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

arls 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 hon. friend, the member for Southampton, who was lately Governor of the Bank, disapproved of the compulsory extinction of the country issues, and thought that there was no great prac tical evil iri those evils except that they were not made on securities, Mr. Newrnarch was of opinion that the country issues 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, also disapproved of interference With the private issues, and I will take the liberty, as his opinion is given very clearly, of reading it to the house. He is asked— "What is your own view at present ; having the advan tage of experience, and having seen what has actual y taken Place since 1844, do you think it thsirableto makeany change with regard to the issues of the country banks in England, or of the Irish and Scotch banks ?—I think, speaking generally, they have worked far more satisfactorily since 1844 than they over had done in any previous period during my recollection, or in any previous period that 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 must add, however, this—that, although the action of private issues has been improved, still there have been failures among private issues, even recent y ; therefore, they arc not altogether in a perfectly satisfactory state. " Do you attribute that improvement to the limit which has been imposed by law on their issues ? —I do mainly." Therefore, the effect of 11r. Norman's opinion is that it is not 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 not 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 tl3' issue ' he entertained a doubt as to the expediency of any such provision. Those are the opinions of some of the Most competent witnesses on the question of the English Country issues and of the Irish and Scotch issues, and they do not point to the expediency at present of doing what My right hon. friend called "developing the policy of the act of 1844," by converting the Bank of England into the Cole b an k of issue for the United Kingdom. There is ano ther point which has boon raised in connection with this Part of the subject, viz., that if that central bank be not _ . tho Bank of England it should be a Government bank, that Government should assume to itself the right of issuing Paper 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 bank. 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 introduction. A. letter from Mr, Goulburn to the Governor and Deputy-Governor of the Bank of England, dated April 26, 1814, contains this passage : " 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 Measure might bo effected by the establishment of a public department for the issue of notes, independent altogether of the Bank," That clearly contemplates some public establishment either lavi ng a parliamentary organisation, or being directly sub ject to the Crown—a public department unconnected with the Bank. Ho goes on to say : " But her Majesty's Government are willing in the 15rst in stance to consider whether this can be effected by a division of the Bank into• two distinct and separate departments, to conduct exclusively, ono the business of issue, the other that of banking." This shows that the notion of a Government Bank of Issue for the entire kingdom was considered when the Act of 1 844 was prepared, and therefore we may suppose that it vas part of the development of that act to place the cur rency 9f the country on that footin g . But the first ques tion which naturally arises on that proposition is, " By what means are the Government to supply the country with the paper currency—is it merely to have a central office in - tiondon, and by the payments of dividends to contractors arid other modes by which the Government makes payments ! , 0 trust to the diffusion and dissemination of notes; or is it to keep up an agency of branch banks all over England, Ireland, and Scotland ?" If the latter plan were adopted ... question whether such a system would be found to come pat all to the views of some of its supporters. (Hear, r.) On the other hand, if no such system were followed " alight be doubted whether serious inconvenience would set arise from the action of such a bank of issue wholly un connected with the establishment carrying on the ordinary : 3 ,Pprati ons o f b an ki ng , th e ve ry plan of such an institution ring founded upon the entire separation of the functions O issuing f rom th a t of banking. On this question Lord verstone has expressed an opinion in the committee last rssion which will, I am sure, receive the attention of the " The object of putting it (the issue of notes) more avow "-13' and distinctiy in the hands of the Government than it is at present, I think is of this nature, that so long as there „exists-in the public mind an impression that pressure up on the trading world is aszociated with the management of the Monetary system of the country, it might be veryincontve h. lent to place that monetary system more avowedly hands of the Government ; and I mu s t also observe thathe I think the interposition of some responsible body between the Government and the management of paper issues might be ceedingly convenient in strengthening and assisting i the Governme n t t o res ist pressure which might come upon t at certain periods to do that which it ought not to do." We may therefore consider the result of Lord Overst one's opinion, as delivered to the committee of last session, to be unfavourable to the assumption by Government of the ex clusive right of making paper issues. Another meat expe rienced Bank direbtor entered a, little more fully into this question, and showed rather more in detail some of the. consequences which that system would give rise to. This is Mr. Hubbard's description of the consequences which would ensue on entire separation of the functions of issue from those of banking. He says :-- The larger proportion of the public dividends are now paid by a mere stroke of the pen; the amount of dividends due to each banker, n o t o n ly f or hi mse lf, but f or a ll hi s cons tit uen t s , ' 8 carried in one lino to his credit, and in a few h0u7.4 3,000,0001. or 4,000,0001. of public dividends are in that way disposed of, and transferred from the audit roll to the different c orporations and banks who are entitled to receive them ; so that the economy of labour and avoidance of risk are great and marked advantages of these two functions being per formed by the same corporation. Still in their essence they a'°, ctf course, distinct functions. " In fact, at present the dividends are paid with a very small use of ba. - nk-notes ? A very small use. " But still it is conceivable that the Government might, ter the purpose of making issues, pay dividends in notes ? Certainly, it is 'one of the most obvious means of issuing notes. " It might pa .y salaries, and contractors and others in notes, Might it not ?