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

IMPERIAL PAR LIAMENT. HOUSE OF LORDS—(YEsTratply.) The Loan CsAzecuraoa took hie seat on the woolsack it fire o'clock. THE BELFAST RIOTS. Viscount DUNGANNON gave notice that on Mon day next he intended to ask the President of the Council whether the report of the evidence, taken by the Com missioner, who recently sat at Belfast, was likely to be presented to their lordships. INDIAN NEWSPAPERS. The Earl of ELLENBOROUGH gave notice that on Monday next he would move that there be laid on the table a copy of the Arms' Act lately passed by the Legislative Council of India ; also a return of all native and European newspapers licensed under the Act of the Legislative Council up to the 29th of June last, together with copies of all letters of warning addressed to the editors of such nat ive and European newspap er s, of all revocations of the licenses of newspapers, and of all correspondence with regard to the restriction of such licenses. RELIGIOUS WORSHIP ACT AMENDMENT BILL. _ The Bishop of OXFORD asked if it was intended to press this bill to a second reading on Monday next. The Earl of SHAFTESBURY said he should state the principles of the bill on Monday, and postpone the second reading till a future day. Their lordships then adjourned. HOUSE OF COMMONS.—(rESTBRDAY.) The Sri:Ain't, took the chair at 4 o'clock. BEVERLEY ELECTION. The SPEAKER announced that he bad received a communication from the examiner of recogßisances, stating that the recognisances for prosecuting an in. quiry against the last return for Beverley were unobjec tionable. THE PATRIOTIC FUND AND RUSSIAN GUNS. Lord ALFRED CHURCHILL moved for returns of the amount contributed by each of the colonies respect ively toward the Patriotic Fund, distinguishing the sums voted by their different Legislatures from the amounts fur wished by voluntary subscriptions ; and, of the number of Russian guns taken during the late war, which have been distributed as trophies amongst the different col°. nice, specifying the number sent to each colony.— Agreed to. EAST INDIA (BISHOPS AND CATHEDRAL ESTABLISHMENTS, ttc ) Col. SYKES moved for a return of the annual expen diture for Ecclesiastical objects in India, at the dlffe. rent presidencies, from 1836-1837 to the latest period, tinder the several heads of bishops and cathedral esta blishments ; number of regular chaplains ; number of uncovenanted auxiliary chaplains • cost of budding churches; coat of grants in aid Of church bulking ; allowances to Roman Catholic chaplains; and miscella neous expenditure.—Agreed to. EAST INDIA (MILITARY FORCE.) Sir F. SMITH moved for a return of the actual mili tary force that was in India at the time of the outbreak of the mutiny at " Meerut ;" distinguishing the several branches of the service, Cavalry, Artillery, Engineers, and Sappers, and Infantry ; and diitiuguialsing the troops of the Queen's service from those of the Eait India Company ; showing, also, as far as can be ascertained from documents now in the hands of the Government and of the Board of Control or East India Company, the stations at which the troops ware at the time of the outbreak of the mutiny severally quartered. —Agreed to. TRANSMISSION OF TROOPS AND STORES. Sir DE LACY EVANS gave notice of a motion relative to the transmission of troops, &c., to India, but he spoke in his usual low tone of voice, and was conse quently inaudible in the galleries. ENDOWED SCHOOLS (IRELAND). Mr. GREER asked the Chief Secretary for Ireland whether the report of the Commissioners of Inquiry in regard to endowed schools in Ireland had yet been given ; ant;, if not, when it was expected to be ready. Mr. H. HERBERT said that the report had n-t yet been sent in to the Government but he expected shortly to receive It. ECCLESIASTICAL COMMISSIONS BILL. Mr. KNA TCHBULL HUGESSEN asked the Secretary of State for the Home Department whether it was the intention of the Government to re-introduce the Ecclesiastical Commission Bill of last session during the present session. Mr. MASSEY raid that such a bill would be introduced in the other House of Parliament, but he was unable to say whether or not it would contain the provisions of the bill of let session. HIGHWAYS. Mr. KNATCHBULL-HUGESSENasked the Under Secretary for the Home Department whether it was the intention of Government to introduce a bill for the amendment of the law relating to the management of Highways during the present session. Mr. MASSEY said that he should introduce such a bill next session. TELEGRAPHIC COMMUNICATION WITH EGYPT AND INDIA. Mr. CRAWFORD staked the First Lord of the Trea sury whether any arrangements bad been made, or con •entions entered into, by or on behalf of her Majesty's Government, with any companies, individnals, or foreign governments, for establishing telegraphic conamn rtications with Egypt and India ; and whether any aegotiations were uow pending, and with whom, in reference thereto, and, if any had been terminated, would he state the terms. Lord PALMERSTO' said the Government had been in communication with Austria on the subject, but the conditions required by Austria were such that Her Majesty's Government could not with propriety agree to them, and therefore negotiations had been dropped. (Hear, hear.) The conditions ►ere, that Her Majesty's Government rhould engage to use no other line but that in their communications with In dia; and, also, that this country should undertake to continue the line from Suez to India ; that the British Government declined to agree to. He hoped Austria would be induced to adopt a line of communi cation through her territory, and if so, the Government would be ready to pay for the use of the line in such a manner as might be agreed to. The Turkish Government proposed to establish a line of is legraph from Constantinople or a point on the opposite shore to the head of the Persian Golf, with the hope if the line should be established that the British or In dian Government would carry it on from that point to Kurrachee. (Hear, hear.) IttIWA'R,DS . TO INDIAN OFFICERS. Colonel NORTH asked it the officers who had received titles from her Majesty, and the widow of General Neill would be called on to pay the usual fees. Mr. WILSON said they would not. Tore() years ago it was arranged that such persons should not be called on to pay fees. The officers engaged in the Crimean war, rewarded in a similar manner, paid no fees, and the same course wool' now be adopted. (Rear, hear.) ARMY WARRANT, 1854. Oe the motion for the adj )urninent of the house, Geg. PEEL asked the Under-Secretary what was the result of the Government inquiry on the army warrant of 1854, and what steps had been taken in consequence Sic J. RAMSDEN said that, in consequence of the ludian disturbance, the department to which it belonged bad not been able to direct its attention to the subject, but he hoped shortly after the recess to be able to give an answer to the question. After some remarks from Col. NORTH, t'le subject dropped. VOTE OF THANKS TO THE INDIAN FFICERS. Sir DE LACY EVANS asked the Government when a vote of thanks of the h.)use would be proposed to those officers who had so gallantly dibtinguished themselves in India I Lord PALSIERSTON said he was unable then to nama a day. He would give due notice when it would be proposel. ENGLISH ENGINEERS AT NAPLES. Mr. MILNES called the attention of the Govern ment to the apprehension and detention of BritieL engineers found on board the Cagliari by the Neapolitan authorities. Lord PALMERSTON said that full inquiry had been made into the circumstances, but the Govern ment did not consider themselves called upon to interfere. These individuals had been taken in an apparent vi o l a ti on o f t h e N eapol i tan laws, and her Ma jesty's Government bad no right to say they should not be t.ied for thit offence. One of the moat eminent Neapolitan counsel had been appointed there, acid so far as things now stood, her Majesty's Government bad no cause of complaint against the Neapolitan Government. THE ADDRESS. Mr. W. MARTIN brought up the report on the address. After a few remarks from Mr. PAOKE, The report was unanimously agreed to. THE INDEMNITY BILL. On the motion of tbe Chancellor of the Exchequer the house resolved itself into a Committee to consider the Bank Charter Act (7th and Bth Vic. cap. 32). Mr. FITZROY in the Chair. This Act and the Royal Speech having been previously referred to the Committee, the Chairman read the pas. sage in the Royal Speech relating to tbe subject. The CHANCELLOR of the EXCHEQUER then said—l rise for the purpose of bringing under the atten• tion of the house the queation which, as has been stated in the extract from the gracious Speech from the Throne, has led to the assembling o f Parliament before the usual Ire order that the Committee may fully understand the nature of the act of her Majesty's Government which has induced the directors of the Bank of England to in fringe the provisions of the statute, and thus renderad it obligatory upon me to ask the house to give its consent to a Bill of Indemnity, it will be my duty to call th e i r attention to the existing state of t he law. Sir R. P ee l , in the course of his long political career, induced the Le gislature to agree to two important Acts relating to th e currency, which were in point of time separated from each other by a quarter of a century. The first of these Acts, as is well known to the Committee, was passed . in 1819: It rest ore d t h e currency to it s proper nietaic basis, put an end to the state of things existing during the war—a state of suspension of specie payments, and established the convertibility of a bank note. After that Act bad been passed the power of the Bank cf England to issue notes was unlimited in point of s xtent. They were only subject to the condition of being payable in gold on demand, and the power of establishing country banks was also unlimited, subject to the privilege which then existed in favour of the Bank of England from the practice in reference to 6 partners. These banks when es tablished could create any quantity of bank notes. The same power existed both in Ireland and Scotland. Any person could under that law establish a bank and issue notes payable to bearer on demand, provided only that those notes were paid in specie on presentation at the bank. That was the state of the law from 1819 to 1844, the date of Sir R. Peel's second important Act on the currency. That second act, he stated