ive information from India and other quarters, j",,' would th ey, in the face of such a state of things, e matters as they were ? He thought it would be e t hat Government should adopt some intermediate bp o eastir e, Pending the inquiry they were about to enter in order to appease the publi c mind, and leave a eretionary power in the hands of the governor of Bank to issue more than 14,000,000/. The Right kank Gentleman who spoke last said it was to him _tte r of great surprise that, there being a deficiency utli bullion in the Bank to the amount of 7,000,000 L in the Month of October, there should be an increase of atl'inote circulation to the extent of between 200,000/. t ea ,, 300 ,000/. Thi s h e i ns i nuate d as a c h arge of bad eoiZagernent on the part of the Bank. He (Mr. Herries) 1 1 , not conceiv e why, with the limitations imposed p l ft 'ull it, the Bank should be compelled to withdraw any aj te t : °f its n otes f rom t h e pu bli c , f o r the purpose of ho m in g the rate of exchange. It would be found . that APril, 1847, the variation in the note cucud etll of the Bank was not such as to deman ior.ilnula! attention. But the subject . would, doubt " receive the attention of the Committee. He con ect,vu the more he reflected on the subject—the more he Ai et i dered various opinions —the more he weighed con i)tpag authorities on the subject, the more he was com e.,ll4eb to Come to the conclusion, that the Act of 1844 t i e a foUnded on a mistaken theory, and that it was par alarly wrong in the separation of the Bank into two e Partraents, and in compelling a limitation of the circu ,,lktien to 14,000,000L—(Hear, hear.) There was one r`i, tilt which he contemplated with more than common ,s'rettd, and that was lest by the failure of the Act of -2 44 , men's minds would be hurried on to distrust the I,,'"andation of the monetary system which had been laid e n - ,„ 18 , 19 . He should be sorry to see the public mind ! r ig . round to that point—(Hear, hear)—and he could 14 ' believe the House would consent to forego the advan tte of cash payments. But, at present, the first and t thi ng they could do wou ld b e to remove th e impedi -44 which fettered the discretion of the Bank, imposing t ilt rer safeguards they deemed necessary, and giv theg tisfaction to the mercantile world by removing hi.dilPPrehensions which the recent panic had left be- Cheers.) tii, e r d J. no RUSSELL—We have had, in the present Lo .. "' S inn, a great variety of views presented to us, and e at n Y topics h are b een touc h e d on w hi c h did not come ith (l iltal lY within the scope of the debate. We have had ce - eti t ) ttle novelties of opinion, and a great deal of dis -10% disquisition ; but I am happy to find that, in ba s l i ng the Right Hon. Gentleman, I follow one who pr o ,',Pt himself within the limits of that which is pi„rr'Y the subject of debate, and that he has given h e . . e 'tms which, whether I differ from them or not, must Pers' o eWed With great respect, coming as they do from a Pea 0 " his experience, of his ability, and of his . know 'theeountry.—( , both of the constitutional and financial history of Hear, hear.) I must however state at treilloutset that the conclusion to which I should wish to Itil t , r h e Rouse is very different from that which the Pre' vr ,",i . len• Gentleman seems to have adopted when he i t ;" the House at once, whatever else they might do, wo r th eunduct of the Government blameabre . or . praise /4)4'g; to d o away at all events with the restrictions im try t 'l' the Act of 1844, and for the interest of the coon- Sty tl ° l give security to the mercantile class. Now, I must 44 th 4t as regards this House, considering the difficulties L ee e e ubject—considering the perils to which we have Gel i e xPosed under the system to which the Right Hon.. epic, referr e d— an d co nsidering the differences of o ile t ' ll which now exist, it would be very rash in us at A t a to decid e w i thout i nqu i ry t h at yon wou ld a b an d on to le 37 4 l A lt ern which w a s a d o pted by very general consent 'eleitt• But, in order to give confidence to the mer- L te cl ass, his proposition is more objectionable, You as admitted by the Right Hon. Gentleman, ( lik e :: : 11 Y come as the resdlt of your inquiry to some mo ,Nth."nn of the Act of 1844 or to some other result, etiph, 4 egard to the monetary system ; and what the e l ,' Ron. Gentleman wishes, in order to give confi etiere, is this, that you will abolish your present system, Ple ee e Peal your existing law, but what you put in its eleh tt ,, a hnil be matter o f d ou bt an d speculation for Wle eh vh , months. I cannot conceive any proposition ore o „ would tend more to create distrust and doubt itei ti "gst th e mercant il e c l ass, an d wh i ch wou ld more tra tik ee commercial men to say, Let us pause in our te. e tions, let us abstain from giving orders to our Torre th - Poildents till we know what law is to be substituted tti,o n 'u t it which has been abrogated. Looking at this ques ta* wit hout any consideration of party politics, I think tt l i t "ey of it wou ld b e very i ncom pl e t e , if, looking tt t h is immediate cause of the meeting of Parliament period, we did not likewise look to that which °e- V ° , befor e of a similar character in different periods %f tae Act history. Within very few years after the passing e e.y of 1819, this country found itself in a state of Leg er eat prosperity. That prosperity, owing to the '44 44 4 inflation of credit, led us, as it had done on pre piltlis 4 1 7 1 ,1 a /dons, to improvident speculations, to various soared Proj ec t s w hi c h, as I thi n k M r . C ann i ng said, *hi e , lik e a balloon filled with vapour, but l o ng to e slightest puncture of a pin might d 14) the earth. The period which fol. - w ,as one of extreme danger and alarm. -‘4sea T ,n o had the management of the Bank consulted TLe -41verpool ; Mr. Huskisson, and Lord Ashburton. et,'"'lld not hav e b e tt er a dvisers, but the state in - - s".Y found affairs was such, that, as my Right 4 ttit e Il and the M em b er f or Coventry (Mr. Ellice) qov led 1 aVd as Lord Ashburton lately described, the the lttnor of the B an k o f E ng l an d h e ard with delight for a° ng of the clock on Saturday which gave the 'or "llan till :M on d ay b e f ore t h ey wou ld b e called on th e Y More bullion. The result of the consultation on !Mall turkda Y Was, that the Bank was advised, with the oe r,„ar,mnunt of bullion in its coffers—stated to hurt,r fu, ° o oi, but in the opinion of Lord Ash -1:1(4k/1 much less —to make a very large issue of bank %tux. That was a bold and wise course in a great at r:IleY, but at the same time no person would wish . 411 thoe Country should be again placed in such danger; 'akr,'e e u g h we may have escaped in 1825 with a great 1144 4 ,a of property —though we may have escaped the arise e crash o f t h e Bank, yet if such a crisis were to Er er a gulo, the result might be more fatal.—(Hear.) one at 8o des 1 , least must wish that such a catastrophe d„ e 'e as 'erted by precaution rather than meet it by ecie s i - ci Perate re remedy. Again, in 1837, there was ,dit era ble . pa nie and distress, owing to the state of ilie - 3 1 and in 1,i30 as stated by m Right Hon. Friend tha t e mber f 11 y in such a state t h or- Portsmouth, we were v e su ere „ was the slightest internal drain, there must ate of - v e asion ve cash payments. Now, this was a p erm . et.- grea t danger, and it took place under the atilesae,4kl-o-littnretehell.Ft of 1819. I will state to the House e n Periods but flion possessed by the Bank at_ these te ti nta°kh of and t he state of the circulation.. In the ebrn ar , e, 1824, the amount of bullion in the . 0 ", 13 ,41 iO,OOO/. ; and the circulation was -1 A,004 . " In Lugust, 1825, the bullion amounted to the c toulativa t 9 1V;3 9 5,Q 001 . ; so that, on that occasion, while the bullion had diminished upwards 10,000,000 L, the circulation was only altered by 300,0001. In the month of March, 1838, the bullion in t tie Bank amounted to ]0,015,0001.; the cir eulation amounted to 18,600,000/. In September, 1839, the bullion amounted to 2,816,0001.; the Bank circula tion to 17,960,00 , 4. Thus whilst the bullion was dimi nished from 10,000,0001. to under 3,000,000/., the circa lation only diminished 640,0001. Now, considering that such was the condition of the Bank under the Act of 1819, and that its effects had been such in 1825 that Mr. Huskisson declared they were within 24 hours of a state of barter, and that in 1839 we were in such a state that the slightest internal drain would have caused a suspension of cash payments, I do think it was not sur prising that a Committee of the House should have re commended—and that the Government of the country should have, in 1844, endeavoured to find whether, by some alteration of the system, that which all persons who consider the subject on right principles wish to pre serve—the convertibilityof Bank notes might not be made more secure. Now it is my conviction that to a consider able degree the Government of 1844 succeeded in giving greater security to the convertibility of the bank note, and averted some of the evils which otherwise might have occurred during the late pressure. This, I think, follows even from what the Right Hon. Gentle man (Mr. Hurries) referred to. In 1825 and 1839, if the drain had gone on a little longer, it would have been impossible to give coin at the Bank of England. But there was no such danger at the present time. The amount of bullion i❑ the Bank diminished from 16,000,000 to 9,000,000. I will not now discuss whether the Bank should not have taken precautions before August last. But, in the month of April last, a very remarkable letter having appeared in the Times, showing the continued drai❑ of gold which was going on, and that this drain all operated on the reserve of the Bank, and in no way on the discount or circulation, the Bank directors immediately began to change their course. To a great extent they limited their discounts, and from the month of April to the beginning of June, the circulation was diminished to about 1,500,000/. At that time there was considerable distrust and panic; but, I believe that if the Bank directors had not seen that if they proceeded in the same course they would infringe the provisions of the Act of 1844, they would have allowed the drain of gold to go on, and we should then have had, as on two former occasions, still greater cause for alarm. In point of fact, 2,000,000/. or 3,000,000/. in gold is the lowest amount which the Bank has held, and this has prevented that convulsion which was so near occurring on the former occasions to which I have alluded. But there is another question, on 'which I do not wish to give any opinion, and which should, I think, be referred to the Committee, in order that they may ascertain whether any further precautions can be taken.