The Sun.
London, England, 1857-12-05 00:00:00

; 1
8 "ts

Ilonger prevail in our laws and manners, and I protest against
the quotation of the year 1825 for the future in any currency
debate. (Hear.) Now, let us refer to the point before us.
We are in a state of great commercial distress and distrust.
I entirely agree with the noble lord on this point, that to
suppose that the great commercial distress which now pre-
vails could have been occasioned by the mismanagement of
the currency of this or any ether country is like supposing
that a greatuobleman could be ruined by the mismanagement
of his pocket money, (Hear, hear.) The fact is, we are mis-
taking and.liave for a long time too easily mistaken, in all
these discussions capital for currency. But though the com-
mercial distress and distrust are entirely occasioned by the
management and application in this country, in America,
and in the European nations, of the great mass of floating
capital which prevails, still, at the same time, we cannot con-
ceal from ourselves that we have a law in this country intended
only to act on our currency, and which, so far as the principle
it asserts is concerned, Lhepe the vast majority of this house
willmaintain, but which, whenever commercial distress and
distrust occur, is found entirely unendurable, oppressive, and
imeracticable, and on every occasion' of emergency we are
obliged to suspend it. (Hear.) The noble lord who has just
addressed the house, and who has addressed it with peculiar
authority on this subject, since he was the very first Minister
who recommended the violation of the statute, has referred to
the two occasions in a brief space of time when this Act was
suspended ; but, if he would refresh his recollection from the
evidence taken before the committee of last year, to which
c instant reference has been made during this debate, he will
find that practically, or virtually at least, the suspension of
this Act is not to be confined to those two instances, memo-
rable as they are ; because in the autumn of 1856 there was a
a very great pressure, and the precious metals were leaving
this country—one of the causes, by-the-bye, of our present
embarrassment, and consequent on the expenditure for the
Russian war. The pressure on the money-market was ex-
treme; the rate of discount was raised —and wisely raised—
by the directors of the Bauk of England, and by the prudent
and courageous manner in which in that instance, as subse-
quently, they managed their affairs, the danger for the
moment was averted. But we have the evidence of Mr.
Chapman, and that is no inconsiderable testimony, as all
acquainted with the subject will admit. Well, he by whom
the force of a money pressure is always felt, who represents
the greatest discount house in Lombard-street, says that
had it not been for some private information which reached
him to the effect that in case of extreme pressure
there would be au inference on the part of the Go-
vernment, he should at that moment have given up the
idea of struggling any further, and it was only on that tacit
understanding that he went on with his business. (Hear,
hear.) Remember who gave that evidence. He is the very
individual whose representations, if I am rightly informed, in
1857 as well as in 1847, induced the Minister of this country
to recommend the suspension of this Act. (Hear, hear.)
The question naturally arises what is the effect of allowing the
currency of this country to be regulated by an Act which we
are in a continual state of being prepared to suspend ? So
entirely do I admire the object of that Act, so anxious am I
myself to hope that a large majority of this House is pre-
pared to uphold the practicable and virtual convertibility of
the note, that I should be most anxious to interpret the ma-
chinery of the Act in a manner the most favourable to its
co etinuance, and to the non-necessity of alteration. I would
pass over one crisis, in which its provisions had been sus-
pended, with what I should consider a wise indulgence, but
it becomes the committee deeply to consider whether it will
sanction a chronic state of suspension—whether we arc to
have an Act of such a character as always either to be sus-
pended, or to be in that state in which those who are acting
under it knew that when an emergency arises it will not be
put in practice. Is thut wise ? (Hear.) " But," says the
noble lord, "on the whole that is the course I recommend."
The noble lord loves a precedent. He sets a precedent in
this instance himself, and I can easily understand the
tender regret with which the noble lord would, at the
same time, witness that we had •turned from that
precedented, and as it were passed some censure, mild,
I am sure, on the sagacity of his conduct in
1847. But the noble lord says that this Act is a consider-
able cheek on what he calls over-speculation and an inflated
currency, which in times of prosperity abound. I am sorry
to hear from the noble lord that our periods of prosperity
aro always necessarily to be accompanied by such distress,
but when the noble lord so fairly tells us what are the con-
sequences of increased circulation—when he tells us that,
unless we have these considerable checks, the currency will
be greatly increased—there will be no check on the issues of
the Bank—a crisis will arise, the circulation will be inflated,
and there will, in fact, be no 'standard of value, I may be
permitted to say to the noble lord with all respect, that
though these were opinions once held by persons of consider-
able reputation, and for aught I know may be still adhered
to by persons of considerable repute, yet they are con-
clusions the authenticity of which is entirely impugned by
authorities of a more novel nature than perhaps the noble
lord may be aware of, and of no less high a character than
any to which the noble lord could appeal. Many high
authorities have held that the depreciation of a bank-note
convertible at par is a simple impossibility, and they have
also held that it is quite out of the power of any bank to
issue beyond the requirements of the country, and what
is still more important, is that it is not in the power
of any one to prove that any i‘sue at any tine has ever
affected the price of articles. Nay, more, we have con-
clusive evidence in our possession that the rover.° is the
fact. Now really, Sir, under these circumstances I must
protest against the noble lord so freely, and in that style of
declamation which he can command even upon a curreillY
question, lending his authority to a principle which I believe
to bo quite fallacious, and to conclusions which I believe to
be untenable, and to details which I think he will find him-
self totally unable to substantiate. But, says the noblelord,
" this Act is a check upon the over-speculation of the day,

