The Sun. — London, England, 1857-12-12 00:00:00

Was investigated by the committee of last session, and I Will shortly state to the house some of the opinions given by very competent witnesses upon it. My bore friend, the Member for Southampton, who was lately G ,vernor of the Bank, disapproved of the compulsory extinction of the country issues, and thought that there was no great prac tical evil in those evils except that they were not made on securities, Mr. Newmarch was of opinion that the country 'genes ought not to be discontinued. Mr. Hubbard thought that the right of issue of the English country banks should be bought up, --that is to say, that they should be extin guished by law, but that the bankers should be compen sated for the loss of their right of issue. Mr. Norman, a 'witness of great authority, ale() disapproved of interference with the private issues, and I will take tho liberty, as his °Pinion is given very clearly, of reading it to the house. xe is asked— " What is your own view at present ; l e aving the advan tage of experience, and having seen what has actual y taken Place since 1844 do you think it desirable to makeauy change With regard tothe issues of the country banks in England, or of the Irish and Scotch banks I—l think, speaking generally, t hey have worked far more satisfactorily since 1844 than they ever had done in any previous period during my recollection, or in any previous periodthat I have heardof; and, consider ing' the habits and feelings of the country, and the interests involved I doubt whether it would be expedient to attempt by any direct legislative action to interfere further with pri vate issues. I mast add, however, this—that. although the action of private issues has been improved, still there have been failures among private issues, even recenty ; therefore, they are not altogether in a perfectly satisfactory state. "Do you attribute that improvement to the limit which leas been imposed by law on their issues I —I do mainly." Therefore, the effect of Mr. Norman's opinion is that it is sot desirable to interfere with the private issues. Lord Overstone also gave his opinion on this question. He ap- Proved the gradual absorption of the country issues, but lkot by means of any strong measures for their suppression or for the suppression of the Scotch and Irish issues. With regard to the question of requiring security for the corm issue' he entertained a doubt as to the expediency of LnY such provision. Those are the opinions of some of the most competent witnesses on the question of the English c ountry issues and of the Irish and Scotch issues, and they do not point to the expediency at present of doing what 1 / 1 9 sight hone friend called "developing the policy of the set of 1844," by converting the Batik of England into the Ida bank of issue for the United Kingdom. There is ano ther point which has been raised in connection with this ,Pazt, of the subject, viz., that if that central' bank be not t he Bank of England it should be a Government bank, that 'um Government should assume to itself the right of issuing PoPer over the whole of the United Kingdom, and should Prohibit the issues of paper either by the Bank of England or the Bank of Ireland, or any other chartered or private °attic. It is, I think, undoubted that when the act of 1844 Was, under consideration some plan of that sort was in con templation, although Sir R. Peel did not think it desirable at that time to attempt its intrpduction. A letter from Mr, Goulburn to the Governor and Deputy-Governor of the -3unk of England, dated April 26, 1814, contains this Pass; g e It. appears highly desirable that any new arrangement should be founded on the basis of an entire separation of the business of the issue of notes from that. of banking. This Teas , are might be effected by the establishment of a public thear tment for the issue of notes, independent altogether of B that clearly contemplates some public establishment either "inlet a parliamentary organisation, or being directly sub- Ject to the Crown—a public department unconnected with t he Ba nk. He goes on to say : , " Bu .t her Majesty's Government are willing in the first in trance Ito consider whether this can be effected by a division of th e Ilank into two distinct and separate departments, to Conduct exclusively, one the business of issue, the other that ut banking." This shows that the notion of a Government Bank of Issue for the entire kingdom was considered when the Act of 1 844 wa r s prepared, and therefore we may suppose that it 'woo part of the development of that act to place the cur t!incy of the country on that footing. But the first ques %lore which naturally arises on that proposition is, " By nat means are the Government to supply the country with .. 40 paper currency—is it merely - to have a central office in a - "ortdon and by the payments of dividends to contractors !ad other modes by which the Government makes payments .° trust to the diffusion and dissemination of notes; or is it to keep up an agency of branch banks all over England, :rebind and Scotland ?" If the latter plan were adopted Voestion whether such a system would be found to come a t all to the views of some of its supporters. (Hear, it On the other hand, if no such system were followed 4 raigbt be doubted whether serious inconvenience would 40 t arise from the action of such a bank of issue wholly un eorrnected with the establishment carrying on the ordinary 1 3 . Pe rations o f b an ki ng , th e ver y pl an o f suc h an i n ztit u ti on i'eitlee founded upon the entire separation of the functions i Inuing from that of banking. On this q couestion Lord cartons has expressed an opinion in thecommittee last v a eesi on which will, I am sure, receive tho attention of the house. object of putting it (the issue of notes) more avow edly :and distinctly in the hands of the Government than it is at present, I think is of .this nature, that so long as there the in the public mind an impression that pressure upon Leo tregling world is ai•ociated with the management of the konetr‘ry system of the country, it might be very ineouve b, lent to place that monetary system more avowedly i n the aands of the Government; and I must also observe that I t hink the interposition of some responsible body between the Govern went and the management of paper issues might be e xceedingly convenient in strengthening and assisting the Ouvernment to resist pressure which might come upon it at ce rtain periods to do that which it ought not to do." IVs may therefore consider the result of Lord Overstone's ° P . minn, as delivered to the committee of last session, to be unfavourable to the assumption by Government of the ex chesive right of making paper issues. Another meat expe 311e:iced Bank director entered a little more fully into this qn estion, and showed rather more in detail some of the ?aie sequences which that system would give rise to. This 1 4 Air. Hubbard's description of the consequences which Iscnild ensue on entire separation of the functions of issue ota those of banking. He says : " The larger proportion of the public dividends aro now paid 'l' :a mere stroke of the pen ; the amount of dividends duo to eau banker, not only for himself, but for all his constituents, Is carried in ono line to his credit, and in a few hours 3 ,400,000/ or 4,000,000/. of public dividends are in that way d im Posed of, and transferred from the audit roll to the different e caPorations and banks who are entitled to receive them ; so t hat the economy of labour and avoidance of risk are great and marked advantages of these two functions being per feruaed by - the-same corporation. Still in their essence they ar e, of course ' distinct fuuctio-~s. In Let, at present the dividends are paid with a very mall use of bank-notes ? A very small use. at still it is conceivable that the Government might, for tine purpose o f ma ki ng i ssues, pay di v id en d s i n notes?— uertai nly, it is ono of the most obvious means of issuing notes. "It might pay salaries, and contractors and others notes, r i ght it not ?-.-No doubt it might, and that would be a means Y which those notes would be periodically thrown into eir- L ula tielt ; and, on the other hand, the payment of the public „i - i. ve auc through the Customs and Eeci.-e would be a means Tinging those notes hack again, so that there would be a t„a`_Laal passing out and in of notes through the medium of tvro operations. Put I ratty observe that if the Govern ors WOre to attempt to discharge those two operations in , m "Ina person the amount of currency required would be ",. er mously larger than it is now. It is owing to the eircum - B e' ll ee of the Bank having as customers the various large Pd dend holders that it is enabled to perform all those opera .Llol4 with so small ap expenditure of currency. ``• If the Government were to establish a bank of issue of th e own, that would have the effect of counteracting some of most effectual instruments for economisiug the currency now' in use I—lt would occasion a very much larger amount of currency to be required. "'there would be a greater amount of notes in circulation? 7:-A. much larger - amount of notes in circulation at particular times, and it would bo subject to very considerable varia tions, whereas the operations of the Bank of England have the effect of reducing, by its expedients, the variations in the amount of notes. Although they have to pay 6 003 003. at each of the four quart ers , th e average variatio ' is vary little more than 1,000,0001." Thesis answers must, I think, satisfy the house that a great economy of the currency is effected by combining the Bank Of England'operations and the issues of the Bank for the Payment of dividends, whereas, if the Governm en t were to assume to itself the exclusive function of issuing, it would be forced to keep a larger amount of paper in circulation, i llastunch as the Government notes, no less than the notes ~ i f the B an k o f E ng l a nd, would be required to be supp or t e d D r a reserve of bullion ; and the cost to the public of in creasing the reserve of bullion wonid more than compen late any economy which might be derived from any other tattroe. Therefore, notwithstanding my right hon. friend's t a ral2gue about the antiquated relations of the Bank of -adigh and with the Government, I confess that I see great advantages in the present state of things with respect to management of our currency, and I doubt whether any ec onomy to the public or. any security to the holders of notes would arise from an entire subversion of the existing 11 A q 'tel and a prohibition of , the issue of notes by the Bank of E ng l an d , by private banks in England, by the ua nks in. Ireland and Scotland, and by the assumption of an eXCIUSiVe right of issue on the part of the Government. There ie a point as to which it seems to me there is some misunderstanding in the public mind. It is often used as • u argument in favour of this measure that the right of "suing coin is one of the ". Regalia Coronae," and that the power of issuing paper money bears a close analogy to it, a nd an.ght to be exercised by the State. What is the fact in regard to th e i ssue o f coins? There is no doubt that the right of issuing coin is a part of the prerogative of the Crown, but the Crown is in fact nothing but a manufac turer of coin. The Crown never purchases bullion, and never takes any step for supplying -the public with coin. Bullion is brought to the Bank of England, the Bank of England sends it to the Mint to be coined, the Mint coins it and returns it to the Bank of England, the Bank issues it to its customers in the form of sovereigns or any other denomination of cola.. The entire business of the receipt % b ullion and the issue of coin is managed by the Ban's of England as much as is thuissue of paper, and in truth the only function with respect to the coinage which the Crown performs i s t h at of impressing the die upon the bullion which is sent to the Mint to be coined, that bullion being in fact the property of the Bank er of private individuals. Therefore, those who imagine that the country would re ceive great advantages from a Government bank and a Go vernment issue of coin will find when the case comes to be examined that their idea is altogether fallacious. Looking, therefore, to the present state of our paper currency, to the issues of the Bank of England, to the issues of th e Pk, and to the issues of banks in Ire land and Scotland. I cannot see at present that there is • "jibing which either, according to our own observation at the facts, or the opinion of competent witnesses, calls 11 Pati us to resort to any compulsory measures for a sup pression o f a ll i ssues exce pt those of the Bank' of Englan d -- VG vest th a t r i g ht e xclusively in the Bank o f England,or still more to abolish the right of issue b y the Bank of England itself, and invest that right in the Crown. lam not prepared, whatever may be the result of this motion, ei ther to submit to the house a measure for the develop ment of the Act of 1841 iu the manner which I have de scribed, or to assent to the alteration %411'ch has been I pro posed., R ut then the right honourable gen tl e man, if lightly catch the spirit of his motion, says—" inquiry is exhaust e d ; you h ave d one ever ything that com mittees can accomplish; you h ave now arr i ve d at the time for legi s l a ti on ; the Government is bound to have a P r l li ; call upon you to state what is your policy with a ' n 4 ret to the eurretry, and to bring forward some new .