The Sun.
London, England, 1867-01-28 00:00:00

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THE SUN, LONDON, Ai ONDAY EVENING, JANIU-A Y 28, 1867.

Mr. Childers, M.P., on Parliamentary and

had been given to him. lle should return to Par-
liament greatly strengthened and refreshed by the
genuine and hearty manner in which they had
been pleased to expres3 their approval and confi-
dence. He concluded by moving a vote of thanks
to the chairman, which was adopted unanimously,
and the proceedings terminated.

Administrative Reform.

On Friday night Mr. Childers, M.P., addresscl
his constituents in the West Riding Court-house,
Pontefract. Mr. Richard Maxon occupied the chair.
Mr. CHILDERS was received with loud applause.
He expressed the very great pleasure it gave him to
be once more amongst them to give an account of
his stewardship. Ile felt that it was a pleasure to
put before them as clear a statement as he could of
the present state of political matters, so that if he
had their confidence be might be able to return to
his duties in Parliament with satisfaction and alac-
rity. When he stood before them two years ago
he stated that we had just passed through one of
.the great eras of politics—the era of free trade.
The Chancellor of the Exchequer had by a suc-
cession of masterly movements pretty nearly ex-
hausted that budget of free trade to which the
country and Parliament were committed some
years ago, and he told them that they were ap-
proaching subjects of a difficult kind that required
most careful deliberation. During the first four
years he was in Parliament he was a member of the
party supporting the Government of the day, and
learnt his Parliamentary business upon the back
benches of the Government side of the house—not
always supporting them, but yielding to them a
general allegiance—but rather more than two years
ago he was called to bear his share in the govern-
ment of the country, and as they were pleased to
approve the conduct he bad adopted as an indepen-
dent member of Parliament, so they had been pleased
to suppress his conduct as a subordinate member of
her Majesty's Government. (Applause.) He now
came before them as a member of the Opposition,
his duty being to support the Government when
he thought them right, and oppose them when
he thought them wrong, for he was there as
one of the representatives of this great country,
above all party considerations, to endeavour to do
his best for the country at large. Let him in a few
words remind them that a Government supposed to
be in a large majority in Parliament had been re-
placed by a Government supposed to be in a mino-
rity. Although not actually returned by the elec-
tors of Pontefract until 1860, he considered himself
as their member from 1859, and in that year the
question of reform was in the hands of a Conserva-.
tive Government. He should never forget the cir-
cumstances of his canvass in 1859, when he saw all
his opponents quite as stanch reformers as himself,
indeed he was a little beaten in the race as to the
extent of reform they were to ask for. The bill of
Lord Derby's Government, however, met with the
disapprobation of Parliament, and Lord Palmers-
ton's Government came into office. That Govern-
ment felt it to be its duty to propose to the Parlia-
ment a considerable reform in the representation
of the people, but it was talked out of the house.
Between 1860 and 1865 great growlings took place
on the subject, but the Government did not feel
itself in a position to initiate further measures.
Then came the election of 1865, and last year a
moderate bill was proposed by her Majesty's Go-
vernment. Lord Palmerston had proposed a £6
bill for boroughs and £lO for counties, while that
of Lord Russell and Mr. Gladstone was a £7 bill
for boroughs and £l4 for counties; the difference
therefore was an addition of no less than 300,000
electors by the last bill, against an addition of pos-
sibly 450,000 by the bill of 1860. Thus there was
a material difference of 150,000 electors. It was said
to be an imperfect bill because it did not deal
with the question of the redistribution of seats.
It was simply a franchise bill, which would not
have taken effect until somewhere about the
close of the present year, and therefore there was
plenty of time to deal with the question. (Applause.)
While on that subject, let him remind them at any
rate at Pontefract they had no personal interest in
the question of redistribution, for Mr. Gladstone,
in one of his speeches last year, had said that the
borough of Pontefract was a constituency of mode-
rate size, and not a small borough in the sense of
the bill then proposed, or in any bill ever introduced
into Parliament by a Government which undertook
to deal with the subject of small boroughs for the
purpose of restricting their representation. (Loud
cheers.) That, then, was the imperfect character
of the bill, and it was to that supposed imperfect
character of the bill that the severest attacks were
directed, and ho might almost say successfully
directed. It was not, however, upon that question
that the Government were finally defeated, for the
final defeat came from a noble lord representing an
constituency, who proposed the system of
valuation by rating instead of the valuation by
rental, which the people in this part of the country
so very much sympathised with. (Loud cheers.)
The Government felt it its duty to resign office, and
he thought they would all agree that it had no other
course—(hear, hear)—for it had been dragged
through a succession of divisions, in which its ma-
jorities had been only 5, 10, 14, 7, until at last the
majorities were
convicted into a minority. Such, in
short, was the history of the late Reform Bill, and
now they had in
office the ablest men on the other
side of polities, headed in both houses by those who
had been the leaders of the party for many years
past—as able men
as could be found in the Con-
servative ranks. The question was to be asked
how ought this Government to be treated by those
who were their political opponents last year, and
upon that question
he was anxious to obtain their
advice and support. His answer would be positive
and undoubted enough. He did not think they
should deal with the present Government—he meant
particularly those who were attached to the late
Government—as if they bad been turned out of
office on an ordinary party division, they themselves
being eager and desirous of office. That certainly
was not the line taken by Lord Derby or his sup-
porters in both Houses of Parliament, for he showed
a great desire to include in his Government men not
attached to the Conservative ranks. They were not
to treat the Government as if they had been ousted
from office by a succession of intrigues. If a Govern-
mentdid its duty, those who sat on the other side of
thehouse showed them some forbearance, for it took
considerable time to build up an efficient Execu-
tive Government, and changes weakened an Admi-
nistration,both within and
nceodUntry. He was per-
paredeeile sup-
port ithoutto,gtiilveaeinntdifil
enacpl
influence
es
ewoifiettaikGovernment, not t
1
they had aright to expect from political friends,
but that generous consideration and forbearance
which their measures would justify. (Cheers.) That
brought him to the question of Parliamentary re-
form, upon which subject there were several courses
open to the Government. They might bring in a
b hey
ybout might bring in no bill at all, and say
nothingit ; they might proceed by resolution.,
might ask the house to support them in ap-
pointing : t
as
a
they
inquiry ; or they might
w
beenulisststigognesotf edthe other day, for the
hoatittstsoba
adoininstructc them as to the action they should
take. The last course was like asking them to be-
come political Macawbers of the day, waiting for
something to turn up outside before they deter-
ey
d tou
tterl take. (Laughter and applause.)
He ft
if this suggestion were
adoptedit wendedo
unworthy of any Govern -
meat, and that the present Government would not
listen to it, and go about the consideration of this
e wl
h act n fi course
d e
b it that
great question in such a light and childish manner.
(Cheers.)
Mr. J. CARTER (Knottingley), in proposing a
vote of confidence to the hon. member, expressed
his opinion that if the Government attempted to
carry on without bringing in a Reform Bill, they
would have to resign within a week. (Applause.)
Mr. KNIGHT seconded the proposition. He was
very much pleased to see that Mr. Childers was
prepared to support the principle of arbitration for
the settlement of strikes. (Applause.)
The vote was carried amidst prolonged cheering.
Mr. CHILDERS acknowledged the vote, and ten-
dered his thanks for the very warm reception which

