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

12, 18N7.

' of a century the returns show them to have occurred with
astronomical precision—how is it possible to view that rise
inthe spribg, that sinking in winter, and that even condi-
tion in the autumn, without seeing that there is some law
which regulate the circulation of notes much too strong to be
influenced by Acts o Parliament I We do not possess much
Information abo.it their own transactions from the country
bankers; Vey are of all men the least likely to give it --they
are naturally jealous and reserved. But their returns are
upon the table of the house, and they completely prove that
the issue of bank notes depends upon the wants of the com-
munity. If they were to attempt to force the issue of their
notes, what would they be doing? Why, while they think
they, are putting their notes into circulation, they aro hut
lending their capital by means of such advances, and if these
injudicious advances lead to a commercial convulsion, that
convulsion cannot with any propriety be ascribed to the issue
of bank lutes. The circulation of bank notes is currency,
and I defy any banker to convert that currency into capital.
Any cue may take and lock up the notes in his strong box ;
that he may de ; and if he do, no ono will say that w so
locked up such notes can have any eff:et on the circulation.
So much, then, for these poor country bankers whose over-
issue of notes, according to the right hon. gentleman and the
school of which he is so eminent a member, produced the con-
vulsion of 1825. Let us now look at the crisis which oc-

•
curred in 1837. The commercial convulsion of 1857 was
produced, according to the school of the ultra-bullionists, by
the over-issue of bank notes convertible at par by the joint
stock banks. Look now at the evidence and documents which
gentlemen who then made speeches did not possess. I know
that I have an advantage over the gentlemen of that day, in
availing myself of documents and evidence which did not
then exist ; but the speeches that were then made operated
on public opinion, and in effect became the foundation on
which was based the legislation which followed. I come now
to the issue of bank notes convertible at par by the j oiut stock
2.

banks. Then we find that on account of the horrible sins of
the psor country bankers, it was become necessary that we
should have banks of a more authentic credit. 1113 country
bankers had convulsed the country, and they had nearly

severed the connection of America with th's country.

What did tha honourable member for Halifax (Sir C. Wood)

who is taking notes to-night—(a laugh) —do' then? He
says that this is a great affair, this commercial convulsion.
but I have found out the reason. Let me remind you what

occurred when joint-stock banks were founded in this coun-
try. We have since heard so much of these banks having
done great things, that they have accomplished such great
disasters by means of their colossal credit, that hon. gentle-
men must not expect that joint-stock banks established in
1835 were of equal dimensions. But let me say that joint-
stock banks when established were of no mean character.
There were at that time 107 of these institutions in the couu-
_

try ; they had a paid-up capital of 15,000,0001. ; and their
subscribed capital was nearly ten times that amount. There
were 478 branches and agencies of these banks pushed into

every active town and scat of trade and seat of agriculture in
England. They were esta' lished on the principle and with

the idea, that they would make a groat profit by circula-

tion of their bank-notes. What occurred ? When the coin-

mereial convulsion happened in 1537, it was found that the

eiren'ation of the joint-stock banks Lad increased. Between
the year 1835 and 1837—that is, during the two years pre-

ceding the convulsion—their circulation had increased by the

amount of 1,500,000/. It was instantly said that the com-
mercial convulsion of England had been occasioned by that
over-issue of 1,500,000/. There was a redundant currency.
The fall of great houses and the disturbance of capital and
credit throughout the United Statee and England wete attri-
buted to that cause. It was urged by the defenders of joint-
stock banks that their busluessitad really very much increased
iu consequence of the demands of the public upon them ; bat
these gentlemen wore not listened to. Cmn there be anything
more absurd than to think that so great and important an
effect as the commercial convulsion of 1837 could be oeca-

sioned by so mean and pe .ty' a came ? But, let me remind
you that these instances and these arguments were not. only
a' one time prevalent but predominant in this house ; and it
is because these • arguments, founded upon these .instauees,
have been taken so easily that we have had the law passed

in 1844 which, to the confmion and shame of the country,
mu't, on every recurring emerge-nu, he suspended? Whit
is the oint, then, with respect to these joint-stock banks ?
It is but very -recently that, in the course of the examina-
tion cf witnesses by the same committee—a repetition of
which the right lion, gentleman proposes to-night
I find the right hon, member for Halifax sharply cross-exa-
mining one of the wituesscs who had advanced an opinion

winch I belieVe to be a legitimate opinion, viz., that an over-
issue of bank notes convertible at par was impossible—the

right boa, member sharply cross-examining him asto the
over-issue of notes to the paltry amount of 1,500,0001. But
it now turns out that this excess of issue was P oducei by

