The Sun.
London, England, 1847-12-03 00:00:00

ADJOURNED DEBATE.

On the order of the day being read for resuming
the adjourned debate for the appointment of a Select
Committee to inquire into the causes of the late mone-
tary pressure,
Mr. URQUHART rose and said that the Par-
liament were met at this period for the pur-
pose of considering the cause of public dis-
tress, and they were now informed by the
Government that it was their intention to
move for the appointment of a Committee
whose inquiries were to be confined to a
consideration of the affairs of the Bank of Eng-
land. He believed that the evil lay far deeper than
in the state of that establishment. The Legislature
was alone to blame for the state of the country. The
evils were traceable to the abrogation of useful laws,
and the pressing of other measures having a tendency
to reduce the circulation of the country. The only
remedy for these evils was to be found in the
abrogation of those laws which had been passed
upon the subject of the currency.—(Hear, hear.)
The only effect to be expected to result from the
operation of a law regulating commerce was an
effect for evil. The effects of such a measure were to be
found in the disruption of the affairs of the country.
It had been found that a reduction of the rate of in-
terest had been instrumental in promoting
the prosperity of the country, but under the
operation of this law the rate of interest was
raised, and the present distress was the consequence.
With respect to the arguments which had been
brought forward by the Chancellor of the Exchequer
on a previous evening, he considered that they were
only brought forward for the purpose of rendering
abortive the inquiry to be instituted, and leading
Hon. Members to suppose that the Bank Charter
had nothing whatever to do with producing the ex-
isting distress. On Tuesday night last it was said that
the present disaster was not the result of the Bank
Charter, but that it was caused by speculations in rail-
ways. Now he would ask what railways were? They
were undertakings like many other speculations in this
country, at least in some respects; all that could be said
of them was, that a great number of people were em-
ployed in their construction, and the wages those people
received went to pay for tea, sugar, bread, butter, and
other articles of food, as well as clothing. There might
have been injurious speculations in railways; no doubt
there were; but those were questions of a private and
commercial kind. In railways it should be recollected
there was no abstraction of capital from the country.
How was it that our demand for foreign grain had not
called forth a corresponding demand for our manufac-
tures? The expectations and hopes held out in that re-
spect by the advocates of free trade were sadly disap-
pointed—gold was preferred to our manufactures. The
reason was, because there was a bonus for gold, and an
embargo upon our manufactures. The lamentable result
was, that many millions were drained out of the country,
which had brought it to its present state. He would
ask why was it that the price of gold was fixed ?—why
was it that our gold sent out of this country during the
war should have been sent at 51. an ounce, and now sent
out at 31. I7s. 101 d. ? Free trade had been called for--
restrictions were objected to and denounced. The prin-
ciple was admitted. Why should not the same princi-
ples be applied to gold ? During the war we exchanged
our gold at the then market value, but since the rule
has become inflexible that gold should be at the same
price under all circumstances and all changes. People
who now produce a Si. note to get change receive sove-
reigns for it, but if every one who had notes wished to
get them exchanged, and presented them for that pur-
pose, there would be no such thing as convertibility.—
(Hear, hear.) He looked upon the fact that there was
no fixed standard for gold as one of the most important
topics of that debate. How was it reconcilable that they
were for restrictions upon gold which represented all
things ? He regretted to find that the consideration of
the currency was not a party question. It had been
hitherto left almost exclusively to usurers and persons
connected with the Exchange. Those persons succeeded
in securing the heads of parties in that House, and
having done so, they further secured their bodies and
their tails,—(Laughter) The Right Hon. Gentleman
the Chancellor of the Exchequer stated, with reference
to the banks of Scotland, that they had to be supported.
That observation was cheered by the House, manifestly
for the purpose of throwing discredit upon those banks.
Why should that be so? Some large mercantile houses
in Scotland might have been, and he dared say were,
embarrassed, but they never before bad seen a Chan
cellor of the Exchequer come down to that House to
speak in such a manner of so large a number of mer
cantile houses. Why should the Scotch banks be
sneered at? Was it because the industry and prudence
of those who were connected with them afforded indis
putable arguments that they were proof even against the
currency system? They proved that the issue or cir-
culation of 1/. notes was not dangerous, and they give
proofs of daily increasing prosperity, notwithstanding
all the embarrassments and difficulties with which
they had to struggle. The people of Scotland, who had
so small a voice in that House, had paralysed the in-
fluence of the Minister who had bees able to carry his
Bill of 1844, relating to the remaining part of the
United Kingdom. The Right llon. Baronet stated in
that House, in 1844, that, so far as Ireland and Scotland
were concerned, he proposed to leave them for future
legislation, as their circumstances were not only so
different from each other, but also from this country;
and especially, he avowed, as his reason for nut interfer-
ing with Scotland, that he did not wish to encounter so
powerful a combination of public opinion. A more grave
subject had never come before the House. It was one
which influenced all public affairs for good or evil,
chiefly for evil, and extended down from the richest
banker in Lombard- street to the humblest peasant in the
land. It was one that degraded our morality, and
endangered our existence as a nation.,—(Hear, hear.)
