The Sun. — London, England, 1857-12-05 00:00:00

IMPERIAL PARLIAMENT. HOUSE OF LORDS—(YEsTimply.) • The LOBE CIIANCELLO3 took his seat on the woolsack M five o'clock. THE BELFAST RIOTS. Viscount DUNGANNON gave notice that on Mon day next he intended to ask the President of the Council whether the report of the evidence, taken by the Com missioner, who recently sat at Belfast, was likely to b e presented to their lordships. INDIAN NEWSPAPERS. The Earl of ELLENBOROUGH gave notice that on Monday next he would move that there be laid on the table a copy of the Arms' Act lately passed by the Legislative Council of India ; also a return of ail native and European newspapers licensed under the Act of the Legislative Council up to the 29th of June last, together with copies of all letters of warning addressed to the editors of such native and Eu ropean newspapers, of all revocations of the licenses of newspapers, and of all correspondence with regard to the restriction of such licenses. RELIGIOUS WORSHIP ACT AMENDMENT The Bishop of OXFORD asked if it was intended to press this bill to a second reading on Monday next. The Earl of SHAFTESBURY said he should state the principles of the bill on Monday, and postpone the second reading till a future day. Their lordships then adjourned. HOUSE OF COMMONS.—(YESTERDAY.) The SPILLIUR took the chair at 4 o'clock. BEVERLEY ELECTION. The SPEAKER announced that he had received a communication horn the examiner of recogeisances, stating that the recognisances for prosecuting an in quiry against the last return for Beverley were unobjec tionable. THE PATRIOTIC FUND AND RUSSIAN G UNS. Lord ALFRED CHURCHILL moved for returns of the amount contributed by each of the colonies respect ively toward the Patriotic Fund, distinguishing the sums voted by their different Legislatures from the amounts fur sighed by voluntary subscriptions ' • and, of the number of Russian guns taken during the late war, which have been distributed as trophies amongst the different colo nies, specifying the number sent to each colony.— Agreed to. EAST INDIA (BISHOPS AND CATHEDRAL ESTABLISHMENTS, &c.) Col. SYKES moved for a return of the annual eetpeu diture for Ecclesiastical objects in India, at the diffe rent presidencies, from 13364337 to the latest period, under the several heads of bishops and cathedral esta blishments ; number of regular chaplains ; number of uncovenanted auxiliary chaplains ; coat of building churches; cost of grants in aid of church builling ; allowances to Roman Catholic chaplains; and miscella neous expenditure.—Agreed to. EAST INDIA (MILITARY FORCE.) Sir F. SMITH moved for a return of the actual mili tary force that was i❑ India at the time of the outbreak of the mutiny at " Meerut ;" distinguishing the several branches of the service, Cavalry, Artillery, Engineers, and Sappers, and Infantry ; and distinguishing the troops of the Queen's service from those of the East India Company ; showing, also, as far as can be ascertained from documents now in the hands of the Government and of the Board of Control or East India Company, the stations at which the troops were at the time of the outbreak of the mutiny severally quartered. —Agreed to. TRANSMISSION OF TROOPS AND STORES. Sir DE LACY EVANS gave notice of a motion relative to the transmission of troops, &c., to India, but he spoke in his usual low tone of voice, and was conse quently inaudible in the galleries. ENDOWED SCHOOLS (IRELAND). Mr. GREER asked the Chief Secretary for Ireland whether the report of the Commissioners of Inquiry in regard to endowed schools in Ireland had yet been given ; and, if noi, when it was expected to be ready. Mr. H. HERBERT said that the report had not yet bean sent in to the Government but he expected shortly to receive it. ECCLESIASTICAL COMMISSIONS BILL. Mr. KNATCHBULL HUGESSEN asked the Secretary of State for the Home Department whether it was the intention of the Government to re-introduce the Ecclesiastical Commission Bill of last session during the present session. Mr. MASSEY said that such a bill would be introduced in the other House of Parliament, but he was unable to say whether or not it would contain the provisions of the bill of last session. HIGHWAYS. Mr. KNATCIEIBUI:L-HIT GESSENasked the Under Secretary for the Home Department whether it was the intention of Government to introduce a bill for the amendment of the law relating to the management of Highways during the present session. Mr. MASSEY said that he should introduce such a bill next session. TELEGRAPHIC COMMUNICATION ;WITH --- EGYPT AND INDIA. Mr. CRAWFORD asked the First Lord of the Trea tory whether any arrangements had been made, or con. ventiona entered into, by or on behalf of her Maj:isty'a Government, with any companies, individuals, or foreign governments, for establishing telegraphic commu nications with Egypt and India ; and whether any negotiations were now pending, and with whom, in reference thereto, and, if any had been terminated, would he state the terms. Lord PALMERSTON said the Government had been in communication with Austria on the subject, but the conditions required by Austria were such that Her Majesty's Government could not with propriety agree to them, and therefore negotiations had been dropped. (Hear, hear.) The conditions were, that Her Majesty's , Government should engage to use no other line but that in their communications with In dia ; and, also, that this country should undertake to continua the line from Suez to India ; that the British Government declined to agree to. He hoped Austria would be induced to adopt a line of communi cation through her territory, and it so, the Government would be ready to pay for the use of the line in such a manner as might be agreed to. The Turkish Government proposed to establish a line of telegraph from Constantinople or a point on the opposite shore to the head of the Persian Galf, with the hope if the line should be established that the British or In dian Government would carry it on from that point to Kurrachee. (Hear, bear.) REWARDS TO INDIAN OFFICERS. Colonel NORTH asked it the officers who had received titles from her Majesty, and the widow of General Neill would be called on to pay the usual fees. Mr. WILSON said they would not. Three years ago it was arranged that such persona should not be called on to pay fees. The officer& engaged in the Crimean war, rewarded in a similar manner, paid no fees, and the same course woul I now be adopted. (Hear, heard ARMY WARRANT, 1854. Oa the motion for the adjournment of the house, Gen, PEEL asked the Under. Secretary what was the result of the Government inquiry on the army warrant of 1854, and what steps had been taken in consequence ! Sir J. RAMSDEN said that, in consequence of the Indian disturbance, the department to which it belonged had not been able to direct its attention to the subject, bat he hoped shortly after the recess to be able to gi►e au answer to the question. After some remarks from Col. NORTH, the subject dropped. 'VOTE OF THANKS TO THE INDIAN OFFICERS. Sir DE LACY ETANS asked the Government when a vote of thanks of the house would be proposed to those officers who had so gallantly distinguished themselves in India t Lord PALMERSTON said he was unable then to name a day. He would give due notice when it would be proposed. ENGLISH ENGINEERS AT NAPLES. Mr. MILNES called the attention of the Govern- Meat to the apprehension and detention of British engineers found on board the Cagliari by the Neapolitan authorities. Lord PALMERSTON said that full inquiry had been made into the circumstances, but the Govern ment did not consider themselves called upon to interfere. These individuals had been taken in an apparent violation of the Neapolitan laws, and her Ma jesty's Government had no right to say they should not be-tried for that offence. One of the most eminent Neapolitan counsel had been appointed there, and so far as things now stood, her Majesties Government had no cause of complaint against the Neapolitan Government. - VIE ADDRESS. Mr. W. MARTIN brought up the report on the alms. After a few remarks from Mr. PACSE, The report was unanimously agreed to. THE INDEIINITY BILL. On the motion of the Chancellor of the Exchequer the house resolved itself into a Committee to consider the Bank Charter Act (7th and Bth Vic. cap. 32). _ _ Mr. FITZROY in the Chair. This Act and the Royal Speech having been previously referred to the Committee, the Cbaiimau read the pas. sage in the Royal Speech relating to the subject. The CHANCELLOR of the EXCHEQUER then B MA—I rise for the purpose of bringing under the atten. tiO° of the house the question which, as has been stated in the extract frointhe gracious Speech from the Throne, has led to the assembling of Parliament before the usual time. In order that the Committee may fully understand the nature of the act of her Majesty's Government which has induced the directors of the Dank of England to in fringe th e provisions of the statute, and thus:: rendered it obligatory upon me to ask the house to give its consent to a Bell of Indemnity , it will be my duty t o ca l l their attention to the existing state of the law. Sir R. P ee l, i n tha coarse of his long political career, induced the Le gislature to a gree to two important Acts relating to the currency, which were in point of time se parated from each other by a quarter of a century. The first of.theae Acts, as is well known to the Committee, was passed in 1819. It restored the currency to its proper metallic hoojes-put an end to the state of things existing durin and war ---a state of suspens i on o f specie payments, established the convertibility of a bank note. After that Act had been passed the power of the Bank of England to isime notes was unlimited in point of extent. They were only subject to the condition of being payable in gold on demand, and the power of establishing country rHE SUN LONDu banks was ales unlimited, subject to the privilege which ' then existed in favour of the Bank of England from the practice in reference to 6 partners. These banks when es tablished could create any quantity of hank note!. The same power existed both in Ireland and Scotland. Any " person could under that law establish a bank and issue notes payable to bearer on demand, provided only that. those notes were paid in specie on presentation at the bank. That was the state of the law from 1819 to 1844, the date of Sir R. Peel's second important Act on