deprivin till poor country bankers of nearly the whole. of
their circulation, and not only that, but by affecting thi
br.tneh bairks of the 'Bank of England to no incon:ide'able
aniquut. So that over the whole of this country, :,fter the

additi n to it of 1,r500,000/., the aggregate circulation in that
year was a'ssolutely diminished. Who can think, after evi-
dence of thatkintL of supporting a timer/ which I think t',e
Chancellor (4the Exchequer to-night Fas cast to the winds ;
but yet it is a theory which is supported by the law that he
recommends the Sovereign to suspend, and by the reappoint-
ment of that committee which he suggests What can evi-
dence do more that has not-been done by the events which
occurrel in rogsrd to join'-stock banks, whose over-issue, as
it was allege I, of a million and a half, had occasioned a con-
vulsion in England and Europe. At that time there were
failures of joint-stock banks for 1,500,0001.; but .what was
their issue.? There wa4 one bank, for instance, the Northern
and Central J..int-Stock Dank, which failed in 1837 for a
large amount, but their issues were only 30.000/. in notes.
It was that paltry issue, however, of 30,000/. which cause i
the convulsion, and not the injudicious, improvident, and
unprincipled advancesi to the extent of 1,500,000/. (Hear.)
What has occurred at the present day ? Look at the join-
stock ba,. ks iu Scatland England which have scspended;

