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

4:'14141 SUN*
_.1.40ND0164,

C 1.14.
r'u with regard to the Bank Act of 1844 would
Committee
Present in itself an ample field for investigation Wet.
tht omenittee which the House was now asked to gran
Would be impossible to conceal from themselves that
"re had been a very great disappointment in respect to
the results of that Act. He did not mean to say that
the
„ Ptiblic had not been guilty of extravagant expects
7).°_4 as to the change which the measure of the Right
Z,°,4,. Baronet the Member for Tamworth was likely to
produce . •
, but it was undeniable that hopes had been
Zs• iletlY held out, not only by the Right Hon. Baronet
raself but by almost every gentleman by whom it was
toPprted, that the effect of the Bill would be materially
tionirnsilli!h speculation, materially to lessen the fluctua.
us_ !I prices, materially to contract all violent fluctua-
te in the currency, and, certainly, materially to lessen
Riocl4.4,,nce of any future panic or season of distress. The
Is; 'Lion. Baronet, then First Minister, and the Right
bee.' kXentleman the Chancellor of the Exchequer, had
,ucittcautious of leading to too extensive anticipations;
refer lt was also true, that the eminent writer to whom
cute that night had been made had, in his pamphlet
toti,,refri3ern
urichgto modify expectations, but that gentleman,
to the former condition of the currency, did
of'tsitl distinctly refer all former crises to the deficiency
:1 s• 14w CS it had then existed. Well, now the new
.°.,ltalion had had a trial, and, after all, we had had a
re;t more intense than ever; fluctuations in prices were
acme,in and all the phenomena attending former crises
vs Still more aggravated form; and he could not see
ei:tt the Act of 1844 had had, in the progress of the
eerrreill‘ the slightest tendency to give steadiness to the
(ReencY, or to contract it within narrower limits.—
ar. hear.) Colonel Torrens, an eminent supporter
° that
ths,ss' Act, prophecied that it would preserve us from
sd- Commercial revulsions, those cycles of excitement
plai Pressure which, as it had been felicitously ex-
ec)resulted from the alternate expansion and ex-
-144 of of an ill-regulated currency; but it had no such effect.
to snr. of those who in the last year had fallen sacrifices
ihe-Pmercial pressure had entertained the belief that
ps-,''et would have carried them through without any
eses-t4s4,ti°4. The Act had done some injury in having
es
among the public an unfair reliance upon the
r:(l3krised securities which it would afford, and to it
so!ut be attributed that mischief which inevitably
f-ed from every interference of the Legislature with
tett'eting objects with commerce and trade.—(Hear.)
tot law affecting to protect commerce, and intending
141 Part prudence to the public, had the effect of
leading among the community a false reliance upon
Legislature, and, pro tanto, did induce them to throw
wi.lcie that self. support and caution which would other-
Ite characterise them.—(Hear, hear.) The principle
ni" Which the Bill was founded was, that the circulation
ilnotes should be regulated by the foreign exchanges.
e
h had taken the greatest pains in the world to discover,
tt
44 examination of the evidence laid before that Coin-
s,,
c:-4r of ythe Bill a close
and examialso bnation oa
closef the speeches
examination of
made in
lto,—
oathing that had been written in favour of it—and he
114,755 y he had not been able to find one reason to induce
tos4 to believe that they either could or should attempt
rgulate the internal circulation of the country by the
te4grl exchanges.—(Hear, hear.) There were many
44k°111sfw.why bankers—not only those connected with
tt 0 issue, but those connected with banks of deposit
t"ells--why bankers of every kind should watch the
eh-4'e of the foreign exchanges as narrowly as a mer-
ths4t watched the state of the exports and imports of
. in .
eell'airnodity which he dealt, because the foreign
Erges indicated the increasing plentifulness or the
Bearscar
of the article in which the banker dealt.—(Hear,
t,,N But, while he disagreed with the Right Hon.