„ e xtensive m easur e of legislation founded upon that pointy, whic h you ere bound to declare." Well, in answer to that appeal I would in the first place remark that, by P mm onconeent, thislate commercial crisis out of which, as understand, this demand open the Government has grown, 6, 3 been cancel, not by any derangement of the c urrency, but by a derangement of capit.d and credit. If defects be s o —if the present cr i s i s h as no t grown ou t o f any ! . 'cts in our currency why upon the occurrence of this „'i-* Is is this demand made upon the. Governnient ? 011 '3 , are w e now called upon peculiarly to legislate upon t old. rc ency law s ? Wh y i s it that at this moment we are tall ° d eai - ae a currency poliey ? I confess that I a to y unable to see why there is any exigency for such a IHE ,StflNT,' LONDON, SATURDA V EVENING, DECEMBER' profession of faith on the part of the Government on this 11th day of December which did not exist at the end of last session. Well, but oven if we admitted that We late com mereial crisis imposed upon the Government the duty of declaring a policy, I could not admit that it affords any reason for an immediate alteration of the act of 1i44. I can comprehend the arguments of those who object to the act of 1841 upon general grounds. I understand the argu ments of Mr. Newmarch and Mr. Tooke, who say,—" We rely simply upon the convertibility of a note against the stopping of the Bank; but no such security can be obtained except as a security against over issues of paper." No doubt there are arguments of considerable weight to be urged in support of that view; and, in fact, unless such arguments could be urged, I need scarcely say that men of such emi nence as Mr. Tooke and others who agree with him would not adhere so stedfastly to it. They are not men to be de luded by shallow fallacies, or to found a theory upon a very narrow induction of facts. There is something un doubtedly to be advanced by those who say we are to carry the principle of free trade to its fullest extent, and to have a free currency—(loud cheers)—we rely exclusively upon the convertibility of the note, and we will not ask for any limitation made by an act of Parliament. I do not myself agree in that view, but I mention it as a view which is entertained by parsons entitled to the highest respect from their ability and knowledge of the subject. That view is capable of being supported by arguments of considerable weight; but such arguments are in no way applicable to a commercial crisis, nor are they in any way strengthened by the occurrence of a commercial crisis. (Hear, hear.) Their view goes to the very root and foundation of the Act of 1841. It is an objection, not to the failure of that Act under circumstances of extraordinary pressure, but to its mai:aridness in times of ordinary operation. (Hear, hear.) Therefore I cannot for a moment admit that the occurrence of an extraordinary crisis, in which all the ordinary laws with regard to the currency must be considered as sus pended, affords any ground to call upon us to legislate upon the subject of the currency. Take, for instance, the obvious case of the policy of the Habeas Corpus Act, or protection against unwarrantable imprisonment. We all know there have been periods of great disturbance—times when there has existed a state of things approaching to anarchy, in which the greatest sticklers for constitutional forms would admit that the suspension of the Habeas Corpus Act was a less evil than its enforcement. But I will refer to a case of the presentday, about which, no doubt, gentle men in this house will be divided. I mean the suspension of the freedom of the press in India. lam not now going to argue that question ; but everybody will see that there may conceivably be reasons to justify the measure of Lord Canning during the existence of a military mutiny thathas nearly become a general revolt, which might not in bias smallest degree justify such a step in the ordinary state of India. Therefore I cannot for a moment admit that, be cause we have passed through a commercialcrisis—because that commercial crisis may have rendered it necessary to suspend the Act of 1844, that circumstance affords any ground for the appeal made by the right honourable gentleman to the Government to bring forward now legislation on the subject of the currency. There appears to me toy be an excessive disposition to expect benefit from legislation at a period of commercial crisis. There is no time, in myopinion, when it is more incumbent on a prudent Legislature to be upon their guar ,t in respect to legislation on commercial matters than at a moment of that sort. (Hear. hear.) During a commercial crisis the executive Government may perhaps be able to do some thing ; but I believe it will in general be found that the Legislature are comparatively powerless (hear, hear) and that they must wait the return of a more normal state of things before they can apply any remedies with effect. No error in legislation, it seems to be, can be greater thin that of supposing that it is in the power of Parliament *to devise some sudden panacea for the evils engendered by commercial discredit—(hear)—or that such a period as that which, we have just pass d through constitutes any ground for calling upon the Government to come forward with some cede of laws to regulate- our currency and place it upon a new foundation. Least of all can I admit thatthat demand is in any way justified when no distinct and precise proposition is submitted to the house; and when a mere vague and general appeal is made to the Executive. unac companied by any statement of the remedies which it might be expedient to a !opt. Supposing, according to the phrase of the Scotch laws, we descend from these lofty considerations and condescend to enter upon particulars— (a laugh)—it will naturally occur to the house to inquire what specific alterations of the law would suggest them selves for consideration at the present time, independently of that other change of system which I have described as the development of the Act of 1818. The question is whether there. should be a relaxing power engrafted upon the Act, to be called into activity at moments of oommercial crisis. The plan which seems to have been ultimately acquiesced in after the debates of 1)47 was that the matter should be left to the discretion of the Executive Government, to be exercised in cases of emergency. Now, the power of relaxing the legislative limit might either be vested in the executive .Govern went, or, as has also been suggested, in the directors of the Bank of England. As to the latter alternative, it really seems to me that to impose certa;n restrictions upon the Bank of England, and at the same time to give them the power of dispensing with those restrictions, is almost equivalent to making no law at all. (Hear, hear.) Teere fore, if there is to be a relaxing power, we aro driven, I think, by the necessity of the case to vest it in the execu tive Government. The course recommended by the com mittee of the House of Lords which reported on this sub ject in 1818, after the inquiry consequent upon the com mercial distress of the previous year, was described in these words : -- " To leave these cases when they do arise to be dealt with by the irregular exercise of the mere authority of the Crown and its advisers, setting aside once in five or six years,' or even at periods more remote, the express provisions of a dis tinct statute, appears wholly inconsistent with that fixity and order which it is or ought to be thembject of all law to secure. " The committee are of opinion that the principle on which be act of 1844 should be amended is the introduction of a discretionary relaxing power ; such power, in whomsoever vested, to be exercised only daring the existence of a favour- able foreign exchange." - Stich was the conclusion of the committee of the Upper Honge. Tho committee of the HOUBO of Commons came to a directly opposite conclusion. They say— " Your committee havehad under their consideration whe , her it is advisable that powers should be conferred by law upon the Government to enable them to meet the occurrence of a ,, y circumstances which , may call for extraordinary inter ference ; but they have come to the conclusion that, looking to the impossibility of foreseeing what the precise character of the circumstances may be, and also what may bo the mea sure best calculated to meet them, it is more expedient to leave to those with whom the responsibility of the Govern ment m'iy rest at the timo to adopt such measures as may appear to them best suited for the emergency." I will now trouble the house with the opinions of two very eminent witnesses on this subject. The one is Mr. Hubbard, who, when examined before the select committee on tho Bank Acts in June last, gave the following evidence : " At present it is the established practice of the Govern men. not in way to interfere to control the discretion of the directors with regard to the management of the Bank I—Not at all, - Assuming that this is the rulg, and also assuming that it is conceivable that some extraordinary circumstances might arise in which it might be desirable for the Govern- ment to release the Bank from the restrictions that are im posed upon it by the Act of 1844. would you prefer that the Government should interfere upon their own responsibility, as they did in 1847, or that the power of interfering in cer tain cases should be conferred upon them by Act of Perna- meat ?—I think that to introduce any provision to meet a contingency would be highly undesirable, because it would have the effect of detracting from the moral influence which the Bank Act now has in enforcing the prudent conduct of all banking and commercial operations. " Therefore, with r spect to the question of power being given to the Government to interfere in extraordinary cas s, you would rather that the law should remain iu its present state 7 If any events were to occur, from whatever cau9e, which suspended the whole action of credit throughout the country, the Ministers of the day would, no doubt, held it to bo their duty to apply some immediate and powerful remedy ; but I think it undesirable to enter upon the contem plation of events which in the ordinary course of things are not likely to occur, and the entertaining of whiejr can only, I think, be detrimental totho proper e:ongideration of the Bank itself. " Does it not appear to you that such a crisis, if it ever were to occur, would be of so extraordinary a n a ture that it almost lies out of the domain of the law to provide for it Exactly so." Therefore Mr. Hubbard's opinion is in favour of leaving the law in its present state. The next witness whom I shall quote is Lord Overstene, but I am afraid that I am weary ipg the house with extracts. [" No, no."] In the evidence given by that high authority before the committee of the House of Lords in 1818 he is asked : " Assinning that the Act of 1844 is to continue to be the law of the land, and assuming that it is necessary that a dis• cretion should from time to time be exercised, under possible circumstances, to suspend the action of that law, in which way aro you of opinion that that discretion can be moat safely lodged, with the view to insure as little as possible a depar ture froni this statute ?" Lord Overstone replies : " I think it important to render a recourse to the suspend ing power extremely difficult, and such as will be resorted to only under the last and 'most extreme necessity. I think that by leaving the Government. to