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

securities into a market which was not prepared to re-
ceive them ?—(Hear, hear.) There was in the Bank at
that time of bullion 7,865,0001.; the notes then outstand-
tag in circulation were 21.800,0001.; there was in the
nf 4nnking department 447,246/. of bullion, and 1,517,270 t
t'tea ; and against this the deposits were—private
poeits 8,700,000 Z, and public deposits, 4,766,000/. The
overnment might have been told that within twenty-
(ltirhoursthe Bank might hare been asked for 2,000,0001.
55f their private deposits ; and if so, they must have
re,rniten, for they had not the means of meeting it—
ketear, hear)—and the only alternative would have been
tlai. go into the market in which Exchequer-bills
eere at
a discount and the stocks were low.—(Hear.)
Ile did not mean to say that they could not have done it
a great sacrifice, but what would have been the ruin
tla the City if the Bank had gone into the market to sell
°°,ooo/. of stock ?—(dear, hear)—and such a state of
nXll was inherent in the working of the Bill of 1844.
(o ear, hear.) Those who had discussed this subject
, lore the Bill was passed, fully coesidered what might
De the effect of the arrangements of the Bill, and there
;tail not the slightest circumstance which had resulted
j_Orunit that had not been fully prophesied.—(" Hear,
.7,ar from Lord G. Bentinck.) Mr. Fullerton very early
" Whenever, by the course of trade the stock of
bull'
eo ton in the Bank shall be reduced to a level nearly
inrresponding with the amount of its notes in eirculation
o°lteess of the 14,000,0001. issued on credit—when the
rssury of the banking department shall be exhausted,
de nearly so, and its means of solvency shall be wholly
Pendent on the sale of its securities, then, and not till
then
pill
h ; your experiment be fairly tried."—(Hear.
tellr.) But Mr. Tooke was more accurate in his
VrecY• After having stated nearly what Mr.
Nerten had done, he said, " This being the
; the directors would not have a moment to
e?l'a• Upon a demand upon them, under such
eiteltrastances, without taking measures for maintaining
bat restoring the proportion of their reserve, they must
Almnt their doorsg to advances or. discounts.—(Hear.)
VW, under certain circumstances, it will operate with a
,ems
of violence on the state of credit which,. as it
,„ to me, these gentlemen have no adequate idea of.
kntear, hear.) Before two or three millions of bank
;Qtes could be forcibly extracted, the pressure on the
iketerves of the London bankers would be extreme, and
'eY would call in their loans"—this had actually taken
aee
-'s—(Hear, hear.) "It would be within the mark to
ay that a rate of discount of 20 per cent. would in
h„
-atlY cases be exacted— (Hear, hear)—and sacrifices of
ft°tals would be made to a great extent ; and, after all,
blight be doubtful whether this effort of the Bank
tiiejardd be effective in sufficient time. hear.) In
h. Qsse, while the circulating department might still
be 6000,000/. of bullion, the deposit department
I,,,nnid have no alternative but to stop payment—(Hear,
..t,rd--5 most absurd and disastrous thing, but too ab-
tja4" and disastrous to be allowed to take its course ; and
teet.Goeernment would be imperatively called upon to in-
4kriere and prevent so lamentable a catastrophe. He
trlild be glad at another time to go into a more full ex-
onation of the grounds of the different theories which
I:Aitied the opinions of men on this subject—those of Mr.
tai'id and Mr. Norman on the one side and Mr. Fuller-
, -e and an Hon. Gentleman (Mr. Wilson), who entered
Il' fully into the subject a few nights since, and made
etrie, lucid and logical statement on the subject, on the
That speech deserved an answer, but he had as
Li-"yomard no reply to it. He would, however, confine
1,-gla WI to the practical point, and would ask whether it
sto-",s,in,cit impossible to maintain the Act of 1844 as it now
4‘ as there no apprehension—was there not a
possibility,, nay, was there not a probability of the recur-
:lt:lle°, cf a similar disaster to the one just passed, and
to;e4 might not end so satisfactorily ? And were they
e,,eave the mercantile world with that apprehension and
toe ,e,fbre,us thought that her Majesty's Government ought
et 41E0 some steps pending the inquiry to prevent the
6urren_
ee of those impending difficulties which were
A„-rent— for they were not accidental—in the
but of of 1844. There was no man who had
;abjecten slightly directed his attention to this
that must not apprehend the recurrence
Possibly of worse times than those they had
passed through. They had yet to learn what were the
to "eta of the failures here in distant parts. They had
t,,,,receive information from India and other quarters,
j",,' would they,
in the face of such a state of things,
e matters as they were ? He thought it would be
e that Government should adopt some intermediate
bpoeastire, Pending the inquiry they were about to enter
in order to appease the public mind, and leave a
eretionary power in the hands of the governor of
Bank to issue more than 14,000,000/. The Right
kank Gentleman who spoke last said it was to him
_tter of
great surprise that, there being a deficiency
utli bullion in the Bank to the amount of 7,000,000 L in
the Month of October, there should be an increase of
atl'inote circulation to the extent of between 200,000/.
