The Sun.
London, England, 1839-07-09 00:00:00

few months of that evidence being given there was a great
departure from the rule—in fact the fluctuations proved
that the Bank had no proper and steady system of dis-
counts and securities. In May 1835 the currency was in
a healthy condition ; the Government were then wishing
to barrow 15,000,000/. ; they had communications with
the Bank, which refused to say whether the usual facilities
would be given. The Chancellor of the Exchequer ob-
tained his money at 34 per cent , but within two days
after that loan was concluded the Bank issued a notice
offering advances of money upon India Bonds, Exchequer
Bills, and other securities at Three and a Half per cent.
That did not do, and in 15 days more they issued another
notice offering advances upon stock, being the first offer
of the kind since the disastrous period of 1825. He had
no hesitation in saying that those different notices were
advertisements that money would be lent ; money con-
tinued to decline till the year 1838; but notice was
again given that money would be lent on Exchequer
bills, &c. at Three and a Half per cent. There had
been a difference of 11,267,000/. in the amount
of the circulation within a very few years. The
irregularities that existed in the affairs of the Bank were
such as to make it impossible for any commercial man to
conduct his business or speculations on any fixed principle.
The greatest variations that had taken place in the Joint-
stock Banks amounted to 2,107,000/., while the varia-
tions in the issues of the Bank of England had been, as
he had satisfactorily shown, at various times most enormous.
In December, 1838, the Bank had given notice that it
would renew its. issnes ; and cotton, which before that time
was being sold at 6d. and 61d. per lb., was, from the im-
petus thus given, in a very short time raised to 9d. and
W. per lb. How different was the course pursued by the
Bank of France from that adopted by the B ink of Eng-
land ? During the severest pressures that Bank never re-
fused to discount, and only on some occasions slightly
raised the rate of discount. It had not altered its
rate of interest from 1818, notwithstanding tbe Revo-
lution of 1830, which was 4 per cent. When he (Mr.
Hume) last visited France, he inspected that Bank, and
on asking the foreman whether there was any objection
to his looking at the books, the reply was " None at all,
our house is a glass house." Every morning the Chancel-
lor of the Exchequer of France received from the Gover.
nor an account made up the previous evening of every
shilling received in the Bank, and a statement of all its
transactions. By that means the greatest confidence ex-
isted in the Bank, and when the Belgian Bank failed, and
here was a considerable pressure on the Bank of France,
all that they did on that occasion was to re-discount the
notes which Lafitte's Bank had issued. That was all that
was done to place the question in a proper position. The
distress that existed in 1836, when many thousands of poor
people in Manchester, Birmingham, Sheffield, and other
manufacturing towns were thrown out of employment and
starved, in consequence of their masters being ruined, might
be traced to the pernicious system adopted by the Bank.
It was absolutely necessary, in order to protect the pro-
perty of the country, that there should be a currency of
one uniform standard. Private interests must not be
allowed to interfere with those of the public. It behoved
Parliament not to separate until they had ascertained
what was the proper course to be adopted to prevent
similar occurrences again taking place. If it could be
shown that one course had done the evil, and that another
course would have avoided it, the Bank Directors ought to
be anxious to have the benefit of the investigation of a
Committee on this subject. He ( Mr. Hume) had wished
for the appointment of a Committee earlier in the Ses-
sion, and regretted that it had not taken place, but in the
present critical situation of the Bank he thought the Chan-
cellor of the Exchequer ought not to allow the House to
separate without appointing such a Committee. The Hon.
Member concluded by moving his resolution.
Mr. WILLI MS, in seconding the amendment, re-
gretted that so little interest was taken on the subject,
which was of such great importance, for there could be
nothing more important that an inquiry into the fluctua-
tions which bad taken place in the value of every descrip-
tion of money in the country. At one time they found
every interest in a state of prosperity—at another time
they saw the commencement of adversity, which went on
progressing, until every interest in the country was in a
state of depression—tl ey saw prosperity and adversity
moving about as in a cycle. There must be some great
and powerful cause for this ; and some remedy ought to
be sought out for these evils. He thought they had been
occasioned almost entirely by the mismanagement of the
machinery of the Bank of England, and the great powers
given to it. The connection of the Exchequer with the
Bank of England, had tended to agggravato the evil.
The issues of the banks, et one time high and another
low, were continually varying. It' he began with the
stoppage in 1797, more evil could be traced from that
period than any other. In 1810 bank notes had
become depreciated, and great alarm was caused. A
Committee of the House of Commons was ap-
pointed, and an inquiry took place. In 1815, at the
time of the general peace, the Bank of England was
obliged to resume cash payments. The Bank, thereupon,
began to draw in its issue, with the view of meetingits,
obligations, and the consequence was again a great depre
ciation in property, great distress among the working
classes, and amongst persons engaged in trade and com-
merce. The prices were so great, that an Act was passed
relieving the Bank from the obligation. Then, again,
they got into prosperity. Matters went on until Peel's Bill
was passed. The pressure then was so great, that in
1822, just before the Bill came into effect, the Bill was
repealed in part, extending the time for the circulation of
one pound notes. Immediately after the Bill came into
operation, commodities rose trom 50 to 100 per cent.,
and gold and silver were exported to pay for this
vast increase of the raw material. That brought
on the panic of 1825, and perhaps no other country
was ever placed in such a situation of jeopardy.