do it upon its own re sponsibility, and as a violatioh of au existing Act of Parlia ment, we obtain a better protection against the too easy and ready an exercise of the power than by lodging the discretion with aniether " At what period of pressure do things not become amen able to principl e ? —When the actual conduct o f p arties be comes suh that you cannot bring it under the test of any ordinary principle. When people act, not from any rea on able motive, their cobnudtuuctn There appears, under asn t o h t e eaubleinuclablionflouepnrienecoipflep.ranie, I con sideranswer—(hear ; but it marks with tolerab le distinct ness the circumstances under which the noble lord thinks the Act.of 1844 ought to b 3 departed from. Lord Over stone is next asked " Do net you think that if the discretion is only to bo ex ercised under circumstances so extraordinary, it is almost impossible to anticipate them by legisla , ioul—The circum stances under which it would be necessary to exercise the discretion cannot be defined beforehand. There is also this difficulty—the very knowledge that such a measure may be resorted to tends to check the introduction of the natural and proper correctives, Therefore, though you cannot alto gether get_over the diffieulty, I think it is obvious that the true policy is to do nothing that shall in any way whatever strengthen the feeling in the public mind that under pres sure they will have this relaxation ; for in proportion as they anticipate it, in the same degree they will abstain from the proper And natural correctives ; and to whatever degree they abstain from resorting to those; in the same degree the ulti mate pressure w ll be augmented." These opinions aro in favour of not interfering with the existing law. Now, perhaps, I may b 3 permitted shortly to express my own opinions, intimated as they have boon on a previous occasion to the house. I confess that, look ing at the precedent of 1817, and having regard also to the manner in which this house has agraod to the Indemnity Bill lately pas;cd, I do not believe that if any commercial crisis flionld hereaiter occur any great practical differ ~ n ee will exist in,the f6si tion- of a Government between their vie x of the effect of these two pecedents and the conduct winch tliey would pursue if they had legislative authority to suspend the act but were called upon to assemble Par liament within a fortnight or throe weeks after exorcising that authority. If the suspendin ©sewer were, as it ought to be, treated as one proper to beised only on extra• stwwo y e b ta tf i f s th t : a t s mould u p i r d a n ct o i t ea b l ,3 d terry te,nriclienbareytwoececnatime i niTte r r t s an re t 4 as la ythelync.,liionau.ttioAswenotu.ld,(atheearre)foreA,tbtehetsaaraleet t t l i o n u e a , h i f t i a t n w u e n re e o t u h s e t i g t e ti n t e i o r general xe rshfi s ipaotuweenrt part on Pet thifit warn of the Executive to suspen.l the law, an d then afterwards to corne for atiindetnnity—altnottah I cnnfess it see ms to lie that the passing of an Indemnity Bill condones what ever constitutional offence may havo boon committed —if that view should prevail, I should feel no insuperable ob jection to the adoption of such a coarse. At the same time, as far as my Wa n opinion is concerned, I see no rea son for disturbing the present state of things. Then there is another remedy which may be resorted to in extraordi nary cases, which has sometimes been resorted to in periods of commercial distress, and which I have heard suggested as a substitute for a temporary suspension of the Bank Act. I mean an issue of commercial Exchequer-bills. Of course, if Parliament were sitting, end such a remedy were thought advisable, it would be in the power of the execu tive Government for the time being to ask Parliament for a power of issuing such Exchequer-bills, and of lending them to firms which might be in temporary difficulties. But let me observe that Exchequer-bills are not money — they are securities—(hear) —and that what houses in difficulty require at a moment of commercial crisis is money itself, and not merely securities. (Hear, hear.) Therefore, although commercial Exchequer-bills would be of some advantage, nevertheless they are not the moat con venient or appropriate remedy for the evil. Well, but then it has been suggested to me that, instead of the Bank making over-issues beyond those which the law authorises at a period of this sort, a power might be vested in the Government on such an occasion to issue Treasury notes in the nature of bank notes. and being a legal tender. That, it is said, would be doing by authority what has been done, as it were, surreptitiously and under a cloak by the letter recently written to the Bank. I have heard that suggestion from a gentleman -whose name would, I am sure, command great respect if I mentioned it to the house; but it seems to mo to be open to this objection should be sorry to authorise the Government by Act of Parlia ment to issue inconvertible notes. (Hear.) If these notes were peyable on demand it is clear that the Government at a moment of crisis has got no gold. It possesses no means of paying notes on demand, and therefore the only way by which it could discharge its obligations would be to place itself in the hands of the Bank and say, "Be good enough to allow our notes to be presented to you, and we will borrow the use of your bullion, and will pay you a certain price for the notes which you may be called upon to cash." Knowing the disposition of the Bank to do everything by which they can promote the public service, I say that an arrangement of that sort might be effected if the Bank reserve of bullion would admit of it. At the same time it appears to me that the difference between that state of things and what has actually taken place would be iu name rather than in reality—(loud cries of " Hear") ; because if these over-issued notes, called Trea sury notes, wore payable at the Bank of England with their bullion reserve, I dc' not see what we should gain by calling them Treasury notes. It would be batter to do as we have done—authorise the Bank to increase their note circulation. (Hear, hear.) If, therefore, the appeal for another currency policy and for some grand scheme of legislation is founded upon any notion of that sort. I can not admit that any great public benefit would arise from it. (Hear, hear.) Then we come to the question of the enlargement of the limit of 14,500,0001., or, as is some times proposed, the substitution of either 16,000,0001. or a larger number of millions of notes to be issued by the Go ose nment in place of the credit notes of the Bank of Eng land; and it is alleged that in that manner, if the quan tity were sufficiently increased, the difficulties now expe rienced in times of commercial panic might be removed. This plan of making a large issue of inconvertible notes was brought by several witnesses before the attention of the committee of last session ; and on a former occasion I happened, erroneously as it seems, to ascribe to my hon. friend the member for Warwickshire (Sir. Spooner) the opinion that he was in favour of inconvertible notev. Now ho altogether disavowed that opinion, and there is no mem ber of this house whose opinion I should be so unwilling to misrepresent as his. I think, however, he will admit that my error was not an unnatural ones when I recall his attention to the evidence given before the committee of last session by one of the witnesses (Mr. Twells), who, as I understand, represented the opinions of my hon. friend. This is the last. extract with which I shall trouble the house, but it contains opinions altogether different from those which I have previously adduced, and I therefore feel it is but fair that I should give an example of witnesses of all classes of opinions who were examined before that committee. Now, these are Mr. Twells' opinions with respect to the policy of enabling either the Bank of Eng land or the. Government to issue 20,000,0001. instead of 14,500,000/. of, bank notes of the character which he de scribes in his answers. In order to avoid the possibility ..f misrepresenting my hon. friend's opieions, I desire, if the house will allow me, to quote Mr. Twells' answers in his own words. Ho is asked : " You recommend the issue of 20,000,0001. of bank notes not payable in gold on demand, but receivable by the Govern ment in payment of taxes ? —Yes. "Of course it would be necessary to omit the words, I promise to pay,' because the e notes would not, in fact, be promises to pay on demand ?—QUite so. (A laugh.) " Do you think that that currency would run the risk of ever being depreciated in value--that is to s ty, that incon vertible 51. notes would n exchange for fivo sovereigns I I do not know as compared w;th sovereigns ; that, I think, is of no consequence in-the world." (Laughter.) "We want it for our internal commerce, and we want it to pay Govern ment their taxes. (Laughter.) "I thought you said you could conceive that it might hap pen that under the system which you recominetcl the Si. note would. not exchange for five sovereigns ?—That I think is not material. A bank-note, I conceive, is convertible into every thing. If you wanted to convert it into gold, you would go to a bullion merchant, and he would give you the market value ie gold, as he would in any other commodity ; it might be more or it might be less tLan five sovereigns." The house will see that this is rather an interesting ques tion to those who have the collection of revenue, if the notes should not be exchangeable for five sovereigns. (Hear, hear.) Then the witness is asked— " What do you conceive to bo the advantage of making those inconvertible notes received in payment of taxes?—The advantage is, that it keeps them at a steady price. I go by experience, and I am looking at the 20 years when eVe had no gold. " If you make these notes receivable in payment of taxes, is not that a violation of the principle of inconvertibility?— No, I conceive not. " You compel- the Government to take ono of these 51. notes for a tuns or five sovereigns, do you not? —For five pounds." (A laugh.) "If the; tax ma they do not say, We require you to pay five sovereigns, but five pounds. It is a term of account, and I give them five pounds. (Renewed laughter.) "Then you think that a pound is something independent of the value of the gold which it represents ?—Quito ; we had the term pound' in account when we had nothing to repre sent it ; it is only recently that we have had the sovereign, which represents the pound. " Do you think that a pound then meant a piece of paper with c ertaiu words priuted upon it? —lt had a superscription, which ave it a value in the country payable for all taxes. " Then your view of a pound is that it is something quite independent of any value in metal ?