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

that conclusion, he should have thought himself un-
worthy of the place he held if he had hesitated,
owing to any former opinions of his own, to do
what he thought his duty.—(Hear, hear.) Not only did
he think the exercise of this discretion was required by
Other circumstances, but it was evident that notes had
been hoarded to a great ext.- nt, and a circulation which,
under other circumstances, would have been adequate
to its purposes, and when the pressure or panic was
removed—(Hear)—would have proved abundant for its
objects, was prevented by this hoarding from perform-
ing its functions. As a proof of this, tens of thousands
of notes which had been hoarded in the boxes had been
brought into circulation ; and when the House remem-
bered that under 400,0001. was the amount of notes
taken out of the Bank of England after the 25th of
October, it furnished a proof that there was an adequate
amount of circulation in the hands of the public, but
that from tear and alarm it had been hoarded up, and
thereby rendered incapable of being brought into use.
—(Hear, hear.) His Noble Friend (Lord J. Russell)
and he had seen parties of all descriptions, and the uni-
versal application which had been made to his Noble
Friend and himself was to this effect—they said " We
do not want notes—what we desire is that you should
give us confidence ; it is only for you to say you will
stand by us, and nothing in the world else will give us
confidence. We do not want notes, but only to know
where we can get them."—(Hear.) They added, "Charge
any rate of interest you please, ask what you like."—
(" No, no," from Mr. Spooner.) The Hon. Gentleman
sail " No, no," but he (the Chancellor of the Exchequer)
must be permitted to know what had been stated to him,
and he would say distinctly such was the constant tenor
of the applications which had been made. He repeated
that they said " Charge ten or twelve per cent. interest
if you like, we do not mean to take notes, but let us
know that at some rate of interest we can get them, and
that will amply suffice." An Hon. Member had asked
the other day what had been the change of circumstances
which had induced the Government to act on Saturday
in a manner different from the course they had declined
but a short time before. In reply to that question, he
could now state that the accounts received on the Thurs
day, Friday, and Saturday, had been of a totally different
description from those which had preceded them, and
they then had believed that according to the passage he
had already quoted from Mr. Huskisson, they had
come to this—that a stagnant cirettlation wanted
life—it every day became more embarrassed, whilst
these new calamities contributed to increase the
general apprehension of the country. It was
on that Saturday, and not before that, he and
his Noble Friend thought it right and proper to
act, because then they were in possession of information
which afforded them a justification for the violation of
the statute.—(Hear, hear.) Having determined to act
in the emergency, of course the next question which
had arisen was the mode in which it should be done. He
and his Noble Friend had long before considered the
matter, and had made up their minds as to the best
mode of action in case action should become necessary,
and he should have been glad if there had been any
mode of action that would have been effectual, other
than that which they had taken. It had been suggested
that they ought to have advanced Exchequer-bills on
goods and produce, but he was not quite clear whether
at the time goods and produce were just as saleable as
Exchequer-bills—(Hear, hear)—and, therefore, that
mode of action would have failed. Others invited an
advance of Consols, and a third suggestion was, that the
issue of some description of a Government note would
have answered the purpose. Now, in his judgment, it
would clearly have been absurd and foolish to act at
all, unless in a way which they were pretty sure would
be effectual; and therefore having determined to act, they
had acted in that manner which, approved by practised
and practical authorities, they believed would be certain
to ensure its purpose.—(llear, hear.) He must also
state that to nine-tenths of the parties who had applied
to the Government to sanction the issue of notes in this
way, it was stated it would be essentially necessary that
some limit should be put upon it, and the first sugges-
tion was that a limited amount of notes should be issued
with an increasing rate of interest. To this plan there
was, he thought, a decided and fatal objection—namely,
there would have been a scramble for the first and second
million, and that as soon as that was over the same state
of things would have occurred again. But if they were
not to limit the amount of notes, the other, and he
thought the wiser, suggestion was, that a limit should be
put on the rate of interest. That course had been
adopted, and in the recommendation made to the Bank
of England was a high rate of interest, because if a
high rate of interest had not been adopted they would
have done that which would have been most mischievous
—namely, to check the importation of capital and
bullion into this country.—(Cries of " Hear, hear.")
At the same time, he (the Chancellor of the
Exchequer) had been as anxious as anybody not to
impose a rate of interest higher than was necessary, and
therefore instead of adopting a minimum rate of 10 per
cent., they had adopted 8 per cent., the lowest amount
suggested to the Government by the applicants being 7
per cent. The rate of 7 per cent. clearly would not
have answered the object which was in view, for when
the rate had been fixed by the Bank of England on the
direction of the Government at 8 per cent., what was
the rate of interest out of doors ? At that time the
rate of interest at Hamburgh was 7 per cent. He held
in his Arland a letter from the Consul at Hamburgh, dated
the 2id of October, which stated that then the discounts
there were at the rate of 6 and 7 per cent, per annum,
and it was not less in any part of Europe. At New
Y.,r1.. on the 30th of October, before the intelligence
of what had happened here had reached that country,
money was in active demand there ist the rate of 7 per
cent., and in some cases higher rates had been paid.
