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

He hoped in conclusion that the house would not consent I
to the motion of the hon. member for Birmingham, nor do
anything to lessen the position of the country abroad. f
Ifx,, WILKINSON could not entertain any hope that, if
s act were repealed to-morrow, panics would

•
BAILLIE believed it was the intention of Sir R.
.e, at the end of ten years from the passing of his
~,.inquiry should take place into the operation of
At act, and if it was proved to be beneficial that restric-
tion should be carried still further, and that ho intended
to place all private banks upon a similar footing to that of
the Bank of England, and to compel them to withdraw
their paper circulation. With regard to the motion before
the house, he agreed with the Government so far that he
thought this was not a favourable time to enter upon any
attempt of this kind, but he did think that a time might
cease hereafter when it would be advisable to submit the
subject to the consideration of a select committee. (Hear.)
One cause which operated injurionsly now on the market
WAR that within the last three or four years our trade with
India was so uufavourable that we had to send 7,000,00J1•
sterling to India is the precious metals. If India was to
supply us with great quantities of cotton, as some hon.
s e that we
gentlemen expected, it was actually impossible
could pay for it, for the people of Indiaimwpoouldnot take our
manufactures—they did not want them. (Hear.)
Mr. GLYN said though he could net vote for the motion
of the hon. member for Birmingham, be confessed the sub-
ject was worthy the consideration of the hence.(Hear.)
bate were
The panics referred to in the course of the
created, not by fears of the convertibility of the bank note,
they were caused by that which was common to all notes,
the knowledge on the part of the people of property that
there was a fixed amount beyoud which no advances could
The panic in 1847 was cured by the letter
Foe (Hear.)
issued by the Government at the proper moment when
the exchanges had turned, and the proper rate of in-
terest was fixed by the Government of the day. The
effect was instantaneous ; people had hoarded their notes,
lent when that letter was issued they produced them,
and the market was immediately relieved. He could
not concur with the honourable gentleman who spoke last
(Mr. H. Braille), that it was the intention of Sir Robert
poet to prevent private banks at the end of 10 years
from being banks of issue, though that, no doubt,
in time would be the natural consequence. There was
another question which he wished to put to the house—
whether, in point of fact, the time was not come when
the profit and responsibility of the circulation of this coun-
try ought no longer to rest with individuals, but with the
Government, and before the Bank Act was renewed ho
• hoped that the Chancellor of the Exchequer would carry
oat his intention of appointing a committee upon this snb-
toc" t. It was not fair to the bank, or to the country at
large, that the matter should be allowed to remain as it
was. At the same time he wished to say one word upon
the conduct of the directors of the bank, about which
there was great misapprehension. Their duties, under
tho operation of the present act, were most di cult—
(hear, hear)—while, at the same Lime, the machinery was
most cramped ; and he was anxious to offer his /need of
praise for the manner in which they had performed their
ditties. Their conduct had been most admirable, and they
had steered through their difficulties in a manner which
reflected the highest credit upon the bank. (Hear, hear.)
He trusted that the Chancellor of the Exchequer would
offer some explanation of what he intended to do.
