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

fors of balances and credits. The debts of one banker were
balanced by those of another. All those transactions were
based upon gold ; therefore every one must naturally feel i
anxious when the amount of bullion in the bank was gra-
dually decreasing. It was an artificial system, which pro-
d aced periodical revulsions and disarrangements, unless the
necessary amount of gold were replaced by importations
from Australia and California. Nothing could be more im-
portant than the certainty of having a fixed medium of
change. 20,000,000 i. were considered sufficient to liquidate
the bill and trade transactions of the country. It was be-
cause the bank might be forced to reduce the amount of
notes below 20,000,0001. that panics ensued. The supply of
money was usually sufficient, but unfortunately it was cut
short by the present system. He wished that the public
should always have that amount of the medium of ex-
change which was necessary for the commercial transac-
tions of this country. He did not wish to curtail the legi-
timate profits of the bank, btt he was of opinion that a
portion of its capital might be profitably isvestedin foreign
securities. He did not use capital in the sense of gold. The
right hon. gentleman (Sir C. Weed) belonged to that
school which held that capital meant gold—
Sir C. WOOD—I never said so.
Air. CAY LEY —The right hon. gentleman had repeatedly
argued to that effect.

Sir C. WOOD—Never.
Mr. CAYLEY—It was quite clear, according to the bul-
lion theory, that if all the gold were taken away from the
country, there would be no capital left ; but any man of
common sense must know that, if all the gold were taken
away, much capital would still remain behind. He only
wished that, in the commerce .of this country, the counters
used should be of exactly equal, amount.
Mr. L. HEYWORTH said his belief was that panics
had their origin in the law of nature and in nothing else.
If the earth produced a superabundance of food, produce
would be cheap,. and trade would be stimulated. He be-
lieved that large discount was the only remedy for over
production, and that gold had nothing to do with it.
The CHANCELLOR of the EXCHEQUER said he could
assure the hon. member for the North Riding (Ur. Cayley)
that it was not out of any disrespect to the house that he
had abstained from noticing this question at an earlier
period of the evening. The object of the discussion was
whether or not the house should appoint a select committee
to inquire into the subject of the currency, and, before he
stated his opinion, he was anxious to hear what might be
the opinions of different hon. members, and then he should
be able to judge from those opinions whether or not they
wore in favour of the appointment of the committee. The
motion, which had bean submitted to the house by the hon.
member for Birmingham (Mr. Muntz) was, that a select
committee should be appointed to inquire how far the pre-
sent monetary system was in accordance with the require-
ments of the country, and to consider if it could be im-
proved or amended. Owing to the great familiarity with the
subject of the currency which the hon. member possessed,
he had illustrated the subject by historical deductions, be-
ginning with William the Conqueror, descending to the
time of Queen Elizabeth, and thence to the Acts of 1819
and 1814, and he had brought forward numerous instances
1 to establish the facts which he said existed. He (the Chan-
cellor of thaExchequer) did not precisely understand what
would be the nature of the inquiry which was proposed that
a committee, if appointed, should undertake. It had been
said that the committee would have to inquire into the
means of preventing fluctuations in prices of articles and
the rate of discount, which was injurious to all classes ex-
cept the class of bankers. The hon. member for Birinin ;-
ham said the object he had in view was to give happiness,
power, and prosperity to tie community. Teat was a most
extensive subject of inquiry, and a very lofty and excellent
object; but he would put it to the judgment of the house
whether they thought a select committee of 15 gentlemen
would be competent persons to undertaken speculative and
theoretical inquiry of that nature? In a select committee
philosophers would, no doubt, sit down to examine the
subject calmly, and they would call before them persons
who had examined into the theory of currency, and they
Iwould have to read all those difficult books which had been
written upon the subject before they could come to a con-
clusion. He must be permitted to think that, if the object
which the hon. member had in view was this, the house
would hardly agree to the appointment of such a committee.