--No doubt it might, and that would be a means by which those notes would be periodically thrown into cir culation ' • and, on the oth er h an d, th e p a y men t o f t h e pu bli c revenue through the Customs and Excise would be a means of bringing those notes back again, so that there would be a gradual passim;; out and in of notes through the me di u m of those two operations. hut I may observe that if the Govern leant were to attempt to discharge those two operations in its own persorn the amount of currency required would be 'Mr:inner sly I arger than it is now, It is owing to the eircum- Snce of th e B an k h av i ng as cus t omers th e v arious large 2idend hold era that it is enabled to perform all those opera tions with so small an expenditure of currency. `` If the Government were to e stablish a bank of issue of its Own, that w ou ld h a ve the effect of counteracting some of the most effect tual instruments for economising the currency 11 " in use ? -It'would occasion a very much larger amount of currency to be required. "'[here wo odd be a greater amount of notes in circulation? " - A Much la rger amount o f notes i n c i rcu l a ti on at particular times, and it would be subject to very considerable varia tions,.wherea ,s the operations of the Bank of England have the effect of r educing, by its expedients, the variations in the amount of no tea. Although they have to pay 6,000,0007. at each of the four quarters, the average variation is very little more than 1,00 0,0001." These answers must, I think, satisfy the house that a great economy of tb o currency is effected by combining the Bank of England of .orations and the issues of the Bank for the Payment of dividends, whereas, if the G overnmen t were t o assume to i tsaalf the exclusive function of issuing, it would be forced to keep a larger amount of paper in circulation, inasmuch as the Government notes, no less than the notes of the Bank Of England, would be required to be supported 13 3' a reserve of bullion ; and the cost to the public of in creasing the reserve of bullion would more than compen sate any economy which might be derived from any other lionrce. Thor e fora, notwithstanding my right hon. friend's har angue abc nit the antiquated relations of the Bank of England witl i th e G overnmen t, I con f ess th a t I see great tC an iages in the present state of things with respect to managem e nt of ou r c u r rency, and I doubt whether any „„s °ll °Ley to tine public or any security to the holders of ` 10,,88 would r r rise from an entire subversion of the existing 11: te Z n i and s, prohibition of the issue of notes by the Bank of Engl zard, by private banks in England, by the banks in Irel a nd and Scotland, and by the assumption of ,1,?! exclusiv e t i g ht o f i ssu e on the part of the Government. .nere : is a poi, nt as to which it seems to me there is some Irns understar i • di ng in the public mind. It is often used as au argument in favour of this measure that the right of . s one of the " Regalia Coronae," and that the and ' mg pa per money bears a close analogy to it , °light to; suing - ex - er - cised by the State. What is tho fact in regard to tho issue of coins? There is no doubt that the right of lima ing 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 take s tuay step for supplying the public with coin. Bullion is b z ought to the Bank of England, the Bank of England sen..is it to the Mint to be coined, the Mint coins It and retur z as it to the Bank of England, the Bank issues it to its cusi, Drillers in the form of sov e reigns or any other denominati on of coin. The entire business of the receipt of bullion a r the issue of coin is managed by the Bank of England as much as is the issue of paper, and in truth the only funct ion with reapect to the coinage which the Crown performs is that of impressing the die upon the bullion which is sent to the Mint to be coined, that bullion being in fact VI.) property of the Bank or of private individuals. Therefore , those who imagine that the country would re ceive groat advantages from a Government bank and a Go vernmen t issue of coin will find when the case comes to be examinf d that their idea is altogether fallacious. Looking, therefore, to the present state of our paper currency, to the her tea of the Bank of England, to the issues of the Englial d private banks, and to the issues of banks in Ire land rs' ad Scotland. I cannot see at present that there is anytb ing which either, according to our own observation of the, facts, or the opinion of competent witnesses, calls U pon us to resort to any compulsory measures for a sup- Prers4ion of all issues except those of the Bank of England —to vest that right exclusively to the Bank of England, or still more to abolish the right of issue by the Bank of England itself, and invest that right in the Crown. lam 11 ' 4 prepared, whatever may be tho r esult of this motion, either to su b m it to the house a m easure for the develop ment of the Act of 1841 in the wanner which I have de scribed, or to assent to the alteration which has been pro posed. But then the right hono ura ble gentleman, if I rightly catch` th e spirit of his motion, says--" Inquiry is exhausted ; you have done everything that com mittees can accomplish • you have now arrived at the time for - legislation ; the Ceovern anent is bound to have a policy"; we call upon you t } state what is your policy with respect to the currene and extensive measur y e , of 2 to bring forward some new policy, which you are bound legislation at ion founded upon that to that appeal I would in the first '*el a p r l e a; common consent, thislate cornempeenliatl_ Well, in answer remark that, by crisis out of which, as I understand, this demand any derangement has grown, has been caused, not by of the currency, but by a derangement of capital and credit. If that be so—if the present crisis has not grown out of any defects in our currency laws- wh y upon the occurrence of tAia crisis is this demand made upon the Government ? told are we now called upon pea rfiliarly to legislate upon uur c\irrency laws ? Why is it that at this moment wo are told tA tall declare a curency policy I confess that lan to y uuable to see r why thoxa i& y exigency for ouch a IHE SUN, LONDON, SATURDA EVENING, DECE viI3ER 12, 18N1 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 the late com mercial 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 1344. 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 he 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 scsrcoly say that men of such emi nence as Mr. Tooke and others who agree with him would not adhere so stedfastly to it. They ara 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 persons 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 1844. It is an objection, not to the failure of that Act under circumstances of extraordinary pressure, but to its unsoundness 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 C or p us Act, or protection against unwarrantable imprisonment. We all know there have boon 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 thatthe suspension of the Habeas Corpna Act was a less evil than its enforcement. But I will refer to a case of the present day, about which, no doubt, gentle men in this house will be divided. I mean the suspension of the freedom of the press in India. I sin 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 mutinythathas nearly become a general revolt, which might not in the smallest degree justify such a step in the ordinary state of ludia. Therefore I cannot for a moment admit that, be cause we have passed through a commercial crisis—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 new legislation on the subject of the currency. Thera appears to me to be an excessive disposition to expect benefit from legislation at a period of commercial crisis. There is no time, in my opinion, when it is more incumbent on a prudent Legislature to be upon their guard 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 ara comparatively powerless (hoar, 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 than that of supposing that it is iu 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 code of laws to regulate our currency and place it upon a now foundation. Least of all can I admit thatthat demand is iu 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 lopt. 