to the house, was to be considered as a complement of the first ; he in tended it to secure, in fact, that convertibility of the note which was made legal only by the Act of 1819; and the provisions which he introduced were to the following effect :—ln the first place, he enabled the Bank of Eng land to issue notes on securities to the extent of 14,000,0001. together with any further sum which might aecrue from the lapsed circulation of the English coun try banks, as to which some detailed provisions were in troduced into the Act. An order in Council under those provisions was passed about two years ago, authorising the Bank to add to that portion of its tissue which rests upon securities the aura of 475,0001. Therefore at pre sent the issues which the Bank of England can make upon securities—and it is not allowed to make any issues except upon Government securities—is 14,475,0001. In addition, the law allows the Bank of England to make an amount of issue equivalent to the bullion which may be in its coffers. The Act of 1844 further introduced a provision which seems to me, although in some manner connected with them, yet to be essentially different in its character from the other provisions—l mean that for dividing the Bank of England into two dspartments, the issue and the banking department. Gentlemen who are familiar with the mode in which the weekly returns of the Bank are published, are aware that the *Facts and liabilities are always classed under those two divisions. I shall presently have to call the attention of the Com mittee to the practical working of that system with reference to the measure to which I am about to ask their assent. I should add that with regard to English country banks the Act of 1844 contained this important provision,—it prohibited any bank which might after the passing of that Act be established in England from issuing bank-notes. It limited, also, the note issues of the existing banks to the amount which was then in circulation. It contained no pro vision requiring them to issue notes on securities, nor did it allow them to exceed the fixed limit by issuing notes against bullion. Therefore, under the Act of 1844, the condition of the English country banks is this :—No new country banks can issue bank-notes at all, and the country banks existing at the time of the passing of that Act are limited in their issue to the cir culation which they then possessed. In the following year was passed an Act with respect to Scotland and Ireland, which was intended as a part of the same mea sure. Its effect was to limit the existing banks of Ireland and Scotland to their then issues, as in the case of the country banks of England. It did not require that those issues should be guarded by securities of any kind, but it authorised them to make issues in excess of their certified circulation against a deposit of bullion. Therefore, in Ireland and Scotland there is a certain amount of paper which is limited under the Act, in addition to which the banks issue a certain portion against sovereigns. The committee ought to bear in mind the practical result of this compound system upon the circulation as it exists at the present moment. On the 11th of April last the notes of the Bank of England in the hands of the public amounted to 19 ,752,0151. At the same date the note circuiation of The English country banks was ........... £6,920,000 The Scotch banki 3,832,000 The Bank of Ireland dud other banks in Ireland Total £17,905,000 Adding that amount to the circulation of the Bank of England, we may take the paper circulation of the Unites Kingdom to be in round numbers about 38,000,0001. Of that 33,000,0001. the only portion which is strictly covered by bullion is that which is issued by the Bank of England in addition to the 14,475,0001. which they issued upon securities. The whole of the circulation of the English country banks and the chief part of the circulation of the Bank of Ire land and the Scotch and Irish country banks is, so far as the law is c,oncerned, not represented by bullion. The security whizh the law takes fcr that portion of the circulation is the legal convertibility of toe note—the liability of the banker to pay in specie when the note is presented. That is the existing state of the circulation nnder the different Acts which regulate our currency ; aid it is essential to bear in mind, with reference to the solvency of the Bank of England and the importance of keeping a large bullion reserve in that centr ol establish rner.t, the c:meiderable amount of the provincial issue. When Sir R. Peel introduced the measure of 1844, he stated one of the main objects which he had in view was to provide security against the excessive issue of paper, and thereby to guard against the recurrence froia time to time of those commercial panics under which the coun try had at different intervals suffered previously to 1844. At the same time be stated that he did not propound his measure as a panacea, or as an infallible guard against such panic, because he said that the issue of bank paper was only one of their causes, and he recognised the fact that cimmercial panics might arise from causes which did not lie within the scope of his legislatioa. But in 1847, after the commercial crisis of that year, when it became requisite for the Government to authorise the Bank, if the necessity should arise, to exceed the limit& fixed by the Act of 1841, Sir R Peel, in the discussion which arose, delivered his opinions more fully on the subject than be bad previously done, and he gave a definition, corrected by experience, of hid own views as to the objects of the Act of 1844, which, as it contains an authentic ex?osaion of his opinions, I trust the Com mittee will permit me to read. Sir R. Peel, upon the 3d of December, 1847, said : " I say, then, that the Bill of 1844 had a triple object. Its first object was that i❑ which I admit it le +s failed, viz., to prevent., by early and gradual, severe and sudden contraction, and the panic and confusion inseparable from it ; but the Bill had two other objects, of at least equal importanle—the ono to maintain andf, guarantee the convertibility of the paper currency into gold, the other to prevent the difficulties whica arise at all times from undue speculation being aggravated by the abuse of paper credit iu the form of promissory notes. In these two objects my belief is that the Bill has completely succeeded. My belief is that you have had a guarantee for the maintenance of the principle of convertibility such as you never had before ; my belief also is, that whatever difficulties you are now suffering, from a combination of various causes, those difficulties would have been greatly aggravated if you had not wisely taken the precaution of checking the unlimited issue of the notes of the Bank of England, of joint-stock banks, and private banks." That was Sir 11,,bert Peel's definition of the act after he had become aware of the events of 1847. I may also call attention to the rernarits that my right hon. friend near me (Sir C. Woed), wh, then held the office which I now hold, made upon the measure then brought before the house, as showiug that in his view the act was never considered as a specific against commercial panics. Ho said : " A complaint has been made that this act has not pre served us from commercial convulsion. I think that those who expected such an effect from it much miscalculated the motives by which persons engaged in commercial trans actions are eotuated. Certainly, for one, I never hold out any such expectations to the country. I stated most dis tinctly that I did not contemplate that such would be the effect of the act. . . The same effects precisely might have occurred under a metallic circulation as have occurred under our mixed currency, and the advocates of the act of 1844 never professed that its operation would produce any other result than that which might have happened nn ler a metallic circulation." I think that thin reference will satisfy the committee that the authors of the act of 1844 did not contemplate its proving a panacea or a complete guarantee against the occurrence of commercial crisis, which are produced by a variety of onuses oe which no legislation,and certainly no legislation confined to the currency, could operate. I w.ll now briefly advert to the peculiar crisis of 1847. It was described by my right hon. friend in moving for a coin- ' mittee on the subject as being caused by the abeerp tion of available capital for the purchase of corn and the construction of railways acting upon a very unsound state of commercial affairs. It arose from internal causes, from an internal demand flr a large and extraordinary amount of capital, and had no cmnection, as in the case which we are now considering, with our foreign trade. In 1847, as in the present year, her Majesty's Government, considering the urgency of the commercial crisis, came to the conclusion to issue a letter to the directors of the Bank, authorising them in certain cme ttngencies to exceed the limits fix-d by the law. The cause of issuing that letter was stated to be the want of confidence in the commercial classes which then existed, and its object was also defined to put an end to the present alarm. Although the cause of the panic in 1847 was different from that rif the panic of this year, yet the object aimed at by the issuing of the Government letter in those two years was identicaly the same. The Bank directors, however, did not find themselves under the necessity of overstepping the law of 1647. Confidence was re-established by the issuing of the letter. Its in fluence upon the commercial classes was immediate, and the Bank directors were enabled to navigate their ships through their difficult'e3 without exc?eding the limits of the law. Neverthe'e3s, Parliament was assembled before the usual time. Tbe . attention of Parliament was called to the matter by her Majesty's Spet di, lir as no Indern n'ty Bill was required the d'rect event of Parliament to a bill was not obtained. Nevert hetes., a committee of inquiry into the Act was appointed upon the motion of my right hon. friend. That motion gave ri , e to a debate, but I believe it was unanimously assented to by the House. Sir Robert Peel, who was the author of the Act, expressed himself in terms the most unarn , itignens, in approbation of the sanction which hail been • giveen by the Gove rnmen t t o th e suspens i on for a t me of tb werlpaits fi xed by th e A c ' . I sha 1 