the currency. That second act, he stated to the house, was to be considered as a complement of the first ; he in- ` I tended it to secure, in fact, that convertibility of the note which was made legal only by the Act of 1819 ; and the provisions which he introduced were to the following effect :—ln the first place, he enabled the Bank of Eng land to issue notes on securities to the extent of 14,000,0001. together with any further sum which might aecrue from the lapsed circulation of the English coun try banks, as to which some detailed provisions were in troduced into the Act. An order in Council under those provisions was passed about two years ago, authorising the Bank to add to that portion of its tissue which rests upon securities the sum of 475,040/. Therefore at pre sent the issues which the Bank of England can make , upon securities—and it is not allowed to make any issues except upon Government securities—is 14,475,0001. In addition, the law allows the Bank of England to make an amount of issue equivalent to the bullion which may be in its coffers. The Act of 1844 further introduced a provision which seems to me, although in some manner connected with them, yet to be essentially different in its character from the other provisions—l mean that for dividing the Bank of England into two departments, the issue and the banking department. Gentlemen who are familiar with the mode in which the weekly returns of the Bank are published, are aware that the assets and liabilities are always classed under those two divisions. I shall presently have to call the attention of the Com mittee to the practical working of that system with reference to the measure to which I am about to ask their assent. I should add that with regard to English country banks the Aot of 1844 contained this important provision,—it prohibited any bank which might after the passing of that Act be established in England from issuing bank-notes. It limited, also, the note issues of the existing banks to the amount which was then in circulation, It contained no pro vision requiring them to issue notes on securities, nor did it allow them to exceed the fixed limit by issuing notes against bullion. Therefore, under the Act of 1844, the condition of the English country beaks is this :—No new country banks can issue bank-notes at all, and the country banks existing at the time of the passing of that Act are limited in their issue to the cir culation which they then possessed. In the following year was passed an Act with respect to Scotland and Ireland, which was intended as a part of the same mea sure. Its effect was to limit the existing banks of Ireland and Scotland to their then issues, as in the case of the country banks of England. It did not require that those issues should be guarded by securities of any kind, but it authorised them to make issues in excnss of their certified circulation against a deposit of bullion. Therefore, in Ireland and Scotland there is a certain amount of paper which is limited under the Act - iu addition to which the banks issue a certain portion against sovereigns. The committee ought to bear in mind the practical result of this compound system upon the circulation as it exists at the present moment. On the 11th of April last the notes of the Bank of England in the hands of the public amounted to 19,752,0451. At the same date the note circulation of The English country banks was ........... The Scotch banks 3,832,000 The Btnk of Ireland And other banks in Ireland Total Adding that amount t• the circulation of the Bank of England, we may take the paper circulation of the United Kingdom to be in round numbers about 38,000,0001. Of that 38,000,0001. the only portion which is strictly covered ty bullion is that which is issued by the Bank of England in addition to the 14,475,0001. which they issued upon securities. The whole of the cironlition of the English country banks and the chief part of the circulation of the Bank of Ire land and the Scotch and Irish country bank■ is, so far as the law is concerned, not represented by bullion. The security which the law takes fcr that portion of the circulation is the legal convertibility of toe note—the liability of the banker to pay in specie when the ncte is presented. That is the existing state of the circulation under the different Acts which regulate our currency ; and it is essential to bear in mind, with reference to the solvency of the Bank of England and the importance of keeping a large bullion reserve in that central etabli-h -mento the considerable amount of the provincial issue. When Sir R. Peel introduced the mea.ure of 1344, he stated one of the main objects which he bad in view was to provide security against the excessive issue of paper, ' and thereby to guard against the recurrence from time to time of those commercial panics under which the coun try had at different intervals suffered previously to 1844. At the same time he stated that he did not propound his measure as a panacea, or as an infallible guard against such panic, because he said that the issue of bank paper was only one of their causes, and he recognised the fact that commercial panics might arise from causes which did not lie within the scope of his legislation. But in 1347, after the commercial crisis of that year, when it became requisite for the Government to authorise the Bank, if the necessity should arise, to exceed the limits fixed by the Act of 1344, Sir R. Peel, in the di,cussion which arose, delivered his opinions more fully on the subject than he had previously done, and he gave a definition, corrected by experience, of his own views as to the objects of the Act of 1844, which, as it contains an authentic exposition of his opinions, I trust the Com mittee will permit me to read. Si► R. Peel, upon the 3d of December, 1847, said : " I say, then, that the Bill of 1844 had a triple object. Its first object was that in which I admit it has failed, viz., to prevent, by early and gradual, severe and sudden contraction, and the panic and confusion inieparablo from it ; but the Bill had two other objects, of at least equal importance—the one to maintai n an d guarantee the convertibility of the paper currency into gold, the other to prevent the difficulties whim arise at all times from undue speculation being aggravated by the abuse of paper credit in the form of promissory notes. In these two objects my belief is that the Bill has completely succeeded. My belief is that you have had a guarantee for the maintenance of the principle of convertibility such as you never had before ; my belief also is, that whatever difficulties you are now suffering, from a combination of various senses, those difficulties would have been greatly aggravated if you had not wisely taken the precaution of checking the unlimited issue of the notes of the Bank of England, of joint-stock banks, and private banks." That was Sir Robert Peel's definition of the act after he had become aware of the events of 1847. I may also call attention to the remarks that my right hon. friend near me (Sir C. Wood), who then held the office which I now hold, made upon the measure then brought before the house, as showing that in his view the act was never considered as a specific against commercial panics. He said : " A complaint has been made that this act has not pre served us from commercial convulsion. I think that those who expected such an effect from it much miscalculated the motives by which persons engaged in commercial trans• actions are actuated. Certainly, for one, I never held out any such expectations to the country. I stated most dis tinctly that I did not contemplate that such would be the effect of the act. . . The same effects precisely might have occurred under a metallic circulation as have occurred under our mixed currency, and the advocates of the act of 1841 never professed that its operation would produce any other result than that which might have happened wider a metallic circulation." I think that this reference will satisfy the committee that the authors of the act of 1844 did not contemplate its proving a panacea or a cimplete guarantee against the occurrence of commercial crisis, which are pro iuced by a variety of causes on which no legislatiou,and certainly no legislation confined to the currency, could operate. I will now briefly advert to the peculiar crisis of 1347. It was described by my right hon. friend in moving for a com mittee on the sabject as being caused by the ab;erp• tion of available capital for the purchase of corn and the construction of railways acting upon a very unsound state of commercial affairs. It arose from internal cau:ee, from an internal demand for a large and exr.raordirary amount of capital, and had no connection, as iu the case which we are now considering, with our foreign trade. In 1847, as in the present year, her Majesty's Government, considering the urgency of the commercial crisis, came to the conclusion to issue a letter to the directors of the Bank, authorising them in certain con tingencies to exceed the limits fix-d by the law. The cause of issuing that letter was stated to be the want of confidence in the commercial classes which then existed, and its otject was also defined to put an end to the present alarm. Although the cause of the panic in 1347 was different from that of the panic of this year, yet the object aimed at by the issuing of the Gavereineet litttr is thte.e two years was identically the same. The Banlc directors, however, did not find themselves under the necessity of overstepping the law of 1847. Confidence was re-established by the issuing of the letter. Its in tl tierce upon the commercial classes was lam:ladle' e, and the Bank directors were enabled to navigate their ships through their difficulties without exc?edieg the limits of the law. Nevertheless, Parliament was assembled before the usual time. Toe at teetion of Parliament was celled to the matter by her Maje:ty'a Speoee L a: as no Indern n.ty Bill was required the direct aesetit of Parliament to a bill was not obtained. Nevertheless, a committee of inquiry into the Act was appointed upon the motion of my right hon. friend. That motion gave ri e to a debate, but I believe it was unauinaouly asseoted te by the House. Sir Robert Peel, who was the author of the Act, expressed himself iu terms the most uriatn bigueus, in approbation of the sanction which bad been given by the Government to the suspension for a time i.f