—(Hear, hear.) The Right Hon. Gentleman has referred to what took place in the month of October, more especially to the letter which my Right Hon. Friend (the Chancellor of the Exchequer) wrote to the Bank, and he says that we have not stated the circumstances connected with that letter. I thought that my Right Hon. Friend had stated those circumstances very clearly and in great detail, but I will, nevertheless, myself refer to the main features of the case. There had been, in the year 1846, as in the years 1825 and 1836, a very flourishing state of things. There was such an abundance of capital that its possessors were anxious to place it out at two per cent. interest, and could hardly obtain even that. Con currently with such a rate of interest there was a great seeking after speculations for advantageous invest ment, accompanied, as has always been the case, by a dangerous and wild spirit of speculation. Now, Ido not mean to say that it is matter of blame that, as re gards many of these speculations, those who entered into them had not solid foundations for their calculations. I remember Mr. Tierney 's saying in this House, with his natural shrewdness, that the person who one year is a rash speculator may have been the year before an en terprising British merchant. " Great wit to madness often is allied, And thin partitions do their bounds divide." One person may be most successful in rash speculations; another, who had tolerably reasonable expectations, may be cruelly deceived by a reverse of fortune. Among other things there occurred last year, what cannot be imputed as blame either to the Government or to the parties immediately concerned, a very great failure of the potato crop. In the beginning of this year we had great symptoms of the recurrence of that disease; letters came from all parts of the country stating that it was again making its ravages. I thought it necessary, and the whole House agreed as to the necessity of the corn. laws being suspended. Many persons thinking it probable that there would be a high price of corn entered into very large speculations in that article. It so happened, how ever, that by the goodness of Providence the potato dis ease was arrested within a fortnight after the unfavour able accounts were first received; and, although we had a backward spring, the summer weather was so favour able, that we had not only a plentiful but an early har vest. As a natural consequence, corn which had boen bought for a very dear market came into ene in which the price was considerably depressed, and the speculator could not sell it for anything like the sum which he had given for it. That is one reason why very considerable distress fell upon the mercantile world. The combination of other causes, operating together, led to that which one alone would not have sufficed to produce. Take the case of the railway speculations. I believe that, if this country had continued flourishing, especially if we had not' had the misfortune of the failure of tho potato crop of last year, the expenditure on railways would have been kept within due bounds, and it would not have been found too great for the floating ca pital of the country.—(Hear, hear.) But when to: an: immense railway expenditure you have to add 33,000,0001. paid for corn, and other circumstances tending to produce distress, it can no longer be matter of surprise that the whole commercial world felt the difficulty of procuring money ; that capital became scarce; that that which, a few years ago, was to be had by almost any one at one or two per cent., could not be had at five, six, or even seven per cent. Hence very great embarrassment in the whole of the commercial world. Now, Sir, let us look at the position of the Bank. Without giving any positive or dogmatic opinion upon the subject, I may say that it has been the decision of Parliament for a very long period that we should not embark on the dangerous sea of a state currency. — (Hear, hear.) We place the disposition of that part of the currency which consists of paper convertible into coin in the hands of a great bank, which has, to a cer tain extent, a monopoly. The Bank directors, con sisting of persons who belong to the mercantile interest, naturally enough perform all the ordinary duties which they owe to the proprietors; they endea vour to obtain discounts, they obtain the interest of the day, and few persons think of criticising the course which they pursue with regard to commerce in general. Now, without entering into general questions, with regard to what is currency and what is not, it is evident that a great part of the trans actions of the country are carried on by means of mer cantile paper, that is, by means of bills of exchange, which are discounted and rediscounted, and go from merchant to merchant, and from manufacturer to manu facturer, and that a large proportion of the transactions of the country rest upon the credit which is due to that paper, and to the facility with which it is passed from hand to hand among those who conduct the industrial occupations. But when there arise failures in the mer cantile world—when, owing to the circumstance of any of the speculations, whether justly or not, being unsuc cessful, one house after auother fails, then begins dis trust ; then, the commercial world in general, not knowing exactly which house will stand and which house will fall, refer to the Bank of England as a great state machine—a machine to be put in operation for the benefit of the public and not for the benefit of the par ticular proprietary to which it may belong. Now, Sir, I have seen an illustration of that in the language and conduct of the directors of the Bank. On many occa sions I have observed, that if they had only to consider their owu interest, they would hesitate very much in giving discounts, and they would act like prudent pri vate bankers and firms in general, merely for their own supposed benefit. But then they are told, " You must consider the interests of the public ; everybody at Liverpool, Glasgow, and Manchester, is looking to you at this moment to support some great firm which is in danger of suspending payment, or some great bank which is in peril' of stopping—the industry of the whole district will be sacrificed if you do not interfere." I must say that on such occasions the position of the Bank becomes a very complicated one. If by any con trivance of legislation or of administration we were to provide that the Bank should at all times consider the interests of the public, and not alone those of itself, or if, on the other hand, the public were generally agreed that the Bank has nothing to attend to but its own interest, and that, on occasions of distrust and dis credit, no man should go to the Bank for any other accommodation than he would get as a customer in ordinary times—in either of those cases, I say, that the duty of the Bank directors would be simple and the problem easy of solution. But, acting at one time, as it is natural for them to act, employing the balances of the Exchequer to obtain a mercantile profit, and then being suddenly called upon to con sider the great interests of the State, their situation is difficult and perplexing beyond measure.—(Hear, hear.) I say, therefore, that although it may be said that at one time they ought not to have fixed so low a rate of interest, and, at another, they ought to have lowered the rate, I think it is desirable that we should make every allowance for the double duties which they have to perform—(Hear, hear)—duties which have been im• posed upon them by the State, and which they could hardly perform so as at once to satisfy the State and the proprietors. Now, Sir, what was the position which the Bank held in the beginning of October? Let me say, once for all, that I do not believe that the Act of 1844, or indeed any other Act, with regard to the cur rency, which the Legislature may have passed, could have prevented commercial panic and difficulty. We give nearly all our measures credit for more than they can possibly perform. We give them credit for doing that which they are not likely to do. This has been the case with regard to Catholic Emancipation and the Re form Act.—(Hear, hear, and laughter.) Let me say, in a parenthesis, that while I think free trade pro duces, and will produce ultimately still greater benefit to this country, yet the benefits of free trade, like those of every other measure, have been exaggerated by those who have been its advocates.—(Laughter.) I shall say this, not as a particular, but as a universal truth.