The Sun.
London, England, 1856-02-29 00:00:00

He hoped in conclusion that the house would not consent ! furs of balances and credits. The debts of one banker were
to the motion of the hon. member for Birmingham, nor do , balanced by those of another. All those transactions were
anything to lessen the position of the country abroad. ' I based upon gold ; therefore every one must naturally feel
Mr. WILKINSON could not entertain any hope that, if i anxious when the amount of bullion in the bank was gra-
Sir R. Peel's act were repealed to-morrow, panics would dually decreasing. It was an artificial system, which pro-
not occur. duced periodical revolsions and disarrangements, unless the
Mr. H. BAILLIE believed it was the intention of Sir R. necessary amount of gold were replaced by importations
Peel that, at the end of ten years from the passing of his from Australia and California. Nothing could be more ine-
act, an inquiry should take place into the operation of portant than the certainty of having a fixed medium of
that act, and if it was preyed to be beneficial that restric- change. 20,000,0001. were considered sufficient to liquidate
tion should be carried still further, and that he intended the bill and trade transactions of the country. It was be-
to place all private banks upon a similar footing to that of cause the bank might be forced to reduce the amount of
the Bank of England, and to compel them to withdraw notes below 20,00e,0901. that panics ensued. The supply of
their paper circulation. With regard to the motion before money was usually sufficient, but unfortunately it was cut
the house, he agreed with the Government so far that he short by the present system. He wished that the public
thought this was not a favourable time to enter upon any should always have that amount of the medium of ex-
attempt of this kind, but he did think that a time might change which was necessary for the commercial transae-
came hereafter when it would be advisable to submit the tions of this country. He did not wish to curtail the legi-
subject to the consideration of a select committee. (Hear.) titnate profits of the bank, bit he was of opinion that a
One cause which operated injuriconly now on the market portion of its capital might be profitably investedin foreign
_
was that within the last three or four years our trade with securities. He did not use capital in the sense of gold. The
India was so uufavourable that we had to send 7,000,009/, right hon. gentleman (Sir C. Wood) belougen to that
sterling to India in the precious metals. If India was to school which held that capital meant gold—
supply us with great quantities of cotton, as some hon. Sir C. WOOD—I never said so.
gentlemen expected, it was actually impossible that we Mr. CAYLE Y —The right hon. gentleman had repeatedly
could pay for it, for the people of India would not take our argued to that effect.
manufactures—they did not want them. (Hear.) Sir C. WOOD—Never.
Mr. GLYN said though he conld net vote for the motion Mr. CAYLEY—It was quite clear, according to the bul-
of the hon. member for Birmingham, he confessed the sub- lion theory, that if all the gold were taken away from the
ject was worthy the consideration of the house. (Hear.) country, there would be no capital left ; but any man of
The panics referred to in the course of the debate were common sense must know that, if all the gold were taken
created, not by fears of the convertibility of the bank note, away, much capital would still remain behind. He only
they were caused by that which was common to all notes, I wished that, in the commerce of this country, the counters
the knowledge on the part of the people of property that I used should be of exactly equal amount.
there was a fixed amount beyond which no advances could Mr. L. HEY WORTH said his belief was that panics
ins. (Hear.) The panic iu 1847 was cured by the letter had their origin in the law of nature and in nothing else.
issued by the Government at the proper moment when If the earth produced a superabundance of food, produce.
the exchanges had turned, and the proper rate of in- would be cheap, and trade would be stimulated. He be-. *
terest was fixed by the Government of the day. The sieved that large discount was the only remedy for over
effect was instantaneous ; people had hoarded their notes, production, and that gold had nothing to do with it.
but when that letter was issued they produced them, The CHANCELLOR of the EXCHEQUER said he could
and the market was immediately relieved. He could assure the hon. member for the North Riding (Mr. Ceyley)
not concur with the honourable gentleman who spoke last that it was not out of any disrespect to the house that he
(Mr. H. Baillie), that it was the intention of Sir Robert had abstained from noticing this question at an earlier
reel to prevent private banks at the end of 10 years period of the evening. The object of the discussion was
from being banks of issue, though that, no doubt, whether or not the house should appoint a select committee
in time would be the natural consequence. There was to inquire into the subject of the currency, and, before he
another question which he wished to put to the house— stated his opinion, he was anxious to hear what might be
whether, in point of fact, the time was not come when the opinions of different hon. members, and then he should
the profit and responsibility of the circulation of this coon- be able to judge from those opinions whether or not they
try ought no longer to rest with individuals, but with the were in favour of the appointment of the committee. The
Government, and before the Bank Act wart renewed he motion, which had been submitted to the house by the hon.