and although there may be some objection to the mode in
which that check is exercised, still the benefit which results
_ _

from it is indubitable." But when the noble lord talks of

this Act operating as a beneficial check, while the Govern-

meet may interfere with the period of is being carried out,
let me ask the house to consider one point which I think has
not been fairly taken into considerat;on during the course of
this debate. If the house be prepared to sanction and coun-
tenance this dispensing power to be exerted at the arbitrary

Will of the Minister of the day, how does it propose to recog-
nise the difference of position between those firms who fall
victims before the dispensing power is exercised ? Are those
who hold on a favoured 24 hours struck upon the clock of
the Royal Exchange of London to dominate over those with
_ _

whom they ought to be fellow-victims? (Hear, hear.) Let
me remind the house that when we discuss this question and
perhaps discuss it too easily as regards those whohavo fallen,
it might perhaps be as well to go a little into detail, for
it is only through detail that the house can realise some
idea of the consequences of this fear and distrust in London
and the other great marts of commercial enterprise. Now,
hero io w cinernmPnt with which I have been
furnished, and I will answer for its being correct and accu-
rate, although r cannot answer for its being complete, be-
cause there are names of many victims with rega d to whom
the amounts for which they have fallen have nut yet been
ascertained ; but here is a document of desolation in my
hand, the contents of which I think will surprise even those
gentlemen connected with the commerce and monetary
transactions of the country who have addressed us to-night.
It is a return of the number of firms which have fallen be.
tween the 7th of September and the 12th of NJvamber,
a period of little more than two months, and among those
firms there are some of no inconsiderable import ince, and.
some which ranked, as far as capital can be a test of position,
in the highest class Xi mercantile repute. In that brief period
I find that no lass than 85 firms fell which represented a
capi al of 42,000,000/. sterling, and, with the exception of
firms representing 8,600,000 of money, those mercantile este,.
blishm,nts fell before the letter of November, some of them a
few days, even hours, before that letter. (Hear, hex".) Now
if we aro to leave the law in this state, I really think that it
becomes us calmly, but earnestly and seriously, to consider
what is the operation of the policy, what the state of the ad-
ministration in this country which thus conducts and controls
its commerce. I have heard statesmen to-night, and among
them the noble lord the member for London, who do not shrink
from the responsibility of exercising this dispensing power. I
must say that the right hon. gentleman, tho Chancellor of the
Exchequer, showed more modesty, and displayed his reluctance
to exercise such a responsibility, by intimating the possibility
upon his part of making some suggestion which w,,uld avoid
a responsibility so terrible. A man must have great confi-
dence in himself, in his position, and in his character who,
under cir _umstances such as I have described, when 85 firms
representing a capital of 40,000,000/., had fallen within so
short a period, would, as a Minister of the Crown, have no
re;uciance in deciding when to interfere. (Hear, hoar.) I
am deeply conscious that every English statesman is sin-
cerely anxious to do his duty to his conntry, and I can readily
conceive the terrible anxiety with which a Minister under
such circumstances might consult some eminent capitalist,
perhaps one of his principal supporters, and ono whose mer-
cantile knowledge and intelligence had been of great assist-
ance, I won't say in preparing a budget, but in furnishing
details for the assistance of a Minister in framing his financial
scheme. I am not making any personal allusion, but I sin
only supposing the general position in which a Minister may
be placed. Well, then, suppose the Minister to consult such