ei;°4et the Chanceflor of the Exchequer in believing
tell the internal circulation of the country could be re-
tssit,ted by the foreign exchanges, he was glad to find
41 at least he agreed with that Right Hon. Gentleman,
Geld with all the Hon. and Right Hon. Gentlemen who
glad his all
in support of the Act of 1844—he was
to find, he said, that he could agree with them, to
sereat extent, on the principles which they pro-
Ia the first place he agreed with them
iss'ertig the principle of convertibility next in preserv-
a single standard of value;_ and also in the principle
k:t whatever currency was adopted—whether a purely
psst4ilic currency, or a mixed curreny of metal and
10„ Per, it could not be considered as being based on a
it principle, unless in all its fluctuations and changes
e,o4fortned to that which a metallic currency would
leiti;?rra to. He admitted to the fullest extent that un-
it meant that, it meant nothing. He admitted that
ki4Per currency could not be maintained by any sirgui
tZlIt, unless it could be shown that in all its changes o
eh;le, end quantity it conformed precisely to the cha.nges
(ell took place in a currency purely metallic.—
th:tr, hear.) He went further, and would say that
cure °Nect of every banking regulation should be to
epee"/the pressure over a longer period—to make the
cti„ltive of scarcity to be felt at an earlier period, in
body to prevent its being felt so severely at a later pe-
*44 Oil that pa of the question he entirely agreed
Ch the observations of the Right Hon. Baronet the
thokleellor of the Exchequer that evening—they had
to the to his (Mr. Wilson's) satisfaction, and ho believed
, the
of most of those who heard him, that
toad " intensity of the late pressure been delayed
jet: longer period, by retaining the rate . of
the inter
at a low price, it was impossible to conceive
latueztent of disturbance to which the country would
tters.," been exposed ; and, therefore, while he did not
41;,7, with tine Right Hon. Gentleman that they could
f the rnal circulation of the country by the
itc)s,-0 exchanges—or that, if it were possible,
4,114 desirable to do so, yet in all the great
eslessential parts of his argument he cordially agreed
•111tt- him. As far as he understood the theory of the
Isne,,of 1844, it was this—that as the exchanges fell the
en-hlit should contract the circulation, that with the
Ivi"`ritetion of the circulation prices would fall, and that
take
the fall of prices an export of commodities would
thle place ; our imports would be suspended, and thus
'Averse exchanges would be regulated. This theory
-o"lPlied the power on the part of the Bank to contract
br expand the circulation of notes at their pleasure ;
..lat that they possessed such a power he utterly denied.
hlib(lieex, hear.) For, if it did so, it could only be
Qsubstituting coin for notes; and, that being the case,
e, for one would be glad to know how the Bank could
ue ben 4
e„-eeted by an attempt to contract their paper cir-
sells.,-"°n by the issue of sovereigns ? He knew that
11,7,11 gentlemen maintained that the circulation of the
tot": of England was represented by the quantity of
4;41 issued from the issue department to the banking
11:,,Itrtrnent ; but he was glad to hear the Right Hon.
s view, their ci
tu-tllet admit that, in
e l,ltbnt the
quantity of noteshi rcul
in the hands of the public.ation
;lIA.NCELLOR of the EXCHEQUER said it
11,1'4 prevent misconception if he explained that what
18;4t1 Said was, that under the old law, previous to
head' the circulation meant the amount of notes in the
tisZttof. the public, together with bank post bills; but
Mat time it meant the notes in the hands of the
hf-,.c, and no other (as we understood).
411 .WILSON understood the Right Hon. Baronet as
kttilitting that the word " circulation" meant the notes
11:11411ds of the public, but whether he had the pri-
kti,,ele of agreeing with him on that questiop, or not, he
tee maintain that the word " circulation could only
the notes in the hands of the public; and if they
Ittou-itftito talk of the action of circulation on prices, it
elaq. IPpear conclusively that it could mean nothing
Wouldgeie any man pretend that the notes lying
tes `cent in the Bank had any effect upon prices ? He
esrej!ted it was impossible, in his opinion, the. t the Bank
1144 either contract or expand at their pleasure the
tho,lltitY of notes in the hands of the public, as long as
er- notes were convertible—a principle for which they
LA!' solely indebted to the Right Hon. Member for
Bill of 1819. He believed that the reason-
„1:11 Mr. Jones Loyd's pamphlet went entirely upon
frosconoeption of an inconvertible as distinguished
tell Bathe vertible currency. With an inconvertible cur-
tillats,y could, of course, increase or decrease the
Nr11„-''Y of notes at pleasure ; but with a convertible
tasur4l°Y the operation of convertibility was itself the
IC of the quantity which the public would hold.
