The Sun.
London, England, 1848-02-18 00:00:00

FRIDAY

that incubus which still pressed upon the springs of in-
dustry, and which damaged public confidence and public
credit. It was their duty to at least endeavour to restore
a better order of things—a system ef management under
which the commercial activity and enterprise of this
country might be once more edvantageously exercised.
—(Hear.) It was not upon this country alone that this
pressure had fallen—it had fallen upon Scotland likewise,
in which country great depression existed owing to our
present monetary regulations. He asked them at pre-
sent, for the sake of the commerce of the country—for
the sake of the industry of the country—for the sake of
the manufacturing districts, where the labouring classes
were now labouring under great distress—for the sake
of the moneyed interests themselves, not of those who
had accumulated large fortunes under the operation of
the present Act—(llear, hear) but for the sake of
the general and industrious monetary interests—he
entreated the House to agree to the proposition he now
made to them, which would replace those interests in the
state of comparative safety—he believed he might say
complete safety—which they enjoyed before the passing
of this Act. The measure he proposed was a purely reme-
dial one, and if Parliament in its wisdom should at any
future time determine to adopt a now system in place of
that which was at present existing, there was nothing
in his motion which (meld hind any one either to one
opinion or another. Ile hardly thought it right to tres-
pass iut ther upon the patience of the House with regard
to this branch of the motion. Ile was aware he had
treated it very imperfectly, but it had been his wish to
confine himself throughout to simple argument. On the
first part of his motion, however, it might still be neees-
sary to offer a few observations. He was aware that to
this part of his motion it would be objected by many
that they were not satisfied with the conduct of lee.
Majesty's Government—that they did not wish to ex-
press any opinion as to the course which Government
took in October ltst; but that if they must do so,
they thought Government ought to have interfered
earlier, and that if they had done so much mis-
chief would have been prevented. Now, he was
undoubtedly of the opinion that if the Act of 1545 had
been set aside at an earlier period, it would have been
better for the country; but then he looked to the re-
sponsibility of her Majesty's Government—he was
willing to put himself in their position, and consider the
monstrous responsibility they incurred by their uncon-
stitutional act of suspending the Act, which was a step
to be taken only at the last extremity—(Hear.) Then
some persons might object that there was a Committee
already sitting upon this subject, and that the Ileuse
ought to wait for their report. Now, if any Hon. Gen-
tleman thought the Committee which was now sitting
was likely to propose any measure that would relieve the
present distress—(Hear, hear, and a laugh)—of course
he could not expect his rote. Then it might also be
objected that there was no cause for apprehension, for
her Majesty's Government bad already, when the case
was urgent, taken a step to relieve commercial distress,
and that if the like circumstances were to occur, there
could be no doubt they would do so again. To this he
would answer, that it was not fair to throw the whole
responsibility upon Ministers, and that if Ministers
interfered at all, it would only be, as on the last occa-
sion, at the last extremity. Upon the whole, there-
fore, he submitted his motion with confidence to the
House.—(Cheers.)
Mr. HASTIE (Paisley) rose with no ordinary satis-
faction to second the motion, and ho did so with this
strong conviction on his mind, that he had never before
heard a more able, clear, and pratical explanation of the
question than that to which the House had just listened.
It was, he thought, very ,clear, that if this Act were per-
' witted to remain, whenever there was a short harvest,
or a foreign loan, or a disposition on the part of the
people generally to hoard money, there would be distress
in the country. No rise in the rate of interest would
prevent a drain of bullion, when that drain was caused
by the purchase of foreign corn or the other causes he
had mentioned. If the Act of 1844 were of that utility
which some parties would have them believe, there was
still no occasion for its remaining, because it had not
placed them in any better condition than they were in
before. In 1838 there was the sum of 10,000,0001. iu
the Bank. The pressure was then not so great as in
1846, because there was no failure in the potato crop, nor
was the bad harvest which had occurred in England ge-
neral over the continent; but if there had been only
10,000,000/. in the Bank in 1847, as there was in 1838,
he would ask what their position would have been in that
case? The banking department must have stopped pay-
ment, and he need hardly say that if one department of
the Bank stopped, whatever might have been the amount
of bullion in another department, it would have been
said at once by the general public that the Bank of
England had failed. He would further observe that pre-
vious to 1844 the Bank of England had never allowed
discounts below 4 per centS; but on the passing of the
Bill they were told they would have nothing to do but
to attend to their business as bankers; and believing
that, and having a large stock of notes in hand, they
naturally turned them to the best account they could,
and thus reduced the rate of discount to 2} per cent.