—ln gold ; as completely now as it gas in the early part of my experience. " And you think it desirable that a currency shoukl be estaledshed. upon that principle ?" Now here is the important point. His answer was— " I would have it established upon that principle ; but, as I have stated, it' there can be any amendment suggested it will be very desirable." (Laughter.) I think, bearing that evidence in mind, the house must see that my error in supporting my hon. friend to be in favour of an inconvertible currency was not an unnatural one ; but of course I don't dispute the accuracy of the statement he has since made. If, however, we do lays e o w n e d le s t i n o e n t of te i be e m T a w d e e l l t s h - e - i f f e the md a p t r i i enn icmheetltahe g o o f v D er e n eem en h t e i r s , perhaps it may be e n i o p t i e a i w l o h p i t e h t h h e e r e co o c as should l o l t u e h t l l e d o n n b Ow 3 t o a c d p u o i r e p e r t , e l e il d c c s e i u l n e e g li t i l , s i l i f a s o t c r i i o l e r n x r a e w n m h t p mid that a mor i e e, li a m a ite th d e p i r a o se p e osi p ti e o r n . milted under the Act of 1814 should be increased by a million or two, or something of that sea. Now, I admit that there is nothing in the principle of the Act of 1844 w hich was fixed on grounds repeatedly 1 w 4 1: s r o e o q l. o i r (Hearth.) a . ) t T the her e is ee amount m should magic elkknow w be of c h a t c h t a ly yt particular amount, fsrtaietnetallyattethtehetipuirie ; he I am ount more than 14,030,000/. (Hear.) a h y at s i u s'a g mattert m h a a y t f a iTr p l ersou , e w i h t o an is i a p i l l e d o h a e d m A i c t t would be d an alteration for the consideration of the house but Iwhiceohnfmesasey gen tlemen doubt extremely whether the advantage anticipate from su ch •001, r), repro in w are two objectsin view. One is from that se Yfr• SPoone I must not number my lion. friend ( • rived from it. So far as I u nderstand the matter, there sented by Mr. Twells. They con sider that Itvheestiamg thatpe country and increases the wealth of the nation ; letoatulbege 'mentation of the paper currency is an rr i a n d c d r e 2 a , s o i o ti o g ,o t o e limitte the h o e f a ßank n i t s e e u f e n s t 2 e , a oo i o e ,O t hooe hands / .yon wky of o wooly public. That I take to be an entire delusion. ([!sari) Ido not believe that the Bank of England w ould induce t public to use more notes than they do at pre sent, and if e th ele power were given, unless some stronger occasion than we have yet :witnessed were to occur the present num ber of not es in the hands of the public would not be increased. But it is said the Bank of England would have a larger reserve in the banking department, and that in a moment of crisis the necessity for resorting to extraordinary measures ore the part of the executive Government would be avoided. It would not be avoided, however, if the Bank of England diminished its bullion reserve in proportion to its increased power of issuing notes, which it would have an undoubted right to do. (Hear.) The Bank would have a right to keep 2,000,0001. less of bullion in reserve, and the only difference would be that there would be. 2,000,000/. of notes issued on securities instead of upon that amount of bullion ; and the banking reserve when a crisis arrived would be exactly what it would have been if such an arratigemeut had not existed. (Hear.) But the strength and resources of the Bank would be less, for the bullion on which its strength rests would be 2 030,0001. less than before. If the Bank were to act in that state of the law exactly in the same manner as it did in the present state of the law, then, undoubtedly, on the occurrence of a com mercial crisis its bullion would be the same, and it would have 2,000,0091. more to work with; but we are not entitled to reason on a state of things so uncertain ; it would be hazardous to form any expectations of that kind, and therefore I am not in favour of altering the amount specified in the Act of 1844, though it is is fair question for the consideration of the House and the committee which I propose we should appoint. There is another question which may be very properly considered at the present time, and that is whether it would be expedient to require some additional guarantee for the issues of coun try banks in England and of the Scotch and Irish issues. This subject hes been imperfectly investigated by the select committee of last session, and therefore when the pro posed committee comes to the subject of the condition of issues it will be one deserving of their consideration. An other point is whether Bank of England notes shall not be made a legal tender in Ireland and Scotland. The circum stances out of which the present law has grown were fully and accurately stated by a noble lord in another place in the course of yesterday. He stated that the original enactment by which the B ink of England note was mate a legal tender included both Ire land awl Scotland ; but, inasmuch as doubts arose as to the construction of the Act, it was held to be confined to England, awl in 1845 an express enactment was passed by which the operation of the clause relating to legal tender was limited to England. (Hear, hear.) It seems to me that no good reason can be allegejl why that clause should not be modified, and why , we shoul I not revert to what seems to have b ten the de sign and intention of the original enactment. (Hear, hear.) There is another question, too, which ban been raised by tho bun. member for Dublin (hr. 'Vance), and that is whether it would not be proper that in Ireland the notes of the Bank of Is eland should be made a legal tender. That seems to me a fit subject also for the consideration of the committee. I have been forced most reluctantly, after the indulgence which the house showed me last week, to trespass at considerable length upon their time. I have seen the interest that the general question has excited, and having necessarily paid much attention to it, I thought it my duty to state my views thus fully to the house. (Cheers.) It appears to me that if the house should adopt the motion that I have made, accomp micel with en in structibn to inquire into the ca , sea of the commercial dis tress—if they appoint a committee that will follow up the ' inquiry of last session and report on the general principle of the Act of 1814, which will investigate the subject of provincial issutisin England, and also in. Ireland ani Scot land, and which - will, so far as they think it expedient, illustrate the general operation of the Act of 1341, and so far as they can report on the causes of the recent commer cial crisis, they will make the best provision for legislation that this house can possess, and, the exigencies that called for the Indemnity Act having passed awaY, they will have done all that the circumstances arising out of the late crisis required. (Cheers.) The right hon. gentleman then moved that a select committee be appointed to inquire into the operation of the Bank Act of 1344 (lth and Bth of Victoria, cap. 32), and of the Bank Acts fur Irel and and Scotland of 1815 (Bth and 9th of Victoria, caps. 37 and 38). Mr. DISRAELI—It seems to me that the arguments of the Chancellor of the Exchequer rest upon a rather incon sistent basis. The right hon, gentleman rises and acknow ledges, without any qualification, that it was his opinion that the present commercial distress originated in a disturbance of capital and credit. Why, then, says the right honourable gentleman, is our attention attracted to the question of currency ? Ono would have supposed that the right hon. gentleman had forgotten for the moment the circumstances under which Parliament W3B assembled, and the reasons for our meeting at this inconvenient time of the year. If currency has nothing to do with this ques tion, why did the right hon. gentleman'and his colleagues violate that law which regulates the circulation of bank notes? And therefore if the right hon. gentleman tells us to-night that he cannot understand the reason why criti cism is offered, Ican only suppose that while he was speak ing he had forgotten the cause of the present session of Parliament. Considering what the cause is, and that the country finding itself - , not in 'a state of distress, but of ab solute convulsion—considering that the state of the com mercial world was adverted to from the Throne, and that that conameicial state has already operated upon our manufacturing districts, and that the Government, in con sequence of the state of affairs; have recommended the di rectors of the Bank of England to violate the law which regulates the circulation of bank notes, I can scarcely sup pose that there is any member of this house who does not imagine that it is the first duty of Parliament to express some opinion upon such important events. It seems how ever that we have been called together merely to consider the indemnity bill, but not to express any opinion aseto what has taken place, or sugeest any remodia. measures. I cousiderthat to pursue such a course would not bo to the honour of Parliament. I anticipated from the first day of our mee ides that there would, beet discussion upon the subject ; and if I avoided mixing up this question with the debate on the iudenanity bill, it was because the house thought that it would be more convenient to keep the two p or tunity would be afforded to consider this question. I subjects separate, ant upon the understanding that an op• wish the house to understand in answer to a remark which has fallen from the right hon. gentleman, that he seems to misconceive some of my observations the other night. He supposes that I or some one else made an attack upon the evidence taken before the committee of last session, of which, be it remembered, I was myself a member. The that committee hon, gentleman says tha t t he evidence taken before committee is' not inferi or to t hat taken befo re an y other committee, notwithstanding that it has been spoken of in terms of derision. The right hon. gentleman, if he had sat on former committees on which I have sat before he became a memb. r of this house, and whose evi dence was of a very valuable character, would have still found the evidence of the last committee not inferior to that of any former committee on the same subject; but what I would especially urge is, that we have in the evidence of the last committee the same witnesses, the acme informa tion, the same facts, and the same arguments that we had in the evidence of the committee upon commercial distress. (Hear.). Let him understand that so for as I am concerned I greatly appreciate the evidence of the committee. It is because that evidence is most valuable, and has exhausted the entire subject, that I think any further inquiry unne cessary. He says that the committee, at the conclusion of the session, presented their report, and recommended that they should be reappointed this session. lam not answer able for their having done so. I was not present when that resolution was come to I will not, however, avail myself of that excuse. The right hon. gent/truest' will not however. Pretend that what has since occurred in the commercial world—if I may use so confined a terme-does not justify any gentleman, who at the end of the last session was wil ling to listen to other witnesses going over the same ground, in now asking for legislation. He will not, lam sure, maintain that the events which have occurred' during the recess may not fully justify any gentleman in now coming to a conclusion that is is a aubject which requires no further investigation, but an immediate and distinct dotermins- Lion. I cannot understand why he is in favour of the re appointment of the committee. So far as I could follow him, he seems to have made up his mind upon every subject connected with the question of circulation which can pos sibly be offered for the consideration of a committee. ([Tear.) On ono point, however, he has not satisfied me. He will, he say e, leave the law as it now stands ; but how will he restore it to its moral influence? He cannot forget that it has been twice violated, and that consequently people now I.ok upon it WI an obsolete law, and no human boilsg believes that it can bo carried into general practice. The right hon. gentleman must know as well as ao.y other gentleman in his house that the Dimwit a law loses that moral influents which all laws ought to possess, that moment it becomes, to all intents and purposes, is dead letter. It is the duty of the house, I con ceive, to arrive at some definite conclusion upon the matter, and when I am told that by the amendment which I have brought forward I delay inquiry, and am not prepared to enter upon legislation, I say that my amendment is, in every sense, a proper and sufficient motion, and the only motion that can b 3 made and which puts the house inn clear and intelligible position. What I want the house to agree to ia, that wo will not stop future legislation, which we do if we ask for future inquiry. I would - induce the house to say that we will not now appoint a committee, to be stopped from expressing our - Opinions upon the question of currency when Government meets again after Christ mas, for every cno knows that it will then be impossible for any one but a member of the ,Crown to bring in a bill relating to it. It is, however, in the power of the house to come to a practicable course, and prevent us when we meet agaiu on the 4th of February from having our mouths padlocked on this question, and an obstacle thrown in the way of any party or any combination of men who may wish to commence immediate legislation upon it. I wish the house to remember what has occurred in the commer cial world within the last few months. I remember the commercial crisis of 1847, and I was here when the commer cial convulsion of 1837 took place, and I have read, as you all know, what happened in 1825 ; but there has been nothing in those periods of commercial distress to at all resemble in force and extent of circulation the distresses of the last few months. In 1825 there was a great deal of overtreeling, and speculation was excited by the fact that then, for the first time, commercial relations with. the Spanish States of South America became open to us In 1837 we had