many of them wee not banks of issue at all, and some of 1
them, with a liability of a million, had been issuin; to an
amount which was perfectly contemptible. In fact, the notes
sent into circulation by these banks have produced no effect
upon those five portentous years to which I have been calling
your attention. The right hon. gentleman proposes an in-
quiry into the case of the Scotch and Irish banks, and the
operation of the law of 1845 ; and to that I have no objes.-
Um). But If. you look at the circulation of the Scotch banks
you will find an important illustration of the principle for
which I have been contending. Since the year 1820, in that
country where banking facilities and the employment of
bankn„,,, capital and credit is so great, we find that the notes
in the hands of the public have every yoar,bcen dhninishing.
And at this momout I doubt whether the amount is so great
as it was when that great development of banking took place.
I have now shown you that with regard to the circulation of
the notes of the country bankers in 1825, and tho notes sent
into circulation by the joint-stock banks in 1837, there can
be nothing more futile than to suppose that the convulsions
of those years were attributable to such causes. Let us come
to 1847, when the only victim on whom the calamities of the
country could be placed was the Bank of England , and when
the only cease which could be alleged for its misfortune was
' the mismanagement of their notes in circulation. ' Oar expe-
rience of that year entirely proves that the directors of the
Bank of England have not the least controlling power over
the circulation of their notes ; for, in 1847, when this crash
o curred, and when there was a withdrawal at the beginning
of the year of bullion to the amount of 7,000,0001., the notes
in the hands of the public remained at exactly the
same amount. Later in the year, when the crash occurred,
and when the law was suspended, there still remained
in the hands of the public —how locked up or disposed
of is not recorded—the same amount of bank notes,
When you talk of over-issue, and of the power of the
Bank directors to force the circulation of their notes, let me
remind the house of what occurred in 1847 with respect to
' the commercial circumstances of this country. In 10 years
you have doubled your exports and imports, and in these 10
years you have not added one bank note to the amount in
circulation. Tho whole of the bank notes in circulation in
1840 and 1847—1 am speaking from memory, but sufficiently
accurate for our purpose--was about 40,000,000; and in the
last return which I have F eon for 1855 (and circumstances
have occurred since then which favour my argument) the
whole of the bank note circulation of England was 39,000,000/.
All this proves that bank notes are in a certain sense falling
into disuse ; and the truth is, that no doubt we have arrived
at such facilities of communication—the daily post, the elec-
tric telegraph, and other circumstances —as render that kind
of accommodation no longer so important as it was 10 years
ago. Now, sir, I hope this house will believe that, with the
views which I have attempted to place before it, I approach
the consideration of the illegal suspension of the Bank Charter
Act by the Government with no prejudice whatever. 'I
am not one of those who suppos3 that a disturbance of the
capital credit of a country like England will be at all peen-
niarily affected by the circumstance of their having a limited
I circulation of the notes of the Bank of England. Bat, sir, it
is impossible, in my mind, to resist this conviction, that the
act of 1814, which, after all, was an act only to regulate the
circulation and the issue of Bank of England notes, was an
act drawn up in deference to those fallacious principles re-
specting issue which have so long and so fatally prevailed in
the country.; that tho provisions of that net were framed
in deference to those mistaken views ; and that, in con-
sequence of the deference to those mistaken views, that act
has exercised aggravating influence upon the commercial
distress which has recently prevailed. Sir, I believe that to
be the case. A great objection to that act in my mind is that
it paralyses circulation. Circulation, which should at all
times be active, and. especially active at a tuna of commercial
alarm, becomes stagnant at the very instant when those cir-
cumstances of apprehension arise. That act, I believe, ope-
rates upon circumstances, however different, in exactly the
same manner. Whether you are dealing with a foreign drain,
or with a domestic drain, occasioned by panic, the action of
the Bank Act is exactly the same. While at one instant it is
perfectly competent to control foreign interference, the very
moment when there is any alarm, the Bank acknowledges
that it is itself subject to terror, and it feels and increases the
very confusion which it shares. Now, sir, at the bottom of
' all this, in my mind, the misapprehension that there exist d
in the minds of the framers of that act, as to their residing
in the Bank any power which regulates the issue of bank
notes. They assumed as a truth—what I think can be proved
to be erroneous--that it was possible for any issuer of notes
to force his circulation. But, sir, if the principles which I
have attempted to recommend to the consideration of the
house are founded in truth, we need no longer argue as to
whom a distributoiy power is to be entrusted of bank notes
convertible at par, because it is impossible in my mind to
be'ievo that that power of distribution would be abused.
However, that is a point to which this house must direct its
attention. (Hear, hear.) Now, sir, I find hon. gentlemen
coming forward who propose nothing, or who are about to
advocate opinions which are not maintainable either by ar-
gument or by facts. I think I, ou the other hand, have
taken a course which is the Parliamentary one, which is the
-legitimate one, .which is, I maintain, the meLlerate and
proper one. (Hear.) As for legislating before Christmas
is
absurd
tulle,
eo npai
rqs
tu es t
Ministeri on o f thhit
skoilnf d,
wouldit i
embarktuopsounp
spuocs
lel
atliiia
ut
nedveern,
taking. But I ask the house to-night to come to a resolution
conclusion,ared t ocoteh to
awphii.ceheiwipitialtsohocow that though oNvuog h w
can
we
arrivea re no
att pthriesp
due season, after duo deliberation, we will scl iress ourselves
the materials for legislation are in our possession, and that in
to the solution of this great public diffi.culty. (Cheers.) I
would say ono word with respect to the conduct of the Bank
of England. I understand, sir, and I have been told in the
course of the last speech but one of the Chancellor of the Ex-
chequer, that all the directors of the Bank of England are in
favour of this measure—that they are in favour o • the Act of
1 1844. Now, sir, I should not wish to speak of the directors of
the Bank of England in any other terms than in those of the
sincere respect to which they aro entitled. 1 think it is a very
utd, of such an
h so
great thing for the people of England, and for the City of Lon-
don,w
that a body of men of such intelligence and publicit
spirit can be ieduced to undertake the,
management
institution as the Bank of Eng'and, and who can conduct
themselves with so great firmness,
d , I
ni
,y
ai
great liberality. But if an attempt be made to influence pub-
e
ltihceoßpiannikondiirnetchtoisrhs, I ousaemby appealing to the great authority
they will permit mo to advert
of
to some circumstances, not iu a hostile but in truly • dl
ra
t io spirit,n owfltthicehhlouthsien,knootuginhtotrdoebre bro h ' a
tr, t beton) the consatle-
to deprave the Bank directors
of their due influence upon our debates, but which I think
shduld be placed before the house, not in an exaggerate I light,
but in that calm tone to which they are entitled. Now, I do
not know whether hon. gentlemen have read the evidence that
was taken before the committee on • the Bank Charter Act
which sat Once last year. Perhaps since this catastrophe has