tea,,300,000/. This he insinuated as a charge of bad
eoiZagernent on the part of the Bank. He (Mr. Herries)
11, not conceive why, with the limitations imposed
plft'ull it, the Bank should be compelled to withdraw any
ajtet:°f its notes from the public, for the purpose of
homing the rate of exchange. It would be found
.that
APril, 1847, the variation in the note cucud-
etll of the Bank was not such as to deman
ior.ilnula! attention. But the subject. would, doubt-
" receive the attention of the Committee. He con-
ect,vu the more he reflected on the subject—the more he
Aietidered various opinions—the more he weighed con-
i)tpag authorities on the subject, the more he was com-
e.,ll4eb to Come to the conclusion, that the Act of 1844
tie a foUnded on a mistaken theory, and that it was par-
alarly wrong in the separation of the Bank into two
ePartraents, and in compelling a limitation of the circu-
,,lktien to 14,000,000L—(Hear, hear.) There was one
r`i, tilt which he contemplated with more than common
,s'rettd, and that was lest by the failure of the Act of
-244, men's minds would be hurried on to distrust the
I,,'"andation of the monetary system which had been laid
en-,„18, 19. He should be sorry to see the public mind
!rig. round to that point—(Hear, hear)—and he could
14' believe the House would consent to forego the advan-
tte of cash payments. But, at present, the first and
t thing they could do would be to remove the impedi-
-44 which fettered the discretion of the Bank, imposing
tiltrer safeguards they deemed necessary, and giv-
theg tisfaction to the mercantile world by removing
hi.dilPPrehensions which the recent panic had left be-
Cheers.)
tii,erd J.
no RUSSELL—We have had, in the present
Lo
.."'Sinn, a great variety of views presented to us, and
eatnY topics hare been touched on which did not come
ith(l iltallY within the scope of the debate. We have had
ce-etit)ttle novelties of opinion, and a great deal of dis-
-10% disquisition ; but I am happy to find that, in
bas ling the Right Hon. Gentleman, I follow one who
pro,',Pt himself within the limits of that which is
pi„rr'Y the subject of debate, and that he has given
he..e'tms which, whether I differ from them or not, must
Pers'oeWed With great respect, coming as they do from a
Pea
0" his experience, of his ability, and of his. know-
'theeountry.—(
, both of the constitutional and financial history of
Hear, hear.) I must however state at
treilloutset that the conclusion to which I should wish to
Itilt,rhe Rouse is very different from that which the
Pre'vr,",i.len• Gentleman seems to have adopted when he
it;" the House at once, whatever else they might do,
worth eunduct of the Government blameabre.or. praise-
/4)4'g; to do away at all events with the restrictions im-
try t 'l' the Act of 1844, and for the interest of the coon-
Sty tl°l give security to the mercantile class. Now, I must
44 th 4t as regards this House, considering the difficulties
Lee e eubject—considering the perils to which we have
GeliexPosed under the system to which the Right Hon..
epic, referred—and considering the differences of
oilet'll which now exist, it would be very rash in us at
At a to decide without inquiry that yon would abandon
to le374lAltern which was adopted by very general consent
'eleitt• But, in order to give confidence to the mer-
Lte
class, his proposition is more objectionable,
You as admitted by the Right Hon. Gentleman,
(like:::11Y come as the resdlt of your inquiry to some mo-
,Nth."nn of the Act of 1844 or to some other result,
etiph,4egard to the monetary system ; and what the
el,' Ron. Gentleman wishes, in order to give confi-
etiere, is this, that you will abolish your present system,
PleeeePeal your existing law, but what you put in its
elehtt,,ahnil be matter of doubt and speculation for
Wleehvh, months. I cannot conceive any proposition
oreo„ would tend more to create distrust and doubt
iteiti"gst the mercantile class, and which would more
tratikee commercial men to say, Let us pause in our
te.etions, let us abstain from giving orders to our
Torre th-Poildents till we know what law is to be substituted
tti,on'utit which has been abrogated. Looking at this ques-
ta* without any consideration of party politics, I think
ttlit"ey of it would be very incomplete, if, looking
tt this immediate cause of the meeting of Parliament
period,
we did not likewise look to that which °e-
V°, before of a similar character in different periods
%f tae Act history. Within very few years after the passing
ee.y of 1819, this country found itself in a state of
Leger eat prosperity. That prosperity, owing to the
'44444 inflation of credit, led us, as it had done on pre-
piltlis 4171,1a/dons, to improvident speculations, to various
soared Projects which, as I think Mr. Canning said,
*hie, like
a balloon filled with vapour, but
long toe slightest puncture of a pin might
d 14) the earth. The period which fol.
- w,as one of extreme danger and alarm.
-‘4seaT,no had the management of the Bank consulted
TLe -41verpool
; Mr. Huskisson, and Lord Ashburton.
et,'"'lld not have better advisers, but the state in
--s".Y found affairs was such, that, as my Right
4ttite Iland the Member for Coventry (Mr. Ellice)
qov led 1 aVd as Lord Ashburton lately described, the
the
lttnor of the Bank of England heard with delight
for a°
ng of the clock on Saturday which gave the
'or "llan till :Monday before they would be called on
theY More bullion. The result of the consultation on
!Mall turkdaY Was, that the Bank was advised, with the
oe r,„ar,mnunt of bullion in its coffers—stated to
hurt,rfu,°ooi, but in the opinion of Lord Ash-
-1:1(4k/1 much less—to make a very large issue of bank-
%tux. That was a bold and wise course in a great
at r:IleY, but at the same time no person would wish
.411 thoe Country should be again placed in such danger;
'akr,'ee ugh we may have escaped in 1825 with a great
11444 ,a of property—though we may have escaped the
arise e crash of the Bank, yet if such a crisis were to
Erer agulo, the result might be more fatal.—(Hear.)