He would therefore meet the motion of the
Chancellor of the Exchequer with a direct negative.
The measure of 1844 had only been let in through
the former Committee having come to no decision. It
might be asked what interest Ireland had in this ques-
tion? A system which had brought mighty England on
her knees, must lay Ireland in the dust. The latter
country was not without capital, though she might have
little gold. She abounded in capital, and was conse-
quently alike affected by our banking system. Let Irish
Members, then, however much divided on other ques-
tions, concur on the question of money.—(A laugh.) In
this question no party considerations were involved ;
Hon. Members need not be trammelled by fear of oppo-
sing Ministers, or of voting black white.—(Laughter.)
Mr. E. ELLICE thought it most extraordinary that,
with the vast industry and mineral wealth of this country,
periodical convulsions should occur, shaking commerce
and industry to its centre.—(Hear.) Most willingly would
he support the views of the last speaker, if ho thought
any benefit was to be derived from the change lie pr
posed. Few people, now-a-days, imagined that our evils
could be remedied by a fluctuating standard.—(Hear.)
How was such a standard to be used—how made ap-
plicable to our condition ? Such an expedient had never
been resorted to in any country without bringing that
country to ruin.—(Hear.) One of the most unfortunate
steps ever taken in this country was, that, after having
incurred such a vast amount of obligations during the
war, we should resolve to resume cash payments in 1819.
—(Hear.) He had deeply deplored this course ;. b
ec u
tt it
The ob of
was now too late to go back.---(Hear.) j
that measure was to carry out in good faith that which
Parliament had determined on. At that time his only
objection to it was the reduction of the value of the ounce
of gold from 81s. to 775. lOld., and on this ho had pro-
posed an amendment, but without success. He had since
felt bound by that measure, and had been foremost in
seeking to maintain it.
Mr. MUNTZ—You cannot maintain it.—(Hear.)
Mr. ELLICE—But we were bound to endeavour to
do so as long as we could.—(Hear, hear.) The Right
Hon. Gentleman then alluded to the crises of DUG
and 1819, and observed that the bullion then forced
out of this country had very soon after been found
in the Bank of France. Then came the Right Hon.
Baronet's (Sir R. Peel's) measure of 1819 ; and who
did not remember the closely succeeding events of 11122,
when 13,000,0001. of paper was borrowed from the Bank,
gold took its departure, and the memorable disasters of
1825 occurred ? The Bank, with 30,000,000/. of paper
out, was then so near stopping payment, that the di-
rectors sat in the parlour with their watches out,
anxiously awaiting the stroke of four o'clock, to close
the doors of the establishment.—(Hear, hear.) Other
fluctuations of less import had succeeded., until in 11144
the Right Hon. Baronet (Sir R.Peel) had proposed his
recent measure, doubtless with the view of checking
these fluctuations. To effect this the principle of con-
vertibility had been adopted. Though he (Mr. Ellice)
approved of this principle at the time, he had now great
doubts as to its operation ; and he entirely dissented
from the inference drawn by his Right Hon. Friendthe
Chancellor of the Exchequer, that the measure of 1844
was the safest that could be devised. Surelyriedcenet
events could not warrant such a belief in the
occurrence ma
any man.—(Hear, hear.) One recent
had much tended to alter his opinion as to the
security of the principle of convertibility. He alluded
s
to the vast importatioß! of grain, both in thi
country and in France. While, in France, these trans-
actions, being chiefly transfers of grain from one part
of the country to the other, had caused but little de-
rangement of their monetary ai airs—here, on the other
hand, the whole of the funds necessary to purchase corn

(CI hP frmrt the er-lt--,1 e;rob?;Thmrnt,
01.: Bank of Fagland, the greAtest derangen.i.mt had

1:,1y

withdrawal from ee the
amount of gold sent out of the country.—(llear, hear.)
Stich a state of things could not possib!y have occurred
had our currency been based upon actual deposits cf
money. It mattered not to this part of the argument
what was the standard of value—it might be gold, or'
tin, or any other metal; but with a fluctuating standard
it would be impossible to conduct the vast affairs of a
nation like this. He was no enemy to railways; on the
other hand, he thought the Elon.Gentleman opposite (Mr.