b‘leuld be generally admitted that the public never
art gt larger quantity of notes in its possession than
beret4renient for the general purposes of trade ; and,
tie,re, if the Bank attempted to contract its circula•
, it could only do so by withdrawing from circuits-
en
I),r, portion of the notes abiolutely necessary for the
iorrnance of the internal transactions of the country.
artiPtiP°Be they were to sell 500,0001. of Exchequer-bills
140.13 Y other securities. They would send these to a
; he would go to the Stock-Exchange and sell
,47111 bay to five individuals, who would each give him a
iZileque for 100,000/. upon his banker—possible upon the
nk of England; but that would make no daference in
,the operation. Suppose the cheques were taken to the
kofEngland if
; the parties who drew the cheques
"Id any deposits with the Bank the simple operation
theuld be that their account would be debited with the
h clues. The deposits of the Bank would thus become less
that amount, and the Bank reserve would become
re by that amount ; but the circulation would nor be
euf/etete • There would not be a single bank note taken
eh of circulation by the operation. Then, suppose the
throes were taken to a banker in Lombard• street, and
tx%ureker's clerk were to ask for 500,000/. of notes in
hs„%littlge for the cheques. It was well known that the
hold;ers Lombard-street were not in the habit of
ths; larger amount of notes than
.was necessary for
esi-cir; reserve for carrying on the business. cf the day ;
to s they found that they had not a sufficient reserve
et,;rlable them to pay the 500,000/. they would send the
110-t„tlite.l to the Bank of England, and bring the 500,0001.
tl'an-saf:ack ; so that the transaction.
.wouold be a simple
the r of 500,000/. from the securities
.t the Bank to
reserve in the Bank,—a mere conversion of 500,0001.
"o"lo4.cities into 500,0001 reserve. It would not affect
circulation one iota, so far as he could discover.
Ilan%B4llle kind of process would take lace if ti e
h
Nat' onf England were determined to incrpease its c
T!, Bank would, in that case, purchase
Exehanes They would send their broker to the Stock-
Purchase 500400/. worth of securities,
itSa°h e Would pay for is notes. It was quite true that for
1407 weirs there would be 500,000/. more notes in circu-
-44 Lyn than there were in the morning; but it was just
wor`n ale that the five brokers who sold the 500,0001.
thei of securities would send the 500,0001. either to
ll err Own banker's or to the Bank of England in the
.sacon, so that, instead of the circulation increasing,
tOl4 would be accomplished would be that the Bank
added to its securities 500,000/., and diminished its
I,:sers e by 500,000/.—(Hear.) lie had yet to learn how
1,4:3,
*could be depreciated. Until be saw some reason
Ene;ll.3ao holding a 51. Bank of England note, and
,xecg it not equal to five sovereigns, could not have it
0o raged for five sovereigns—until be saw that he
sihh, j!ot believe that a convertible note could pos-
thi,' lc depreciated. He was glad to be supported in
DeolAr bY Mr. Horner, Mr. Huskisson, Lord Liver-
-1844; r• Ricardo, and all the eminent writers prior to
a bank. note being convertible could not be depre-
ei4test
excess,. and bank-notes could not therefore be issued in
she „,_ It was quite true that the Right Hon. Baronet
TloC_enber for Tamworth, in introducing this Bill, did
4 'ferl instances where a depreciation took place

notwithstanding the notes were convertible. The first
case quoted by the }light Hon. Gentleman was tha
the Bank of Englan I in 1669, when bank-notes wet,
depreciated 17 per cont. lie believed, however, that
that was easily explaned.
Sir R. PEEL—I merely quoted the report of the
Bullion Committee of 1810, where I found the state-
ment made.

