The Sun.
London, England, 1847-12-01 00:00:00

DECEMBER 1, 1041.

Ithought he had shown they had acted successfully.---
(Hear, hear.) But it had been urged that they ought to
have acted much more largely, and that it was the duty
of the Bank of England to have discounted every bill
that came to them. They did so ; but then parties said
it was usury to charge more than four-and-a-half or five
per cent. If such demands were conceded, it was useless
to talk of the convertibility of paper. There would be
a time, early or late, when the Bank would have been
compelled to take some stringent step ; but it was said
that such a step was unnecessary when the Bank had
8,000,0001. of gold in its coffers. Why, it was the pos-
sesssion of that sum of 8,000,000/ that gave safety to
the step which was taken.—(Hear, hear.) The Govern-
ment had felt assured that with exchanges in favour
' of this country, with 8,000,0001. of gold in the Bank,
that there would be an influx of bullion into this coun-
try before any drain could be made on the gold in the
Bank. And to what were they indebted to the posses-
sion of that 8,000,000/. but to the operation of the Act
of 1844?—(Hear.) If the Bank had gone on during the
summer discounting at tour and a-halt or five per cent.,
what check could have been given to over-trading and
over-speculating ? If railroads could have gone on
borrowing at four and five per cent. by an unlimited issue
of notes, they alone would have swept away more than
the whole circulation.—(Hear, hear.) If by a drain of
bullion the amount had been diminished to 2,000,000/. or
3,000,0001., could anybody doubt but that, under the
alarm and want of confidence which existed at the time,
there would have been a run upon the Bank for gold ?
Former experience had shown that such would have
been the case, and, instead of taking the measures they
had, the Government would have been in imminent
danger of being compelled to suspend cash payments, and
to have asked Parliament for a Bill of Indemnity. If
they had avoided that danger, it was to the operation of
the Act of 1844 that they were indebted.—(llear,
hear.) He was not prepared to say that he
thought all the difficulties and all the pressure
was over. He had said last year, that, from
the changes which had taken place, this country had
a hard time to go through. He was of the same
opinion still. He did not, like some, attribute the
present pressure entirely to the adoption of free-trade
principles. There had been the pressure of a panic in
1825 and 1837, under a protective system. Now there
was a pressure and a panic in the state of change from
protection to free trade, through which the country was
now going. His belief was, that when the s) stem of
free trade was fairly established, the prospects of the
country would be fixed on a firmer basis than ever, but
at the same time he never had expected that the change
would take place without being accompanied by some
evil. Neither ought the present state of things to be
attributed exclusively to the Act of 1844. Why, after
the passing of the Act of 1819 there was hardly a cala-
mity which affected the agricultural, the commercial, or
the manufacturing interests, which had not in like man-
ner been attributed to that measure. But now the ma-
jority of the world considered that the Act of 1819 had
operated most beneficially to this country ; and in like
manner he anticipated that when the pressure of the
present time had passed over, and people looked back
at the events of the last few months, they would
be inclined to entertain similar opinions of the Act of
1844. A complaint had been made that the operation
of that measure had nut saved this country from com-
mercial revulsions and distress. He fur one had cer-
tainly never held out any expectations that it would do
so. All he had said was that it would prevent over-spe-
culation, by the absence of an ill-regulated currency.
Mr. Jones Loyd, in the pamphlet he had already quoted
said that to guard against commercial revulsions was not
the object of the Bill. That was so: the object was to
combine a paper with a metallic currency. There were
objections to a metallic currency, inasmuch as it was
not the cheapest or most convenient, but it was the
, safest. It was the currency of the two greatest com-
mercial communities in Europe—Holland and Hamburgh,
and yet those countries had not been free from commer-
; cial revulsions. To say that, under such a system,
expansion of the currency was prevented, was contra-
' dieted by the events of the summer of 1846, when a
larger amount of notes was issued. He had never
prophesied or thought that the operation of this system
would be other than it would be under a metallic
currency. Whatever evils might happen under a metal-
lic currency might happen under this; whatever advan-
, tages might be attained by a metallic currency might
be attained by this, with the certain addition of economy
and convenience. It was perfectly clear that the amount
of reserve in the Bank of England, in the summer of
1846, had prevented any action on the notes in the
hands of the public for some considerable time.—(Hear,
hear.) It was perfectly consistent, he admitted, with
the provisions of the Act that no such action on the
public should take place; and there was, therefore, no
legal obligation upon the direction of the Bank to act
otherwise than they had done. He thought it would
have been wiser and better if they had given timely
warning, and had taken longer precaution.—(Hear.)
