The Sun.
London, England, 1848-08-23 00:00:00

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- - before the Committee of that House should lay facts before
the House upon which they might arrive at a conclusion
On this subject, and he certainly thought that when the
proper time should come for taking such decision, evidence
of a valuable nature would be found to have been given. Ile
had been glad, he must say, to hear some of the opinions
which had been delivered the Right Hon. Gentleman. He
was not, quite prepared, at'the same time, to accede to the
accuracy of the Right Hon. Gentleman's account of all the
evidence which he had hi might under their notice that even-
ing, and particularly of that which had been given before the
Committee by the Governor of the Bank of Ireland, for that
gentleman had said lie conceived that the Act of 1844 had
given greater stability to the Bank and greater confidence to
the public.—( Hear, hear.) Ile should rather, then, have
?said that his evidence was favourable, and not unfavourable,
to the Act of 1834. The Right lion. Gentleman also stated
that which certainly was not stated at the earlier periods of
these discussions, viz., t hat the commercial distress of 1837
was in no degree traceable to the Act of 1844. But that
was not the language that was held in the autumn of 1847,
when the commercial distress was attributed to that Act.
With respect to the report of the Committee of the House of
Lords, it was certainly not ir. favour of the views which he (the
Chancellor of the Exchequer) entertained of the Act of 1844.
lt said, however, and particularly in the evidence from
Glasgow, that speculation—railway speculation— was very
te in Scotland, where failure overtook the coin erci a I
houses there, and that those is hich did fail in that part of
the country were more or less engaged in that speculation.
Mr. Gurney, too, stated most distinctly that, in his opinion,
the Act of 1844 had nothing to do with causing the corn.
tnercial distress in questien—and that certainly it had
nothing to do with scarcely any of those great failures
which took place before the month of September. It was
come satisfaction to him, he must say, to find this confirms-
lien of the views he had himself expressed on former occa-
aiclos, and that, further than this, there had been evidence
given which bore out the observations he remembered he
had himself made, as to the injurious tendency of the want
DJ precautionary measures on the part of the Bank of
England at an earlier period of the year, than that
at which they were ultimately adopted. With respect
to the time at which the Government's letter to the
13ank of England was issued, it could not be doubted that
the result of the week in which it was issued showed that
they were right in sending forth that letter. Mr. Gurney,
t.ko, spoke favourably of the principle of the Bank Charter
ct, and anything he had said against, it was only in conic-
quence of the pressure that took place under it. As re-
gardeeJ the operation of the Act of 1844 in a drain of gold,
all the witnesses hefote the Committee of the House of Lords
were agreed, and said that it was precisely that which,
%en it that Act were not law, ought to take place. As to
d:,:ase of its checking an issue arising from a speculative
tfgand, if an issue of paper tended to produce speculation,
Win restriction of the issue must b beneficial. The Act
1,e?e44 was admitted tri be useful ine limiting the issues of
-atrY banks; and if an issue of paper by country bankers
.I?.uld have the mischievous effect ot aggravating prevalent
211 s, similar issues, not bnsed on gold, by the Bank of
tigan.d, would have produced the same effect. The
eela.l.„esn,ee given before the Lords' Committee showed the
eto-t7a`rei Of the crisis which took place in October last did
h se from the want of circulation of bark notes, for
mere Were in the' hands of the public 4,000,0001. more than
Csie•„cants of the country required. The evidence of Mr.
was almost conclusive on that point. Horsley
4,-I.:ier stated in his evidence that from the best lopinion he
Cnicie there were nearly 3,000,000/. in notes issued
bn-re'Y for the maintenance of credit, and not for the pur-
ierzasofbcuitrculation. He thought the Hon. Member for Mon-
':se had correctl s re esented that period, not as a currency
as a) commercial crisis.—(Hear, hear.) The
questi°4 was not what was the amount of paper which
ouught to be substituted for gold, but the question was, wand
afar were necessary for supporting public credit, and
istfarenting the recurrence of an extreme state of panic and
0)Zalt• Mr. Tooke was of opinion that nothing could be more
of sen„lieretis than the issue of paper for the mere purpose
thi,;„o"crting credit, and that the Bank never could do any-
com-,Z More injurious than to issue merely for the support of
rill :I.:lees:elle: credit. The fact was that no fixed or certain
ge F°111(1 be laid down for dealing with such crises or emer-
hich were exceptions to all rules and all laws,
litlll must be dealt with accordingly.—(Hear, hear.)
