The Express.
London, England, 1847-05-15 00:00:00

LOAN DISCOUNT BILL.

On the motioeTTo7sorniTnt; ese:eramitteelin this bill,
The Marquis of GRANBY said be conceived the question
they were tailed en to discuss was not to be confined to the
proposition of the Chancellor of the Exchequer, but was to
embrace the state of the oountry, the pressure on the money
market, and how much of this was to be attributed to the
act of 1844. There could be no doubt that the present it ste
of things took place under the operation of tie law of 1844.
But it was said it was impossible to foresee the storm that
was coming; and that things would be much worse but for
this lave It Wlay sale that it saturated the country with
gold ; and he believed it was intended by this to saturate the
minds of hon. members with the impression that this act
saved them tram great distress. (Hear, hear.) How stood
the facts ? On the 7th of September, 1844, the Bank Charter
Act came into operation; on the Bth of February in that }ear
the bullion and coin in the Bank of England amounted
to 15,209,051 ; and on the 24th of April, 1847, it was
9,213,890 e, so that instead of being saturated there was
. 6,000,0001. less of gold in the Bank under the operation of
this act than there woo before it. (Hear, he ax.) It was said
it was impossible to foresee the want of peen isiong, the failure
of the cotton crop, and the extent of railway speculations.
But these things were foreseen, as the enemori el of the bankers
which had been referred to by the hon. member for Shrews-
bury testified. (Hear, hear.) Their free-trade measures
of 1842 not only induced the gold to be taken away, but they
declared that not only would not the vacuum of every pound
that was exported be filled up, but they also declared
that far every pound in geld that west abroad they
would take away its equivalent in Bank paper. (Hear.)
Ile had often hand it said that they must get worse before
they could expect to get bets r, but he had never heard a
doctor say that be would make • person worse in order that
he might be better. (Laughter.) The government, however,
in the course they had pursued, had acted as if that were
the hest method of praceediug. One of the great objects of
the B ink Restriction Act was to give the Bank of England
c >etre' over the issue of paper by the country banks. Not-
withstanding that, the government had refused to allow the
Bank to exercise that control. Why was no discretionary
power given to the Bank under the present pressure ?
The sole use of money being to facilitate the ex-
change of commodities, how could they refuse to relax
the present system? The noble lord then referred
to a speech of Lord Morpeth at Sheffield, in the
autumn of last year, in which it wan argued that commerce
and agriculture. should be entirely exempted from the inter-
ference of meddling governments. That principle was far
mere applicable to their banking system at the present time.
(Hear, hear.) There was another remarkable speech, which I
was delivered by the right hon. baronet the member for
Tamworth last emotion. In that speech the right hoc. baronet
said that if they took the corn of America and the timber of
'tussle, and those countries took nothing in return, no harm
would arise. (Hear, hear.) One tendency of the free-trade
measures was now becoming apparent. The excess in the
imports, consisting chiefly of articles of luxury, and not
including corn, was 4,333,79'21. The effect of this had
been to displace a vast quantity of the industry of the coun-
try. In the speech of hes noble relative (Lora Morpeth), to
which he had already referred, the audience were told of the
numerous countries which were ready to supply them with
corn ; and it woe said that if the people of England opened
their mouths wide, other nations would fill them. (Laughter.)
If they heed before opened their mouths wide, he hoped
they would now open their eyes wider. (Great laughter.)
He flared that their breeches-pockets had been opened, and
that lees had gone into their mouths than out of thc:r poc-
kets. The house had been told that the present scarcity ex-
tended to Franfe, Holland, and Belgium. In that state-
ment he heard the echo of another speech, than which no
more eloquent speech had ever been delivered in that house :
it came to his mind like the remembered tones of a mute
lyre. In that speech the right hon. baronet the member for
Tamworth said that the more they increased their de-
pendence on foreign supply, the more would they
increase the risk of • monetary pressure. (Hear,
hear.) The house ought to congratulate itself that the
corn law had not been repealed eight or ten yearn ago.
II ed it been so, the remit would have been to force out of
cultivation their own roil to the extent of four or five
million quarters of corn, and there would have been so much
more therefore now to import from abroad. (Hear, hear.)