—(Hear, hear.) But to return to the immediate subject of discussion. What we had to hope from the Act of 1844 was, not that it could prevent commercial panic, but that, when commercial panic arose, the cur rency would not be in effect destroyed, anbde lostt the converti bilityof bank notes into coin wou ldnot prevailing commercial confusion. In that respect I think the Act has, in the main, been successful. The Right Hon. Gentleman says, we have not said what was the state of the Bank when we proposed to interfere; and then, contradicting his own assertion, he proceeded to read it from the Gazette returns, The state of the Bank was this: if at the commencement of the month of teber, it had considered merely its own interest it would have allowed the paper which it had lent to be repaid without making fresh loans, and it would then have been in a state of security, having a sufficient amount of reserve. But, pressed on all sides to afford some relief to the suffering credit and commerce of the country, the Back made large advances to houses which they con sidered solvent. At the middle of the week which ended with the 23d of October, I began to think that the chief difficulties had been surmounted, as confidence was beginning to prevail in Lon don. But there succeeded great panic and distrust in the country. There was the breaking of a bank at New castle, and a run upon another powerful and wealthy bank in the same town, upon which the industry of the whole neighbourhood depended. The gentleman who was the agent of the Bank of England in that town, ad vanced to the latter bank all the gold that he had in his possession, and, in addition, he sent to Leeds for 40,000 sovereigns. This bank got over its difficulties, but there were well-founded rumours of similar difficulties in other parts of the country. The state of the Bank was then what the Right Hon. Gentleman had stated. While the bullion in the issue department was 7,865,0001. the amount of the notes and gold and silver coin taken to gether was 1,994,516 L ; the notes alone amounting to 1,547,2701. Now, under these circumstances, it appeared to me that if there should arise similar runs upon banks and similar pressure from commercial firms in any of our great cities, and applications to the Bank for relief should be refused, there would be not only a panic, but a dreadful convulsion in the country, which could not fail to affect very much the metropolis, while even the Bank itself could hardly be safe. Sir, the opinion of the Bank was not that which I have stated, their opinion, as conveyed in a formal resolution on the 25th, was that they could comply with the provisions of the law and maintain their position. At the same time the Governor of the Bank frankly confessed to us that if such cases as those to which I have alluded should arise, or such as had oc curred at Liverpool a little while before, they could not give further accommodation, and they might probably be obliged still further to restrict the accommodation which they gave. Now, under these circumstances, we consider that the time had arrived when, in order to pre vent the evil which was sure to arise from the perusal of the Bank returns, which must have appeared in the Gazette of the following Friday, it was necessary to adopt some extraordinary measure. I must say that in the course of this debate the prudence of our so acting has hardly been disputed.—(Hear, hear.) My Hon. Friend the Member for the Tower Hamlets did, indeed, throw some doubts upon that proceeding, but nothing has occurred since, which has in the least tended to shake my opinion that the step taken was calculated to restore confidence, and that although it was necessarily attended with evils, the evils were much less than those which would have resulted from a contrary course.—(Hear, hear.) It has been said we ought not to have mentioned any particular rate of interest. I must confess that I had before my eyes, ,during the whole of that anxious period, the danger lest by some false step we might encourage unfounded speculation, and thus place the convertible currency in the greatest danger. At that moment we had the exchanges in our favour ; gold was coming in, and, it was probable, if there had been time, that even without any extraordinary measure the Bank would have been in a :position to extend its discount, and to give further effectual assistance to com merce. Well, but then we had the fear before our eyes lest by any imprudent measure of ours we might turn the course of the exchanges against as, and pro duce a state of things from which it would be impossible for us to escape without, on the one hand, a sudden con traction of the currency, or, on the other, a suspension of cash payments. It was under that apprehension that I. for my part, willingly agreed that we should take the step, which I at once admitted to be contrary to all rule, of recommending a high rate of interest to be re quired by the Bank. It seemed to me that the effect of that step could not fail to be that there would be less fear of accident arising from undue pressure for discounts, and that the exchanges would be more likely to continue favourable whilst the imports of gold would certainly not cease. Those, in fact, have been, as we expected they would be, the results. The influx of gold has continued, and the reserve in the Bank is now uo less, I believe, than six millions. I have no confidence that, if we had not insisted on the condition I have described, the same results would have occurred. I scarcely believe they would. Our object was to restore confidence without giving rise to improvident speculation; and in that re spect I believe it will be generally allowed that our measure was quite suocessful.—(Hear,) But then the Right Hon. Gentleman who spoke last wishes for a measure by which we may prevent the recurrence of the difficulty we have escaped, and may guard against all misfortunes in times to come without fixing any limits to the issues of the Bank; and another Hon. Gentle man, the Member for Huntingdon (Mr. T. Baring) like wise called on me the other night to tell him whether we did not mean to allow the Bank a still greater liberty of assisting the great commercial houses of the country, should they be found to require such assistance at a future period. Now, Sir, when I am asked these ques tions, I am obliged to inquire in return whether these Honourable Gentlemen really have fixed in their own minds what they wish to do, and to what end their propositions would lead? (Hear, hear.) They are both advocates of a currency convertible into gold upon demand ; they would see with alarm and dread the recurrence of a suspension of cash payments by the Bank.—(Hear, hear.) Well, then, you must allow that there must be some mode by which that re currence must be prevented.—(Hear, hear.) You may say that the mode proposed by the Bill of 1544—that the great commercial breakwater erected by the Act of Parliament—is useless and mischievous; but you cannot help admitting that there must be a certain degree of prudence exercised by the Bank, or else that it will be impossible to guard against the mischiefs which led to suspensions on former occasions. —(Cheers.) Mr. Pitt, when be required large loans for the Bank, during the long period in which he administered the affairs of this country, was obliged to have r ecourse t o measures which the Bauk did not approve. But Mr. Pitt never meant that those measures should lead to a suspension of cash payments.—(Hear, hear.) It was sure l y no part of the policy of a statesman who conducted the affairs of this country with so much skill, and with such steady aim and purpose, to resort, as an ultimate measure, to a currency not payable upon demand. Neither, I will presume to say, was it his desire to find himself at that point when in 1797, in the midst of the operations of a war, he was forced by circumstances to resort to that extreme and most disastrous measure.— (Cheers.) And if this were so, let us, Sir, reflect that the same danger which was incurred in that instance by requiring heavy loans from the Bank for the use of Government, would be equally incurred if you laid the Bank open to the demands from commercial houses for the purpose of supporting . or propping up *heir credit.—(Cheers.) Yet this is the course the Hon. Gentlemen would advise us to pursue.—(Renewed cheers.) However much they may abhor the idea of a suspension of cash payments, the measures they would propose, without meaning or intending it, would neces sarily, from the lax administration of the Bank, lead to a state of things which must result either in a contrac tion, which would ruin half the commercial houses 0' the country, or else to a suspension of cash payments, by which alone so great an evil could bo averted. A Right lion. Gentleman has spoken to-night of the differences iu the opinions of writers of great ability and of great experience upon this question. Now , I do not wish to enter into the matters of theory discussed by Tooke and Fullerton on the one side, and by Mr. Jones Loyd and Norman upon the other. They have all discussed the question with great ability. But that which concerns us Mr more than their theoretical views is the practical course they recommend with regard to the administra tion of the Bank. Now, although these writers differ as to the Act of 1844, I find no greater difference be tween them as to the way in which the principle of the Act should be carried out. They are agreed that when ever the Bank finds the drain of gold going on, and the exchanges becoming adverse, that it is the duty of the Bank then to take measures gradually and prudently to stop the drain, and to keep the Bank in a steady position. Both Mr. Tooke and Mr. Jones Loyd are agreed that this should be the end the Bank should seek to attain. It may fairly be a question whether by the enactment of 1844 you are able to attain this end; but certainly there are none who have ever thought much upon the currency who have not agreed, that when there is a drain of gold it is incumbent on the Bank to adopt a course of pru dence. It may be doubted whether the Act of 1844 sufficiently provides for the exercise of that prudence by any certain rule. For my part, I think, that on these subjects you not only require a rule, but persons who are impressed with its value to administer that rule. I concur, therefore, in what was said by a Right lion. Friend to-night, that this Committee,: if appointed, ought to consider, first, how far the provisions of the law are sufficient ; and, second, how far we can obtain a steadier administration on th e p ar t o f th e B an k, by preventing the control ef parties who attend the meeting of directors only oc cas i ona ll y , an d w h o h o ld var i e d opinions upon the subject of the law.