The Sun.
London, England, 1844-06-14 00:00:00

the motion that had been made by his lion. Friend a most !
proper one, and he should, therefore, (rive it his support.
Mr. MASTERMAN would vote for the Government, but
he hoped that some of its obnoxious regulations would be con-
sidered in Committee and removed. The respectable country
bankers were tied down in too stringent a way, by having their
circulation confined to the average of the last two years, a
period during which, some of them from prudence and others
in consequence of the difficulties of the country, had been com-
pelled to curtail their issues. The proposal made by the
country bankers, that they should be either permitted to issue
a larger amount than the average of the last two years, or that
the maximum should be calculated upon an average for the last
five years, was certainly not unreasonable. He wished to ad-
vert to the subject of a memorial which he had presented
to the First Lord of the Treasury, and which
was signed by a great number of the bankers in London,
complaining of the restriction of the circulation to 14,000,0001.,
and proposing that a power of expansion should be vested in
her Majesty's Government and in the Bank of England.
From what they had heard that night from the Right lion.
Gentleman, he feared that the Government would not consent
to that proposal ; but he hoped that further time might make
them look mere kindly on the proposition. It could not be
said that 14,000,000/. was the exact amount required, and all
they asked was that a power of expansion should be vested
somewhere, so as to prevent a crisis, in the event of such a
thing being likely to occur.
Mr. WARBURTON said the Hon. Member for Liskeard
had asked what was the object of the Bill ? Why, the object
of the Bill was not to prevent speculation—no Bill could
prevent that ; not to prevent baukruptcy—no Bill
could prevent that ; but to ensure convertibility—
not that sort of convertibility with which he had heard, to his
surprise, the Hon. Member for Lambeth declare, that he
should be satisfied that the paper should be worth so much
sugar or so much coffee.—(" No, no," from Mr. Hawes).
The Hon. Member denied that; but what was the test he had
applied during the term of non-convertibility? Why, he con-
teaded that the Bank had conducted itself properly during that
period, and that the currency had not been depreciated, because,
estimated according to its value in sugar and certain other com-
modities, it had not undergone depreciation. The Hon. Mem-
ber for Lambeth had certainly not gone so far as to set up an
abstract standard of value, but he had set up a standard of
sugar, which, he admitted, was something tangible ; but that
was not what he (Mr. Warburton) understood by convertibility.
By convertibility he understood the convertibility of paper into
gold, and the object ef the Bill was to secure that convertibility.
The Hon. Member for Warwick contended that the Bill
ought not to extend to the restriction of country banks, be-
cause it appeared from the statements made by persons from
those banks, before the Committee of 1839-40, that they were
unable to regulate their country paper in conformity with the
exchanges, or with the gold in the hands of the Bank of Eng-
land. It appeared that the country bankers never did con-
form to those exchanges, and it was indispensable to converti-
bility that they should do so. The only objection that could
be reasonably urged against the measure appeared to him to be
this—it provided that the Bank of England paper should ex-
peed and contract in proportion to the stock of bullion ; but it
did not provide the same with regard to the country banks, and
so far it was defective. It seemed to him of little importance
whether country bank notes were convertible into gold
or Bank of England notes, but it did not go far enough, inas-
much as it did not make the country paper expand and con-
tract, as the Bank paper did. He did not find fault with the Go-
vernment for that—the present opposition showed that they
had carried it as far as it was prudent to attempt it. They had
not provided for its expansion and contraction, but they had
set a maximum founded on the average of the two preceding
years. The effects to be apprehended from the contraction of
the currency had been greatly exaggerated. The only conse-
quence of that contraction would be the substitution of a small
amount of gold for the paper which would be withdrawn. Now
to suppose that this great country, which at the close of the
war bore an expenditure of 120,000,0001. per annum,
could not provide a little gold for the deficiency
of the currency, was too absurd to maintain. An-
other argument was, that a great deal of gold was produced in
Russia, and that Russia was so jealous of our power that she
would not allow it to come into this country. He
had heard that " Aurum per medios virat Sattellites ;"
and he would remind the House that, during the war, Mr.