Free trade, they were told, had not had a Stir trial. Why,
it was not from Belgium, France, or Holland, that we ob-
tained supplies of core in years of scarcity—the rulers of
those countries closed the porta at such periods ; and if we
had now the superabundance of America, the high price
obtained would enable America the better to purchase o'er
manarectures. (Rear, hear.) Ile believed that his noble
friend (Lord G. Bentinck) lead taken the true course in
opposing the fallacy that if they took care of their imports
the exports would regulate themselves—(hear, hear)—
and that they should seek to extend the colonial,
as contra-distinguished from the foreign, trade. How
long were they to act like the moth at the
candle, and, though their wings were burnt, offer their
bodies also as a sacrifice. (Laughter). Ile entreated
the gore rnment, if they die nothing else, to enable the in-
dustrious classes to c wry on their business by taking off the
restrictions imposed in 1844, and by expanding the currency
of the country. (Cheers).
The CHekNCELLOR, of the EXCHEQUER said he
had imagined that the debate of that evening would be a
continuation of the debafe of Monday on the monetary con-
dition of the country, but the noble lord had directed his
remarks principally to free trade, and to the reductions made
in the import duties. 'rho noble lord had spoken of
the export of gold within the last eight menthe, hot
he would remie,d him that free trade measures
had been in operation long before that period.
The noble lord forgot that in the years 1844 and 184.5, and
even up to last August, when the necessity of importing
corn became apparent, gold flowed into this country. He
argued on the now almost exploded doctrine that this coun-
try laboured under a misfortune in being dependent on
f reign nations for a supply of food. The noble lord could
not mean to say that borne produce had been diminished by
the operation of the corn 101 l of last session, and, if he could
not argue that, he (the Chencellor of the Exchequer) would
like hien to explain where he thought this country would be
at the present time if see were not receiving supplies of
foreign foal? (Hear, hear.) But he would not
follow the noble lord through his free trade argu-
ments ; it would he better if lee kept himself to the
subject more properly before the house. On that topic
it would probably be expected from a minister
occupying his position, that he should give some reply to the
speeches made the other night. The hon. gentleman', one
of the members for London (Mr. Mastennan) had asked him
upon that occasion to give an assurance that he would not
come uuon the Bank for deficiency bills. That was an assu-
rance which he (the Chancellor of the Exchequer) should
not be no indiscreet as to give ; but the hos. member might
be well assured that he should try to avoid the necessity for
such a step by taking measures calculated to prevent it.
Another hon. member had, in the course of the debate.
asked the government to explain their views upon the bill of
1844 ; and the right hon. gentleman the member for Tam-
worth told them that no affection for his own offspring should
induce him to abstain from candidly ft-considering that
bill, if the government thought it desirable to bring the sub-
ject hefore the house. But, ache had twice declared on previous
occasions, her Majesty's advisers saw no necessity for such a
course. (" Hear, hear," from Sir R. Peel.) This was not
• question into which party spirit had over entered. When
he (the Chancellor of the Exchequer) gave a disinterested
support to the bill of 1844, he was acting in opposition to the
government which proposed it. He had arrived at that
time at a conviction that that measure of the right hon.
baronet was the only sound one en which the currency could
he based. As chairman of • currency • committee
in a previous year, he had formed that opinion
after grave consideration, and he bad to state
that night, that to that opinion he still adhered.
(Repee.ted cheers from Sir It. Peel). If, indeed, he desired
to be convinced of the policy of the measure, he couleti,
scarcely have found graver reason than in the debate which
had just occurred. Nothing could be more remarkable than
the extraordinary discrepancy of opinion which ap-
peared to prevail bets een the &peahen in that debate. One
proposed nn entire repeal of the law. Another, one of the
members for Birmingham (Mr. Meoatz), said that the bill of
1814 was indispensably necessary to carry out the hill of
1819, and therefore to satisfy him both the statutes of 1844
and of 1819 must be repealed. But the other honourable
' member for Birmingham (Mr. Spooner) declared that he
was not satisfied with the state of things which existed pre-
, nous to I 819; so that to please him, it would be necessary to
go back to 1797, when the state of things teas far from being
dissimilar to that existing at the present time. It would be
an act of folly, therefore, looking at these conilictieg opinions,
Ito propose a repeal of a law as to the best mode of altering
which no two persons seemed to be agreed. When hon. mem-
bers could make up their minds among themselves, and come to
, the house with some definite proeosition, then that preposition
as contrast- el with the present measure could be discussed,
but until their minds were made up it would be sheer in-
sanity to interfere. But then there were other hon. mem-
' hers of the house, who talked of free-trade in banking. The