hoped that the Chancellor of the Exchequer would carry member for Birmingham (Mr. Muntz) was, that a select
out his intention of appointing a committee upon this sub- committee should be appointed to inquire how far the pre-
ject. It was not fair to the bank, or to the country at sent monetary system was in accordance with the require-
large, that the matter should be allowed to remain as it ments of the country. and to consider if it could be im-
was. At the same time he wished to. say one word upon I proved or amended. Owing tothe great familiarity with the
the conduct of the directors of the bank, about which subject of the currency which the hon. member possessed,
there was great misapprehension. Their duties, under he had illustrated the subject by historical deductions, be-
tho operation of the present act, were most difficult— ginning with William the Conqueror, descending to the
(hear, hear)—while, at the same time, the machinery was time of Queen Elizabeth, and thence to the Acts of 1819
most cramped; and he was anxious to offer his meed of and 1844, and he had brought fOrward numerous instances
praise for the manner in which they had performed their to establish the facts which he said exi"ed. He (the Chan-
duties. Their conduct had been most admirable, and they eellor of the Exchequer) did not precisely understand what
had steered through their difficulties in a manner which would be the nature of the inquirywhich was proposed that
reflected the highest credit upon the bank. (Hear, hear.) a committee, if appointed, should undertake. It had been
He trusted that the Chancellor of the Exchequer would said that the committee would have to inquire into the
offer some explanation of what he intended to do. means of preventing fluctuations in prices of articles and
Mr. NEWDEGATE had been the first to call attention the rate of discount, which was injurious to all classes ex-
to the necessity of extending the limit of 14,000,0001. to cept the class of bankers. The hon. member for Birtnin ;-
22,000,000.. that being the average of the issue of the Bank ham said the object he had in view was to give happiness,
of England for the last 20 years. In 1847 the bullion in the power, and prosperity to the community. That was a most
Bank of England was reduced by the necessity of paying for extensive subject of inquiry, and a vary lofty and excellent
corn which had been imported to about 8,000,000/. ; those object ; but he would put it to the judgment of the house
8,000,0001. of bullion, tend the 14,000,00 e/. of securities, whether they thought a select committee of 15 gentlemen
amounting to 22,000,0001., formed what was commonly would he competent persons to undertake a speculative and
termed the "sticking point." The bullion in the Bank of theoretical inquiry of that nature? In a select committee
England at the present time was not more than 10,000,0001., philosophers would, no doubt, sit down to examine the
and if that should be reduced to 2,000,0001., the Govern. subject calmly, and they would call before them persons,
meat would have to interfere again by a letter similar to who had examined into the theory of currency, and they
that of 1847, in order to restore confidence to the commercial would have to read all those difficult books which had been
world; and what did it, matter whether the act of 1814 was written upon the subject before they could come to a con-
aetually interfered with by the Governmennor whether they elusion. He must be permitted to think that, if the object
gave an assurance that it would be under certain eircum- which the hon. member had in view was this, the house
stances ?It was the destruction of confidence in 1847 that would hardly agree to the appointment of such a committee.
caused the demand for gold, and the consequent alarm, and Assuming that no such general inquiry as that would be
from the moment that relief was at-Ended, the depression undertaken by a committee to be appointed by that house,
in the value of property began to cease. The effect of using he came to what really was the principal question for con-
such a letter as that of 1817 was to place the Government sideration, which was, whether a committee should be ap-
beyond the law, and to alter the value of every man's pro- pointed to consider the operation of the Bank Act of 1811.
party in this country ; and lie would ask whether it was That was the ground upon which the question had been
safe, whether it was reasonable, to leave the value of the argued by the hon. member for Wallingford (Mr. Malins)
whole property of the kingdom dependent upon the will of in a speech of great force and great clearness. The hon.