the limits fixed by the Act. I sha 1 quote some of his words on that oNiasion, azid I think is is of imporlacce that the committee should bear them in mini, inasmuch aii,the distinctness with which ha spoke proves that be, upon the policy Nevi either as certainly better qualified than any other pt r on ott:t,hieluiallttewoprh t:ni;ettnho there ar this n occurs.ll o l u ia s e e s , staa t it o de speak with authority of the Act, was satisfied of the pri,priety not b 3 reasoned witt -zee 12g cannot he foreseen or : hen panic --a state which power to prevent the cense tinst by law—which or n • Government must asinine a There is the necessity for a dilcureett'ces which may occur. w th a i s nk bot w te a r s properly e ion which I xercised in th e present inataiica• It to authorise a violation of the law than to ruu the risk of the consequences which might have ensued if no tion on the part of the Government had taken pla, Sir ' I think that the Government were justified in that letter. I think that', having issued it, they actou with the strictest regard to constitutional principle in forthwith summoning Parliament." That was the judgment,tif I may gay so, that Sir li. Peel pronounced upon that question. But the matter did not rest merely with the appointment of a committee, and the approbation by individual members of Parliament of the step taken by the Government. On the 17th of Feb. 1848, Mr. Herries, who was then a member of this house, moved two resolutions in a committee of the whole house, the first of which confirmed in a most distinct manner, the policy of the step. It was in these terms : " That looking to the state of distress which has for some time prevailed among the commercial classes, and to the general feeling of distrust and alarm by which the eni• barrassments of trade have been aggravated, it is the opi nion of this house that her Majesty's Ministers were justi fied, during the recess of Parliament, in !recommending to the Bank of England (for the purpose of restoring confi dence) a course of proceeding at variance with the restric tions imposed by the Act of the 7th and Bth Vic., cap. 52. " That this house will resolve itself into a committee upon the said act." That resolution was put and carried without a division, from which it is manifest that the house, upon a consi deration of the subject, explicitly approved the act of the Government:l:But a select committee wag appointed to inquire into the act of Parliament, and several most able aid competent witnesses gave evidence before them, In their first report, dated the Bth of June, 1848, they said : " The issue of that letter was no doubt an extraordinary exercise of power on the part of the Government, but the House has decided that in the peculiar circumstances of the period they were justified in taking that step." Therefore the committee—perhaps, it is a solecism to say so—adopted the resolution of the House ; at all events, the committee, after great consideration and inquiry, referred to the previous resolution of the House as em bodying their own opinion. Having thus, I fear at too great length, but with a minuteness which I thought the importance of the subject required, stated what took place in 1347, I will now, with the permission of the House, call their attention to the events which are now immediately under our consideration. With regard to the commercial crisis into which we have lately entered, and from which I think. we can scarcely be said yet to have emerged, it may be observed that no symptom of an alarming or even of a threatening character (if we compare the bullion and reserve notes of 1856 and 1857) manifested itself:until about the 18th of October. From that day a perceptible deterioration began. The bullion in the Bank fell between the 10th and the 18th of Nov. from 10,110,000/. to 6,434,0001. ; while the reserve notes fell during that period from about 4500,000/. to about 1,400,000/. But before that time it cannot be said that anything occurred which would create uneasi ness in the course of affairs at the Bank. The immediate cause of the crisis was, as must be within the knowledge of most of the hon. gentlemen who are now present, un connected either with the management of the Bank or with any issues of paper money in this country. It grew out of the derangement of the American trade, supervenino: upon some previous inconveniences created by the Indian revolt, the shipment of bullion, the dis turbance of the Indian trade, and, to a certain extent, speculation upon the continent. However, it may be said that the almost exclusivefcause of the commercial distress was the derangement of the American trade. For some months previously to November the foreign drain of buil:on was accompanied by an adverse state of the exchanges and a high rate of discount at the Bank. On the 2d of April it was 64 per cent., on the 18th of June it was 6 per cent., on the 16:,12 of July 51 per cent., on the Bth Oct. it was raised to 6 per cent., on the 13th Oct. to 7, on the 19th Oct. to 8, on the sth Nov. to 9, and on the 9th Nov. to 10 per cent. These figures show that 1 igh rates of discount had prevailed, the natural consequence of an adverse state of the exchanges ; but the operations of the Bank and of the discount houses in this country had been successful in reversing that state of things, and in producing a fa vourable state of the exchanges before the issue of the Government letter. At that time the foreign drain of gel f bad been checked, and the exchanges were favour able. Well, although some uneasiness might still exist as to the state of the Bank, nothing at that moment seemed to indicate any immediate probability of the Government being called upon to exercise any extraor dinary powers ; and as the right hon. gentleman (slr. Disraeli) referred yesterday to the state of our trade during the month of October as a circumstance which ought to hare induced her Majesty's Government to hesitste before they recommended the prorogation of Parliament until the end of December, I would beg leave to remind him that even if the state of trade had been more unfavourable than it actually was there was no symptom of commercial distress which would have rendered is necessary for the Government b resort to any extraordinary act. It was only in the event of Lheir being called upon by any urgent and unforeseen neces sity to authorise a suspension of the law that it was likely to be necessary that, upon merely commercial grounds, they ghoul l advise her Majesty immediately to assemble Parliament. In the event of that improbable contingency—as we thought it—arising, a constitutional power existed, which could be exercised at any moment, of summoning Parliament by proclamation to meet in 14 days. Tnat is an explanation of the charge of want of caution and foresight on the part of the Government brought forward by the right hon. gentleman. Well, the first event which precipitated matters iu the late commercial crisis was the failure of the Borough Bank of Liverplal. I wish to call the attention of the conornittee to the fact that it was not a joint-stock bank, and that it was not a bank of issue. I believe that there is not a single bank of issue in that town, but the Borough Bank was not a bank of issue ; I it was a corporation of a general character, and the amount of its liabilities was very considerable. As fur, therefore, as that,e e stablishment was concerned the con sequences produced by its fallsre cannot in any way be traced to an excess in the issue of bank paper. That failure took place about the 27th of October, and the next event of importance was the failure of Messrs. Den nistoun on the 7ch of November. That heuse was ex tensively engaged in the American trade. I believe that it was a house conducted with prudenoe, and possessed of large capital, but it was suddenly forced to suspend payment b; the misfortunes arising out of the convul. signs that had taken place in America, which were at tended with much greater distress than had occurred in this country, and accompanied by a general suspension of cash payments. The house of Messrs. Dennistoun failed, as I have said, on the 7th of November for up wards of 2,000,0001. About two days afterwards, I believe on the Otis of November, a large joiutestock bank in Scotland failed—the Western Bauk, which had numerous branches. Within a day or two afterwards another large joint-stock bank—the City of Glasgow Bank—also failed. The joint circulation of these banks was about 800,0001., of which about one-half was the certified circulation they were authorised to make upon securities, the remainin g h a lf upon b u lli on . T he i r deposits were about 9,000,0001., showing that it was not their note circulation, but the magnitude of their other transactions and liabilities which led to their unfortunate failure. (Hear, hear ) I may mention with regard to the Western Bank of Scotland that there had been no run at all upon it previous to its failure, and that when its doors were closed not a single note had been presented fur payment out of the usual course, taus showing that it was not the discredit of the notes of the bank, but a failure to meet its large engagements of other descriptions which led t o its unfortunate fall. The first sign of pressure more immediately affecting the mercantile classes in London, and approach. ing nearer to the Bank of England, was the failure of the house of Messrs. Sanderson and Co., bill-brokers, which took place on the 10th of November. Such an event could not occur without exercising a serious in fluence upon the credit of other similar establishments in this city. The publication of the Bank retorts for the week ending Wednesday, Nov. 4, which showed a considerable reduction of the Bank reserve, was a cir cumstance which, combined with the other facto I have mentioned, could not but create uneaeines2 and alarm and call attention to the diminishing resources of the Bank. The alarm increased in London, and I think I cannot adduce a clearer or more compendious proof of the existence and extent of that alarm than by referring to the increase of the bankers' deposits at the Bank of England in the week from the 4th to the 12th of Nov. It may at first sight seem somewhat paradoxical to the committee to refer to tae increase of bankers deposits in the Bank of England as a proof of alarm—(hear) — but it must be borne in mind that the Bank of England is the bank in which the London and other