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 altethtions 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 commercial crisis. Tho plan which seems to have boon ultimately acquiesced in after the debates of 1847 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 ment, 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 certain 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.) There fore, if there is to be a relaxing power, we are 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 tho 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 the object of all law to secure. " The committee are of opinion that the principle on which the Act of 1844 should be amended is the introduction of a discretionary relaxing power ; such power, in whomsoever vested, to be exercised only during the existence of a favour able foreign exchange." Such was the conclusion of tho committee of the Upper House. The committee of the House of Commons came to a directly opposite conclusion. They say— " Your committee have had under their consideration whe ther it is advisable that powers should be conferred by law upon the Government to enable them to meet the occurrence of aoy 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, an also what may be the mea sure best calculated to meet them, it is more expedient to leave to those with whom the responsibility of the Govern ment may rest at the time 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 the Bank Acts in June last, gave the following evidence : " At present it is the established practice of the Govern ment, not in way to interfere to control the discretion o f the directors with regard to the management o f t he Bank ?—Not at all, " Assuming that this is the rule, 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 tho 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 eases should be conferred upon them by Act of Parlia ment 1--I think that to introduce any provision to meet a contingency would be highly undesirable, because it would have the effecr. 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 in its present state I—lf any events were to occur, from whatever cause, which suspended the whole action of credit throughout the country, the Ministers of the day would, no doubt, hold it to be 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 tb occur, and the entertaining of which can only, I think, be detrimental to the proper c.msideration 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 nature 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 ing the house with extracts. [" No, no."] In the evidence given by that high authority before the committee of the House of Lords in 181 S he is asked : " Assuming 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 ate you of opinion that that discretion can be mo 4t safely lodged, with the view to insure as little as possible a depar ture from this statute ?" Lord Overstono 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 violation of an existing Act of Parlia ment, we obtain a better protection against the too easy and ready au exercise of the power than by lodging the discretion with any other parties. * , "At what period of pressure do things not become amen able to principle ?—When the actual conductheof part ies test of any be comes such th a t y ou cannot bring it under ordinary principle. When people act, not rom any rea-on able motive, but under the blind influence of panic, I con sider their cond uc t as no t a menable to principle." There appears, no doubt, to ba some tautology in this last answer—(hear, h ear )—but it marks with tolerable distinct ness the circumstances under which the noble lord thinks the Act of 1844 ought to be departed from. Lord Over stone is next asked : " Do net you think that if the discretion is only to be ex ercised under circumstances so extraor di nar y , it is alraost impossible to anticipate their, by legislation:o—Th° circum stances under which it would be necessary to exercise the discretion canoot be defined beforehand. There is also this difficulty—the —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 difficulty, I think it is obvious that the true policy is to do nothing that shall in any way whatever strengthen the feelin g 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 bo augmented." These opinions are in favour of not interfering with the existing law. Now, perhaps, I may ba permitted shortly to express my own opinions, intimated as they have been 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 agreed to the Indemnity Bill lateiy passed, I do not believe that if any commercial crisis should hereafter occur any great practical difference will exist in the position of a Government botween their view of the effect of these two precedents and the conduct which they would pursue if they had legislative authority to suspend the act, but were called upon to assemble Par liament within a fortnight or three weeks after exercising hesus ending power were, as it ought that authority. If to be exercised to be, treated as one proper only on extra ordinarybelief is that the practical differ ence occasions, my between the two states of things would not be very important. My inclination would, therefore, be to l e t matters rest as they do present. (Hear.) At the sam e time, if it were the general wish of Parliament—if it were thought an uncoustitutional exorcaiwse, oafnpdotwheernoanfttehnevapradrst of the Executive to suspend. the l to come for an indemnity—although I confess it seems to rue that the passing of an Indemnity Bill condones what everi constitutional offence may haTo Ina committe d—f , that view should prevail, I should feel no insuperable ob jection to the adoption of each a course. At the same time, as far as my o am 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 nazy 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 coarse, if Parliament were sitting, and such a remedy were th iught 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 bo 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 most 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, woul I 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 me to be open to this objection :—I should be sorry to authorise the Government by Act of Parlia ment to issue inconvertible notes. (Hoar.) If these notes were payable 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 everychine b 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 in 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 ngland with their bullion reserve, I do not see what we should gain by calling them Treasury notes. It would be better 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 14,500,000/., or, as is some times proposed, the substitution of either 16,000,000/. or a larger number of millions of notes to be issued by the Go vernment in place of the credit notes of the Bank of Eng laud; 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. opinion ti f bi o r ee i rl e an nd t ,l tfsortge this that it e rshe l l I:neroenbumbe misrepresent disavowedeas whose for was hh iosin.sef opinion ahv Warwickshire oathut ironpok opinion, ihsohonow, ( inconvertible nvitdeMr however, o . h there seon Spooner) iwostinellso. h mN unwilling etom. admit we that my error was not an unnatural one, 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 tho possibility ef misrepresenting my hon. friend's opinions, I desire, if the house will allow me, to quote Mr. Twellie answers in his own words. He 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 these 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 say, that incon vertible Si. notes would net exchange for five sovereigns 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 intornal commerce, and we want it to pay Govern ment their taxes. (Laughter.) " I thought you said you couldconceivo that it might hap pen that under the system which you recommend the Si, note would not exchange for five sovereigns ?