quote smile of his a nn that o,:cagier and I think • is (, im f •p or' a , ce that the cnutnittee shouh hear them in mina , i nas m uc h as the di st i nctness batter which he spoke proves that be, either in or cut of who Was certainl y this ttel i q u ualified than any other pi r on upon the policy of the Ac o tiiewas se, to speak with authority 'was satisfied of the propriety p ovine aloinstPbnile— of the step then taken, y —the Government must assume a " But when there occurs a staat:e7 a ' a state which aw—which cAs ncaontnbote b r e ea f r o e n s e e d e n w or i power to prevent tho cons e quences which may occur. Thera is the necessity for a dlscration which I think was properly ex.2relsed in the present instance. I t was better to authorise a violation of the law than to run the risk of the consequences which might have ensued if no interven tion on the part of the Government bad taken place. . . Sir, I think that the Government were justified in issuing that letter. I think that, having issued it, they acted with the strictest regard to constitutional principle in forthwith summoning Parliament." That was the judgment, if I moray so, that Sir R. Peel pronounced upon that question. But the matter did not rest mere'y with the appointment of a committee, and the approbation by individual members of Parliament of the step taken by the Government. On the 17th of Feb. 1848, Mr. Harries, who was then a member of this house, moved two resolutions in a committee of the whole house, the first of twhich confirmed in a most distinct manner, the policy of the step. It was in these terms : " That looking to the state of distress which has for some time prevailed among the commercial classes, and to the general feeling of distrust and alarm by which the em• barrassments of trade have been aggravated, it is the opi nion of this house that her Majesty's Ministers were justi fied, during the recess of Parliament, in 'frecommending to the Bank of England (for the purpose of restoring confi dence) a course of proceeding at variance with the restric tions imposed by the Act of the 7th and Bth Vic., cap. 52. " That this house will resolve itself into a committee upon the said act." That resolution was put and carried without a division, from which it is manifest that the house, upon a consi deration of the subject, explicitly approved the act of the Government. ;But a select committee was appointed to inquire into the act of Parliament, and several most able aid competent witnesses gave evidence before them. In their first report, dated the Bth of Joni, 1843, they said : " The issue of that letter was no doubt an extraordinary exercise of power on the part of the Government, bat the House has decided that in the peculiar circumstances of the period they were justified in taking that step." ' Therefore the committee—perhaps, it is a solecism to say so—adopted the resolution of the House ; at all events, the committee, after great consideration and inquiry, referred to the previous resolution of the House as em bodying their own opinion. Having thus, I fear at too great length, but with a minuteness which I thought the importance of the subject required, stated what took place in 1347, I will now, with the permission of the House, call their attention to the events which are now immediately under our consideration. With regard to the commercial crisis into which we have lately entered, and from which I think we can scarcely be said yet to have emerged, it may be observed that no symptom of an alarming or even of a threatening character (if we compare the bullion and reserve notes of 1856 and 1857) manifeeted itselfiuntil about the 18th of October. From that day a perceptible deterioration began. The bullion in the Bank fell between the 10th and the 18th of Nov, from 10,110,0001. to 6,434,0001. ; while the reserve notes fell during that period from about 4 500,000/, to about 1,400,000/. Bat before that time it cannot be said that anything occurred which would create uneasi ness in the course of affairs at the Bank. The immediate cause of the crisis was, as must be within the knowledge of most of the hon. gentlemen who are now present, un connected either with the management of the Bank or any issues of paper money in this country It grew out of the derangement of the American trade, supervening upon some previous inconveniences created by the Indian revolt, the shipment of bullion, the dis turbance of the Indian trade, and, to a certain extent, specelition upon the continent. However, it may be said that the almost exclusive :cause of the commercial distress was the derangement of the American trade. For some months previously to November the foreign drain of bullion was accompanied by an adverse %tete of the exchanges and a high rate of di: count at the Bank. On the 2d of April it was 61 per cent., on the 18th of June it was 6 per cent., on the 16:11 of July 51 per cent., on the Bth Oct. it was raised to 6 per cent , on the 13th Oct. to 7, on the 19th Oct. to 8, on the sth Nov. to 9, and on the 9th Nov. to 10 per cent. These figures show that high rates of discount had prevailed, the natural consequence of an adverse state of the exchanges ; but the operations of the Bank and of the discount houses in this country had been successful in reversing that state of thiege, and in pro:llacing a fa vourable state of the exchanges-before the issue of the Government letter. At that time the foreign drain of goli had been checked, and the exchanges were favour able. Well, although some uneasiness might still exist as to the state of the Bank, nothing at that moment seemed to indicate any immediate probabi ity of the Government being called upon to exercise any extraor dinary powers; and as the right hon. gentleman (Ur. Disraeli) referred yesterday to the state of our trade during the month of October as a circumstance which ought to have induced h.r Majesty's Government to hesitate before they recommended the prorogation of Parliament until the end of December, I would be: leave to remind him that even if the state of trade had been more unfavourable than it actually was there was no symptom of commercial distress which woul I have rendered is necessary for the G svernment to resort to any t xtraerdieary act. It was oily in the event of their being called open by any urgent and unforeseen necer sity to authorise a suspension of the law tat it was likely to be necessary that, upon merely commercial grounds, they shoul I advise her Majesty immediately to assemble Parliament. In the event of that improbable contingency—as we thought it—arising, a constitational power existed, which could be exercised at any moment, of summoning Parliament by proclamation to meet in 14 days. That is an explanation of the charge of want of caution and foresight on the part of the Government brought forward by the right hon. gentleman. Well, the first event which procipitAted matters in the late enme-cial crisis was the lailure of the Borough Baak of Liverpool. I wish to call the attention of the co nmittee to the fact that ifFsvae not a joint-stock bank, and that it was not 'it bank of issue. I believe that there is not a single bank of issue in that town, but the Borough Bank was not a bank of i , sue ; it was a ci rperation of a general character, and the amount of its liabilities was very considerable. As far, therefore, as that establishment was concerned the con sequences produced by its Metre cannot in any way be traced to an excess in the issue of bank paper. That failure took plac , about the 27th of October, and the next event of itnportance was the failure of Messrs. Den• nietoun on the 7th of November. Teat heuse was ex tensively engaged in the American trade. I believe that it was a house conducted with prudenoe, and possessed of large capital, but it wag suddenly forced to suspend payment b : the misfortunes arising out of the cenvul siens that hail taken place in America, which were at tended with much greater distress than had occurred in this (reentry, and accompanied by a general suepenei sn of cash payments. The hens° of Meesrs. Dennistoun failed, as I have said, on the 7th of November for up wards of 2,000,0001.. About two days afterwards, I believe on the 9th of November, a lsrge joint-stock bank in Scotland failed—the Western Bank, which had numerous branches. Within a day or two aitecwarde another large j Int-steck bank—the City of Glasgo w Bank—also fehed. The joint circulation of there banks was about 800,0001, of which about one-half was the certified circulation they were authorised to make open securities, and the remaining halt upon bullion. Their deposits were about 9,000,0001., showing that it was not tht it note circulation, but the magnitude of their other transactions and liabilities which led t, their unfortunate failure. (Hear, hear ) I may mention with regard to the Western Bank of Scotland that there had been no run at all upon it previous to its failure, and that when its doors were closed not a single note had been presented for p tyment out of the usual course, thus sho Nino that it was not the discredit of the notes of the bank, but a failure to meet its large engagements of other descriptions which led to its unfortunate fall. The first sign of pressure more immediately afftcting the mercantile classes in London, and approach ing nearer to the Bank of England, was the failure of the house of Messrs. Sanderson and Co., bill-brokers, which took pl ice on the 10th of November. Such an event could not occur without exercising a e(rrous in flueuce upon the credit of other similar establishments in this city. The publication of the Bank returns for the week endost; Wednesday, Nov. 4, which chewed considerable reduction of the Bank reserve, was a cir cumstance which, combined with the other facts I have mentioned, could not but create uneasiness and alarm and call attention to the diminishing resources of the Bank. The alarm increased in London, and I think I cannot adduce a clearer or more compendious proof of the existence and extent of that alarm than by referring to the increase of the binkere' deposits at the Bank of Eng l and in the week from the 4th to the 12th of Nov. 1 It may at first sight seem somewhat paradoxical to the committee to refer to t'se increase of bankers depesii,s in the Bank of England as a proof of alarm—(hear) — but it must be borne in mind that the Batik of Eogland is the bank in which the London and other bankers keep their deposits, and therefore when they