Rothschild had carried the gold for the payment of our troops
through the midst of the French army. It was ridiculous to
suppose that any jealousy could prevent gold from being brought
to this country—the facility of its transport rendered it so appli-
cable for the standard of value. It passed over all obstacles ;
and to imagine that a poor country like Russia would lock
up their gold mines from us, was perfectly absurd. The
Bill did not profess to prevent speculation, which
was only one of the elements of rise of price. He did
not say it was not an element, for if every man deposited gold
in one bank, and had credit only for the amount of that gold,
the concerns of the country might be carried on without
paying any gold at all; but if they gave him additional credit
they gave him additional power of purchase, and that would
create a rise of price. Lie was happy to hear that the Govern-
ment would firmly resist the application of the London honkers
to allow an expansion of currency under circumstances ef
difficulty—it would destroy the vi hole plan, by expanding the
currency at the very period when it ought to be contracted.
The only way to maintain convertibility was to contract and
expand the currency in proportion to the amount of the
precious metals. The Government had adopted that mode of
securing convertibility—that was the object of the Bill, and
for that the Government deserved the thanks of the country.
Mr. DARBY admitted that if they made the issues of the
Bank of England dependent upon exchanges they could not
altogether leave out the country banks ; but what the country
bankers complained of was, that they were placed on too
limited a basis, which would place not only the country
bankers, but those who depended on them, in a very difficult
position.—(" Hear, hear," from Col. Sibthorp. ) Country
bankers had, during the last few years, been very careful in
their issues and accommodations, and it certainly was limiting
them too narrowly to take the average of the last two years
as the maximum. There had been no issues recently but
such as had been called for by the wants of the
people, and the effect of thus limiting the circu-
lation would be to induce everybody to contract their commer-
cial business. In the manufacturing districts the deficiency of
accommodation might be partially remedied by means of bills of
exchange, but such could not be the case in the agricultural dis-
tricts, and if they so contracted the basis of the circulation, the
farmer could not possibly have that accommodation which he
required. Sudden contraction in the issues was very pernicious,
and would force the adoption of a system of small bills, than
which nothing could be more ruinous. With respect to the
Order in Council for a greater issue than that allowed by the
Bill, be must say it was very strange that the Bill should repu-
diate a principle, and, at the same time, permit a license which
seemed in direct opposition to its provisions. He thought the
Order in Council should be further extended, and that the coun-
try banks should derive some advantage from it.
air. GISBORNE would have been very favourable to the
proposition that the Bill be read a second time that day six
months. The first question was, had every person who had
mercantile transactions a right to trust whom he pleased, but
this Bill attempted to abstract that liberty. A might go to B
under the present system, and offer him a price for his goods
which he was willing to accept of, but as A had not the money,
and as he was unknown to B, he gave him a bill indorsed by
C, who was known to B ' • A having put his name on the bill
was deemed satisfactory. B put the bill in circulation, but it
happened that neither A or C were known to D, but he was
willing to take the signature of E ; thus it was all the letters
of the alphabet, as he might say, were engaged. These
transactions were deemed perfectly innocent, and were never
interfered with so long as they kept above the sum of 5/. ; and
so long as the promise was to pay at the expiration of two or
three months, but if the promi e was to pay "on demand,"
and the sum beneath five pounds, all the malignancy, and all the
mischief was said to attach to it. Demand for gold caused a
reduction of price, and abundance of gold the reverse; and,
therefore, he could perfectly understand how paper currency
might depreciate or rather hinder the appreciation of gold.
By our legislation, we certainly did run some risk of injuring
the convertibility of the Bank of England, and the great
danger that Bank had to fear was the loan of fourteen
millions to the Government which the present measure imposed.