—That I think is not material. A bank-note, I conceive, is convertible intoevery thing. If you wanted to convert it into gold, you would go to a bullion merchant, and he would give you the market value in gold, as he would in any other commodity ; it might be more or it might be less than 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 be 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 wo 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 sum of five sovereigns, do you not?—For five pounds." (A laugh.) "If they tax me 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 repro sent it ; it is only recently that wo have had the sovereign, which represents the pound. " Do you think that a pound then meant a piece of paper with certain words printed upon it? —lt had a superscription, which r 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 uow as it was in the early part of my experience. " And you think it desirable that a currency should be estabdshed 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, if 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 not adopt the recommendation of Mr. Twells--if the prin ciple which ho lays down is not to be made the foundation of the new currency legislation which the government is called on to produce in this current month of December, perhaps it may be said that a more limited proposition should be adopted, such, for example, as the issue per mitted under the Act of 1814 should be increased by a million or two, or something of that Bart. Now, I admit that there is nothing in the principle of the Act of 1844 which requires that the amount should be exactly 14,500,000/. (Hear.) There is no magic I know of in that particular amount, which was fixed on grounds repeatedly stated at the time ; and I admit that a person who is friendly to the principle of the Act may fairly suggest any amount more than 11,000,0001. (Hear.) That is a matter for the consideration of the house; but I confess that I doubt extremely whether the advantage which many gen tlemen anticipate from such an alteration would be dee rived from it. So tar as I understand the matter, there are two objects in view. Ono is from that school, in which I must not number my hon. friend (Hr. Spooner), repre sented by Mr. Twills. They consider that the simple aug mentation of the paper currency is an advantage to the country and increases the wealth of the nation ; that by increasing the limit of Bank issues 2,000,0)0/. you would add 2,000,000/. to the amount of notes in the hands of the public. That I take to be an entire delusion. (Hear.) I do not believe that the Bank of England would induce the public to use more notes than they do at present, and if the power were given, unless some stronger occasion than wo have yet witnessed were to occur the present number of notes 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 on 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 2,000,000/. less of bullion in reserve, and the only difference would be that there would be 2,000,000/. of riote3 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 arrangement 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 2.000,0001. 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 2,000,001/. snore 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 a 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 has 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 male 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 coarse of yesterday. He stated that the original enactment by which the 1.3 Lnk of England note was ma le a legal tender included both Ire land and Scotland ; but, inasmuch as doubts arose as to the construction of the Act, it was held to be confined to England, awl in 1845 au 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 alleged why that clause should not be modified, and why we should not revert to what seems to have been the de sign awl intention of the original enactment. (Hear, hear.) There is another question, too, which has been raised by the hon. member for Dublin (Hr. Vance), and that is whether it would not be proper that in Ireland the notes of the Bank of Ireland should be made a legal tender. That seems to me a fit subject also for the consideration of the committee. I have beau 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, accompanied with an in struction to inquire into the causes 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 Ole Act of 1814, which will investigate the subject of provincial issuesin England, and also in Ireland an Scot land, and which will, so far as they think it expedient, illustrate the general operation of the Act of 1811, 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 1R44 (7th and Bth of Victoria, cap. 32), and of the Bank Acts fur Ireland and Scotland of 1815 (Bth and 9th of Victoria, caps. 37 and 38). Mr. DISRA.ELI—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 am! 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 ? One would have supposed that the right hon. gentleman had forgotten for the moment the circumstances under which Parliament was 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, Team 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 commercial 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 as to what has taken place, or suggest any remedial measures. I consider that to pursue such a course would not be to the honour of Parliament. I anticipated from the first day of our ►nee ing that there would be a discussion upon the subject; and if I avoided mixing up this question with the debate on the indemnity bill, it was because the house thought that it would be snore convenient to keep the two subjects separate, and upon theunderstanding that ass op portunity would be afforded to consider this question. I 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 retnemthred, I was myself a membcr. The right lion, gentleman says that the evidence taken before that committee is not inferior to that taken before any 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 member 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 sense witnesses, the same informa tion, the same facts, and the same arguments that we had in the evidence of the committee upon commercial distress. (Hear.) Lot him understand that so far as lam concerned 1 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. gentleman will not however pretend that what has since occurred in the commercial world—if I may use so confined a term-- does not justify any gentleman, who at the end of the last session was wil- ling fo 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 it is a subject which requires no further investigation, but au immediate and distinct determina tion. 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. (Rear.) On ono point, however, he has not satisfied me. He will, he says, leave the law as it now stands ; but how will he restore it to its moral influence? Ho cannot forgot that it has been twice violated, and that consequently people now look upon it as an obsolete law, and no human being believes that it can be carriel into general practice. The right hon. gentleman must know as well as any other gentleman in this house that the moment a law loses that moral influence which all laws ought to possess, that moment it becomes, to all intents and purposes, a 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 be made and which puts the house in a clear and intelligible position. What I want the house to agree to is, that we will not stop future legislation, which we do if wo ask for future inquiry. I would induce the house to say that wo 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 one 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 again on the 4th of February from baying our months 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 overtra,ding, 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 ns In 1837 we had extended commercial relations with the United States of