an individual. It may be of the utmost importanca to a man
engaged in commercial pursuits that the suspending power
should be delayed for 24 hours, or precipitated by that
period, in order to destroy a rival or to save himself. The con-
sequences of such a course I need not dwell upon. I know that
such a case may not happen, but would it be wise in us to
sanction a law which might, under any circumstances, lead to
consequences of such a character ? I am sure that the House
will ralect deeply upon the difficulty which now surrounds
us, that they will recollect the contents of the startling
document to which I have alluded, and that they will feel
that it is no child's play to bear responsibility on such a sub-
ject—a subject which I say is the last with regard to which
the responsibility of a Minister of the Crown ought to be
exercised, It is a responsibility almost beyond the endur-
ance of any individual, and one which is totally alien to the
character of the constitution of this country. (Hear, hear.)
Yon have thought a dispensing power with regard to civil
and political rights unbearable, and you have changed a dy-
nasty rather than submit to it, and are you prepared now to
extend to a Minister such a power with regard to a subject
which in this country touches you, perhaps, more nearlythan
either civil or political rights? Where commercial and mone-
tary interests are concerned, are you prepared to submit
quietly to a dispensing power, exercised arbitrarily at the
discretion of the Minister, the exercise of 'which even when
most virtuously employed may be unjust in its application
and. ruinous in its results ? (Cheers.) I think, therefore, that
it is most desirable that we should take some course to prevent
a repetition of the transactions of 1847 and 1857. I think
the time has arrived in which we ought to exert ourselves to
solve a difficulty which may be great, but one which we ought
not to evade but which we ought to endeavour t 3 surmount,
and I regret that I see no disposition on the part of Govern-
ment to undertake the task. That such appears the ease I re-
gret the more because I think that all that has been said upon
the subject during the present session might have tended to
prove to her Majesty's Ministers there wos no desire in any
quarter to throw any obstacle in the way of the full excereise
of their discretion, but that, on the contrary, there was every
wish to assist them to a solution of the difficulty which would
redound to their honour. We are to-night asked to agree to a
Bill of Indemnity; now, I said yesterday, perhaps rather
inadvertently, that my consent to that bill would depend upon
the line taken by the Government with respect to the act
itself. I forgot that the bill was not a Bill of Indemnity for
Ministers alone, but also an indemnity for the Bank directors.
Now, I don't think that any one can impugn the conduct of
the Bank directors. There is no evidence before us that the
Bank directors required this interference; and in 1847, net
only did they not only solicit the Government for a suspen-
sion of the act , on the contrary; they did not avail them-
selves of its suspension, but disapproved the course which
had been adopted, and maintained the convertibiiity of the
note. I have reason to believe that in the present instance the
directors of the Bank have acted in the same magnanimous
spirit ; and if, at the suggestion of the Government, they
have consented to take an illegal step, I think, whatever may
be our differences of opinion on the general subject,. it would
be cowardly and vindictive to throw any obstacle in the way
of their indemnity. So far, therefore, as the Bill of Indemnity
is asked, I am prepared to accede to the request of the Go-
vernment, but further than that I cannot afford my consent.
I think the Government have taken an erroneous step, not-
withstandug the high authority just expressed is their
favour by the noble lord in recommending that the house
should again appoint the committee to consider this question.
I must repeat my belief that there is no subject which
can pouch the attention and cousidtiratin 0 public pros on