Mr. WILSON said that in the copy of the Right Ho-
nourable Baronet's speech which he had seen there were
no marks of quotation; but whether the Right Honour-
able Baronet did so or not it was quite necessary that
he (Mr. Wilson) should refer to the circumstance in
order to explain how the anomaly had arisen. In 1669
it was quite true that Bank of England notes were de-
preciated to a large extent; but it was also true that at
that very moment there was a suspension of cash pay-
ments and the notes were no longer convertible. It
was also stated that in 1804 the notes of the Bank of
Ireland required to be worth 1181. 10s. to command
1001. notes of the Bank of England, showing a deprecia-
tion of 18i per cent.; but it, was equally true that at
that very moment there was a suspension of cash pay-
ments both in England and Ireland, and the notes were
no more convertible than in 1669. It had also been
stated that the unfavourable exchanges between Scot-
land and England bad been rectified by a depreciation
of the notes then in circulation; but the notes in Scot-
land referred to were not notes payable on demand only,
but notes payable on demand, or at the option of the
issuer, six months after date, by allowing interest at
the current rate. These notes, therefore, bore some-
thing of the character of Exchequer-bills now. The
state of the American Bank had also been referred
to, to prove that convertibility was not a sufficient
check against depreciation. He must say that
a more unfortunate case could not have been quoted.
The condition of the American Bank was analogous
to nothing in the world. It embodied everything that
was absurd in banking arrangements, and was as un-
satisfactory as could well be; but when the banking
system of New York hai been placed on an intelligible
and sound footing there had been no more depreciation.
There had not been a single example of depreciation in
New York since 1840, when the Act was passed secur-
ing the convertibility of the notes at the pleasare of the
holder. Tno case of Russia and the other cases which
had been referred to were explained in a similar manner.
In his mind there was nothing more clear than that the
law of 1819 afforded the most perfect security against
depreciation. Now he must show that it was utterly
impossible the Bank of England, in case of an advance
of the exchanges, could contract the circulation. Sup
pose there were an advance of the exchanges from an
increased price of food, from a deficient harvest, from
an importation of grain, and an export of bullion—what
took place at home? 'l'he circulating medium was
measured by the price of the commodity we had to
dispose of, and the number of transactions we had to
perform. If the prices, therefore, were rising at home,
how was it possible for the Bank to contract its cir-
culation at the very moment when increased prices
and increased transactions required a larger propor-
tion of the circulating medium than when prices were
low ? Another reason why the Bank could not contract
its circulation was, that in every case where inconve-
nience was felt for want of a circulating medium, the
vacuum would be supplied by checks drawn upon the
deposit department—so that while there was a bank of
issue and a bank of deposit, it was quite impossible to
contract the circulation. In the autumn of last year, on
the 29th of August, the amount of bullion in the Bank
of England was 15,366,0001. ; the circulation in notes,
bank post-bills, and bills of exchange, was 21,311,0001. ;
the securities in the Bank of' England amounted to
24,804,0004, of which only 12,500,000/. were bills of
exchange or private securities. At this period, from
causes which had been described by the Right Hon.
Baronet the Chancellor of the Exchequer, owing to the
high advance of exchanges against this country, week
after week and month after month, the bullion in the
Bank gradually declined, and on the 3d of April 1847, the
bullion in the Bank of England had sunk from 15,366,0001.
