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

and by the Right Hon. Baronet (Sir R. Peel). No
banking Act could, in his opinion, prevent such a result
following from such a course. He saw no advantage
which could result from interference, but believed the
evil must be left to cure itself. He was favourable to
the imposition of some check on the Bauk, whose in-
terest was to keep money plentiful, and especially upon
the issue ef country bank notes.
Mr. DRUMMOND said that the Right lion. Baronet
the Member for Tamworth must be a wonderful man,
and his Bill of 1844 be a most wonderful Bill, if either
could accomplish one-twentieth part of that which had
been attributed to them.—(llear, and a laugh.) lie
(Mr. Drummond) was not one of those who thought the
repeal of the corn-laws had anything whatever to do
with the position in which this country was now placed ;
but, with regard to railroads, he confessed that he
thought both the late and the present Government
had been much to blame when, having been warned
by their own respective boards, they ought
to have taken some decisive measure to check the mania
which some time since raged. Railroads had served to
raise the interest on mortgages, and he feared the con-
sequences would not end until they had witnessed a great
sacrifice of pirate property. The misfortune, too, was,
that they could not atop where they were—the railroads
which had been commenced must be finished, and more
money would be required. With respect to the Bill of
1844, ho had expected that it was to be the precursor to
to the putting an end to the connexion between the Go-
vernment and the Bank of England; but it was quite
obvious, from what had recently transpired, that the
mode of conducting the business of the Bank had beeu
completely changed. As to over-trading, it was mani-
fest that it had existed to an incredible extent. In an-
cient times, when argosies went out from Venice or Ge-
noa, they carried goods and bullion to exchange for
Produce, and there was in the world no such thing as
trading by paper until this nation had chosen in its wis-
dom to get rid of its own race of kings, and to bring
over a Dutchman.—(Hear, and laughter.) Hence had
arisen a system of raising a false credit. A most astute
and cautious mercantile man had stated, " When people
talked of solid capital without credit, they had no know-
lodge of the commerce of this country. A man with a
capital of 10,000/. may legitimately be doing business
to three times that amount." So that it was clear
the system ott which the trade of this country had
been carried on was perfectly rotten, for it was
quite clear to him that a trade conducted on a credit
to the extent of three times the solid substance a man
possessed could not stand. How was it that the adver-
sity had so much increased in its depth and intensity ?
Because they had changed the whole relative condition
of society. In former times the land was considered
everything, and a distinction had been established by
common law, because it was common sense, between that
which was real and that which was personal ; but of
late years the practice had been to cry down land and
exalt cotton ; they had put down the landlords and ex-
alted the cotton lords—(A laugh)—they had cheapened
goods, but they had also taken from their customers the
means of buying them.—(Hear, hear.) They had list-
ened to a manufacturer of consummate eloquence, pru-
dence, and judgment, who had said that the towns
should rule the country. The towns did so, and much
good might it do them.—(Hear, and a laugh.) The
system had enabled them to raise colossal fortunes
amidst a starving population.—(Hear, hear.) Under it
the operatives were lording it over them at one time,
and burning their mills and sacking their palaces at
another. It had been said that free-trade principles
Pervaded the land, and London was pointed to as having,
In maintenance of those principles, returned as its repre-
sentative the Noble Lord at the head of the Treasury.
That was true; but the constituency had taken off some
of the grace of that charm by coupling the Noble Lord
With a Jew.—(Laughter.) But on the other hand, the
constituency, par excellence the most enlightened modern
Athens, had given a reverse judgment, for they bad
found • out that the modern Demosthenes must not come
bete, and they had sent in his stead a gentleman who was
to teach the House how to behave itself.—(Laughter.)
Mr. MACGREGOR said that he would have abstained
from obtruding himself on the attention of the House,
Were it not that, as the representative of a great coin-
refrOial constituency, he felt called upon, when the
subject of commercial distress was under consideration,
„t° address a few observations to the House. His Right
Lon. Friend the Chancellor of the Exchequer had stated
with great ability the causes of the commercial distress
Which had visited the country, and although he agreed
with his Right Hon. Friend in attributing the distress to
those causes, he differed from him as to the degree to
which some of the causes had operated. He conceived
that the deficient harvest and the failure of the potato
crop was the principal cause of the distress which pre-
vailed. With respect to railways, although Parliament
had passed a much greater number of Railway Bills than
he thought it was wise to do, he did not attribute much
of the distress to investments in railways, for during
the period of unparalleled scarcity which had recently
prevailed, be believed that the employment afforded by
railways had, to a great extent, relieved the distress of
the country. Nor did he attribute tke distress to the
Bank Charter Act of 1844, although he thought that
Act was defective, and believed that it would be pro-
ductive of so much inconvenience that Parliament would
be obliged to remedy its defects. It was his opinion
that we should never hare a currency not con-
vertible into gold ; but, at the same time, he
conceived that the restrictions imposed by the Bank
Charter Act of 1444 constituted, particularly as regarded
Scotland, a grievance, and must necessarily cause much
inconvenience, and some commercial distress. It was a
matter of regret to him that his Right Hon. Friend the
Chancellor of the Exchequer referred to the Scotch
banking system, or rather the joint-stock banks of that
country, in terms which were calculated to create an
erroneous impression respecting those establishments.
