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

TIE SUN, LONDON,

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 of management under
which the commercial activity and enterprise of this
country might be once more advantageously 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 ewing to our
present monetary regulations, lie 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—(hear, hear) but for the sake of
the general and industrious monetary interests—he
entreated the House to agree to the proposition he now
=de to them, which would replace those interests in the
slate 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 new system in place of
that which IT PIS at present existing, there was nothing
in his motion which could hind any one either to one
opinion or another. lie hardly thought it right to tres-
pass further upon the patience of the House with regard
to this branch of the motion. He was aware be 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 neces-
sary to offer a few observations. lie was aware that to
this part of his motion it would be objected by many
that they wore not satisfied with the conduct of her
Majesty's Government—that they did not wish to ex-
press any opinion as to the course which Government
took in October last; 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 1846 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—ho 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 House
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 vote. Then it might also be
objected that there was no cause for apprehension, for
her Majesty's Government had ulready, 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.—(C heers.)
Mr. HASTIE (Paisley) rate 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-
mitted to remain, whenever 'here 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. in
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; bat 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-
vione to 1844 the Bank of England had never allowed
discounts below 4 per cent.; 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 beat account they could,
and thus reduced the rate of discount to 2f 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 bankers, 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 umiue speculation that succeeded. Such
was not the effect which any measure of this
[louse ought to produce, and yet there could
be no doubt that the effect of the Bill of
1844 was, when money was plentiful, t,) render
it more abundant, and when it was scarce to add to the
scarcity ; so that in its twofold operation it was dan-
gerous to the country. It was au extraordinary fact,
which the !louse would do well to bear in mind, that a
rise of per cent. on the bills afloat, which were calcu-
lated at an average rate of Go.),00a,000/. a year, was a
charge of 20,000/. per month upon the commercial in-
terest. Now the interest upon these bills had occesion-
ally been raised as high as 3 or 4 per cent. ; so that the
loss must have been enormous. lie thought the greatest
condemnation of the Bill was to be found in the speech
of the Right lion, the Chancellor of the Exchequer
during the former discussion, when lie stated that, not-
withstanding the many suggestions; he had received from
ao many deputations which he 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.—(Hear, hoar.) 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 he 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. The 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. ( hi the other hand,
Gentlemen may be disposed to blame Government for
Right lion. Gentleman said the Govern-
ment accorded a discussion on the last occasion. He
(the Chancellor of the Exchequer) did not know what
the Right lion. Gentleman meant by that statement, for
now. suspending
'e in
October, and yet be willing to suspend
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
No, no, the debate was adjourned.") That was be-
cause nobody else seemed willing to address the House.
With t
regard too
fthe o resolution expressing approbation
of of course, he had nothing
c
to say. His own opinion was that he had done right,
and if the Hens° chose now to express approbation, the
theconlu
Government would receive it with satisfaction ; but as
he could not approve of the second part of the motion,
and thought it ill-timed, he had no objection if the Right
lion. Gentleman would withdraw the second part, that
he should withdraw the first also—(Laughter)—and
then the whole motion would he as if it had not been.
The Right Hon. Gentleman proposed in his second
motion to suspend the Acts of 1844 and 1845—that is
to say, to su•pend the laws by which the issues of
bank notes throughout the United Kingdom were now
regulated. Whether that suspension was to be per-
manent or temporary, the Right Honourable Gen-
tleman had left them in some little doubt. It did not
seem to him that the slightest case had been made out
for a temporary suspension of those laws. The Right
Honourable Gentleman stated, and very truly, that tho
alarm which existed in October last was Caused by y the
low state of the reserve fund in the Bank. Ile 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. He 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 bill-brokers
the
stopped or suspended payment, and 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 6,000,000/. 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 Ilon.
Gentleman, and there arose an apprehension that the
1 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, arid 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,
the whole amount subsequently taken out, as the Right.
lion. Gentleman had stated, being under 400,000 e,
, (Hear, hear.) 'What was the state with the Bank re-
serve at the present moment ? According to the state-
ment in the Gazette of last Friday, there were then of
notes and coin in she Bank a sum of 8,185,0001.; and ho
had seen, just before ho came down to the House, the
return which the Bank had sent to the Treasury, and
which would appear in to-morrow'a Gazette, and he
found the state of the reserved fend to he, of notes and
coin, the sum of 9.686,000/.
Mr. PATTISON—And what is it now?
The CHANCELLOR of the EXCHEQUER be•
lieved it was increasing, but he 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 poss.
tiea to afford assistance. lie might also state that,

though slowly, the trade and commerce of the country
were now gradually reviving; and there was no likeli-
hood of any public demand which the reserve fund
would not be able to meet. If the Right Honourable
Gentleman's motion had been brought on in December
last, when notice of it was first given, and when Parlia-
ment was about to separate, perhaps there might have been
some plausibility for it, though even then he should have
opposed it. Not the slightest case had been made out for a
temporary suspension of the Act of 1844; for the dan-
ger, against which they were asked to provide, was one
of the most problematical kind. But the Right Hon.