to 10,246,0001., and the circulation of notes had dimi-
nished from 21,311,0001 to 20,815,000/. But the se-
curities had risen from 24,000,0001. to 30,000,0001., of
which (and he called attention to this fact) the private
securities amounted to 18,627,000/. Keeping the eye
upon these two periods, and recollecting that the bullion
had sunk 5,119,0001., he found that, notwithstanding the
operation of the Bank Bill of 1844, the circulation had
sunk only 4,960,000/., but the securities had increased
5,260,0001.; and the increase of private securities had
been no less than 6,000,000/. sterling; for, during the
whole period, notwithstanding the extraordinary drain
of bullion, the circulation, instead of following the bul-
lion, diminished only 16,9601. But he found that,
during that period, the number of bills under discount
was increased by 6,000,0001. sterling. These bills re-
presented in the first instance an issue of Bank-notes ;
there being more bills carried to the Bank from August
to March represented an issue of Bank notes; but it was
clear that, although there was immediately an issue of
notes, those notes returned to the Bank ; fur the circu-
lation, instead of following the drain of bullion, under
the operation of the Bill, was kept up by the increase of
discounts upon bills or private securities. He believed
that on these facts we saw the fundamental error which,
in his opinion, was contain ed in the Bill of 1844. Ile
believed the fundamental error in the Bill was this, that
those by whom the Bill was framed had confounded cir-
culation with capital and currency with bullion. For
the currency was the amount of the 'circulation of the
Bank of England, and not the amount of the capital at
the command of the public by means of discounts.
Therefore he believed that the restriction which that
law had imposed upon the circulation of the country was
unnecessary in so tar as the convertibility of notes was a
sufficient guarantee of excess or deficiency, and tended
to withdraw public attention from what he believed to
be a more irnpottant subject of consideration—the
amount of reserve or capital, and not the circulation of
notes. If attention had been directed to the deposits in
the Bank, the ordinary considerations of prudence in the
conduct of private affairs would have mitigated, if not pre-
vented, the late crisis. Fortunately, we had two means
of knowing the fluctuations of the deposits in the Bank
of England. The Bank Committee, in 11140, had col.
lected some very important and useful documents; they
had obtained from the Bank of England and the Bank
of Ireland returns of the weekly state of the deposits for
a number of years. The returns of the Bank of
England were divided under different heads :—pub-
lic deposits, and private or other deposits; of which, first,
there were those of the London bankers ; secondly,
those of the East India Company ; thirdly, those of the
Banks of Ireland and Scotland ; fourthly, other de-
posits, including the private deposits of merchants ; and
lastly, those of the different branch banks in the
country. For obvious reasons he excluded from his
consideration the Government deposits, as they were
regulated by other circumstances than those connected
with the state of commerce or the interests of trade.
He rejected also the deposits of the East India Com-
pany, as they were not governed by the same principles
as those which applit dto trade. H. excluded likewise
the securities deposited in the Bank of England belong-
ing to the Banks of Ireland and Scotland. He had
constructed a table from these returns. It would be
in the recollection of the House that the year 1838
was a year of fair, good, ordinary prosperity; that in
the latter part of the year we had recovered the panic
of 1837, and the bullion in the Bank of England had
increased from 4,000,0001. to 10,000,000/. ; and there
was an impulse given to our trade, so that the year 1838
was a year of as fair average prosperity as any year that
could be mentioned. In the early part of 1839, in come-
vence of a bad harvest, there was an importation of
grain and efflux of bullion to such an extent, that the
country was in a state of extreme depression, and the
Bank of England was obliged to have recourse to the
Bank of France for assistance. Therefore he had col-
lected materials for a comparison of the state of the de-
posits during the last quarter of 1838, representing a
period of renewed average prosperity, and the last
quarter of 1839, representing a period of pressure. He
did not think it fair to take the weekly averages, but the
average of the whole quarter, and he found this result:—
the average weekly deposits in the Bank of England of
the London bankers, in the quarter from October 1 to
December 31, in the year 1838, were 812,000/.; in the
corresponding quarter of 1839 they were 615 0001. The
private or other deposits in the Bank of England, in the
last quarter of 1838, were 3,020,0004; in the last quarter
of 1839 they were 2,122,000/. The deposits of the
branch banks in the last quarter of 1838 were 592,0001.;
in 1839, 451,0001. In the Bank of Ireland the private
deposits, in the last quarter of 1838, were 2,234,0001; in
1839, 1,834,0001; and the agency deposits in 1838
were 486,0001, and its 1839, 391,0001. The
totals of the different items were, for the
last quarter of 1838, a year of ordinary
prosperity, 7,144,000/. ; and in the last quarter of 1839,
only 5,413,000/., showing a reduction of 25 per cent. on
the deposits available for the giving public accommoda-
tion between these two periods. Now, he asked what
was the nature of the banker's trade ? His profits were
derived from discounting bills at a high rate of interest.