extended commercial relations with the United States of America. Iu 1847 we hid a famine coincident with an extended investment of capital in public works. But on all these occasions, great as has been the suffering —great as has been th e di stress an d commerc i a l co nvulsion —you could place your fine had a share in bringing t er on one or two causes which them about. What do we find now ? We have a di s t ur b ance o f cre dit, not limited to England or to some foreign countries, but, in a manner, general. You have suspension in the United States of America ; you now have a commercial republic tran sacting its business upon the basis of a metallic currency, pe, and in some portions iu a state of bankrupt cy. Th ere i s no country in which credit is not more o r l ess prostrate. It is prostrate in the Baltic States. Th e t am Larne is the case in Spain, in the s outh of Germany, in the cen t re of Euro of the north of Germ any. In 1817 there was a document published from whi c h h e gathered th a t the failures which took plice between A ug u s t an d the end of November amounted to 7,000,000 1. The o th er evening it was my painful duty to c a ll th e attention o f th e house to the list of failures which h ave taken lace during the present crisis, and I aria • pry to say that se p veral other houses may now be ad !est to the black catalogue. These failures amount to the sum of 45,C00,000/. This is a sum much more than double the failures 'which oecurred in 1817. Under these circumstances, it seems to me that it is the duty of Parlia ment to inquire Into the causes of this strange convulsion —(hear, bear, - from the Ministerial benches) --ant if the right hon. gentleman had come forward and appointed a committee to inquire into the causes of commercial dis trsss alone, I would support him i n d o i n g so;' . but when I find a committee appo i nted to i nqu i re into comm erc i a l distress, and as to h ow f ar it has b een occas ion e d by th e circulation of bank notes, I know by experience what is in store for us. In 1847 the Chancellor of the Exchequer proposed a committee to inquire into the commercial dis tress which then existed, and into the effect which the cir culation of bank notes had in producing it. What hap pened ? For days did that committee sit, and its pro ceedings were a mere j um bl e of opinions upon the currency. It was, in fact, a currency committee, and it diverted the attention of the house from the consideration of the Act of 184 t, and the consequence has been that you have had that set in use for the last 10 years without the slightest amendment; and if we now act in the same manner, the great probability is that when another crisis may occur, and we may not have to wait atenther decennial period for it, produced and aggravated by : the same cause, we shall not find ourselves more advanced than we were in 1817 ; and the only romedy will be the same as that now proposed —the appointment of a committee to ascertain what por tion of the distresshas been produced by the circulation of bank notes. I shall endeavour to explain what are, in my mind, the causes of the late commercial convulsion, and I shall be glad if those gentlemen who are to follow me it to a select committee. I take, then, as the (I) l f ike the present than by may fall, as I think the obtaining information egncia2ugse of the disturbance of public credit the recent houseon will th c cheroot hasrsrte b c aj t any yf muchr e o r mrbo batter at into tde ri sthan;eus which so en metals. I take 1851 as timea instance hadr railroads the culminating point of our prosperity. We had then the enormous amount of 22,000,0001, of bullion, I r ate o f Ow interest, not more than 2 per cent. ; and this circumstance was no t peculiar to England, because the same prevailed in ; gr °rni e m a ßi t discoveries of the preciou s every great country. It prevailed also in America, although acted. upon much earlier than other countries had been by the discovery of gold in California: Since 1843 we have had imported into this country the enormous sum of 190,0001. of gold. What was the consequence of all this ? l o r m oa e ds w change wa s to take place in the value of money, and an op portunity idea that the fi t t h s e tst portunitv afforded by increased capital of executing public works. e a Europe. France, lied ouly one or two extremely There . was an h necessary lines, executed those great lines of railway in h th en ro a ug g h r o es u t t the centre end south of France. She did more ; she exe cuted public works and raised public buildings which neither Louis XIV. nor the First Napoleon, whatever their will might have been, wer e a bl e to execute. Sh e raised new palaces. Public works on a still more extensive scale were carried on in the centre and South of Europe. In short, there was scarcely any country, either in Europe or America, in which there was not a Government invest ment of capital in this way, Upon these immense invest ments there was a superstructure of. speculation in the shares of those compames— the necessary consequence of the first investment. A new claess of houses and of mono tery institutions was established, in order to collect the savings and superfluous cash, and invest them in these nri ,iertakinv. That was the time when the Credit Mobiliur was established, which pushed on affiliated institutions iu every city in Europe. We criticised those institutions, we impugned the principles on which they were founded, we expressed suspicion concerning the dividends they paid, we have denounced their investments of capital and their advances as unscrupulous, reckless, improvi dent, and u upeincipletl. (Hear, hear.) But what has more rece ntl y occurred in this country shows that, whilst we pointed out the mote in our neighbem's eye, we were not sufficiently conscious that our own condition was even more emberraesing. These (ler perhaps t a kings stimulated consumption, and this great stimulus to consumption increased the price of all produce. Gamb -I;ng arose just the same in shares in public works as in produce; in which there was so extraordinary a rise las seemed to astonish the world. This oral attributed in part to the increase in our metallic trease e res. The conse quence of all this was speculation, reckless investments, and overtrading, which year after year increased. Year after year those engagements wore carried on throughout the world by the application of capital and the continua tion of credit to au extent never before equalled. Only three days ago I saw an instance which appeared to me remarkable of the manner in which credit was applied, but was told that it was by no means an uncommon in stance. A merchant in New York drew upon a merchant in Hamburg. The latter declined to receive the bills un less the invoice was sent. What was the invoice ? The invoice was for a cargo of wheat from San Fernando, in California, to be despatehed to Melbourne. Well, the merchant at Hamburg accepted the bills, and the moment he accepted the bills he drew upon the merchant in Lon don who accepted his bills, and converting those bills into capital, took up the bills which the merchant drew from America. The result was that the merchant in London supplied the capital for this commercial speculation of California to Melbourne, although totally ignorant of all the circumstances of thertransaction, the solvency of the parties, or the value of the cargo. Now, why had such trading as this gone on to such an extent, and for such a duration ? I will show you the cause. For the last three years we have been on the eve of a great crash ; but when the exchanges were turning, and the accommodation becom ing confined—when a crash was at hand, and mon were looking about in alarm, there arrived those golden galleons from Australia—those rich argosies from California— which, throwing an immense heap of treasureupontho mar ket, averted the suffering which was imminent. But things went on, and it was no longer in the power of 20 or 3J mil lions of treasure to prevent the crash which has occurred. The most surprising thing was that suffering - existed when, not only in this country, but throughout Europe, there was the most exuberant harvest upon record. (Hear.) It is most remarkable that throughout the last five years there have existed causes in Europe any one of which had, under other circumstances, brought about a convulsion. During the greater portion of the time there was a Euro pean war; the two greatest States in Europe were nego tiating large loans; there were three successive bad har vests in France; you had the silk panic, yet the convul sion had been retarded by the arrival of gold. The right hon, gentleman the Chancellor of the Exchequer said the commercial distress was occasioned by the derangement of capital and credit. It is not for me to dispute that posi tion, but the right hon. gentleman is the first Minister who maintained that commercial distress was occasioned by derangement of capital and credit. I express the opinions of those who are most largely engaged in the foreign trade when I say that it was not during those five years that we measure :l even by hundreds of millions, but by a denomi nation unusual even in commercial returns. In those ti an sections the share of England is to be computed by hun dreds of millions, and yet we aro to bo told that the sole cause of the derangement of our commerce is some 20,000,0001. in Bank of England notes. We shut our eyes to those immense operations, and we concentrate our at tention upon one of the smallest forms of credit that can influence trade. (Hear.) Why, sir, the derangement of credit can only be brought about by the abuse of credit, and not by the mismanagement of the currency. The right hon. gentleman the First Lord of the Admiralty cheers that, but what have the right hon. gentleman and his school been doing these thirty years whenever a disturb ance in the commercial world occurred, but ascribing these commercial disturbances to bank notes? What happened in 1825? There was then a commercial convulsion. Then it was pretended that the cause was the issue of notes by the country bank% Well, in 1337 there was again a crisis. That was attributed to the joint-stock banks issuing so many bank notes, and no one was more positive in that allegation than the right honourable gentle. man the member for Halifax (Sir Charles Wood.) In 1847 there was another crisis. What produced the con vulsion then, according to great authority, was the mismanagement by the Bank directors of the circula tion of their notes. In every instance capital was confounded with currency--in every instance they have attributed to the least influential form of credit conse. gneiices which could only be effected by the employment of credit and capital conjointly on a colossal scale,- and which no circulation of bank notes could, under any cii cumstances, ever roach. Now, sir, I will show this house, if it will permit, in this misapprehension also lies the cause of the diSleulty under which wo are now labouring, an •.1 in its solution alone shall we ever discover any efficient means of extricating ourselves from this perpetually re curring embarras- ment. It has always struck me as a very curious subject of inquiry, why men should persist in such a confusihn of ideas as always to mistake capital for cur rency, and to attribute to the leas powerful instrument the more influential results. It is also a very curious thing that in this country the two schools of currency. who agree in no single principle, are in accord upon one point. Th tt high authority to which the right her. gen tleman the Chancellor of the Exchequer referred (Lord Overstone), who does justice to the merits of bullion, and my hon. friend behind me (Hr. Spooner), who sufficiently esteems the merits of paper, both agree on the point that commercial convulsions are occasion° r or may be mate rially prevented, by the wise regulatioli of the circulation of bank notes. Now, I a aat to know the reason why people, differiug in every respect as regards the subject generally, should be in accord cn that point ? I think the fact may be accounted for, and I am of opinion that iu asccrtainin2; the causes of that agreement we may advance a step to wards ascertaining the means by which we may extricate ourselves from the embarrassments surrounding this un settled subject. ' When the resumption of cash payments took place in 1819 it was followed by a great-fell of prices, and that continued for two years or even more. Now, it was not at all surprising that those who suffered, and sharply, at