The Sun.
London, England, 1844-06-25 00:00:00

departments, though it would introduce a new principle
into the Bank of England. Another new principle of
the Bill was, that the Bank was restricted from issuing
notes upon silver. He considered that was an erroneous
restriction, for silver was the standard of value in the
New World, and it was a protection to gold.—(Hear.)
Another objectionable point in the Bill was that it con-
tracted the issuing power of the Bank in case of another
bank of issue ceasing to issue its notes. If a bank issuing
90,0001. ceased to issue to that amount, the issuing of
the Bank of England was limited to 60,0001., thus con-
tracting the power of the Bank 30,000/. He thought it
right to make those objections ; he made them, however,
as a Member of Parliament, and not as a member of the
Court of Directors of the Bank of England.
Mr. W. WILLIAMS was not surprised at the dislike
of the Hon. Gentleman, to see the power of the Bank of
England had been curtailed, and that he wished that a
power to issue sixteen and a half millions had been left
to them. He knew that the Right Hon. Gentleman who
introduced this Bill would be pressed by influence on all
sides. He looked on this Bill as the complement of
the Bill of 1819. While the banks- had the power of
unlimited circulation, there was no class in the country
whether high or low which did not feel the effects of it.
These was unsteadiness and uncertainty in everything,
there was fluctuation from high prices to low prices.
He, therefore, looked on this measure as one of the
greatest importance. The excessive circulation of the
Bank of England paper had encouraged speculation—it
made the country a vast exporting country. But the
foreign exchanges were soon turned against them, and
they were obliged to correct them by a large export of
bullion. In 1824, the Bank of England had over
14,000,0007. in its coffers; in December, 1825, it had lost
the whole of that bullion. The Hon. Gentleman went'
on to quote the evidence of Mr. Norman, given before
the Bank Committee, to the effect that in eighteen
months no less than six and a half millions had been ab-
stracted from the Bank. The consequence was, that
prices rose and the greatest sacrifices were
obliged to be made. The fact was, that
gold would not keep company with paper.—(A laugh.)
PerluiPs in the first -coming into operation the Bill
might not have the effect which he anticipated, but he
maintained that in the first three years of its operation
it would bring into circulation a greater amount of
bullion and paper together than had been since 1819.
Our gold and silver circulation of the present time
amounted to no more than thirty millions, whereas in
France, which had much less commerce, there was a
circulation of 100,000,000 in gold and silver. Why
should the circulation of this country, which had the
balance of trade so largely in its favour, have so inferior a
circulation ? He attributed it to the effect of the paper
currency, which sent the bullion out of the country.• In
the letters of Daniel Hardcastle, published in the Times,
it was proved that during thirty years this country lost
230,000,0001. by that process alone. There could be no
doubt that the debt had been borrowed in a depreciated
currency, and was now being paid in gold. The Hon.
Gentleman then referred to the report of the Bullion
Committee in 1810, of which Mr. Horner was the
Chairman, and which showed that so great had been the
depreciation of the currency, in consequence of the in-
creased circulation of Bank paper, that it was thought
necessary by the Legislature to double the salaries of
all the officers of State, all persons in Government em-
ployment, and all persons in every avocation of life. He
was surprised that his Hon. Friend, the Member for
Lambeth—lecollecting the effects of the measures relat-
ing to the Bank circulation in 1818, afterwards altered
in 1822, and recollecting the condition in which
the Bank was in 1824, and the disastrous events
which followed—could persist in his opposition to this
Bill.—(Hear.) He then read extracts from the evidence
of Mr. Richards, the Governor of the Bank of England,
before the Committee of the House of Commons in 1832,
to show what had been at that period the consequences
of the restricted circulation, which required the inter-
vention of the Government to prevent the most disas-
trous effects upon all the interests of the country. On 1
a previous occasion a Minister of the Crown stated that,
in consequence of the state of the circulation, the country
was , within twenty-four hours' of barter. To re-
medy these evils, Mr. Canning, in 1822, brought in his
Bill, which he described figuratively as creating a column
of paper raised upon a basis of gold. -But the result
showed that the eloquent statesman was very much mis-
taken. The consequences of all those fluctuations from
high to low circulation, were productive of the greatest
evils and distress. The depression which was occasioned
by those changes was the cause of the people of this
country !going to the American and other foreign funds
for the more safe investment of their money. Nothing
could have stood up against those constant fluctuations ;
the changes and uncertainty in wages, employment, and
profits, could never have been stood up against but by
the industry and energy of the people of this c suntry.