Mr. NEWDEGATE had been the first to call attention
to the necessity of extending the limit of 14,000,0001. to
22,000,0001. that being the average of the issue of the Bank
of England for the last 20 years. In 1847 the bullion in the
Bank of England was reduced by the necessity of paying for
corn which had been imported to about 8,000,0001. ; those
8,000,0001. of bullion, and the 14,000,0031. of securities,
amounting to 22,000,0001., formed what was commonly
termed the "sticking point." The bullion in the Bank of
England at the present time was not more than 10,000,0001.,
and if that should be reduced to 2,000,030/e the Govern-
moot would have to interfere again by a letter similar to
that of 1847, in order to restore confidence to the commercial
world; and what did it matter whether the act of 1844 was
actually interfered with by the Government,or whether they
gave an assurance that it would be under certain circum-
stances ? It was the destruction of confidence in 1847 that
caused the detnanil for gold, and the consequent alarm, and
from the moment that relief was afforded, the depression
in Cho value of property berm to cease. The effect of using
such a letter as that of 1817 was to place the Government
beyond the law, and to alter the value of every man's pro-
perty in this country ; and lie would ask whether it was
safe, whether it was reasonable, to leave the value of the
whole property of the kingdom dependent upon the will of
the Government? By the operation of the present law,
the accommodation which the Bank of England afforded
was regulated by the amount of bullion in its coffers, and in
consequence the directors were obiiged to withdraw accom-
modation by raising the rate of interest to 6 or 8 per cent.,
or to any amount which might bo necessary to create a
pressure. The Bank of England had therefore, in fact, a com-
mand over trade, and consequently over the value of property
throughout the country. He was entirely opposed to the
act of 1844; and he must say that if the Lon. member for
Birmingham divided he should divide with him, because if
the motion were carried it would pledge the house to
nothing more than this—to inquire whether by any means
they could avoid a recurrence of the circerastartces of 1817;
and he would ask the Government what would have been
the state of credit in this country in 1847 had not the pre-
sent First Lord of the Admiralty, and the noble lord the
member for the City of London, had the courage to use
their special authority to inteirupt the operation of the
law ? In the present war the credit of the country was the
mightiest weapon it possessed; but if the bullion in the
Bank of England were to sink to within two millions of the
amount allowed by law, it might be well if the Government
were to allow an oppoitnnity for considering how far the
fictitious necessity of 1817 might be avoided. If a panic
were to arise now, similar to that of 1817,1 end the Govern-
ment were not to interfere, there would be a demand for
gold, and there would not be enough of it in the country to
convert one-third of the notes in circulation. The rules by
which the government of the Bank of England was con-
ducted were so arbitrary that the institution lost much of
the public confidence. He would support the motion, and
he hoped the Government would not resist the inquiry for
which the hon. gentleman had moved. (Hear, hear.)
Sir \V. CLIY said that one peculiarity in the present
debate was, that no one h el supported the appointment of
the committee on the ground o.i which the hon. gentlemen
the member for Bileninglmen lied moved it. All the hon.
members who tool: part in the debate appeared anxious
not to disturb the great settlement of 1819, and not to do
anything which could alter the standard of vilee as hilt
down in that act. All the speakers who had risen since
the mover had confined themselves to the operation of the
Act of 1844. It was an error to suppose that it was pos-
sible by any legislative enactment to maintain money .in
this kingdom
.on a different level from that which nre-
trailed in other countries ; fur money was preserved at an
equable rate by the operations of commerce, and, like all '
other commodities, obeyed the law of supply and de-
mand. (Rear, hear.) Not only had there been a bad
harvest, and " a drain from the E Ist," but the
allied nations eagegal in carrying on the war, ha .l all
been competing in the money market; arid, so far from-
being surprised at the present rate of interest, hs was
astonished thatit was not emelt higher. For his own part,
• be wash ,and to say that he saw no good likely to result
from the appointm int of the connuitt m sought for. At the
same time, if the Chancellor of the Exchequer did not op-
pose
it, be (Sir W. Clew) would not withhold his vote.
An HON. MEMBER here hewed that the house be
counted.
(There were anti° time about 32 members present ; but,
when it became known that the !notion had been made, Mr.
Creufnna Mr. alurrough, and a Jew other members dis-
tin suished for their zeal ie securing for the house the bene-
fit of debates in which they therasslves take no part, rushed
into the house, and, having by their presence made up the
requisite number of members, immediately returned to
more congenial pursuits in the coffee-rooms or library a .1-
j ecent )
Mr. CAYLEY expressed his surprise that no member
of the Government hail risen to express an opinion on this
subject. He had hoped the Chancellor of the Exchequer
would have delivered his sentiments, as also the First Lord
of the Admiralty, who had taken a very active part in the
committee of 1847 and 1848. The hon. gentleman the Se-
cretary for the Treasury might perhaps favour the house
with his opinions on a subject upon which it was believed
he did not coincide with his colleagues in the Government.