:ci not see how any fixed principle could be laid down
e:rah-sealing ve'th such contingencies—extraordinary cases de-
0---"ed extraordinary remedies. Let them consider what
°,ld have been necessary to support credit in 1847. But,
tugs toe first place, let them reflect on the sort of credit which
would have been then called upon to support. He would
'lintread to the House a portion of the evidence of Mr. James
Andrews
aline ulty a? were
Mr. Anderson was asked—
d,,L4 What were the other causes to which you attribute the
if?unt great cause was the investment of a large
of capital in railways, and the speculation concomi-
ztL with that investment. I mei:male purchase and sale—
' gambling, in fact, in shares of railways..
,7,Was that speculation very rife in your part of Scotland?
among all classes.
184.. n ere those houses which have suspended payment during
ye and 1848 generally engaged in railway speculations?—
', almost in every case, more or less.
Their accounts have, I suppose. a good deal come under
;171',nt" notice ?—Yes ;t when I say railway speculations. I
cause there
say peculations in shares generally; be-
-7.41e there were speculations in other shares as well as
spolor:P7..shares; but the railways were the great source of
"Anon.
rue
_Did you find that parties drawing bills took unusual
esiina of obtaining money for the purpose of carrying on
"a3‘ speculation ?—Yes ; a considerable part of the loss
,anstained by the bank with which I am connected arose
;Lon' that cause, trom parties ostensibly drawing bills t(!r
failure
business transactions which turned out upon their
th-gre 'to have been drawn' against railway speculations;
th,J Were represented to be business b
sh_jeZere drawn in order to support speculations in railway
ea," Will you explain how that was done ? cotton mann-
turer connected himself with a cotton twist dealer, and the
one
drew bills the other, which we supposed were for
the Purchaseofut.:inst for his manufactory; and it turned out
to <
lathe's n ofothinz the kind, but merely connected with specu-
in her "
w this vrasetsfie description of credit which was prevalent
M 18.16 and 1847—a fictitious credit. A drew upon B
and 11 drew upon A. fur no real transaction of_any soi t, kind,
°r description.—( Hear, hear.) A system of credit was thus
built f the most mischievous description, The moment
the slightest check interposed in the facilities for obtain•
ing money, the whole fabric tumbled to the ground—
the bubble burst, and this was one specimen of a system of
credit not based upon gold. Neither the Right Bon. Gen
tleman the Member tor Stamford nor the Hon.
Gentlemian.
the Member for North Warwickshire had stated w
amount of paper issue they would have based upon
ciceedirtt.
It they had done so he would know how to deal with
t
but when they were told that the Act of 1814 had obstructed
a fair support to the commercial credit of the
ultittrey,
he liked to call the attention of the House to the
of credit which was prevalent at the period adverted
to, and which was manifested by the evidence of Mr.
.Anderson, Ile objected to this proposal as vague and
indefinite—he objected to it because it pointed to the relaxa.
Tlion of the Bill of 1844, as the only possible remedy for
h.YB commercial distress or discredit which might exist in
...%c country. If commercial distress and discredit took
.11e coincident with adverse foreign exchanges, he thought
,re.__e remedy of both Honourable Gentlemen ( Mr. Herries and
naN_usedegate) inapplicable, according to their own admis-
se, fur a contraction of paper issue would be the necessary
to goence of adverse foreign exchanges. Again, adverting
seataitstunutefeoPM!ons of Mr. Tooke, he might state that Mr. Tooke
pinion that a paper currency ought to be a mere subs
4_3. and representative of gold—not the representative of
, national debt or tax. If the paper currency was to have
nj reference to bullion, and that it surely ought to have,
wouldtake Place
like to know under what circumstances it would
the Place if gold was unattainable? if paper was to be
gold was
of gold, why should paper be obtainable when
"I,lnwas not to be had?
to Hox. MEMBER But there were fourteen millions
l,eup in the Bank.
ts!sn.e CHANCELLOR of the EXCHEQUER was pre-
est to defend the propriety of obliging the Bank of Eng-
sos"..to limit its issue within a certain amount. But the
,7.uoti after all came to this. Both Honourable Gentlemen
th'".ltted that the paper issue ought to bear some relation to
t!ount of gold in the coffers of the Bank. Then what
relayo,l°4 were they prepared to substitute for the present
hut I—(Hear, hear.) The Hon. Gentleman opposite had al-
esiied to the case of Hatnburgh, in which he said paper
it issued as a substitute for gold. In liamburgh
th_\l as true they had a paper circulation, but all the paper
btiwita out was represented by silver in the coffees of the
s" The bank gave a receipt for the silver, which was
atn..tlivalent to holding so much money. Now suppose a
ghatof commercial discredit to occur in liamburgh, and
it I,VIB proposed that the bank should issue a receipt for
tleer which it had not received, would not that be consi-
ried a very rotten system? But it was nearly the same
which
to issue Bank of England paper in this country
t_ issue would not be based upon gold. With respect
the recommendation of the Committee of the House of
Lords, to which the Right Honourable Gentleman had ad-
vterted, it was true it recommended the removal of the re-
strictive clauses of the Act of 1844, and the restoring to the
Bank the powers of issue, and which would not tie it down
to the amount ofgOld actually in its coffers. Mr. Gurney
had upon this point truly stated that the removal of such a
restriction would be a perfect abrogation of the Act of 1844,
and if that question was to be discussed, it was better that
the repeal of the Act of 1844 should be proposed to the
House. But before that was dose, they ought to bear in
mind what had occurred in 1840 and 1841. A Committee
sat upon that subject in those years, and all parties were
then agreed that the amount of issue ought not to be
left to the unfettered discretion of the Bank of England.