The only funds from which a banker could discount
bills are of three classes: first, his own capital; secondly,
if his bank was a bank of issue, his circulation ; thirdly,
deposits. It was in the power of bankers to give accom-
modation upon their deposits ; but if in these banks
there was a diminution at this period of to less than
1,700,000/. in the amount of deposits, which were re-
duced in one year from 7,000,0004 to 5,000,0004, what
must have been the proportionate reduction of the
amount of deposits in all the banks of London at this
period ? What must have been the reduction in the
deposits of the banks of Scotland, when it was recollected
that they extended to 30,000,0001. sterling ? Why, in
the same proportion, would the total amount of deposits
in the Scoth banks be greater or less according to their
number, as compared with the banks of England. The
number of banks in the united kingdom extended t 01,600,
and, if the same reduction should have been made in their
deposits, we might well conceive the cause of the ex-
tre me pressure felt at that period, from the reduction of
the means of the banks to accommodate their customers,
their funds being exhausted. But, if such were the
effect produced only by a bad harvest in 1839, what
consequences might it not be conceived that such a re-
duction would produce when not only had there been a
severe drain upon the country for grain, but a large rail-
way expenditure had been added ? What might be ex-
pected to be found if theCommittetebe country,shou and the
decline tane
account of the deposits throughout
yeeamkoounniotgdtubreinngumthbeer
opfrebsuennkteyresaart?l,6Hooe,
beliyed that, e
at less than 200,000,000/.
Id not reckon the aggßreegekatoenianmgoutbnet
nofumdebpeorsiotsf
there would be 75,000/ each a. at
30,000,0001., bdeipiko.sitsHaet
banks in Scotland at 400, and the amount o
f
considered the total amount of
Uniteddeposits in Scotland
higher than in other parts of the Kingdom, for
• trust monies, and, t (se ,
by law to receive
au obvious reason. The Scotch banks well! authorised
e
amount of deposits was larger than in other parts of the
United Kingdom ; but he believed that, though the num-
ber of banks was greater, the average amount of depo-
sits at each bank in the United Kingdom was greater

than the average amount of each of the Scotch banks.
Now, he might tie asked, what purpose he intended to
carry out by asking the banks to keep an eye on the
state of the foreign exchanges. The purpose was ob-
vious, that the banks might know, by keeping their
eyes on the state of the foreign exchanges, what was
likely to be the drain on their deposits, and what was
likely to be the demand on their capital. If the Bank
directors directed their attention to these points; if they
looked to the rate of foreign exchanges; if they kept
their money like any other commodity, and if they
raised the rate of interest at an early period without
looking at all to their circulation, but merely to the
loans and discounts which they were rtquircd to make,

he believed that they might, by thus raising the rate of
interest at an early period of the drain, induce the most
beneficial results, end altogether prevent the recurrence
of that pressure which the country had already felt so
disastrous.—(llear, hear.) lie believed that if the Bank
of England, instead of, as in the month of August last,
leaving the rate of interest at three per cent , raising
it in the month of January to four per cent., and only
in the month of April still further increasing it, %hi n
week after week their capital had been diminishing
until it was reduced by the amount of 6,000,0001.—if, he
repeated, the directors of the Bank had raised the it
rate of interest at an earlier period, he believed that the
commercial interests of the country might have got
through the crisis with much less inconvenience—a rate
of interest perhaps high, but not nearly so high as it
was afterwards necessary to fix, in older to restore the
exchanges.—(Hear, hear.) He was not sufficiently san-
guine to believe that anything that Committee could do
would entirely prevent the recurrence of such a crisis ;
for as long as they had the variations of seasons, as
long as they had hope and fear to contend with in the
human heart, and as long as they had speculative ex-
citements and prosperity at one time, so long would they
have periods of depression and of distress at other times.