loccurred they have duly digested those important nistters.
(Hear.) But a second volume has been published; which it
is very probable they may not have read. It is the most
entertaining volume in the world—although it appears under
the repulsive title of an appendix. Indeed it somewhat re-
sembled notes which were hoarded up by the Bank directors
—it was not-put into circulation until a very critical moment.
(A, laugh) This volume contains the opinions of the Bank
delivered in 1856, upon the Beek Charter Act. The Chan-
cel'or of the Exchequer, wishing to obtain the best informa-
tion from the best quarters, addressed a circular to the Bank
directors, asking them to favour him with their opinion on
tho merits of the Bank Charter Act. I did not bring the
volume down with me, thinking it might weary the house ;
but I cannot have mistaken the character of the circular ;
this was at least the cream of the communication. There is
no doubt that the Bank directors, or a very largo majority of
them, did express (with one exception) their opinions in
favour of this act. But the directors as a body were not
contented simply to agree in their adhesion to this measure.
They lifted up their voices and said—They were in favour of
the Act of 1814 ; they acknowledged that what occurred in
1847 was a rather awkward fact in history, but their lan-
guage was that of undiluted panosyrie, they were not the less
sanguine, because it was totally impossible that events liko
that of 1847 could ever happen again. (Cheers.) And in the
same simple, satisfactory, and all-convincing terms a gentle-
man--formerly a member of this house for Southampton, and
now, I rejoice to say,l a country gentleman of Bucking-
hamshire, Mr. Hubbard, a late governor of the Bank of
England—said that the rules of banking are now under-
i stood. (Laughter.) " In 1847," ho said, we did not
understand our business; but we so completely understand
it now that we may dismiss 1847 from our memories as a
hideous dream. Let 1847 no longer disturb the slumbers or
awaken the inquiries of a Chancellor of the Exchequer ; that
can never happen again ; we now understand the true prin.
ciplee of banking. Tho Chancellor of the Exchequer is going
down to Parliament to propose a committee just to amuse
the country, but rest your confidence on the Act of 1844."
(Laughter.) Well, sir, it is a most remarkable thing—and I
think the Chancellor of the Exchequer owes an explanation
to the Bank directors of the circumstance that these prophe-
cies were not published till after the suspension of the Bank
Act. It appzu 's that a book has been printed, which is a
folio volume, and that great expense has been incurred ; but
think that even if the members of the Government had sub-
scribed amongst themselves they ought to have paid the ex.
pense, and withdrawn the book from circulation, and thus
have spared their friends this act of malicious kindness. No-
thing, sir, but a high sense of public duty has induced me to
bring forward this subiect, and to call the attention of the
house to it. It is with great satisfaction that amongst the
other letters I do not remark the signature- of a member of
this house, who, upon this subject, has frequently addressed
the house with that effect which his thorough knowledge of .
the subject and his accomplished eloquence naturally pro-
duces. The hon. member for Huntingdon was, I believe, at
the Baths of Kissingen when this circular was issued, and on
behalf of this house and the country I offer him the most
sincere congratulations. (Laughter) In taking this objec.
tiou respecting the Bank directors, I wish to make one remark
of a more serious character. As I hope that tho
committee will receive its death-blow from this debate
—(hear, hear, and laughter)—l will venture to ex-
press my opinion that the three great conclusions to be
drawn from the arguments and from the facts which I think
are satisfactorily established by the evidence which we have
before us, are these :—I think it is by the evidence conclu-
sive y shown that in the first place the directors of the Bank
really exercise no more control over the circulation of their
notes than the members of this louse do. (Hear.) I believe
what is called the mattag• ment of the circulation of notes by
the Bank directors is a misnomer and a delusion. (Hear.)
Secondly, I t ink that the directors of the Back of England
have a great duty to perform, not only to the nation, but to
themselves. The management of the Government securities
is a subject of more infinite importance' than the circulation
of bank notes. s he wealth of the nation is affected by the
regularity of the rate of discount, and in the d'scretion iu .
which advaeces arc made, so are benefits exercised over the
fortunes of this country. (Rear, hear.) Thirdly, it does
appear that it has become a national object, which statesmen
shall accomplish, that there shall bo in the Bank of England
a great treasury, which shall be at the command of the
directors in moments of emergency like those which have
recently occurred, and when it shall be in their power not'
only to assist commerce, but to insure sufficient currency
for circulation, which shall be a med um of exchange, so
that those interested in the pursuits of commerce shall not •
find themselves in that desolate position in which they have
lately been placed. I have endeavoured to-night to draw this
subject out of the limited sphere of select committees; and the
inquiry, I am convinced, will not be injurious to the community,
however injurious it may be to our characters, if'we evade any
longer a statesmanlike settlement of this sque-tion. This
question is entirely exhausted 1 y select committees, though
no man can esteem higher than I do the select committees
of this house. They contain a nest of information, a power
of research, and an irresistibility of argument, which no other
country can produce or attempt to rival. The question of
the currency is one which a select committee could alone en-
tertain ; it is one not only as to which they have to pursue
research, but to exercise judgment. They not only accumu-
late information, but they have the power of cross-examining
witnesses, which this house cannot exercise. It is therefore
of the highest importance, when qrestions relating to the
great institutions of the country—which aro of a complicated
character, and dealing with vast interests, and also in detail
—arise that they should not be investigated by this house,
but referred to a select committee. But for a long and con•
siderable period I have thought that the question of the issue
of bank notes by the Bank of England has received a suffi-
cient and ample investigation, and all which it deserved. I
am not supposing that upon the principles which shall regu-
late tee issue of bank notes this house will immediately come
to a unanimous opinion, or that that opinion will be carried
here by a largo majority, but the way by which we shall
conic to an overwhelming opinion, if not unanimous, is by
a discussion in Parliament, for which I believe the question
is now ripe. (Hear, hear ) The labours of a committee of
inquiry, however valuable they may be, exercise no influence
over the feelings of the people out of doors. The questions
asked by the committee are so immense, and the variety
of detail is so great, and the authorities referred to so numer-
ous, that it requires men who have leisure time at command,