Hudson), the founder of the system, well entitled to the
gratitude of the country. Still, it should be remembered
that these conjoint causes, corn and railways, had been
productive of immense loss—a loss which could not be
measured by the amount of liabilities of the few unfor-
tunate men who had become insolvent. All had been
subjected to losses—those who stood as well as those
who had fallen.—(Hear, hear.) It was impossible to
estimate the loss which the trading classes had suffered.
Part of this loss was doubtless attributable to the rail-
roads; and the House might take blame to itself for
htiving given too great encouragement to the competition
in these investments.—(Hear.) Still, great good would
arise hereafter from the railways; it was impossible to
estimate the amount of that good; and in securing it we
were in the position of a person who had crippled his
means by the purchase of a deferred annuity.—(Hear,)
Another disturbing cause was the connexion of the
Government with the Bank.—(Hear, hear.) The Bill
of 1844 professed to provide security against the Bank
acting so as to injure the position of the country. The
Right Hon. the Chancellor of the Exchequer contended
that this would not have happened had the directors
acted discreetly. Why, had the Right Hon. Gentleman
himself been governor of the Bank probably the same
course would have been pursued. The whole system
of every Chancellor of the Exchequer since 1819 bed
been nothing but an abuse of credit; they blew the
bubble of prosperity for the sake of the particular
budget of the year—(Hear, hear)—though he =Set
admit that his Right Hon. Friend below him had rather
avoided this last year.—(Hear, hear.) But, in the po-
sition in which this country had been recently placed be
thought it would have been better not to have taken up
a loan, but to have raised the money by taxation. He
never could understand why we should have any floating
debt in this country when Exchequer-bills were at par.
The fact was, that the whole of our revenue system was
so mixed up with questions of currency and Bank ma-
nagement, that it was impossible to go into any inquiry
without considering the whole.—(Hear, hear.) If he
were asked what system he would substitute for the
existing one, he must confess he felt himself very
muchin the dark, and he believed we were all so.—(gear')
After struggling nearly thirty years with the principle
of convertibility, he feared we must now come to the
conviction that it could not be maintained, especially
now that it was subjected to the test of failing harvests
and free trade.—(Hear, hear.) In saying this, he spoke
as a friend of free trade; but he conceived we had not
yet seen all the effects of the system.—(Hear, hear.) The
great defalcation of food in Ireland was another cause
of difficulty; and this led to the inquiry, how were
our existing deficiencies to be supplied? All these
things conspired to make the present a state of transition.
The Bank system of Scotland was an excellent one, be-
cause it provided, by the amount of the funds secured,
against any such disaster as that which had occurred in
to many of the banks of this country. He thought,
however, that in times of pressure and emergency the
Scotch banks should be able to avoid the necessity 0,
c, ming to England for assistance. His Right Hon. Frieni
said that the Bank of England was in a very healthy
and flourishing state, and he believed it had that day re-
duced its interest to 6 per cent., but it was not the con-
dition of the Bank as much as the condition of the pub-
lic which had to do with the question. One of the most
essential things to be inquired into by the Committee
would be the dealing of the Bank in public securities!
The present system was unsatisfactory and unsound, and
he thought they should know better how to amend it after
the inquiry of the Committee. He saw many reasons to
suppose the revival of trade might not be so rapid as had
been anticipated; and they must take care during the
suspense between this great contraction and pressure
and a more natural state of things, that they did
not strain the strings of the industry of the country
too much.—(llear, hear.) His Right Hon. Friend the
Chancellor of the Exchequer had said that certain of the
large merchants ought to have been aware, as well as
himself, of the approaching crisis ; but did he not know
that the pressure of his eight per cent was hanging over
every little tradesman in the country ?—(Hear.) People
got it into their heads that this was the Government re
of interest, and it was charged in every case.—
hear.) He did not believe it was possible to suppose.!
pressure under which the industry of the country would
rot rise •, but they must take care to burden it as lightly
as possible with taxation of any description.(Hear,
hear.) As to our going on without credit it was itnpos;
sible—it was a vastartificial piece of machinery, and vets
abused on all sides— aby the Government and the Beni!,
and yet we found fault with those who followed their
example. The only two countries in the world in which
theses crises had occurred, arising from a deficiency of
the circulating medium, were England and America ;
still, however, he knew the advantages and conveniences
of our present system, but he hoped the Legislature
would secure those advantages to the country without
again exposing it to the risks and dangers under which
it now suffered.—(Hear.)

Mr. NEWDEGATE said it was quite
an i
sell necessary that
forthe
wßhaennk
isthsodueldpegsoitsinwtoertehewmithardkraetw itwassbeocuurnidtiet t
sacrifice its securities at the same time'; and they ought
not to find fault with the Bank directors for complying
with the enactments which had been forced upcn them.