He was not sanguine enough to suppose that anything
that House could do would entirely prevent a recurrence
of these periods ; but he was sanguine that they would
give the public the fullest information that could be
g ; thus, iemn much more than by Acts of Parliament,
they would be taught to regulate their commercial
transactions ; they would have placed within their
reach the information which would teach theta to
mitigate the evils of these periods of pressure.
He did not say that the removal of the evils would be
rapid or immediate ; but he trusted the information
which would be obtained by the Committee would aid in
restoring confidence, and would gradually lead to pros-
perity unequalled at any former time. He could not
forget the extraordinat y expenditure which had been
going on within the last three years, and if the Act
which they were obliged that session to entertain—if the
Bill which the Right Hon. Baronet introduced the other
night, was to be considered one of the means of checking
the present large consumption of capital, that Act, how-
ever necessary it might appear to be, would, in the first
place, have a bad effect on the commerce of the country.
It would have the effect of throwing many persons out of
employment who had been engaged during the last few
months, and 'in receipt of large wages, arising from a
large expenditure, during the construction of large
works, but immediately that these works ceased, and that
the expenditure was withdrawn, then was the reaction
felt in all the branches of commerce, and they might
look forward to a period of considerable depression. lie
had the honour to propose an amendment to the notice
vt hich was proposed by the Right Hon. Baronet, namely,
that all the words after the word "inquire" be omitted
fur the purpose of inserting the following words—" how
far the recent commercial distress has been affected by
the laws for regulating the issue of notes payable on
demand."
Mr. BROWN seconded the amendment.

The question having been put,
Mr. T. BARING acknowledged that many errors had
been committed by all parties, but he would not admit
that the pressure was entirely attributable to over-trad-
ing or want of capital. Blunders had been imputed to
the Bank of England, but, like all other large establish.
ments, he would ask where was there a mercantile house
in which a variety of errors might not be pointed out ?
The Right Hon. Gentleman (the Chancellor of the Ex-
chequer) had stated that the Bank of England had been
guilty of blunders ; but the Right Hon. Gentleman
should not have forgotten that he had himself over-
traded with the interest of the country by leaving a
large amount of Exchequer-bills in the market without
demand for them, and at a disgraceful rate of discount.
Tho Right Hon. Baronet had committed so many blun-
ders that if he had been a small trader his conduct
would have been sufficient to warrant his name being put
into the Gazette.—(Laughter.) He had neglected to
make any provision for the large amount of Exchequer-
bills due last March, although he should have known
the demand for bullion that must follow from the state
in which the country was then in. There were various
intimations made to the Right Hon. Baronet as to the
state in which the monetary affairs of the country were,
but he had totally neglected to make any provision
against its consequences. The want of foresight did not
exist alone amongst the traders of the country or the
Bank of England, but in the Right Hon. Gentleman
himself. The pressure was attributed to over-trading
in corn. There was undoubtedly over-trading and great
speculation iu corn, but that was not the sole cause—her
Majesty's Government were not free from blame. An
inquiry was not the remedy for:the blunders committed—
they should have dozens of different opinions. The
result would be, the evidence would be published without
a report, and the Right Hon. Baronet would take the
recess to consider what was best for him to do next—
(Hear, hear)—thus leaving the country in the same state
for the next year and a half that it is in at present.—
(Hear, hear.) Nothing could be more unsatisfactory
than such a proposition as that made by the Govern-
ment—.-£1 Committee of Inquiry 1 Why, the country
had been sitting as- a committee ; their pressures and
their sufferings had been a committee, and from than
the stale of the country, and the operation of the Act
of 1844, which the Right Hon. Gentleman himselt had
supported, had been learned. The Right lion. Gentle-
man might know from experience that the Beek of
England would not fix too low a rate of interest.