and not only chat, but penetrating mindsss`who can arrive at
a conclusion sufficient to guide public opinion. But the Is.
bones cf a committee, though they have exercised no influ-
ence out of doors, they do so iu this house. (Hear.) In my
opinion wo shall be taking a course which will not only tend
to depreciate bank notes, but the character and influence of
Parliament if we, year after year, and convulsion after con-
vulsion, leave any longer the discussion anti settlement of
his
r.) I
rpri
'eccohl zoatavr his
cslipilst)tuei' st,
injurious,
h andat ot lti el alar discussion
Par-
liamentary at
u4tord t°ul question.
trissoitint. jn ece(ti sdo
debate upon it should not bo encouraged, but
even, if possible, prevented, and that we should rest upon
the conclusions wo have before us from the committee. I
am surprised that a man of so much eminence, and so cap-
able of maintaining his opinion, and, besides, a man who is
a Peer of Parliament, should give such an opinion upon the
proudest privilege of Englishmen, and, as I believe, one the
beneficial exercise of which cannot be over-estimated. (Hear,
hear.) Sir, I hope the time has arrived when we can come to
a safe and satisfactory solution of this question; but I sin
sure, whatever 'rsey be the consequences, I am only acting
rightly when I recommend the house not to delegate their
functions to a select committee, but to show to the country
and our constituents who sent us here that we are equal to
the fulfilment and discharge of those duties which are
brought before us. (Cheers.)
Mr. CARDWELL intended to vote for the inquiry asked
for by the right hon. gentleman the Chancellor of the Ex-
chequer. How stood the ease ? In the course of last ses-
sion a committee of inquiry was appointed to investigate
the subject, and that committee had not as yet made its re-
port. And what had happened in the interval to render
it less desirable that the committee should continue its in-
vestigation. Tile committee, when they separated, were
about' to inquire into the question of the country banks,
into the question of the issue of Scotch and Irish banks,
and into the interesting question of the relations be.
twecn the Government and the Bank of England. Well,
what had occurred in the meanwhile, to render the investi-
gation of these questions of less importance. (Hear.) They -
I had been told that the doctrines of the "bullion committee"
had laid the foundation of most of the misfortunes that had
afflicted England within the last halfcentury. Now, he would
submit that the labours of Mr. Horner and Mr. Huskisson
ought not to bo overthrown quite so lightly. Tile real diffi-
culty they had to consider was the new use of commercial
capital open to the public, as well as the new abuse of corn-
mereiel credit. He alluded to the extraordinary amount of
money now held in single hands, not, as formerly, as depo-
sits in the hands of bankers, to be availed of by them, but in
the hands of depositors, to be used in order to influence the
markets. Three charges had been urged' against the act of
1844. The first was thatit created a limit and consequently
that it created a panic ; secondly, that it exposed the coun-
try to inconvenience in establishing the same fixed rule as
applicable to distress when caused by a foreign and when
caused by a domestic drain ; and, thirdly, that it imposed an
unnecessary fetter upon the commerce of the country. Cor-
tain'y he would admit that the act of 1844 caused a limit ;
but then ho was prepared to contend that it did not cause so
terrible a limit as the act in force in 1826, 1837, or 1839. No;
the simple effect of the act of 1844 was to compel the Bank
directors to take measures for curtailing their issues, while
the bullion was still in their coffers. Could anything, he
would ask, be more exemplary or remarkable than the
position of Irish banks throughout the crisis ? (Hear,
hear.) Yet what was their position in the year 1826
Why, with the exception of three or four, every bank in
Ireland failed. It would, indeed, require a committee to
sit many years to establish the doctrine that the converti-
bility of unlimited currency was incapable of mismanage-
ment. (Hear.) The universal failure of the banks of the
United States in 1837 and 1838 showed the direct connect' on
between an unlimited issue of paper and the horrible catas-
trophes that then occurred. But it was asked, why not rest
a discretionary power in the hands of the directors them-
selves. Now, was it so certain that the bank directors would,
accept so great a responsibility ? Remember that the direc-
tors of the Bank of England were almost unanimous in sup-
portingo ask
le was
sr
this,the
ought not they to inquire how far it was possible the act of '44. What he was inclined t
Bank of England to be responsible for the advance of capital
if it could exercise no control over its issues He believed
that if they were rightly to assess public opinion, they would
find there was but a very declining feeling in favour of a con-
vertible, unlimited currency, which in the years-'26, '37-'39,
was found to be comparable with so large an amount of com-
mercial suffering. The right hon. gentleman having reviewed
especially why those
'
the circumstances of the present times, asked whether there
was any reason why they should not pursue the recommends-
investigationsi o u s f t e
conishmouitldteenoot extend
fthe last
ttoyeasre
Aland ? If those re-
commendations were set at nought, the inevitable result
would be the recurrence of further disasters. He trusted,
therefore, that the course which the house adopted would
lead to the arsrmation of a principle from which the country
had derived inestimable advantages.
Mr. GLADSTONE said that. havins, heard
the speech of
the right honourable gentleman who had just
sat down, be
felt persuaded that this country would be adopting a r:tr°'
spectivo step if he I had followed out the suggestions he
had offered. What was the doctrine propounded on the
currency by him—a subject on which he was pure light
and reason ? Ho had stat d that doctrines had been diffused
wwhich had thrown ovea those of Ifuskissen and others, on
whom the greitest c chance should be placed, and he had
added that if the investigation ware referred to a committee,
those propositions would be negatived. llteh(:tiia. Gladstone)committee
inverted his propositions, and thought
thos; doctrines. He
would in a very short sitting affirm alls
the doe-
thought the right hon • gentleman wa
endangering
•asking the
trines of which he was so strong an advocate,. in,
' house to go hack to a ratificationofthnotrices of which the
unsoundness,
He hon. gentleman had demonstrated
.unsoun ,
being therefore firmly convinced that the
(11r. Gladstone)
.1
ed before 1814 was radically unsound
system which prevai
and clangorous, that
was of opinion Nvo ought not, without
very strong reason, to return to that system. There were, he
thought, specific grounds ou which the house ought now to
proceed, fix ho believed the Parliament of England ought
now to tell the country plainly what it thought of the act of
1814. His reason for that was that he felt satisfied that the
act of 1844 could not stand as it was. That act as experience
has shown,' required alerations in order to obviate difficulties
and dangers which if left without a remedy would peril the
principles of the alt itself. On two occasions they had sec n