(Hear, hear.) Having bad the honour of being the
chairman of the Committee then appointed, he must now
ISay that it would be most monstrous and inconsistent
f) do that now which all rational men who had considered
the subject then objected to. The Honourable Illern-
,er for the West Riding (Mr. Cobden) had then stated
_ueEound and just opinion upon the subject—that beyond the
V'aXitnum amount issued upon securities, the remaining
no .sses _ u
ght alone to take place upon gold. lie could see
11.,,,4yantage in giving Governinent the power of relaxation,
u'rl" Alr. Fullerton was of the same opinion. It was con-
-1.844 to what had been recommended by the Committee of
1 to leave the full discretion in the Bank of England—it
:140 totally adverse to the Act of 1844, which, however, left
i.°_ recommendation of the Committee of 1841 untouched in
11.provisions--natnely, that in extraordinary cases, as in
07,!.3ivind 1847, there should be some department possessed
144ev. era to act according to the circumstances of the emer-
kiBB,;,' Such, too, was the opinion entertained by Mr. Hus-
The "' If ,those crises should again unfortunately occur
euiZ must -he dealt with according to their peculiar cir-
of .rattoes; and he believed in the words of the Committee
be 'jeer. House of Commons, that it was far better it should
Whe"l'mtpattehe discretion. of the Government to interfere
for it
might think fit than to attempt by law to legislate
hot ant, Rte of circumstances which neither were known
tisen_lcieated. Mr. Gurney,' when asked what were the
eetinulstances which would justify the Government in inter-
liencig:af.eplied that it was impossible to state them before-
guise and in that he (the Chancellor of the Exchequer)
lt,ower Mr. Gurney was clearly of opinion that this
hit a exists where, it might and must be of a discretionary
21. cter. The
tenee3 remedy which under one state of circtitn-
poaitio,"learis be useful and availing, might, under another
c.,ll3sion, but a
Jed ,wa"yolfutintrs, be useless and unavailing. He had been
further than he ought to have been with this dis-
etigh .hose topics had been broached, and as the
0pini0,,...0n. Gentleman urged the Government to give some
teetio",uPon them, he had. thus far trespassed on the at-
thatn f the Ho
whe__ v use. He had only to say, in concluSion,
tv;e:ugohi.ti.'.;:eier. this subject was brought forward with the
W,lntsl belairdTgandanwdilllonmg ing to a practical conclusion, he
to exptain his views ; but he
ti,safloorurnnecriusipurnesent discussion would not lead to any prac-
yievr,s,a:ed therefore, as he remained unchanged in
The amendment wmasutshtemn move the previous question.
dreish3rteileaour foouuser Members rose simultaneously to ad-
t7,r• Spooner, left th• ee
Speaker, having given precedence to
se fora. few minutes, but Mr.
vol having been 80 absorb, d with the arrangement of his
Ploan.riteya,e4,sa ohotce_tirmaedndtrse,ssa:ddvatreedvtaOuatulite table, and amidst a
Peak yr) ltuse for the purpose. chair thus :—" Mr.
" The laughter of the House

called the attention of the lion. Gentleman to the absence of
the Right Hon. Gentleman, and he sat down. When the
Speaker resumed his seat,
Mr. SPOONER said he was of opinion, notwithstanding
what the Chancellor of the Exchequer had state:, that the
Right Hon. Member for Stamford had laid a strong ground
for the adoption of his motion. The Chancellor of the
Exelo quer said that the Government would interfere
to suspend the operation of the Act ( f 1844 when
state of things similar to that which existed in 184;
should again arise; but why should the country be ex-
pesed to an amount of suffering such as it then endured
before a remedy could he applied? Was the Right Ho-
nourable Gentleman aware that the depreciation of pro.
perty between 1816 and 1847 extended as far as 250,000,000/. ?
The Hon. Gentleman then read several extracts from the
evidence of Mr. J. Loyd, to show that that gentleman
thought that in some circumstances a relaxation of the 13;11
which he himself had framed should take place. He objected
to any system which the Government could deal with as they
thought fit. This great commercial country ought to regulate
its own monetary system, so that it should regulate itself, and
not produce such fluctuations as had taken place under the
law of 1844. But he would refer to the history of the ques.
lion further hack than the period at which the Right Hon.