America. In 1817 we had 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 bee n the distress and commercial convulsion —you could bad a share in brin g i ng them abou t . Wh a t d o we find place Your finger on o ne or two causes which now? We have a disturbance of credit, 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, in a state of bankruptcy. There is no country in which credit is not more or less prostrate. It is prostrate in the Baltic States. The same is the case in Spain, in the south of Germany, in the centre of Europe, and in some portions of the north of Germany. In 1817 there was a document published from which he gathered that the failures which took place between August, an d the end of November amounted to 7,000,0001. The other evenin g it was my painful duty to call th e attention o f th e house to the list of failures which have taken place during the present crisis, and I am ECry to say that several other houses may now be ad led to the black catalogue. These failures amount to the sum of 45 ,000,000/. Thi s i s a sum much snore than double the failureswhich d in 1 8 47. Under these occurred circumstances, it seems to me that it is the duty of Parlia ment to inquire Into the causes of this strange convulsion —(hear, hear, from the Ministerial benches)--anl if the right hon. gentleman had come forward and appointed a committee to inquire into the causes of commercial dis tress alone, I would support him in doing so; but when I find a committee appointed to inquire into commercial distress, and as to how far it has been occasioned by the 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 37 days did that committee sit, and its pro ceedings wore a mere jumble 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 1811, and the consequence has been that you have had that act, iu use for the last 10 years without the slightest amendment; an d ; 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 another 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 remedy will be the same as that now proposed —the appointment of a committee to ascertain what por tion of the distress has 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 will correct any error into which I may fall, as I think the house has a much better chance of obtaining information on the subject from a discussion like the present than by consigning it to a select committee. I take, then as the goldasthe i consequence prime cause of the disturbance of public credit the recent ,iooooesim. of bullion, I take 1852 as f prosperity. We had then the f low rate o theienormousdiscoveries not na t m n amount c g o n r u Po e tt point t y t a h . n 2:2f 2 ,ll° °o l r p ue t e re r p er i va . ;i prevailed d alsothis Am e ra was not peculiar to England, because the same prevailed in eavltehroyugghmaaetted upon much earlier than other countries we have had imported into this country the enormous sum h a d b een by the ttieco N v v e n ry at o w f oTfhle9reo'w"asLaonfigdoeladt.hat the time had come when a great California. ofSince a l this 8 ? change was to take place in the value of money, and an op portunity afforde d b y increased capital of executing public works. We had in the first instance railroads throughout Europe. France, which had only one or two extremely necessary lines, e xecuted those grea t l i nes of railway i n the centre and sou th 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, were able to execute. She raise d new palaces. Public works on a still more extensive which Was scarcely ye was not a G overnme nt invest mentr A ofepi scale wore carri ed on in the cen tre and South of Europe. In short,rc a theta any country, e ither in Europe o .7- Upon th ese i mmen se invest ments there was a su p erstru cture of soeculation in the shares of tho se com p anies—the necessary consequence of the first investm ent. A new c lasss of houses and of mone tarymetaeitae nl in this wa institutions was established, in order to collect the Th a t was the tim e w h en the Credit M o bili e r sav i n gs and superfluo us cas h , and invest them in these un which pushed on aff i liated i ns tit u tions city in Europe. We criticis e d th os e institutions, we impugned the p rinciples o n which they were found ed, w e expressed suspi cion con cerning the dividends they paid, we have denounced the ir investments of capi tal and their adva nces as unscrupulous, rec kl ess , improvi dent, and unp rinci p led. d w in e a r s: :as: every n ab a shed, (Hear hear.) Bat what , has more recently occurred in this country shows that, whilst, we pointed out the mote in our neighbour's eye, we were not Buffici m ety a coomnbacairoruasutihna: our own great condi tionwae perhaps even under takings stimulated consumption, and this great stimulus to consumption increased the price of all produce. Gamb ling arose just the same in shares in public works n as i pro duce, in which there was So ext raor di na ry a ripe as seemed to astonish the world. This was attributed in part to the increase in our metallic treasures. The conse quence of all this was speculation, reckless investments, and ovortrading, which year after year increased. Year after year those engagements were 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 despatched to Melbourne. Well, the merchant at Hamburg accepted the bills, and the moment he accepted the bills he drew upon the merchant in Len 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 the transaction, the solvency of the parties, or the value of the cargo. Now, why had such trading as this gone on to inch 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 men were looking about in alarm, there arrived those golden galleons from Australia—those rich argosies from California— which, throwing an immense heap of treasure uponthe mar ket, averted the suffering which was imminent. But things went on, and it was no longer in the power of 20 or 3) 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 Car 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 measured oven by hundreds of millions, but by a denomi nation unusual oven in commercial returns. In these ti an sections the share of England is to be computed by hun dreds of millions, and yet we are to be 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 brou;ht 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 sight 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 b sink notes ? What happened in 1823? There was then a commercial convulsion. Then it was pretended that the cause was the issue of notes by the country banks. Well, in 1837 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 (ail. Charles Wood.) In 1847 there was another crisis. What produced the con vulsion then, according to groat 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 instancy they have attributed to the least influential form of credit conse quences 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 cir cumstances, ever reach. Now, sir, I will show the house, if it will permit, in this misapprehension also lies the cause of the difficulty under which we are now labouring. and in its solution alone shall we ever discover any efficient means of extricating ourselves from this perpetually re curring embarras•mont. It has always struck me as a very curious subject of inquiry, why men should persist in such a confusion of ideas as always to mistake capital for cur rency, and to attribute to the loss powerful instrument the snore 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. That high authority to which the right hare gen tleman the Chancellor of the Exchequer referred (Lord Overstone), who does justice to the merits of bullion, and my hon. friend behind me (Mr. Spooner), who sufficiently esteems the merits of paper, both agree on the point that commercial convulsions are occasioned, or may be mate rially prevented, by the wise regulation of the circulation of bank notes. Now, I wautto know the reason why people, differing in every respect as regards the subject generally, should be in accord on that point ? I think the fact may be accounted for, and I am of opinion that in ascertaining the canoes 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 fall of prices, and that continued for two years or even snore. 