bankers keep their deposits, and therefore when they increase those deposits suddenly and extensively it is a proof that they are guarding themselves against a run upon their fund', that they expect demands from their customers, and are, in fact, if I may so say, hoarding their resources. Thu increase of bankers' deposits at the Bank of England is, therefore, a recognised test of the existence of alarm. In the week from Nov. 4 to Nov. 12 these deposits increased by no less than 1,970,0001. But there was another decisive proof of the existence of alarm in this city— namely, the general cessation of all discounting except by the Bank of Esgland. At that time it was scarcely possible to obtain an advance, oven upon hills which were undoubtedly good, either from bill brokers or bank e rs ; their o perations were for the moment ueiver• sally suspended, and the Busk of England was the only establishment in London at which discounts could take place. That circumstance may be referred teas a tolerably conclusive proof of the general prevalence of al trio. I may mention that at that time a single discounting house paid in one day 800,0001., 700,0001. to depositors, and 100,000/. to discounters—a sum, I apprehend, almost un paralleled in operations of that kind. I will now call the attention of the committee to the state of the Bank on the day before the recent Government letter was issued, and t o its state on the day previous to the issue of a similar letter in 1317, and I think the committee will gee that with relent to every point indicative of ti.e strength of its resources the position of the Thuds in 1857 was less fovouranle than its position in 1847. Tne inference to which I wish to lead the committee is that, if the Government were justified by the opinion of Par liament, of the public, and of competent judges, in i,su ing the letter in 1847, then a fortiori they were justified this year in issuing a similar letter. The following is a statement of the position of the Bank of Englaud iu Oct. 1847, and Nov. 1857 : Oct. 23, Nov. 11, 1847. 1857. Bullion £8,313,000 ... £7,171,003 Reserve of notes in Banking Department 1,547,000 ... 957,000 Reserve of coin 447,000 ... 501,000 Deposits (Private) 8,580,000 ... 12,035,00. Private Securities...... Therefore 1 think the committee will see that whatever were the grounds for the interference of the Governme 0 in 1847 the grounds were still stronger in the preeeLt year. There is another most material point of different' between the two cases, which perhaps even still tnorc t CAE t 7 0 - 1 L.? _LP r. 4 ,at in the pre- I been reached of things begun io of the letter, in the c ,elerated that pro cess ; but iy manifested itself, and the wo. e itswas issued. Now, in the presen, (ivy is the fact. We had not reacheu ti. e letter was issued ; and, whatever opinion med as to the benefi cial effects of the letter there is co doubt that if it had not been written, if this authority had not been given, ws should have seen a worse state of aings after the 12th of November than before it. Now, the fact which seems to me material as constituting the differ ence between the two years is the proeress of the Lon- don disceent at the Bank in 1847 and 1857. On the 23d October, 1847, the London discounts of the Bank were 7,762,600/. The amount remained stationary till about the 4th of November, when it fell to 7,500,0001 ; and a few days later it sank even lower. In the present year, on the other hand, those discounts amounted on the 9th of November to 7,256,0001. They went on regularly in creasing, till on the 27th Nov. theyreached 12,022,0001., and on the let Dec. they still stood at 11,961,0001. This shows that the sum under discount at the Bank of England was greater at the end of that period than at its commencement, whereas in the corresponding period of 1847 that amount had considerably diminished. There. fore I infer from these facts that, whereas the worst of the crisis had been overcome before the letter of 1847 was issued, the worst had not been overcome when the letter of this year was issued. I trust, Sir, that I have established to the satisfaction of the committee that the course taken by the Government in 1847 was maturely considered and deliberately approved by Parliament— that the authors and promoters of the measure approved this proceeding, and that it constituted a precedent by which subsequent Governments could with propriety re• gulate their conduct. In the present case the causes of the panic were no doubt different, but the result was the sane; the circumstances with which the Government had to deal were similar, the urgency was greater, and whatever reason justified the resort to extraordinary measures in the year 1847 will be found to apply with greater cogency aril greater conclusiveness to the case of the present year. But the existence of a precedent has not grown out of mere accident from the occurrence of circumstances which had not been foreseen when the original measure was prepared. I have the evidence of C itton, the Governor of the Bank at the time when the bill of 1844 was under consideration, and that gen tlemiin stated to the committees of both Houses of Pare liement that the precise contingency which occurred iu 1847, as also in the present year, was foreseen by Sir Robert Peel, who appeared to have contemplated a mode of meeting it exactly identical with that which has been adopted in both years. That seems to me an im portant part of the case ; and I will therefore read an extract on this point from Mr. Cotton's evidence before the committee of this house which sat in 1843. Similar evidence was given 4y him before the committee of the House of Lords. Mr. Cotton was thus examined : "In the case of a panic do you think that a contraction of the circulation is any cure for it ?--T. think it is, inas much as it increases the value of money and induces people who have hoarded money to part with it. " Do you think, even in the case of an internal panic, the proper mode of cure is a contraction of the circula tion !—The proper mode of cure is a contraction of the cir• lation ; whether it is worth while to submit to the remedy is another question. I can easily conceive that there may be monetary crises when it is necessary for the Govern. ment to interfere, and to do as was dune in October. " You contemplate, as I understand you, that under the operation of the Act circumstances may arise which will call for the interference of Government ?-1 did content , plate it, and I believe that I shall not be guilty of a breach of confidence if I state that the subject was discussed very fully with the First Lord of the Treasury and the Chance llor of the Exchequer during the consideration of the pro visions of the Bill, and when the subject was again pressed on him Sir Robert Peel expressed his opinion to me in these terms :---`llfy confidence is unshaken, that we are taking all the precautions which legislation can prudently take against the recurrence of a monetary crisis. It may occur in spite of our precautions, and if it does, and if it be necessary to assume a grave responsibility for the pur pose of meeting it, I dare say men will bo found willing to assume such responsibility.' " It was contemplated that circumstances might occur ' which would render it necessary to suspend the limit of the Act of 1844. Can you state what were the sorts of events that you had then in contemplation ?—I should say events similar in effect to the events of 1825, when there was entire discredit of all the country bank circulation, and a panic which brought down, not merely an immense number of bankers, but others who were man of undoubted property." ' I think that passage ought to convince this committee that, in referring to the proceedings of 1847 as constitut ing a Parliamentary precedent of the utmost authority, we have every security that the subject was fully con sidered both in its character and its consequences, and that legislation was left in its present state upon mature deliberation. The right bon, gentleman (11r, Disraeli) pet a question last night which he had a perfect right to ask, and t ) which he is entitled to have an answer. It was :--" Whether the issue of this letter was called for by the Bank directors, and whether pressure was applied to the Government in order to obtain it I Now, Sir, I state distinctly that the issue of that letter was the spontaneous act of her Majesty's Government. (Hear, hear.) That they proceeded upon their own deli berate and conscientious view of the circumstances of the case—(bear, hear)—that they were not urged by depu tations, by the representations of mercantile bodies, nor were they implored to interfere by the &rectors of the Bank of England. No man invested with a public and official responsibility could have acted in a more honour , rabic and conscientious manner than the directors of that [ corporation. They showed themselves throughout ready to carry into effect all the obligations which the law cast upon them, and they merely said that they were willing , to act upon any advice which the Governinentrnight tes tier to them, but that they were prepared to obey the provisions of the law. Sir, the Government were guided by their view of the facts which I have disclosed to the committee—facts, the corresponding circumstances to which were deliberately reviewed by the Parliament of 1347, and were considered by them as constituting a legitimate ground of interference. These facts existed in a far more intense degree in November, 1857, than in Oc.ober, 1847. Our justification therefore is, that we acted in consequence, not of the pressure of the me+rcan. tile body, but in consequence of the pressure of facts, and that we obould have been guilty of a grave dere liction of duty if in so grave and urgent a state of circatn stances we had hesitated to take upon ourselves the re sponsibility which was assumed by the Government. I do not at all seek to screen myself under the existence of mercantile pres,ure. If the act which we have done is right, let the house indemnify the Beetle directors, let them indemnify those who advised them. We do not seek to shelter ourselves under any pretence of having been coerced into the act. The committee is in posses sion of a numerical return from theßank fully exhibiting the state of things each day from Nov. 11, and I shall not trouble them with a minute analysis of these figures. I will only say that, unlike 1847, tin Bank