Gentleman connoenced. Me was an anxious auditor of Ho
debates on this subject in 1810 and 1811 ; and he would sun
that in all the great principles laid down by Mr. Horner he
concurred. The lion. Gentleman then reviewed the history
of this subject, and deprecated the resumption of cash pay-
ments on the ancient standard. Previously to 1816 they had
a double standard of silver and gold, and the debtor might
pay in the cheaper metal ; but, by the alterations in the law,
a more stringent system was adopted, the effect of which:
had been shown in the subsequent commercial distress of thr
country. After some observations on the effect of the Act of
1819, in necessarily causing fluctuation, the Hon. Member
said, that his Hon. Friend the Member for Tamworth might
ask him, as he had before, " What is a pound ?" ('‘ Hear,"
and a laugh.) He (Mr. Spooner) knew that a pound was a
piece of gold of a certain value and fineness, stamped in a
certain way ; but the question was, what ought to be a pound
—(Hear, hear.) In 1819 the inquiry ought to have been,
what was a pound in relation to the debt of the country, in
relation to mortgages. and to the position of debtor and credi•
tor; and it would not do now, after the country had been
ruined, to turn round and, in a cold phlegmatic manner, to
ask " What is a pound ?" It was in vain to attempt any al-
leviation of the distress so long as they relied upon any fluc-
tuating basis, any demand for foreign corn upon anything
that should call upon the Bank of England to find gold tot
its notes that were in circulation. It was then they com-
menced their onward course towards bringing the Bill of
1819 into operation ; and seeing the exchanges against them,
they put out their paper merely to go the same round again
of prosperity and adversity. If they were regulated by the
exchanges, what were they to do next year? Did any
man anticipate anything less than an immense import of
corn ? How was it to be paid for? Some said by our ma
nufactures ; but had not the bullion gone out before, and
would it not go out again? To be brought back, it was
said ; but at what a sacrifice. He pointed out the effect
that the drain of gold would have upon the labourers in
England, and in preventing this country rendering assist
ante to Ireland. Unless the currency was extended, a
heavy responsibility would rest upon the Government. He
was asked, would he have an unlimited issue of paper, and
unlimited speculation? His idea of convertibility was that
a note was convertible into what a man wanted. If it
were a legal tender, if it would pay all taxes and all
debts, and purchase what any man required, that was
convertibility, not into gold, but into all the practical neces-
sities and purposes of life. He implored the Noble
Lord not to be led away by the vaain philosophy of the day,
but, like Mr. Pitt in 1797, to rise above the trammels,
and adapt his proceedings to the circumstances of the
times. Let the gold go abroad to bring in food, but,
at the same time, let there be a circulating medium
representing all the property of the country, and then
our labourers would find that we were not only able to
feed them, but to dispense a large and liberal measure of re-
lief to Ireland, and turn that discontented population into a
peaceful and loyal people, and meanwhile a stock of manu-
factures would be accumulating, which would enable us to
get back our gold again. lie trusted that Parliament would
not separate while Members had nothing to tell their con-
stituents but that when famine pressed, proposals for mea-
sures of relief were met with the previous question—that the
Ministers were hesitating and doubting—that they had no
opinions—and that at the approach of the storm they dared
not pledge themselves to any course of conduct that might
avert it. If that went forth among the people despondency
would be the consequence, and there was no knowirg what
might be the result. There was a remedy; let them apply
it. Let them call forth the energy of the people and set the
credit of the nation free.—(Hear, hear.)
Sir R. PEEL—Sir, I was quite prepared to bear my Hon.
Friend claim credit for entire consistency on the subject of
the currency, and I, for one, am prepared to concede his
claims. But I confess that I was not prepared to hear from
him that he was a disciple of Mr. Horner. My Hon. Friend
says that he disagreed with Mr. Horner in the practical con-
clusion lie came to that cash payments should be resumed in
the year 1819, but that in the reasons and arguments which
he used he entirely concurred. Why, Sir, if there be any
communication between those who are living and those who
are departed, Mr. Horner must now be shuddering in his
grave at being represented by the Hon. Gentleman—
(Laughter)—by an Hon. Gentleman who proposes that the
circulating medium shall be represented, not by gold, but by
the debt of the country—(Laughter)—so that if you have now
an annual expenditure of 50,000,0004—and if you increase
that expenditure to 60,000,000/., although you may think
your resources do not justify that increase, yet you
are to issue paper money, not convertible into gold. on no
other foundations than your own necessities ; and thus you
are to have a constant interest in incurring debt, from which
the ready means of relief is to be, an issue, in proportion, of
paper, which is to be always received into the Exchequer in
liquidation of debts due to the State.—( Hear, hear.) So that
you are to have a direct interest in indefinitely increasing the
debt, and yourcurrency is to be in proportion to your debt.—
( Hear, hear.) But when my Hon. Friend goes further and
proposes to convert the whole property of the country into
circulating medium, and yet says he is the representative of
Mr. Horner, I own that he does excite my surprise.