that time, should have ascribed_ to the resump tion of cash payments, the great injury whicn they expe rienced, I believe that the resumption had nothing to do with the fall of prices, and I do not think there is a pro- Veal in Euclid more capable of complete deMonstration than that conclusion, although, as I have already re marked, I think It was most natural for a large body of commercial men to attribute their embarrassments to that cause ; and it was at that very time that the Birmingham school arose which has exercised a good deal of influence on these questions. Now, sir, this class of opinions has been predominant in this house ; all public men have accepted them; and I trace the origin of this opposite opinion to the bullion committee of lelo. I am sure that no one in this house would speak of the labours of the bullion com mittee but with that respect which all groat intellectual eflbrts and public services deserve; that committee vindi cated that great principle upon which the happiness of communities mainly depends, the stun lard of value. (Hoar, hear,) The bullion committee proved that au over issue of inconvertible paper might be depreciated, and in our case depreciated. I think a very fair argument might be urged to show that the price of geld in those days was raised by some other cause besides the existence of depre ciated paper ; but let that pass ; that our paper currency was depreciated, and that it was demonstrated to be so by the bullion committee, I think no fair inquirer can deny. But, sir, the bullion committe took place after all nearly 50 years ago, and I suppose that committee i s n o t an excep tion to the rule that time and thought mature the expe rience of mankin 1. It is not im p ossible that the bullion committee 50 years ago may have been incorrect in some of its conclusions. This is an age of progress, and any thing which happened 50 years ago has been :objected during the interval to great modifications; our commerce, our jurisprudence, as they were established 50 years ago, have undergone very great changes; and it is absurd to suppose that the bullion should have foreseen all the poe sible consequences even of the principles which they ad vanced and established, and that all the sharp experience which this country has gone through during the years that h ave since elapsed, all those great experiments in our cir culation, all those convulsions which have been the subject of endless Parliamentary inquiries, and all the new light which has been thrown upon the subject, It is, I say, absurd to suppose that the science of currency is exactly in the same state as it was when the report of the bullion committee was presented to the Speaker from that bar. Now, sir, the bullion committee was perfectly right in this principle that the inconvertible paper money of this country had become depreciated by over-issue ; but, sir, I think they rapidly and rashly extended that conclusion to bank notes convertible at par. Now, I hold that there is a distinction complete, and which can be established by argument and an appeal to facts, between paper money and paper credit, and that in convertible notes are paper money, and subject to depre ciation, but that bank notes convertible at par cannot be subject to depreciation, and to that position I beg to call the attention of the right bon. bart (Sir C. Wood) whom I now see making a note. I hold, sir, that by ample, com plete, and irrefutable evidence throe things may be proved —first, that notes convertible at par cannot be depreciated; secondly, that it is impossible to force their circulation— (boar)—and, thirdly, that for any issuer of bank notes, convertible at par, to price cannot be affected by a bank note circulation under such conditions farther than they would be affected by an equal amount of metallic cur rency. (EL ae.) I hold, air, that it has been shown by the labours of our committees, in the evidenee which they have taken—l hold that it has boon shown, in a manner which cannot be confuted, that there is a clear distinction be tween paper money and bank notes convertible at par, and that there is a law which regulates the circulation of bank notes convertible par, which prevents redundancy, which renders what people call the inflation of the circulation impossible—(hear)—and which renders a balance between the issue and reflux of the notes a matter of mathematical demonstration. Now, sir, there is I feel a certain difficulty in speaking upon this subject in what is, and I trust always will be, a popular assembly ; but, sir, the subject has suf fered because it has not been discussed in this house, and referred instead to Parliamentary committees. Perhaps therefore the house will bear with me while I shcrtly ex plain the principles which I think produce these effects. Now, sir, in the case of gold or paper money, and by paper money I mean bank notes which are not convertible, they are introduced into the market as a medium of payment ; they discharge their office, and when fresh pay ments are to be made, fresh gold,if it can be got, and fresh paper money, easier to be obtained, again serves as a medium of payment, but a bank note convertible at par enters the market, not as a medium of payment, but as a loan upon which interest is paid, and when the timefor that loan being repaid comes round, other bank notes must return to the issuer to effect that payment ; the consequence is that the issue and the reflux are always equal, and ie the long run the balance is always struck between them. (Severed hon. members were here observed to express dissent.) Now, sir, let us apply those principles which I have I know imperfectly expressed. Let us apply those principles to the effects which this country has had to eucouuter with regard to the issues of bank notes dur ing all these commercial convulsions that during 30 years have periodically prevailed. I'll take the issues of the coun try banks, which have already been referred to to-night. The commercial convulsion of 1825, allow me to remind the house, was alleged by the Minister of the day—and the alle gation has been r,pcated by his successor upon the Treasury bench at this moment— to have been occasioned by the over circulation of cotes by country bankers. Sir, upon that sub ject we have evidence which was not in the possession of the bullion committee, which carried on its investigation evi.h out half the advantage we now possess from statistical returns and inquiries—we have evidence before us presenting results which no man can resist, and which utterly destroys the theory which the right lion. gentleman opposite (Sir 0. Wood) has always supported. We have a return of the issues of notes by country bankers for a period of 25 years; that return is on our table, and let any hon. gentleman look over it, it in cludes the issues of hundreds of country bankers—between 700 and 800, I believe—and when he examines them he will at once see that there is some law which regulates the issues of bank notes convertible at par which is too strong to be re sisted by country bankers or governed by the British Partite meet. Yon will find, in the whole circulation to England supplied by hundreds of country bankers, that at a particular I cried of the year the circulation expands, that at another period of the year it is depressed, and at another, the middle term is effected; and as constantly that, these terms corm spend with the occupations of the people amongst whoM those notes are circulated : that in April, when the farmer— for it is amongst that class that the notes of country banks chiefly circulate —when the farmer, I say, buys stock, there is an increase of circu'ation : that at the end of the year, when agricultural pursuits are dead, the circulation fails, and after the harvest you will find the circulation equal. Now how is it possible to view these phenomena—for a quarter 12, 18N7. ' of a century the returns show them to have occurred with astronomical precision—how is it possible to view that rise inthe spribg, that si n ki ng i n winter, and that even condi tion in the autumn, without seeing that there is some law which regulate the circulation of notes much too strong to be influenced by Acts o Parliament I We do not possess much Information abo.it their own transactions from the country bankers; Vey are of all men the least likely to give it --they are naturally jealous and reserved. But their returns are upon the table of the house, and they completely prove that the issue of bank notes depends upon the wants of the com munity. If they were to attempt to force the issue of their notes, what would they be doing? Why, while they think they, are putting their notes into circulation, they aro hut lending their capital by means of such advances, and if these injudicious advances lead to a commercial convulsion, that convulsion cannot with any propriety be ascribed to the issue of bank lutes. The circulation of bank notes is currency, and I defy any banker to convert that currency into capital. Any cue may take and lock up the notes in his strong box ; that he may de ; and if he do, no ono will say that w so locked up such notes can have any eff:et on the circulation. So much, then, for these poor country bankers whose over issue of notes, according to the right hon. gentleman and the school of which he is so eminent a member, produced the con vulsion of 1825. Let us now look at the crisis which oc- • curred in 1837. The commercial convulsion of 1857 was produced, according to the school of the ultra-bullionists, by the over-issue of bank notes convertible at par by the joint stock banks. Look now at the evidence and documents which gentlemen who then made speeches did not possess. I know that I have an advantage over the gentlemen of that day, in availing myself of documents and evidence which did not then exist ; but the speeches that were then made operated on public opinion, and in effect became the foundation on which was based the legislation which followed. I come now to the issue of bank notes convertible at par by the j oiut stock 2. banks. Then we find that on account of the horrible sins of the psor country bankers, it was become necessary that we should have banks of a more authentic credit. 1113 country bankers had convulsed the country, and they had nearly severed the connection of America with th's country. What did tha honourable member for Halifax (Sir C. Wood) who is taking notes to-night—(a laugh) —do' then? He says that this is a great affair, this commercial convulsion. but I have found out the reason. Let me remind you what occurred when joint-stock banks were founded in this coun try. We have since heard so much of these banks having done great things, that they have accomplished such great disasters by means of their colossal credit, that hon. gentle men must not expect that joint-stock banks established in 1835 were of equal dimensions. But let me say that joint stock banks when established were of no mean character. There were at that time 107 of these institutions in the couu _ try ; they had a paid-up capital of 15,000,0001. ; and their subscribed capital was nearly ten times that amount. There were 478 branches and agencies of these banks pushed into every active town and scat of trade and seat of agriculture in England. They were esta' lished on the principle and with the idea, that they would make a groat profit by circula- tion of their bank-notes. What occurred ? When the coin- mereial convulsion happened in 1537, it was found that the eiren'ation of the joint-stock banks Lad increased. Between the year 1835 and 1837—that is, during the two years pre- ceding the convulsion—their circulation had increased by the amount of 1,500,000/. It was instantly said that the com mercial convulsion of England had been occasioned by that over-issue of 1,500,000/. There was a redundant currency. The fall of great houses and the disturbance of capital and credit throughout the United Statee and England wete attri buted to that cause. It was urged by the defenders of joint stock banks that their busluessitad really very much increased iu consequence of the demands of the public upon them ; bat these gentlemen wore not listened to. Cmn there be anything more absurd than to think that so great and important an effect as the commercial convulsion of 1837 could be oeca- sioned by so mean and pe .ty' a came ? But , let me remind you that these instances and these arguments were not. only a' one time prevalent but predominant in this house ; and it is because these • arguments, founded upon these .instauees, have been