The Sun.
London, England, 1847-12-04 00:00:00

T 11

securities ttiheesalin?t_.(o a market which was not prenered to re- r that occasion, while the bullion had diminished upwards
Hear, hear.) There was in the Bank at iof 10,000,0001., the circulation was only altered by
that time of bullion 7,865.0001.; tho notes then outstand- 300,000/. In the month cf March, 1838, the bullion
tag circulation were 21.800,0001.; there was in the in the Beek amounted to 10,015,000/.; the cir
basking department 447,246/. of bullon, and 1,547,270/. culation amounted to 18,600,0001. In September, 1839,
Li notes ; and against this the deposits were—private the bullion amounted to 2,816,0001. ; the Bank circuh!-
e. posits 8,700,000/., and public deposits, 4,766,000/. The tion to 17,960,004. Thus whilst the bullion was dinn-
jernment might have been told that within twenty- niched from 10,000,0001. to under 3,000,0001., the cireu-
fnrhoursthe Bank might have been ask for 2,000,0001. Laical only diminished 610,000/. Now, considering that
of their private deposits ; and if so, they must have such was the condition of the Bank under the Act of
broken, for they had not the means of meeting it— 1819, and that its effects had been such in 1825 that
pHear, hear)—and the only alternative would have been Mr. Huskisson declared they were within 24 hours of a
r go into the market in which Exchequer-bills state of barter, and that in 1839 we were in such a state
were at a discount and the stocks were low.—(Hear.) that the slightest internal drain would have caused a
He did not mean to say that they could not have done it suspension of cash payments, Ido think it was not stir-
!" a great sacrifice, but what would have been the ruin prising that a Committee of the House should have re-
-214 the City if the Bank had gone into the market to sell commended—and that the Government of the country
i'hi°°°'°°°/. of stock ?—(Hear, hear)—and such a state of should have, in 1844, endeavoured to find whether, by
ngs was inherent in the working of the Bill of 1844. some alteration of the system, that which all persons
.--(Hear, hear.) Those who had discussed this subject who consider the subject on right principles wish to pre
before the Bill was assed fully
'? considered what might serve—the convertibilityof Bank notes might not be made
be the effect of the
aPrrangertents of the Bill, and there more secure. Now it is my conviction that to a consider-
" not the slightest circumstance which had resulted able degree the Government of 1844 succeeded in giving
fro
ne it that had not been fully prophesied.—(" Hear, greater security to the convertibility of the bank-
said from Lord G. Bentinck.) Mr. Fullerton very early note, and averted some of the evils which otherwise
ifoirdres,p•olnVidaienngever, by the course of trade the stock of might have occurred during the late pressure. This, I
hellion in the Bank shall be reduced to a level nearly think, follows even from what the Right Hon. Gentle-
with the amount of its notes in eirculation man (Mr. Herries) referred to. In 1825 and 1839, if
treasury of the banking department shall be exhausted, impossible to give coin at the Bank of England. But
Or nearly so, and its means of solvency shall be wholly there was no such danger at the present time. The
4ePendent on the sale of its securities,. then, and not till amount of bullion in the Bank diminished from
th" will he awl your experiment be fairly tried."—(Hear. 16,000,000 to 9,000,000. I will not now discuss whether
'ar.) But Mr. Tooke was more accurate in his the Bank should not have taken precautions before
PrreY. After having stated nearly what Mr. August last. But, in the month of April last, a very
Ul erten had done, he said, " This being the remarkable letter having appeared in the Times, showing
1"e, the directors would not have a moment to the continued drain of gold which was going on, and
?". Upon a demand upon them, under such that this drain all operated on the reserve of the Bank,
vlrenmstanees, without taking measures for maintaining and in no way on the discount or circulation, the Bank
or restoring the proportion of their reserve, they must directors immediately began to change their course. To
shut their doors to all advances or discounts.—(Hear.) a great extent they limited their discounts, and from
And, under certain circumstances, it will operate with a the month of April to the beginning of June, the
degree of violence on the state of credit which, as it circulation was diminished to about 1,500,000/. At
seems to me, these gentlemen have no adequate idea of. that time there was considerable distrust and panic;
(Rear, hear.) Before two or three millions of bank but, I believe that if the Bank directors had
Dotes could be forcibly extracted, the pressure on the not seen that if they proceeded in the same
reserves of the London bankers would be extreme, and course they would infringe the provisions of the
they would call in their loans"—this had actually taken Act of 1844, they would have allowed the drain of
place.—(Hear, hear.) "It would be within the mark to gold to go on, and we should then have had, as on two
Say that a rate of discount of 20 per cent. would in former occasions, still greater cause for alarm. In point
goods
cases be exacted— (Hear, hear)—and sacrifices of of fact, 2,000,0001. or 3,000,000/. in gold is the lowest
E°ol3 would be made to a great extent ; and, after all, amount which the Bank has held, and this has prevented
if might be doubtful whether this effort of the Bank that convulsion which was so near occurring on the
Would be effective in sufficient time.—(Hear, hear.) In former occasions to which I have alluded. But there is
whi:y this ease while the circulating department might still another question, on !which Ido not wish to give any
. ,000,000/. of bullion, the deposit department opinion, and which should, I think, be referred to the
Zeetturll have no alternative but to stop payment—(Hear, Committee, in order that they may ascertain whether
)--a most absurd and disastrous thing, but too ab- any further precautions can be taken.—(Hear, hear.)