increase thoee deposits suddenly and extensively it is a proof that they are guarding themselves against a run upon their fund!, that they expect demands from their customers, and are, in fact, if I may so say, boarding their resources. The increase of bankers' deposits at the Ban . k of England is, therefore, a recognised test of the existence of alarm. In the week from Nov. 4 to Nov. 12 these deposits increased by no lees than 1,970,0001. But there was another decisive proof of the exestence of alarm in this city— namely, the general cessation of all discounting except by the Bank of E igland. At that time it was scarcely possible to obtain an advance, even upon bills o filets were undoubtedly good, either from bill brokers or bankers; their operations were for the moment univer sally suspended, and the Bulk of England was the only establiehinent io London at which discounts ceuld take place. That circumstance may be referred to ae a tolerably conclusive proof of thegeneral prevalence of alarm. I may mention that at that time a single discounting house paid in one day 800,0001., 700,0001. to depositors, and 100,000/. to discounters—a sum, I apple bend, almost un paralleled in operations of that kind. I will now call the attention of the committee to the state of the Bank on tbe.day before the recent Government letter was issued, and to its state on this day previous to the issue of a similar letter in 1847, and I think the committee will ceo that with regard to every point indicative of tee strength of its resources the position of the Beni( in 1857 was less favourable than its position in 1847. Tne inference to which I wish to lead the committee is that, if the Government were justified by the opinion of Pat. liament, of the public, and of competent judges, in issu ing the letter in 1847, then a fortiori they were justified this year in issuing a similer letter. Toe following is a statement of the position of the Bank of England it Oct. 1817, and Nov. 1857 : Oct. 23, Nov. 11, 1847. 1857. Million Reserve of notes in Banking Department 1,517,000.., 957,000 Reserve of coin 447,000 ... 501,000 Deposits (Private) 8,580,000 ... 1'.1,9 il,OO Private Securities Tberef re 1 think the committee will see that whatevt, were the grounds for the interf rence of the Governtre ,t in 1847 the grounds were still stronger in the preset,t year. There is another most material point of difFerenc' between the two cases, which perhaps eleZl still more rHE SUN LON DON, SATURDAY EVEN ING, DEGEMBEK 5, tSS7. justifies the interference of the Government in the pre sent year. In 1847 the turning point had been reached before the issue of the letter—the state of things begun to improve. It is true that the issue of the left-r, in the opinion of competent judges, accelerated that pro cess ; but the improvement had already manifested itself, and the worst had been seen before it was issued. Now, in the present year the direct contrary is the fact. We had not reached the worst when the letter was issued ; and, whatever opinion may be formed as to the benefi cial effects of the letter, there is no doubt that if it had not been written, if this authority bad not been given, we should have seen a worse state of things after the 12th of November than before it. Now, the fact which seems to me material as constituting the differ ence between the two years is the progress of the Lon don discount at the Bank in 1847 and 1857. Ou the 23 October, 1847, the London discounts of the Bank were 7,762,600/. The amount remained stationary till about the 4th of November, when it fell to 7,500,0001; and a few days later it sank even lower. In the present year, on the other hand, those discounts amounted on the 9th of November to 7,256,0001. They went on regularly in creasing, till on the 27,h Nov. they reached 12,022,0001., and on the let Dec. they still stood at 11,961,0001. This shows that the sum under discount at the Bank of England was greater at the end of that period than at its commencement, whereas in the corresponding periel of 1847 that amount had considerablydirninished. There• fore I infer from these facts that, whereas the worst of the crisis had been overcome before the letter of 1847 was issued, the worst had not been overcome when the letter of this year wag issued. I trust, Sir, that I have established to the satisfaction of the committee that the course taken by the Government in 1847 was maturely coaeidered and deliberately approved by Parliament— that the authors and promoters of the measure approved this proceeding, and that it constituted a precedent by which subsequent Governments could with propriety re gulate their conduct. In the present case the causes of the panic were no doubt different, but the result was the same; the circuen•tances with which the Government bad to deal were similar, the urgency was greater, and whatever reason ju-tified the resort to extraordinary measures in the year 1847 will be found to apply with greater cogency and greater conclusiveness to the case of the present year. But the exi , tence of a precedent has not grown out of mere accident from the occurrence of circumstances which bad not been foreseen when the original measure was prepared. I have the evidence of C Aeon, the Governer of the Bank at the time when the bill of 1844 was under consideration, and that gen tlemsn stated to the committees of both Houses of Par liameet that the precise contingency which occurred in 1847, as also in the present year, was foreseen by Sir Robert Peel, who appeared to have contemplated a mode of meeting it exactly identical with tbat which has been at.opted in both years. That seems to me an im portaet part of the case ; and I will therefore read an extract on this point from Mr. Cotton's evidence before the committee of this house which sat in 1848. Similar evidence was given 1 y him before the committee of the Rouse of Lords. Mr. C 4ton was thus examined : " In the case of a panic do you think that a contraction of the circulation is any cure for it ?—I think it is, inas much as it increases the value of money and induces people who have hoarded money to part with it. "Do you think, even in the case of an internal panic, the proper mode of cure is a contraction of the circula tion ? —The proper mode of cure is a con traction of the cir lation ; whether it is worth while to submit to the remedy is another question. I can easily conceive that there may be monetary crises when it is necessary for the Govern ment to interfere, and to do as was done in October. " You contemplate, as I understand yon, that under the operation of the Act circumstances may arise which will call for the interference of Government ?—I did contem plate it, and I believe that I shall not be guilty of a breach of confidence if I state that the subject was discussed very fully with the First Lord of the Treasury and the Chance llor of the Exchequer during the consideration of the pro visions of the Bill, and when the subject was again proved on him Sir Robert Peel expressed his opinion to me in these terms My confidence is unshaken, that we are taking all the precautions which legislation can prudently take against the recurrence of a monetary crisis. It may occur in spite of our precautions, and if it does, and if it be necessary to assume a grave responsibility for the pur pose of meeting it, I dare say men will he found willing to assume such responsibility.' " It was contemplated that circumstances might occur which would render it necessary to suspend the limit of the Act of 1814. Can you state what were the sorts of events that you had then in contemplation ?—I should say events similar in effect to the events of 1825, when there was entire discredit of all the country bank circulation, and a panic which brought down, not merely an immense numb-sr of bankers, but others who were men of un loubted property." I think that passage ought to convince this ceniinittee that, in referring to the proceedings of 1847 as constitut ing a Parliamentary precedent of the utmost authority, we have every security that the subject was fully con sidtred both in its character and its consequences, and that legislation was left in its present state upon mature deliberation. The right bon. genileman (dr. Disraeli) pat a question last night which be had a perfect right to ask, and t s which he is entitled to have an answer. It was :—•" Whether the issue of this letter was ceded for by the Bank directors, and whether pressure was applied to .be Government in order to obtahe it ! Now, Sir, I state distinctly that the issue of that letter was the spontaneous act of her Majesty's Government. (Elear, hear.) That they proceeded upon their own deli berate and conscientious view of the circumstances of the case—(t•car, hear)—that they were not urged by depu tations, by the represen.ationa of mercantile bodies, nor were they implore , l to interfere by the d rectors of the Bank of England. No man invested with a public and official responsibility could have acted iu a more honour rabic and conscientious manner than the directors of that corpration. Tney showed themselves throughout ready to carry into client all the ob!igations which the saw cast upon them, and they merely Paid that they were wiling to act upon any advice which the Government might tee der to them, but that they were prepared to obey the provisions of the law. Sir, the Government were guided by their view of the facts which I have disclosed to the oonnuittee—f acts, the corresponding cireu instances to which were deliberately reviewed by the Parliament of 1847, and were considered by them as constituting a legitimate ground of interference. These facts existed in a far more inten.e degree in November, 1857, than in October, 1847. Oar justification therefore is, that we acted in consequence, not of the pressure of the merman. tile body, but in consequence of the pressure of facts, and that we should have been guilty of a grave dere. 