almosto
Bwsuegvytfaoefrth asib in
which there exists oven such a surplusage of knowledge and
information as upon the principles on which the currency of
this country should be established, and on -which it has of
late years been carried on;"and that any attempt-, to postpone
the solution of the grave difficulties which surround it by
further inquiry will lead to great public inconvenience, -pos-
sibly to great public disaster. I think we ought to show no
hesitation in meeting those difficulties that we ought to give
our best consideration not only to the passing, but the itnree.
diate passing of some, measure which will prevent the future
necessity of appealing to this house for bills of indemnity to
her Majesty's Ministers for such acts as that in respect-of
which they now deeM it necessary to ask us to support them.
I have endeavoured to call the attention of the house to what
I think the vital point in this bill which requires our con-
sideration. lam for supper:Mg the spirit of the bill as far
as it maintains the convertibility of the notes which the,
Bank issnes. I would do, that completely, sincerely, and in
no spirit of equivocation, but believing as I do that the law
by its enactments forcing the Bank to treat a foreign'
and a domestic drain by the same means, not only occasions,
but agsravates distress and distrust among the commercial
classes of this country, I think we ought to meet that difficulty ;
by remedying the law in that respect. Let the house realise to it-
self oue great differene 3 between a domestic and a foreign drain,
With a foreign drain we have learnt by experience efficiently
to core. We have never had a greater strain on our resources
in that respect than we have had of late years, but by that
powerful arm which the usury laws now place on the Bank of
England we have been enabled to cope with that efficiently;
and I therefore think there is no man in this country who
has now any fear of ultimately disastrous consequences of a.
foreign drain. A foreign drain is avert' unimpassioned, cal-
culating
aeoe
ssuuTiOnludttsrr,
countries
sisraeeoanqnsduoeinri lwepahonoi
unde
which
haiaseli
calculation.
tetaidiedos
0:
ni.
culating transaction. It is founded, on a knowledge Of our
mankind
as ewe and
inexorabledoe
;wlmoil
nml
teai
shonset
the
ntnmyhi
tocetafuhbr
tdomiyeciveoaa:tedmitnghnr/
to a domestic drain you have to encounter elements of a'
e
7ridieffeeeip•leaSeconlultas,reoanfetetfeersar.r
annTt
into
hope
hoop morale calculation
go vqeur
nalimt
the exchange are not free fy,om the influence of those pas.
sions, and when you have circumstances in which a •whole
nation, is panic struck you cannot hope by the aid of economic
science succe.ssfully_to.encounter them. It is therefore the
duty of Parliament to remedy the deficiencies of the law in
that respect. But I cannot believe we have any chance of
obtaining that remedy if wo consent to the emirs° suggested
by her Majesty's Ministers. In 1840 the whole question of a
bank of issue was gone into by a committee which, whether
we look to the reputation of the members who formed it, 0 r
the high character of the witnesses called before it, produced
a volume inferior in interest to none in this house:- In 1847,
after, the panic, you had a committee to inquire into the
same subject and into the influence of this very Act of 1844.
At the beginning of last year a third committee was appoint-
ed, and its transactions are before you. What more canyon
want ? All the more distinguished writers of the day on pub-
lic and political economy have favoured the country with
their speculations on this subject. There is no new writer
before us, and I think therefore the time has come when we
ought to settle this question. What is the -use of a govern-
ment if it cannot settle this qUestion? (A laugh) What is the
use of a House of Commons if it cannot animate and inspire
a government? (Laughter, and an ironical cheer.) There aro
some men who think that members of Parliament are only
made to form Parliamentary committees ; but it is only a
prpparatory, though a very useful, training to accumulate in-
telligence in that way, to sift evidence and draw conclusions.
There is something higher and more necessary ; that is, to re-