words sounded well, nut those who used theca should bear in
mind the cane of the United States in 1837, when free-trade
in banking, or unlimited competition in issue, accompanied
by every guard the people could put upon It (except, indeed,
that of convertibility) ended in a suspension of payments,
and almost universal bankruptcy. (Hear, hear.) In the
count of the attacks, too, which were made upon the
act of 1844 the unfair practice had been resorted to of
attributing tee the &whore of that act expressions with refer-
ence to its effects which they had never used. As an ex-
ample, it had been said that an expectation was held out
that after the passing of the bill government would have no
recourse to the Bank for defictercy bills, Now he had
referred to the debate, and could find no record whatever of
any such promise. It was further imputed to him (the
Chancellor of the Exchequer) that he had concealed from
the Bank the probable amount of deficiency bills which
the government would require. If there was one thing
which, in his opinion, was more inadvisable than another,
it was any sort of concealment of such matters. Last Ja
nera7, fox the first time, there were no deficiency hilts ; and
if the Bank were se short-sighted as to conclude from that
circumstance that there would never be deficiency bibs again,
why they must take the consequences. The noble lord op-
posite thought that a certain amount of pressure in the
money market might have been foreseen. Every one form
saw last autumn that the imports of corn necessary to
support the people must occasion • drain of gold ;
but, so late as February last, no one had anti-
cipated the extent of the pressure, or of the alarm which
had arisen. Aright honourable gentleman bad expressed an
opinion that the limited amount of accommodation to the
public was occasioned by the amount required on deficiency
bills. Now in former times of pressure it had happened that
a larger amount was required on deficiency bills by the go-
vernment than at the present time. The following table
would show the circulation, deficiency bills, and pri-
vate securities held by the Bank at various periods
of alarm in the money market —January, 10, 1837:
Circulation, 18,700.0001.; deficiency bills, 4,800.0001.;
' private securities, 17,900,0001. Ott. 15, 1839: Cirealstica,

17,800,00 Cd. ; dells:dewy bale, 4,300,0001.; private securities,
13,000,0001. April 10, 1847: Cireulatiob, 20,400,0001. ;
defi-
cieoey hills, 2,400,0001. ; private securities, 18,000,0001. The
amount of the circulation, therefore, was 3,000,0001.
higher in 1847 than in 1839, whilst the deficiency bills were
2.000,0001. lees, and the private securities 3,000,0001.
more. Surely, after this, no one would again urge
that the deficiency bills occasioned the crisis. (Hear, hear.)
Now, when he remembered the punkin of gentlemen in the
City, he was but littlesurprised that they should complain.
One of the complaiote, however, which ho had heard that
tight Lad, he must own, astonished him. The hon. member
for Huntingdon blamed them for investing the savings bank
money in stock. Why, the necessary effect of the operation
must he to keep up the price of stock, and yet it
was of this operation that the contractor of the loan
complained. He must remark, also, that the hon. member
for Huntingdon had blamed the right hon. baronet the
member for Tamworth and himself for what he termed ob.
strutting the Bank. Now, he (the Chancellor of the Ex-
chequer) begged leave to say that he had never obstructed
the Bank. He was, and always had been, on the most
cordial and friendly terms with the Bank. What be did say
woo, that the bill of 1844 might have been more gradually
and steadily brought into operation, and that in that
case it would have worked better than it had done.
That was an opinion to which he still adhered. He did
not feel it necessary to recapitulate his siews as to the state of
distress now existing, and his conviction that this distress
arcs incapable of remedy by any tampering with the cut rency.
Several deputatiarts had waited upon him, and all had con-
curred in recommending the repeal of the act of 184-4 as the
only remedy for the present pressure. None had however
left him with the impression that he was prepared to relax
the currency. He had told all and every one thet he did
net think the pressure was caused by the state of the circa-
halloo, nor would it be removed by alteration. With reap. ct
to eottou, the noble lord the member for Stamford had sag.
grated a strange remedy for scarcity. If the laws regulating
the currency were relaxed, the price of everything would be
rind, and thus cotton would be rendered more scarce than
ever. Railways had been alluded to in the course of the
evening by the hon member for Sunderland, and in that
quarter he confessed his belief that there had been a con-
siderable absorption of capital. In the north of England,
especially, the want of money mainly arose from so many of
the trading community having their capital locked up in
railway securities. Ile did not wish to be understood as
vying anything against railways, but nevertheless it could
not be denied that they had locked up a great deal of money.
The best proof of the want of capital was the high rate of in-
terest Friel for advances. It had been urged that this proved
a scant circulation; but this was a mistake he had hardly
expected that any one would fall into at this time of day.