But the obligation to do so rested simply upon the dis-
cretion of the directors of the Bank; and he was far
from saying that that discretion had not been wisely
exercised. It was utterly impossible that an establish-
ment which possessed so large a capital should
not be most powerful, either for good or
evil, upon the commercial interests of this
country ; and it was a matter of vital im-
portance, that the management of that banking
establishment should be conducted soundly and dis-
creetly.—(Hear, hear.) He feared that recent events
had somewhat shaken the confidence of the public in the
direction of that establishment.—(Hear, hear.) It
might beilifficult to suggest a mode of improving that
direction ; but he was certain that this was a subject
well worthy consideration, and might be a fit subject for
I inquiry in the Committee he was about to move. Though
the Bank Charter did not expire for some years, he
believed the Bank parlour would be fully disposed to
I concur in any measure which the wisdom of Parliament
might suggest.—(Hear, hear.) He believed they found
some difficulty in inducing persons to undertake the
heavy responsibility of the office of Governor of the
Bank of England—(Hear, hear)—and he was assured
that it was a subject to which the Bank parlour would
most willingly direct their attention, and that they
would gladly co-operate with Parliament in anything
that might be considered an improvement in its manage-
ment.—(Hear.) He was anxious not to go further at
present into those controverted subjects connected with
the currency ; he had referred to them, as he promised
and intended, no further than was necessary to illus-
trate the view which the Government took of the pre-
sent state of affairs, and the view which had induced
them to pursue the course they had pursued. He was
not ignorant that many men of great authority, great
experience, and great practical acquaintance with busi-
ness, differed from the view* be had ventured to state.
He believed they differed also in no inconsiderable man-
ner among themselves as to the course that ought to be
pursued.—(Hear, hear.) In the opinion of Government
it was most desirable that all these views, differing as
they did from each other upon a subject of vital import-
ance to the country, should be well and carefully
weighed.—(Hear, hear.) They had thought it unad-
visable that, so soon after events which had excited so
strong a feeling, any attempt at legislation should be
made, because on no subject was the exercise of calm
deliberation and impartial judgment more urgently re-
quired.—(Hear, hear.) But the Government did think
it expedient that an inquiry should take place when all
these events were fresh in men's minds, as they
were at present.—(Hear, hear.) He thought no
one would deny that, in the course of the last year
and a half, phenomena had occurred well calculated
to throw light on the subject, and to illustrate any
opinion which ger tlemen might have entertained on the
question. Fow of us could say we had not learnt some-
thing by the experience of the last 18 months
(Hear, hear, and a laugh.) And, for his own part, he
thought it most desirable that a Committee, composed of
persons of various opinions, taking different views of
the subject, should inquire into the matter, and that, by
the collision of their opinions, and the result of the evi-
dence that might be laid before them, they might be
able to throw additional light upon this complicated and
difficult subject. Many of those gentlemen who had
taken a most decided part against the Act of 1844 in the
course of the last session, had voted for that Act three
years ago. Amongst those, were one of the Hon. Isi y-
hers for Lincolnshire, his Hon. Friend the Member for
Oxfordshire (Mr. Henley), and one of the Hon. Mem-
, bers for the City of London.
Mr. HENLEY said he had not voted for the Bill of
1844, but for Mr. Muntt's amendment.
The CHANCELLOR of the EXCHEQUER said
there were several Hon. Members who had voted for
that Bill at the time, but who had since seen reason, and
doubtless good reason, as it appeared to them, to change
their opinions. All he wished to say was, he trusted
this inquiry would not be considered in any party spirit.
—(Hear, hear.) He did not deny that he should go
into Committee with an opinion certainly biassed one
way by the result of the inquiry made in a former Com-
mittee, of which he had had the honour to be chairman;
and he certainly should go into that Committee, as he
trusted and believed every other Hon. Gentleman would
e
do, with the fullest determination to weigh impartially
the whole of the evidence that might be presented, the
whole of the considerations that might be laid before
them. He believed that such an investigation, conducted
before a Committee fairly and impartially constituted,
would, in the end, tend to promote the bests interests of
the country. He would now conclude by moving the
resolution of which he had given notice, for the appoint-
ment of a Committee.