ishure dand disastrous to be allowed to take its course ; and The Right Hon. Gentleman has referred to what took
Government would be imperatively called upon to in- place in the month of October, more especially to the
steerfeele and prevent so lamentable a catastrophe. He letter which my Right lion. Friend (the Chancellor of
planation
be glad at another time to go into a more full ex- the Exchequer) wrote to the Bank, and he says that we
divided of the grounds of the different theories which have not stated the circumstances connected with that
"°_,ed the opinions of men on this subject—those of Mr. letter. I thought that my Right Hon. Friend had stated
i;y" and Mr. Norman on the one side and Mr. Fuller- those circumstances very clearly and in great detail, but
Ye; and
an Hon. Gentleman (Mr. Wilson), who entered I will, nevertheless, myself refer to the main features of
?vheYerryfully into the subject a few nights since, and made the case. There had been, in the year 1846, as in the
et lucid and logical statement on the subject, on the years 1825 and 1836, a very flourishing state of things.
ke, , • That speech deserved an answer, but he had as There was such an abundance of capital that its
. heard no reply to it. He would, however, confine possessors were anxious to place it out at two per
wails 'lf to the practical point, and would ask whether it cent. interest, and could hardly obtain even that. Con-
was impossible to maintain the Act of 1844 as it now currently with such a rate of interest there was a
ponio: Was there no apprehension—was there not a great seeking after speculations for advantageous invest-
retie, `"tY, nay, was there not a probability of the recur- ment, accompanied, as has always been the case, by a
whi ,0' a similar disaster to the one just passed, and dangerous and wild spirit of speculation. Now, Ido
eo iea might not end so satisfactorily ? And were they not mean to say that it is matter of blame that, as re-
vi
.eirre the mercantile world with that apprehension and Bards many of these speculations, those who entered
thaeleghet suspended over them ?—Hear, hear.) He, into them had not solid foundations for their calculations.
to i_re, thought that her Majesty's Government ought I remember Mr. Tierney's saying in this House, with
re a" some steps pending the inquiry to prevent the his natural shrewdness, that the person who one year is
ju7tirrence
of those impending difficulties which were a rash speculator may have been the year before au en-
Act rent—for they were not accidental—in the terprising British merchant.
but of 1844. There was no man who had " Great wit to madness often is allied,
sub* "en slightly directed his attention to this And thin partitions do their bounds divide."