It was true that upwards of 35,000,0001. had be en ex-
pended on railways during the last year, but that awn
had not go
c3no3en,
ot
roc
aour,tyooo, fohle. the
fmorucsoitrocrcuool. ation of the country.
spaaaniyddmtoetnhttehoefreal pressure had been produced by the
ter
nteWndbilittbeav
Lad greatly aggravated the crisis, for large impfrinoerei tradetgahtito rib s°
of corn must lead to large exportations of bullion, and
its effect on the monetary system of the country must
be evident. It was true that America had taken more
of our manufactures, but then it had been at ruinous
prices. He also contended that free trade had deranged
the general balance of trade, and turned it against this
country, as was shown by a reference to our exports
ald imports for the years 1845, 1846, and 1847. The
experts had fallen off 3,000,000/. in the last year, and
1,000,0001. iu the last month. That a system of free
trade was inconsistent with a restricted currency w
proved by these results, and with the immediate pro dsping
ect
of recurring difficulty were they to rest content, pen
the proposed inquiry (perhaps for the next 18 months),
until our merchants were ruined, and all the labourers
engaged on railway works, and the artisans era-
ployed in our manufactures, were thrown upon the poor-.
rates?—jlear, hear.) It might be said that there was
now no deficiency of bullion in the coffers of the Bank.
But how had that bullion been obtained? The Russian
Government, taking advantage of the period of de•
pression here, had sent some 300,000/. or 400,000/.ble
of
bullion in exchange for our securities, and it was possi
we might obtain a still further supply by the sat
means. As to the dangerous tendency of being de
pendent in this way upon a foreign Government, he fully
concurred with the Hon. Member for Stafford. Suppose
Russia should desire to possess 2,000,000 or 3,000,000 of
our securities, by the Act of 1844 it was provided that
upon a certain contingency the Bank should throw
securities into the market. It was not impossible that
when such securities were offered for sale the Govern-
(rni
oitnmoifght
rho,
o o requireon n t
ray
if at the
wnihaattnweonutldofbethtehneccaounr--
iti
rence of the contingency eontemplated, when some
'an
million or two of securities were thrown into the market,
the Government and the Bank were both obliged to sell?
Such an event, if taken advantage of by Russia, would
have more effect in controlling this country than any
war, while, as a pecuniary speculation, it would be ad -
vantageous rather than otherwise to the Russian Go-
vernment. It was unworthy of the House by refusing
those relaxations of the restrictions imposed by the Act
of 1844, which the condition of the country demanded,
to place us in the position of borrowers from any foreign
power. The Chancellor of the Exchequer, in speaking
of the circulation, quoted always the Bank returns, with-
out referring to the country banks.
The CIIANCELLOR of the EXCHEQUER had dis-
tinctly stated that the country circulation was 200,00846;
01.
to 250,0001. less in October,lB47, than in October, 1
that in Scotland it remained at about the same; and that
in Ireland there had been a considerable reduction iu
August this year, as compared with the same month in
1846.
Mr. NEWDEGATE proceeded to show that in Au-
gust last the circulation of the whole United Sing
was
mwaosntlhesssriens
plet3c4fi7v
ealsy c: oimn pAaruegduws
ti,th3,2l9Bo4,6o,oionlt;hse
efpo
beglio
to
4,038,000/.; October, 4,450,0004; and in November,
4,250,000/. While the contraction of issues did 114
amount to 2,000,000/., in the month of August, the cur"
rency of the United Kingdom had decreased to the es'
tent of 3,292,0001., and in October to nearly four 1.5 d 6
half millions. Taking the whole circulation of the
country at 40,000,0004, the contraction would be equal
to ten per cent. The Right Honourable Baronet could
not, therefore, contend that there had been no Con"
traction of the circulation. He complained, also, al
the operation of the Act of 1844, as giving an Oran'
tags to the Bank in the discount market, and as being
opposed to the principle previously recognised, that *
contraction of credit should precede a contractionthe
of the circulation. He might be told that
convertibility of notes was never endangered during.'
the late pressure, inasmuch as the Bank were comp
to keep in their hands a certain sum of gold in propor-
tion to their issues. But in October last there was great
danger of the Bank being either obliged to violaW O
its
charter or stop payment. At that time 1,176,000/. W
truth
all the notes it had in reserve; and, if there was any
In rumour, some influential bankers then waited on the
Government and stated that they must withdraw their
deposits from the Bank if something was not inse-
dia.tely done. These deposits amounted to about
8,000,0001., and had only 3,000,0001. been eudcl"l4
withdrawn, what alternative would the Bank have h;7l
but to stop or violate the charter? It might be 9...483
they might have sold securities, bat what wad o(4
ties have produced in the market under such circul:
ves
stances? These matters, he trusted, would be in.t
gated by the Committee, but ho also hoped that the
in
terests of the country would not be endangered
termination obstinately to maintain—pending
i 6 a
long t
tedious inquiry—a law under which depressionsol...us
continue and increase so long as the balance of tr
mained agi.in it us, and that no dogmatic adherence toot
principle which experience had proved to be erroneos.
would induce Government to refuse to relax an oPPrel
sive and dangerous law. i-on• caltf
Mr. MITCHELL attributed the commercial num
olne:
under which the country had been suffering to
trading and improvident speculations, especially in:os
ways, encouraged, he was sorry to say, by 1.1"'"-

A

r„,,
arikn3 the Ps;eht Hon. Baronet (Sir R. Peal).