hat act brought within the sharpest trials, but looking at
the present crisis they found from the figures of the Chan-
cellor of the Exchequer that the reserve at present in the
Bank was 4i mill ons, that was including 2 millions not autho-
rised by law. 'On the 11th Nov., that reserve was not 2 mil-
lions. There was, therefore, an increase between the 11th
Nov. and the 11th Dec. of something over 1 million of reserve
in the Bank. So far so good ; but during that period what
had been the increase in the public deposits ? If the public
deposits bad increased by a sum less than a million, or less
than the increase of reserve, he could not think there had
been any real or material advance towards a state of ease and
security. He did not think that it was in the state of the
currency but in the condition of commerce that the elements
of commercial disaster existed, and ho believed it would. con-
tinue there so long as a belief existed that whenever difficul-
ties arose the Government could step in to relieve them. The
light hon. gentleman having quoted at some langth and with
unqualified approval the opinions of Lord overstone as given
in the House of Lords on the Bank Indemnity Bill, proceeded
to remark that it had been said that the committee of last
session had taken a great deal of evidence, and that now we
ware about preventing them from making a report ; but the
very circumstances under which that committee broke np
showed that all the committee intended was to place the
evidence before the house. The Chan ellor of the Exchequer
had taunted him with a want of the appreciation of the wit-
nesses that WO been called, bat that was not his objection,
which was really this, that the system of a large number of
witnesses was a circuitous machinery which would be more
easily worked in that house. What had that committee
done ? It had taken a vast deal of evidence in reference to
issue, the standard of value, and other matters, and all these
things would have to be begun again. Then the committee
would have to consider the antiquarian and unexamined
state of the relations between the Government and the Bank
of England. Now, perhaps, he might mention what per-
haps very few persons knew, that whenever a loan was made
the Bank of England should be a corporation until the
loan was paid. That was an assurance to cralitors, and
perfectly fair when governments were in bad odour, and
when banks were good, but now he thought, when persons
lent money to the Government, they should know that
they lent it on the security of the State of England. Now
all these things were matters for inquiry in quiet and easy
times, but in times of commercial difficulty they should be
seized upon by Parliament with the full certainty that what-
ever course they took they would be backed up by the coun-
try. He advised that measures should be taken to bring the
principles of the Bank of England fairly to issue, and when
they had done that they would be able to approach a very
gave question. (Hear, hear.) The right hon. gentleman
deprecated the various kinds of liability which prevailed,
end which he believed had very materially contributed to
the existing distress.
Mr. MALINS deprecated sudden violations of the law, and
expressed an opinion that it should never be dependent upon
say letters that might be issued by the Government. He
contended that the act of 1844 was false in principle, false in
theory, false in practice, as the events of 1847 and 1857
amply testified. He opposed the committee, because he
thought the time for legislation had arrived.
Mr. HORSFALL intimated his intention of voting for the
re-appointment of the committee. He had no intention in
doing so to prevent legislation. He did not agree with hon.
members that the bill ought to be abrogated, and that there
was no safety for c mmerce till that was done ; but he
thought the bill of 1844 required some amendment. The act
had no doubt failed in its final object to prevent panics ; but
as that was the most important feature of the bill, he thought
that if the committee of inquiry could devise anything to pre-
vent them they would have accomplished what the principle
of the bill had hitherto failed in doing. He was not
zue of those who believed the crisis of 1847 arose from the
bill of 1811, or that the bill of 1819 should be made the