'letter' of duty if in so grave and urgent a state of circum stances we had hesitated to take upon oureelvea the re sponsibility which was assumed by the Government. I do not at all sock to screen myself under the existence of mercantile pressure. If the act which we have done is right, let the house indemnify the Beek directors, Ist them indemnify those who advised them. We do net seek to shelter eurcelees under any pretence of having been coerced into the ac". The committee is its posses• sloe of a numerical return irons the B ank fully exhibiting the state of things each day from Nov. 11, and I shall not,trouble them with a minute analysis of these figures. I will only say that, unlike 1847, tl $ Bank directors im mediately found themselves compelled to act upon the authority given by Government, and to make issues in eXC3R4 of the limit fixed by the . act. Th ey fi rst i ssue d 1,000,0001. of notes from the issue to the backing doper'. meet, placing against that sum as equal amount of secu rities ; and on a subsequent day they made a similar transfer. The first issue was on the 12th of Nov., and the second on the subsequent day. The effect of that— technically—is that the Bank has infringed the provi sions of the act to the extent of 2 .000,000/. sterling ; but the committee should bear in mine that, although °semi; to the pecu' a • manner in which the ac coun t so f t h e B an k are kept the Law is technically infringed to that amount, at no time has the Bank issued se much as 2,000,000/. to the public. It has merely passed 2 00),0001. from ono department to another. I have before me a Et;.t;:tnent of the amount in excess which was from day to day jellied to the publ e. 03 the 15th N the ex - mss of re tea in the hands of the public was 1 86,0001., on she foil? wing day 622,0001., and so on until the 20 11 Nov., 'hen it reached the maximum of 928,0001. If the committee will deduct the amount of the reserve of notes in the bankieg department from the 2,000,000/ transferred from the i-sue department they will see the difference is the figures which I have given. That in the real amount which has reached the public. On Nov. 21 that amount was 617,000/. ; on the 23 1 , 397,000./. ; on the 24th, 317,0001. ; on the 25th it had fallen to 81,0001.; on the three following days there Was an incr ease , but on Nev. 30 it had fallen to 15,000/. ; and on Dec. 1 the note re serve was more than 2,000,0001. ; therefore, strictly speaking, there was no issue in excess of the limit. I need not, however, remind the committee that the ope rations of the B ink being now divided into two depart meats it was impossible to work the banking departnifest without an issue of notes from the issue department, and that that transfer was technically a violation of the law; but the committee should bear in mind that the real and essential violation of the act has been confined to the amounts which I have just nee!. It may be asked what would have been the result if the letter of Government had not been issued. That is a matter about which we is suing that only form coej, c t ures. The actua l re sult of that letter must be admitted to have been favore, It diminished alarm an I restored con fid en ce ; and it did not in the smalle s t d egree endanger t h e con vertibility of the note, b.icauee a fav oura bl e turn o f the exchanges had taken place, and there was at that time no fear of a fo reign drain of gold. Therefere I cannot think that at that moment the conver ibility of the note was endan gered by the step w hi c h was author i se d by Government. If that authority had not been given, it is certain that the only measur e t o w hi ch the Ban k cou ld have resorted for its own prot ec ti on would have b een the immediate and total cessati on o f di scounts. ( H ear , hear.) Indeed, could they have f oreseen the impossibility of Government taking such a step, th ey m i ght, per h aps , have diminished their discounts a day earlier. At all events , the y must r the time the letter was issuedat have entirely sopped their discounts. Wheth er so decided a step ag that on the part of the Bank of E n gl an d raieht not h a ve led to the ex• tension of discredit a mong eictablistiments of a similar na ture engaged in si m il ar operations o f b a nking I leave it to the Committ e e t o d etermine. ( O ppca ition cheers.) It is not for me to giv e any pos i t i ve o pinion upon sue) a subject, but if such discredit had arisen the Commit tee must see what w ou ld h ave been the effect upon the banking departme n t o f t h e B ank o f E n gland by leading o the withdrawal of d epos i ts. N ow , as by the two law departments of th e b an k are separa t e d the one from the other, and the assets o f th e i ssue ca nnot be applied to relief of the banking department, the Bank of England might have found it se lf i n t h e pa i n f u l position of post portion cf the aseet e o f t h e i ssue post poning payment to d e p os i tors—( h ear ) —or of applying a department — because its assets would u n d ou bt e dl y have b een s nfficient---(hear) —to the dischar ge o f t h e liabilit i es o f the banking de partment. I think it probable that each a contingency ;night not have ari sen ; never theless, it was within the range of possibility. Events as I have learned from painful experience — events M arc h ver y rapidly during a commercial crisis. Persons who are loaded with the responsibility of action in moments of that sort must be prepared for them, and I leave it to the Corareittee to c judge whether, with such a centiegency before them, her Majesty's Government would have been justified in withholding the letter which they sent to the Bank. I am fully conscious of the gravity of the step which the Government took. The deliberate infraction of a funda mental law governing the currency is, as this Committee will readily believe, a step which no persons responsible for their acts would lightly take. (Hear.) Ido not in the smallest degree seek_ to diminish the importance of the proceeding resorted to by her Majesty's Ministers ; at the same time, let it be remembered that the actual excess hitherto committed by the Bank has been limited to the amount which I have stated, and that the effect of the authority which was given was simply to enlarge the amount of the issues upon securities. Now, if the entire circulation of this country had been metallic, I could have understood any objection which might have been entertained to an authority being given to a corpo ration like the Bank of England to issue 2,000,0001. of bank-notes ; but, inasmuch as they were authorised by the Act of 1844 to issue 14,000,000/. upon securitii s, and as that act contained a provision for further increasing that amount, in accordance with which it has by an order in Council been increased to 14,500,0001., the only effect of the authority given by Government was in a guarded manner, under the close observation of the Government and of Parliament, and to meet a momontary emergency, to increase the issues of that description. No new principle was introduced by that authority. It bee been said that the Government have authorised the Bank to commit an act equivalent to the debasement of the currency, that what we have done is almost equal to permitting a repudiation of contracts, and that the sanc tity of property was invaded by this additional issue of bank-notes. I entirely dispute the correctness of that view. (Hear.) If any doubt bad existed as to the in stantaneous convertibility of the additional notes issued ander our authority there would have been some ground for the charge which ha. been made against the Govern ment; but, inasmuch as the additional issue by the Bank was not sufficient to affect the value of the notes, and each note was convertible into gold upon demand, it cannot be said with justice that the Government have depreciated the currency, authorised the repudiation of contract., or struck at the security and sanctity of pro• perty. (Hear, bean) I wish I had it in my power to say that this commercial crisis was definitively terminated, and that we could look forward with entire confidence to the Bank not having occasion to avail itself of the authority which we have given to it. I think it highly probable that the directors may not have occa sion again to exceed the statutory limit ; but, at the same time, I cannot assure the house that no such con tingency can be expected to occur. Perhaps, in Rome respects, it would have been more convenient to Par liament if it could have looked back upon a completed commercial crisis before it was called upon to indemnify the Bank directors. The Government thought, however, that it was their duty, having authorised an infraction of the law, at once t• lay the matter before Parlia ment, and hence the celerity with which the Legisla ture has been assembled., The pressure still continuing, and the wounds caused by the crisis being yet unhealed, it will be necessary for me to propose in the bill a pros pective power to the Bank to exceed the limits of the charter for a period of 28 days after the meeting of Par liament subsequently to the recess. (Hear.) I have taken that as a convenient period with a view to the revision of Parliament, if revision should be Recess:try, and I trust that if the house should be willing to pass the Indemnity 1311 it will not refuse to allow me to insert a clause to the effect I have stated. (Hear.) I shall ask the house in the course of the evening to agree to the reappointment of the committee on the Bank Acts which sat last seesien. That committee examined many important witnesses, but its inquiries were uot campleted, and at the end cf the sessicn it presented the following report to the house :•—" Your committee have agreed to report to the house the evidence which they have re ceived ; and, as their investigation of the subject referred to them is still incomplete, they beg leave to recommend that a select committee be appointed to resume the en quiry in the ensuing session of Parliament." We should, as a matter of course, have acted upon that recommen dation, and have moved the reappointment of the com mittee, but it has been said that what has occurred during the last few months has weakened the reasons for that course. It seems to me, on the contrary, that the commercial crisis and the act of the Government have strengthened rather than weakened the reasons fir the reappointment of the committee. (Hear.) Is must be obvious that if the house is desirous of reconsidering any of the details of the Act of 1844, it cannot do so with greater advantage than after a full inquiry before a select committee, and after the examination of competent wit nesses upon all the different branches of the suliict. Tne general portion of the subject was fully investi gated last sessiou, but so much of it as relates to the country banks of England and the banks of Scotland and Ireland was not entered upon, and I think it must be obvious, after the events of the last few months, that there is a great deal in