Jeet that must not apprehend the recurrence One person may be most successful in rash speculations;
Possibly el worse times than those they had another, who had tolerably reasonable expectations, may
ePfises_ed through. They had yet to learn what were the be cruelly deceived by a reverse of fortune. Among
to. uta of the failures here in distant parts. They had other things there occurred last year, what cannot be
receive4,,e information from India and other quarters, imputed as blame either to the Government or to the
10:e-would they, in the face of such a state of things, parties immediately concerned, a very great failure of the
.21:e matters as they were ? He thought it would be potato crop. In the beginning of this year we had great
zETe that Government should adopt some intermediate symptoms of the recurrence of that disease; letters came
e,„:_u, pending the inquiry they were about to enter from all parts of the country stating that it was again
drsictiretn order to appease the public mind, and leave a making its ravages. I thought it necessary, and the whole
tht,
,oittionary power in the hands of the governor of House agreed as to the necessity of the corn. laws being
rtzitton.:rGlak to issue more than 14,000,0001. The Right suspended. Many persons thinking it probable that
of but
fentleman
who
spoke last said it was to him there would be a high price of corn entered into very
great surprise that, there being a deficiency large speculations in that article. It so happened, how-
bullionea 0 in the Bank to the amount of 7,000,000/. in ever, that by the goodness of Providence the potato dis-
til. enot:th of October, there should be an increase of ease was arrested within a fortnight after the unfit:rout--
411,71_0 circulation to the extent of between 200,000/. able accounts were first received; and, although we had
121,:tau ,000/. This he insinuated as a charge of bad a backward spring, the summer weather was so favour-
eoZnignenient on the part of the Bank. He (Mr. Herries) able, that we had not only a plentiful but an early har-
upottlaito!tconceive why, with the limitations imposed vest. As a natural consequence, corn which had been
pmt
te
of tho Bank should be compelled to withdraw any bought for a very dear market came into one in which
ing
the
notes from the public, for the purpose of the price was considerably depressed, and the speculator
frea .
.e rate of exchange. It would be found that could not sell it for anything like the sum which he had
ia'tieploti Aopfril, 1847, the variation in the note circu- given for it. That is one reason why very considerable
the Bank was not such as to Pa demand distress fell upon the mercantile world. The combination
11e attention. attention. But the subject would, doubt- of other causes, operating together, led to that which
fesesed receive the attention of the Committee. He
eon- one alone would not have sufficed to produce. Take the
more he reflected. on the subject—the more he case of the railway speculations. I believe that, if this
fieeientsiindereed various opinions—the more he weighed con- country had continued flourishing, especially if we had
gtauthorities on the subject, the more he was corn- not:had the misfortune of the failure of the potato crop
gelled— 0 come to the conclusion, that the Act of 1844 of last year, the expenditure on railways would have
itic'as founded on a mistaken theory, and that it was par- been kept within due bounds, and it would not
ularly wrong in the separation of the Bank into two have been found too great for the floating ca-
eiepartments, and in compelling a limitation of the circu- pital of the country.—(Hear, hear.) But when
lation to 14,000,0001.—(Hear, hear.) There
point which he contemplated she ith more th was one to: an; immense railway expenditure you have to add
dread, and that was lest by the failure fan common
33,000,000/.
1244, men's minds would be hurried on to distrust paid for corn, and other circumstances
nesatc Act
theof tending()f
surpriset optrioi
that
tucteh e distress,
whole
commercialca nn o lon g:.orrldb e
felt matterth the
foundation of the monetary system which
in 1819. He should be sorry to see th had been laid difficulty of procuring money ; that capital became
coining round to that point—(Hear, hear)
toforego the adrane
e public mind scarce; that that which, a few years ago, was to be had
not believe the House would consent —and he could by almost any one at one or two per cent., could not be
6. cash payments. But, at present, the first and
tags of r six,asso aoe
Ira eivne n t sevenhe
wholep e rocent.
the hence
commercialvery
hest thing they could do would be to remove ghraedatatemfibvae;
meats which fettered the discretion of the he impedi- world. Now, Sir, let us look at the position of the
:whatever safeguards they deemed Bank, imposing Bank. Without giving any positive or dogmatic opinion
•Ling satisfaction to the mercantile world necessary, and giv. upon the subject, I may say that it has been the decision
eue a by removing of Parliament for a very long period that we should
Ninaapprehensions which the recent panic had left be- not embark on the dangerous sea of a state currency.—
Lord J. RUSSELL—We have had, in the (Hear, hear.) We place the disposition of that part of
eeecussion a great variety of views presented present the currency which consists of paper convertible into
:edastourally
in_ any topics have been touched on which did to us, and coin in the hands of a great bank, which has, to a cer-
not come tain extent, a monopoly. The Bank directors, con-
'within the scope of the debate. We have had sisting of persons who belong to the mercantile.