The consequence was that bills for short time went to
the Bank, while bills for six, nine, and ten months were
eagerly sought after by the brokers and bai,kers, with
a view to discounts. This it was which had given such '
a stimulus to credit as, in a great measure, to be the
cause of the undue speculation that succeeded. Such
was not the effect v, hich any measure a this
House ouelit to produce, and yet there could
be no doubt that the (Got of :lie all of
1844 was, when money was plentiful, to render
it more abundant, and when it was scarce to tel'l to the
scarcity ; so that in its twofold operation it was dan-
gerous to the country. It was an extraordinary fact,
which the House would do well to bear in mind, that a
rise of 1 per cent. on the bills afloat, which were calcu-
lated at au average rate of 600,000,000/. a year, was a
charge of 20,000/. per month upon the commercial in-
terest. Now the interest upon those Wile had occasion-
ally been raised as high as 3 or 4 per cent. ; so that the
loss must have been enormous. He thought the greatest
condemnation of the Bill was to be found in the speech
of the Right Hon. the Chancellor of the Exchequer
during the former discussion, when he stated that, not-
withstanding the many suggestions he had received from
so many deputations which ho then received, ho and his
colleagues found that nothing would do but a suspension
of the Act, and that as soon as the Act was suspended it
had the magical effect of restoring confidence, and caus-
ing even more bullion to enter the Bank than was re-
moved out of it.—(llear, hear.) lie cordially seconded
the motion.
The CHANCELLOR of the EXCHEQUER said
the Right lion. Gentleman had truly said, at the outset
of his remarks, that though ho would make one speech
he would submit two motions. He thought no person
who read the resolutions submitted by the Right Hon.
Gentleman could entertain a doubt of that. Tho one
motion
expressed approbation of the step which Go-
vernment had taken in October last; the other went to
pledge the House to an opinion that the Act of 1844
and 1845 ought to be permanently suspended. There
could be no doubt that he might be right as to the sus-
pension of the Act in October, and yet wrong as to the
propriety of suspending it now. On the other hand,
Gentlemen may be disposed to blame Government for
suspending in October, and yet be willing to suspend
now. The Right Hon. Gentleman said the Govern-
ment accorded a discussion on the last occasion. He
(the Chancellor of the Exchequer) did not know what
the Right Hon. Gentleman meant by that statement, for
he had certainly gone, he feared, at greater length than
was agreeable to the House, into the whole ques-
tion—the discussion lasted for three nights. Twenty-
two Hon. Gentlemen gave their opinions upon it, and
simply because no other persons appeared disposed to
offer their opinions the debate was closed.—(Cries of
44 No, no, the debate was adjourned.") That was be-
cause nobody else seemed willing to address the House.
With regard to the resolution expressing approbation
of the conduct of Government, of course, he had nothing
to say. His own opinion was that he had done right,
and if the Homo chose now to express approbation, the
Government would receive it with satisfaction ; but as
he could not approve of the second part of the motion,
and thought it he had no objection if the Right
Hon. Gentleman would withdraw the second part, that
he should withdraw the first also—(Laughter)—and
then the whole motion would be as if it had not been.
The Right Hon. Gentleman Drop ;std in his second
motion to suspend the Acts of 1844 and 1845—that is
to say, to suspend the laws by which the issues of
hank notes throughout the United Kingdom were now
regulated. Whether that suspension was to be per-
manent or temporary, the Riche Honourable Gen-
tleman had left them in some little doubt. It did not
seem to him that the slightest ease had been made out
for a temporary suwension of those laws. The Right
Honourable Gentleman stated, and very truly, that the
alarm which existed in October last was caused by the
low state of the reserve fund in the II ink. He concurred
with a great deal that fell from the Right Honourable
Gentleman, that in the autumn the alarm which existed
originated not in the conduct of the Bank, or through
the operation of the Act of 1844, but in causes which
were altogether unconnected with them. lie believed
there could be little doubt that the alarm was caused by
the want of accommodation in the Bank, by which they
were usually enabled to discount commercial bills. In
the course of the autumn a number of hillsbrokers
stopped or suspended payment, and the consequence
was a demand for accommodation from the Bank of
England to an extent that was quite unexampled.
The discounts applied for at the Bank last year were
double the amount of what was asked in the Oc-
tober preceding.—(Hear, hear.) They discounted no
less than from 6,000,0001. to 7,000,000/. from the
increased demand for accommodation on the part of the
public. In so doing they reduced the amount of their
reserve to the point that was stated by the Right Hon.
Gentleman, and there arose an apprehension that the
Bank could afford that accommodation no longer, and
that was the cause of the panic. No doubt his opinion
was that this was originally owing to the low rate of
interest that had previously existed, and he was equally
clear that the real effect of his letter in October was to
place the Bank in the same position as if it had more
money in reserve. Parties were restored to the belief
that they could get accommodation with the Bank if
they wanted it, which immediately allayed the panic,
ta!ten out, as the Right.
the whole amount ,iithequently
Hon. Gentleman lad stated, being under 400,000:.___
(Hear, hear.) hear.) What was the state wi I,the Hulk re-
serve at the present moment ? According to the st to
ment in the Gazette of last Friday, there were then of
notes and coin in the Bank a sum of 8,185,000/ ; and he
had seen, just before he came down to the House, the
return which the Bank had sent to the Treasury, and
which would appear in to-morrow's Gazette, and he
found the state of the reserved fund to be-, of Lobes and
coin, the sum of 0.686,0001-
Mr. PATTISON—And what is it now?
The CHANCELLOie of the EXCHEQUER be-
lieved it was increasing, but be thought it better to refer
to statements which were or would be accessible to all
the Members. There could not, therefore, now be the
slightest apprehension that the Bank was not in a posi-
tion to afford assistance. lie might alto state that,