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 blem in Euclid mere 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 1810. I am sore that no one in this house would speak of the labours of the bullion com mittee but with that respect which all great intellectual efforts and public services deserve ; that committee vindi cated that great principle upon which the happiness of communities mainly depends, the standard of value. (Hear, bear,) The bullion committee proved that an over issue of inconvertible paper might bo depreciated, and in our case depreciated. I think a vory fair argument might be urged to show that the price of gold in those days was raised by some other cause besides the existence of depre ciated paper • but lot 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 is not an excep tion to the rule that time and thought mature the expe rience of mankind. It is not impossible 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 subjected 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 pos sviabnlececdonasnedquesetnavisehva s o n f ti the th a p t r i allnc i e the s sharpavhi e h e x t i h ) e e r y i e n a cde which this country has gone through during the years that have 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 ana 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 aro 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 hon. bart (Sir C. Wood) whom I now see making a note. I hold, sir, that by ample, com plete, and irrefutable evidence three things may be proved —first, that notes convertible at par cannot be depreciated; secondly, that it is impossible to force their circulation— (hoar)—and, thirJly, that for any issuer of bank notes, convertible at par, to price cannot be affected by a bank note circulation under such conditions further than they would be affected by an equal amount of metallic cur rency. (llt ar.) I hold, sir, that it has been shown by the labours of our committees, in the evidenee which they have taken—l hold that it has been shown, in a manner which cannot be confuted, that thero 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 paym ents 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 in the long run tho balance is always struck between them. (Several 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 is encounter with regard to the issues of bank notes dur ing all these commereial 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-eight. 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 repeated by his successor upon the Treasury bench at this moment— to have been occasioned by the over circulation of notes 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 with 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 hon. gentleman opposite (Sir C. 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 ho examines them lie 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 Parlia ment. Yon will end, in the whole circulation to England supplied by hundreds of country bankers, that at a particular I eriod 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 corre spond with the occupations of the people amongst whom those notes aro 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 circulation : that at the end of the year, when agricultural pursuits aro dead, the circulation falls, and after the harvest you will find the circulation equal. Now how is it possible to view these pheuerana—for a quarto; of a century the returns show them to have occurred with astronomical precision- a lio* is it possible to view that rise in the sprihg, that sinking in winter, and that even condi tion in the autumn, with ou t seeing that there is some 1::w which regulate the circulation of notes much too strong to be influenced by Acts of Parliament ! We do not possess much informatian about their own transactions from the country bankers; they 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.fbr ce th e i ssue o f th e i r notes, what would they be doing ? Why, while they think they are putting their notes into circulation, they are but 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 notes. The circulation of bank notes is currency, and I defy any banker to convert that currency into capit a l : Any one may take and lock up the notes in his strong bo x ; that he may do ; and if he do, no one will say that w He so locked up such notes can have any effect 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 produce% 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 oint stock banks. Then we find that on account of the horrible sins of the poor 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 the 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 wore founded in this coun try. We have since hears 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 mo say that joint stock banks when established were of no mean character. There were at that time 107 of these institutions in the coun try ; they had a paid-up capital of 15,000,000/. ; 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 seat of trade and seat of agriculture in England. They were established on the prineiple and with the idea, that they would make a great profit by the circula tion of their •bank-notes. What occurred T When the com mercial convulsion happened in 1837, it was found that the circulation of the joint-stock banks had 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 1,500,0001. It was instantly said that the com mercial convulsion of England had been occasioned by that over-issuo of 1,500,000/. There was a redundant currency. The fall of great houses and the disturbance of capital and credit throughout the United States and England were attri buted to that cause. It was urged by the defenders of joint stock banks that their business had really very much increased iu consequence of the demands of the public upon them ; but these gentlemen were not listened to. Can there be anything more absurd than to think that so great and important an effect as the commercial convulsion of 1837 could be occa sioned by so mean and petty a cause ? But let me remind you that these instances and these arguments were not only at ono time prevalent but predominant in this house ; and it is because these arguments, founded upon these instances, have been taken so easily that we have had the law passed in 1844 which, to the confusion and shame of the country, must, on every recurring emergency, bo suspended t What is the point, then, with respect to these joint-stock banks ! It is but very recently that, in the course of the examina tion af witnesses by the same committee—a repetition of which the right hon. gentleman proposes to-night I find the right hon, member for Halifax sharply cross-exa mining one of the witnesses who had advanced an opinion which I believe to be a legitimate opinion, viz., that an over issue of bank notes convertible at par was impossible—the right hon. member sharply cross-examining him as to the over-issue of notes to the paltry amount of 1,500,0001. But it now turns out that this excess of issue was produced by depriving the poor country bankers of nearly the whole of their circulation, and not only that, but by affecting the branch banks of the Bank of England to no inconsiderable amount. So that over the whole of this country, after the addition to it of 1,500,000/., the aggregate circulation in that year was absolutely diminished. Who can think, after