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

sure should be thrown on the individual Member who
had happened to propose it.— (Hear, hear.) What are
the facts with respect to this measure? In 1819 the
measure for the restoration of the standard was pro-
posed by me as a private Member of Parliament,
wholly unconnected with the Government. It was the
result of the inquiries of two Committees—Commons
and Lords. The report of the Committee of the
house of Commons, recommending the restoration of
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that the Bill be read a second and third time, there were
no divisions. In the Lords there was unanimous ac-
quiescences, excepting on the part of one Member of the
House of Peers, who moved an amendment, that whereas
the Bill proposed that cash payments should not be re-
sumed until 1823—Lord Holland moved that 1820 should
be substituted. He was not content to wait until 1823,
but wished the Bill to come into full operation at once.
Now, as I said before, the restoration of the standard as
the remedy for the evils of inconvertible paper were
wise measures for the security of property, and for
providing a just remuneration for industry : and I do
not attempt to relieve myself from their responsi-
bility ; but I think I am only asserting the character
of both branches of the Legislature when I invite them
not tacitly to relieve themselves from what was the fruit
of their unanimous assent.—(Hear, hear.) Well, then,
we come to the Act of 1844. I was then at the head of
the Government, the Bank Charter was about to expire,
and it was necessary that some proposal should be made
to the House with reference to it. It was certainly then
competent for us to have relieved ourselves from direct
and immediate responsibility by proposing another in-
quiry. But I beg to remind the House, that when, in
the year 1844, I proposed a particular measure for its
consideration, in five preceding years there had been
five different Committees—in 1836, 1837, 1838, 1840,
and 1841. I hear it now said that the subject was not
exhausted, that there had not been inquiry sufficient,
and that further inquiry was necessary. But in 1844 I
found that the subjects of currency and hanks of issue
had taken up 3,000 questions and 3,000 an-
swers in 1836 ; that, not satisfied with that mass
of information, the inquiry was resumed in 1837,
and 4,570 were added to the stock. Even that
was not enough. The Committee was re appointed in
1838, when 1,700 questions were asked and answered,
and even yet no practical resolution was arrived at. In
1840 the expiration of the Bank Charter approached;
the Committee over which the Right Hon. the Chancellor
of the Exchequer had presided with so much intelligence
was re-appointed, and to the stock of nearly 9,000 ques-
tions and answers already accamulated, 3,859 were
added, each question leading to a long and elaborately
reasoned answer. In 1841, the questions and answers
then amounting to nearly 14,000, another Committee was
appointed, and that Committee closed without any par-
ticular or specific recommendation.—(Hear and laughter.)
Mr. Tooke, Mr. Jones Loyd, Mr. Horsley Palmer, and
other eminent authorities had been examined, and it ap-
peared to the Government that the best course would be
to submit a measure to the House of Commons for the
regulation of the currency, preparatory to the termina-
tion of the Bank Charter, and to invite the House
to come at last to some specific decision.—(Loud
cries of " Hear, hear.") The House did come to a
decision. Ido not believe that there ever was a ques-
tion carried by much larger majorities. I think, if I
recollect rightly, that not more than thirty Honourable
Members ever voted against the proposal of 1844, In
the Lords, the measure passed without opposition.—
(Hear, hear.) I say again, therefore, that the House of
Commons cannot justify itself in a matter of this kind,
which ought to be kept free from all party considerations,
and concerning which it had ample means of informa-
tion, for having lightly and inconsiderately given its
consent to the proposal of the Government. The sub-
ject is now perfectly open to reconsideration.—(Hear.)
It would ba unwise in any one irrevocably to bind him-
self to opinions given in 1844. Nothing could be more
injurious than that any man should now refuse to come
to a different conclusion from that of 1844, if, after all
the experience we have acquired since on a question so
complicated, he should see just cause to alter his opinion.
The House of Commons would be justified in taking ad-
vantage of all this information, but it would hardly be
justified in saying that on any occasion it had
blindly given its assent to the proposal of any Mi-
nister or Ministers.—(Hear, hear.) I think that there
has been some misrepresentation as to the objects of
this measure. Ido not deny that one of its objects was
to prevent,the convulsions which theretofore had occurred
in consequence of the neglect of the Bank of England
to take earnest precautions against undue issues of its
treasure. I certainly did hope that although no impe-
rative obligation was imposed on the Bank for the regu-
lation of its conduct in the banking department, yet that,
after the experience of 1836 and 1839, the Bank would
conform to the principles of banking which its directors
had acknowledged to be just, and from which they ad-
mitted they had departed, although they had been
prescribed as rules for their regulation. From the
number of mercantile houses that have failed—from the
general insolvency which has occurred, I am bound to
admit that I have been disappointed in my hope w.th
respect to the main object of the Bill; but, even so, I
must contend that it was in the plower of the Bank to
have alleviated much of the distress that was suffered.