commend a policy; and I think the time has come when we
ought to recommend a policy. (Cheers.) Now, the right hon.
gentleman the Chanceller of the Exchequer has uo wish that
there should be any great de'ay in passing this Bill of Indem-
nity. I wish to meet him in that respect frankly and in the
most friendly spirit; but I hope the right hon. gentleman
will not really and practically hold if we give him this Bill of
' Indemnity that Parliament was only called together for that
object. The right hon. gentleman has a motion on the paper for
a committee. If he would only settle the night on whichto take
that motion for a committee I would move to that motion an
amendment the purport of which would be, without, of
course, pledging myself at this moment to its exact phraseo-
logy, to express the opinion of the house that it is expedient
to legislate on the subject, and not to refer it
,to a select com-
mittee. If the right hon. gentleman will say this day week
for his committee, I will assist him to the best of my power
in carryinghis bill ; and on this day week, if he will move the
committee, I will endeavour in a manner befitting the
portance of tho subject to ask the house to consider whether,
under all the circumstances of the case, it is expedient that
this question should be referred to a select committee, and
whether it is not wiser to proceed at once to legislate on the
subject. (Hear, hear.)
The CHANCELLOR of the EXCHEQUER could not but
acknowledge the fairness with which the right hon. gentle-
man had treated the subject, and the disposition he had
shown to facilitate the business before the house. Undoubt-
edly, the passing of the Indemnity Bill was the main object
for which Parliament had been assembled at this time, and
formed the principal business which the Government wished
to forward. If the house consented to allow the bill to be
introduced that evening, he would propose the second read-
ing for Monday, and would bring forward his motion for a
committee on Friday. He hoped that arrangement would
suit the convenience of the house. (Hear, hear.) Per.
haps he would be permitted to refer for a moment to a
question of fact which had been adverted to by the right hon.
gentleman the member for Oxfordshire, and also by the right
hon. gentleman opposite (Mr. Disraeli). He alluded to the
statement made before the committee of last session by Mr.
Chapman, the managing member of the house of Overend
and Gurney. At the present moment ho had not the report
of the committee before him, and therefore he quoted from
memory; but his recollection of the evidence given by Mr.
Chapman was, that on some occasion he had received an as-
surance from a gentleman on whom he placed reliance that
in the event of their house discounting to a large amount
they might rely on the suppo tof the Government. A ques-
tion was put as to the authority on which that statement was
made, and he did not assert that he had received any direct
communication from the Government. It was possible that
his (the Chancellor of the Exchequer's) recollection might
not be very precise as to the words used ; but, be that as it
might, he thought it right to state that no such communica-
tim as Mr. Chapman mentioned was ever made by the present
Government either to the house of Overend and Gurney or to
any other similar discounting-house whatever; (Hear.) Ha-
wished to assure the house in the broadest terms that could
be used that the statement of Mr. Chapman, and the
impression of the person to whom be referred, had no autho-
rity from the Government, and must have originated in an
entire misapprehension. (Hear, hear.)
Mr. CARDWELL said the arrangement proposed by the
Chancellor of the Exchequer led to the inference that
the discussion of the groat question before them would be
taken rather on the motion for a committee than on the bill
which was about to be introduced. He acquiesced in the
make till
Fenritdaanydnowxotu.ld reserve any observa-
tionsw isd ohe hfatdhtaot rakm
The resolution was then agreed. The house resumed ; leave
lnlotrhoef btiblio,
.Exchequer,ditwasbrrooaudghat
dinroatctcionirdo,-
in wasgl
yg
bi vye
tuh toe Chance bring i
and ordered to be read a second time on Monday.