Mr. SiOONER explained that his proposition was limited
to the amount of Governtrent expenditure, for which the
whole property of the country was liable.
Sir R. PEEL—My Hon. Friend by no means mitigates my
alarm by his explanation—(A laugh )—for 1 think I remem-
ber to have heard him say something about property afford-
ing a fair and just foundation for the currency, and I own
that does not diminish or alter my opinion as to the effect
which the establishment of his system would have upon the
currency in its relation with foreign countries.—( Hear.) But.
when my Hon. Friend speaks of representing the opinions of
Mr. Horner, I think he has forgotten what really passed in
1810. The seventh resolution, moved by Mr. Horner, pro-
vided that no contract undertaken for the payment of money
in pounds sterling can be legally discharged,' except in gold
coin of a certain specified weight; and that the promissory
notes of the Bank of England were a stipulation to pay cer-
tain sums in pounds sterling. It does not appear that there
was here any reference to the army estimates—(Laughter)—
or the navy estimates, or the miscellaneous estimates or the
amounts that might be voted for the ordinary expenditure of
the country.—(A laugh.) On the contrary, all is referred to
the pound sterling.—(Hear.) And the resolutions of Mr.
Horner went on to state that, when Parliament suspended
cash payments there was no intention to alter the value of
those promissory notes of the Bank of England— that they
borrowed money from the public creditor, telling hint that
on the return of peace he should be paid in gold. Indeed,
nothing otherwise was ever intended, and all those who
lent money at that time were entitled to be paid in
gold on the faith of that promise. Now, does the Hon. Gen-
tleman, who says he agrees in the argument of Mr. Horner
—does he agree to that?—(Cheers and laughter. ) The re-
solutions of Mr. Horner went on to say that the state of the
foreign exchanges must he taken, into account in regulating
the currency. Yet my Hon. Friend blamed the report of the
Committee of the House of Lords because it referred to the
state of the exchanges in connexion with the question of the
currency. Now, why did not my Hen. Friend in 1810,
warn the country of the dangers upon which he has spoken
to-night ?—( Cheers.) He says that he concurred in the
principles of Mr. Horner's resolution—then why was he
silent on the dangers which he says were to be apprehended
from them ?

Mr. SPOONER—I was not in the House in 1810.

_ _ ... „...., .._ .
Sir R. PEEL—My Hon _Friend says he was not in the
House in 1810, but then he argues that it was possible in
1819 to have estimated the depression of the funds. I fully
admit that that would have been possible—(Hear)—and we
should then have paid some ss. or 7s. in the pound less.
I am not saying that it would have been just, but that it was
possible for Parliament to have done this. Parliament might
have said, we have made a promise, it is true, but we cannot
fulfil it. That, however, would have been very unjust.—
( Hear, hear.) But I will tell my Hon. Friend, who adheres,
lie says, to the principles of Mr. Horner, that although a man
who owes a pound and pays only 15s. will gain something,
yet all that will not alter the currency as regarded all future
transactions. Alter the paper as you will, practically the
same state of things will arise—whether the note be worth
12s. or a pound, there will be the same obligation to keep
your promise ; and the effect will be the same as to the pres-
sure upon commerce at particular times and the difficulty of
obtaining money.—(llear, hear.) Sir, my Hon. Friend
says he is in a small minority in this House in his views
Genuttiols
of 1844,
that majority
question. But I very much doubt whether, of those
Friend.":"thwinhko are anxious for an alteration in the Act
those minor questions the great • •
Act, and that their ninB are not with my Honourable
those persons care very little about
involved in the opposition to that
currency.
restricted currency
I think theainl hope is of an unlimited foveaar
as cluirk upon those who wish
for unlimited paper as
tiaraoennZ
public
enemies, and those who are
benefactors. There was one
witness examined, Mr. Salta,
geenhtren champion of the opi-
Right H
n who expressed his
nions of Birmingham, and
ess even exceed-
lejonlc:nin their accuracy
opinions with a boldness and
wTtantessm—y
which commanded our atte—,
in g that ascribed to him by the
Gentle-
man the Chancellor of the Exchequer. itoinaoutrrable
Honourable Friend seems almost ashamed of hilse
(A laugh)—but he was examined at some length, and
among the rest I asked him:—
" Will you state whether I correctly understood you as
saying that that national paper should be issued ad libitum
till the period when prices were remunerative, and every
industrious able-bodied man found full employment ?-----
Certainly,
" When that object had been achieved you would fix your
standard at that point ?—Yes.