the Government? By the operation of the present law, member did not hold out to the house a general speculative
the accommodation which the Bank of England afforded inquiry, but he said plainly, " what has been the opera-
was regulated by the amount of bullion iu its coffers, and in tion of the Act of 1844," and " they wished to have a
consequence the directors were obliged to withdraw accom- committee to inquire into that." Now, that was a simple
modation by raising the rate of interest to 6or 8 per cent., question. It was one which the house was able to come
or to any amount which might be necessary to create a to a conclusion upon. If it were wished to inquire into
pressure. The Bauk of England hal therefore, in fact, a corn- the operation of the Act of 1814, it would be better to
mend over trade, and consequently overthevaLeof property move for a committee to inquire into that, act, instead of
throughout the country. He was entirely opposed to the stating a motion in the vague and abstract terms which
act of 1844; and be must say that if the hon. member for were implied in the motion before the house. Assuming
Birmingham divided he should divide with him, because if that that was the object of this motion, and one upon which
the motion were carried it would pledge the house to most hon. members would be inclined to give their votes,
nothing more than this—to inquire whether by any means let the house consider whether it was desirable to inquire
they could avoid a recurrence of the circumstances of 1847; into the operations of that act. He would repeat now
and he would ask the Covet utnent what would have been what he stated on a former evening, that, in his opinion,
the state of credit in this country in 1847 had not the pre- the present moment was not peculiarly well suited to nn-
sent First Lord of the Admiralty, and the noble lord the dertake an inquiry into the Bank Act of 1844. The cir-
member for the City of London, had the courage to use cumstances of the country were remarkable, inasmuch as
their special authority to interrupt the operation of the they were now in the second year of a war, which had
law ? In the present war the credit. of the country was the made great demands upon the reserve bullion iu the Bank
mightiest weep ei, it possessed; but if the bullion in the for the purposes of foreign shipment. Moreover, the state
Bank of En,y,laail were to sink to within two millions of the in which the finances of the country were now in did not,
amount allowed by law, it might be well if the Government render the present moment one of the most fitting for en-
were to allow an opportunity for considering how far the gaging in an inquiry which would render it necessary for
fictitious necessity of 18 t 7 might he avoided. If a panic an investigation to be made into the various operations in
were to arise now, similar to that of 1817dand the Govern- which the Rink had been concerned. Therefore, it ap-
erient were not to interfere, there would be a demand for peered to him that, if it was• proposed that a committee
gold, and there would not be enough of it in the country to should be appointed for a general and philosophical inves-
convert one-third of the notes in circulation. The rules by tigation into the operations of the Act of 1841, which the
which the government of the Bank of England was con- words of the motion seemed to imply, the house would not
ducted were so arbitrary that the institution lost much of be inclined to appoint. such a committee. If it was in-
the public confidence. He would support the motion, and tended to confine the researches of the committee to the
he hoped the Government would not resist the inquiry fur mere practical operation of the Bank Act, the present mo-
whichment did not seem well suited for the inquiry. The hon.
the hon. gentleman had moved. (Hear, hear.)
Sir W. CLAY said that one peculiarity in the present member for Wallingford (Mr. Malins) seemed to entertain
great alarm at the prospects of the count-y. He thought
debate was, that no one hen supporten the appointment of
they were threatened With a national bankruptcy, and if
the committee on the ground on which the hon. gentleman
that were not imminent it was by no means improbable.
the member for Birmingham had moved it. All the hon.
members who took part in the debate appeared anxious Mr. MALI NS was understood to dissent.
not to disturb the great settlement of 1819, and not to do The CHANCELLORof the EXCEIEQI7EII--Well, such
anything which could alter the standard of value as laid a calamity the hon. member thought possible, and be asked down in that act. All the speakers who had risen since whet course the Government proposed to take in the event
the mover had confined themselves to the operation of the of the Bank not being able to meet the demands which
Act of 1811. It was an error to suppose that it was pos. might be made upon it. Ho would say that the appoint-
siblo by :my legislative enactment to maintain money in ment of a committee would, at all events, be a very imper-
this kingdom on a different level from that which pre- feet remedy to prevent a national bankruptcen If they
vaned in other countries ; for money Was preserved at an were threatened with such a great national danger as that
equable rate by the operations of commerce, and, like all affecting the credit of the Bank of England, it most be ob-
other commodities, obeyed the law of supply and- devious that at this moment the appointment of a committee
mend. (Hear, hear.) Not only had there been a ba,l to take evidence on the subject of the currency would be
harvest, and " a drain from the East," but the attended with great inconvenience. When the last corn-
allied nations engaged in carrying on the wen heel all rnittee was appointed it, occupied two sessions, anti he
been competing in the money market; and, so far from might assume, therefore, that the appointment of a come being surprised at the present rate of interest, ho was mitten now would offer a very imperfect secawity against
astonished thatit was not ninth higher. For his own part, the danger which might be apprehended. Nov, what was
he was bound to say that he saw no good likely to result the present state of the Bank of England? He would not
from the appointment of the committee sought for. At the trouble the house with 'a long statement of figures, but he
same time, if the Chancellor of the Exchequer did not op- would remark that on the 23d of February inst., the circu-
pose it, he (sir W. Clay) would not withhold his vote. Minn of the Bank was 19,251,0001., while the bullion was
An HON. MEMBER here moved that the house be 10575,0001 ,or considerably more than one-half the circa-
counted.
