The Sun.
London, England, 1857-02-07 00:00:00

expressed en opinion in favour of the act of 1844, it was
incumbent on him to appoint a fair committee, because
the house woad othcrwi.e flie
elusions to which it might come. The fact that the act of
1844 was passed for only ten years showed that it was to
be adapted to the changed circumstances of the country.
The act of 1844 might be well adapted to the circumstances
of 1844, and yet very ill adapted to the circumstances of
the present time, when the tr.:ports of the country were
nearly double the amount of what they were ten years ago.
His right hon. friend (Sir C. 'Wood) said that the active
circulation had not diminished in 1847. But was the right
hon. gentleman ignorant that, though it might appear on
paper that the active circulation was what it purported to
be, it was practically locked up by the apprehension that
existed ? And in proof of that, he begged to mention that
in 1847 a wealthy man in London went to his broker'when
ho thought the pressure was over, and handed him 10,0001.
in cut notes to invest, and when the broker asked him why
they were cut in halves, he said, "To tell you the truth,
I did not like to trust the whole notes to the Bank."
That showed the general distrust which prevailed.
Hon. gentlemen said it was now a recognised doctrine that
the best mode of checking a drain was to raise the rate o f
discount, and talked of the effect of this step since the bill
of 1844 ; but they forgot that before 1844 the Bank could
not make use of this engine, for the usury laws prevented
it. Although he was not prepared to say that it was not
a most legitimate mode of action, yet the Bank had con-
trived to keep things steadier when it had no such power.
He hoped the Chancellor of the Exchequer would take care
that the committee was fairly constituted, and comprised
intelligent men of all interests ; if that was done, whatever
might be the result, it would give satisfaction out of doors,
but if not, whatever might be the report, it would not be
satisfactory.