" Tilt 3,0 u had achieved that object, till prices were remu-
nerative, and all able-bodied industrious men had employ-
ment, we should have an unlimited issue of paper ?—Yes ;
the only reason that I say that is, that, under the present
system, we have so far departed from what is right in the
basis; we have had such extraordinary fluctuations, that we
cannot now tell where we are. It is necessary, therefore, to
take observations ; but the great principle is, that the labourer
should have his wages, the manufacturer his profit, and that
the creditor should have his due; that the labourer should
have his value for his labour, as well as the wealthy man, the
creditor the value for his money.
" Do I correctly state your views, when I state that you
would propose that national paper should be issued without
limit, or without any reference to any metallic standard of
value, until that period should have arrived when the prices
generally should give to every able-bodied industrious man
full employment ? —You correctly understand me."
I then afterwards asked the witness:—

" 13 there not an association in Birmingham on the subject
of the currency ?..7,Yes.
"Are the views which you have expressed the views of
that association ?—lres.

"Are you a member of it ?—Yes.
" Though some individuals may differ from the views
which you have expressed, are they not the general views of
the association ?—They are.
"Did you ever bear any one dissent from them think
not ; at any rate, those who have dissented have ceased to
dissent.
" But did you ever find anybody successfully contend
against those views ?—No ; I never heard anybody attempt
it."
—(Laughter.) I wonder much ifmy Hon. Friend thinks that
Mr. Salt is a disciple of Mr. Horner.—(Laughter.) My
Hon. Friend says that he is in a small minority in this
House; but among all the great writers and talkers about
the currency, depend upon it ithat_he is sympathised with is

• all which he says about returnng to the old system. With
respect to the motion now before us, my Right Hon. Friend
(Mr. Herries) invites the House to enter into a pledge with
respect to what its proceedings will be next Parliament;
but, although the promoters of disaffection and of disloyalty
to the present system throughout the country derive little
,ati-faction from his former motion, they will not feel better
,atisiled with the present. He does not ask the House to
alter the law; he merely asks it to take the subject into its
serious consideration next session, and serious, no doubt, it
will be; but what advantage can be derived from adopting
such a pledge. Now, I address myself to those who disap-
prove of my views upon the subject of the currency. 1
. think the credit of the House does not stand high as regards
the adoption of great practical reforms. We have shown
rather a taste for discussion—(Laughter)—than for practical
legislation. We are now arrived at the 22d of August, not
having made much progress with practical measures, not, in
fact, having fulfilled our indispensable engagements, and vet
we are asked to draw a bill at six months on the next
•,ession. And under what circumstances was the House
asked to give the pledge? 1 was one of those that my
Right Honourable Friend referred to as having retired
from active service. I attended, however, last Tuesday, in
order to be present at the discussion. My Right Honourable
Friend said that there. was an intense anxiety throughout
the country on the subject of that motion. Why last Tues-
day I found thirty-five Members present at the time my
flight Hon. Friend should have brought on his motion. To-
night I returned, 'and there were only forty-two Membcrs
present, when an Hon. Member moved that the House he
counted. Is it likely that any recommendation of a House
that shows so little of that intense anxiety which my Right
Hon. Friend referred to, will have much weight with the
country? My Right Hon. Friend, indeed, indulges in figu-
rative language, and says, that the House, " like a wounded
snake, drags its slow length along " At all events, let us not
give ourselves the air of the boa constrictor, and end the pa-
rallel by enacting the needless Alexandrine. The Right
Hon. Baronet proceeded to say that he was unwilling to in-
cur the charge of whiffling discussion. When the proper time
came he should maintain to the utmost of his power the policy
of preserving the restrictive clauses of the Act of 1844. He
believed that these clauses prevented the country from
having in April last superadded to commercial distress the
danger of political convulsion. Without these clauses he
believed the Bank would have persevered from April to
June, as they had done from January to April, in extending
their securities at the time the gold was leaving their
coffers. At the proper moment he would take up the Lords'
report and put aside the Commons' report, with which lie
agreed. He would be prepared to impeach the Lords' re-
port, and do all he could to show that the most impolitic
arrangement that could possibly be made would be to invest
the Bank of England with a discretionary power of relaxing
the restrictive clause of the Bank Charter under the con-
ditions proposed. He would endeavour to show that it
would be infinitely safer for the country to reserve the
discretionary power in the hands of the Government, to be
exercised upon their responsibility to Parliament. The
Right Honourable Gentleman then proceeded to specify the
conditions under which paper money could be circulated in
the three kingdoms without any deposit being required of
gold. 33,000,0001. in notes could be issued without the
dep( sit of a single ounce of gold. To meet the monetary
exigencies of the country more was required, and the ar-
rangement was that notes might still be issued, but in order
to secure their convertibility it was required that an equal
amount in gold should be deposited. A paper currency of
48,, 00,000 was available on a deposit of 15,000,000 of gold.