taken so easily that we have had the law passed in 1844 which, to the confmion and shame of the country, mu't, on every recurring emerge - nu, he suspended? Whit is the oint, then, with respect to these joint-stock banks ? It is but very - recently that, in the course of the examina tion cf witnesses by the same committee—a repetition of which the right lion, gentleman proposes to-night I find the right hon, member for Halifax sharply cross-exa mining one of the wituesscs who had advanced an opinion winch I belieVe to be a legitimate opinion, viz., that an over issue of bank notes convertible at par was impossible—the right boa, member sharply cross-examining him asto the over-issue of notes to the paltry amount of 1,500,0001. But it now turns out that this excess of issue was P oducei by deprivin till poor country bankers of nearly the whole. of their circulation, and not only that, but by affecting thi br.tneh bairks of the 'Bank of England to no incon:ide'able aniquut. So that over the whole of this country, :,fter the additi n to it of 1, r 500,000/., the aggregate circulation in that year was a'ssolutely diminished. Who can think, after evi dence of thatkintL of supporting a timer/ which I think t' , e Chancellor (4the Exchequer to-night Fas cast to the winds ; but yet it is a theory which is supported by the law that he recommends the Sovereign to suspend, and by the reappoint ment of that committee which he suggests What can evi dence do more that has not - been done by the events which occurrel in rogsrd to join'-stock banks, whose over-issue, as it was allege I, of a million and a half, had occasioned a con vulsion in England and Europe. At that time there were failures of joint-stock banks for 1,500,0001.; but .what was their issue.? There wa4 one bank, for instance, the Northern and Central J..int-Stock Dank, which failed in 1837 for a large amount, but their issues were only 30.000/. in notes. It was that paltry issue, however, of 30,000/. which cause i the convulsion, and not the injudicious, improvident, and unprincipled advancesi to the extent of 1,500,000/. (Hear.) What has occurred at the present day ? Look at the join- stock ba,. ks iu Scatland England which have scspended; many of them wee not banks of issue at all, and some of 1 them, with a liability of a million, had been issuin; to an amount which was perfectly contemptible. In fact, the notes sent into circulation by these banks have produced no effect upon those five portentous years to which I have been calling your attention. The right hon. gentleman proposes an in quiry into the case of the Scotch and Irish banks, and the operation of the law of 1845 ; and to that I have no objes.- Um). But If. you look at the circulation of the Scotch banks you will find an important illustration of the principle for which I have been contending. Since the year 1820, in that country where banking facilities and the employment of bankn„, ,, capital and credit is so great, we find that the notes in the hands of the public have every yoar,bcen dhninishing. And at this momout I doubt whether the amount is so great as it was when that great development of banking took place. I have now shown you that with regard to the circulation of the notes of the country bankers in 1825, and tho notes sent into circulation by the joint-stock banks in 1837, there can be nothing more futile than to suppose that the convulsions of those years were attributable to such causes. Let us come to 1847, when the only victim on whom the calamities of the country could be placed was the Bank of England , and when the only cease which could be alleged for its misfortune was ' the mismanagement of their notes in circulation. ' Oar expe rience of that year entirely proves that the directors of the Bank of England have not the least controlling power over the circulation of their notes ; for, in 1847, when this crash o curred, and when there was a withdrawal at the beginning of the year of bullion to the amount of 7,000,0001., the notes in the hands of the public remained at exactly the same amount. Later in the year, when the crash occurred, and when the law was suspended, there still remained in the hands of the public —how locked up or disposed of is not recorded—the same amount of bank notes, When you talk of over-issue, and of the power of the Bank directors to force the circulation of their notes, let me remind the house of what occurred in 1847 with respect to ' the commercial circumstances of this country. In 10 years you have doubled your exports and imports, and in these 10 years you have not added one bank note to the amount in circulation. Tho whole of the bank notes in circulation in 1840 and 1847—1 am speaking from memory, but sufficiently accurate for our purpose--was about 40,000,000; and in the last return which I have F eon for 1855 (and circumstances have occurred since then which favour my argument) the whole of the bank note circulation of England was 39,000,000/. All this proves that bank notes are in a certain sense falling into disuse ; and the truth is, that no doubt we have arrived at such facilities of communication—the daily post, the elec tric telegraph, and other circumstances —as render that kind of accommodation no longer so important as it was 10 years ago. Now, sir, I hope this house will believe that, with the views which I have attempted to place before it, I approach the consideration of the illegal suspension of the Bank Charter Act by the Government with no prejudice whatever. 'I am not one of those who suppos3 that a disturbance of the capital credit of a country like England will be at all peen niarily affected by the circumstance of their having a limited I circulation of the notes of the Bank of England. Bat, sir, it is impossible, in my mind, to resist this conviction, that the act of 1814, which, after all, was an act only to regulate the circulation and the issue of Bank of England notes, was an act drawn up in deference to those fallacious principles re specting issue which have so long and so fatally prevailed in the country.; that tho provisions of that net were framed in deference to those mistaken views ; and that, in con sequence of the deference to those mistaken views, that act has exercised aggravating influence upon the commercial distress which has recently prevailed. Sir, I believe that to be the case. A great objection to that act in my mind is that it paralyses circulation. Circulation, which should at all times be active, and. especially active at a tuna of commercial alarm, becomes stagnant at the very instant when those cir cumstances of apprehension arise. That act, I believe, ope rates upon circumstances, however different, in exactly the same manner. Whether you are dealing with a foreign drain, or with a domestic drain, occasioned by panic, the action of the Bank Act is exactly the same. While at one instant it is perfectly competent to control foreign interference, the very moment when there is any alarm, the Bank acknowledges that it is itself subject to terror, and it feels and increases the very confusion which it shares. Now, sir, at the bottom of ' all this, in my mind, the misapprehension that there exist d in the minds of the framers of that act, as to their residing in the Bank any power which regulates the issue of bank notes. They assumed as a truth—what I think can be proved to be erroneous--that it was possible for any issuer of notes to force his circulation. But, sir, if the principles which I have attempted to recommend to the consideration of the house are founded in truth, we need no longer argue as to whom a distributoiy power is to be entrusted of bank notes convertible at par, because it is impossible in my mind to be'ievo that that power of distribution would be abused. However, that is a point to which this house must direct its attention. (Hear, hear.) Now, sir, I find hon. gentlemen coming forward who propose nothing, or who are about to advocate opinions which are not maintainable either by ar gument or by facts. I think I, ou the other hand, have taken a course which is the Parliamentary one, which is the -legitimate one, .which is, I maintain, the meLlerate and proper one. (Hear.) As for legi slatin g before Christmas is absurd t u l le , e o n p a i r q s t u es t Ministeri on o f t h h it s k o i l n f d, wouldit i embarkt u o p s o u n p s p u o c s l e l a tl i i i a u t n e d v e e r n , taking. But I ask the house to-night to come to a resolution conclusion,ared t oco t e h to a w p h i i . c e h ei wi pit i a l t s o ho co w that though o Nv u o g h w can we arrivea re no a t t p th r i e s p due season, after duo deliberation, we will scl iress ourselves the materials for legislation are in our possession, and that in to the solution of thi s great public diffi.culty. (Cheers.) I would say ono word with res p ect to the conduct of the Bank of England. I understand, sir, and I have been told in the course of the last speech but one of the Chancellor of the Ex chequer, that all the directors of the Bank of England are in favour of this measure—that they are in favour o • the Act of 1 1844. Now, sir, I should not wish to speak of the directors of the Bank of England in any other terms than in those of the sincere respect to which they aro entitled. 1 think it is a very utd, of such an h so gr eat thing for the people of En g land, and for the City of Lon don,w that a body of men of such i n t elligence and public it s pirit can be ieduced to undert a ke the , management i ns tit u tion as the Bank of Eng'and, and who can condu c t t h emse lves with so great firmness, d , I ni ,y ai gr eat liberality. But if an attempt be made t o i n fl uence pub e ltihceoßpiannikondiirnetchtoisrhs, I ous a e m by appealing to the great authority they will permit mo t o a d ver t of to some circumstances, not iu a hostile but in truly • dl ra t io spirit, n o w f l t t h ic e h h l ou th s i e n , k no o t ug in ht o t rd o e b r e bro h ' a tr , t beton) the consatle to deprave the Bank directors of their due influence upon ou r debates, but which I think shduld be placed bef ore th e h ouse, not in an exaggerate I light, but in that calm tone to which they are entitled. Now, I do not know whether hon. gentlemen have read the evidence that was taken before the committee on • the Bank Charter Act which sat Once last year. Perhaps since this catastrophe has loccurred they have duly digested those important nistters. (Hear.) But a second volume has been published; which it is very probable they may not have read. It is the most entertaining volume in the world—although it appears under the repulsive title of an appendix. Indeed it somewhat re sembled notes which were hoarded up by the Bank directors —it was not-put into circulation until a very critical moment. (A, laugh) This volume contains the opinions of the Bank delivered in 1856, upon the Beek Charter Act. The Chan cel'or of the Exchequer, wishing to obtain the best informa tion from the best quarters, addressed a circular to the Bank directors, asking them to favour him with their opinion on tho merits of the Bank Charter Act. I did not bring the volume down with me, thinking it might weary the house ; but I cannot have mistaken the character of the circular ; this was at least the cream of the communication. There is no doubt that the Bank directors, or a very largo majority of them, did express (with one exception) their opinions in favour of this act. But the directors as a body were not contented simply to agree in their adhesion to this measure. They lifted up their voices and said—They were in favour of the Act of 1814 ; they acknowledged that what occurred in 1847 was a rather awkward fact in history, but their lan guage was that of undiluted panosyrie, they were not the less sanguine, because it was totally impossible that events liko that of 1847 could ever happen again. (Cheers.) And in the same simple, satisfactory, and all-convincing terms a gentle man--formerly a member of this house for Southampton, and now, I rejoice to say,l a country gentleman of Bucking hamshire, Mr. Hubbard, a late governor of the Bank of England—said that the rules of banking are now under i stood. (Laughter.) " In 1847," ho said, we did not understand our business; but we so completely understand it now that we may dismiss 1847 from our memories as a hideous dream. Let 1847 no longer disturb the slumbers or awaken the inquiries of a Chancellor of the Exchequer ; that can never happen again ; we now understand the true prin. ciplee of banking. Tho Chancellor of the Exchequer is going down to