—(Hear.) But, whatever the House may do with regard to this inquiry, I hope, Sir, above all, that it will not consent to adopt the advice of the Right Hon. Gentleman who spoke last, and commit itself at once to a decided opinion. Although, as he justly said, from the year 1810 to the present time, this subject has employed some of the ablest men of England—although it has been directed by the views of Lord Grenville and Mr. Huskisson, of Mr. Horner, Mr. Canning, and of some of the ablest living writers, yet I believe, that on a subject so diffi cult, so intricate, and se important, there are still many and most potent truths to be acquired. It is possible, should it seem desirable, to make some modifications of the great plan of 1844, in order that the currency of the nation may be worked more steadily and securely.—(Hear, hear.) That is quite possible, should it be desirable. But, Sir, I must say with regard to the Act of 1844, that I do consider that Act to be a great improvement on the Acts which preceded it—that I do believe it has, in a great degree, answered its purpose—and that I find, since it has been in operation, that we have never been in that position in which the Bank was likely to be left without a single sovereign in its coffers.—(Cheers.) Though the Act of 1844, therefore, may not have cured commercial convul sion, it has done much to keep the currency from being affected by the evils attending commerce.—(Renewed cheers.) Holding this view, I beg the House to appoint a Committee to consider soberly and calmly the whole bearings of the subject, and not by passing any sudden or i precipitate resolution to cause men to doubt whether it s the intention of Parliament to maint a i n th e conver tibility of the paper currency and to preserve the me tallic standard of the nation.—(The Noble Lord resumed his seat amid much cheering.) Mr. J. REYNOLDS said that in the course of these debates attention seemed to have been directed exclu sively to the eflect of the Act of 1844 upon England only. He had heard nothing said of that Act as it affected Scotland or Ireland. Soon after the Bill passed, he, as a member of an Irish deputation, had an iuterview r with the Right Hon. Baronet on thelsubject of its opera tion; but all that he received from him was a display cf the ex t:a.me courtesy and great pLtience for which, as he understood, the Right Hon. Baronet was so peculiarly remarkable.—(A laugh.) He could testify that the operation of the Act of 1845 had been most injurious to the Bank of Ireland, and as a matter of consequence to the commerce and trade of that country. The Right Hon. Gentleman (Sir R. Peel), indeed, had, in an inter view on the subject, when he complained of the rest' ic tions imposed upon the Bank of Ireland by that measure, reminded him that the Irish bankers could issue notes to the extent of their bullion; but, as a practical man, he urged upon the Right Hon. Baronet that the profits of the bankers upon circulation might very well be more than balanced by the loss upon the locked-up bullion. It must be borne in mind that banking p ro fi ts arose i n a grea t degree from trading upon one's credit, in contradistinc tion to one's capital.—(Great laughter.) Before this patchwork legislation came into operation the rule with bankers in Ireland bad been simply this—the entire liabilities of the particular bank to the public were cal culated, and then, in times of ease, the minimum amount of gold and silver retained to m ee t t h ose li a bili t i es was one-third, or 6s. Bd. in the pound. This rule had been found to work well ; and it had yet to be proved to him that the Act of 1844 for England and 1845 for Ireland had effected any improvement in the matter. The Government letter of October, about which there were such contending opinions, he regarded with entire ap probation. He trusted now to find in the Right Hon. Baronet a strenuous advocate for the emancipation of money. Where there was free trade in everything else there could surely be no valid resistance to free trade in money. As an Irishman, he would more emphatically call upon the Legislature to r e l ease b ank i ng i n I re l an d from the oppressive restrictions to which it had been subjected, restrictions which, in th e i r consequences , im posed upon many anindustrious, struggling farmer or trader the payment of full 15 per cent. interest for advances. The position of the Irish farmer was singu larly hard. At a time when the banks of Scotland, having to provide for a population under 2} millions, had banking means, in capital and deposits, of not less than 37 millions, the banks in Ireland had but 10 millions for a population exceeding 8 millions. The Right Hon. Baronet, the Chancellor of the Exchequer, had attributed the late panic mainly to two causes— to the money expended in procuring foreign corn, amounting iu 14 months to 33 millions sterling; and to the amount of capital invested in railways, which he stated at 50 millions sterling. The latter investment might be regarded as seed which, at some future date, sooner or later, would produce ample fruit, He was not very wrong in saying that of 33,000,000/. paid by this country for corn, at least one half was expended for Ireland. He trusted the Right Hon. Baronet, now that his Bill had been proved to be fallacious, would abro gate it altogether. The Irish population, previous to the autumn of 1845, lived entirely upon potatoes, while they sent their corn their butter, their pork, and other agri cultural produce, to this country, to the extent of 15,000,000/. annually. For this large export they took no gold, but they took English manufactures--cotton, silks, hardware, Staffordshire ware, &c. In fact, almost every manufactured article used in Ireland was imported from England. The destruction of the potato crop put an end to this export of English manu factures, and there was a double drain, for we were obliged to send 15,000,0001. or 16,000 . ,0001. w or th o f corn to Ireland to feed the people, while we ceased to receive the 15,000,000/. or 16,000,0001. of Irish produce in exchange for so much of our manufactures. He be lieved that this had very much to do with the commer cial difficulty in this country.—(Hear, hear.) He hoped this statement would have the effect of dir ec ti ng t h e attention of the House to the necessity that existed for better government in Ireland, in order that her re sources might be developed. Ireland was undoubtedly the best market England possessed ; no country con sumed so extensively and so advantageously her menu factures. Sir R. PEEL—Mr. Speaker, I trust, Sir, that any observation I may have to make on the subject now under the consideration of the House will be made in that temper and dispassionate spirit which characterised the speeches of the Noble Lord and his Right Hon. Friend.—(Hear, hear.) I cannot but express, in com mon with the House generally, my pleasure at the re turn to this House of my Right Hon. Friend the Member for Stamford (Mr. Herries), and my congratulations that by that return the House will have the benefit, in matters of this kind, of his great intelligence and great practical ability.—(Cheers) Before faddress myself to the subject—the immediate subject—of debate, I wish to clear the way by a reference to the charge that was made against me last night by the Hon. Gentleman the Hon. Member for Stafford (Mr. Urquhart), and which has been repeated to-night by another Hon. Gentleman —certainly in the most courteous manner in which it is possible to prefer an accusation. The charge made by both those Hon. Gentlemen is this, that in bringing forward the Act of 1844, as the organ of the Govern ment, I gave a public assurance that the banking establishments of Ireland and Scotland should not be affected, but that the Bill of 1844 should refer exclu sively to this part of the United Kingdom; and the Hon. Gentleman the Member for Stafford, went so far as to say that an insidious advantage had been taken of Scotland—that the suspicion and jealousy of the people of Scotland, which had been peculiarly excited on the subject of banking, had been allayed by that assurance; and in figurative language, the Hon. Gentleman added, that the banking system of Scotland had received from me a stab in the back. The Hon. Gentleman supported that charge by a reference to the first clause of the Act of 1844, and having assorted that I had publicly directed in 1844 that the banking system of Scotland was not to be in the slightest degree affected by that Act, he asked what would the House think of the Right Hon. Gentleman, who, having given that assurance, inserted in the Act surreptitiously that first clause which pro vides that no bank in any part of the United Kingdom which up to May, 1844, did not issue notes, should not be allowed to issue them for the future, snit the Hon. Gentleman went on to quote from my speech the pas sage in which I said "Of Ireland and Scotland I have made no mention proposing to reserve for sepa rate legislation the state of the currency in each of those countries." From that statement, supported on such authority, the House might naturally have inferred that the accusation was well founded, but what will the House think of the Hon. Gentleman who, having read that passage, omitted to read the next, which was to the following effect? " The prohibition against the estab lishment of new banks of issue will extend both to Scot land and Ireland—(Cheers)—both of which will be in cluded in those enactments, which will require the per formance for the future of certain conditions prelimi nary to the forming of new joint-stock banks."—(Hear, hear.) Could there be, on the part of a Minister bring ing forward a measure, a more distinct and formal avowal, that, though the currency under 51. was to be reserved in Scotland and in Ireland for separate legisla tion, yet that the Act, as applied to this country in re spect to the prohibition of the new banks of issue, should extend to all parts of the United Kingdom?