scapegoat of the panics of 1825 and 1837. This act was
capable of material improvement. No bank act could pre-
vent periodical crises. In every instance the proximate cause
wag to beattributed to the export of national capital, yet they
Sad always occurred from over-trading. Had the Govern-
ment delayed the issue of the letter 24 hours longer the con-
sequence would have been most dengerous, and he thanked
them for having issued it. It might be satisfactory to know-
that the issue had received the sanction of the noble lord the
member for London, who adopted a similar course in 1847,
awl that it received the approval of Sir H. Peel. The late
Mr. Hmikisson, long bef re the passing of the Bank Act of
1837, said that the occurrence of panics and commercial dis-
tress could not be foreseen or defined by any power, or their
remedy might be left to the head of the Government, subject
to the responsibility of Parliament. (Cries of " Divide.")
Mr. WEGUELLN denied that the issue of the letter of the
Government had led to the assistance by the Bank of persons
who would not otherwise have been assisted. So far as he
was aware no person before or after the issue of the letter had
been refused assistance on good banking security. (11&ar,
bear.) Had the Government complied with the spirit of the
act they ought to have stopped all discounts on advances some
siays before the Government letter was issued, but the direc-
t ifs took upon themselves the responsibility of continuing
such advances after that date. Considering that the effect
of the refusal would have been more serious to the commerce
a the country than their continuing to advance contrary to
the spirit of the act. (Hear.) The proceedings of the Bank
were regularly communicated daily to the Government, and
after having watched the proceedings the Government decided
t)n issuing the letter. (Hear.) Nothing would be mere dis-
astrous to the Bank, or the monetary and trading interests of
the sonntry, as that it shvild be limited to that of a joint