The SPEAKER having read the resolution from the
Chair,
The CHANCELLOR of the EXCHEQUER again
rose, and said, an Hon. Friend had reminded him that
he had omitted to state that, as to taking any course
immediately, it was not the intention of the Government
to propose any measure at present. They believed that
there was not the slightest probability of any such mea-
sure being required. The state of the Bank was such
that no person could entertain the slightest apprehen-
sion as to its power of meeting any demands that might
be made upon it. The amount of the Bank's reserve,
last night, was 5,800,0001., and of bullion 10,600,0001.—
(Hear, hear.) The mere statement of these sums was a
sufficient warrant to the House that there was little
probability of any occasion for alarm. The bullion in
reserve amounted to six millions and a half in reund
numbers. It should also be remembered that Parlia-
ment was assembled ; and if any emergency, the
shoulde
possi-
bility of which he certainly could not contemplate,
•
arise, Government would have the power of imea
msumreedwiahtieelyh
applying to Parliament to sanction any
in ei
jo.piNnvithon—e
o(
r gear.ia
ly)
wGaesntleman who bad just
SO mightN s d,
agreed with the Right Hon. appeari t o beh
eneeacuesses a rhye.
the amendment he in-
spoken, in the appointment of a Committee, that ho
thought it necessary to move
-
thought that
o
thete in-
tended de
Right to mHoovne.
G ebeforentl e
mhaenf satha down.d hHi
se
m the terms of ittion as itincon then
veniently extensive; for,
stood, the time of the Committeer might be occupied by
a variety of topics; and the object he had in moving his
theof the House
amendment was, to obtain sanction

that the inquiries of the Committee should be tnore con-
fined. As the motion then stood it would allow to the
consideration of the Committee any subject which any
Honourable Member might conceive to have been the
cause of the reck nt commercial crisis.—(Hear, hear.)
Now, if he understood aright the object of the Go-
vernment and the desire of the country, the object
they had in this inquiry should be con fined to the
one question of banking and currency. Perhaps there
never was a period when the question of banking and
the currency commanded such anxious attention as at
present. The variety of opinions held by those gentle-
men interested in the commerce and banking of the
country had been materially shaken within the last
month, and by no event more than by the necessity
under which the Government had found itself of inter-
fering with the Act of 1844. The step which had been
taken had induced in the public mind a want of confi-
dence in the existing law, and that impression would not
be removed until Parliament had thoroughly sifted the
subject, and definitively pronounced its decision. The
question which every man having commercial obligations
to undertake, and future transactions depending on those
obligations, was now asking himself was—ls the law of
1844 to be maintained in all its integrity? or, if not, is it
to be subjected to such modifications as the pressure of
circumstances may call for? or, in the the third place. is
that Act to be abandoned altogether, and a new prin-
ciple set up? He believed that if these three questions
were not fully answered, Parliament would endeavour
in vain to restore that public confidence which existed
but three months ago. There were, however, other good
reasons why the attention of the Committee proposed
to be appointed should be confined strictly to the subject
of banking. Some Hon. Members might not be aware
of the position in which this question had been left in
1841 by the last Committee which had entered upon a
similar inquiry. A Committee was appointed in 1840,
to inquire into banking and currency, in reference to
the operation of the Bank Charter Act, and the investi-
gation was without result, in consequence of the dissolu-
tion of Parliament in 1841, Of that Committee the
Right Honourable Baronet the Chancellor of the
Exchequer was the efficient chairman, and the
Right Honourable Baronet (Sir Robert Peel) an effi-
cient member The Committee said it would be for
the House in the next session to determine whether tins
other Committee should be appointed, to whom all the
evidence should be referred for the purpose of framing
report; but under the then existing circumstances they
considered they had only one course to pursue, to report
upon the evidence they had so far heard without any
observation. Such was the conclusion of that long in-
vestigation of 1840, and from that day to this no further
inquiry had been instituted. Parliament proceeded to
legislate without seeking for any more information, and,
looking to the striking difference of opinion in evidence
taken before that Committee, and given on their respec-
tive sides by men of equal experience and intelligence on
the subject, he could not but conclude that Parliament
had not done-all that was necessary, before the Act of
1644 was passed, in oreer to ascertain precisely those
principles upon which it would have been safe for
them to decide.—(Hear, hear.) The question haying
been left in that unfinished state was one of the best
reasons why it should be taken up now by a Com-
mittee, which should be a Committee on banking only.