one at
8o des
1, least must wish that such a catastrophe
d„e 'e as 'erted by precaution rather than meet it by
eciesi-ciPerate re remedy. Again, in 1837, there was
,diterable.pa nie and distress, owing to the state of
ilie -31 and in 1,i30 as stated by m Right Hon. Friend
that ember f 11 y in such a state
th or- Portsmouth, we were
ve
su ere
„ was the slightest internal drain, there must
ate of-veasion ve cash payments. Now, this was a
perm. et.-
grea t danger, and it took place under the
atilesae,4kl-o-littnretehell.Ft of 1819. I will state to the House
en Periods but flion possessed by the Bank at_ thesete
ti nta°kh of and t he state of the circulation.. In the
ebrnar
, e, 1824, the amount of bullion in the
.0", 13,41 iO,OOO/. ; and the circulation was
-1A,004." In Lugust, 1825, the bullion amounted to
the c toulativa t 9 1V;395,Q001. ; so that, on

that occasion, while the bullion had diminished upwards
10,000,000 L, the circulation was only altered by
300,0001. In the month of March, 1838, the bullion
in t tie Bank amounted to ]0,015,0001.; the cir
eulation amounted to 18,600,000/. In September, 1839,
the bullion amounted to 2,816,0001.; the Bank circula-
tion to 17,960,00,4. Thus whilst the bullion was dimi-
nished from 10,000,0001. to under 3,000,000/., the circa
lation only diminished 640,0001. Now, considering that
such was the condition of the Bank under the Act of
1819, and that its effects had been such in 1825 that
Mr. Huskisson declared they were within 24 hours of a
state of barter, and that in 1839 we were in such a state
that the slightest internal drain would have caused a
suspension of cash payments, I do think it was not sur-
prising that a Committee of the House should have re-
commended—and that the Government of the country
should have, in 1844, endeavoured to find whether, by
some alteration of the system, that which all persons
who consider the subject on right principles wish to pre
serve—the convertibilityof Bank notes might not be made
more secure. Now it is my conviction that to a consider-
able degree the Government of 1844 succeeded in giving
greater security to the convertibility of the bank-
note, and averted some of the evils which otherwise
might have occurred during the late pressure. This, I
think, follows even from what the Right Hon. Gentle-
man (Mr. Hurries) referred to. In 1825 and 1839, if
the drain had gone on a little longer, it would have been
impossible to give coin at the Bank of England. But
there was no such danger at the present time. The
amount of bullion i❑ the Bank diminished from
16,000,000 to 9,000,000. I will not now discuss whether
the Bank should not have taken precautions before
August last. But, in the month of April last, a very
remarkable letter having appeared in the Times, showing
the continued drai❑ of gold which was going on, and
that this drain all operated on the reserve of the Bank,
and in no way on the discount or circulation, the Bank
directors immediately began to change their course. To
a great extent they limited their discounts, and from
the month of April to the beginning of June, the
circulation was diminished to about 1,500,000/. At
that time there was considerable distrust and panic;
but, I believe that if the Bank directors had
not seen that if they proceeded in the same
course they would infringe the provisions of the
Act of 1844, they would have allowed the drain of
gold to go on, and we should then have had, as on two
former occasions, still greater cause for alarm. In point
of fact, 2,000,000/. or 3,000,000/. in gold is the lowest
amount which the Bank has held, and this has prevented
that convulsion which was so near occurring on the
former occasions to which I have alluded. But there is
another question, on 'which I do not wish to give any
opinion, and which should, I think, be referred to the
Committee, in order that they may ascertain whether
any further precautions can be taken.—(Hear, hear.)
The Right Hon. Gentleman has referred to what took
place in the month of October, more especially to the
letter which my Right Hon. Friend (the Chancellor of
the Exchequer) wrote to the Bank, and he says that we
have not stated the circumstances connected with that
letter. I thought that my Right Hon. Friend had stated
those circumstances very clearly and in great detail, but
I will, nevertheless, myself refer to the main features of
the case. There had been, in the year 1846, as in the
years 1825 and 1836, a very flourishing state of things.
There was such an abundance of capital that its
possessors were anxious to place it out at two per
cent. interest, and could hardly obtain even that. Con-
currently with such a rate of interest there was a
great seeking after speculations for advantageous invest-
ment, accompanied, as has always been the case, by a
dangerous and wild spirit of speculation. Now, Ido
not mean to say that it is matter of blame that, as re-
gards many of these speculations, those who entered
into them had not solid foundations for their calculations.
I remember Mr. Tierney 's saying in this House, with
his natural shrewdness, that the person who one year is
a rash speculator may have been the year before an en-
terprising British merchant.
" Great wit to madness often is allied,
And thin partitions do their bounds divide."