The effect of fixing eight per cent, as the minimum
rate of interest was, to alarm a great portion of the in-
dustrial community, and if money could not be procured
at a lower rate, it could not be expected that the manu-
facturers of the country would be able to execute
foreign orders.—(Hear, hear.) They could never carry
on a profitable export trade with a rate of interest so
high as eight per cent., and if such a rate of inter( st
was to rule, they must expect to see a great diminution
of that export trade on which they must rely, not
merely to pay for gold, but also for the increase in the
foreign debt which had arisen from the facilities given
by their recent legislation to foreign imp:ix-ca.—(Bear,
hear.) They had afforded the foreigner many advan-
tages of late, and if by any measure they prevent( d the
manufacturers of this country from obtaining money at
a cheaper rate of interest than the foreigner, he be-
lieved they would sacrifice one of the great advantages
which the manufacturing interest lately obtained. lie
would not go into Committee without obtaining
some assurance from her Majesty's Government
as to what they intended to do in case a similar
crisis occurred again, or to what extent they
would suffer it to proceed before they would af-
ford relief.—(Hear, hear.) He should desire to
accompany the resolution with this appendage—
" That that portion of the Act of 1844 which re-
stricted the issue of notes to one-fourth on silver, and
14,000,0001. on securities, should be suspended, and left
to the discretion of the Bank and Government united,
till the Committee made their report."—(Hear, hear.)
There could be no hope of a report early enough on
which to found an immediate measure, and the opera-
tions of the commercial world would remain uncertain
unless some such measure as he had suggested were
adopted, or some declaration were made by the Govern-
ment as to the course they would pursue in case a
similar crisis arose again. The Hon. Gentleman who
spoke last said that a double standard was not com-
patible with security. He (Mr. Baring) denied that ;
for there existed such a double standard in the United
States and in Holland, both commercial countries.—
(Hear, hear.) They might have a double standard in
this country, and though it might be attended with
some inconvenience and expense, these evils would be
light in comparison with the differences which had
taken place this year between the value of capital and
money, which were enough to ruin the commercial
world. He did not think the measure of 1844 could
be said to be satisfactory to its promoters ; it was not
satisfactory to the country, and under these circum-
stances it could not be satisfactory to the House.—
(Hear.) He trusted, therefore, that the House would
not think it shelved from consideration by the appoint-
ment of that Committee.—(Cheers.)
Mr. RDBINSON said that the motion of the Right
Hon. Gentleman the Chancellor of the Exchequer was a
tacit admission that the law respecting the currency
required revision, and that the system of free trade
proved a complete failure. Ho agreed with his lion.
Friend who just addressed the House that an inquiry of
this kind, without restriction or limitation, could lead to
no practical result. He could soe no end to the proposed
iterchueiriya,toantdheweopueldratpiernefeerf twothe Committees-44r
eentdo
tihne-
gother to inquire into the effect of their late free-trade
policy. To that policy he was disposed to ascribe the
evils which now afflicted the country, and the only re-
source for surmounting them was a recurrence to the
principle of protection. He was, on principle, in favour
of a property and income-tax, but he would oppose it
unless the Government pledged themselves to retrace
their steps, and to go back to the system of protection.
He did not think the Government was to blame for in-
terfering as they did with the Act of 1844, but he
thought they were wrong in not interfering sooner.—
(Hear, hear.) He hoped that if a Committee was ap-
pointed it would be composed of those Members who
had the greatest knowledge of the subject; but, at the
same time, he could not see the utility of inquiry. No
blame was, he thought, attributable to the Bank for the
course pursued ; it was the system that was to blame.
The currency was totally inadequate to the demands of
the country, and until that evil was remedied there must
be periodical crises. A great error was committed in
1819. At that period it would have been xnueh wiser to
have restored the old standard—viz., gold and silver, in-
stead of making gold the exclusive standard, and with
precautions against their running into excess, small
notes might have been allowed to circulate with benefit
to the country. As regarded free trade, he must say
that there was no disposition on the part of foreign
Governments to follow our example in that respect. In
his amateur trip on the continent, the lion. Member
for the West Riding of Yorkshire (Mr. Cobden), in
every one of the large commercial towns which he
visited, had been well received by a class of merchants
who were interested in obtaining access to our markets,
but who had no sort of influence with their cwn Go.
vernments, as well as by philanthropists who lived in a
world of their own creation.—(Hear, hear.) The Hon.
Member could not refer to a single change in the tar.ff
of any country as the result of his mission. In conclu-
sion, he would observe, that ho did not regard with ap-