_Nu:
f01h,;41 COUlti, in his opinie:. • - a res. is
which"og from such a course. tie saw advantage
ctrl could result from intetaerence, but belies', d the
must be left to cure itself. He was favourable to
ite`e_itaosition of SCUM check on the Bank, whose in-
ti.r_e!it was to keep money plentiful, and especially upon
the issue of country bank not+ s.
ths4lr. DRUMMOND said that the Right Hon. Baronet
and for Tamworth must be a wonderful man,
Isluct his Bill of 1844 be a most wonderful Bill, it either
rterld accomplish one-twentieth part of that which had
attributed to them.—(Hear, and a la igh.) He
rUinmond) was not one of those who thought the
with of the corn-laws had anything whatever to do
bu h the position in which this country was now placed ;
thl, with regard to railroads, he confessed that he
bye
both the late and the present Government
b been much to blame when, having been warned
t(3),, their own respective boards, they ousht
which taken some decisive measure to check the mania
riti4e the • since 'eh seine time raged. Railroads had served to
se interest on mortgages, and he feared the con
stquensea Would not end until they had witnessed a great
thesrti6ce of Private property. The misfortune, too, was,
which
had been commenced must be finished, and more
18",eY would be required. 'With respect to the Bill of
to he had expected that it was to be the precursor to
'e Putting an end to the connexion between the Go-
otru tnent and the Bank of England; but it was quite
sss,,tlelts, from what had recently transpired, that the
ode of conducting the business of the Bank had beeu
f -I"tely changed. As to over-trading, it was mani-
tlit that it had existed to an incredible extent. In an-
t:4 times, when argosies went out from Venice or Ge-
pssa' theY carried goods and bullion to exchange for
ssauce, and there was in the world no such thing as
(ihg by paper until this nation had chosen in its sv.is-
ettle to get rid of its own race of kings, and to bring
i!. 1* a butchman.—(Hear, and laughter.) Hence had
risen a system of raising a false credit. A most astute
cautious mercantile man had stated, " When people
lied of solid capital without credit, they had no know-
ae of the commerce of this country. A man with a
tss-ellal of 10,000/. may legitimately be doing business
taree times that amount." So that it was clear
331 stem on which the trade of this country had
suite carried on was perfectly rotten, for it was
r the clear to him that a trade conducted on a credit
it, e extent of three times the solid substance a man
sitlaessed could not stand. How was it that the adver-
had so much increased in its depth and intensity ?
moiety.ey had changed the whole relative condition
es pbss. In former times the land was considered
saiL.',,`°lng, and a distinction had been established by
7°4 law, because it was common sense, between that
14:" was real and that which was personal ; but of
Yeara the practice had been to cry down land and
al ,114 t cotton ; they had put down the landlords and ex-
god' the cotton lords—(A laugh)—they had cheapened
3, but they had also taken from their customers the
s:aatill of buying them.—(Hear, hear.) They had list-
tienes-st° a manufacturer of consummate eloquence, pru-
th and judgment, who had said that the towns
goo rule the country. The towns did so, and much
Iyhitt might it do them.—(Hear, and a laugh.) The
asarallt bad enabled them to raise colossal fortunes
the '''st a starving population.—(Hear, hear.) Under it
sad okPeratives were lording it over them at one time,
tele "'riling their mills and sacking their palaces at
1)e It had been said that free-trade principles
Isirr°44,ed the land, and London was pointed to as having,
ten-tative a`ntenance of those principles, returned as its repro-
That Noble Lord at the head of the Treasury.
of was
th true; but the constituency had taken off some
with e grace of that charm by coupling the Noble Lord
con w•—(Laughter.) But on th other hand, the
lititituency, par excellence the most enlightened modern
d
fsa„'lls, had given a reverse judgment, for they had
he go out that the modern Demosthenes must not comes
torte, and they had sent in his stead a gentleman who wa
meach the House how to behave itself.—(Laughter.)