directors im mediately found themselves compelled to act upon the authority given by Government, and to make issues in excess of the limit fixed by the act. They first issued 1,000,0001. of notes from the issue to the backing depart ment, placing against that sum as equal amount of seen rities ; and ou a subsequent day they made a similar transfer. Tue first issue was on the 12th of Nov., and the is.cond on the subsequent day. The effect of that— technically—is that the Bank has infringed the provi sions of the act to the extent of 2 ,000,000/. sterling ; but the committee should bearin mind that, althoegh owing to the pecu''ar manner in which the accounts of the Bank are kept the law is technically infringed to that amount. at no time has the Bank issued se snuck as 2,000,0001. to the public. It has merely passed 2,003,000/. from one department to another. I have before me a statement of On the 1 5 th Nev. the excess o f n , : t es i n the amount in excess which was from d a y t o d a y i ss u e d to the pubre. the hands ef the public was 18 6,000/., on the following day e n:22 the,o/ 0 amount and of s° o reached the maximum of 9 23,000/. If th e comm itt ee will d of notes in the banking department from the 2, 00 0,0001, tra ns f erre d f rom th e d O, i , sue depar merit they will see the diff erence i s th e fi gures the n reserve until the 20:11 Nov., wheel it which I have given. That is the real amount which has reached the public. On Nov. 21 that amount was 617,0001. ; on the 23-1, 397,0001. ; on the 24th, 317,0001. ; on the 25th it had fallen to 81,0001.; on the three following days there was an increase, but on Nev. 30 it had fallen to 15,0001. ; and ou Dec. 1 the note re serve was more than 2,000,0001. ; therefore, strictly speaking, there was no issue in excess of the limit. I need not, however, remind the committee that the ope rations of the Bank being now divided into two depart nier.te it was impossible to work the banking department without an issue of notes from the issue department, and that that transfer was technically a violation of the law; but the committee should hear in mind that the real and essential violation of the act has been confined to the amounts which I have just read. It may be asked what would have been the result if the letter of Government I had not been issued. That is a matter about which we can only form conjectures. The actual result of issuing that letter must be admitted to have been favourable. It diminished alarm and restored confidence ; and it did not in the smallest degree endanoer the convertibility 'ot the note, because a favourable turn of the exchanges had taken place, and there was at that time no fear of a fo reign drain of gold. Therefore I cannot third: that at that moment the convertibility of the note was endan gered by the step which was authorised by Government. If that authority had not been given, it is certain that the only measure to which the Bank could have resorted for its own protection would have been the immediate and total ceesatien of discounts. (hear, hear.) Indeed, could they have foreseen the impossibility of Government taking such a stop, they might, perhaps, have diminished their discounts a day earlier. At all events, they must at the time the letter was issued have entirely stopped their discounts. Whether so decided a step as that ou the part of the Bank of England might not have led to the ex tension of discredit among establishments of a similar na ture engaged in similar operations of banking I leave it to the Cumnottse to determine. (Oppositiou cheers.) It ie net fur me to give ar t y positive opinion upou coca a sulject, but if such discredit had arisen the Committee eiu-t sea what would have been tho area upon the banking department of the Bank of England by leading to the withdrawal of deposits, Now, as by law the two departments of the bank are separated the one from the other, and the assets of the issue cannot be applied to relief of the banking department, the Bank of England might have found itself in the painful position of post poning payment to depositors—(hear)—or of applying a portion ef the assets of the issue department—because its assets would undoubtedly have been sufficient—(hear) —to the discharge of the liabilities of the banking de partment. I think it probable that each a contingency !night not have arisen ; nevertheless, it was within the r.'.ngc of possibility. Event., Kg I have learned from painful ex perience —events march very rapidly during a commercial crisis. Persons who are loaded with the responsibility of action in moments of that sort must be prepared for them, and I leave it to the Committee to judge whether, with such a contingency before them, her Majesty's Government would have been justified in withholding the letter which they sent to the Bank. I am fully conscious of the gravity of the step which the Government took. The deliberate infraction of a funda mental law governing the currency is, as this Committee will readily believe, a step which no persons responsible fer their acts would lightly take. (Hear.) Ido not in the smallest degree seek to diminish the importance of the proceeding molted to by her Majesty's Ministers ; at the same time, let it be remembered that the actual excess hitherto committed by the Bank has been limited to the amount which I have st ated, and that the effect of the authority which was given was simply to enlarge the amount of the issues upon securities. Now, if the entire circulation of this country had been metallic, I could have understood any objection which might have been entertained to an authority being given to a corr.- ration like the Bank of England to issue 2,000,0001. of bank-notes ; but, inammuck as they were authorised by the Aot of 1844 to issue 14,000,000/. upon securities, and as that act contained a provision fur further increasing that amount, in accordance with which it has by an order in Council been increased to 14.500,0001., the only effect of the authority given by Government was in el guarded manner, under the close observation of the Government and of Parliament, and to meet arnomentary emergency, to increase the issues of that description. No new principle was introduced by that authority. It has been said that the Government have authorised the Bank to commit an act equivalent to the debasement of the currency, that what we have done is almost equal to permitting a repudiation of contracts, and that the sanc tity of property was invaded by this additional issue of bank-notes. I entirely dispute the correctness of that view. (Rear.) If any doubt had existed as to the in stantaneous convertibility of the additional notes issued under our authority there would ha►e been some ground for the charge which has been made against the Govern ment; but, inasmuch as the additional issue by the Bank was not sufficient to affect the ♦alue of the notes, and each note was convertible into gold upon demand, it cannot be said with justice that the Government have depreciated the currency, authorised the repudiation of contracts, or struck at the security and sanctity of pro perty. (Rear, hear.) I wish I had it in my power to say that this commercial crisis was definitively terminated, and that we could look forward with maim confidence to the Bank not having occasion to avail itself of the authority which we have given to it. I think it highly probable that the directors may not have occa sion again to exceed the statutory limit ; but, at the same time, I cannot assure the house that no such con tingency can be expected to occur. Perhaps, in some respects, it would have been more convenient to Par liament if it could have looked back upon a completed commercial crisis before it was called upon to indemnify the Bank directors. The Government thought, however, that it was their duty, having authorised au infraction of the law, at once to lay the matter before Parlia ment, and hence the celerity with which the Legisla ture has been assembled. The pressure still continuing, and the wounds caused beithe crisis being yet unhealed, it will be necessary for me to propose in the bill a pros pective power to the Bank to exceed the limits of the charter for a period of 2Z' days after the meeting of Par liament subsequently to the recess. (Hear.) I have taken that as a convenient period with a view to the revision of Parliament, if revision should be necessary, and I trust that if the house should be willing to pass the Indemnity B II it wi I not refuse to allow me to insert a clause to the effect I have stated. (Hear.) I shall ask the house in the course of the evenine to agree to the reappointment of the committee on the Bank Acts which sat lest session. That committee examined many important witnesses, but its inquiries were not completed, and at the end of the session it presented the following report to the house Your committee have agreed to report to the house the evidence which they have re ceived ; and, as their investigation of the subject referred to them is still incomplete, they beg leave to recommend that a select committee be appointed to resume the en quiry in the ensuing session of Parliament." We should, as a matter of course, have acted upon that recommen dation, and have moved the reappointment of the com mittee, but it has been said that what has occurred during the last few months has weakened the reasons for that course. It seems to me, on the contrary, that the commercial crisis and the act of the Government have strengthened rather than weakened the reasons fer the reappointment of the committee. (Hear.) It mug be obvious that if the house is desirous of reconsidering any of the details of the Act of 1844, it cannot do so with greater advantage than after a fu►l inquiry before a select committee, and after the examination of competent wit nesses upon all the different branched of the subject. The general portion of the subject was fully investi gated last session, but so much of it as relates to the country banks of England and the banks of Scotland and Ireland was not entered upon, and I think it must be obvious, after the events of the last few months, that there is a great deal in connexion both with the country banks of England, and the banks of Scotland and Ireland which well deserves careful inves tigation. (Hear.) Moreover, I confess I doubt whether it would be prudent, when men are smarting under the painful embarrassments of a commercial crisis, when