The Sun.
London, England, 1856-04-08 00:00:00

IMPERIAL PARLIAMENT.

HOUSE OF LORDS—(YEsTmr.DAy).

The LORD CHANCELLOR took his seat on the wool•
sack at five o'clock.

The Earl of MALMESBURY gave notice that on
Thursday he should ask a question of the Secretary of
State for War respecting the return of the cavalry and
artillery horses from the Crimea to this country.
AUSTRALIAN POSTAGE.

The Earl of HARDWICKE rose to put a question
to the Postmaster-General with respect to Australian
postage. He said that he had on a former occasion
made an inquiry of the Government on this sub-
ject, and he was told that the regular departure of the
usual mails for Australia and this country had been in-
terfered with in consequence of the war. In 1852 a
system of steam navigation for the purposes of postal
communication from Australia to this country was es-
tablished. Although that communication was not com-
pletely satisfactory to the colonists, it nevertheless
did answer the purposes ofaregular steam communicatiop,
giving in every alternate month a communication by the
I-thtnus of Suez to Australia on an average of only 04
days. That communication was, however, stopped in
1554, and from that year to the present time he might
8.. y that no regular communication for postal purpsee
existed. The conveyance of the malts was by merchant
vessels and other inferior ship,. From letters he had
received from the other side of Suez, he was informed that
the steam postal communication had not been interfered
with in consequence of the war, for the vessels that had
ereviously been engaged in the service were since em-
ployed in commercial pursuits elsewhere. The Austra
Tian colonies had presented a memorial upon the subject
to the Lords of the Treasury, and had shown
the strongest dispo,ition to defray a large
proportion of the expenses of a regular steam
communication. The Government bad advertised
for tenders, and many tenders had been received by
them for the conveyance of the Australian mails. The
colony of Victoria bad proposed to advance a sum of
50,000/., and New South Wales 20,000/ , towards the

expenses. The Government, in their advertise.
ments, omitted to specify the particular route,
but had left that important point in doubt
and uncertainty. lie would sincerely impress on
the Government the importance of this communication,
when it was considered that from Melbourne alone

1,000,0001. of gold had been received within the year.
He wished to inquire what progress had been made by
the GeNernment in this subject ; and concluded by ask-
ing the noble duke to lay upon the table the memorial
of the General Mercantile Association of Australia to
the Lords of the Treasury with respect to this question.
The Duke of ARGYLL said he was fully impressed
. .

with the great importance, he might indeed say the ab-
solute importance, of establishing a regu'ar postal com-
munication between Australia and this oountry. Tenders

had been sent i❑ to the Admiralty for the conveyance of
the mails by steam communicatior, and these tenders
were at present under the consideration of the Govern-
ment. It wets true that the Treasury minute
did not specify the particular route the mails
were to take becau,o they thought it much better to

leave it an open question for the-present, in order that
they might be better able to test the respective advan-
tages of each. The Government were not disposed to
put the motion off, but they thought it absolutely ne-

cessary to have the as,-ent of the colonists themselves
beforehand, as it was expected that they would d 3•

fray half the expenses. He had not the least
abjection to lay the memorial the noble earl opposite had
moved for on the table of their lordships' house.

THE CURRENCY.
The Earl of EGLINTON rose to call the attention of
the Government to the expediency of issuing a Royal
cmlmitsion to inquire into the operation of the laws
which regulate the cu,rtncy of the United Kingdom.
He feared that many of their lordships might have viewed

the notice be had given on this subject with some feeling
of alarm, as it was a subject very difficult to understand,
and from which most men therefore naturally shrank ;
but he assured their lordships that he would abstain
from indulging in any vague theories or long calculations
of figures, and would merely endeavour to convince
them that a searching inquiry into the system now es• a-
Wished was, if not necessary, at all events desirable. He
thought the present a proper time for inquiry on the
subject, on account, i❑ the first place, of the position in
which the Bank charter now stood. The present charter
was established in 1844 for 10 years, after which it was
liable to be terminated by one year's notice. The Bank
might consequently be said to be now waiting for a new
charter, and he believed that few persons would desire
to see a new charter granted without the subject under-
going a most searching investigation. Another reason
which made him think that this was a proper time for
commencing this inquiry was the circumstance that a
peace was now about to commence which was likely to be
enduring, from the prostration of
.the Northern agvres-

sor and the intimate aliance of the great countries of
Europe. The country was now, probably, on the •ve of
a career of considerable commercial enterprise, and of a
state of internal tranquillity and content almo,t unpar--
allel-d, and on this account, too, he thought the period
favourable for inquiry. In 1848, in consequence of the
severe monetary crisis which took place in the preceding
_ .