Ars r'l44-CGREGOR said that he would have abstained
*err! obtruding himself on the attention. of the House,
ssPis it not that, as the representative of a greatncotmhe-
al constituency, he felt called upon, w
$t Jedret of commercial distress was under considh.eeration,
0841 -668 a few observations to the House. His Right
pith Friend the Chancellor of the Exchequer.hadd.sttate,ds
1 great abilit the causes of the commercial res
witlheh had Visited the country, and although he agreed
the-s- his Right Hon. Friend in attributing the distress to
thteauses, he differed from him as to the degree to
thalse"aorne of the causes had operated. He conceived
es,-,," waseficient harvest and the failure of the potato
laeled, sthe principal cause of the distress which pre-
Lad- e'-'• With respect to railways, although Parliament
he tirts3ed a much greater number of Railway Bills than
of ,011ght it was wise to do, he did not attribute much
.a•
the ,listress to investments in railways, for during
pseipPeriod of unparalleled scarcity which had recently
heiss'abed, be believed that the employment afforded by
the -11Y8 had, to a great extent, relieved the distress of
cots
Nor did he attribute the distress to the
Ac ilk Charter Act of 1844, although he thought that
du,tias defective, and believed that it would be pro-
be...." of so much inconvenience that Parliament would
thttobliged to remedy its defects. It was his opinion
terrible
We should never have a currency not con-
gold ; but, at the same time, he
echrieelyed that the restrictions imposed by the Bank
roamer Act of 1844 constituted, particularly as regarded
Il_tland, a grievance, and must necessarily cause much
.^.'°nvenience, and some commercial distress. It was
matter of regret to him that his Right Hon. Friend the
Cha
encellor of the Exchequer referred to the Scotch
king system, or rather the joint-stock banks of that
,-ntitry, in terms which were calculated to create all 7.stroneous impression respecting those establishments.
s_4e believed that to the system of Scotch banking,
r,npled with the economy and industry of the people,
"ge general prosperity of that country and the great im-
tr°l'ensent3 made in manufactures and agriculture, must
se attributed. The best test of the merits of the Scotch
banks was to be found in the small number of failures
which had taken place, and also in the fact thatofthe
establishments which had failed nearly all had
paid in
lull their obligations to the public. He begged leave to
8j(1.4 passage from Mr. M'Culloch'is " Statistics of the
e'Attah Empire," on the subject of Scotch banks :
th,:;wing partly to the superior stabilitypedrheraipvsedtofrtohme
leas extensive proprietary, but more
seaa risk attending the business of banking in
R2tlatad, bankruptcies have been very rare among
-'otch banks. They have long enjoyed the unli-
kis ad
tee confidence of the public, and from their
"tug small sums (10/.) as deposits, and
theyaing
ersst
rate upon them at about 1 per cent. below market
este, they have contributed much to diffuse a spirit of
ertli°ll3Y, and to increase accumulation. One-pound
the!' We issued by the Bank of Scotland in 1704, and
sh,:r,i4sue has been thence continued to the present day;
ls-yin'tet prohibiting their circulation in England not
last been extended to Scotland. For many years
et',Y little gold coin has been seen in Scotland..
eo Qcoteh banks make their advances partly by dis-
aitlient of bills and partly by what are called cash ere-
A • 1%0 latter is a very convenient method of issue.
slivath account is a credit given by the bank to an in-
t lidual drawing for it, wholly or partially, as he pleases,
oestililtteing it in the same way—being charged interest
Archon the portion he withdraws." A little pamphlet,
1-,n in 1734 by Patrick Lindsay, then Lord Provost
sa.'dinburgh, gives an account of the condition of Scot-
previously to the establishment of banks in that
,s,,ses.rastry,
snr•Lindsay says:—" We were then stran-
Zsr_ to trade. War was our trade and military discipline
h profession and sole study. When we had peace
ttbroaude, our gentlemen and persons of quality went
sh in quest of foreign adventures, and carried
it4:_d_tFoog numbers of the common people as soldiers
pills for foreign service. Many of them were en-
Isscr 0 on both sides in these wars in the low countries."
sivnntry had ever developed its resources so exten-
It,W_IY. and so advantageously as Scotland had since the
equal l Bank was established in 1797. No country of
eult- riclnPulation had made greater improvements in agri-
tisse 0 and manufactures. It would be unjust in refer-
t9. the progress which Scotland had made, to with-
all allusion to the excellence which she has attained
'4 naval architecture, particularly in the department of
steam
tw v easels. The admirable steamers which run be-
e en Liverpool and Boston and New York were all
smiltin the Clysdeles, atnhdanit was not going too far to assert,
that better vessels
Whether for the purposes tohiceie constructed in Scotland,
launched from the docky or commerce, never were
as:"
f this country. All this
had taken place under the sS°
and therefore he trusted that Xcal:t system of banking ;
to interfere rashly with a system tempt would be made
not beneficial results. Let it be unders
htoohsdthparoldieucdeidd
wish to; see a system of currency in Scotlandt which
should not be convertible into gold ; all lie maintained
a"L!I., that the Scotch banks were adapted to the wants
ettte country in which they were established, and an-
wijecl every purpose which was required of thorn.