that crisis is still incomplete, when its consequences have not yet been fully developed, to select that particular mo ment for revising your currency laws. Whether the proposal was made by the Government or by indepen dent members, I cannot think that we should deliberate upon a most difficult subject, a subject which has per plexed the minds of some of the ablest men whom this country has produced, under circumstances likely to lead to a safe and beneficial conclusion. Therefore, as I should have moved the reappointment of the committee of last sear under ordinary circumstances, it seems to me that the extraordinary cirounistanoas under which we are now assembled render such a step still more expedient. (Hoar.) By what I have said the house I think must be led to the inference that the commercial crisis has not arisen from any abuses of the currency—from any ex cessive issues of bank paper in this country. (Hear.) Whatever its causes may be, they stand, it seems, wholly aloof from the proper and direct policy of the act of 1844. (Hear, hear.) Let us first take the Bank of England, the most important part of this subject. Can it be said with truth that the directors of the Bask of England have shown any want of foresight, any want of prudence, any want of sagacity, cr any want of firmnes during the past year ? I confess it appears to me, having had necessary occasion to watch their proceedings with vigilance, that they have not failed in any of the duties incumbent upon them. (Hear, hear.) Let us compare, as a test of excessive issues on their part, their notes its the hands of tee public, with their private securities dur ing the years 1856-7. The following is a statement of their notes with the public, including Bank poet-biil, at various periods of 1856 : October '21,815,000/. October 25 ~... 21,412,0001. „ 11 21,501,0001. November 1 ... 21,483,000/. „ 18 22,111,0001. 8... 21,149,0001. For the present year, when as we are toll commercial discredit has been canoed by excessive issues of Bank paper, the returns are as follow : October 3.,.... 20,825,000/. I October 31 , 21,184,000/. „ 10 20,303,0001 .. November 4... 21,080,000/. 17 21,052,000/. 11... 21,0L;3,000/. „ 24 So that, in point of tact, the amount of notes in the bands of the publie has been actuilly leas this your than in 1356. Let na now compare with the ireue of notes and Bank post-bills the private securities of the Bank at cor responding periods of 1850-7. The following is a return of the private securities at the latter end of each of these years 1856.* 1557. October 4 21,582,0001. October 3 21,835,0001. November 8... 18,626,000/. November 11 26,113,000/. Therefore that shows that there was not any excessive issue of paper on the part of the Bank of England, and that the amount of Bank of England note. hal not been excessively or unduly increased. With respect to the country banks, can it be said that any portion of this discredit is traceable to their over lime In the first place, take the Borough rank of Llvarpeol. That is not even a bank of issue. Then the lergejoint-stock bank which has lately uu!ortuoretely fallen—the Northanaber. land and Durham Dietriet Bank ; that, though a bank of very extensive operations, and though it has felal for a large sum of money, was likewise not a bank of issue, and, therefore, whatever its imprudence or mis fortunes, they were in no way connected with an abuse of the power of issuing paper. (hear, hear.) With respect to the Scotch banks which have failed, both of these undoubtedly were banks of issue, but their notes bore a very small prop ,rtion to their entire liabilities, and about half were covered by gold ; and no per son aware of the fact., or who will make himself lie quainted with them, can fail to come to thin conclusion, that the failure of these Lanks is wholly indepen dent of all questions relating to paper currency. rhere fore, as far as the direct operation of the Act of 1844 is concerned, as far as its object was to prevent the exces sive issue of paper either by the Bank of Eapland, or by the country banks of England, or by the banks of Scotland and Ireland, it must be admitted that the policy of that Act, and of the Act of 1844, was SUCCAS fuI. Those who impugn the policy of those Acts must say fleet at a'l events they were inoperative, or that, in spite of them the currency was in a wise and sound state ; and those who are friendly to the policy of those Acts will attribute the sound state of the currency to their direct operation. But, whatever these parties may think, the main fact cannot be disputed, that our paper cur rency was and has remained up to the present momentin a perfectly sound state. (hear.) It is quite conceivable, as my right hon, friend remarked iu 1847, that a com mercial panic might arise if the circulation were purely metallic. Tnere might be undue credit and unsound speculation, and these Causes might produce the came effects as are observable aethe present moment in the town of Hamburg, where there is no paper c rJulation, where the only circulation is metallic, and where there xiet all th e acu t e sym ptoms of a commercial crisis. ([Tear.) Now, with respect to the operation of the Act of 1841, I ain des.r ,us of drawing the attention of the committee to the distinction between the ordinary ope rations et the Act in those circumstances w ,ich were cunt 'IOWA(' by its authors, and its o;eretions at a inernent of panic cr crisis. If we take its operations under ordinary circumstances, the limit imposed on the Beek of Eeelatid and on the country bank , i, and on Irish and Scotch banks operates in the way of preven tion. It (lees not cheek the ordinary habitual operations of commerce, but it is like a punishment in the penal law which by its preventive consequences determines inea'e conduct. But when we came to a state of panic ail theies circumstances are reversed. Men ' s minds aro then in an extraordinary state. Mutual dia trust prevails through the community, and a law which may be perfectly suited to the ordinary condi tions if trade, in which it nsay ()prate beneficialle when luau ale left under the influence of ordinary motive., may at a time of panic be found to produce effects the reverse of beneficial. The question then arises whether some extraordinary power should not be required to suspend the operation of such a law. The 1 5:11' present law does two things. It imposes a limit 6,1 the issue of the Bank of England and exhibits the accounts ' of the Bank of England in a peculiar form, and likewise requires that those accounts should be published once a week. Now, wherever you impose a limit, there is ne question that the existence of that limit, provided it makes itself felt at a moment of crisis, must increase the alarm. People feel at the moment that a peril presses on them, they begin to calculate bow much remains of that fund to which they look fur assistance in times of commercial difficulty, and in whatever way you fix the limit, whether by Act of Parliament, or, as Mr. Tooke proposed, by a sort of usage, or, as in France, by the discretion of the Government acting on the Bank of France, there is no doubt that in moments of crisis the limit must aggravate the alarm. (Hear, hear.) I can bear witness, from my own observation, that such was its operation in 1847. There is no doubt, in my opinion, that when a crisis once sets in, when you have an extra ordinary state of distrust quite different from the state in which men ordinarily live (because it is by mutual trust and confidence that commerce is carried on), when you get into a state of apprehension, and every man suspects his neighbour, then undoubtedly any limit, which is im posed on the paper circulation, must aggravate the alarm. In that way I distinguish between the ordinary and the extraordinary operation of this Act. (Hear, hear.) Well, then, the manner in which the assets of the Bank are distributed, by which the whole bullion is set against the paper issue of the Bank, and by which only a small portion of reserve notes is placed in the banking department in a very conspicuous manner against the deposits, concentrates the atten tion of the commercial public upon the amount of gold in reserve. They watch its diminution from day to day, and when it has reached a certain point each person desires to get a share of it as long as it lasts. The bank ing account tends, then, by that accident, to aggravate in a commercial crisis the public alarm. These circum stances appear to me to show that in its extraordinary operations this Act maytend to aggravate panic, though in ordinary times it tends to promote a sound state of circulation, and so far as the state of the currency is con cerned, to avert panics ; but when a panic arises from other causes, at that particular crisis, though the panic may only last a few days, it aggravates the alarm. It appears to me that at moments of that sort we can only resort to the discretion of the Government for the time beingj but I shall be happy to hear if any gentleman has any other remedy to offer for those rare, I am happy to say. but nevertheless recurring occasions. It seems to me you can only resort to the discretion of the Govern• ment in some form or other. Now, there is a question on which the Government has carefully deliberated, and on which after deliberation they have not thought it their duty to make any proposition to the house. The question is one which will be considered by the committee to be appointed, I hope, by this house. The question is whether it is preferable to leave the power of dealing with these emergencies vested in the executive Government for the time being, to be exercised by them on their responsibility to Parliament, and cut jeot to the duty of assembling Parliament at an early period after the exercise of the power, of submitting to it the whole facts of the case and asking for an indemnity—the question, I repeat, is whe ther we should, in conformity with the opinion of the Commons committee of 1847, leave the matter in that state which undoubtedly involves an infraction of the law though the wound which may bedone to the constitution is healed by constitutional and Parliamentary means, or whether we should adopt the conclusion of the committee of the House of Lords in the same year, who thought it irregular to grant such a power to the executive Go vernment, and that Parliament ought to engraft into the Act itself a power of suspension. The bill, the