Again, though the Bank of England had discounted
a small amount of bills at 5f per cent., yet at the
time the letter of his Noble Friend and himself had
been addressed to the Bank, the average rate charged
by the Bank was 7i per cent., so that the real
extent to which that letter raised the rate was not more
than half per cent. upon the rate then charged at the
Bank of England, and one per cent, upon the rates on
the continent and in America. It was desirable that
capital and bullion should be attracted to this country,
and it was only by the attraction of a high rate of inte-
rest that this desideratum could be accomplished.—
(Hear, hear.) He conceived, therefore, that the mode
in which the Government had acted was the one best
calculated to attain the end they hail in view—namely,
the influx of capital and the importation of bullion, and
thereby the removal of the panic. But it had been said
that the Government ought to have left it to the Bank of
England to fix the rate of interest; but he thought it
was much fairer, both to the public and to the Bank,
that they (the Government) should take that responsibi-
lity from which neither he nor his Noble Friend were
disposed to shrink. It had also been remarked that the
Government ought to have made the increased rate to
apply only to such portions of the advances as were
made by the Bank in consequence of the letter.
He, however, contended that it would have been
utterly impossible for the Bank to have acted in a dif-
ferent spirit after the receipt of that letter, and to have
drawn a distinction between the advances made in con-
sequence of the Government letter and those which
without the letter would have been made. Again an
exception had been taken to that paragraph in the letter
which referred to the extra profit being carried to the
account of the public, but that was inserted far the pur-
pose of protecting the Bank, in conformity with the 6th
clause of the Act of 1844—a clause inserted at the in-
stance of the Bank itself. He thought that the purpose
for which the letter had been issued—not to create ca-
pital—snot to support credit, which had no security to
offer, but to release the circulation which had been closed
by fear and alarm, had been answered, and he believed
that those engaged in the commerce and trade of the
country would admit that the effect intended had been
completely realised.—(Hear, hear.) He did not mean
to say that parties may not have been disappointed that
they were not released from the position in which they
had placed themselves, or that others might not have
expected that something would have been done that
would enable them to put money in their pockets and to
carry on concerns which they had not the means to sup-
port, but he believed that the great bulk of the commer-
cial world, by means of the confidence created by the
letter in question, had been enabled to use those means
which, when alarm had been allayed, had been found to
be perfectly adequate. No doubt the pressure had re•
mained, because it had been caused by the circumstan-
ces to which he had alluded at the commencement of
his observations. No doubt failures had taken place,
and might still take place (for, after the assurances
given in the summer of the sound state of trade had been
so signally falsified by results, he could not say he
had any great confidence in any particular house), yet
the Government had succeeded in preventing a general
failure, which at once would have been fatal to the
country. lie was happy to be enabled to state that orders
from abroad were coming in, and, from a circular sent
to him by an eminent cotton broker in Liverpool, he
learned that a decided improvement had taken place in
the demand for cotton; that the state of the manufac-
turing districts was improved; that an increased number
of mills were now working full time; that others would
more or less follow the example; that the number of
operatives employed had increased, and there was,
consequently, good reason to hope that distress in the
approaching winter would be averted. This circular was
dated the 26th November, and from it it was most satis-
factory to find that exports to the United States were
considerably on the increase, and he observed that to-
day a considerable amount of bullion had been returned
from the United States, and he hoped that goods would
be taken in exchange. He trusted that this showed a state
of things very different from that state of shame, bank-
ruptcy, and disgrace which had been:pictured to the House
a few evenings ago. He believed that the trader was now
enabled to meet the demands upon him, for an enor-
mous amount of bills had been punctually paid in the
course of the last month, and he believed that the-
general trade of the country was at the present moment
healthy and sound, and that they might hope it would
steadily and slowly, but surely improve, and survive,
and that supremacy of British commerce would again be
, maintained.—(Hear.) His belief was that an earlier in-
terference on the part of the Government would not
have attained the end they wanted. It would be con-
ceded to the Government that it was no light matter for
them to overstep the law which had been sanctioned by
an overwhelming majority is Parliament—that it was
not a light matter that they should be firmly convinced
of the necessity of the step, and they should have good
reason to believe that the representations made to them
were based upon a solid foundation. In April last a
panic had prevailed, and the Government had then been
told that from 2,000,0001. to 3,000,000/. must be sent to
Liverpool in order to save the commerce of that town.
However, no advances had beeu made, no failures had
then taken place, the alarm passed off, and it was clear
that if the Government had then yielded, they would have
s hided without reason. The main cause of the pressure
was the want of capital, which the Government could not
undertake to supply; but when they had been convinced 1
that the pressure was beyond all human calculation, I
they had felt themselves justified in acting; and he ki