One person may be most successful in rash speculations;
another, who had tolerably reasonable expectations, may
be cruelly deceived by a reverse of fortune. Among
other things there occurred last year, what cannot be
imputed as blame either to the Government or to the
parties immediately concerned, a very great failure of the
potato crop. In the beginning of this year we had great
symptoms of the recurrence of that disease; letters came
from all parts of the country stating that it was again
making its ravages. I thought it necessary, and the whole
House agreed as to the necessity of the corn. laws being
suspended. Many persons thinking it probable that
there would be a high price of corn entered into very
large speculations in that article. It so happened, how-
ever, that by the goodness of Providence the potato dis-
ease was arrested within a fortnight after the unfavour-
able accounts were first received; and, although we had
a backward spring, the summer weather was so favour-
able, that we had not only a plentiful but an early har-
vest. As a natural consequence, corn which had boen
bought for a very dear market came into ene in which
the price was considerably depressed, and the speculator
could not sell it for anything like the sum which he had
given for it. That is one reason why very considerable
distress fell upon the mercantile world. The combination
of other causes, operating together, led to that which
one alone would not have sufficed to produce. Take the
case of the railway speculations. I believe that, if this
country had continued flourishing, especially if we had
not' had the misfortune of the failure of tho potato crop
of last year, the expenditure on railways would have
been kept within due bounds, and it would not
have been found too great for the floating ca-
pital of the country.—(Hear, hear.) But when
to: an: immense railway expenditure you have to add
33,000,0001. paid for corn, and other circumstances
tending to produce distress, it can no longer be matter
of surprise that the whole commercial world felt the
difficulty of procuring money ; that capital became
scarce; that that which, a few years ago, was to be had
by almost any one at one or two per cent., could not be
had at five, six, or even seven per cent. Hence very
great embarrassment in the whole of the commercial
world. Now, Sir, let us look at the position of the
Bank. Without giving any positive or dogmatic opinion
upon the subject, I may say that it has been the decision
of Parliament for a very long period that we should
not embark on the dangerous sea of a state currency.—
(Hear, hear.) We place the disposition of that part of
the currency which consists of paper convertible into
coin in the hands of a great bank, which has, to a cer-
tain extent, a monopoly. The Bank directors, con-
sisting of persons who belong to the mercantile
interest, naturally enough perform all the ordinary
duties which they owe to the proprietors; they endea-
vour to obtain discounts, they obtain the interest
of the day, and few persons think of criticising
the course which they pursue with regard to commerce
in general. Now, without entering into general
questions, with regard to what is currency and what is
not, it is evident that a great part of the trans-
actions of the country are carried on by means of mer-
cantile paper, that is, by means of bills of exchange,
which are discounted and rediscounted, and go from
merchant to merchant, and from manufacturer to manu-
facturer, and that a large proportion of the transactions
of the country rest upon the credit which is due to that
paper, and to the facility with which it is passed from
hand to hand among those who conduct the industrial
occupations. But when there arise failures in the mer-
cantile world—when, owing to the circumstance of any
of the speculations, whether justly or not, being unsuc-
cessful, one house after auother fails, then begins dis
trust ; then, the commercial world in general, not
knowing exactly which house will stand and which
house will fall, refer to the Bank of England as a great
state machine—a machine to be put in operation for the
benefit of the public and not for the benefit of the par-
ticular proprietary to which it may belong. Now, Sir,
I have seen an illustration of that in the language and
conduct of the directors of the Bank. On many occa
sions I have observed, that if they had only to consider
their owu interest, they would hesitate very much in
giving discounts, and they would act like prudent pri-
vate bankers and firms in general, merely for their
own supposed benefit. But then they are told, " You
must consider the interests of the public ; everybody at
Liverpool, Glasgow, and Manchester, is looking to you
at this moment to support some great firm which is in
danger of suspending payment, or some great bank
which is in peril' of stopping—the industry of the
whole district will be sacrificed if you do not interfere."
I must say that on such occasions the position of the
Bank becomes a very complicated one. If by any con-
trivance of legislation or of administration we were to
provide that the Bank should at all times consider the
interests of the public, and not alone those of itself, or
if, on the other hand, the public were generally agreed
that the Bank has nothing to attend to but its own
interest, and that, on occasions of distrust and dis-
credit, no man should go to the Bank for any other
accommodation than he would get as a customer in
ordinary times—in either of those cases, I say, that
the duty of the Bank directors would be simple and
the problem easy of solution. But, acting at one
time, as it is natural for them to act, employing the
balances of the Exchequer to obtain a mercantile
profit, and then being suddenly called upon to con-
sider the great interests of the State, their situation is
difficult and perplexing beyond measure.—(Hear, hear.)