some novelties of opinion, and a great deal of dis- interest, naturally enough perform all the ordinary,
cursive d• •• •
follow. die •; but I am happy to find that, in duties which they owe to the proprietors; they endea-
be ,Mg the Right Hon. Gentleman, I follow one who your to obtain discounts, they obtain the interest
.18 kept himself within the limits of that which is
13rePerl
o„i_ y the subject of debate, and that ho has given
theof ethoeursdeay, and few persons think of criticising
musat in general. I,v u!ens which, whether I differ from them or not, which they pursue with regard.. to commerce
e viewed with great respect, coming as they fromdo Now, without entering into general
tel.:). of his experience, of his ability, and of his k questions, with regard to what is currency and what is
not, it is evident that a great part of the trans-
.l!`lege, both of the constitutional and financial histonow,
trans-
the country.—( actions of the country are carried on by means of mer-
theHa I must however state of
.. outset that the conclusion to which I should wish atot cantile paper, that is, by means of bills of exchange,
'lag the which are discounted and rediscounted, and go from
lijuil House is very different from that which the merchant to merchant, and from manufacturer to mam-
t' t lion. Gentleman seems to have adopted alien h
aYed the House at once, whatever else they mi ht doe facturer, and that a large proportion of the transactions
wort,ll:lae conduct of the Government blameable or gpraise: of the country rest upon. the credit which is due
dtofthat
1„03:,,,?, to do away at all events with the restrictions lea- paper, andh to_ the facility with whicht
"passron
try
t" oe! the Act of 1844, and for the interest of the coura hand to. and among those conductwho. the
hindustrial
4,0,2 give security to the mercantile class. Now, I must cantileoccupations. But when there arisefieiluresin t ciner-
__ world—when, owing to the circumstanceof any
cfV_lat as regards this House, considering the difficulties
Gentle of the speculations, whether justly or not, being unsuc-
teenueexposed under the system to which the Right Hon. trust ; then, the co
cessful, one house after another fails. then begins dis
mmercial world in general, not
chi_,o Gentleman referred—and considering the differences of knowing e'xactly which house will stand and which
0.!:_`: a which now exist, it would be very rash in us at house will fall, refer to the Bank of England as a great
theto decide without inquiry that you would abandon state machine—a machine to be put in operation for the
"e system •
which was adopted by eery general consent benefit of the public and not for the benefit of the par-
en e class, his • . •
!Jai, ItBii
44. But in .
, order to give confidence to the mer- ocular proprietary to which it may belong. Now, Sir,
be
.._
You in,' as admitted by the Right Hon. Gentleman, conductof the ofthe Bank. Onmany occa-
eillecation of
eee • Y come as the resdlt of your inquiry to some mo- aions I have observed, that if they had only to consider
with re the Act of 1844 or to some other result, their own interest, they would hesitate very much in
latight
Tagond. to the monetary system ; and what the giving discounts, and they would act like prudent pri-
lilf:epeal your existing law,
Gentleman wishes, in order to give confi- vete bankers and firms in general, merely for their
"nee, is this, that you will abolish your present system, own supposed benefit. But then they are told, •. You
but what
you put in its must consider the interests of the public ; everybody at
place shall be matter of doubt and speculation for Liverpool, Glasgow, and Manchester, is looking to you
ti, hich would tend more to create any
proposition at this moment to support some great firm which is in
nra_ongst the mercantile reate distrust and doubt danger of suspending payment, or some great hank
f duce commercial men to
let us abstain t•aoYm' Let-
class, and which would more which is in peril of stopping—the industry of the
us pause in our whole district
transactions,
for
rrrtea dents till we know what lawg'Yingwill be sacrificed if you do not interfere."
orders to our 1 must say that on such occasions the position of the
which has been abrogated, Lois to be substituted Bank becomes a very complicated one. If by any con-
very lmionT
tion without any consideration of part°king at this ques- trivance of legislation or of administration we were to
politics, I think provide that the Ban
nur survey of it would be k should at all times consider the
to the immediate cause of the meetinPc,,et7e if, looking interests of the public, anti not alone those of itself, or
at this period, we did not likewise look FoothaPt ornament if, on the other hand, the public were generally agreed
Curved before of a similar character in differeawt that's nab
that the Bank has nothing to attend to but its own
of our history. Within very few years after the p‘ --Jodi'. interest, and that, on occasions of distrust and dis-
°f e the Act of 1819, this country found itself in a -staasts'ag credit, no man should go to the Bank for any othe:
very great prosperity. That prosperity, owing to state
accommodation than he would get as a customer in
-general inflation of credit, led us, as it had done on pre- ordinary times—in either of those cases, I say, that
'vious occasions, to improvident speculations, to various the duty of the Bank directors would be simple and
Plena and projects which, as I think Mr. Canning said, lit problem easy ofßut, acting at ,
soared like a balloon filled with vapour, but balancesprofit,
of the Exchequer to obtain a mercantile
ring to the earth. The period which fol. aiderfitliend then being suddenly called upon to con-
, sect's[ another ageeat interests of the State, their situation is
owed
a„ 0 Was one of extreme danger and alarm, difficult
Vi se who had the management of the Bank consulted I say, th:r"fPerplexing beyond measure.—(Hear, hear.)