stock opeiation or to that of the investment of capital
and deposits ; because unless there was a feeling in the tour.
try that there was a power behind the Bank in periods like
the present to support her in making advances to the com-
mercial world, there would be a tenfold greater panic in mo-
ments of crisis than that they had seen, and he referred to
Hamburg as an illustration, where a rigid system of currency
was enforced. The disasters in America, Germany, and this
country had arisen fram a common origin, Ho agreed very
bench in what had fallen from the right hon. gentleman the
aueinber for Buckinghamshire as to the cause of our commer-
(dal distresses, namely, an exportation of gold. That arose
from the war we had carried on with Russia. During its
continuance there had been a drain of gold by the three great
countries engaged in it to the extent of between thirty and
forty millions annually more than we had been in the habit of
spending, (Hear, hear.) Now, a war expenditure resolved
Itself into a distribution of wages for the manufacture of am-
munition, freightage of ships, Ste. ; and he put it to the
)trouso whether such an additional expenditure did not drive
up the prices of every consumable article. They found in
1854 and 1855 trade in a most flourishing and prosperous
3onditiou, because every merchant who imported goods found
te. ready sale for them with rising prices. (Hear.) When
peace came, the merchants considered that if we had been
prosperous in war we should be twice as prosperous in peace ;
but the consequence sr-as the reverse, and every article im-
ported sold at a lower and declining price. (Hear.) As an
Instance of that kind the hon. gentleman stated that in the
'article of sugar in the four British and continental ports the
a3onsumption of sugar, in the first ten months of this year,
lead declined 100,000 tons less than in 1855. Taking that
es an example, he thought it showed that the consumption
3f Europe generally had been enhanced by the war.
!Me same occurrence happened after the war of 1815 ; and
that being the case, he thought we might fdrly attribute the
disasters that had occurred. He thought they were not cor-
rect in attributing the distress to the currency laws. Ho con-
sidered the Government acted wisely in issuing the let or,
and he supported the appointment of the committee. (Hear )
Mr. B. BLACKMORE considered the pressure was far
from over. He felt from his own experience that tLe pres-
sure that had been felt by the commercial community was
beginning to press with great severity on the working classes,
which, if not stayed at this unfortunate period of the year,
would soon overtake the agricultural classes. tie congra-
tulated the Chancellor of the Exchequer on the flow of gold
Into the Bank coffers, because that was taken as the barome-
ter of the state of prosperity of the conntry. He advocated
a return to the issue of 1/. and 2/. Bank of England notes, as
affording great facilities to tho payment of wages, with the
convertibility of the Bank Act of 1844 guaranteed, by which
means the currency would not be depreciated. He regretted
tint the Government only intended to pass the Indemnity
Lill. He thought it would have been more satisfactory to
the country, and ho was sure it would have been to the
Industrious classes of the country, if, instead of the reap-
pointment of the committee, with a long delay of inquiry,
the house had been allowed to apply itself to some practical
=ode to remedy the pressure that threatened the industrious
*lasses. (Divide, divide.)
The CHANCELLOR of the EXCHEQUER said that
whatever doubt might have existed before the commence-
ment of the debate as to the expediency and almost neces-
sity there was of the reappointment of the coaimittee on this
subject, it must have been removed by the course the de-
bate had taken. The house had been told by the right
b en, gentleman opposite (the member for Buckinghamshire)
that further inquiry on the subject was superfluous, because
.Lie facts were so plain and undoubted that no difference of
°Anion existed on the main principle of legislation and yet
after hearing the debate he (the Chaneelior of the Exchequer)
omefessed it seemed to him that if the house was reduced to
$ le necessity of founding a measure on the speeches of the
principal members of the house who had spoken ou the sub-
ject, they would find themselves in the necessity of taking a
ticket out of the legislative lottery, in hopes of its coming
wet a prize. (Hear.) Ho was in hopes that hon. members
who supported the amendment would have laid down in most
distinct terms the principles on which to legislate, and he
appealed to the house whether the right hon. gentleman the
member for Buckinghamshire or the right lion, gentleman
the member for the University of Oxford had clearly and dis-
tinctly enunciated the principles ou which leg slation should
proceed. (Hear.) The right hon, gentleman concluded by
Stating that the Government had enunciated clear views upon
the question, but they considered it better to refer the whole
question to a committee, rather than it should be said Go-
Sernment had expressed confident opinions on the question,
and were desirous of biassing hon. members, without their
having had an opportunity of examining evidence on the
luestion. (Hear.)
The house then divided
For the motion
Against it ll7
Majority in favour of Go eernment --178
Mr. NEWDEGATE inquired if was the intention of the
Government to alter the Act of 18 14 ?
The CHANCELLOR of the EXCHEQUER slid it would
be a question for the consideration of the Government after
the committee had reported. The right hon. gentleman then
moved that it be an instruction to the committee to inqui.e
hit() the cause of the recent commercial crisis, and how far it
ad been affected by the issue of notes payable on demand.
Mr. T. BARING thought the subject ought to bo referred
toga itellarate committee.
e CHANCELLOR of the EXCHEQUER said that if two
Committees wore ts inquiring int:thappointed they would in reality both
saedsame thing.
Mr. HlJDapee
was to avoid legim,ltiotnhat if the object of the Government
they would secure that object by
baying one committee.
be allowed to derd J. RUSSELrive said hethought the Bank ought not to
L an
the suspension of the act, ifrom the increased issue under
The CHANCELLOR of the ExcRE
right that the Bank should be plum :pH said it was but
sinister motives. eve suspicion of any
Sir H. WILLOUGHBY inquired who
would bear the loss
any occurred ,
p he
The CHANCELLOR of the EXlfCaHnEygsUhoEußassalt%helace
e could not
see how any loss could occur.
would take care to let the hoe, baronet know how it
to
be met, (Laughter. )
Mr. DISRAELI hoped the Government would consider the
proposit on of the hon. member for Huntingdon, and have
second committee. Indeed, he thought it would be well to
have a separate committee fur Ireland and Scotland.
Sir-C. WOOD said that separate committees must conflict
in their proceedings.
Mr. T. BARING said the House of Lords had acted upon
the course he had propos d.
Mr. NEWDEGATE thought this was conclusive as to what
the Government ought to do in the matter.
Mr. T. O'BRIEN, as one having supported the Govern-
tient, thought the preposition of the rig ht hon, gentleman
(Mr. Disraeli) was well worthy of consideration.
The motion was then agreed to.
NEW WRIT.
A sew writ was ordered for the Elgin Burghs in the room
of Mr. Duff, who had accepted the Chiltern Hundreds,
WEXFORD FREE BRIDGE.
On the motion of Me VANCE, the following returns were
Ordered :—Return showing the amount of all moneys re.