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

netted with questions of banking, which could not fail to
produce a most injurious effect, He, therefore, protested
against the establishment of a single bank of issue. He
did not think that the plan would work well ; and in the
City of London he believed that there were many who
concurred in that opinion. He understood that thirty
London bankers had wriven to the Right lion. Baronet,
pointing out what they conceived to be objections—and
• objections which, according to the scheme he had laid
down, he would be unable to meet. In the country, too,
the bankers entertained great objections to it. (._)a these
grounds, then, and relying on the Act of 1819, he
thought the Right lion. Gentleman had not made out a
case for further interference, and he should therefore
conclude by simply making his motion.
Mr: HASTIE seconded the motion. He agreed with
the principles the Hon. Gentleman had laid down, that
all promissory notes ought to be convertible, on demand,
into gold. With that provision, he thought there was
no danger of over-issue on the part of the country banks.
The whole object of the present Bill was to prevent those
' panics which had given such a shock to the trade of this
country since 1825, Now, in the first. place, they had
not taken proper pains to ascertain the causes (f these
panics, and he felt bound to declare it as his opinion that
the Bill of the Right Hon. Gentleman contained more
elements of panic than any preceding one.
The CHANCELLOR of the EXCHEQUER was not
prepared, when he received the notice gven by the
Honourable Gentleman, to hear such objections as
those which he had urged in his speech. Enter-
taining the opinions he did, the Honourable Gentleman
should have moved for the total rejection of the Bill, for
that would have been the more manly and consistent
course. The Hon. Member approved of sound prin-
ciples, and admitted that the Bill contained some, but
studiously resisted the putting of them into operation.
The Hon. Member agreed in the principle on which the
report of the Bullion Committee was founded, but
thought its recommendations were injudicious. The
Hon. Gentleman attempted to prove, from the price of
sugar at the time of the war, that th.re was a redun-
dancy of currency at that particular time. Nothing
could be more fallacious than such a test, and the history
of the time proved it. In 1825 the country was re-
duced to such a condition, that Mr. Huskisson felt him-
self forced to declare that the country was brought down
to a state of barter. Did the Hon. Member forget 1839,
when, in consequence of the mismanagement of tue paper
currency, the Bank was reduced to seek foreign aid, and
it was doubtful for some time whether the Bank would
have been able to pay in gold. If convertibility since
1819 was preseved, it was only by having a re-
currence to measures which pressed severely on
the industry and energies of the country ; and they
were bound to consider if they could not prevent a re-
currence of such evils. The lion. Gentleman objected
to the plan, because it was not preceded by sufficient
and competent inquiry. Why, what were Committees
of the House engaged about for two years, but inquiring
into the state of the currency 2—(Hear, hear.) The
principle of the Bill presented to the Mouse by his
Right lion. Friend was to have the currency of the day
in a fair proportion of gold and paper, and to make it
fluctuate as if the currency were entirely metallic. The
Bill guarded against those fluctuations which had been
so ruinous to private individuals, as well as to the na-
tional interests generally. The Bank of England, in
order to prevent those disasters, should have full
power over the exchanges; but hitherto paper issue took
place from a source over which the Bank had no control,
and which did nGt act in unison with the Bank. As
the Bank contracted, this source became more
copious, and hence the want of a proper
controlling check, and the result of that want.
But, argued the Hon. Member for Lambeth, your com-
mercial distress is not to be imputed to the state of • the

currency, or to any changes that may have taken place
in it. He (the Chancellor of the Exchequer) did not
deny that it would be unfair to charge all the distress'
that had taken place at times to the fluctuations in the
currency—no doubt there were many prevailing causes
that also must be taken into account on that head ; but
this he was prepared to say and to maintain, that the
forced expansion of the currency, at a time when the
natural tendency of things would lead to a contraction,
was a main and essential ingredient of those distresses
from which this country had periodically suffered.—
(Hear, hear.) And it was no answer to the proposit• on
which had been submitted by her Majesty's Government,
to say that because they could not remove every one of
those ingredients, and every one of those causes, they
were to be debarred from attempting to cure those
evils, the existence of which was palpable, and
the remedy for a considerable portion of which
they honestly believed th y had it.-- in their
power to suggest.—(Hear, hear.) But the llon.buraotl
Gentleman (Mr. Hawes), in confirmation of the views
he held, had referred to the heels of the United Stateg,
and asked, was not their Currency quite convertible? He
asked, was it n(4_ tkb-re the principle that the noes of
the satiny cotnl,e ting banks should be payable in gold,
and iet Inuit happened ? Why, this had happened :
Tint, by their competition of issue, they had reduced
their country to that condition in which they alike over-
looked the precepts of morality and the obligations of
honour, and caused wide-spread ruin around--.(Hear,
hear.) This was done in his (the Chancellor of the
Exchequer's) opinion, not from a want of convertibility,
but from a recklessness of competition and of issue,
and which had led to those wild shemes which none
regretted more—for none suffered more—than the
authors of such recklessness.—(Hear, hear.) One main
principle which the Hon. Gentleman (Mr. Hawes) had.