The principle of convertibility was not now more gene-
rally granted than when the last inquiry was suspended,
and there was another question which had been since
started and become popular, supported as it was by many
Members of that House. There were many/gentlemen
who would now concede the necessity of a fitted standard
of value, and the necessity of the convertibility of notes
into that standard, yet there were others still uncon-
vinced, who asked why there should be a fixed price of
gold. This question had been very generally taken up
through the country, and the attention which was now
paid to commercial topics caused it to be frequently
discussed. If it were really attempted by that House
to fix the price of gold, or of any other commodity, he
would stigmatise it as a foolish and futile endeavour,
and he thought that it had been sufficiently shown of
late years how ineffectual it was for Parliament to seek
to regulate the price of corn or any other commercial
article.--(Hear.) When, therefore, it was inquired why
we fixed the price of gold at 31. 173. 100. per ounce•
his simple reply would be, that in the ordinary
meaning of the term " price" we did not fix the price at
all.--(Hear, hear.) He would answer that we only de-
fined the division of certain amounts of solid gold tntO
pieces, made into coins—that we merely determined that
one ounce of gold should represent 31. 17s. 104 d. towards
the fourth sovereign in coin. We no more attempted t°
fix the price el gold by saying that an ounce shall coin
into so much, than we sought to fix the price of wheat
in enacting that invariably a quarter shall represent
eight bushels.—(Hear, hear.) Gentlemen might turn
round and say, " You do fix the price of gold; it is not
altogether a measurement, for you have two prices—.
the Mint price, 31. 17s. IQ4d., and the Bank price.
which is 31. 175.9 d." This was true, but the word
" price" nas again improperly applied. If a quantity
of gold was taken to the Bank, 31. 17s. 9d. would be
obtained for it per ounce, the remaining three halfpence
being charged tor the time and trouble which would
be expended in converting the mass into coin. If taken
to the Mint the full price of 31. 17s. lOid. would be
received, but if a man, for his own convenience, pre-
ferred going to the Bank, then he would have to
submit to pay those three halfpence on each ounce as
being fully equivalent to the time which otherwise would
have to be sacrificed.—(Hear, hear.) The next question
to which the public mind was becoming alive related to
the usury. laws. It was not uncommon even in this day
to hear gentlemen of some intelligence advocating a re-
currenceto the usury-laws ; but ho was convinced that,
if the Committee which had been moved for was ap-
pointed, it would have to report upon the extreme incon-
venience of any portion of those laws being left in exist•
ence.—(Hear, hear.) He believed that there were many
Hon. Gentlemen opposite (on the Opposition side) who
would now bear witness to the inconvenience which land-
lords had recently experienced in having retained what
they deemed a privilege to themselves, when they per-
mitted merchants to pay more than five per cent. for
their accommodation. Recently, too, inconvenience
had been felt in Scotland from the impossibility, or
rather, illegality, of borrowing money on heritable sem•
rities at the current market price of money. There were,
it was true, modes of evading this law ; landlords
might carry a bill of exchange to a banker, and
procure discount at ten per cent, gheelodgin e-
ritable bonds as collateral security.--(Hear,
But was this the way in which the Legislature should
proceed ? Was this the position in which the great
landed and commercial interests of the country should
be placed ?—(Hear, hear.) Nothing had more contri!
rbeupteedaltoof thethe aulsleuvryiatliaownso;f laantde
sodistressfar
the a n the
recommend-
ing partial
enm
advice of the
Committee would be, that Parliament
ing their re-enactment, he believed:that sbondrepeal
whatever remnants remained.—(Bear, hear.) Another
tr
ec
question which had engaged attention, and which boasted
of the support of a Noble Lord whose authority was
vwieseigdhttoy.be wases withtabli s reference. to nNc eo
Nothing
ntgh e
astonishedd ouble sta nbdi rid (
wad !