introduction of which I hope the house will sanction, and intro luo, at a time when the events which have called for its in , roduction are still recent, while the crisis in its consecieencee is not fully developed, will not centein any distinct provision upon that subject. It ap pears to me, indeed, that the question is one of im portance in a constitutional point of view rather than as involving any great difference in its practical results. If, after the proceedings which took place in 1847, and if Parliament should coins to a similar conclusion now, the Government acting under tha influence of two such pre cedents might find their course facilitated and guided, while, upon the other baud, if a clause were inserted in the present bill authorising the Government in cases of emergency and in times of panic to relax the limit, but containing a clause similar to that which is contained in the act which enables Government to embody the Militia, but which provides that they shall call Parlia ment together within 14 days. I think the practical result of such a state of things would be the same as those of the present system, because I think that a Government would be apt to look upon the distinctioe as a mere formal one, and would feel the same reluc tance to act upon the power afforded them, except in cases of extreme emergency. While, therefore, I think that the subject is more important as a constitutional question than from any difference in the practical result •E the two systems, there are other reasons why I think that a clause conferring such a power upon the Govern ment ought not to be introduced iato the present b:11. Two select committees have sat to inquire into the subject - , one a committee of this house, and the other a committee of the House of Lords, and, after fully hearing and considering evidence on the subject, those com mittees arrived at diametrically opposite conclusions. (Hear.) It is a subject therefore with regard to which we may anticipate a great difference of opinion, and the Go vernment wool I be glad to hear the views entertained by leading members of this and of the other house of Per liament before they can consider it their duty to submit any measure with regard to it. Now, sir, there are que, • tions relating to the operation of the law in Ireland and Scotland which are worthy of notice, and I think that it may become the house to consider whether some amend ments in the existing law may not be made with great propriety--(loud cries of hear, hear)—to consider, for example, whether there could be any objection to pro viding that the Bank of England note should be a legal tender over the whole of the United Kingdom. (Cheers.) Also, it might became us to consider whether, in order to prevent the inconvenience arising from the drains of gold from this country under the present system, it might nut be advisable to allow the Irish and Scotch banks to issue notes Against Bank of England notes. (Hear, bear.) There is another subject to which I ad verted last ye :r in /loving the appointment of the com mittee to inquire into the operations of the Act of 1844 which has been the subject of much popular discussion at the present peri el—l mean the policy of permanently increasing for the future the limit of the issue of the Dank of England. (Hear, hear.) It is said by some persons that if the Peelle of England had been authorised by law in the beginning of Nov. to issue 16,500,0001, instead of 14,500,0001., and to give them such a power does not involve any difference of principle from the Act of 1844, for it was quite within the views of the pro moters of that Act, the crisis might have been got over without any extraordinary step being taken by the Go vernment. I think, then, as far as I understand the case, that is a fair representation of the views of many gentlemen. (Hear, hear.) Now, sir, I wish in answer to that view to call the attention of gentlemen who entertain it to this fact. If the bullion reserve of the Bauk of England had been what it was at Use com mencement of the crisis, and if the Bank of England had been empowered by law ,to issue 16,500,000/, instead of 14,500,0001. undoubtedly no extraordin ary interference might have been necessary. (Hear, bear.) But at the mine time I can quite usiderstand that, inasmuch as I believe that in a monetary panic the existence of a limit tends to increase alarm, such interference might have been necessary. (Hear, hear.) Now, if the Bank of England had not kept the same bullion in reserve which the law now requires, if it bad merely issued 2,000,0001. more upon securities and diminished the reserve by 2,000,0001., which, under such a state of the law, it would be enabled to do, the Rank of England would have had no greater facility than it has now had, but the reserve of bullion would be less by 2,000,0001. (Rear, hear.) I think that this consideration must tend to convince gentlemen who hold that view that a resort to the expedient of increasing the credit of the issue of the Bank from 14,500,0001. to 16,500,000/. might not be quite so effectual a remedy in times of panic as they imagined. (Hear, hear.) I regret that I have been convene f to trouble the hours at such great length upon this subject, but inasmuch as these questions were the real occasion which induced the Government to recowueeud her Majesty to call Parliament together at this early period, and inasmuch as they have groan out of an important crisis which must lead to important results, inasmuch as the step which has been taken by the Government woe an ax ra. ordinary and extra-legal step—for we .stand before Parliament, I will not say in the position of culprits, but in the position of having advised the Corporation of the Bauk of England to make a departure from the existing law—inasmuch as we are now called upon to af4{ Parliament to indemnify the Bankn if olf havelt:o felt giditandmy ourselves, I trust I may be c ( l c u t t l y eery tos . ) snake a statement of f osrugcihrelengthte chair that t totheho u:. The motion having been read f v o the for and bill to e C Chairman bringo of f t he Bank of England respect certain titeaCommittee d b m e n d i f i i re t c h te e d t o o e mi a v r e r iss i‘ tr i e r s . o G f tLhAeirDnsoTtoess, Eandsatide—coAnsfirfainr,susicrh , issues,nsl am con. corned I think that my right hon. friend, instead of h a ving to aide the indulgence of this house upon account of the length at which he has thought it his duty to explain au important subject, has, on the contrary, conferred upon us an important obligation. (Rear, hear.) On the other hand, lam by no means sure that the same duty' is incumbent upon me, or that it likewise attaches to other members of this house. At all events, for my own part, I do not think that this is an opportunity upon which I should feel it necessary to trespass upon the attention of the house at any length ; but, at the same time, I wish to make a few remarks upon what has fallsu from my right hoe. friend in respect to the subject now before the Committee, and likewise with regard to the ulterior motion which he in tends to make with regard to the reappointment of the Bank Charter Committee. As - respected the bill of in demni y for which his right hon. friend intended to ask, he was not prepared to offer airy opposition to it. Ile could easily conceive that questions might arise, and the speech of his right hon. friend appeared to indicate a consciouseess ua his part of the feet, whether the pre cise mom e nt t a k en b y th e G overnmen t fur the issuing of the letter of the 12th Nov. was the right one, or might tueeest tione might arise whether any other measures m had certainly a h e a d ve d b a e n e g n er a s d w op il t i e e d h i f a iis lie r u igh o f f it,i2e hoe. friend meet frieed ti f, diff:fculties he thought that his right hon. friend w J ,g mutatis en, she ;en threatened the country. However was at :u t s n: i g ti h a t d b i e i : utotandis a justification o urgiiig the circumstances of 184 r 7 . as of th'ieencobueoame the -duty of the teareineut of 1857 ; taken b by the Go kind, what a vas house to consider, tblt ceedings of i b s u g t tv i i t n , se t their traateifidciaitriaouneasteorapbroio preeedento of that nature, (Bear,) force attached to His right hop. friend in speaking of occasions of this kind had justly and properly spoken of them as recur ring occasions. Unhappily, the occasion with which we were now conversant could not he spoken of in the pact tense, and even when the day arrived when it could be spoken of in the past tense, we must yet look for the recurrence of similar events ; and if this had been the universal system of the trading of this country—be would not stay to ask what trading, and whether it was the trade in money —but if it had been the universal system of trading in this country, and especially of the money trade, we roust feel the force of the precedent of 1817, and the duplication and reduplication we were giving to the force of that precedent by again :lama' ting its justification. (Hear, hear.) The question must els() be considered with a view to the elucidation 0 what further dutits were cast upon the house with regard to the Mate of the law. His right hon. friend in his speech bad embraced not only a vindication of the issuing of the letter of the Government, which he (Mr. Glasietone) did not impugn ; but he had also included in it an argument in favour of the re-appointment of the Bank committee of last year ; and he (Mr ; Gladstone) wished to represent to his right hon. friend and the house how the matter stood. His right hon. friend thought it would be better to re-appoint the committee than to legislate, and he gave two reasons for holding that opi nion. In the first place, because a committee bad been sitting which had made an incomplete inquiry, and which had recommended its own re-appointment; and secondly, because at a time when men's minds were warm, and smarting under the influence of the comma , cial crisis, we could not expect to obtain the fruits of wholesome legislation. With regard to the first reason, he must say he attached but little weight to it. There were many precedents ; and it had often happened that at a period of quiet, and when ample time was afforded for the operations of committees of that house to con eider ;a particular state of circumstances, and when urgent circumstances arose which were powerful to teach more in a few weeks than a committee