lation—a state of things which, in former times, would
(There were at the time about 32 members present ; hut, have been considered most prosperous, and he thought the
when it became known that the motion had been made, Mr. present state of the Bank was most creditable. There had
Cranfurd. Mr, Murrough, and a few other members elis- been many hostile criticisms hosed upon the arbitrary rule
tinguished fee: their zeal in secn'
ring for the house the belie- of making 141 millions, by which the circulation of the
fit of debates in which they themeelves take no part, rushed notes should be regulated: ; and it was said, why ,elect
into theltouse, aril, liaving, by their presence made up the that sum more than any other? The reason it was
requisite number of umushere, immediately returned to selected was because it was believed that the circulation
more cenoenial pursuits in the coffee-rooms or library al- would never descend lower than that sum. The goes-
j ecent )
tion was, whether anybody was ready to propose anything
Mr. CAY LEY expressed his surprise that no member hatter? A gentleman interested in the currency had re-
of the Government had risen to express an opinion on this cently published a pamphlet upon the subject of the Bank
subject. He hail hoped the Chancellor of the Exchequer Act of 1844. That gentleman had been for many years
would have delivered his sentiments, as also the First Lord familiar with this question, and though now at a very ad-
of the Admiralty, who had taken a very active part in the vented age, he had treated the subject with great vigour.
committee of 1847 and 1818. The hou. gentleman the Se- He might be taken as a representative of the opposition to
cretary for the Treasury might perhaps favour the house the Bank Act of 1844. What was his substitute ? He pro-
with his opinions on a subject upon which it was believed posed to fix the minimum of hellion in the Bank at not less
he del not coincide with his colleagues in the Government. than 12 millions. Now he did not think it desirable that
He (Mr. Cenley) agreed with the hon. member for East the minimum should be fixed by act of Parliament ; but ho
Surrey that the problem of the currency was a most difficult thought thatit should be settled by au arrangement between
one to solve. He recemniended the hon. member for Div- the Bank and the Government, arid that it might be left
niinghattt to be satisfiol with the discussion that had taken, upon the t understanding. Now, till hon. gentleman think
or Was likely to take place, for the small attendance of hon. that if an agreement were drawn up—an agreement which
members ou that occasion was not at all a true criterion of would be in writing—between the governors of the B ink
the interest which the conetry felt on this subject. (Hear.) and the Executive Government, that the reserve of bullion
At the same time he thought that an inquiry on the subject should never be Below 12,000,0001., that the directors of
would be extremely useful ; but that inquiry ought to be the Bank would not consider themselves as much bound
made not by a committee of that house. but by three of the by such au agreement as if it had been embodied in an act
ablest financiers out of that house. He remembered well of Parliament ? Would those gentlemen think themselves
the sort of committee that sat upon this subject in 1843 ;ho safe in allowing the reserve to sink below 12,100,0001., who
never in his life saw a greeter juggle. That was a packed had entered into an agreement of that kind? Here was the
committee. it was true only one or two members suggestion offered bytheablewriteron the subject to whom
representing the Government sat upon that certunittee, but he had referred. When he came to approach the particular
they were always in their places, and they voted directly suggestion, he had nothing to offer but what he (the Chan-
in the teeth of the evidence. That committee reported in cellor of the Exchequer) had stated. For this reason he
direct opposition to the moos of evidence given before it. (the Chancellor of the Exchequer) thought that if the hon.
(Hear.) The hon. member for Kendal could bear testi- gentleman should press his motion to a division, he should
mony to that fact. Of the 17 witnesses who were examined feel bound to give his vote against the appointment of a
by the committee, only four gave evidence in favour of the select committee at that moment. Nevertheless, he fully
Act of 1841. More able moo could not have been called he- admitted that the operations of the Bank Act of 1844 was
fore the committee than the witnesses they examined. All a fit and proper subject for the consideration of the house
the witnesses connecte 1 with the commercial interest were by a select committee, when the proper moment had at--
unanimously of opinion that that act was the proximate rived. It not only deserved, -hut -required, investigation
cause of the great panic of 1817. Sir R. Peel said that his by a proper tribunal. He trusted, however, that the. oh.
bill of 1844 would prevent veolent oscillations in the money ject of his hon. friend, which seemed to be rather specula-
market, but never had the money market been so violently tive than practical, would be attained by a full discussion
agitated as since the passing of that measure. For a can- cf the subject, which had now been somewhat prolonged,
fury previous to 1841, the Ban': of England had not altered and that he would not think it necessary to press his ino-
it rasetne oft discount. He (Mr. Cayley) believed that one Lion to a division. Before he sat down, however, he would
fonna jo,
be y the currency system of this country was not refer to an answer which he had
reade on a previous occa-
so satisfactory as it might be, was the desire sion to a question pot to him' by the hon. member for
of the Chancellor of the EXchequer to make a gain of Invereess-shire, with respect to a provision of the Bank
100,00(-1. or 200,000/. out of the Bank of England for per- Act of 1841, which will expire in August next. It
mitting it to manage the monetary affairs of the Govern- seemed that he (the Chancellor of the Exchequer) then
ment. But at what a fearful cost to the commercial classes made an answer which, it seemed, did not satisfy the hon.