I say, therefore, that although it may be said that at
one time they ought not to have fixed so low a rate of
interest, and, at another, they ought to have lowered
the rate, I think it is desirable that we should make
every allowance for the double duties which they have
to perform—(Hear, hear)—duties which have been im•
posed upon them by the State, and which they could
hardly perform so as at once to satisfy the State and
the proprietors. Now, Sir, what was the position which
the Bank held in the beginning of October? Let me
say, once for all, that I do not believe that the Act of
1844, or indeed any other Act, with regard to the cur-
rency, which the Legislature may have passed, could
have prevented commercial panic and difficulty. We
give nearly all our measures credit for more than they
can possibly perform. We give them credit for doing
that which they are not likely to do. This has been the
case with regard to Catholic Emancipation and the Re-
form Act.—(Hear, hear, and laughter.) Let me say,
in a parenthesis, that while I think free trade pro-
duces, and will produce ultimately still greater benefit
to this country, yet the benefits of free trade, like
those of every other measure, have been exaggerated
by those who have been its advocates.—(Laughter.) I
shall say this, not as a particular, but as a universal
truth.—(Hear, hear.) But to return to the immediate
subject of discussion. What we had to hope from the
Act of 1844 was, not that it could prevent commercial
panic, but that, when commercial panic arose, the cur-
rency would not be in effect destroyed, anbde
lostt the converti-
bilityof bank notes into coin wouldnot
prevailing commercial confusion. In that respect I think
the Act has, in the main, been successful. The Right
Hon. Gentleman says, we have not said what was the
state of the Bank when we proposed to interfere; and
then, contradicting his own assertion, he proceeded to
read it from the Gazette returns, The state of the Bank

was this: if at the commencement of the month of
teber, it had considered merely its own interest it would
have allowed the paper which it had lent to be repaid
without making fresh loans, and it would then have
been in a state of security, having a sufficient amount of
reserve. But, pressed on all sides to afford some relief
to the suffering credit and commerce of the country, the
Back made large advances to houses which they con-
sidered solvent. At the middle of the week which
ended with the 23d of October, I began to think
that the chief difficulties had been surmounted,
as confidence was beginning to prevail in Lon-
don. But there succeeded great panic and distrust in
the country. There was the breaking of a bank at New-
castle, and a run upon another powerful and wealthy
bank in the same town, upon which the industry of the
whole neighbourhood depended. The gentleman who
was the agent of the Bank of England in that town, ad-
vanced to the latter bank all the gold that he had in his
possession, and, in addition, he sent to Leeds for 40,000
sovereigns. This bank got over its difficulties, but there
were well-founded rumours of similar difficulties in other
parts of the country. The state of the Bank was then
what the Right Hon. Gentleman had stated. While the
bullion in the issue department was 7,865,0001. the
amount of the notes and gold and silver coin taken to-
gether was 1,994,516 L ; the notes alone amounting to
1,547,2701. Now, under these circumstances, it appeared
to me that if there should arise similar runs upon banks
and similar pressure from commercial firms in any of
our great cities, and applications to the Bank for relief
should be refused, there would be not only a panic, but
a dreadful convulsion in the country, which could not
fail to affect very much the metropolis, while even the
Bank itself could hardly be safe. Sir, the opinion of the
Bank was not that which I have stated, their opinion, as
conveyed in a formal resolution on the 25th, was that they
could comply with the provisions of the law and maintain
their position. At the same time the Governor of the
Bank frankly confessed to us that if such cases as those to
which I have alluded should arise, or such as had oc-
curred at Liverpool a little while before, they could not
give further accommodation, and they might probably
be obliged still further to restrict the accommodation
which they gave. Now, under these circumstances, we
consider that the time had arrived when, in order to pre-
vent the evil which was sure to arise from the perusal of
the Bank returns, which must have appeared in the
Gazette of the following Friday, it was necessary to
adopt some extraordinary measure. I must say that in
the course of this debate the prudence of our so acting
has hardly been disputed.—(Hear, hear.) My Hon.
Friend the Member for the Tower Hamlets did, indeed,
throw some doubts upon that proceeding, but nothing has
occurred since, which has in the least tended to shake
my opinion that the step taken was calculated to restore
confidence, and that although it was necessarily attended
with evils, the evils were much less than those which
would have resulted from a contrary course.—(Hear,
hear.) It has been said we ought not to have mentioned
any particular rate of interest. I must confess that
I had before my eyes,
,during the whole of that
anxious period, the danger lest by some false step
we might encourage unfounded speculation, and thus
place the convertible currency in the greatest danger.
At that moment we had the exchanges in our favour ;
gold was coming in, and, it was probable, if there had
been time, that even without any extraordinary measure
the Bank would have been in a :position to extend its
discount, and to give further effectual assistance to com-
merce. Well, but then we had the fear before our
eyes lest by any imprudent measure of ours we might
turn the course of the exchanges against as, and pro-
duce a state of things from which it would be impossible
for us to escape without, on the one hand, a sudden con-
traction of the currency, or, on the other, a suspension
of cash payments. It was under that apprehension that
I. for my part, willingly agreed that we should take
the step, which I at once admitted to be contrary to all
rule, of recommending a high rate of interest to be re-
quired by the Bank. It seemed to me that the effect of
that step could not fail to be that there would be less
fear of accident arising from undue pressure for discounts,
and that the exchanges would be more likely to continue
favourable whilst the imports of gold would certainly not
cease. Those, in fact, have been, as we expected they
would be, the results. The influx of gold has continued,
and the reserve in the Bank is now uo less, I believe, than
six millions. I have no confidence that, if we had not
insisted on the condition I have described, the same
results would have occurred. I scarcely believe they
would. Our object was to restore confidence without
giving rise to improvident speculation; and in that re
spect I believe it will be generally allowed that our
measure was quite suocessful.—(Hear,) But then the
Right Hon. Gentleman who spoke last wishes for a
measure by which we may prevent the recurrence of the
difficulty we have escaped, and may guard against all
misfortunes in times to come without fixing any limits
to the issues of the Bank; and another Hon. Gentle-
man, the Member for Huntingdon (Mr. T. Baring) like-
wise called on me the other night to tell him whether
we did not mean to allow the Bank a still greater liberty
of assisting the great commercial houses of the country,
should they be found to require such assistance at a
future period. Now, Sir, when I am asked these ques-
tions, I am obliged to inquire in return whether these
Honourable Gentlemen really have fixed in their
own minds what they wish to do, and to what end
their propositions would lead? (Hear, hear.)