Assuming that we such general inquiry as that would be
undertaken by a cnnmittee to be appointed by that house,
he came to what really was the principal question for con-
sideration, which was, whether a committee should be ap-
pointed to consider the operation of the Bank Act of 1814.
That was the ground upon which the question bad been
argued by the hon. member for Wallingford (Hr. Matins)
in a speech of great force and great clearness. The hon.
member did not hold out to the house a general speculative
inquiry, but he said plainly, " what has been the opera-
tion of the Act of 1814," and " they wished to have a
committee to inquire into that." Now, that was a simple
question. It was one which the house was able to come
to a conclusion upon. If it were wished to inquire into
the operation of the Act of 1814, it would be better to
move for a committee to inquire into that act, instead of
stating a motion•in the vague and abstract terms which
were implied in the motion before the house. Assuming
that that was the object of this motion, and one upon which
most hon. members would be inclined to give their votes,
let the house consider whether it was desirable to inquire
into the operations of that act. He would repeat now
what he stated on a former evening., that, in his opinion,
the present moment was not peculiarly well suited to un-
dertake an inquiry into the Bank Act of 1811. The cir-
cumstances of the country were remarkable, inasmuch as
they were now in the second year of a war, which had
made great demands upon the reserve bullion iti the Bank
for the purposes of foreign shipment. Moreover, the state
in which the finances of the country were now in did not
render the present moment one of the most fitting for en-
gaging in an inquiry which would render it necessary for
an investigation to be made into the various operations in
which the Bank had, been concerned. Therefore, it ap-
peared to bins that, if it was proposed that a committee
should be appointed for a general and philosophical inves-
tigation into the operations of the Act of 1.841, which the
words of the motion seemed to imply, the house would not
be inclined to appoint such a committee. If it was in-
tended to confine the researches of the committee to the
mere practical operation of the Bank Act, the present mo-
ment did not seam well suited for the inquiry. The hon.
member for Wallingford (Mr. Malins) seemed to entertain
great alarm at the prospects of the county. He thought
they ware threatened with a national bankruptcy, and if
that were not imminent it was by no means improbable.
Mr. MALIN'S was understood to dissent.
The CHANCELLOR of the EX re' FIE (211 E a —Well, such
a calamity the hon. member thought possible, and ho asked
what eonrse the Government proposed to take in the event
of the Bank not beie,g able to meet the demands which
might be made upon it. He would say that the appoint-
ment of a committee would, at all events, be a very imper-
fect remedy to prevent a national bankruptcy. If they
were threatened with such a great national danger as that 1
affecting the credit of the Bank of England, it mast be ob-
vious that at this moment the appointment of a committee
to take evidence on the subject of the currency would be
attended with great inconvenience. When the last com-
mittee was appointed it occupied two sessions, and he
might assume, therefore, that the appointment of a eoms
mittee now would offer a very imperfect security against
the danger which might be apprehended. Now, what was
the present state of the Bank of England? He would not
trouble the house with a lore statement of figures, but he
would remark that on the 23d of February iust., the circu-
lation of the Bank wars 19,251,0001., while the bullion was
10,575,000/ , or consi lerably more than one-half the circa-
lation—a state of thine which, in former times, would
have been considered most prosperous, and he thought I he
present state of the Bank was most creditable. There had
been many hostile criticisms based upon the arbitrary rule
of making 111 millions, by which the circulation of the
notes should be regulated ; and it was sail, why select
that sum snore than any other ? The reason it was
eelected was because it was believed that the circulation
would never descend lower than that sum. The ques-
tion was, whether anybody was ready to propose anything
hotter? A gentleman interested in the currency had re-
cc ;fitly published a pamphlet upon the subject of the B ,nk
Act of 1841. That gentleman nail been for many years
feroiliar with this question, and though now at a very ad-
vanced ago, he had treated the subject with great vigour.