of this country was that gain made? Every 100,0001. member as to what the Government proposed to do with
gained by the Chancellor of the Eechequer lo means Of reference to the contents of that provision. There was no
the restrictions upon the Bank of England. 'cost the mer- objection on the part of the bank of the contents of that
centile interest of this country Donne
0001 By the mo- provision, or that the Government should bring in a bill
notary system of 1819, when, for the first iine, gold was for the purpose of continuing that provision. He would
made the only standard in this country, this result w.s only repeat that the appointment of a committee, he
produced—a very slight variation in the ince of that coin, thought, would not be suitable to the preeent occasion.
and there was a tendency towards its miles And what. Steadiness in the value of money and in the rate of dis-
measure was adopted to bring it back into this coa try 9 count was highly desirable, and what he thought ought to
Just such a measure as was calculated to ruin theureen.
cantile body, for a great number of forced sales
greatwer be the endeavour of every good citizen to promote by
every means in his power; ane he might also add, that
Made, the result of which is
to produce asteadiness in legislation was quite as desirable a matter as
fall in prices. A great fall in priced tempted the steadiness in the currency, and was equally of the highest foreigner to come here for goods instead of for gold, . importance.
The house should not injudiciously interfere and that was the system, by which the bullion was with thisquestion of currency. He (the Chancellor of the
brought back to our shores. That system, which was Exchequany would not be supposed to anction the notion
ruinous to the commercial body, had been resorted to from of any peen o- . . pp .
n entertaunno the idea ofs the convertibility
time to time since the peace. (Hear.) A system more of the currency, buthelhl 1 that tper they would, under all
crude, barbarous, not to say brutal, he hadin a
never heard of.. circumstances, nn conjectures, maintain the immu-
The hon. member for Birmingham had said that the phi- tability of that standard. (Hear, hear.)
Mr. 'SPOONER sain that at last they were favoured
losophers were all of oue mind on this subject, but that was
vvitlothe but he
Gove
hot exactly the truth. Some of the moist eminent writers
Government upon this most important
on finance were totally opposed to the principles of the act question ; but he muet aa that
Le
if anything were wanting
of 1814. He (Mr. cayley) \quilted to give to the connuer- before to curifirm the opiynionc e had formed with refereial body that which be believed they really wanted, viz., eace hi the consequences Of the Act of 1844, it was -
plied by the answer which the right hon. member (the
sup-
bullion in the bank to the atuouut of :about 20,00:40000
the Chancellor of the Chancellor of the Exchequer) had given toi this motion.
He should like to know whenter
Exchequer had ever endeavoured to ascertain what was the He dealt with it as a speculative motion—whereas
friend was the last man in the world to whorew ereas his hon.
total amount of our monetary transactions under the act of
1844. as tested by the clearing-house. The hon, member thet could be justly applied. The motion wasseacuh an eaPnid"
for Kendal warichairman of the clearing-louse, and he (Mr. distinct on the part of the hon. member for Bizrinrieseh
Cayley) went there the other day to ascertain from him —it was, how far the present monetarysyatem of thengcouanm-
what the amount of the daily transactions was. He told try was in accordance with the requirements of the coun-
, the hon. member that as return that was made to Parlia- toy, and to consider whether it could net be improved and nd
- ment abont 20emars ago showed that the daily transactions amended. Whether or not the hon. member was right
I
amounted to about 5,000,030/., but the hon. gentleman said (Mr. Spooner) had no doubt that he spoke the opinions of
that that was altogether a misstatement—that the trans. a very large majority of the, commercial interests of this
actions were Private, and could not be revealed to the public. country. (Hear.) The right hon. member said that the
He (Mr. Cayley) believed, however, that the transactions cf provisions of the act were such that it ought to be consi-
the clearing-house in London amounted to 15,000,000/. derably amended, but that the time had not yet arrived.
daily, which, multiplied by 300, gave a sum for the whole Had he given any reason why, this was not a proper time?
year of 4,500,030,000 e c. transaction;, Let them look at Why was this not a time for a committee to be appointed.
the credit involved in those transactions. They were trans-Ito inquire into tide most important question ? Tiao right
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