laid down was, that Government should never be in a
position unduly to interfere with, or to control the Bank
in its managements and issues. This power of inter-
ference did not exist in the present charter, and in that
which was now proposed as its substitute it was more
than ever effectually guarded against, for there was to be
not a quarterly, not a monthly, but a weekly return of the
state and liabilities of the Bank, and this, not for the
mere uses of Parliament, but of every man in the king-
dom, and it would then be very soon ascertained if the
Bank were in any way acting under the control of _the
Government.—(Loud cries of "Hear, hear.") But,
.aid the Hon. Gentleman, there is no evidence to
show any ground far the interference of Parliament
with the banks of issue. Now, he did not believe it
was necessary for him to show that there had been
very great misconduct to justify the Government in
introducing this measure. It was enough for him (Mr.
Goulburn) to prove that the consequences of the present
system necessarily led to evils against the recurrence of
which there was a means of guarding. He had no wish
to say anything against country bankers. Though some
most iniquitous transactions had come to light, he
acknowledged that body to be eminent for worth and
for honour. But it was not denied. by them that their
operations were governed by the state of things around
them,—by the wants of the neighbourhood —by the
desires and the demands of the community amongst
which they lived ; and that they knew nothing whatever
of the foreign exchanges in the management of their
issues, and the government of their conduct. Of this
there was sufficient proof in the acknowledgments of the
country bankers themselves.—(Hear, hear.) He would
not trouble the House further, for the question had been
so fully discussed on a former occasion and with such
ability, that he should but weaken the force of what
was then advanced were he to say more upon the subject.
He would conclude, by saying, that he thought it would
have been more fair and more manly too, to have
attacked the measure on its principle than to have
assailed it on mere minor points of detail as had been
the case that evening.—(Hear, hear.)
Sir W. CLAY said, though he considered the mea-
sure was in one or two points susceptible of im-
provement, yet as a whole he looked upon it
as a good one, and the principle on which
it was founded, he most cordially approved.
lie believed that these principles were, abstractedly.
sound and true, and it was most important to the country
that they should be carried into practical operation.
It was not necessary to deal with the theories of the
Birmingham School—they were very generally rejected
by the good sense of the country. Bat it was not only by
them that opposition was to be offered to the plan ; his
Hon. Friend the Member Lambeth was one of those
who thought the Bill unnecessary. He. hoe-ever, be-
lieved the Bill to be both expedient and necessary. One
great truth had been entirely overlooked. That was
twoth e principle,
no
ong rtoho as t ts es yt e couldms, notoe
of
combineconvertible th the e• o
and
ko
di n gt
ho
of
other of inconvertible paper. England would always
have her full share of the precious metals in Europe. So
great was their tendency to flow into Enlgand, that Mr.
Rothschild said, before the Committee of 1832, that
were it not for a bad harvest now and then, foreign
loans, or mining speculations, he believed that the wealth
of the world would centre in England. The action of
the currency fully justified the proposal of the
Bill before the House.—(Hear.) He should not
trouble the House with details in support of these
general principles. He contended that neither the Bank
of England nor the country banks had regulated their
issues according to the exchanges, and that a measure
to regulate them both was necessary. His Hon. Friend
was quite mistaken in what he had stated with regard
to a suspension of cash payments in America. There
was by the law of the States as complete a convertibility
of notes into cash as in this country. It might be asked
then why was it that cash payments were suspended ?
From the same reason that it had happened in England;
there was an excessive rage and competition of issue,
and the law could not enforce an impossibility. He con-
sidered that the Right Hon. Baronet was entitled to the
best thanks of every lover of his country for bringing
forward this measure.
Mr. NEWDEGATE opposed the motion. He trusted
that the remonstrances that had been made by the
country bankers would be duly attended to. Of this
he was sure, they were well worthy of attention.
The result of the adoption of the proposed system would
be, that the system of credit would displace the system
of currency, and small bills would necessarily take the
plac place of theThs as
This
swohrie would givechwwoouuldbe to money circu-
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would
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fi
aristocracy of birth, the aristocracy of talent. and the
aristocracy consisted of those elements. There was the
aristocracy of wealth. Each of these sections of the
w
aristocracy had its failings. The aristocracy by birth
indolent and overbearing, but it was generous. The
aristocracy of talent was intolerant, but the aristocracy
of wealth was the most oppressive that could exist. It
regarded human beings merely as units of production,
and if it were to become the sole aristocracy,
it would become so oppressive that the people
would be obliged to look out for means to
defend themselves against it. The United States
afforded au example of a democratic country growing
into an aristocracy. The aristocracy there was an aris-
tocracy of talent. The country was guided by dema-
gogues ; but they bad been very careful to guar&
against the aristocracy of wealth. Day by day they
took additional protections against it, by enacting its re-
peated subdivisions, and by enlarging the franchise. , If
they adopted this measure it would tend to enhanee the
standard of value more than anything that had precede&
it; and when, in their future troubles, they turse4 'roux"