He (Mr. Cayley) agreed with the hon. member for East
Surrey that the problem of the currency was a most difficult
one to solve. Ho recommended the hon. member for Bir-
mingham to be satisfied with the discussion that had taken,
or was likely to take place, far the small attendance of hon.
members on that occasion was not .at all a true criterion of
the interest which the country felt on this subject. (Hear.)
At the same time he thought that an inquiry on the subject
would be extremely useful ; hut that inquiry ought to be
made not by a committee of that house, but by three of the
ablest financiers out of that house. He remembered well
the sort of committee that sat upon this subject in 1843 ; ho
never in his life saw a greater juggle. That was a packed
committee. It was true only one or two members
representing the Government sat upon that committee, hut
they were always in their places, and they voted directly
in the teeth of the evidence. That committee reported in
direct opposition to the mass of evidence given before it.
(Hear.) The hon. member for Kendal could bear testi-
mony to that fact. Of the 17 witnesses who ware examined
by the committee, only four gave evidence in favour of the
Act of 1811. More able men could not have been called be-
fore the committee than the witnesses they examined. All
the witnesses eonneote 1 with the commercial interest were'
unanimously of opinion that that act was the proximate
bee.ililsoefolui
the great panic of 1817. Sir R. Peel said that hies
would prevent violent oscillations in the money
market, but never had the money market been so violently
agitated as since therpassing of that measure. For a cen-
tury previous to 1841, the Bent: of England had not altered
Its rate of discount. He (Mr. Cayley) believed that one
reason why the currency system of this country was not
found to be so satisfactory as it might be, desire
Exchequer of the Chancellor of thewas the
equeto
r make gain of
100,0001. or 200,0001. out of the Bank of England
for
per-
mitting it to manage the monetary affairs of the Govern-
meat. But But at what a fearfulgc,oisnt t°matdhee,aortmercial classes
of this country was that
100,0001.
gained by the Chancellor of the Exchequervel7
of
the restrictions upon the Bank of England, cost means„
c intile interest of this country 100,000,000/. By: hem:-
notary system of 1819, when, for the first time, gem was
made the only standard in this country, this result was
produced—a very slight variation in the price of that coin,
and there was a tendency towards its efflux. And what
measure was adopted to bring it back into this country
Just such a measure as was calculated to rain the mer-
e intik) body, for a great number of forced sales were
made, the result of which was to produce a, great
fall in prices. A great fill in prices tempted the
foreigner to come here for goods instead of for gold,
and that was the system by which the bullion was
brought back to our shores. That system, which was
ruinous to the commercial body, had been resorted to from
time to time since the peace. (Hoar.) A system morn
crude, barbarous, not to say brutal, he had never heard of.
The hon. member for Birmingham had said that the phi-
losophers were all of one mind on this subject, but that was
not exactly the truth. Some of the most eminent writers
on finance were totally opposed to the principles of the act
of 1814. lle (Mr. Ceylev) wanted to give to the commer-
cial body that which he lislieved they really wante.l, viz.,
bullion in the haul: to the amount of about :-!0,00),09a1.
Be should like to know whether the Chancellor of the
Exchequer bad ever endeavoitred to ascertain what was the
total amount of our inouetery treneactious under the act of
1841- as tooted by the clearing-house. The hon. reember
for Kendal was chairmau of the clearing hinge, and he (Mr.
Cayley) went there the other day to ascertain from hint
what the amount of the daily transactions was. He told
the hon. member that a return that was made to Parlia-
ment about 20years ago showed that the daily transactions
amounted to about 5,000,0001,, but the hon. gentleman said
that that was altogether a misstatement—that the trans-
actions were private, and could not be reveled to the public.
He (Mr. Cayley) believed, however, that the transactions of
the clearing-house in London amounted to 15,000,0001.
daily, which, multiplied by 300, gave a sum for the whole
year of 4,530,000,000'. of transactions. Let them lock at
the credit involved in those transactions, They were trams-

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