connexi m both with the country banks of England, and the banks of Scotland and Ireland which well deserves careful inves tigation. (Hear.) Moreover, I confess I doubt whether it would be prudent, when men are smarting under the painful embarrassments of a commercial crisis, when that crisis is still incomplete, when its consequences have not. yet been fully developed, to select that particular mo ment for revising your currency lawny. Whether the proposal was made by the Government or by indepet, dent menth.rs, I cannot think that we should deliberate upon a most difficult subject, a subject which ha r per plexed the minds of some of the ablest men whom this country has produced, under circumstances likely to load to a safe and beneficial conclusion. Therefore, as I should have moved the reappointment of the committee of last year under ordinary circumstances, it seems to ins that the extraordinary circumstances under which we are now assembled render such us step still more expedient. ([Tear.) By what I have said the house I think must bo led to the inference that the commercial crisis has in t arisen from any abuses of the currency—from any ex cessive issues of bank paper in this country. (gear.) Whatever its causes may he, they stand, it seems, wholly aloof from the proper and direct ploy of the act of 1844. (Hear, hear.) Let us first take the Bank of England, the most impoi taut part of this subject. Can it be said with truth that the directors of the Bank of England hive shown any want of foresight, any waist of prudence, any want of sagacity, er any want ogi firienses during the past year ? I confess it appears to me, having had necessary occasion to watch their proceedings with vigilance, tbat they have not failed in any of the duties incumbent upon them. (Hear, hear.) Let us compare, as a test cf excessive issues on their part, their notes in the hands of toe public with their private securities dur ing the years 1853-7. The following is a statement of their notes a ith the public, including Bank poet-bid, at various periods of 1850 : October 4 '21,885,003/. October 25 ....: 21,412,0031. „ 11 21,501,040/. November 1 ... 21,483,000 d. „ 18 22,141,02W. ~ 8... 21,149,000/. Fur the present year, when as we ere told commercial discredit has been caused by excessive issues of Bank paper, the returns are as follow : October 3...... 20,825,0001. I Octobor 31 2 1 ,18 4 ,000 1. ~ 10 20,863,0001. November 4... 21,080,0001. ~ 17 21,052,0001. I „ 11... 21,0 , 53,0001. „ 24. 20,586,003. So that, in point of fact, the amount of notes in the hands of the public has been actuAlly less this year than in 1856. Lat us now compare with the irsuo of notes and Bank poet-bills the private seciritiez of the Bank at cw , responding periods of 1850 7. The following is a return of the private securities at the latter end of try...h of these years :—• 1856. 1357. October 4 21,332,00 0 1. I October 3 2 1,835,0054 November 8... 18,e26,000/. l November 11 26,113,000e Therefore that shove that there was not any rxeessive issue of paper on the part of the Bank of England, a n d that the amount of Bank of England notes has not been excessively or unduly increased. With r es p ect to the c untry hanks, c an it be said that issue porti en o f this , discredit is traceable to their over ? In the first place, take the Borough Bank of Liverpeol. That is not even a bank of issue. Then the lergejoint-stock bunk which has lately uafortuoately fallen—thy Northumber. land and Durham District Bank ; that, though a bank of very extensive operations, and though it has fa led for a large sum of money, was likewise not a bank of issue, and, therefore, whatever its imprudence or mis fortunes, they were in no way co nnec t e d w i th an alms. of the power of issuing paper. (Rear, hear.) With respect to the Scotch banks which have failed, both of these undoubtedly were banks of issue, but their notes bore a very small prop ;rtion to their entire liabilities and about hall were covered by gold ; and no per: son aware of the facto, or who will melee himself ac quainted with them, can fail to come to this conclusion, that the failure of these banks is wholly indepen dent of all questions relating to paper currency. There fore, as far as the direct operation of the Act of 1844 is concerned, as far as its object was to prevent the exc s sive issue of paper either by the Bonk of England, or by the country banks of England, or by the banks of Scotland and Irela n d, it must be admitted that the policy of that Act, and of the Act of 1844, was success ful. Those who impugn the policy of those Acts must say that at a'l events they were inoperative, or that, in spite of them the currency was in a wise and sound state; and those who are f r i en dl y to the policy of those Acts will attribute the sound state of the currency to their direct operation. But, whatever these parties may think, the main fact cannot be disputed, that our paper cur rency was and h as rema i ne d up to the presen t mom entin a perfectly Sound state. (Bear.) It is quite conceivable, as my right hon. friend remarked in 1847, that a com mercial panic might arise if the circulation were purely metallic. There might be undue credit and unsound speculation, and these caution might produce the same effects ae ar e o b serva bl e a t'the present moment in the town of Hamburg, w here there is no paper c tnilation, where the only circulation is metallic, and where there . exiet all th e acute sym pt o ms of a commercial creek (Rear.) Now, with respeci e to the operation of the Act of 1841, I am des'r ms of drawing the attention of the committee to the distinction between the ordinary ore rations of th e A c t i n th os e circumstances w:ich were cout.mplat e d b y i ts au th or s, and its (seer tions at a moment of panic cr crisis. If we take its operations under ordi nary c i rcums t ance s, the limit !reposed on the Beek of Elgfand and on the country banks, end on Irish and Scotch banks operates in the way of preven tion. It does not cheek the ordinary habitual operations of cem inerce , b ut i t i s lik e a punishment in the penal law which by its preventive couseqnences delermines men's conduct. But when we come to a state of panic all these circumstances are ravereed. Men's minds are then in an extraordinary state. INlutcal die• trust prevails through the community, and a law which may be pi rfrctly suited to the ordinary condi tions of trace, in which it may operate beneficially when men are left under the influence of ordinary motives, may at a time of panic be found to produce effects the reverse of beneficial. The question then arises whether some extraordinary power shcule not be required to suspend the operation of such a law. The present law does two things. It imposes a limit on the issue of the Bank of England and exhibits the accounts of the Bank of England in a peculiar form, and likewise requires that those accounts should be published once a week. Now, wherever you impose a limit, there is ne question that the existence of that limit, provided it makes itself felt at a moment of crisis, must increase the alarm. People feel at the moment that a peril presses on them, they begin to calculate how much remains of that fund to which they look for assistance in times of commercial difficulty, and in whatever way you fix the limit, whether by Act of Parliament, or, as Mr. Tooke proposed, by a sort of usage, or, as in France, by the discretion of tie Government acting on the Bank of France, there is no doubt that in moments of crisis the limit must aggravate the alarm. (Hear, hear.) I can bear witness, from my own observation, that such was its operation in 1847. There is no doubt, in my opinion, that when a crisis once sets in, when you have an extra ordinary state of distrust quite different from the state in which men ordinarily live (because it is by mutual trust and confidence that commerce is carried on), when you g. t into a state of apprehension, and every man suspects his neighbour, then undoubtedly any limit, which is im posed on the paper circulation, must aggravate the alarm. In that way I distinguish between the ordinary and the extraordinary operation of this Act. (Hear, hear.) Well, then, the manner in which the assets of the Bank are distributed, by which the whole bullion is set againat the paper issue cf the Bank, and by which only a met portion of reserve notes is placed in the banking department in a very conspicuous manner against the deposits, concentrates the atten tion of the commercial public upon the amount of gold in re serve. They watch its diminution from day to day, and when it has reached a certain point each person desires to get a share of it as long as it lasts. The bank ing account tends, then, by that accident, to aggravate in a commercial crisis the public alarm. These circum stances appear to me to show that in its extraordinary operations this Act maytend to aggravate panic, though in ordinary times it tenets to promote a sound state of circulation, and so far as the state of the currency is con corned, to avert panics; but when a panic arises from otber causes, at that particular crisis, though the panic may only last a few days, it aggravates the alarm. It appears to me that at momenta of that sort we can only resort to the discretion of the Government for the time being ; but I shall be happy to bear if any gentleman has any other remedy to offer for those rare, I am happy to say. but nevertheless recurring occasions. It seems to me you can only resort to the discretion of the Govern meat in some f irm or other. Now, there is a question on which the Government has carefully deliberated, and on which after deliberation they have not thought it their duty to make a ny proposition to the house. The question is one which will be considered by the committee to be *pp:Anted, I hope, by this house. The question is whether it is preferable to leave the power of dealing with these emergencies vested in the executive Government for the timebeing, to be exercised by them on their responsibility to Parliament, and sutject to the duty of assembling Parliament at an early period after the exercise of the power, of submitting to it the whole facts of the case and asking for ren indemnity—the question, I repeat, is whe ther we should, in conforneity with the opinion of the Commons committee of 1847, leave the matter in that state which undoubtedly involves an infraction of the law though the wound which may bedone to the