He would now call the attention of the House to the way in
which they had legislated upon this subject, and to which he
(Mr. Gisborne) objected altogether. ( Here the Hon. Gen-
tleman took a historical review of the different measures passed
by the Legislature on the subject of the currency, but has the
same view has been given in reports of preceding speakers, we
refrain from repeating it.) The lion. Gentleman having ar-
rived at the legislation of 1519, said that he agreed in the pro-
priety of a return to cash payments, but he did not agree with
the proposers of that measure in the standard of value they had
established. When at a subsequent period this return to cash
payments was not found to be sufficient to ward off the evil
which afflicted this country, it was found necessary to resort
to other measures, and they were told if they only suppressed the
issue of one-pound notes, all their difficulties would vanish.
They were suppressed, and very shortly afterwards the coun-
try was again in trouble. They were told the currency had
only to be put on a sounder footing and all would be well
again, and to this end the infallible remedy was bit upon of li-
miting the number of partners in a bank to six. This
led him on to the time when trouble ccming
again joint-stock banks were established. In 1836 or
1837, he forgot which, they first heard the mention of one hank
of issue, which arose from a remonstrance addressed to the Go-
vernment by the town of Manchester, and Mr. Jones Loyd
having told them they were right in their view, they became
fully satisfied on the subject. They never thought, or they
could not see, that the object of Mr. Jones Loyd was to put
down every monopoly but his own.—( Hear, hear.) The Hon.
Gentleman concluded amidst loud cries of " Divide, divide,"
by stating that he would support the motion of his Hon. Friend
the Member for Lambeth.

Sir ROBERT PEEL said nothing which he had heard at
all influenced his judgment against the Bill before the House.
All the persons who had spoken against the Bill had also
expressed themselves in favour of a metallic currency.
He did not know from the Hon. Gentleman who proposed the
resolution, or from the Hon. Gentleman who closed the de-
bate, why the metallic currency should be abandoned.—( Hear,
hear.) The Bill of 1819 was passed on the recommendation
of Committees which had examined the whole subject. The
House would recollect what had occurred in the inquiries re-
specting the establishment of silver as the standard of value.
A resolution was passed declaring the dollars to be worth four
shillings, but it was discovered that at that rate the dollars left
the country. The value of the dollar was subsequently de-
clared to be 4s. 6d., and the exportation of dollars ceased.
It was a contradiction of facts, which he thought the experience
of every man recognised as perfectly plain. The Hon Gen-
tleman bad referred to the United States to show that the
analogy drawn from the affairs of that country was totally in-
applicable. Why, in the United States they had joint-stock
banks; they had a paper convertible into gold; in the consti-
tution of the banks they had every guarantee for solvency ; but
there was an unlimited competition of issue, and the conse-
quence was, bankruptcy and general failure.—( Hear, hear. )
In 1811 there was a State bank, corresponding to
some extent, in functions and powers, with the
Bank of England ; this hank exercised a Lcontrel over
the others. In 1811 this central State bank was
abolished, and three years afterwards there was an universal
suspension of cash payments, in consequence of the check af-
forded by the central bank being removed. In 1830 another
this kindT
bank of the same kind was established—it ceased to exist in
1833, and a few years afterwards they lo'nia found all the
banks twice in succession suspending cash payments. This,
he contended, was an argument for an increased control. Then,
let him refer to the opinion of two men of the highest autho-
rmity
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consequence of the
States, which exercised a salutary control over the circulation
and issues of the others. Mr. Webster a' • gain said that he was
in favour of a convertible paper currency, be cause no paper
could be made equal and kept equal to metal, except it was
convertible into gold and silver on demand ; and what body or
power ought to he made the regulator of this? What was
their experience in their own country? Did he pro-
pose to disturb a perfectly successful system. They all
adhered to a metallic standard ; but it was said there bad not
been shown sufficient grounds for interfering with the issue of
paper. Why, what warnings had they not had within the last
twenty year; ? What proofs had they not had of the necessity
for legislative interference, in order to maintain the principle of
convertibility. There were four years in which there was
a great drain of gold from the country, 1825, 1832, 1836,
and 1839. In that period it was decisively proved that the
country banks did not conform in their issues to theexchanges,
and were not reduced according to the efflux of gold. On the
contrary, their issues had increased, when, if his principles
were tru they ought to have been contracted. It, was said