—(Cheers') But, moreover, not only was that statement given by a speech, but it b e i ng necessary to found t h e Bill on preliminary resolutions, to which the con sent of the House must be given, in the eighth reso resolution, which I moved on the night when I brought forward the question, and which resolution was unani mously assented to by the House not on the night on which it was offered, but after the interval of some days after it had been printed and communicated to the Scotch and Irish bankers, and published in every news to this aper ineffect:— the United Ki ng d om; t the eight resolution was ‘. That it is expedient to prohibit by law the issue of pro missory notes, payable to bearer on demand by any bank not issuing such notes on the 6th of May, 1844, or by any bank thereafter to be establi s h ed in any part of the United Kingdom." Now, I think I shall have satisfied the House that if a stab were given to the banking system of Scotland, at any rate it was not given in the dark.—(Cheers.) And the Hon. Gentleman says he undertook, in a letter written, in 1844, to enlighten the people of Scotland on the subject of the Bill of th at year, to warn them of what must happen in the year 1845. I shall reply be his attack by giving him this friendly advice; that when next he addresses the people of Scotland on the subject of a Bill pending in this House, he first takes the pre caution of reading both the resolution and the Bill. — (Hear.) Her 'Majesty's Government have addressed themselves to the particular question of whether or no a Committee shall be appointed to consider the causes of the recent commercial distress, including the laws which regulate banking. Sir, when a Government ap peals to this House for the exercise of those powers of inquiry which peculiarly belong to it, I conceive that whatever opinions I, as an individual, may form as to the probable results of inquiry, still it is impossible to refuse that appeal.— (Hear, hear.) The functions of inquiry are our constitutional functions, and if the Execu tive Government be of opinion that there are not grounds of legislation without inquiry , then, I say, it is impos sible to refuse their appeal. An amendment has been moved on the motion of the Noble Lord, restricting in quiry specifically to banking. I have experience enough to know that, even if the amendment were carried, it would be impossible to exclude other branches of inquiry. When the Committee of 1836 was ap pointed, specifically to inquire into the laws re gulating banks of issue, that Conamit in te sat during the whole of 1836, was re- appointed 1837, and did not furnish a report until August, 1838. When I state this, I think it will be admitted that it serves no practical object to limit the rubjects for inquiry. —(Hear, hear.) I, therefore, shall vote for the proposal of the Government, because I think that if there is to be an inquiry, none of the causes of the present commercial distress ought to be excluded from such inquiry.—(Hear, hear.) I feel it my duty to state to the House that I mean to devolve on no other party, on whom it does not justly fall, the responsibility which attaches to me for the part I have taken either with respect to the restoration of the standard in 1819, or the attempt to mitigate the evils which accompanied our system of bankinah an d currency previous to 1844. I feel that I did no Inore than my duty in 1819 and in 1844 in calling the attention of the House to those points. Therefore, I do not wish to devolve on others t i g ie h a te r, st b degreerea. But repenti my responsibility, because in reverting to those mea sures I do not in the s the course I then took._ attempt to the to make characot one must submit it to this House whether it is quite decorous, quite respectable of a deliberative assembly, to individual Member responsible for an y p articular course hear.) Many Members of this of legislation.—(Hear, House are not in their individ ual ca p acities res p onsible for the Bill of 1844, but in their corp orate ca p ac ity they deliberate on all public questions' a nd nothing could t en d more to depreciate the character of the Houses of Com• involving the most mons and Lords than to countenance. the impression that, in matters of this kind, deliberately . adopted by the im portant interests, being in themselves of the most com plicated nature, a measure Way of a mu,- . Lords and Commons, the whole responst TUE SUN, LONDON, SATURDAY EVENING, DECEMBER 4, 1847. sure should be thrown on the individual Member who had happened to propose it.— (Hear, hear.) What are the facts with respect to this measure? In 1819 the measure for the restoration of the standard was pro posed by me as a private Member of Parliament, wholly unconnected with the Government. It was the result of the inquiries of two Committees—Commons and Lords. The report of the Committee of the house of Commons, recommending the restoration of e f s, oer,t raisedp:and, oe,therecarriedsres o unanimous rftadbv hrsy. N ea V lsv i tam t has h sene aols o ßt unbi measure votes eye concurrence.ieoe o esfk T_ singlerne believe, nBuc.l unanimous. 9a concerned, iii eenvo irmi nso dissentient biteoohedsne. Objec tionstAtv hbo Housea esi Again, against were,a, ona measuret wt n a . and that standard, Bdtomhri indeed, a elml : w o; e proposed s ni o e for Coventry ; but, if I recollect right, on the questions that the Bill be read a second and third time, there were no divisions. In the Lords there was unanimous ac quiescences, excepting on the part of one Member of the House of Peers, who moved an amendment, that whereas the Bill proposed that cash payments should not be re sumed until 1823—Lord Holland moved that 1820 should be substituted. He was not content to wait until 1823, but wished the Bill to come into full operation at once. Now, as I said before, the restoration of the standard as the remedy for the evils of inconvertible paper were wise measures for the security of property, and for providing a just remuneration for industry : and I do not attempt to relieve myself from their responsi bility ; but I think I am only asserting the character of both branches of the Legislature when I invite them not tacitly to relieve themselves from what was the fruit of their unanimous assent.—(Hear, hear.) Well, then, we come to the Act of 1844. I was then at the head of the Government, the Bank Charter was about to expire, and it was necessary that some proposal should be made to the House with reference to it. It was certainly then competent for us to have relieved ourselves from direct and immediate responsibility by proposing another in quiry. But I beg to remind the House, that when, in the year 1844, I proposed a particular measure for its consideration, in five preceding years there had been five different Committees—in 1836, 1837, 1838, 1840, and 1841. I hear it now said that the subject was not exhausted, that there had not been inquiry sufficient, and that further inquiry was necessary. But in 1844 I found that the subjects of currency and hanks of issue had taken up 3,000 questions and 3,000 an swers in 1836 ; that, not satisfied with that mass of information, the inquiry was resumed in 1837, and 4,570 were added to the stock. Even that was not enough. The Committee was re appointed in 1838, when 1,700 questions were asked and answered, and even yet no practical resolution was arrived at. In 1840 the expiration of the Bank Charter approached; the Committee over which the Right Hon. the Chancellor of the Exchequer had presided with so much intelligence was re-appointed, and to the stock of nearly 9,000 ques tions and answers already accamulated, 3,859 were added, each question leading to a long and elaborately reasoned answer. In 1841, the questions and answers then amounting to nearly 14,000, another Committee was appointed, and that Committee closed without any par ticular or specific recommendation.—(Hear and laughter.) Mr. Tooke, Mr. Jones Loyd, Mr. Horsley Palmer, and other eminent authorities had been examined, and it ap peared to the Government that the best course would be to submit a measure to the House of Commons for the regulation of the currency, preparatory to the termina tion of the Bank Charter, and to invite the House to come at last to some specific decision.—(Loud cries of " Hear, hear.") The House did come to a decision. Ido not believe that there ever was a ques tion carried by much larger majorities. I think, if I recollect rightly, that not more than thirty Honourable Members ever voted against the proposal of 1844, In the Lords, the measure passed without opposition.— (Hear, hear.) I say again, therefore, that the House of Commons cannot justify itself in a matter of this kind, which ought to be kept free from all party considerations, and concerning which it had ample means of informa tion, for having lightly and inconsiderately given its consent to the proposal of the Government. The sub ject is now perfectly open to reconsideration.—(Hear.) It would ba unwise in any one irrevocably to bind him self to opinions given in 1844. Nothing could be more injurious than that any man should now refuse to come to a different conclusion from that of 1844, if, after all the experience we have acquired since on a question so complicated, he should see just cause to alter his opinion. The House of Commons would be justified in taking ad vantage of all this information, but it would hardly be justified in saying that on any occasion it had blindly given its assent to the proposal of any Mi nister or Ministers.