constitution is healed by constitutional and Parliamentary means, or whether we should adopt the conclusion of the committee of the House of Lords in the same year, who thought it irregular to grant such a power to the executive Go vernment, and that Parliament ought to engraft into the Act itself a power of suspension. The bill, the introduction of which I hope the house will sanction, and intrcieluem at a time when the events which have called for its to reduction are still recent, while the crisis in its consequences is not fully developed, will not . contain any distinct provision upon that subject. It ap pears to me, indeed, that the question is one of im portance in a constitutional point of view rather than as involving any great difference in its practical remits. If, after the proceedings which took place in 1847, and if Parliament cheuld come to a similar conclusion now, the Government acting under the influence of two such pre , cadent!! might find their course facilitated and guided, while, upon the other hand, if a clause were inserted in the present bill authorising. the Government in cases of emergency and in times of panic to relax the limit, but containing a clause similar to that which is contained in the act which enables Government to embody the Militia, but which provides that they shall call Parlia ment together within 14 days. I think the practical result of such a state of things would be the same as those of the present system, because I think that a Government would be apt to look upon the distinction as a mere formal one, and would feel the same relec ' tance to act upon the power afforded them, except in cases of extreme emergency. While, therefore, I think that the subject is more important as a constitutional question than from any difference in the practical result eV the two sy--teeng, there are other reasons why I think that a clause conferring such a power upon the Govern ment ought lot to ba introduced into the present bal. Tao select committees have sat to inquire ;nto the subjec', one a committee of this house, and the other a • committee of the House of Lords, and, atter fully hearing • and considering evidence on the subject, those emel t rnittees arrived at diametrically opposite conclusions. . (Hear.) It is a subject therefore with regard to which we may anticipate a great difference of opinion, and the •Go vernment would be glad to hear the views entt-rtaieed by leading members of this and of the other bawl) of Par- I lien:tent before they can consider it their duty to submit any measure with regard to it. Now, sir, there are quo , - ; tions relating to the ore-ration of the law in Ireland and Scotland which are worthy of notice, and I think that it may become the house to clothier whether some amend ments in the existing law may not be made with great propriety—(loml cries of hear, hear)—to consider, for example, whether there could be any objection to pro viding that the Batik ot England note should be a legal tender over the whole of the United Kingdom. (Cheers.) Also, it might become us to consider whether, in order to prevent the inconvenience arising from the drains of gold from this country under the present system, it might not be advisable to allow the Irish and Scotch banks to issue notes against Bank of England notes. (blear, hear.) There is another subject to whicn I ad verted last year in noving the appointment of the cora. mittec to inquire into the operations of the Act of 1844 which has been the subject of much popular discueeion at the present period—l mean the policy of permanently incr:.asieg for the future the limit of the issue of the Bank of Ea-gland. (Hear, hear.) It is said by some persons that if the Pank of England had been authoriet d by Law in the beginning of Nov. to issue 16,500,0001, in-toad of 14,500,000/., and to give them such a power does not involve any difference of principle from the Act 0f.1844, for it was quite within the views of the pro motets of that Act, the crisis might have been got over without any extraordinary step being taken by the Ge. vernment. I think, then, as far as I understand the case, that is a fair representation of the views of many gentlemen. (Hear, hear.) Now, sir, i wish in answer to that view to call the attention of gentlemen who entertain it to this fact. If the bullion reserve of tee Bank of England had been what it Was at the com mencement of the crisis, and if the Bank of Beet-mid had been empowered by law no issue 16,500,0001 . , inetead of 1 4,500,0001. undoubtedly no extraordin ary interference might have been necessary. (Elear, hear) Bet at the same time I can quite understand that, inasmuch as I believe that in a monetary panic the existence of a lanit tends to increase alarm, such interferoace might have h ea necessary. ((lean Leer.) No ?7, if the Bank of ugland had not kept the same bu lion in reserve which the law now requires, if it had merely issued 2,000,0001 more upon securities and diminished the reserve by 2,000,0001., which, under such a state of the law, it would be enabled to do, the Bank of England would have bad no greater facility than it has now had, but the reserve of bullion would be lees by 2,000,0001. (Hear, hear.) I think that this coesicleratiou must tend to convince gentlemen who hold that view that a resort to the expedient of increasing the credit of the issue of the Beek from 14,500,0001. to 16,500,0001. might not be quite so effectual a remedy he times of panic as they imagined. (Hear, hear.) I regret that I have been compellel to trouble the flown at such great length upon this subject, but inasmuch as these questions were the real occasion which induced the Government to recommend her Majesty to call Pailiament together at this early period, and inasmuch as they have groan out of an important crisis which must lead to important results, itiaeinueh as the step which has been taken by the Government was an ( x ra. ordinary and extra-legal step—for we stand before Parliament, I will not say in the position of culprit., but the Bank the position of having advised the Corpora tion of le Bank of England to make a departure from the existir g law—inasmuch as we are now called uo and on to ask L Parliament to indemnify the Bn k of if I England have felt it my ourselves, I trust I may be forgiven duty to make a statement of such length to the house. (Cheers.) The motion having been read from the chair that the Chairman of the Committee be directed to move for leave to bring in a bill to indemnify the Governor and Company of the Bank of England in respect of certain issues of their notes, and to confirm such issues, Mr. GLADSTONE said—As far, sir, as I am con. cerned I think that my right lion. friend, instead of having to ask the indulgence of this house upon account of the length at which he has thought it his duty to explain an important subject, has, on the contrary, conferred upon us an important obligation. (Hear, hear.) On the other hand, I am by no means sure that the same duty is incumbent upon me, cr that it likewise attaches to other members of this house. At all events, for my own part, I do not think that this is an opportunity upon which I should feel it necessary to trespass upon the attention of the house at any length ; but, at the same time, I wish to make a few remarks upon what has fallen frhm my right hon, friend in respect to the subject now before the Committee, and likewise with regard to the ulterior motion which ho in tends to make with regard to the reappointment of the Batik Charter Committee. As respected the bill of in deinuny fur which his right hon, friend intended to ask, he was not prepared to offer any opposition to it. He could easily conceive that questions might arise, and the speech of his right hen. Creme': appeared to indicate a consciousness on his part of the feet, whether the pre cise moment taken by the Gevernment for the issuing of the letter of the 12th Nov. was the right one, or ques lions might arise whether any ether measuresinigules not have been adopted in lieu of it, to meet the d ff :c l and dan g er s which his right hon. friend had certainly shown terente.ned the country. However that might he, he thought that his right hon. friend was justified in urging the circuinstancee of 1847 as being mutelis mutanlis a justification of the course taken by the Go vernment of 1857 ; but it then became the duly of the house to consider, in giving th , it ratification to pro- , madmen of that kind, what a vast and immeasurable I force attached to precedents of that nature, (Rear.) , ' His right hon. friend in speaking of occasions of this kind had justly and properly spoken of them as recur ring occasions. Unhappily, the occasion with which we were now conversant could not be spoken of in the past tense, and even when the day arrived when it could be spoken of in the past tense, we must yet look for the recurrence of similar events ; and if this had been the universal system of the trading of this country—he would not stay to ask what trading, and whether it was the trade in money—but if it bad been the universal system of trading in this country, and especially of the money trade, we must feel the force of the precedent of 1847, and the duplication and reduplication we were giving to the force of that precedent by again admit ting its justification. (Hear, bear.) The question must also be considered with a view to the elucidation o what further duties were cast upon the house with regard to the state of the law. His right hon, friend in is speech bad embraced not only a vindication of the issuing of the letter of the Government, which he (Mrs Gladstone) did not impugn ; but he had also included in it an argument in favour of the re-appointment of the Bank committee of last year ; and he (Mr. Gladstone) wished to represent to his right hon. friend and the house how the matter stood. His right hon. friend thought it would be better to re-appoint the committee than to legislate, and he gave two reasons for holding that opi nion. In the first place, because a committee had been sitting which had made an incomplete inquiry, end which had recommended its own re-appointment; and secondly, because at a time when men's minds were warm, and smarting under the influence of the comma , - cial crisis, we could not expect to obtain the fruits of wholesome legislation. With regard to the first rearms, he must say he attached but little weight to it. There were many precedents ; and it had often happened that at a periud