iedi'lr_d Liverpool, Mr. Huskisson, and Lord Ashburton. one time tle ght
naoltthtooughhaveit
fixed
dy bsoe
lsoawida trhaatot ao;
,hhyear)--d •
LeY Could not have better advisers, but the state in interest
Nvuich ii,they found affairs was such, that, as my Right the rate, I think it . er, they ought to have lowered
-'fitu.n. Friend the Member for Coventry (Mr. Ellice) every allowance for is
desirable that we should make
nated, and as Lord Ashburton lately described, the to perform—me the double duties which they hare
a(overno duties which have been fin
the 2, •r. of the Bank of England heard with delight posed upon themar
tsoience to satisfy the State and
State, and which they could
114 ',rating of the clock on Saturday which gave the hardly perform soicraoswe:th
the
time till Monday before they would be called on the proprietors.
be rinwleat was the position which
tt; any More bullion. The result of the consultation on the Bank held in the
b?olfieOvectothbeart?theLeAtetmo;
t,
with regard to the cur
be
all was, that the Bank was advised, with the say, once for all, that I gdoAnnettontg
noutrtson
be a" amount of bullion in its coffers—stated to 1844, or indeed any other
bur 1,000,000/., but in the opinion of Lord Ash• rency, which the Legislature
creditmore than the)
This
sil for doing
have passed, could
much less—to make a very large issue of bank- have prevented commercial pay
yafned difficulty. We
and
sdbeen tilt
tuae • That was a bold and wise course in a great give nearly all our measures credit
Leti the Re
temergeneY, but ut the same time no person would wish eau possibly perform. We give themmThr
and
the country should be again placed in such danger; that which they are not likely to do.
ulti
erit.hough we may have escaped in 1825 with a great case with regard to Catholic Emancipation
hce of property—though we may have escaped the form Act.—(Hear, hear, and laughter
aristnate crash of the Bank, yet if such a crisis were to in a parenthesis, that while I think free trademe say,o N•ee.. again, the result might be more fatal.—(Hear.) duces, and will produce ultimately still greater beipterfii
shouldyone be averted by precaution rather than meet it by those of every other measure, have been exaggerated
co
nnaidseprerieptite a remedy. Again, in 1837, there was by those who have been its advocates.—(Laughter.) I
credit, a e_ panic and distress, owing to the state of shall say this, not as a particular, but as a universal
the
.... and in 1830, as stated by my Right Hon. Friend truth.—(Hear, hear.) But to return to the immediate
that -s,,le.leaeber for Portsmouth, we were in such a state subject of discussion. What we had to hope from the
state
be.,alrtt re was the slightest internal drain, there must Act of 1844 was, not that it could prevent commercial
of suspension of cash payments. Now, this was a panic, but that, when commercial panic arose, the cur-
cperation'er
the amounot the
great danger, and it took place under the rency would not be in effect destroyed, and the converti-
two periudts or
Act of 1819. I will state to the House bills' of bank notes into coin would not be lost amid tla
bullion possessed by the Bank at these prevailing commercial confusion. In that respect I think
Bank u x ebrnar
month ...f
r., and the state of the circulation. In the the Act hae in the main, been successful. The Right
y, 1824, the amount of bullion in was 13 the Hum Gentleman saye, wehave
19,726,000/ ,810,000 L ; and the circulation was t fhe B • proposed to interfere; and
~
- not said what was the
ank when we
~e_.l •In Auust 1895 th b 11. . s ate o t . . . .
tion he proceeded to
g igj ,000/. the
circulation - , e u ion amounted to then, contradicting his own asser , •
to 19,398,0004 ; so that, on read it from the Gazette returns. The state of the Bank