Wilson) more than to find man of sound knowledge, and
ot
transactions, cet iaoct propose te dis-
did not know in what way they would
aaidnvtoeanacteinwgitahuceohmamn eerxcpiaeldliiefnetaanad
tmhoien.etaHrya
inst the
would at this moment have been so popular aga t 3
in
cinhiatrt
egde.
ti
af n
da
adrodu be
existed,
sstteadn,d anrod wn
ne.mr ep
Ipaein-
-
Bank as that they h elbtofwopualydinhgavneobeeen •
either of theid ma on rd s
ep
just
silver
ung notes. an d
to redeem those notes at another period in the cheapest
it then happened to possess.--(Hear,
nrnahnadsew giode complaint that the Bank had the power _
p
metal scionsato )1:
Der pvt eai esi
go. d y issi
thing, then, could be more conclusive
and sth hear.)
o, he felt
N
must maintain their single standard ;
(iiea
thanat the0
y.
g
ehad been loud in repre.
the precious metals from abroad
assured, would the Committee nrteipemoretntowbtoheimHpnorutseed.
During the last season many
enabled, at particular perm s p , o conver
subsequentlylowed tobeisosbuleigendotet:
I!
silver r) ti e
into
h notes,
en js
andy iht i
pas
becoming.wndaoswdootne r teheseumrsei
popular
b ingt
redeem
pro-
position that the eg
oßankldi beo
It auplpdear
e dalt o
h im,
unreasonable to ask the Bank of England to issue notes
however, very
on silver, although it might
on any commodity whatever excepting that in which it
was bound to redeem them ; it was equivalent to asking
that they should issue notes on any other article the
price of which might be subject to variation. He did
not think that the Legislature had acted discreetly
in allowing the Bank to hold any part of their
notes on silver at the passing of the last Act.
No convenience was secured which was not likely
afterwards to prove an inconvenience ; and it was
clear that it would always be in the power of the
Bank to purchase gold with the silver they poi-
seised with as much facility as they had procured the
silver itself. When the Bank had sixtenn millions of
gold in its possession it was no convenience whatever to
hold silver, and when its bullion was being drawn out for
the purpose of correcting the foreign exchanges, it was ss
little convenience to retain any portion of that silver l;
the whole amount might just as well have been in gold.
There was, therefore, no reason why the Bank should
hold any more silver than was required in the ordinary
silver coinage. It was clear that whatever bullion the
Bank had in its possession was so much abstraction of
the capital of the Bank for that purpose, and that
capital might just as well, in the first instance, be
invested in gold as in silver. And there was another
reason why the recommendation of these gentlemen
was unnecessary. The silver bullion which came into
the country was more useful in the hands of privar
merchants for the purpose of regulatiil e,xchang,
than it would be if at the disposal of the Bank. If •
quantity of silver was imported from South Almeria►
the importer, whether Rothschild or 'any other cap;
talist, made more use of the metal in correcting the
talist,
it continent
were than
placedw o would dt
the
peeelsfsairbel eo
ffo
ther i
to b e exchangesturned o
nedf
Bank. It was also advised, in order that the Minx
tthoe
should have a greater power of correcting these foreign
exchanges, that it should hold a portion of the securitleel
of foreign states, the expectation being that in the event
of an adverse exchange they would be able to transfer
them, and so restore the exchange to par. But theorise
argument as he had applied to the first proposition
would demonstrate the inutility of this. These foreign
securities were held by capitalists here to a huge
amount, and the first things that went out of the count'',
when the exchanges were against us, long before the
bullion in the Bank was run upon, were these very on
curities, exported to meet the obligations of indindunt
merchants, because the prices fell here to a lower 1%4
than at Paris or Amsterdam. The less, indeed.
thought, they made the Bank of England a cc:oo34l,r';
establishment, the more they confined it to the singed
objects of banking, and the more strictly they deun,
those objects as of a purely internal and ho ra
character, the morn simple would the raanagenci
er-
erLt
of that institution become, and the more
tain would it eventually prove to be in its, ci„Pie):
rations.—(flear, hear.) But beyond these genera' s'
jects of inquiry it appeared to hire that what eir

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