They are both advocates of a currency convertible into
gold upon demand ; they would see with alarm and
dread the recurrence of a suspension of cash payments
by the Bank.—(Hear, hear.) Well, then, you must
allow that there must be some mode by which that re-
currence must be prevented.—(Hear, hear.) You may
say that the mode proposed by the Bill of 1544—that
the great commercial breakwater erected by the Act of
Parliament—is useless and mischievous; but you cannot
help admitting that there must be a certain degree of
prudence exercised by the Bank, or else that it will be
impossible to guard against the mischiefs which led to
suspensions on former occasions.—(Cheers.) Mr. Pitt,
when be required large loans for the Bank, during the
long period in which he administered the affairs of this
country, was obliged to have recourse to measures which
the Bauk did not approve. But Mr. Pitt never meant
that those measures should lead to a suspension of cash
payments.—(Hear, hear.) It was surely no part of
the policy of a statesman who conducted the affairs of
this country with so much skill, and with such
steady aim and purpose, to resort, as an ultimate
measure, to a currency not payable upon demand.
Neither, I will presume to say, was it his desire to find
himself at that point when in 1797, in the midst of the
operations of a war, he was forced by circumstances to
resort to that extreme and most disastrous measure.—
(Cheers.) And if this were so, let us, Sir, reflect that
the same danger which was incurred in that instance by
requiring heavy loans from the Bank for the use of
Government, would be equally incurred if you laid
the Bank open to the demands from commercial houses
for the purpose of supporting. or propping up *heir
credit.—(Cheers.) Yet this is the course the Hon.
Gentlemen would advise us to pursue.—(Renewed
cheers.) However much they may abhor the idea of a
suspension of cash payments, the measures they would
propose, without meaning or intending it, would neces-
sarily, from the lax administration of the Bank, lead to
a state of things which must result either in a contrac
tion, which would ruin half the commercial houses 0'
the country, or else to a suspension of cash payments, by
which alone so great an evil could bo averted. A Right
lion. Gentleman has spoken to-night of the differences
iu the opinions of writers of great ability and of great
experience upon this question. Now, I do not wish to
enter into the matters of theory discussed by Tooke and
Fullerton on the one side, and by Mr. Jones Loyd and
Norman upon the other. They have all discussed the
question with great ability. But that which concerns us
Mr more than their theoretical views is the practical
course they recommend with regard to the administra
tion of the Bank. Now, although these writers differ
as to the Act of 1844, I find no greater difference be-
tween them as to the way in which the principle of the
Act should be carried out. They are agreed that when-
ever the Bank finds the drain of gold going on, and the
exchanges becoming adverse, that it is the duty of the
Bank then to take measures gradually and prudently to
stop the drain, and to keep the Bank in a steady position.
Both Mr. Tooke and Mr. Jones Loyd are agreed that this
should be the end the Bank should seek to attain. It may
fairly be a question whether by the enactment of 1844
you are able to attain this end; but certainly there are
none who have ever thought much upon the currency
who have not agreed, that when there is a drain of gold
it is incumbent on the Bank to adopt a course of pru-
dence. It may be doubted whether the Act of 1844
sufficiently provides for the exercise of that prudence
by any certain rule. For my part, I think, that on these
subjects you not only require a rule, but persons who
are impressed with its value to administer that rule. I
concur, therefore, in what was said by a Right lion.
Friend to-night, that this Committee,: if appointed,
ought to consider, first, how far the provisions of the
law are sufficient ; and, second, how far we can obtain a
steadier administration on the part of the Bank, by
preventing the control ef parties who attend the meeting
of directors only occasionally, and who hold varied
opinions upon the subject of the law.—(Hear.) But,
whatever the House may do with regard to this inquiry,
I hope, Sir, above all, that it will not consent to adopt
the advice of the Right Hon. Gentleman who spoke
last, and commit itself at once to a decided opinion.
Although, as he justly said, from the year 1810 to the
present time, this subject has employed some of the
ablest men of England—although it has been directed by
the views of Lord Grenville and Mr. Huskisson, of Mr.
Horner, Mr. Canning, and of some of the ablest living
writers, yet I believe, that on a subject so diffi-
cult, so intricate, and se important, there
are still many and most potent truths to be
acquired. It is possible, should it seem desirable, to
make some modifications of the great plan of 1844, in
order that the currency of the nation may be worked
more steadily and securely.—(Hear, hear.) That is
quite possible, should it be desirable. But, Sir, I must
say with regard to the Act of 1844, that I do consider
that Act to be a great improvement on the Acts which
preceded it—that I do believe it has, in a great degree,
answered its purpose—and that I find, since it has been
in operation, that we have never been in that position in
which the Bank was likely to be left without a single
sovereign in its coffers.—(Cheers.) Though the Act of
1844, therefore, may not have cured commercial convul-
sion, it has done much to keep the currency from being
affected by the evils attending commerce.—(Renewed
cheers.) Holding this view, I beg the House to appoint
a Committee to consider soberly and calmly the whole
bearings of the subject, and not by passing any sudden
or
iprecipitate resolution to cause men to doubt whether
it s the intention of Parliament to maintain the conver-
tibility of the paper currency and to preserve the me-
tallic standard of the nation.—(The Noble Lord resumed
his seat amid much cheering.)