—(Hear, hear.) If the Bank had taken early precau-
tions, which it was in their power to have taken—if
they had had energy and resolution to meet the first
difficulty by timely perseverance and determination—
by raising the rate of discount—my firm persuasion
is, that the necessity for that extraordinary interven-
tion to which her Majesty's Government had resorted
last October, would never have existed. I cannot there-
fore say that the state to which the country has been
lately reduced was the effect of the Bill of 1844 ex-
clusively. I believe that the executive instruments, by
whom that Bill was to have been carried into operation,
might, by persevering and energetic measures, have
prevented the necessity of violating its provisions.
(Hear.) It was said that the whole object of the Bill
was to control the Bank of England and prevent the
recurrence of former panics. I distinctly said, upon the
second reading of the Bill, that such a result would not
necessarily follow. Towards the close of my speech
upon the second reading, I expressed this opinion:—
" No Minister could be wild enough to suppose that this
measure would prevent all undue speculation in paper
currency, but there was a species of speculation, inde-
pendent of paper currency, which, it was hoped, the
Bill would be capable of checking." There was no at-
tempt to cripple or control legitimate speculation. The
object of the Bill was a triple one. In the first,
I admitted already, it had failed, but in the
two others, which are of, at least, as great
importance, I say it has succeeded completely; and
my firm belief is, that the difficulties which have
lately beset us would have been infinitely aggravated
if you had not wisely and judiciously taken the pre-
caution of limiting your paper currency. The Hon.
Member for the city of Dublin spoke of the grievous
injuries sustained by Ireland in consequence of the in-
terference with the privileges of bankers in that part of
the United Kingdom. The Hon. Gentleman's authority
was of course entitled to respect, but his statements
wore certainly somewhat new. He said that banking
business in Ireland was carried on not upon capital, bat
upon credit. I have great respect for the Hon. Gentle.
man's statements—as founder of the National Bank of
Ireland they are deserving of consideration, but I must
tell that Hon. Gentleman, with gravity. but with sua-
vity and courtesy, that I should mucl rather have his
capital than his credit.—(Laughter.) If there ever was
a country on the face of the earth, the poorer classes of
which had suffered the utmost amount of misery and
misfortune from the abuses of banking, it was that
country of which the Hon. Gentleman had spoken.
But I will give you an eminent authority on the sub-
ject of Irish banking—an Irishman too. Sir Henry
Parnell, writing on that subject in 1827, said : " The
losses that Ireland has sustained by the failure of
her banks, might be described in a very few words.
There were in 1804, as appeared by the report of the
Committee upon Irish exchanges, fifty registered
banks. Since that year a great many more had been
established-20 more probably, making 70 in all. With
the exception of a few- which withdrew from business,
and four in Dublin, three in Belfast, and one in Mallow,
the whole had failed one after the other, involving the
country in the greatest misery and distress." I recollect,
Sir, in 1820, the failures almost in one day of eleven
banks whose notes had circulation ,through almost the
whole of Ireland, but at all events through the southern
and western parts. I was in the west of Ireland about
ten days afterwards, and I could not possibly describe
anything like the misery and destitution I witnessed.
The lion. Gentleman (Mr. Reynolds) said the banking
in Ireland was carried on upon the principle that they
reserved gold to cover one-third of their liabilities ; my
recollection on that subject is entirely at variance with
that of the lion. Gentleman. I think if he had stated
that Irish bankers held one tenth of gold in
proportion to the whole extent of their liabilities it
would have been nearer the mark. I should like to
know whether the Agricultural Bank of Ireland
kept one-third, but if Irish bankers wished
to adopt precautions against insolvency and ruin, the
Bill of 1844 onlyaided them in doing so. The country at
large was now suffering from failures, general distress,
and the restriction of capital. The first impulse is to
visit with blame that very measure only for which lam
convinced your difficulties would have been fifty times
greater. I shall now, with the permission of the House,
read one or two extracts from the writings of as eminent
a financier as ever lived. Adam Smith, in his well-
known werk, " The Wealth of Nations," says—" No
complaint, however, is more common than that of a scar-
city of money. Money, like wine, must always be scarce
with those who have neither wherewithal to buy it, nor
credit to borrow it. Those who have either will seldom
be in want either of the money or of the wine which
they have occasion for. This complaint, however, of the
scarcity of money, is not always confined to improvident
spendthrifts. It is sometimes general through a whole
mercantile town and the country in its neighbourhood.
Over-trading is the common cause of it. Sob men,
whose projects have been disproportioned to their capi-
tals, are as likely to have neither wherewithal to buy
money nor credit to borrow it, as prodigals whoseex-
pense has been disproportioned to their r•'venue. Before
their projects can be brought to bear their stock
is gone and their credit with it. They run
about everywhere to borrow money, and every-
body tells them that they have none to lend."
Now that is the precise condition in which we are ; we
run about in all directions to borrow money, and we are
told by everybody he has "none to lend."—(Hear, hear.)
I will undertake to prove beyond doubt that at all times
a low rate of interest and an apparent prosperity have
led exactly to the same result. You say that it is free
trade, the Act of 1844, and various other causes that
have brought about the present state of things but