r• SANDARS said it had been stated that the c
arn-
attribu
nial distress in which the country was involved was
fro table to railways, but he decidedly dissented
th 111 that proposition. He should like to know whether
ef: construction of railways had sent gold out of the
isaudtit,r7. Had it caused the exchanges to be against us?
es— it caused the floating capital of the country to be
nsereed to fixed capital? Certainly not.—(gear,74'tistuc) It had been said that money expended on the
-°tion of railways—that railway ca.pital, was all
"'Xede •
atss, caPital. That was not so. If a. sman, for in-
invested 50,0001. in railways it undoubtedly
became fixed, in a certain sense; but what became of the
tw.Yers' bills, the sums expended in iron, wages, ;
&c.? Provisions were purchased h
ma-
by the a
hour.
employed, by the iron founders, artisans, &c.c.
Ire a -- "'s paid in that way were therefore no drain
itle°ll the country—they remained in it, and were float-
regn eaPital- As to the Bank Charter he thought it
it r°llsible, even in times of prosperity, that
need !°llld be operative; in times of pressure, he
1, hardly express his opinion that the
essZtencY of the country was inadequate for its
at It did not stand to reason, when corn was selling
g• and Cl. a quarter last year, thut the currency should
ec, le same as when corn was down to 50s. a quarter.
d it be said that the distress had not been deeply,
tel'n,cloh perhaps indirectly, affected by the operation of
Bank eharter ? What a state the mercantile cora-
sza,snltY Must have been in when they were obliged to
oatuiertake the payment of eight per cent. for accommo-
she r I Now he would tell the Right Hon. Baronet that
rade of the country could not have borne such an
.1-LP:.s.st' the Committee of Inquiry which the Right
.-rsaronet had thought it necessary to ask for were
-Tpointed, the result would be many, perhaps different
titexs....e.di,e.s., would be proposed. However, he (Mr. San •
r:t,,,),Pld not object to the inquiry, but he wished to sug-
&that some temporary measure should be passed, in
aritenterini, to suspend the operation of the Bank
and remove suspense and uncertainty amongst
the
emercantile interests. All the mischief that had been
do !sea for the sake of convertibility. Had they ac-
'wnPlished their designs ? No such thing i He main-

tained we had no such thing as7convertihility, and what
!he ,utd JtiggEq,: , that silvt r 5,0t.',1 tie tvadc,
standard as well as gold. He had mire, been an adv.
cafe for free trade, but he thought, as the measure had
passed, it ought now to have a fair trial. He did not
attribute our recent calamities to free trade, but to the
large and necessary importations of grain in 1846. Some
disparagement was cast upon the merchants who had
been engaged in the importation of grain during that
year. He was prepared in that place to defend them.
What were the facts ? In January, 1847, the First
Minister of the Crown (Lord J. Russell) came down to
that House, and recommended the importation of foreign
corn upon as extensive a scale as possible. With that
view—to encourage the importation of it—some of the
restrictions then existing were removed. In July of the
same year similar recommendations were repeated—a
further suspension of duties took place. Corn was im-
ported accordingly, and the country stood in need of it.
Instead, therefore, of the importers being blamed, they
were, he conceived, entitled to the thanks and approba-
tion of the country, even though some pecuniary advan-
tages should have accrued from such speculations. Our
stock of corn was already growing very low, and in his
opinion, before next harvest we should have to send eight
or ten millions of money out of the country for grain to
meet our actual requirements.
Sir W. CLAY should decidedly support the appoint-
ment of the Committee. He wished to caution the
House and the country against expecting too much from
the inquiries and recommendations of the Committee, or
from the legislation which might follow. Legislation
upon these subjects was rather valid to prevent evil than
to originate good. It was quite beyond the power of
the Legislature to add one single pound to the capital of
the country. The utmost it could do was to take care
that the country, in making use of a paper currency,
should not overstep the limits within which alone the
advantage of a paper currency might be safely used.