Mr. J. REYNOLDS said that in the course of these
debates attention seemed to have been directed exclu-
sively to the eflect of the Act of 1844 upon England
only. He had heard nothing said of that Act as it
affected Scotland or Ireland. Soon after the Bill passed,
he, as a member of an Irish deputation, had an iuterview

r with the Right Hon. Baronet on thelsubject of its opera-
tion; but all that he received from him was a display cf
the ex t:a.me courtesy and great pLtience for which, as
he understood, the Right Hon. Baronet was so peculiarly
remarkable.—(A laugh.) He could testify that the
operation of the Act of 1845 had been most injurious
to the Bank of Ireland, and as a matter of consequence
to the commerce and trade of that country. The Right
Hon. Gentleman (Sir R. Peel), indeed, had, in an inter-
view on the subject, when he complained of the rest' ic-
tions imposed upon the Bank of Ireland by that measure,
reminded him that the Irish bankers could issue notes to
the extent of their bullion; but, as a practical man, he
urged upon the Right Hon. Baronet that the profits of
the bankers upon circulation might very well be more than
balanced by the loss upon the locked-up bullion. It must
be borne in mind that banking profits arose in a great
degree from trading upon one's credit, in contradistinc-
tion to one's capital.—(Great laughter.) Before this
patchwork legislation came into operation the rule with
bankers in Ireland bad been simply this—the entire
liabilities of the particular bank to the public were cal-
culated, and then, in times of ease, the minimum amount
of gold and silver retained to meet those liabilities was
one-third, or 6s. Bd. in the pound. This rule had been
found to work well ; and it had yet to be proved to him
that the Act of 1844 for England and 1845 for Ireland
had effected any improvement in the matter. The
Government letter of October, about which there were
such contending opinions, he regarded with entire ap-
probation. He trusted now to find in the Right Hon.
Baronet a strenuous advocate for the emancipation of
money. Where there was free trade in everything else
there could surely be no valid resistance to free trade in
money. As an Irishman, he would more emphatically
call upon the Legislature to release banking in Ireland
from the oppressive restrictions to which it had been
subjected, restrictions which, in their consequences, im-
posed upon many anindustrious, struggling farmer or
trader the payment of full 15 per cent. interest for
advances. The position of the Irish farmer was singu-
larly hard. At a time when the banks of Scotland,
having to provide for a population under 2} millions,
had banking means, in capital and deposits, of not less
than 37 millions, the banks in Ireland had but 10
millions for a population exceeding 8 millions. The
Right Hon. Baronet, the Chancellor of the Exchequer,
had attributed the late panic mainly to two causes—
to the money expended in procuring foreign
corn, amounting iu 14 months to 33 millions sterling;
and to the amount of capital invested in railways,
which he stated at 50 millions sterling. The latter
investment might be regarded as seed which, at some
future date, sooner or later, would produce ample fruit,
He was not very wrong in saying that of 33,000,000/. paid
by this country for corn, at least one half was expended
for Ireland. He trusted the Right Hon. Baronet, now
that his Bill had been proved to be fallacious, would abro-
gate it altogether. The Irish population, previous to the
autumn of 1845, lived entirely upon potatoes, while they
sent their corn their butter, their pork, and other agri-
cultural produce, to this country, to the extent of
15,000,000/. annually. For this large export they took
no gold, but they took English manufactures--cotton,
silks, hardware, Staffordshire ware, &c. In
fact, almost every manufactured article used in Ireland
was imported from England. The destruction of the
potato crop put an end to this export of English manu-
factures, and there was a double drain, for we were
obliged to send 15,000,0001. or 16,000. ,0001. worth of
corn to Ireland to feed the people, while we ceased to
receive the 15,000,000/. or 16,000,0001. of Irish produce
in exchange for so much of our manufactures. He be-
lieved that this had very much to do with the commer-
cial difficulty in this country.—(Hear, hear.) He hoped
this statement would have the effect of directing the
attention of the House to the necessity that existed for
better government in Ireland, in order that her re-
sources might be developed. Ireland was undoubtedly
the best market England possessed ; no country con-
sumed so extensively and so advantageously her menu-
factures.

Sir R. PEEL—Mr. Speaker, I trust, Sir, that any
observation I may have to make on the subject now
under the consideration of the House will be made in
that temper and dispassionate spirit which characterised
the speeches of the Noble Lord and his Right Hon.
Friend.—(Hear, hear.) I cannot but express, in com-
mon with the House generally, my pleasure at the re-
turn to this House of my Right Hon. Friend the Member
for Stamford (Mr. Herries), and my congratulations that
by that return the House will have the benefit, in
matters of this kind, of his great intelligence and great
practical ability.—(Cheers) Before faddress myself
to the subject—the immediate subject—of debate, I wish
to clear the way by a reference to the charge that was
made against me last night by the Hon. Gentleman the
Hon. Member for Stafford (Mr. Urquhart), and which
has been repeated to-night by another Hon. Gentleman
—certainly in the most courteous manner in which it is
possible to prefer an accusation. The charge made by
both those Hon. Gentlemen is this, that in bringing
forward the Act of 1844, as the organ of the Govern-
ment, I gave a public assurance that the banking
establishments of Ireland and Scotland should not
be affected, but that the Bill of 1844 should refer exclu-
sively to this part of the United Kingdom; and the
Hon. Gentleman the Member for Stafford, went so far as
to say that an insidious advantage had been taken of
Scotland—that the suspicion and jealousy of the people
of Scotland, which had been peculiarly excited on the
subject of banking, had been allayed by that assurance;
and in figurative language, the Hon. Gentleman added,
that the banking system of Scotland had received from
me a stab in the back. The Hon. Gentleman supported
that charge by a reference to the first clause of the
Act of 1844, and having assorted that I had publicly
directed in 1844 that the banking system of Scotland was
not to be in the slightest degree affected by that Act, he
asked what would the House think of the Right Hon.