evi. deuce of that kind, of supporting a theory which I think the Chancellor of the Exchequer to-night has 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 ho suggests. What can evi dence do moro that has not been done by the events which occurred in regard to join'-stock banks, whose over-issue, as it was alleged, of a million and a half, had occasioned a con vulsion in England and Europe. At that time there were failures of joint-stork banks for 1,500,0001.; but what was their issue ? There was ono bank, for instance, the Northern and Central J•dut-Stock Bank, which failed in 1837 for a large amount, but their issues were only 30,000/. in notes. It was that paltry issue, however, of 30,0001. which cause I the convulsion, and not the injudicious, improvident, and unprincipled advances to the extent of 1,500,000/. (Hear.) What has occurred at the present day ? Look at the joint stock barks in Scotland and England which have suspended; many of them we'o not banks of issue at all, and some of them, with a liability of a million, had been issuing 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 objec tion. But if you look at the circulation of the Scotch banks you will find an important illustration of the principle for which I havo been contending. Since the year 1826, in that country where banking facilities and the employment of banking canital and credit is so great, we find that the notes in the hands of the public have every year bean diminishing. And at this moment I doubt whether the amount is so great as it was when that great development of banking took place. I havo now shown you that with regard to the circulation of the notes of the country bankers in 1825, and the notes sent into circulation by the joint-stock banks in 1837, there can bo nothing more futile than to suppose that the convulsions of those years were attributable to such causes. Lot 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 cause which could be alleged for its misfortune was the mismanagement of their notes in circulation. Our 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 Turred, 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-issuo, and of the power of the Bank directors to force the circulation of their totes, 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 year exports and imports, and in these 10 years you have not added one bank note to the amount in circulation. The whole of the bank notes in circulation in 1846 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 seen 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 ether 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 cousideration of the illegal suspension of the Bank Charter Act by the Government with no prejudice whatever. I am not one of those who suppose that a disturbance of the capital credit of a country like England will bo at all pecu niarily affected by the circumstance of their having a limited circulation of the notes of the Bank of England. But, sir, it is impossible, in my mind, to resist this conviction, that the act of 1844, which, after all, was an act only to regulate the circulation and the issue of Bauk 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 the provisions of that act 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 tans 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 Ration of the Bank Act is exactly the same. While at ono 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 a 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 distributory, power is to be entrusted of bank notes convertible at par, because it is impossible in my mind to believe 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, on the other hand, have taken a course which is the Parliamentary ono, which is the legitimate 'one, which is, I maintain, the moderate and proper one. (Hear.) As for legislating before Christma s upon a question of this k ind, it is absurd to suppose that the First Minister hims elf would embark upon such an under taking. But I ask the house to-night to come to a resolution which will show that, though we are not prepared to come to ca precipitate conclusion , we can arrive at this ‘zinclusion, that the materials for legislation are in our possession, and that in due season, after due deliberation, we win adaress om ss to the solution of th is great public difficulty. (Cheers.)e ourselves to the solution of this great public difficulty. (Cheers.) I would say one word with respect to the conduct of the Bank of England. I understand, sir, and I have been told in the co urse of the last speec h but one of the Chancellor of the Ex chequer,that all the directors of the Bank of England are in favour f this measure—that they are in favour of the Act of 1844. New, sir, I shOuld not wish to speak of the directors of the Bank of England iu an y other terms than in those of the sincere respect to which they are entitled. I think it is a very great thing for the people of England, and for the City of Lon don, that a body of men of such intelligence and public w spirit can be induced to undertake the mana g ement of such with i ns tit u tion as the Bank of England , and whoay add,ca n conduct t h emse lves with so great firmness, and, I may great liberality. But if an attempt be made to influence pub lic opinion in this house by appealing to the great authority of the Bank directors, I am sure they will permit me to advert to some circumstances, not in a hostile but in a truly friendly spirit, which I think ought to be brought b e f ore th e conside rationr of the house, not in order to deprive the Bank directors of their due influence upon our debates, but which I think should be placed before the house, not in an exaggerated light, but in that calm tone tq which they aro entitled. Now, Ido not know whether hon. gentlemen have read the evidence that was taken before the committee on the Bank Charter Act which Sat pine last year. Perhaps since this catastrophe has occurred they have duly digested those important maters, (Hear.) - But a second volume Las been published; which it is very probable they may not have read.. It is the most . entertaining volume in the world—although ft 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 circu/ation until every critical moment. (A laugh) This volume contains the opinioni of, the ''ank delivered in 1856, upon the Batik Charter Act. The Mau , calor of the Exchequer, wishing to obtain the best informa tion from the best quarters, addressed a circular to 'the 13ahk directors, asking them to favour him with their opinion on the merits of the Bank Csarter Act. I did not bring the volume down with me, thinking it mi, ht 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 large 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 1844 ; they acknowledged that what occurred iu 1847 was a rather awkward fact in history, but their lan guage was that of undiluted panesyric, they were not the less sanguine, because it was totally impossible that events like that of 1847 could ever happen again. (Cheers.) And in the saute simple, satisfactory, and all-convincing terms a gentle man--formerly a member of this house for Southampton; and now, I rejoice t o say, ' a country hamshire, Mr. Hubba r d, a late governorgntlemofan England—said that the r u l es of banking areunder stood. (Laughter.) "I n 184 7, " hei t h o o f B B u a e n ld k n o g i sasaid, „ w now e didnot understand our business ; but it now that we may dismiss 1847 front our - hideous dream. Let 1847 no longer disturb the slumbers as a awaken the inquiries of a Chancellor of the Exchequer that or can never happen again ; we now understand thetru e ; ns • ciples of banking. _ The Chancellor of the Exchequer is - going m. down to Parliament to propose a committee just to amuse the country, but rest your confidence on the Act of 1 