High rates of interest had prevailed wi h a large amount of
woes hi circulation, and low rates when the circulation was
restricted. But although some of the present evils might be
attributed to the causes enumerated, the real substantial
origin of the pressure was the want of food. (Hear, hear,
hear.) That was quite enough to account for all, and
more, than we had suffered. The loss attendant upon the
failure of the potato crop in Ireland Lad been
estimated at 16 millions. He believed that to be below the
mark, that it was, in fact, 18 or 19 millions. But, besides
that, there had been ennsiderable failure in Englund and
Scotland in barley, oats, and potato., and, even of wheat,
he feared that the yield had been deficient. We had, there-
fore, been obliged to go abroad u well as other nations, an
in the first instance, to pay for our supplies in gold. But
the gold would return, and even already the exchanges wi. h
Amei ice were turning in our favour, having risen to 106-
107. The Americans would soon find that they couhl
not employ our gold to better advantage than by sending
it back again to us in exchange fur goods. The sooner,
therefore, we made our payments the better, as we should
thereby get the money back sooner for our manufactures.
Some boa. members had complained that our stocks of goods
were exceedingly low. He said, so much the better ; the
lees goods there were on hand, the more employment for
operatives, provided the operation of the Hours' Act did not
cripple our powers of production. Although he saw some
symptoms of improvement in altars, he did not think he
should be doing his duty if he did not state his fears that
there were yet hard times to follow. It was impossible the:
such a visitation should fall upon the country without in-
flirting a large amount of suffering ; but there were, in his
opinion, no means by which that suffering would be NIP much
increased as by contracting the circulation. Any tampering
with the currency would at once diourb all commercial
transactions. It would affect the wages of labour and the
price of food, and thus add to an amount of distress which,
as it existed at present, required all our patience and forti-
tude to resist.
Mr. HENLEY said the right hon. baronet the Chan-
cellor of the Exchequer had adopted the tactics of the right
hon. baronet the member fur Tamworth, and by trying to
" lug" into that discussion the standard of value of 1819 to
evade the real question which the country at the present
moment required to have solved. Every one admitted that
the gnat demand of money for investment in railroads, and
the advanced price of food, were the principal MUMS of the
present distress, and therefore on these admitted facto discus-
sion was unnecessary. The real question for solution WS!,
whether the fixing a certain limit on the Bank of England as
to the amount of its issues had proved satisfactoy to the
trading community of this country. (Hear, hear.) The
answer to that question had net been afforded by the right
hon. baronet. The act of 1844 might have been necessary
with a view to the regulation of country banks, though it
teemed to him that in reference to that measure, a sort of a
bribe had been given to the country bankers ts hold their
tongues at that time by granting them a monopoly fur a fur-
ther term of ten years, while the country ran the risk of
being straitened by them; but was the limit of 14,000,000(.
to continue the exact amount, neither more nor less, th..t was
to be fixed upon the Bank of England ? Was the govern-
ment or legislature prepared now to adhere to that rule
Were they prepared to maintain the act of 1814 in
its integrity when the granaries of this country were
empty, and when no human being could predict
what the next harvest would he? Would they
give the merchants and trading community to understand
that under no circumstances should the measure of 1811 be
relaxed ? (Hear, hear.) Ho had opposed that measure—he
had thought it unwise, because it attempted to define a
limit that could not be defined, and that the provisions
of the bill must, eventually, he broken through. This
was a moat fearful question, not d pending on ourselves, but
on providence. On various pretexts the d iscretion of banks, as
to issue, had been reduced. Every member who had treated
this question had admitted that, even with the present
law, the trade of this country must depend on their
discretion, and was it wise or prudent to restrain
them, that a few hundred thousand pounds would
strangle that trade ? He held the same opinions when the
bill was introduced in 1814. While he thought it was necea-
sary that the issuing power of the banks should he controlled,
it was a very different thing to fix them by a limitation of
this kind.
Mr. SPOONER mined the adjournment of the debate.
Lord J. RUSSELL wished that it should be adjourned to
this day.
Me. SPOONER had no objection, if the house met at
twelve o'clock. After the strong reference which had been
made to him, he thought he should have an opportunity of
replying to what had been said.
The CHANCELLOR of the EXCHEQUER said he
should be glad to has-u the debate taken this day. He be-
lieved he had stated last night that he wished to take a rage
every day, so that the bill might be got up to the Lords on
Monday.
A desultory eonversatien then ensued ae to the time to
which the debate should be adjourned, and it was at length
arranged that the Poor law Bill should be taken on Monday,
titer which one stage of the Loan Discount BPI, the debate
on the currency to be resumed on the bringing up of the
report of the latter bill on Tuesday. The bill then passed
through committee—to be reported to-morrow (this day.)
, The exceed reading of the Ecclesiastical Commissioners Bill
was fixed for Friday, the 28th instant.
The house adjourned at half-past twelve o'clock.