—(Hear, hear.) I think that there has been some misrepresentation as to the objects of this measure. Ido not deny that one of its objects was to prevent,the convulsions which theretofore had occurred in consequence of the neglect of the Bank of England to take earnest precautions against undue issues of its treasure. I certainly did hope that although no impe rative obligation was imposed on the Bank for the regu lation of its conduct in the banking department, yet that, after the experience of 1836 and 1839, the Bank would conform to the principles of banking which its directors had acknowledged to be just, and from which they ad mitted they had departed, although they had been prescribed as rules for their regulation. From the number of mercantile houses that have failed—from the general insolvency which has occurred, I am bound to admit that I have been disappointed in my hope w . th respect to the main object of the Bill; but, even so, I must contend that it was in the plower of the Bank to have alleviated much of the distress that was suffered. —(Hear, hear.) If the Bank had taken early precau tions, which it was in their power to have taken—if they had had energy and resolution to meet the first difficulty by timely perseverance and determination— by raising the rate of discount—my firm persuasion is, that the necessity for that extraordinary interven tion to which her Majesty's Government had resorted last October, would never have existed. I cannot there fore say that the state to which the country has been lately reduced was the effect of the Bill of 1844 ex clusively. I believe that the executive instruments, by whom that Bill was to have been carried into operation, might, by persevering and energetic measures, have prevented the necessity of violating its provisions. (Hear.) It was said that the whole object of the Bill was to control the Bank of England and prevent the recurrence of former panics. I distinctly said, upon the second reading of the Bill, that such a result would not necessarily follow. Towards the close of my speech upon the second reading, I expressed this opinion:— " No Minister could be wild enough to suppose that this measure would prevent all undue speculation in paper currency, but there was a species of speculation, inde pendent of paper currency, which, it was hoped, the Bill would be capable of checking." There was no at tempt to cripple or control legitimate speculation. The object of the Bill was a triple one. In the first, I admitted already, it had failed, but in the two others, which are of, at least, as great importance, I say it has succeeded completely; and my firm belief is, that the difficulties which have lately beset us would have been infinitely aggravated if you had not wisely and judiciously taken the pre caution of limiting your paper currency. The Hon. Member for the city of Dublin spoke of the grievous injuries sustained by Ireland in consequence of the in terference with the privileges of bankers in that part of the United Kingdom. The Hon. Gentleman's authority was of course entitled to respect, but his statements wore certainly somewhat new. He said that banking business in Ireland was carried on not upon capital, bat upon credit. I have great respect for the Hon. Gentle. man's statements—as founder of the National Bank of Ireland they are deserving of consideration, but I must tell that Hon. Gentleman, with gravity. but with sua vity and courtesy, that I should mucl rather have his capital than his credit.—(Laughter.) If there ever was a country on the face of the earth, the poorer classes of which had suffered the utmost amount of misery and misfortune from the abuses of banking, it was that country of which the Hon. Gentleman had spoken. But I will give you an eminent authority on the sub ject of Irish banking—an Irishman too. Sir Henry Parnell, writing on that subject in 1827, said : " The losses that Ireland has sustained by the failure of her banks, might be described in a very few words. There were in 1804, as appeared by the report of the Committee upon Irish exchanges, fifty registered banks. Since that year a great many more had been established-20 more probably, making 70 in all. With the exception of a few- which withdrew from business, and four in Dublin, three in Belfast, and one in Mallow, the whole had failed one after the other, involving the country in the greatest misery and distress." I recollect, Sir, in 1820, the failures almost in one day of eleven banks whose notes had circulation ,through almost the whole of Ireland, but at all events through the southern and western parts. I was in the west of Ireland about ten days afterwards, and I could not possibly describe anything like the misery and destitution I witnessed. The lion. Gentleman (Mr. Reynolds) said the banking in Ireland was carried on upon the principle that they reserved gold to cover one-third of their liabilities ; my recollection on that subject is entirely at variance with that of the lion. Gentleman. I think if he had stated that Irish bankers held one tenth of gold in proportion to the whole extent of their liabilities it would have been nearer the mark. I should like to know whether the Agricultural Bank of Ireland kept one-third, but if Irish bankers wished to adopt precautions against insolvency and ruin, the Bill of 1844 onlyaided them in doing so. The country at large was now suffering from failures, general distress, and the restriction of capital. The first impulse is to visit with blame that very measure only for which lam convinced your difficulties would have been fifty times greater. I shall now, with the permission of the House, read one or two extracts from the writings of as eminent a financier as ever lived. Adam Smith, in his well known werk, " The Wealth of Nations," says—" No complaint, however, is more common than that of a scar city of money. Money, like wine, must always be scarce with those who have neither wherewithal to buy it, nor credit to borrow it. Those who have either will seldom be in want either of the money or of the wine which they have occasion for. This complaint, however, of the scarcity of money, is not always confined to improvident spendthrifts. It is sometimes general throug h a w hole mercantile town and the country in its neighbourhood. Over-trading is the common cause of it. Sob men, whose projects have been disproportioned to their capi tals, are as likely to have neither wherewithal to buy money nor credit to borrow it, as prodigals whoseex pense has been disproportioned to their r•'venue. Before their projects can be brought to bear their stock is gone and their credit with it. They run about everywhere to borrow money, and every body tells them that they have none to lend." Now that is the precise condition in which we are ; we run about in all directions to borrow money, and we are told by everybody he has "none to lend."—(Hear, hear.) I will undertake to prove beyond doubt that at all times a low rate of interest and an apparent prosperity have led exactly to the same result. You say that it is free trade, the Act of 1844, and various other causes that have brought about the present state of things but how do you account for this ? Take the history of the last sixty years, and I will show you that at the time when protection was at the highest—in times of peace, in times of war, in times before the standard of value was established—nay, in the times of an inconvertible currency—in all these times, I will show you that appa rent prosperity and a low rate of interest led to the same want of money that you are experiencing at this moment. —(Hear, hear.) Take, for instance, the year 1784. You had then your old standard ; you had then the power of paying in silver up to the Amount of 251. and yet, in 1784, in order to protect the convertibility of its notes, the Bank of England was compelled to refuse advances upon the loan, and to reduce its notes from 9,000,0001. to 6,000,000/ Previous to 1784 there had been years of prosperity, and there had been great speculations, but you had in consequence undue excitement, and violent action on the part of the Bank to protect its treasure from exhaustion.—(Hear, hear.) Then in the year 1793, when the standard remained the same, when the currency was convertible, when there had been great prosperity, yet before the war broke out distress began. Will the House allow me to read an account of the distress which existed in the latter part of 1792, and you will see how it corresponds with the distress in 1846. This is a quotation made use of by Mr. Tooke in his work to which reference has already been made. He says—" From the opera tion of causes which I will not pretend to explain, there were an unprecedented number of barkruptcies in 1792, prodigiously exceeding in amount those of any former period. In March there were 105 bank ruptcies, there were 188 in April, 209 in May, 158 in June, and 108 in July. Many houses of established credit failed, and their fall involved vast numbers of their correspondents and connexions. Houses of undoubted solidity, and possessing ample funds, which in a little time enabled them to pay every shilling of their debts, were obliged to stop payment, and many bankers were obliged to make a pause. It was impossible to raise any money on the security of , machinery, for the value of such property seemed to be annihilated, commerce and manufactures were at a stand, and those who had any money, not knowing where to place it in safety, kept it unemployed, and locked it up in their coffers." Does not that account correspond with the state of things existing in 1846? (" No, no" from Mr. Blewitt.) In what respect does it differ?— (Hear, hear.) In the year 1810 you had the command of the whole commerce of the world—you had incon vertible paper, but that did not rescue you from the same distress you suffered in 1793. In 1819 the standard was restored. If you are about to repeal the existing Act, you are about to restore the unlimited and uncontrolled discretion of the Bank of England, to re store to joint-stock banks the privilege of an unre strained issue, and I presume you would permit in that case the revival of private banks, giving to them the same right of issuing notes. Before you do that you will do well to read the accounts of the transactions of the Northern and Central Joint-Stock Bank, of the Norfolk and Norwich Joint-Stock Bank, and of the Manches ter Joint-Stock Bank, and others that issued notes which professed to be convertible into gold, and you will find that the unrestricted issue of convertible paper did not prevent serious abuses which called for the immediate interference of the Government. But the simple repeal of the Act o f 1844 w ill res t ore t o th e B an k of England the exercise of full discretion, without Par liamentary interference. Thus, in 1826, the Bank had this unlimited discretion, and the advantage of the issue of IL notes also. Now I will give you an account of the state of affairs in 1826. I take that account from an unexceptionable authority, whose name, however we may differ from him, must command universal respect. This is the account given by Mr. Alexander Baring the present Lord Ashburton, of the state of affairs in 1826, in consequence of