Mr. IN-GRIM expressed a hope that if a committee
were appointed the present management of the public debt
by the Bank of England would be taken into considera-
tion. The allowance in that account for the last year was
247,000/., being on an average a charge of nearly H. to
each person holding stock in the public funds, as, accord-
ing to the returns for the year 1850, being the last in his
possession, it appeared that the number was only 269,736,
the debt itself being under 800,000,000'. It was true that
in those returns the Bank of England did not appear to
receive so much for their management of the public debt;
inasmuch as they refunded 180,0001. for the privilege of
issuing bank notes. lie however, had no doubt that there
were plenty of banks in England who would be glad to pay
even four times that amount for the enjoyment of a simi-
lar privilege. The trouble and expense attendant upon the
system pursued in that establishment were enormous, and
it even led to considerable frauds. A person holding stock
must attend personally at the Bank of England, or in-
cur a large expense in giving a power or attorney to his
banker or agent to receive the dividend. Now, let them
but compare that system to the ono adopted in respect to
similar monetary transactions. He would take, for ex-
ample, the payment of the dividends on railway stock. He
received from Mr. Watkin, the manager of the Manchester,
Sheffield, and Lincolnshire Railway Company, a statement
of the cost of the payment of their dividends for the last year,
It amounted to 1251. 13s. 2d. The capital was about
9,000,0001., the number of shareholders 4,900. The expense
thereforelof the payment of the dividend averaged only Gd.
per shareholder ; and the mode of payment was much more
satisfactory to the shareholders. ' That expense, however,
did not include any of the charges attendant upon trans-
fer, which he calculated would be, on an average, ls. ad-
ditional ; therefore the whole charge to each person might
be put down at ls. Gd. Ho had also another return from
the Midland Railway which gave precisely similar results.
If any new arrangement were made with the Bank of Eng-
land, he hoped that these facts, would be taken into consi-
deration, and a different system adopted for the payment of
dividends. He might observe, in conclusion, that he ob-
jected to the granting of a now charter to the Bank of
Eogland. It was quite time, he thought, that the State
should take into its own management the issuing of its
notes, and the payment of its own debts. (Hear, hear.)
Mr. A. HASTIE sail that the Chancellor of the Exche-
quer had referred to the operation of the Scotch and Irish
act of 1845, and stated that he had written five or six let-
ters to Scotland, and, as he received ,no answer, he con-
cluded the banks there approved of the act.
The CHANCELLOR of the EXCHEQUER had stated
that he had received replies to the effect that the operation
of the act was considered favourable.
Mr. HASTIE in that case could easily understand what
parties were applied ,to. The right hon. gentleman must
have commuicated with the five chartered banks only, for
he (Mr. Hestia) was well aware that the other banks were
not at all satisfied with the act, and iti 1853 they had pre-
sented a memorial against it. The act had conferred several
privileges on the chartered banks, which ho thought ought
to bo extended to the others, for they were equally, respec-
table and equally well managed. The people of Scotland
were not at all satisfied with the act—it had prevented the
establishment of any new banks, although from the great
increase of trade there was ample room for them. Re
hoped that in the committee the Scotch and Irish banks
would be fairly represented.
Mr. CROSSLE Y was glad to find that the Chancellor of
the Exchequer had consented to the appointment of two
committees instead of one : that on joint-stock banks would
require the legal members ; but for the Bank Charter they
would want commercial men. There wero two reasons why
the charter ought to be investigated—first, the enormous
increase of trade since 1841; and next, that from this in-
crease the prices of all raw materals had risen immensely,
so that the same amount of business now required a much
larger capital. Some gentlemen seemed to think that an
alteration in the charter would be a panacea for all the
' evils cempleiued of, but as long as the Bank was bound to
pay sovereigns ou demand, it would be obliged to raise the
rate of discount whenever the gold was going out of the
country. There was one remark of the hon. member for
Kendal which he thought worthy of consideration—viz.,
whether it would not be desirable to take away the power
of issue from all banks. The Chancellor of the Exchequer
said that the Bank of England paid for the privilege . but
on an issue of 14,300,0001., there was a profit of 840,000/.
per annum, which he considered ought to go to the reduc-
tion of the taxation of the country. (Hoar, hear.)
Mr. CAYLEY expressed his satisfaction at the candour
which had characterised the discussion ; for, formerly, only
one side was allowed to be heard. There were two parties
to this question ; the public were principally concerned,
and it was for them they plight to legislate. Money was
made for commerce, and not commerce for money. The
Chancellor of the Exchequer said that the committee of
1848 had reported in favour of the act of 1814; but of the
seventeen witnesses examined before the committee, only
four, including Lord Overstone and the governor and de-
puty-governor of the Bank, were in favour of the act as it
stood. It was important to ascertain the reason why the
commercial world was so much embarrassed by these con-
stant changes in the value of money. The great desidera-
tum in a medium of exchange was to have it of an uniform
value, but that was impossible under the present system,
When a large amount of bullion accumulated in the Bank,
it was compelled to go into the discount market and coat-
pate with the brokers, in order to find employment for its
capital. The result was that in one instance since 1841,
money had fallen to 1 per cent. The necessary consequence
of this low value of money was that parties were driven to
speculate, in order to get some interest. This led to the
additional labour and increase of consumption. The im-
ports then increased, but as the exports were statienar
the balance of trade turned against us, and it became neces-
saryY to send gold out of the country, and the rate of dis-
count gradually increased. At five or six different periods
prosperity bal driven the gold out of the country, and dis-
aster had brought it back. When the baales ceased to
accommodate their customers they became, in fact, the
chief holders of notes, and thus in times of difficulty the
I banks, instead of aiding, increased the pressure felt by corn-
' mercial men. He thought at all events that sufficient hal
been said to show that some inquiry ought to take place,
and that some remedy was needed. As to the nature
of that remedy, he would not venture at that time to ex-
press an opinion.
The CHANCELLOR of the EXCHEQUER said that he
tweoeu dincaodnefi tnoe t
1:
e himself
proposal t o
to havemeeting at h e
committee. objections
the Bank
a na
kn and
liabletlia t ittohal
loco
e been Thwheiehhouse
would bear in mind that the act of 1844 expired in August,
its extended
privileges en
upontermsiwi ohtiieche gr ei
vn edne rbe yd
motion in the House of Commons. During last session a
motion was made before Easter for a committee to inquire into
the subject of the Lank Act. He had opposed that motion,
feeling that a time when the nation was at war was not
the time when an inquiry upon such a subject could be most
satisfactorily considered. At the latter end of the session, I
after the conclusion of the treaty of peace, he was asked /
whether he should object to the appointment of a committee. I
He then replied that he had no objection to such a course,
but he suggested that at so late a period but little practical
good would come of the appointment, o committee was
appointed, but on the last day of the session au hon. member
gave notice of his intention to move for a committee early in
the present session, Under these circumstances he had
thought:that it was a proper course to move for a committee,
instead of bringing in a bill, which would no doubt have been
referred to a select committee. Ile would remind the house
that since 1810 there had been once in every ten years a
committee appointed to inquire into this subject. Iu 1810
the well-known bullion committee sat with Mr. Horner for
chairman; in 1819 the committee sat, of which Sir R. Peel
was chairman ; in 1830 and 1840 other committees sat, and
in 1848 the committee on Irish distress entered somewhat
upon the consideration of this question. Ho was, however,
willing to accede to the suggestion which had been made for
limiting the duties of the select committee to an inquiry into
the operation of the Bank Acts of 1844 and 1845. He there-
fore moved for a " select committee to inquire into the ope
ration of the Bank Act of 1844 (7 and 8 Vic., c. 32), and of.
the Bank Acts for Ireland and Scotland of 1845 (8 and 9
Vic., c. 37 and 38)."
PASSINGedIeTa TOLLS
bAr
nBgO Li
nI Tal Ob
iNI
for the The motion was agreed to.
l
Mr. LOWE obtain
aboli-
tion of passing tolls.
GENERAL COMMITTEE OP ELECTIONS.
The general committee on elections was • 8.
as re-appointed.
Tho house adjourned at twelve o'clock. •

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