year, committees of both houses were appointed to in-
quire into the c iuses and amount of the distress which
then spread ruin over the country. Both committees
were equally anxious to discharge their duty properly ;
but the result was, that they agreed to report diametri-
cally opposite. Theirl lordship ' committee resolved in
favour of a relaxtion of the act of 1344, while the
committee of the House of Commons came to the resolu-
tion that no change in the system should take place.
These conclusions were come to in both instances by
narrow majorities, and that circumstance formed a good
and sufficient reason why the subject shou!d now be
taken up by a Royal commission, which would be free
from party spirit., which necessarily attached in some
degree to Parliamentary committees on this matter. lie
was rather unexpectedly fortified in his notion that in-
quiry was necessary by the opinions of some of them
who were supposed to be the strongest advocates of the
present system. In a late debate in another place the
Chancellor of the Exchequer was reported to have
said .
"I, neverthelets, fully admit that the operation of the
Bank Act of 1844 is afit subject for investigation by a
committee of this house when its proper time shall have
arrived, and when the circumstances shall appear to have
arrived, and when the circumstances shall appear to be
favourable for the prosecution of such an inquiry. I quite
agree that there are many part: of the operation which
require a complete investigation by a competent tribunal,
and I shall be quite willing, when the proper time arrives,
to assent to the appointment of a committee on the sub-
ject." .
Sir C. Wood also said :
" I am far from saying that such inquiry is undesirable."
He was aware that those gentlemen guarded themselves
against pledging themselves as to time, but they both
admitted that inquiry was desirable. He pressed this
!natter on their lordships' attention, because the system
as at present constituted had been tried and had failed.
The act of 1844 had not worked well, but bad failed in
preventing over-speculation, and bad proved inefficient
when the danger arose. Since the passing of the act
there hail been a commercial crisis, and greater fluc-
tuations of interest than ever had been known before.
Ho would not go into the subject of the country
banks, or into the Scotch and Irish question ; but
would confine himself solely to the case of the
Bank of England. By the act of 1844 the Bank
of England was authorised to issue 14,000,000/. in
notes, on the security of the debt due to it by the State,
and unrepresented by gold in their coffers. Every note
beyond that amount must be represented by gold. The
Bank of England was likewise divided into a banking
department and an issue department ; and thus the gold
which was in the issue department to answer the notes
in circulation over the amount of the 14 000,0001. WAS
not available for any
othere requirements in the banking
department. By anpart of the act the directors of
the Bank were empowered to take up a certain quantity
of country notes when any of the country banks ceased
to issue ; and the amount id that circulation which had
so ceased was nearly 500,0001. It was plainly intimated
to the directors that they were to consider themselves
merely as hankers ; that, as such, they were to look to
their own interest, without reference to the state of the
nation. Accordingly, when gold became plentiful they
towered the interest in order to get their notes out to the
public, and when gold became scarce they raised the
rate of interest. During the last 11 years 40 fluctuations
of interest had taken place, varying from 2 to 7,8, and
9 per cent. ; whereas in previous years the fluctuations
were few and trifling. These fluctuations appeared to be
on the increase, for during the the last four years they
had amounted to 16, and during the last year to 8. The
low rate of interest established in 1847 greatly encou-
raged speculation, and its result was to produce such a
drain upon the Bank that at the end of the year the
amount of gold left in it was considerably under
2,000,0001. The pressure became so great that the rate
of interest was raised to 7 and 8 per cent., and Mr. S.
Gurney stated in his evidence that he had been obliged
to pay 9 per cent. for an advance of 200,0001 , and such
was the panic that Mr. H. Palmer stated thatif the Bank
had attempted to relieve itself by a sale of consols the
price would have gone down to 60. But the directors,
undeterred by the experience of 1847, when money became
plentiful in 1852 again reduced their interest to the ridi-
culously low rate of 2 per cent. The same result followed,
a drain of gold again took place, and the Bank again raised
its interest, and at the end of last year the country was
again in difficulties and numerous bankruptcies took place.
According to the present system he knew that it was
absolutely necessary to
thesesraie the rate of interest—in
other words, "to put on rew"—when gold became
scarce. The Governor of the Bank, in his evidence be-
fore the committee of 1848, said upon this subject—
“ The means of getting back the gold is by making
money dear, and causing a fall generally in the price of
commodities, which will bring back gold;" and " prices
will fall in consequence of the increased value of money."
The effect of " putting on the screw " was not only to
ruin those houses which had been tottering, but also to
depreciate the whole property of the country and to fos-
ter speculative circulation by forcing out the notes of the
Bank. The act of 1844 had falsified the predictions of
its promoters iu another point. The noble lord opposite
(Lord Overstone), generally supposed to be its author,
said, upon the question of note circulation keeping pace
with the increase or decrease of gold—
" The issues of the Bank of England will, under the pro-
visions of that bill, be made to conform strictly to the flue-
' tuations of the bullion. Thus, it appears that contraction
of the circulation in correspondence with the decrease of
the bullion is the only measure which can afford effectual
security for stopping the drain of bullion."
1-No doubt the amount of notes in circulation was regu-
lated by the amount of gold in the Bank, but the expec-
tation of the noble lord had not been fulfilled, because
the note circulation was within a fraction the same in
1847, when there were 9,000,0001. of gold in the Bank,
as in laio, when there were 16,000,000/, ; at the end