undue excitement and apparent prosperity. Mr. Baring says :—" I have no hesitation in attributing the distress of the country to the extent to which paper circulation was put eighteen months ago, and for which the country bankers and the Bank of England are answerable. The latter appeared to have a dangerous redundancy of money—that gave rise to wild speculations in every part of the country. It seemed as if Bedlam had broken loose upon the Royal Exchange—all seemed actuated by the same desire—to lay out money in whatever way they could; when all of a sudden the reverse came, and a panic seized the public. Men would not part with their money on any account. Others, of wealth and known capital, were seen walking the streets of London, not knowing whether they would be able to meet their engagements the next day, and if the crisis was allowed to pass without speak ing the truth, it would only lay the foundation for future evil." This :was in 1826. Then, in 1836, the proceedings of the Bank of England almost en dangered the stability of that establishment, and the President of the Chamber of Commt rce at Man chester declared that in consequence a loss of 40,000,0001. on the great materials of cotton, wool, and silk was to be attributed. Then in 1839 they had been obliged to apply for the intervention of the Bank of France, the gold in the Bank of England being reduced to 2,000,0001.; and again the evils that followed were attri buted to the departure by the Bank of England from those rules which they themselves had established for their own security. Thus, then, I have shown that in 1784, in 1793, in 1810, in 1826, in 1836, and in 1839, you will find the same causes as now—prosperity, low rate of interest, great excitement, leading to immense engagements, which, when tried by the test of a metallic standard, you find them to collapse, and that stagnation and distress followed. The same causes, in my opinion, are operating now.—(Hear,) There has now been the same prosperity, low rate of interest, undue speculation —there has been a mode of conducting business—of issuing paper—of re-discounting bills—(Hear, hear) — which I believe to be quite novel in the commercial history of this country.—(Hear, hear.) In this great country you chose to erect a greater superstructure of paper currency and credit on a smaller basis than any European nation.—(Hear, hear.) This country and the United States attempt, with a small comparative amount of the precious metals, to have an enormous structure of promissory notes and paper currency. There is no country in Europe, in proportion to the extent of its paper credit, including notes and bills of exchange, that puts itself to se small an expense by a foundation of bullion. This gives, no doubt, great facilities to enter prise; but at the same time it is accompanied by great corresponding evils.—(Hear, hear.) The largeness of credit, the extent of our colonial empire, is such that when there is prosperity—when there is a low rate of interest, the temptation of both is encouraged by that great establishment, the Bank, which is the centre of credit, The consequences which follow are inevitable. Establish what rule you please, I know that you will not go to the expense of greatly widening the basis of your currency. Why, you are now calling out for relaxation rather than for restriction—you want more paper in pro portion to your gold than you have at present; the more paper,you have, greater will be your present ease, but if you insist upon having it, more frequent will be the recurrence of these disasters.—(Hear, hear.) The United States attempts the same thing ; and the United States, with its enormous advantages, its great extent of land, its growing commerce—because it has a smaller foundation for its superstructure than even you have— is exposed to more rapid and more disastrous vicissi tudes than you are. But such is the state of your cur• rency ; and the great object is to reconcile as much of of ease and of relaxation as possible, with a permanent guarantee for convertibility. And it was only after the experience of those years of distress, then patent to yon, that you were led to accede to any measure having for its object the pre vention of these recurrences ; it was while the memory of those years was present to your mind, that you willingly acquiesced in any measure which should fetter the discretion of the Bank, and appear to give new facilities, along with a guarantee against such excesses as might endanger convertibility. It is, no doubt, painful to refer to individual houses ; but I have the less reluctance in doing it when I have seen published, on the highest authority, comparisons of their liabilities with their assets.—(Hear, hear.) And I hesitate not to say, that if the commerce of the country is conducted on such principles, in vain may you look to any legislative regulations, or any regulation but discretion, to prevent the evils which must flow from such a reckless course of conducting commercial affairs. —(Cheers.) Sir, when I see amongst the mass of houses (I will not mention names, though they have been pub lished in the pablic papers)—when I see one whose liabilities are to the extemt of 50,0001., and its assets to the extent of 3,0001. (Hear, hear)—l say, if that is the practice of your commerce, don't complain of the Act of 1844.—(Loud cheers.) Is it not monstrous that the standard of this cciuntry should be endangered, in order to cover or facilitate such transactions as these ? What security can I give to a bank that has 600,0001. of paid-up capital, and lends 500,000/. of that capital to one house?—(Lles sr, hear.) What is it to me that the shareholders repose discretion and confidence in their directors ?—(tlear, hear.) Why do they not take an active part in the conduct of their own affairs? They fail; arid then, like this gentleman whose liabilities are to the extent of 50,000/., and his assets 3,000/., they exclaim- —" This infernal Act of 1844, this detestable restrictiot i Act of Peel's is the cause of all our difficulties."—Wheers and laughter.) We want money, and the Act of 1844 prevents our getting it."— ' (Hear, hear.) To au ch persons I would say—thank the Act of 1844 that your difficulties are not aggravated. Just consider what a could have been the state of affairs if "northern and central banks," and "Manchester banks," and "Norfolk and Norwich banks," had been entitled to foster all. these speculations by a issue of papery—(ldeas, hear.) But you will unlimitedhave these excitements and th age stagnations; and, depend upon it, under ordinary cirt aims tances, the native ener g ies of this country would ent.ble you to overcome this. Why, you had just the same prophecies in all these years of dis tresswere tolet "The sun of England is set; there i s no . chance We of future prosperity; here are perfectly solvent persons who cannot get accommodation or money at even 10 or 15 'per cent."—(Hear, bear.) And some gentlemen, from whom I should have expected better things, tell us that the commerce of this country cannot be conducted:if poople are to pay 10 per cent. for their money; east' the Government is blamed for causing it. Why - should not the commerce of this country pay for money what that money is worth ? (Hear, hear.) If :it is hard that they should pay eight or ten per cent., pray, tell rae, by what law prevent it. You would make the usury- you laWs would more stringent, you ear.. I think there is great reason to doubt whether th-e retention of a portion of the usury laws is not telling most injuriously upon those who are affected by it. lear, the evil effects of th hear.) We had experieno of usury-laws in 1826.—(Hear.) Many houses of I . he first respectability and solvency sank, in 1825 and t 1826, because of the usury-laws— because there we ,snot it a waspower w o o r f th b . orr vv ow ha in t g w m as on th ey e and giving f or it what consequence ? T hose who obeyed the law could not lend their money ; and those who evaded it required a still greater into* rest in order to cover the risk which they incurred, —(Hess; hear.) Then, how can you I Possibly proverA this high rate of interest ? But, we . 4 is are told that it is restricting our export trade in cotton - i goods. No doubt it is; no doubt it is a novel thing that persons engaged in commercial enterprise should pay ten per cent. for money ; but no issue of bank -notes will remedy that evil. The dearth again is a dearth of capital—(Hear, hear}-and while capital is scarce, pass what laws you please, you must pay for it. —(Heer, hear.) But, as happened in the six cases to which I have referred before, the native energies of this country would have enabled you to bear all this, without that severity of suffering which you now endure, had it not been that, in the midst of this commercial disaster, there did supervene an unforeseen cause, which but ag gravated tenfold the difficulties of your position, and has augmented that depression which has been the conse quence of over-excitement. Why how is it possible to state that 33 millions sterling have been spent, 'in the course of a few months—of little more than a year—for the purpose of providing subsistence for the people of this country, without seeing that, under any circum stances, even had it been a time of great prosperity, th e evil must have been most intensely felt, the suffering must have been most severe ? And when the investment of capital, for the purpose of purchasing food, came con currently with the exhaustion of capital, in consequence of improvident commercial engagements, it does require all the energies of this country to bear that double simul taneous burthen.—(Hear, hear.) Well, Sir, but teem has been a still further cause of difficulty; concurrently with these two, there has been the adaptation of an un usual amount of capital to a new species of enterprise,— namely, the railways. Ido not estimate the effect of that application of capital so highly as some gentlemen have done. I think that, under ordinary circumstances, nothing would have been more advantageous than such an application.