It bad been said that the 15,000,000 was a dead weight,
and that it was lying idle. It was no such thing; it formed
the guarantee for the convertibility of the 48,000,000 of
paper money. The necessity of this precaution was well
shown by the facts which carne out in connexion with the
great failure of 1847. These facts showed the great risk
which existed of credit being abused, and he thought it
could be easily shown that it was owing to the restrictive
clauses in the Bank Charter, which enabled the directors to
mitigate the distress by acting with the liberality which they
had done. It was impossible to overrate the importance of
preserving the convertibilityofthebank note. The experience
of all countries had shown that the nearer they approached
the English practice, the less was the variation in the rate of
interest, and of discount, and the less the amount of annual
discredit. He thought the greatest calamity that could
befal the country would be to entertain the notion that, in
times of pressure, the true way to mitigate the calamity was
to issue more paper money. Depend upon it that such a
course would prove a mere postponement of the evil. Then
with respect. to the Lords' report, continued the Right Hon.
Gentleman, I rejoice that it has been adverted to, because
it gives me the opportunity of warning the people against
being misled by the doctrine which it promulgates. Ido
not deny the ability with which it was drawn up. Ido not
know who wrote it; but whoever is the writer, it is evident
that he is anxious to bring prominently forward every
defect in the Act of 1844. It is not friendly to that Act. I
do not say it is unfairly hostile or adverse ; but there are
great omissions made. It is said that the Acts of 1844 and
1845 contained many provisions that were judiciously calcu-
lated to secure the convertibility of the bank-note. Objec-
tions are indicated, but they are not specified. An alteration
indeed is suggested in the ratio that ought to exist between
tha issue and the deposit of silver ; but I think that very
little would he gained by an alteration. The chief recom-
mendation is the one which goes to confer a discretionary
power on the Bank to relax, under certain contingencies,
the restrictive clauses. I assert that to grant such a power
will be in the face of all experience. You only passed the
Bill of 1844—passed as the Right Hon. Gentleman truly re-
marked, with such general concurrence, because you were im-
pressed with this conviction, that the directors had possessed
a discretionary power, and had not wisely exercised it in
time of pressure; and in 1825, 1837, and 1839 the Bank, hav-
ing a complete discretionary power, the result of three years'
inquiry was that the discretionary power so possessed could
not be safely left where it was, and you imposed the restraint
embodied in the present law. The report proposes that the
discretionary power should be conferred under the condition
that it shall only be exercised when the exchanges are fa-
vourable to this country. if the discretionary power be right
and proper to be given, the restriction as to the exchanges is
a very unwise one. By agreeing to the recommendation you
make it next to impassible for the Government to act again
as it did in October last, because the answer to Parliament
would be, that the Bank directors were the parties entrusted
with the exercise of the discretion. In fact, the adoption of
such a change would practically be to augment the restric-
tion which already exists. The exercise of the power
which the Government put forth in October is no impedi-
ment whatever of the Act of 1844. That Act is governed
by principles, and so long as they exist the rule is
obeyed; bat when a state of things arises which defies
principles, ordinary rules cannot apply. Mr. Huskisson
stated that it was impossible to frame laws to meet every
case; and when I introduced the Bill of 1844 I made the
same admission. The same thing happens in the operations
of nature. You take precautions against all ordinary dan-
gers, but dangers will arise which could not have been
foreseen, and against which prudence could take no precau-
tion. An officer on a railway, in charge of Smith O'Brien,
found a train which he desired to proceed to Dublin. The
man in charge of it told him he could not comply, a, lie
was under orders to go to Limerick ; upon which the officer
produced a pistol, and threatened to shoot him if he did not
obey his orders. I approve of the act, and I am satisfied
the House would indemnify the officer, if indemnity was ne-
cessary. But although I say this, Ido mean to pass
a law authorising any man to act as this officer did
he 3
Parliament
daexplosionsoccur,
under similar circumstances. Circumstances must justify or
the case
vbiaeilberleym.
but
ntoap:fnaitraprodemtnal
dyelnaesicaachvssn.
whose
prevented,or sa'
e.