844." (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 circiunstance that these prophe sies were not published till after the suspension of the Bank Act. It appea s that a book has been printed, which is a folio volume, and that great expense has been ineurrcd ; but think that even if the members of the Government had sub scribed amongst themselveis 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 mentber 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 hen. member for Huntingdon was, I believe, at the Baths of Kissingen when thli circular was issued, and on behalf of this house and the' 'Country ' I offer him the most sincere congratulations. (L sughter ) In taking this objec tion respecting the Bank directors, I wish to make one remark of a more serious character. As I hope that the committee will receive its death-blow from this debate —(hear, hear, and laughter)— I will venture to ex press my opinion that the three great conclusions to bo drawn from the arguments and from the facts which I think aro satisfactorily established by the evidence which we have before us, aro these :—I think it is by the evidence conclu sive'y shown that in the first place the diiectors of the Bank really exercise no more control over the circulation of their notes than the members of this house do. (Hear.) I believe what is called the manag- ment of the circulation of notes by the Bank directors is a misnomer and a delusion. (Hear.) Secondly, I think that the directors of the Bank 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 inflate importance than the circulation of bank notes. The wealth of the nation is affected by the regularity of the rate of discount, and in the d scretion in which advances are made, so are benefits exercised over the fortunes of this country. (Hear, hear.) Thirdly, it does appear that it has become a national object, which statesmen shall accomplish, that there shall be in the Bank of England a great treasury, which shall be at the command of the directors in moments of emergency like the: c 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 pnrsuits 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 question. This question is entirely exhausted by select committees, though no man can esteem higher than I do toe select committees of this hous). 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 east° which they have to pursue research, but to exercise judgment. They not only accumu late information, but they have the power of crass-examining witnesses, which this house cannot exercise. It is therefore of the highest importance, when questions 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 investigated 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 sufft clout and investigation, and all which it deserved. I am not supposing that upon the principles which shall regu late the issue of bank notes this house will immediately come to a unanimousopinion, or that that opinion will be carried here by a large 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 that, but penetrating minds, who can arrive at a conclusion sufficient to guide public opinion. But the le -1 hours of a committee, though they have exercised no influ ence out of doors, they do so in this house. (Hear.) In my opinion we 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 and settlement of this question. (Hear, hear.) I was surprised to hear that Lord Overstone had declared, in his opinion, that discussion upon this subject is inconvenient and injurious, and that Par liamentary debate upon it should not be encouraged, but even, if possible, prevented, and that we should rest upon the conclusions we 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 am sure, whatever may 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 hero 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 case ? 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. The 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 tween the Government and the Bank of England. Well, what had occurred in the meanwhile, to render the investi gation of these questions oT less importance. (Hear.) They had been told that the doctrines of the "bullion committee" had laid the fouidation of most of the misfortunes that had afflicted England within the last half century. Now, lie would submit that the labours of Mr. Homer and Mr. Huskisson. ought not to be overthrown quite so lightly. T.ie 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 com mereial credit. lie alluded to the extraordinary amount of , money now held in single hands, not, as formeriy, 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 urg d against the act of 1844. The first was that it 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 thinly he would admit that the act of 1844 caused a limit ; but then he was prepared to contend that it did not use so I 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 Bads 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 the Irish banks throughout the crisis ? (Hear, hear.) Yet what was their position in the year 1826 1 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 three- tors of the Bank of. England were almost unanimous in sup porting the act of '44. What he was inclined t o ask was for this,l.he ought not they to inquire how fa r it was possible Bank of England to be responsible for the advance of capital - if it could exercise no con trol over its issues I He believed that if they were rightly to assess public opinion, they would find there was but a very declinin g feeling in favour con vertible, unlimited ' 26, ,, of a currency, which in the years 3- 39, was found to be comparable with so large an amount of com mercial suffering. The right hon, gentleman having reviewed the circumstances of the present times, asked whether there was any reason why they should not pursue the recommenda -1 tions of the committee of the last year, especially why those investigation • s should not extend to Scotland ? If those re commendations were sot 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 alrmation of a principle from which the country had derived inestimable advantages. Mr. GLADSTONE said that. having heard the speech of the right honourable gentleman who had just sat down, he felt persuaded that this country would be adopting a retro spective step if het had foll owe d out the suggestions he had offered. What was the doctrine propounded on tho currency by him—a subject on which he was pure li g ht and reason ? He had stated that doctrines had been diffused wwhich had thrown oven those of Huskissou and others, on whom ' the greatest I elianee should be placed, and ho had added that if the investigation were referred to a committee. those propositions would bo negatived. "e (Mr. Gladstone) inverted his propositions, and thought that aeom He would in a very short sitting affirm all those doctrines. the doe thought the right hon. gentleman was endangering . trines of which he was ansosron house to go back to a ratification right hon. gentleman He (Mr. Gladstone) being system which prevailed and dangerous, advocate, tu asking the of theories of which the d demonstrated the unsoundness. he therefore firmly convinced that the before very strong reason, to thought, proceed, for 1844 was radically unsound of opinion that we ought was return to that system . Th • grounds not, without me were, he on which the house ought now to specifiche believed the Parliament of England o ught now to tell the country plainly 1844. what it thought of of ought of the act His reason for that was that he felt satisfied that the act of 1844 could not stand as it was. That act, as experience has shown, required alerations in order to obviate difficulties an d dangers which if left without a remedy would peril the principles of the not itself. On two occasiont they had ass n ~~