Gentleman had intimated something
_more than a
temporary suspension of that Act; he proposed to sus-
pend it until Parliament should otherwise provide;
and therefore he might :as well have asked the
House for a repeal of that measure.—("Hear, hear,")
from Mr. Retries.) Then he liked things to be called
by their right names—(Elear, hear)—and ho thought it
would have been far better if the Right Hon. Gentleman
bad directly proposed what he intended to effect under
the guise of a temporary suspension.—(Hear, hear.)
But he could not conceive anything that would so com-
pletely stultify the proceedings of that House as to en-
tertain this motion now, having before Christmas unani-
mously appointed a Committee to inquire into the whole
subject.—(Hear, hear.) That would be to judge first
and hear the case afterwards. The Honourable Gen-
tleman himself might be satisfied with a suspension
of the Act of 1844; but another Honourable Gentle-
man near him thought that, unless they altered the
Act of 1519, they would do no substantial good.
The Honourable Member for Birmingham thought that
the Act of 1844 was only a necessary consequence of
the Act of 1819; and many others were of the same
opinion. Then in that conflict of opinon, upon what
ground could the House proceed? Therefore the Com-
mittee had been appointed; gentlemen of various shades
of opinion were members of it, and he hoped,that
much valuable information would be obtained. Of
course the Right Hon. Gentleman must follow up his
motion by another to rescind that Committee, because
it would be perfectly idle for that Committee to continne
its labours throughout the session, if the House should
now, at once (whatever might be the result of those
labours), take upon itself to decide the whole matter.
On a former occasion the Right Hon. Gentleman had
thought it quite essential that they should know the
whole state of the Bank of England. Now, the Governor
and Deputy-Governor were to be examined before that
Commtttee, and he looked to their examination with
very great interest, as likely to afford the fullest in-
' formation on that subject. It seemed to him, therefore.
a mo,t premature proceeding—to use no stronger term
—to call upon the House to decide before it had re.
ceived the information stated to be so necessary.—
(Hear.) The Right Hon. Gentleman had said that
he was anxious to avoid a general discussion on the cur-
rency; and he (the Chancellor of the Exchequer) quite
agreed in that wish; still, if they got into the merits of
the Act of 1844, ho did not see how they were to avoid
the general discussion, and if they could not avoid
it, they were embarked on an ocean of which the shore
or any haven was very distant. They had now arrived
at a period of the session when the public business must
be proceeded with. To-morrow his Noble Friend would
make his financial statement; the time would soon come
when the estimates must be voted, and he did not sup-
pose that the estimates of the present year would be
passed in so peaceable and quiet a way as they had been
in former years. He hoped, therefore, the House would
not encourage any lengthened debate on the subject; no
practical advantage could come of it, and he, at all events,
would not set the bad example of embarking on that
endless sea of discussion. But there were one or two
points to which he wished to advert merely to prevent
misapprehension. The Right lion. Gentleman had said
that the promoters of the Bill of 1844 had thrown blame
upon the Bank for reducing their discounts to 2i per
cent.; but ho did not know who those promoters were.
He knew, on the other hand, that several opponents of
the Bill had laid down the doctrine that the Bank of
England ought always to discount at one uniform rate.
—(Hear, hear.) And if, therefore, blame was to be
cast upon any one, he hoped the Right Hen. Gentleman
would place it on the right shoulders.—(Hear, hear.)
Again, the Right Hon. Gentleman had said that the Bill
entailed upon the banks the necessity in England, Scot-
land, and 'retard, of holding bullion to the amount of
about 3,000,0001.; but what was the fact? In England
it did not entail on the country bankers the necessity
of holding one single sovereign, though it gave them an
issue of 8,000,0001. In Ireland also, it had not entailed
the necessity of holding one sovereign more than before,
and, in point of fact, last autumn, when it was said that
this measure was so mischievous in its effects—that au-
tumn, the experience of which was pointed to as fatal to
the measures of 1844 and 184:5, the circula-
tion was 1,000,0001. below the authorised circulation.
In Scotland the case was rather different; for there
the circulation was higher than the authorised
circulation by 470,000/. ; so that they were
bound to hold gold to the amount of about 500,000/.;
and taking all the three countries together, under
500,0001. in gold was all that the Act had required. The
Eight Hon. Gentleman had also remarked upon a dis-
crepancy between his statement on a former occasion
and that of his Right Hon. Friend the Member for
Portsmouth (Mr. Baring), and had said that he (the
Chancellor of the Exchequer) had stated that there was
no great diminution of circulation, whereas his Right
Hon. Friend had stated that there was a great diminu-
tion. But the statement of his Right Hon. Friend ap-
plied to the interval between August, 1846, and April,
1847; and his statement applied to the period between
August and October, 1847. It had been said that the
great distress last autumn was caused by the diminution
of the notes with the public, which, since the Act of
1844, was a touch more correct expression than circula-
tion; and he had answered that that could not be so,
because from August to October there had been no
great diminution. His Right Hon. Friend, on the other
hand, had said that, according to the pkinciple of the
Act of 1844, there ought to have been no considerable
diminution between August, 1846, and April, 1847; but
that there was that diminution. He merely alluded to
these points to prevent misapprehension; he-did not wish
to set the bad example of entering upon a general dis-
cussion of the currency; he hoped the House would not
do so, and would not now prejudge a question which
was undergoing full investigation.