The point of the inquiry of the Committee would be
practically his, whether the object of the Act of 1844
had been clFsirable; and secondly, whether that object
had been attained. It should be borne in mind that the
framers and supporters of that measure had never held
it out as a measure that would of necessity prevent fluc-
tuations. In his opinion, the experience of the last year
had afforded a most convincing proof of the value of the
measure of 1844. It was to the natural operation of
that Act he attributed the beneficial change which had
taken place in the course of the last six weeks, and
by no means to the relaxation permitted by the Govern-
ment letter of the 25th of October. As to that pro- i
ceeding itself, he by no means concurred in the opinion
that it ought to have been earlier adopted. Had the
measure been earlier taken, it would soon have been fol-
lowed by a large issue of paper of the Bank, and the
consequent entire derangement of the exchanges. He
considered it idle to talk of restriction of the currency ;
for, under the Act of 1844, it was made to expand to
the fullest extent necessary ; all that was done was to
prevent a factitious superabundance of issues. The
events of the last twelvemonth had convinced him that
something was necessary to regulate the Bank's action.
Mr. MASTERMAN said he should not have risen ex-
cept for the remark that had fallen from the lion. Mem-
ber for the Tower Hamlets (Sir W. Clay), as to the re-
cent interposition of Government. He considered that
the Committee would be the proper place for discussing
the causes of the recent commercial disasters, but he
was anxious now to express his opinion that great credit
was due to the Government for their recent interference,
at a moment when, he believed, the country was never
in a more dangerous state.—Hear.) The evil at that
time was not so much a want of money, as the belief
that there was a want of it ; a panic existed withont
any real cause.—(Hear, hear.) He had had the honour
to form one of a deputation who waited on the
members of the Government; and though, in that inter-
view, he had advocated some relaxation, he had done so
without any wish to give room for fictitious issues.—
(Hear, hear.) He had never been favourable to the
Bill of 1844. At the time it was proposed he had ex-
pressed his opinion that no one could say whether the
authorised amount of fourteen millions was sufficient ;
and that it might be necessary to give the Bank power
to issue beyond that amount.—(Hear, hear.) From
what was said by the Right Hon. the Chancellor of the
Exchequer, he conceived he was now convinced that
that measure could not longer work without some modi-
fication. If the Committee was appointed, its inquiries
might occupy a long time; and he hoped that some re-
solution would be come to by the House in the interim,
giving the public confidence that the Bank would be
authorised to extend its issues if necessary. He begged
again to thank the Government for their timely and
valuable interference.—(Hear, hear.)
Mr. BLEWITT severely condemned the Act of 1844,
and likened its operation to that of an " infernal ma-
chine." He quoted from the speech of Sir R. Peel, in
proposing the Act of 1819, and contended that the
Right Honourable Baronet had contradicted his own
principles in the Act of 1844. He felt dis-
gust at the principles which had been pre-
scribed to the Bank as their rule of action. It would
seem, from the way the Chancellor of the Exche-
Exchequer treated the matter, that they were first to be
ruined before they were to be saved.—(A laugh.) When
the letter of the Government was written, had the potato
crop emerged from its rottenness, had the great houses
arisen from their ashes, or had the foreign exchanges
altered at the magical bidding of Wood, the enchanter ?
—(Renewed laughter). Not so! though happily now,
if all did not go so merry as a marriage bell, at least the
bell that rung the knell of commerce had ceased to toll.
—(lronical cheers and renewed laughter.) But he was
tiring the House.—(Cries of " No, no; go on.") Well,
then, he would state his views on the subject of converti-
bility and the standard.—(Hear.) What the gold
standard was he was unable to say ; but that it was
something of consequence in the opinion of the Right
Hon. Baronet was clear from the fact that he would not
have a silver standard at any price. All people were
entitled to demand gold from the Bank of England at a
certain price. Why should we be obliged to buy gold,
not at its market price, but at a price fixed upon
it by the bullion brokers ? Suppose the Em•
peror of Russia were to take it into his head to ex-
change his millions of gold for iron rails, or any other
product of this country, why there would be no demand
for gold at our fixed price, and it would have to lie in
the cellars of the Bank useless, except, perhaps, to
minister to the diseased faneies of the bullionists.—
(Hear, and laughter.) For his part, he could not con-
ceive whence arose the dread there was in this country
of an export of gold. He could see no reason why gold
should not be made an exchangeable commodity as well
as anything else. When our crops failed we had real
cause for dread, but what was the use of shedding tears
for the loss of bullion, which was mere dross, and only
useful as a medium of exchange. He was anxious that
an addition should be made to the subjects for inquiry
by the Committee as to the operation of the Act of 1844,
and he trusted that would be assented to.

On the motion of the Marquis of GRANBY, the
debate was then adjourned.
RAILWAY BILL.

The CHANCELLOR of the EXCHEQUER gave
notico that he should proceed with the Railway Bill at
the meeting of the House to• morrow.
The House adjourned at Twelve o'clock.

ROUSE OF LORDS, Dec. 2.
The Earl of SHAFTESBURY, in the absence of the
Lord Chancellor, took his seat upon the Woolsack
shortly after Five o'clock.