The Sun.
London, England, 1855-11-12 00:00:00

HOW TILE ACT O/ 1844 WAS PASSED.

The following letter has been addressed to a contem-
porary :—Sir,—To explain in 1855 how such a restric-
tive and absurd act as the one to limit the currency came
to be passed, almost without opposition, in 1844, when
free-trade doctrines commanded the general assent, the
circumstances of the times must be remembered. In 1844
the country was comparatively prosperous. The har-
vests of 1842 and 1843 had been excellent. The average
price of wheat, which in one week had sold for 765. in

iB4l, was in 1.843 and 1844 about 50s. The amend-
ments in the tariff in 1842, including a reduction of the
duties on corn, bad been followed by a considerable in-
crease of trade ; railways, in which speculation was ex-
cessive, engrossed public attention, and the country
teemed with hope, energy, and success. Nobody, except
a few writers, bad either inclination or time to bestow

on a question so abstract as that of the currency, or
so remote in its consequences, when bullion was
flowing in, as an act of Parliament to restrict the issue
of Bank notes. Sir Robert Peel was the ostensible

author of the bill, and his name was honourably con-
nectedwith the honest measure of 1819, for re-establish-
ing in its integrity the contract expressed in every Bank
note to pay a specific sum on demand, so shamelessly set
aside by the L9gislature in 1797. In 1844, too, Sir
Robert was extremely popular. Ile patronised railway

enterprise. He had previously, in 1842, in spite of his
own party and to the delight of the liberals, simplified the
tariff, reduced many exorbitant duties, swept away a great
. .

many restrictions and prohibitions, and effected on the

principles of free trade a great customs' reform. In 1843
he had succeeded in settling a long standing and irritating
dispute with the United States on the boundaries of
their empire and our colonies. To his long-established
reputation as a safe minister he had recently added
the lustre of an enterprising.esnele Round reformer, and
evils, especiallyoen all financial subjects, almost uni-
versally confided in. He was considered to be a great
if not an unerring authority. Even his old opponents,
who had designated him shallow and plausible, respected
him for his bold tariff reform, his professed admiration
for the principle of economic science, and his patronage
of its professors. Honoured by his own followers, he
was regarded by the Liberals as a convert in secret to
their doctrines, ready to 'promote,. as far as he could,
free- trade measures, and they were studious not to da-
mage him with his party. They Isere, on the contrary,
anxious to give him,
on all questions of commercial
policy, their cordial support; and hence it came to pass
that an act, described by himself as "affecting every
contract, public or private—every engagement, national
or individual, that could be entered into," seas passed
through Parliament with far less discussion than a Sun- I
day-trading or a Public-house Bill.
On May 6th the subject was brought before the House
of Commons by Sir Robert Peel, in a speech merely ex-
planatory of his vie-vs ;on May 20th the resolutions
were discussed and agreed to in one sitting ; on June
13th the bill, founded on the resolutions, was read a
second time, Mr. Hawes having interposed an amend-
ment, condemning that part of the bill which interferes
with banks of issue, which was lost by 185 to 30 votes.
On June 24th, June 27th, and Juno 28th it was dis-
cussed in committee, but excited little interest, Mr.
Muntz and Sir Win. Clay having moved amendments
with only trifling support ; and on July 4th, with very
little further discussion, it was read a third time and
passed. In the Lords it %vas read a first and second
time as a matter of course, and was only discussed once,
on going into committee on July 12th. Thus, although
the bill was ten weeks before the two houses, it under-
went very little investigation. It was taken on trust,
from the high respect which the Parliament and the public
had for Sir Robert Peel ; and his great reputation be-
came the means of procuring the public senction for a
very erroneous law, and of inflicting a lasting injury on
society.
In the whole Parliament there was no one person, ex-
cept the Earl of Radnor, who opposed on
principle this
thoroughly and erroneously prohibitive and restrictive
measure. To his honour be it now again brought under
notice, he entered a protest against the bill in the jour-
nals of the Lords, because it unnecessarily interfered
with the banks—because it pretended to supply the
want of prudence and discretion in individuals by statu-
tory regulations—and because, amongst other excellent
reasons, " the amount of currency required by the wants
of the country varies from time to time, and is influ-
enced by a multitude of circumstances quite out of the
reach of human control or possible foresight." The
noble lord's forcible arguments passed unnoticed. The
Parliamentary influence of the Prime Minister carried
all before it, and in this, as in many other cases, a blind
deference to authority was the cause of immense public
mischief.
Another circumstance favourable to the success of the
bill was the character of its opponents. In general they
were men who were supposed to be currency mad, living
in a fool's paradise of false beliefs, in the oranipotency
for good of the little shilling, and f promises to pay that
were never to be paid. Or they were currency doctors, '
men who confounded counters with the things counted,
and asserted in consequence an unlimited power to in-
crease the national wealth by increasing the means of
reckoning it. Or they were subtle definers and thinkers,
who disported in all possible bypaths and labyrinths into
which ingenuity could tempt them, and never came into
the highway of common sense or consulted the finger-
posts of facts. Though not usually jocose, Sir Robert was
able to excite the mirth of the house by quoting some of
the nonsense of his opponents ; and he was believed
to be right, because the Birmingham school, Lord Cas-
tlereagh, and Mr. Bosanquet, had written and uttered
very laughable absurdities.
His supporters, too, were men of reputation. Passing
by Mr. M'Culloch,
whose opinions on such a subject
were an authority, the real author of the measure of
1844 was, perhaps, the richest banker in London, a man
generally respected for his liberal politics, and almost
adored for his large fortune. Mr. Jones Lloyd, now
Lord Overstone, by speaking and writing, by verbal evi-
dence and by elaborate pamphlets, readily procured the
assent of the bankers and merchants of London to a plan
which he had suggested, and b3en greatly instrumental
in inducing Sir Robert Peel to adopt. Few in the neigh-
bourhood
of the Royal Exchange could doubt for a mo-
ment the correctness of the opinions of the richest and
most successful banker of the day, and the reputation of
the great millionnaire of Lothbury on a question of bank-
ing and currency helped materially to fasten on the nation
his pedantic and mischievous scheme. If such a plan
had been suggested by some newspaper editor, and taken
up by some little-trusted member of Parliament, it would
have at once been scouted in the City and stifled at
Westminster. The authority of rich, successful, and
popular men imparted life to an absurdity that has now
lasted eleven years, and as at one time stung the com-
munity into tarantula convulsions, and at another fixed
it, like a statue, in despair.
This measure, also, was a cunning appeal to many pre-
judices and many passion'. Banking is comparatively a
new art, and bank notes are comparatively a new inven-
tion. What so natural, therefore, as that every impro-
vident landlord, every unsuccessful speculator, every dis-
appointed projector, every fond conservative believer in
virtues of the past, and hater of novelties as sources of
Feiplutipno 6119_10 thrpw the blame ?# their_ own and. all