condemn the act; laws cannot meet every contingency. In
t is
dit and
it is impossible
tvoh e when they
convince thatt
in
the strong hand must be
ban,tetvaotokter
redl
gone
i.oen‘mt,
eolterthdnr
eieesdceit
b impossible
af3py:l
(alpssari nai
on( i
rcs principle,
to pimitigate
ttrrheei
esi
y
tvetn
hhaie
monetary
he
et
hmet3haey commercialm are
much better not to foresee them or to attempt to provide for
stranttneoseb:ttiheir interference was necessary. The report is •
highly complimentary to the directors of the Bank of
England. I think they deserve it. I think that the
directors who were examined before the Committes of
both Houses gave evidence which showed that they
lcoadllae called might be entrusted with a wide
yfi
numberve We ew called b
that
they had entitled themselves to the utmost clerne'ditandi
t competent for the Committee to call any number:of wee
c-
tfioncsr,tthiel
though
pleased, aws eed
mightu but t
ayvoonol
y The Lords have declared that they place the greateset pleased.
confidence in the discretion and prudence of those genrinesmmen" ;
but when I look at their evidence—when I refer to the
testimony given by Mr. Morris, Mr. Palmer,n Mr. Cotton,
and Mr. Norman, I find them all declaring anadvising that
the Bank Act of 1844 should not be relaxed. It is true that
Mr. Horsley Palmer dissented, and that he expressed him-
self in favour of a relaxing power; but when asked
whether that power should be entrusted to those
for whom restrictions were intended, he said, that
to give the power to the Bank of England would
be a violation of the law, as it would be absurd to restrict
with one hand and to relax with the other. The Bank says
that it is a commercial community, and that, as it is subject
to pressure, it is necessary for it to have the autho-
rity of the law to enable it to resist that pressure. I
hope you will continue the restrictions they ask you for—
that you will not confound the issue of paper money with
the capital of the country, and that you will not believe
that it is in the power of the Bank of England to
diminish or raise the rate of interest to the extent that some
people suppose. I hope you will bear in mind that trade is
carried on with capital, and not with paper motley, except so
far as paper is the representative of gold, and that the carry-
ing on trade with credit means only that you trade, not with
other persons' credit, but on their capital.—(Hear.) I trust
you will recollect that the greatest advantages which a coun-
try can have is a fixity in the value of its money, and a seen-
rity for its convertibility ; and that, unless you have that
fixity, you will not have a security for that convertibility.
Remember, also, that if you have not those advantages, there
is not any lass in this great community which will not suffer.
All concerned in commerce and manufactures must suffer,
but those chiefly will suffer who depend for daily subsistence
upon the wages of labour.—(Hear, hear.) Depend
upon it, if the currency is to be reduced in value, there will
not be at first any corresponding reduction in the value of
the articles to be purchased, but the two shillings and three
shillings a day of the labourer will become gradually of less
value than heretofore.-s(Hear, hear.) Depend upon it,
there is not one class in the whole community who has a
rnore fixed and permanent interest in the arrangements
w
f
_ a
which give to paper money as much as possible the character
cmetallic currency than the labouring portion of the
poPulation.—(Hear h ear.) I hope that when you approach
the consideration o this important subject, you will bear in
mind those
pressure in great
nne Ninciples, and that you will not think
pressure, early and
salutary—that
is necessarily an evil. That
law may be 'utary—that pressure compelled by
remedy against • complained of by some, but it is the only
increased
for securing the disasters, and the only guarantee
(Loud cries of " Hear, hear convertibility
of your paper currency.—
)
Mr. MUNTZ was strongly of
Gentleman who had just sat odpoinion that the Right lion.
rescind his declarations of that nighwt,na Idvnuld, before long,
case of the corn-laws, that his formern confess,
as in thin
sound and ought not to be adhered to.—(Laughter.)
were not
Right Hon. Gentleman had alluded to the opinions
The
Horner; but surely the country was not now to be shoundlsr;
the very improper transactions of that day. It was never'
contemplated when the first Bank Act was trained that
restrictions were to last for ever; but since that period the
circumstances of the country had undergone a great change,
and the working and industrious classes, who had increased
taxation and a doubled national debt to pay, were sacrificed
to the money interests. Mr. Horner defore his death ap-
peared to have taken a very wise view of things, for he
said, "In no case attempt to set questions of currency
right without taking into account and fully appreciating
' the new circumstances which have arisen, and the
vast and new obligations contracted since cash
payments
were abolished in 1817, will inflict great
misery on the people." He did not quarrel with the Right
Hon. Baronet as to the measure of 1844, for he approved
of it at the time as a' necessary part of the Bill of 1819.
And here he might be "excused for reminding the House
that he bad proposed :Vie, principle of that Bill four years
before the Right Hon. 'Baronet proposed it. (Hear,
hear.) In the year 1840 he was examined before a Select
Committee of the House, and on being asked what descrip-
tion of measure he would propose, he replied that there was
no difficulty in the matter, as the easy remedy would