THE CRISES OF 1866 AND 1857.

(From the BuMonist)

awuniadldn'elki
fei
nAtytheeceratrlr,easolaflroB:l6Bt6toli leec,lsfopolmrB:sl:l7, found some
though separated by a
pointsomwi t
e oh
divergenciesr egar d to t
b resemblancel e..;
tween them, there are also various points in
which they are apparently, if not ac-
tually, identical. They were both remarkable for
most serious crises ; but the causes were different.
In 1857 the crisis was commercial, arising from in-
flated trading; in 1866 it was financial, arising
from boundless financing. In both years there was
a call for the suspension of the Bank Act ; and in
1857 the Bank Act was actually, while in 1866 it
was only virtually, suspended. The crisis of 1857
was followed by a grave Parliamentary inquiry,
which established the conclusion that the Bank Act
had nothing to do with the crisis. That of 1866
was followed by a demand for a Parliamentary
inquiry, and the Bank Act was charged with
having intensified the crisis. Very little is
now beard of the necessity for inquiry ; and it is
uncertain whether the Government will assent to
the demand if it be made. But further comparisons
between the two periods may be made with some
advantage, we think, in determining whether in-
quiry be expedient, or, at all events, in determining
in what direction the inquiry, if conceded, should
be made. The directors of the Bank of England,
we have reason to believe, are at present both
neutral and passive ou this question. They are not
opposed to inquiry, but they will not shrink from
it ; and if it be instituted, the information in their
power to communicate will be given simply and
solely in the interest of the public.
The crisis of 1857 had, no doubt, its silent origin
in the gold discoveries some years previously, of
California and Australia. The effect of those dis-
coveries was an enormous expansion of our foreign
trade, a vast accumulation of bullion in the Bank, a
high reserve of notes, and a low rate of discount.
Between 1851 and the autumn of 1857, large
amounts of capital were employed in the Australian
and American trades ; the bullion held by the Bank
fell to moderate proportions ; and the rate of dis-
count stood at 5/ per cent. To these changes the
outbreak of the Crimean war contributed a large
share. Whilst this was the position there arose a
sudden demand for specie for India, and directly
afterwards there was nearly a universal suspension
of specie payments by the banks of the United
States. Great alarm and some most extensive
failures were the inevitable results ; the conti-
nental banks advanced their rates ; and whilst the
crash was in progress, it was discovered that certain
banks in the North bad been supporting a most un-
sound and illegitimate system of trading. The
Bank of England faced the storm with effect. The
Government authorised the directors to increase
their issues, which they did to the extent of
£2,000,000 ; and the rate of discount was main-
tained at 10 per cent. for a period of six weeks,
when it was at one movement lowered to 8, and
subsequently to the normal terms of the market.
Thus the crisis of 1857 arose from bad trading,
aggravated by the suspension of specie payments in
in the United States ; and the Parliamentary com-
mittee found that as the Bank Act of 1841 could
not possibly have checked or prevented these con-
ditions, it was not responsible for the consequences
which ultimately followed them.
The crisis of 1866 arose from different, yet in some
respects, analogous causes to those in force before
1857. For example, though sixteen or seventeen
years have elapsed since the gold discoveries of
California and Australia, the impetus which they
communicated to trade is not yet exhausted. The
momentum continues ; and if the Crimean war de-
ranged the previous movement from 1854 to 1855,
a greater disturbance arose from 1861 from the
conflict within the United States. But the impel-
ling force of a constant production of gold created
new or extended old markets with the ultimate
result that our trade increased enormously between
the years 1860 and 1865. The action on trade
which originated from perpetual supplies of gold
was accelerated, we should say intensified, by a
series of three, if not four good harvests, each of
which saved to the country a minimum of ten
millions of capital. Whilst this condition.was in
course of development, two circumstances arose
which, in their effects at least, were analogous to
the unsound trading that preceded the crisis of
1857. These were, the legislative adoption of the