He believed that to the system of Scotch banking,
coupled with the economy and industry of the people,
bthe general prosperity of that country and the great im-rovements made in manufactures and agriculture, must
e attributed. The best test of taelpneruitsheorf
othieScotch
failures banks was to be found in the sm
which had taken place, and also in thetafact that of the
establishments which had failed nearly all had paid in full their obligations to the public. He e leave to
read a passage from Mr. M'Culloch's " b
aggedSttistics of the
British Empire," on the subject of Scotch banks :
" Owing partly to the superior stability derived from
their extensive proprietary, but more perhaps to the
less risk attending the business f banking
Scotland,o rareamongg
bankruptcies have been veroyni
Scotch hanks. They have long enjoyed the unli-
mited confidence of the public, and from their
receiving small sums (101.) as deposits and paying in-
terest upon them at about 1 per cent. below the market
rate, they have contributed much to diffuse a spirit of
economy, and to increase accumulation. One-pound
notes were issued by the Bank of Scotland in 1704, and
their issue has been thence continued to the present day;
the Act prohibiting their circulation in England not
hiving been extended to Scotland. For many years
Past very little gold coin has been seen in Scotland.
The Scotch banks make their advances partly by dis-
count of bills and partly by what are called cash crc.
dits The latter is a very convenient method of issue.
A cash account is a credit given by the bank to an in-
dividual drawing for it, wholly or partially, as he pleases,
replacing it in the same way—being charged interest
only on the portion he withdraws." A little pamphlet,
written in 1734 by Patrick Lindsay, then Lord Provost
of Edinburgh, gives an account of the condition of Scot-
land previously to the establishment of banks in that
Country. Mr. Lindsay says:—" We were then stran-
gers to trade. War was our trade and military discipline
our profession and sole study. When we had peace
at home our gentlemen and persona of quality went
abroad in quest of foreign adventures, and carried
with them numbers of the common people as soldiers
and troops for foreign service. Many of them were en-
gaged on both sides in these wars in the low countries."
No country had ever developed its resources so exten-
sively and so advantageously as Scotland bad since the
Royal Bank was established in 1727. No country of
equal population had made greater improvements in agri-
culture and manufactures. It would be unjust in refer-
ring to the progress which Scotland had made, to with-
hold all allusion to the excellence which she has attained
in naval architecture, particularly in the department of
steam-vessels. The admirable steamers
vvhieh run be-
tween Liverpool and Boston and New York were all
built in the Clyde, and it was not going too far to assert,
that better vessels than those
constructed in Scotland,
whether for the-purposes of war or commerce, never were
launched from the dockyards of this country. All this
had taken place under the Scotch system of banking ;
and therefore he trusted that no attempt would be
made
to interfere, rashly with a system which had d d
pro uce
such beneficial results. Let it be understood that he did
not wish to; see a system of' currency in Scotland which
should not be convertible into gold ; all he maintained
was, that the Scotch banks were adapted to the wants
of the country in which they were estalalishfed, andwaanna-
offered every purpose which was required
_o them.
Mr. SANDARS said it had been stated that the com-
mercial distress in whioh the country involved was
attributable to railways, but ho e'clredl
from that proposition. lie should like to knyow whetherented
the construction of railways had sent gold out of the
country. Had it caused the exchanges to be against us?
Had it caused the floating capital of the country to be
converted to fixed capital? Certainly not.—(Hear,
hear.) It had been said that money expended on the
construction of railways—that railway capital, was all
fixed capital. That was not so. If a ,man, for in-
stance, invested 50,0001. in railways it undoubtedly
became fixed, in a certain souse; but what became of the
lawyers' bills, the sums expended in iron, wages, ma-
terials, &c.? Provisions were purchased by the la-
bourers employed, by the iron founders, artisans, &c.
The
sums paid in that way were therefore no drain
_uPon the country—they remained in it, and were fion
In capital. As to the Bank Charter he thought it
Impossible, even in times of prosperity, that
he
it could be operative; in times of pressure,
need hardly express his opinion that the
currency of the country was inadequate for its
use. It did not stand to reason, when corn was selling
M 51. and 61. a quarter last year, that the currency should
be the same as when corn was down to 50s. a quarter.
Could it be said that the distress had not been deeply,
although perhaps indirectly, affected by the operation of
the Bank Charter ? What a state the mercantile com-
munity must have been in when they were obliged to
undertake the payment of eight per cent. for accommo-
dation ! Now he would tell the Right Hon. Baronet that
the trade of the country could not have borne such an
impost. If the Committee of Inquiry which the Right
Hon. Baronet had thought it necessary to ask for were
appointed, the result would be many, perhaps different
remedies, would be proposed. However, ho (Mr. San •
days) did not object to the inquiry, but he wished to sug-
gest that some temporary measure should be passed,in
the interim, to suspend the operation of the Bank
Charter, Charter, and remove suspense and uncertainty amongst
the mercantile interests. All the mischief that had been
•
done was for the sake of convertibility! Had they ac-
complished their designs ? No such thing ! Re main-