of quiet, and when ample time was afforded for the operations of committees of that house to con eider ,a particular state of ci r c ums t ances , an d when urgent circumstances arose which were powerful to teach more in a few weeks than a committee could learn in years—(hear, hear)—that the house interfered, and the action of committees was checked by the interposition of the Government. He wished to represent to his right . hon. friend that if the committee on the Bank Acts was re-appointed on the terms proposed by his right hon. friend, it would be an over-burdened cimmittee, and that the first and most certain effect of its re-appoint ment would be to prevent the practical resumption of the question at least in the year 185, and more pro bably in the year 1860. (Hear, hear.) If that was true, the proposition of his right hon friend was anything but satisfactory. What wax it that his right hon. friend called on the house to do ! They bad not met now, as they did is 1847, to consider a tion of the law which was not actual but conditional . and contingent, or to grant an indemity for a past violation of the law ; but they were called on to do, no less than, by a vote of that house, prospectively to suspend the Bank Act. (Hear, hear.) Could that be considered a satisfactory course Nor was it, according to his view, the best mode in which parliament could deal with such question,. Would it tend tJ settle the pubic mind if, after the experience of the crisis of 18417. after the labours of so many committees, after the recurrence of a graver crisis in 1857, they did no more , than suspend the Bank Act and re-appoint the conk' mittee of last year 1 in the speech of his right boo. friend there was lacking a practical distinction between the question of banking and the question of the laws which regulate issues. (Hear, hear.) The committee which sat last session was appointed not merely to Cow • eider the state of banking-, but also the laws whic h regulate issues. It had two subjects referred to its both of them of an immensely comprehensive character ; first, the laws in force in relation to the Bank of Eng' land, and also in relation to country banks, to Scotch banks, and to Irish hanks. Of that subject, in * session of great labour so far as the committee was COO' cerned, it had exhausted the first department of the in' quiry, namely, the suject of issue in connexion with the Bank of England ; they, therefore, bad still to consider the question of issue is reference to country banks, and to Scotch and Irish banks, and when that was exhausted there was still an enormous postscript to the question which the committee was appointed to inquire into—r amely, thesuperannuated awl antiqu.arjan state of the relations between the government and the Bunk of England. (Hear, hear.) That wbick was An important, a novel subject of inquiry, with all the fresh. ness of youth upon it in reference to inquiry which bad never yet been touched upon, had been scarcely er proached by the committee. Such was the progreU which the committee bad made. The right hon. gentleman (11r. Disraeli) had said last night that there would come before the committee only a repetition of current and known doctrines, on which every Wiled mind was made up. The right hon. gentleman seemed to think that the discussion of the question of the currency was an exhausted discussion. He (Mr. Gladstone) agreed with him, buthe must say that while it 'risen exiissusted it was likewise an a erne! discussion. It had within it so strong and inherent a principle of vitality that if you • cut off one of its heads, another arose in its place ;it had a charm, a fascinations about it which seemed todrive men mad. Currency had made as many lunatics as love itself ; and he was not sure whether there ought not to • be established a special asylum in which that mania cou'd receive the best and most effectual treatment. He had the utmost confidence that if a committee entered on that question next year, although it had been exhausted in 1857, it would go on with the process of exhaustion in 1858, and in 1859 it would repeat its inquiries, which w o uld not then be finished, and it Weald probably re commend its own reappointment in another year. His right hon. friend had nothing to recede from : the ques' 0011 was an open one ; they had all the same objects in view, and the question then before the house gave hie right bon. friend the best opportunity of taking further time to consider the announcement which he had made the night before. Could his right hon. friend be afraid of precipitate legislation on the question of currency f Ore some subjects there was often reason to apprehend precipitate legislation, it was the question of currency. There were a hundred gentlemen at least in that house who had given great attention to the subject, each of whom believed that he was in possession of the particular nostrum which was applicable to its solution. Would they all be struck dumb? Did his right hon. friend sup pose that if ho introduced a bill for the regulation of the currency, he would be able to carry it at once 1 Let him be sure that %battler might be the proposal the Government might make, it would receive the eager attention of the house, that it would be canvassed with ability and diligence, and that there would be no chance of its merits or its faults escaping obeervation. What he (Mr. Gladstone) thought ought to be done was to recognise the distinction between the question before the house as it related to issue and as it related to bank ing. So far as the act of 1844 was concerned, as it touched on the question of issue only, and having no thing to do with the question of banking, it was irnpoe: Bible that there could be a better time than the prisons for giving a distinct intimation to the country of the views of the house. For years past there bad been a tendency in the public mind to run abroad towards the least known, the least fixed and central authority, and a tendency to an approximation to one conviction ond conclu-ion as to what was the cost in the question of currency, which would increase if the people saw that Government and Parliament were prepared to give no decisive opinion in the case, and that the utmost they could do was to refer the subject to a committee. We had had the amplest experience of the working of the act of 1844, and he CSlr. Gladstone) was not so much in' clined as his right hon. friend appeared to be to main tain the act of 1844 in its utmost integrity, for he thought that there might be questions connected with it which it was now the time to consider. As he looked around him he saw his hon. friend the member for North Warwickshire (Nlr. Spooner), and he would ask his hon. friend, as an honest man, was he going into the commit tee to learn or to teach ? (Paughter.) Ms hon. friend would, he hoped, forgive him the personality of the ap peal, for the question he had , put to him he could with equal justice have put to any other member of the cow mittee. They would go into the committee prepared to air their own theories, and to extract them if they could out of the mouths of witnes s es by questions which far exeeded in length the answers they received; and it would be a juster description of a committee on currency if one was to stj that it was a machine ,constructed is oppo , ition to the principle on which all other machines we re constructed, that of the saving of ; in order to get that said in ten words which would otherwise be sail in two—(hear, hear, and laughter)—and he was of opinion that the appointment of such a committee was the adjournment sins die---(hear)--of the question PO far as it related to issue. So far as issue was- cen earned they had the amplest experience 'of the act of 1844; and be was bound to say, having been a,party to that act, that it admitted of improvement, perhaps.inthe shape of completion. (Hear, hear.) He thought that as regarded the main purpose fur which that act was established it had perfectly succeeded. We had had in 1847 a formidable foreign drain of gold, and we bad had a formidable foreign drain in 1857, and in both wee we had acted .against the drain by raising the rate of interest, and by carrying out the policy of the act of 1844 we had succeeded in rectifying the state of the exchanges. His sight hon. friend bad marked with chronological fidelity the points to be observed, and it would be seen, that as regarded issue the house was ripe and mature for the consideratiOn of any proposal ei l t i „" the Government mi g ht h ave t o ma k e. H e did Da the n abandon the hope that whe n the h o use m e t kt the usu al li g time for despatch o f p u bli c b us i ness , an d w hen, per hap s; the pressure e of the commercial crisis had passed by , _ _ Majesty's Gov ernmen t wou ld ma k e a proposition Parliament on the subject of the Bank Act of 18 4 e He would again Fay that there was another question which had to be considered, and which was a fit sah.P.°` for inquiry, and that was what were the canoes of too recent commercial events. They had seen and 10114 that night from the authentic figures of his right hone: friend, this was no question of the American tra de op .. e rating by a demand for gold in this country. The ti mand should have been met by the legitimate operation of the laws of commerce, and if that was the cause of the demand for gold in this country, it was right that it should be met by the director, of the Bank of Be f: l an d by the raising of the rate of disc o unt, and if could be shown that such a course bad failed to Me" the foreign drain of gold, he would admit that tr c e s hould stand in a position o f diffi cu lty with regar d to the act of 1844. But that drain bad been met 14 the Bank directors acting wisely and prudently on the principle of the act of 1847. Since then, howe ver ' !here had been a crisis, which had become more formi dable after the exchanges had been rectified, than when they were in an unsatisfactory condition. What then were the causes of that crisis ? There was a prevaleni opinion that it was connected with the state and condi tion of banking. On that point he would not pronounce an opinion, but he would grant that it was a fi t subject for inquiry by a committee. He desired that it should be inquired into, and it was because he wants not inq row in inquiry on the subject that he begged the house wou ld the burthen on a committee of g oin g on t he came old circle of inquiring at once iato the currency, the laws 0