Parliament to propose a committee just to amuse the country, but rest your confidence on the Act of 1844." (Laughter.) Well, sir, it is a most remarkable thing—and I think the Chancellor of the Exchequer owes an explanation to the Bank directors of the circumstance that these prophe cies were not published till after the suspension of the Bank Act. It appzu 's that a book has been printed, which is a folio volume, and that great expense has been incurred ; but think that even if the members of the Government had sub scribed amongst themselves they ought to have paid the ex. pense, and withdrawn the book from circulation, and thus have spared their friends this act of malicious kindness. No thing, sir, but a high sense of public duty has induced me to bring forward this subiect, and to call the attention of the house to it. It is with great satisfaction that amongst the other letters I do not remark the signature- of a member of this house, who, upon this subject, has frequently addressed the house with that effect which his thorough knowledge of . the subject and his accomplished eloquence naturally pro duces. The hon. member for Huntingdon was, I believe, at the Baths of Kissingen when this circular was issued, and on behalf of this house and the country I offer him the most sincere congratulations. (Laughter) In taking this objec. tiou respecting the Bank directors, I wish to make one remark of a more serious character. As I hope that tho committee will receive its death-blow from this debate —(hear, hear, and laughter)—l will venture to ex press my opinion that the three great conclusions to be drawn from the arguments and from the facts which I think are satisfactorily established by the evidence which we have before us, are these :—I think it is by the evidence conclu sive y shown that in the first place the directors of the Bank really exercise no more control over the circulation of their notes than the members of this louse do. (Hear.) I believe what is called the mattag• ment of the circulation of notes by the Bank directors is a misnomer and a delusion. (Hear.) Secondly, I t ink that the directors of the Back of England have a great duty to perform, not only to the nation, but to themselves. The management of the Government securities is a subject of more infinite importance' than the circulation of bank notes. s he wealth of the nation is affected by the regularity of the rate of discount, and in the d'scretion iu . which advaeces arc made, so are benefits exercised over the fortunes of this country. (Rear, hear.) Thirdly, it does appear that it has become a national object, which statesmen shall accomplish, that there shall bo in the Bank of England a great treasury, which shall be at the command of the directors in moments of emergency like those which have recently occurred, and when it shall be in their power not' only to assist commerce, but to insure sufficient currency for circulation, which shall be a med um of exchange, so that those interested in the pursuits of commerce shall not • find themselves in that desolate position in which they have lately been placed. I have endeavoured to-night to draw this subject out of the limited sphere of select committees; and the inquiry, I am convinced, will not be injurious to the community, however injurious it may be to our characters, if'we evade any longer a statesmanlike settlement of this sque-tion. This question is entirely exhausted 1 y select committees, though no man can esteem higher than I do the select committees of this house. They contain a nest of information, a power of research, and an irresistibility of argument, which no other country can produce or attempt to rival. The question of the currency is one which a select committee could alone en tertain ; it is one not only as to which they have to pursue research, but to exercise judgment. They not only accumu late information, but they have the power of cross-examining witnesses, which this house cannot exercise. It is therefore of the highest importance, when qrestions relating to the great institutions of the country—which aro of a complicated character, and dealing with vast interests, and also in detail —arise that they should not be investi g ated by this house, but referred to a select committee. But for a long and con• siderable period I have thought that the question of the issue of bank notes by the Bank of England has received a suffi cient and ample investigation, and all which it deserved. I am not supposing that upon the principles which shall regu late tee issue of bank notes this house will immediately come to a unanimous opinion, or that that opinion will be carried here by a largo majority, but the way by which we shall conic to an overwhelming opinion, if not unanimous, is by a discussion in Parliament, for which I believe the question is now ripe. (Hear, hear ) The labours of a committee of inquiry, however valuable they may be, exercise no influence over the feelings of the people out of doors. The questions asked by the committee are so immense, and the variety of detail is so great, and the authorities referred to so numer ous, that it requires men who have leisure time at command, and not only chat, but penetrating mindsss`who can arrive at a conclusion sufficient to guide public opinion. But the Is. bones cf a committee, though they have exercised no influ ence out of doors, they do so iu this house. (Hear.) In my opinion wo shall be taking a course which will not only tend to depreciate bank notes, but the character and influence of Parliament if we, year after year, and convulsion after con vulsion, leave any longer the discussion anti settlement of his r.) I rpri 'e c c o hl z oa t a v r his cslipilst)tuei' st, injurious, h andat o t l t i e l alar discussion Par liamentary at u 4tord t°ul question. tri s so i t i n t . j n e c e ( t i s do debate upon it should not bo encouraged, but even, if possible, prevented, and that we should rest upon the conclusions wo have before us from the committee. I am surprised that a man of so much eminence, and so cap able of maintaining his opinion, and, besides, a man who is a Peer of Parliament, should give such an opinion upon the proudest privilege of Englishmen, and, as I believe, one the beneficial exercise of which cannot be over-estimated. (Hear, hear.) Sir, I hope the time has arrived when we can come to a safe and satisfactory solution of this question; but I sin sure, whatever 'rsey be the consequences, I am only acting rightly when I recommend the house not to delegate their functions to a select committee, but to show to the country and our constituents who sent us here that we are equal to the fulfilment and discharge of those duties which are brought before us. (Cheers.) Mr. CARDWELL intended to vote for the inquiry asked for by the right hon. gentleman the Chancellor of the Ex chequer. How stood the ease ? In the course of last ses sion a committee of inquiry was appointed to investigate the subject, and that committee had not as yet made its re port. And what had happened in the interval to render it less desirable that the committee should continue its in vestigation. Tile committee, when they separated, were about' to inquire into the question of the country banks, into the question of the issue of Scotch and Irish banks, and into the interesting question of the relations be. twecn the Government and the Bank of England. Well, what had occurred in the meanwhile, to render the investi gation of these questions of less importance. (Hear.) They - I had been told that the doctrines of the "bullion committee" had laid the foundation of most of the misfortunes that had afflicted England within the last halfcentury. Now, he would submit that the labours of Mr. Horner and Mr. Huskisson ought not to bo overthrown quite so lightly. Tile real diffi culty they had to consider was the new use of commercial capital open to the public, as well as the new abuse of corn mereiel credit. He alluded to the extraordinary amount of money now held in single hands, not, as formerly, as depo sits in the hands of bankers, to be availed of by them, but in the hands of depositors, to be used in order to influence the markets. Three charges had been urged' against the act of 1844. The first was thatit created a limit and consequently that it created a panic ; secondly, that it exposed the coun try to inconvenience in establishing the same fixed rule as applicable to distress when caused by a foreign and when caused by a domestic drain ; and, thirdly, that it imposed an unnecessary fetter upon the commerce of the country. Cor tain'y he would admit that the act of 1844 caused a limit ; but then ho was prepared to contend that it did not cause so terrible a limit as the act in force in 1826, 1837, or 1839. No; the simple effect of the act of 1844 was to compel the Bank directors to take measures for curtailing their issues, while the bullion was still in their coffers. Could anything, he would ask, be more exemplary or remarkable than the position of Irish banks throughout the crisis ? (Hear, hear.) Yet what was their position in the year 1826 Why, with the exception of three or four, every bank in Ireland failed. It would, indeed, require a committee to sit many years to establish the doctrine that the converti bility of unlimited currency was incapable of mismanage ment. (Hear.) The universal failure of the banks of the United States in 1837 and 1838 showed the direct connect' on between an unlimited issue of paper and the horrible catas trophes that then occurred. But it was asked, why not rest a discretionary power in the hands of the directors them selves. Now, was it so certain that the bank directors would, accept so great a responsibility ? Remember that the direc tors of the Bank of England were almost unanimous in sup portingo ask le was s r this,the ought not they to inquire how far it was possible the act of '44. What he was i nclined t Bank of England to be responsible for the advance of capital if it could exercise no control over its issues He believed that if they were rightly to assess public opinion, they would find there was but a very declining feeling in favour of a con vertible, unlimited currency, which in the years-'26, '37-'39, was found to be comparable with so large an amount of com mercial suffering. The right hon. gentleman having reviewed especially why those ' the circumstances of the present times, asked whether there was any reason why they should not pursue the recommends investigationsi o u s f t e coni sh m ou it ld tee no o t extend fthe last ttoyeasre Aland ? If th ose re commendations were set at nought, the inevitable result would be the recurrence of further disasters. He trusted, therefore, that the course which the house adopted would lead to the arsrmation of a principle from which the country had derived inestimable advantages. Mr. GLADSTONE said that. havins , heard the speech of the right honourable gentleman who had just sat down, be felt persuaded that thi s coun t ry would be adopting a r:t r° ' spectivo step if he I had followed out the suggestions he had offered. What was the doctrine propo un ded on the currency by him—a subject on which he was pure light and reason ? H o had stat d that doctrines had been diffused wwhich had thrown ovea those of Ifuskissen and others, on whom the greitest c chance should be placed, and he had added that if the investigation ware referred to a committee, those propositions would be negatived. llteh(:tiia. Gladstone)committee inverted his propositions, and thought thos; doctrines. He would in a very short sitting affirm all s the doe thought the right hon • gentleman wa endangering •asking the trines of which he was so strong an advocate,. in, ' house to go hack to a ratificationofthno t ric e s of which the unsoundness, He hon. gentleman had demonstrated . unsoun , being therefore firmly convinced that the (11r. Gladstone) .1 ed before 1814 was radically unsound system which prevai and clangorous , that was of opinion Nvo ought not, w ith ou t v ery strong reason, to return to that system. There were, he thought, specific grounds ou which the house ought now to proceed, fix ho believed the Parliament of England ought now to tell the country plainly what it thought of the act of 1814. His reason for that was that he felt satisfied that the act of 1844 could not stand as it was. That act as e xperience has shown,' required alerations in or d er t o obviate difficulties and dangers which if left without a remedy would peril the principles of the alt itself. On two occasions they had sec n