as this country was placed in at that time. Every de-
scription of our trade and manufacture was reduced to one
half, and Mr. Huskisson said that in consequence of the
mismanagement of the affairs of the Bank of England
this great country had been within forty-eight hours of
barter. Seeing the great increase in the value of com-
modities, Mr. Canning, who was then Minister, became
alarmed, and he got a Bill passed to repeal the Bill which
extended the circulation of 11. notes. Great and distress-
ing fluctuations were thus produced. In the year 1830 the
highest price of Consols was 94f per cent., the lowest 77k,
and in the next year it was 74,k, being a fluctuation of 23
cr 24 per cent. This reduced the debt of 800,000,0001.
by about 16,000,000/. or 17,000,0001. Again there was
gradual prosperity and high prices until the end
of 1836.—( Hear, hear.) The mismanagement of the Bank
was most destructive to the public interests. As for their
three months average, God knew, it was very incorrect.—
( Hear, hear.) He found that on the 3d of July in that
year, 1835, their circulation, including deposits—which he
asserted were a vital part of their stock, although they
would affirm the contrary ; for when they began to take
in their gold the public took in their deposits, as they
could make better use of the money—the circulation of
the Bank was 29,269,000/. and of bullion 6,219,000/. On
the 14th of January 1836 it was exhibited as 36,431,000/.
and the bullion 7.760,0001. being an increase in six
months of one-fifth of the whole; while the increase in the
bullion was 850,000/. The next year the prices of some ar-
ticles were advanced 30,40, 50, 60, and even 70 per cent. It
was really wonderful that while the circulation of paper
affected the whole of the property of this country, there
should he so much indifference and ignorance respecting
it.—( Hear, hear.) In 1836 the Bank again reduced its
issue. The West India loan was almost all paid up, and
the " rest" of the Bank exceeded 9,000,000/., which they
were so anxious to employ that there was a glut of money
in the market ; almost any kind of bills of exchange could
be discounted at 2 per cent. It was a lamentable fact
that nearly all the corn we imported last year was paid for
in bullion instead of being paid for in manufactures, as we
used to do before. It appeared that, on the Bth of Ja-
nuary, in the present year, the circulation was in money
28,526,000/. ;in bullion, 9,360,000/. On the 25th of June
last, it was in money 25,660,060/. ; in bullion 4,344,000/.
The country was really bound to look carefully
to the operation of the Corn.laws.—( Hear, hear.)
Since the Bill of 1819, the country had been almost in
continual danger on account of the irregularity cf the
Bank, in direct opposition to their own evidence when they
solicited the new charter. Ought the property of the
country, the subsistence of the working classes, the com-
mercial and manufacturing interests of the nation, to be
hazarded in that manner ?—( Hear, hear.) He trusted the
House would grant that inquiry which the Hon. Member
for Kilkenny had proved to be necessary. The anion
between the Chancellor of the Exchequer and the Bank
was most injurious to the country. The Exchequer now
depended on the Bank for funds to meet its payments : the
payments of last year were made out by the Government on
deficiency bills. The state of the Bank most impera-
tively called for inquiry. At the half-yearly meet-
ings there were asked and answered a few civil
questions which contained no information whatever.
Ile believed that not one Bank Proprietor—nor a Direct•r
knew anything of the management of their concerns. Was
it fitting that the Government and the country should be
placed at the mercy of such a body ? lie could imagine
a state of things in which the Government would ark the
Bank a loan to save the Exchequer from stopping pay-
ment, and the Bank might reply that if they advanced the
money, they must atop. Should a system be allowed in
which the country might be placed between two such alter-
natives ? As to which was the most to be deprecated,
opinions might vary, but for himself he candidly confessed
that ho thought the stoppage of the Exchequer infinitely
the most mischievous and dangerous. He would now say
a word as to Savings Banks. There were 22,000,000/.
of deposits. Let it be recollected that this was payable at
very short notice, and that a general alarm might produce
a drain upon these funds, the consequence of which
could not be foreseen.—(Cries of " Hear, hear.")
The Right Hon. the Chancellor of the Exchequer had
exulted the other night in the increase of the deposits, as
showing the prosperous state of the working classes, He
(Mr. Williams) maintained, on the contrary, that the in-
crease of those deposits was no such indication, because
the poorer classes did not form, by any means, the largest
nor even b
the k
s prineipal.—(lJea portion of the contributors to the
savings
Hear, He knew that the deposi-
tors were, to an imm,
°llse extent, persons not only in the
middle n
affluent circumstances- He
knew that ranks,
entire family would have
rt
their names in a savings bank,
every" one of them for the
sh,em but e
m in
members
s;:
oi vfel arty
utmost amount allowed by the regulationt, the father de-
riving the whole benefit, from the one per cent •dditiorzal
interest.—( Hear, hear.) For that advantage the con^trY I
would, at a period of unusual depression, and of a conse-
quent run upon the banks, have to stand a loss of 4,000,000/
or 5,000,000/ principal. Now, if the savings banks were
chiefly beneficial to the working classes he would
not grudge this—( Hear, hear,)—but he did grudge
it, knowing as he did that those classes formed but a small
minority of the depositors.—( Hear, hear.) Let it not be
forgotten that the fluctuations in the funds were such as the
following 1825, Consols, 94,11, down to 77 ; 1827;89-
to 76i ; 1829, 743: to 23k. The country was always,
under the existing system, on the verge of a precipice. In
1825 Mr. Huskisson said the courary was within forty-
eight hours of a state of barter. Such a system ought to
be n
oBu:l
Bank
tentirelymanagement,
do
e ne a
quite
way
separate
or
rather,
n d distinct'
the h issuing
p os swefi
rnrom o ft
shouldhe paper
rest
n o money
o f
the
longer
be continued in the establishment which had inflicted so
much evil on the country, and had departed from every