could learn in years—(hear, hear)—that the house interfered, and the action of committees was checked by the interposition of the Government. He wished to represent to his right hon. friend that if the committee on the Bank Acts was re-appointed on the terms proposed by his right hon. friend, it would be an over-burdened committee, and that the first and most certain effect of its re-appoint ment would be to prevent the practical resumption of the question at least in the year 1859, and more pro bably in the year 1860. (Hear, hear.) If that was true, the proposition of his right hen, friend was anything but satisfactory. What was it that his right hon. friend called on the house to do f They had not met now, as they did in 1847, to consider a viola tion of the law which was not actual but conditional and contingent, or to grant an indemity for a past violation of the law ; but they were called on to do no less than, by a vote of that house, prospectively to suspend the Bank Act. (Hear, hear.) Could that be considered a satisfactory course ? Nor was it, according to his view, the best mode in which parliament could deal with such questions. Would it tend to settle the public mind if, after the experience of the crisis of 180, after the labours of so many committees, after the recurrence of a graver crisis in 1857, they did no more than suspend the Bank Act and re-appoint the com mittee of last year ? In the speech of his right hoe friend there was lacking a practical distinction between the question of banking and the question of the lawn which regulate issues. (Hear, hear.) The committee which eat last session was appointed not merely to eon' eider the state of banking, but also the laws whic h regulate issues. It had two subjects referred to it, both of them of an immensely comprehensive character ; first, the laws in force in relation to the Bank of Eng land, and also in relation to country banks, to Scotch banks, and to Irish hanks. Of that subject, in a session of great labour so far as the committee was cow corned, iaue it lhadl, b y exhausted u s sutl7it of d e c the first issue department inn co n exo n of i the in' tee Bank of England ; th e y, th ere f ore, b a d still with to consider the question of issue in reference to country banks, and to Scotch and Irish banks, and when that was exhausted there was still an enertnoui poetscript to the question which the committee was appointed to inquire into—eatnely, thosuperannuated and antiquarian state of the relations between the government and the Bank of England. (Hear, hear.) That which was an important, a novel subject of inquiry, with all the fresh' ness of youth upon it in reference to inquiry which had never yet been touched upon, had been scarcely art' preached by the committee. Such was the progress which the committee had made. The right hon. gentleman (Mr. Disraeli) had said last night that the re would come before the committee only a repetition of currant and known doctrines, on which every min'smin'smind was made up. The right hon. gentleman seemed to think that the discussion of the question of the currency ws an exhausted discussion. He (Mr. Gladstone) agre ed with him , but he must say that while it wagon exhaust ed it was likewise an e'srnal discussion. It had within it so strong and inherent a principle of vitality that if you cut off one of its heads, another arose in its place ; it had a charm, a fascination about it which seemed to drive men mad. Currency had made as many lenatics as love itself ; and he was not sure whether there ought not to beestablished a s p e cial asylum in which that mania could a d b te u t receive moe t t h c,,ebuetiedtenacnadtmbaotsitt a effectreatment.tualitteeentered on e He b that question next year, although it had been exhausted in 1857, it would go on with the process of exhaustion in 1858, and in 1859 it would repeat its inquiries, which would not then be finished, and it would probably re• commend its own reappointment in another year. His right hon. friend had nothing to recede from : the qua-- tton was an open one ; they had all the same objscts in view, and the question then before the house gave him right hon. friend the best opportunity of taking further time to consider the announcement which he had made the night before. Could his right hon, friend be afraid of precipitate legislation on the question of currency l On some subjects there was often reason to apprehend precipitate legislation, it was the question of currency. There were a hundred gentlemen at least in that house, who had given great attention to the subject, each of whom believed that he was in possession of the particulalr nostrum which was applicable to its solution. Would they all be struck dumb? Did his right hon, friend sup' pose that if he introduced a bill for the regulatio n of the currency, he would be able to carry it at onc e 9 Let him be sure that whatever might be the proposal th e e Government might make, it would receive the eager attention of the house, that it would be ca nvassed with ability and diligence, and that there would be no chance Of its merits or its faults escaping observation. What he (Mr. Gladstone) thought ought to be don e wa rn to recognise the distinction between the question beforen.. the house as it related to issue and as it related to ba 3 / . ing. So far as the act of 1844 was concerned, as touched on the question of issue only, and baying a. thing iil ie t h to a that there e w r i e t h couldtbe question better o f for giving a distinct intimation to the counbtary. been A views of the house. For years past there d least known, the least fixed and centralauthori. authority, and tendency in the public mind to run abroad tow a tendency to an approximation to one conviction ofa an ' t was the plornifePs the conclusion as to what was the cost in the que; a t t r w i ds t a h t-h a l t currency, which would increase if the peoplet give no Government and Parliament were prepared c d o e u ci l s d iv d e o o . , p , a in s i° t o n refer the e t h e e ase had had the amplest experience of the working of the in clinedof 1844, and he (Mr. Gladstone) was not so much aa. subjectad t t h o a a t e t e h m e re u ittratoeoes.t t .., h :v t they as his right hen. friend appeared to be tofuv t _ tain the act of 1844 in its utmost integrity, .1,.• member for North around him be saw his hon. fri end the t w h h o i u c g a h i t t t w h a a s t e t l o ra w r e t h m e i g t i h m t e be t e q u e o e s e t s io i d n e e r c . on A n a:A h e a d w l Lt k h e i d s d bahan t ild o yn extradt them if they could ) His hon. friend . tee to learn or to teach ? (L g tut personality f the ap fWrieaardw,icalessaheirheo(eitelert. Spooner),reran, wea (Laughter.) e n h d gt e h e ir o n. gwould the e k e h e i m s I: i n t: would, he hoped, prepared to b e h r e o could the com mittee. i n a t I 1 - otphtbeert committeeom hei member m equali t peal, te ef:jo. justice s theTtichaeqybuaevsat wouldif putooorg gihvtooone air their own theoriefs, w a itneswee by questions which far out of the into of answers committeethey r cei v o e a d c ; ii r a r n o d a c i i t t it was a machine constructed in if one was to say tha t it on which all other machines opposition to the principle . exceededwee would he a i n m j Were constructed,length the of machine constructed otherwise be to get that said in thate wordsof the which savi saving w o o f labour; eld said in two—(hear, hear, and laughter ) — and commit. that the appointment of such a a of opinion hear) ---of the quesio was the adjournment sine d6c—( issue was COO so far as it related to is-us. So far . as ihneorwdneer 4 it admitted of improvement, perhaps i t that act, that i ear ) Ile thought that I corned they had the amplest expereence. been the a act of 8 1 1 14 1 4 ,e ; o a f n e d oi h n e p 1 o was Li o bound n. ( I, e t a o r a , a_y , , having .. b _ that was g rded the main purpose for which that ao 'el:LlZA:died it had perfectly succeeded. " We had hail in 1847 a formidable foreign drain of gold, and wo had had a formidable foreign drain in 1857, and in both cases' we had acted against the drain by raising the rate of interest, and by carrying out the policy of the act of 1814 we had succeeded in rectifying the state of the exchanges. His right hon, friend had marked with chronological fidelity the points to be observed, and it would be seen, that as regarded issue the house was sit ) e and mature for the consideration of any proposal whit!'" the Government might have to make. 'He did not then abandon the hope that when the house met at the usual time for despatch of public business, and when, perhaps' the pressure of the commercial•crisis had passedsiby, her Majesty's tiore to Majesty's Government would make a proposition 13444, Parliament on the subject of the Lank kother question He would again say that there for inquiry, and that was what were t and La ird recent commercial events. They had seen . _ . on, which had to be considered, and which abiacsaausfietssoulbjteboot that night from the au,hentic figures of . his right 0 The de refine by a dem +nil for gold in this country. tratiote friend, this was no question of the American trade sp a ' mend ' should have been met by the legitimate op cause el the laws of commerce, and if that was the . of the rate of discount, and a 1 ,„ o it f sthheoudiedinbaendrnef,jbgyoltdheindtihreicetcoorusnotrfy;liet w ß a a s e r k i g o b ! t}:Athat land by the raising to w e " could be shown that such a course bad failed . __. should stand in a position of difficulty with met ~.., the foreign drain of gel 1, he would admit thraetgawra to the act of 1844. But that drain had been `• the Bank directors acting wisely and prudently on p ore principle of the act of 1847. Since then, 1 10 we .i, there had been a crisis, which had become more ferio (labia after the exchanges had been rectified, than abed they were in au unsatisfactory condition. What _oi! were the causes of that crisis I There was a preval n ~l. opinion that it was connected with the state and c on tion of banking. On that point he would not pronounce an opinion, but ho would grant that it was a St subj e c t u , for inquiry by a committee. He desired that it . shouirlyd eta q ii,to, and it was because tie wanted inquiry tiro : the subject that he begged the house would . t i. , same 0,- o the burthen on a committee of going currency, the laws ojrole of inquiring at once into the on in the