Alderman THOMPSON said that he would not en-
courage a general currency debate, but would confine
his observations to the question under consideration.
The Right Hon. Gentleman the Chancellor of the Ex-
chequer had rested his opposition to the motion on three
grounds; first, that the present position of the Bank,
compared with its position in October last, was so much
improved, that no danger was now to be apprehended ;
the second was, that Parliament was sitting ; and the
third, that a Committee had been appointed.—(Hear,
hear.) As to the first, ho had the satisfaction of agree-
ing with the statement of the Chancellor of the Exche-
quer as to the improved condition of the Bank ; but ho
must remind the House what was the state of the Bank
this time last year.—(hear, hear.) In January, 1847,
the Bank had of bullion 15,000,0001.; and in the reserved
banking account 8,000,0001.; in April the bullion was
reduced to 5,000,0001., and the reserved account to
6,000,0001.—(llear, hear.) It might be said that the
price of corn influenced that diminution ; but he would
ask the Chancellor of the Exchequer whether he saw
perfect secu: ity in the present s'Aite of Italy and France,
and whether they might not be involved in such difficul-
ties as would produce again a great drain of bullion
(Hear, hear.) The present position of things wag, there-
fore, not such as could be safely relied upon.—(Hear.)
As to Parliament sitting, ho must beg them to remember
how the last (louse of Commons had treated the petition
of the merchants of London, pointing out the dangerous
position of affairs, arid the remedy which seemed to them
hadit int
they
ye
thatleast
(apupolaicra,lehleea.r.)HaAd
attdiewy.huattesnedeto,drityto
the
present House of Commons would pay more attention to
their representations than the last ? As to the Com-
mittee, he would only say that that Committee met on
the 4th of February. This was the 17th, and they had
examined two witnesses.—(Hear, hear.) .Considering,
then, what had been the suffering of the country, did
they think that the country would be satisfied to wait for
the report of that Committee as to the causes of the lute
distress and the proper remedy for it ? He believed
that if the country entertained any such hope' it would
only end in disappointment.—(Hear, hear.) Those who
witnessed the calamities of the past autumn must
know that it was utterly impossible for this country
to endure again such a financial pressure and its com-
mercial and manufacturing interest continue to exist.
His Right Hon. Friend the Member for Stamford had
stated that 180 houses had failed, with obligations
amounting to 30,000,0001. ; and he was sure that his
Right Hon. Friend did not overstate the case ; they
knew those who had fallen, but they did not know all
those who had been ruined by that pressure.—(Hear,
hear.) The trade between the continent of India and
this country was prostrate ; there was neither credit nor
capital to convey our manufactures in India ; seven or
eight millions of dishonoured bills returned to England ;
and without the intervention of the East India Company
the produce of the East Indies could not be sent hero ;
but he placed full reliance upon that great Company.
The Right Hon. the Chancellor of the ,Exchequer had
said that there was no doubt a great deal of pressure
through the failure of bill-brokers ; but that was not all,
fur he ventured to say that there was no establish-
ment (he did not except even bankers of the highest
repute) whose credit did not suffer suspicion during
that pressure. It was impossible to negotiate hills to
any foreign country against shipments of goods ; for,
on the continent of Europe they . believed that
all London was baukrupt.—(Hear, hear.) What
was the state of Newcastle ? Why, but for the inter-
ference of ,Mr. Grote, the manager of the branch bank
there, the most disastrous consequences must have fol-
lowed, and Mr. Grote did himself immortal honour by
the course which he had pursued ; he (Alderman
Thompson)
maintained even
but doubtedfor theif thetim timely assistance
peace
de ral
couldren h
by that gentleman. The same state of things existed
in the west of England. What was the cause of it all?
He was glad to hear now, from the Chancellor of the
Exchequer, because on a former occasion lie had ex-
pressed a different opinion, that he believed the panics of
rendered
been
1847 was not to be attributed either to the management
to
of
wthheatßwanaks
it
toaf it':rnmbeThen
r
the Chancellor of the Exchequer assured a deputation
which waited upon him, that there were plenty of bank
attributable or
? to thei the B
io Bill
notes to be had, and that all the difficult). arose from
(2l
23d
df
olfBs t4e.
September
speculation and miscalculation ; but he thought it might
now bo fairly asked, whether he was net the miscaleu-
lator— (Hear, hear)—and whether, if he had been aware
of the mischief that was to take place before the 23i of
October, he would not sooner have written that letter to
the Bank, the necessity of which ho fully admitted? Now
money was abundant ; it might be had on good security
upon easy terms ; and yet now there were two millions
less of Bank of England notes with the public than
there were on the 25th of October, when every one was
complaining of being ruined, on account of the difficulty
`of getting bank-note:. Between the 26th of SeTtembeF