He might be taken as a representative of the opposition to
the Bank Act of 1814. What was his substitute ? He pro-
posed to fix the minimum of billion in the Bank at not less
than 12 millions. Now, he did not think it desirable that
the minimum should be fixed by act Of Parliament ; but he
thought that it should be settled by an arrangement between
the Bank and the Government, and that it might be left
upon th i understanding. Now, di 1 hon. gentleman think
that if an agreement were drawn up—an agreement which
would he in writing—between the governors of the B tnk
anti the Executive Government, that the reserve of bullion
should never ho below 12,000,0001., that the directors of
the Bank would not consider themselves as much bound
by such au agreement as if it had been embodied in an act
of Parliament? Would those gentlemen think themselves
safe in allowing the reserve to sink below 12,e00,000/., who
hid entered into an agreement of that kind? Hera was the
suggestion offered bytheable writeron the subject to whom
he had referred. When he came to approach the particular
suggestion, he had nothing to offer but what he (the Chan-
cellor of the Exchequer) had stated. For this reason he
(the Chancellor of the Exchequer) thought that if the hon.
gentleman should press his motion to a division, he should
feel bound to give his vote against the appointment of a
select committee at that moment. Nevertheless, he fully
admitted that the operations of the Beak Act of 1844 was
a fit and proper subject for the consideration of the house
by a select committee, when the 'proper moment had ar-
rived. It not only deserved, bat required investigation
by a proper tribunal. He trusted, however, that the ob-
ject of his hon. friend, which seemed to be rather specula-
tive than practical, would be attained by a full discussion
of the subject, which had now been somewhat prolonged,
and that he would not think it necessary to press his mo-
tion to a division. Before he sat down, however, he would
refer to an answer which he had made on a previous occa-
sion to a question put to him by the hon. member for
Inverness-shire, with respect to a provision of the Bank
Act of 1844, which will expire in August next. It
seemed that he (the Chancellor of the Exchequer) then
made an answer which, it seemed, did not satisfy the hon.
member as to what the Government proposed to do with
reference to the contents of that provision. There was no
objection on the part of the bank of the contents of that
provision, or that the Government should bring in a bill
for the purpose of continuing that provision. He would
only repeat that the appointment of a committee, he
beste theadi n
ee
thought, would not be suitable to the present occasion.
Steadiness in the value of money and in the rate of dis-
count was highly desirable, and what he thought ought to
sdienavt_hoi_erercuorrfeneveyer,y good citizen to pro Mote by
every means in his power ; and he might also add, that
steadiness
qinuelaeTtgihiosillahotoifoucnsuerwrsas quite as desirable a matter as
and was equally of the highest
importance.
with this currency. He
nHoteiFtjhuedcichircleyllionrteorffethree
Exchequer) would not be supposed to sanction the notion
of any person entertaining the idea of the convertibility
of the currency, but he hoped that they would, under all
circumstances, and in all cohlectures, maintain the immu-
Estnandsaaridithat at last they
t were favoured
tabmilri.tysopfothoax't
(Hear, hear.)
with the opinion of Government n
question ; but ho must say that if anything is most important
ior,ipwere wanting
before to confines the opiuion he heel f ,1
itoth refer-
ence to the cmscipiouces of the A,,t, „
1811,was sup-
plied by the answer which the right 11,w. membert (the
ilaucellor of the Exchequer) 113 motion.
He dealt with it as a speculative motion—whereas his hen.
had given to
friend was the last man in the world to who'll such
epi-
thet could be justly applied. The motion was expressa
nn: d
distinct on the part of the hon. member for Birmingham
—it was, how fat' the present monetary system of the coun-
try was in accordance with the requirements of the coun-
try, and to consider whether it could not be improved and
amended. 'Whether or net the hon. member was right he
(Mr. Spooner) had no doubt that he spoke the opinions of
a very large majority of the commercial interests of this
country. (Hear.) The right hon. member said that the
provisions of the act were such that it ought to be consi-
derably amended, but that the time had not,yot arrived.
t
Had he given any reason why this was rot a proper time?
Why was this not a time for a committee to be appointed
to inquire into this most important question ? The right