principle of limited liability, concerning the true
nature of which most people were profoundly un-
informed ; and the other the introduction, with ill-
considered haste, of numerous finance and credit
companies, after the French model in their elemen-
tary form, but opposed to it in their legal effects as
regarded the liability of shareholders. The public
blindly engaged their fortunes to nominally limited
companies, but to practically unlimited liabilities ;
and the finance and credit companies, constituted
exactly after the same fashion, engaged in great en-
terprises abroad as well as at home, and flooded, for
a long time, the money market with their accept-
ances and their debentures. Chiefly, mainly, from
this cause money, notwithstanding the accumula-
tions arising from good harvests, a state of peace,
and a sound general trade, was dear. The first
signs of a collapse came from India, where a great
speculation had arisen through the sudden demand
for cotton, owing to the closing of the American
market ; and then by degrees it came out that an
excessively unsound business had been done by the
credit, the finance, and some of the discount com-
panies. There was a crash in London in which
several banks disappeared, and also the great house
of Overend, Gurney, and Company. All had,
more or less, done an unsound business. At the
height of the panic there was a demand for the sus-
pension of the Bank Act of 1844 ; and one of the
last public measures of Earl Russell's Government
was to issue a letter empowering the Bank of Eng-
land to increase its issues, charging 10 per cent.
This letter was not acted upon, but the 10 per cent.
minimum was maintained for a period of just three
months. Can it be contended on this statement of
facts that the Bank Act of 1844 is responsible for
the crisis of 1866 ? We submit that it cannot; but
that, if there is to be a Parliamentary inquiry into
the causes of the crisis, its direction should obviously
be to the operation of the principle of limited liabi-
lity, and into the proceedings of the credit and
finance companies.
In 1857, the Government of the day authorised
the suspension of the Act of 1844, upon their sole
fdr reaosyl Dmownt
eshri the luiurged
City.yg e,
deputations
d
ebry
nin aepnpt iocfatti ne
and individuals, but not by the Bank directors, who,
issue of the
Bank at the two periods, just before the
mipuartehetiniciaptotesrit.ionltofmtahye,
as
t h eirne f olrBes, 71; e wuesreef upl
at
sos vc
oe
and therefore
suspension, which was unexercised,
superfluous :-
1226,,913153,,000000
211:3em:
letters,
217
there
eectwivaes lientteg ,66t o saeneywvhael
valid
whether,
reason
nm
fthoraturr)ogsiintigona,
Nov. 11, 1857. May 9,186 G.
£7,171,000 £13,156,110
Bullion
Reserve of notes and
coin
the position
enpuesiiittnise sn: ind that these were the relative
positions
ip)oefsoitrieontshoef tishseueßank
t of England
Go verniitljeu:ilitstt
Letwi l PrivatePi
be obvious, ea tebosdere
at a glance,
of the Bank was greatly stronger it

,3

A

PRICE . . 4d.
STAMPED sd.

than it was in 1857, and that the urgency of
the representations which overcame Mr. Glad-
stone's reluctance to the issue of the letter, was
stimulated by panic. That the panic continued for
several weeks afterwards, and that it was succeeded
by a state of chronic distrust, from which we have
scarcely yet emerged, proves nothing against the
Bank Act ; but it proves a great deal against the
recklessness with which business was conducted by
the organisations to which we have referred, so long
as they had the power to conduct it. A motion for
a Parliamentary inquiry, therefore, into the opera-
tion of the BaLk Act in 1866, would be simply
raising a false issue.

This subject need not be prosecuted further at
present ; but the view we have taken might be sup-
ported by other considerations than the simple
condition of the Bank. It might be confirmed by
references to the actual trade of the country ; by
stocks of commodities which we hold and have
paid for, stocks which negative the idea of a
destruction of capital. Unless it can be shown
that we have lost our commercial capital, there can
be no case for inquiring into the administration of
the Bank of England, or into the laws by which it
is regulated. But as the loss of confidence and of
credit, which marked the crisis of 1866, arose from
causes independent of the administration of the
Bank, and of the laws by which it is regulated,
there is a valid case for a Parliamentary enquiry
into those causes.