—(Hear, hear.) I think that, by the ex tension of railways, yeu are laying the foundation of great future good; and I very much doubt whether or not we ought not to deduct from any evil which the sudden application of capital to railways may have caused all that which otherwise would have been caused by the employment of a like amount of capital in foreign. railways, and in foreign securities generally.—(Hears hear.) I believe that, had we not had the demand for food—had we not had the loss of capital, or, at least.. the suspension of engagements in consequence of im provident commercial enterprise —you would have been able to bear the diversion of capital to railway& with very little derangement of our monetary affairs. For Ido not conceive that will be a dead loss. The time will shortly come, those railways being completed, when they may, I hope, be productive to those engaged in them. And when I think what will be the saving to the country in the conveyance of goods, the saving of time in transport and locomotion, I cannot think that railways ultimately, though at present a means of heightening our difficulties, can fail to be a source of great improvement and gain to the country.—(Hears bear.) Country banks, joint-stock banks, are nothing more than the intervening agents between those who possess capital and those who employ it; they receive deposits from all classes of individuals; heretofore they have been accustomed, as the media between capitskl and its employers, to divert almost the whole of it to com mercial enterprise. Suddenly, a large portion of this capital is diverted to a new species of enterprise; and, no doubt, this must for a time add still more to the scarcity of capital, and so far increase the difficulties under which we labour. Therefore, it appears to me that the concurrence of those three causes—the last only in a minor degree, the two former more heavily—is suf ficient to account for the stagnation we 13 ow feel. Now, Sir, I must say a word with reference to' the let ter of the Noble Lord at the head of the Government. I am bound to say, as not being one of the Nobile Lord's ordinary supporters, that I do cordially approve of the course Government has taken on that matter.—(Cheers.) I think they were perfectly right in not issuimg that letter sooner than they did.—(Hear, hear.) The true remedy for the state of things under which we are suf fering, is individual exertion, the contraction of engage ments, the cessation of all demands which can create embarrassment; and had the Government at an earlier period signified an intention to relax the law they would have materially discouraged those individual exertions, which, after all, must be our main reliance.—(Heir, hear.) But when we were in a state of panic —a state which cannot be foreseen or provided against by law— then I think the authority of the Executive Govern ment to prevent the consequences of that increasing panic was properly exercised.—(Hear.) I consider the issue of that letter is no necessary impeachment of the law. I entirely differ from those who say that the necessity for issuing that letter is a conclusive proof that there ought to have been a discretionary power confided in the Bank.—(Hear, hear.) It is one of those cases in which, as was foreseen by Mr. Hus kisson, not legislation, but the discretion of the Go vernment must apply. I think the Government, there fore, was justified in issuing that letter. I think they acted with the strictest regard to all constitutional scruples in summoning Parliament when they did. If there had been a violation of the law, I think the first appeal ought to have been to Parliament to give them an indemnity; but as there was none, I do not know how it was possible to draw up an application for an indemnity. —(Laughter.) As far as there was any danger, it is obviated by calling Parliament together, and I for one say there is no necessity for an indemnity.—(4 laugh.) I also think the Government were right in not leaving a discretion to the Bank. I think it was a better *curse for them to take, to sanction a violation of the law if it was necessary, but themselves to prescribe the con ditions upon which the law should be violated—to sanction the violation of the law, and throw upon the Bank the responsibility of demanding a high interest.— ' (Hear, hear.) The Right Hon. Baronet proceeded to say that he would not discuss the question, which would be considered maturely in the Committee, ae to whether there should be any alteration in the Act of 3844. He should be acting a part unworthy of a Member of Par liament if he permitted any mere consideration of con sistency to prevent him from giving full consideration to the Act of 1844.—(Hear, hear.) His own. impres sion was in favour of the main principles of that Act. He thought the restriction should be continued on the joint-stock banks of keeping a stock of bullion. Some restriction was surely necessary, after the experience of this crisis of 1839, of 1836, and of 18:16. It was thought the Act of 1844 was the best mode of im posing :that restriction, and he knew no better.— (Hear.) He heard with great satisfaction the speech of his Right Hon. Friend (Mr. Herries) in *hid' he de clared his inviolate adherence to the principLe of a me tallic currency and ,of convertibility. He had no great apprehension on that head, whatever he might heftr in that House. He hoped for the security of property and commercial enterprise some of the opinions which he had heard in the course of the debate would not prevail. The Hon Member for Wakefield had said he thought, on the recommendation of the House, the Government should pay off its debt of 14,000,0001. to the Bank in ha convertible paper. If the Government were to set that example of paying to the Bank a debt which was die and convertible in paper for which there was to be 120 other equivalent than other paper, he foresaw that indi viduals in the same difficulty would be too glad to adopt the same course.—(Hear.) But he could not believe that that House would sanction such injustice.—(Hem) The Hon. Member for Stafford had proposed that they should have convertible paper but with a fluctuating standard. There seemed a contradiction in the *rms.-- (Laughter.) W hat was the meaning of it ? prase tieally that of assignats in France—notes :said gold at the market price of gold meant nothing more or less than a temptation to depreciate the value, of the gold gold by the issu e o f p a p er , an d then to pay y our d ebt in that depreciated value. If they imposed l imit to t t h h e e p is r s i n e e e o o f f g p o a rd e ; r p , n th h e m re ite m d us p t a p h e e r st :c in ur e r l e e i n ini c o y t m under w ich t i h n e a r li s u s c t e t ursattiienng of t ta t n h d a ar t standard system nt no ill or II . r l t e e ss he t h p a a n i d the paper currency of Franco was depreciated some four or five hundred per cent. His impression was Shia the House would imitate the example of its predecessors. In 1822, when the motion for an inquiry was made, Mr. Huskisson moved, and that House assented to it, that they should follow the example of Parliament in the year 1697, and they resolved that they would nobt con sent to make an alteration in the standard coin .of the realm. Again, in 1833, upon the motion of Lord Al thorp, the House re-asserted that principle. If there should be a necessity for it, he felt convinced that the House, on the most enlarged considerations of policy, a nd with regard to strict justice, would re-afirsa that e p. 0 _ test.—(llear.) There was nothing in the aiVi h ni ad " no tngl the eommercial transactions of this country were in error when they talked about the price defined! in creased that the ancient standard was insnflicienot.f gold They. weight of gold, and nothing the promissory note was a p l r s o e m , e . the 101. note did, they make their 51. note promise what i s e e n d to if P :h y ey a ' chos e to would not in the slightest de gr ee c urrency. With the standar d a v l a te lu r e t , he wh na at tu h r of ade been e oeff the increase in the prosper i ty the country ? When the declared value of exports, which decennial increase n with the present standard of value, the i they found, t was not more than 96,000,00104 had increas e d three years was not less th an the i l ß a 3 s next l t u h n e d thought within couldconclusive pr proof ° e o f n t d h u a e t t w t i ht standardthey would o f value see they d commerce that this country was capablr e' ver might be their minute alterations i a om fi t h f 9 .o e , s o a t o n: ev c:i l , :n a o rt t: e . this law of 1844, his hope was that the House would show that they had the same regard to justic e and good faith which had been shown by their predecessors ; and remembering that whether th e policy of the Act of 1844 was or was not a wise policy, the transactions which had been entered inter since 1822 were as ninety-nine to one, when compared with the transactions which took place before that period, and which still remained unliquidated, he trusted a re gard to their own character---a regard for justice—for the permanent interests of the country—a regard, above all, for the condition of those who earned by their in dustry the wages of labour, would induce the House of Commons to uphold the standard which, after long struggling, had been established by the wisdom of Par liament.—(Loud cheers.) Mr. STUART (Newark) moved the adjournment of the debate. The House then divided— For the adjournment 45 Against ....--212 Majority original motion, for the appointment o Mr. WILSON then withdrew his anien f dm a ecnetiumiandstathee, was agreed to. The House then adjourned at a Quarter past One. KING'S COLLEGE HOSPITAL.—Some idea of the extent of the prevalence of influenza may be formed from the great increase of out-patients at the above hospital during the past two weeks. Many days little less than 8 00 apply; and o n ono occasion (Tuesday last) upwards of that - umber received medical treatmentwhon and medicine from the dispensary. The attandance of w omen and children on the same day was 250, of the larger proportion were suffering from the prevailing epidemic. N 1 ~ • -,3:47,* 7_ , • / • ~: ~ 1. :; A rl 1 • #: ,•rf r -- „ 1._11; ~/ \ (1 S;•_t '124 P. 17