Gentleman, who, having given that assurance, inserted
in the Act surreptitiously that first clause which pro-
vides that no bank in any part of the United Kingdom
which up to May, 1844, did not issue notes, should not
be allowed to issue them for the future, snit the Hon.
Gentleman went on to quote from my speech the pas-
sage in which I said "Of Ireland and Scotland I
have made no mention proposing to reserve for sepa-
rate legislation the state of the currency in each of those
countries." From that statement, supported on such
authority, the House might naturally have inferred that
the accusation was well founded, but what will the
House think of the Hon. Gentleman who, having read
that passage, omitted to read the next, which was to the
following effect? " The prohibition against the estab-
lishment of new banks of issue will extend both to Scot-
land and Ireland—(Cheers)—both of which will be in-
cluded in those enactments, which will require the per-
formance for the future of certain conditions prelimi-
nary to the forming of new joint-stock banks."—(Hear,
hear.) Could there be, on the part of a Minister bring-
ing forward a measure, a more distinct and formal
avowal, that, though the currency under 51. was to be
reserved in Scotland and in Ireland for separate legisla-
tion, yet that the Act, as applied to this country in re-
spect to the prohibition of the new banks of issue, should
extend to all parts of the United Kingdom?—(Cheers')
But, moreover, not only was that statement given by
a speech, but it being necessary to found the
Bill on preliminary resolutions, to which the con-
sent of the House must be given, in the eighth reso-
resolution, which I moved on the night when I brought
forward the question, and which resolution was unani-
mously assented to by the House not on the night on
which it was offered, but after the interval of some days
after it had been printed and communicated to the
Scotch and Irish bankers, and published in every news-
to
this aper ineffect:—
the United Kingdom;
t
the eight resolution was
‘. That it is expedient to prohibit by law the issue of pro-
missory notes, payable to bearer on demand by any bank
not issuing such notes on the 6th of May, 1844, or by any
bank thereafter to be established in any part of the United
Kingdom."
Now, I think I shall have satisfied the House that if a
stab were given to the banking system of Scotland, at
any rate it was not given in the dark.—(Cheers.) And
the Hon. Gentleman says he undertook, in a letter
written, in 1844, to enlighten the people of Scotland on
the subject of the Bill of that year, to warn them of what
must happen in the year 1845. I shall reply be his
attack by giving him this friendly advice; that when
next he addresses the people of Scotland on the subject
of a Bill pending in this House, he first takes the pre-
caution of reading both the resolution and the Bill.—
(Hear.) Her 'Majesty's Government have addressed
themselves to the particular question of whether or no
a Committee shall be appointed to consider the causes
of the recent commercial distress, including the laws
which regulate banking. Sir, when a Government ap-
peals to this House for the exercise of those powers of
inquiry which peculiarly belong to it, I conceive that
whatever opinions I, as an individual, may form as to
the probable results of inquiry, still it is impossible to
refuse that appeal.— (Hear, hear.) The functions of
inquiry are our constitutional functions, and if the Execu-
tive Government be of opinion that there are not grounds
of legislation without inquiry, then, I say, it is impos-
sible to refuse their appeal. An amendment has been
moved on the motion of the Noble Lord, restricting in-
quiry specifically to banking. I have experience enough
to know that, even if the amendment were carried, it
would be impossible to exclude other branches of
inquiry. When the Committee of 1836 was ap-
pointed, specifically to inquire into the laws re-
gulating banks of issue, that Conamit
in
te sat
during the whole of 1836, was re-appointed
1837, and did not furnish a report until August,
1838. When I state this, I think it will be admitted
that it serves no practical object to limit the rubjects
for inquiry.—(Hear, hear.) I, therefore, shall vote for
the proposal of the Government, because I think that
if there is to be an inquiry, none of the causes of the
present commercial distress ought to be excluded from
such inquiry.—(Hear, hear.) I feel it my duty to state
to the House that I mean to devolve on no other party,
on whom it does not justly fall, the responsibility which
attaches to me for the part I have taken either with
respect to the restoration of the standard in 1819, or
the attempt to mitigate the evils which accompanied our
system of bankinah and currency previous to 1844. I
feel that I did no Inore than my duty in 1819 and in
1844 in calling the attention of the House to those
points. Therefore, I do not wish to devolve on others
tigiehater, st
b degreerea. But repenti
my responsibility, because in reverting to those mea-
sures I do not in the s
the course I then took._
attempt to the
to
make characot one
must submit it to this House whether it is
quite decorous, quite respectable
of a deliberative assembly, to
individual Member responsible for any particular course
hear.) Many Members of this
of legislation.—(Hear,
House are not in their individual capacities responsible
for the Bill of 1844, but in their corporate capacity they
deliberate on all public
questions' and nothing could tend
more to depreciate the character of the Houses of Com•
involving the most mons and Lords than to countenance. the impression
that, in matters of this kind,
deliberately .
adopted by the
im-
portant interests, being in themselves of the most com-
plicated nature, a measure
Way of a mu,-
. Lords and Commons, the whole responst