They all remembered the condition into which the Bank
of Engl Ind brought itself in 1838 and 1839, when, if it
had not been for the Bank of France coming to the as-
sistance of the Bank of England, the latter would
have been bankrupt. If it had not been for the
assistance of the East India Company, and more
especially of the Bank of France, the Bank of
England must have stopped payment in October, 1839.
At that time the circulation was 25,000,0001., and now
it was upwards of 35,000,000/. Who got the advantage ?
why foreign countries. He thanked the House for
allowing him to make this statement. He would put it
to the House whether something should not be done to
prevent this country going as a mendicant to the Bank
of France. If the House allowed its paper currency
still to continue as it was now, they might depend upon
it ruin must eventually come. He thought the present
measure was a most comprehensive one, and be should
therefore give it his support.
Mr. MASTERMAN urged on the Government the
re-consideration of the question of the contraction of
the issue upon securities by the Bank. At least he
trusted that they would shorten the time for that con-
traction. He thought country bankers ought to have
more time to return their averages.
Mr. MUNTZ said, that after thirty years of blunder.
ing, according to the speech of the Hon. Member for
Coventry, they had got into Paradise, but he had for-
gotten to state what that Paradise was. It was being
heavily taxed, and pressed down with a property-tax.—
(Laughter.) Subject to a corn tax, your labourers
starving, and being beaten by the other 'markets of the
world. The Hon. Member then proceeded at some
length to argue that there ought to be a relative value
between gold, silver, and corn, and concluded by moving
that the House should go into Committee on the Bill
that day six months.
Sir R. PEEL said he thought the House would not
countenance the present attempt of the Hon. Member
(Mr, Muntz) to go into Committee. In former stages of
the Bill, the principle of the measure had been thoroughly
discussed ; and yet the Hon. Gentleman had not com-
bated the measure of the Government when those oppor •
tunities offered, but had taken advantage of the
present occasion to reply to speeches made six or
seven weeks ago. The Honourable Member for
Birmingham professed to be' in favour of a
metallic standard, but still for so using and abusing it
that the man who gave one hundred hard sovereigns for
stock would in a few days find that that stock would
bring to him no more than ninety-five pounds. As an
advocate of a metallic standard his (Mr. Muntz's) views
were absurd and impracticable ; such as he was sure,
though Hon. Members might in courtesy listen to, they
would never adopt. He (Sir R. Peel) thought it best to
say at once that it was impossible for the Government to
accede to the alterations which from various piarters
had been proposed. Still there were some modifications
which the Government had thought it its duty to agree
to, and especially one as to the issues of private bankers,
which it was proposed should now be ruled by the
average of the twelve weeks preceding
i the announce-
ment of this measure. Regarding the issue of private
banks all the Government required was that they should
confine their issue within the maximum, and instead of a
week a month's average would be allowed. On the 10th
of October the limitation of issues would commence. He
hoped the dread of a penalty and the fear of exposure
would prevent any danger of excessive issue from taking
place. With these explanations he hoped the House
would_ now proceed to the consideration of the Bill in
Committee.—(Hear.)
Mr. HLTME said the chief danger of the proposed
plan was the permission of the legal tender system to
continue. When bullion began to disappear from the
coffers of the Bank of England the country bankers just
at that moment became clamorous in their demand for
gold, and thus embarrassments would be generated. He
did pot wish to waste the time of the House by useless
discussion, and, therefore, if the Right Hon. Baronet
told him he had considered the legal tender clause and
come to a determination thereupon, whatever his course
might be, he (Mr. Hume) would not press his amend-
ment. He wished to know whether the Right Hon.
Gentleman meant to continue that clause ?
Sir ROBERT PEEL said he did not mean to disturb
unnecessarily the existing state of thing and create a
shock in the monetary affairs of this country. The pre-
sent legal tender clause would, therefore, be continued.
Mr. WALLACE supported the amendment, and
thought-the measure of the Right Hon, Baronet would
be ruinous to the kingdom both in its foreign and do-
meetie relations, A. worse time could not be selected
fie! suhh a change, as they were on the eve of a bad har-
vest ; and what with a deficiency of corn, and a deranged
currency, the condition of this QoUlltry would be feared,
be disastrous in the extreme,—(Hear.)
Mr, BARNARD said a few wordi which wore n3t
audible in the gallery,
Gen, JOHNSON eald they were living under an arti-
&jai system, and he considered that under such 4
system, an exclusively gold currency would he impossi-
ble. They were trying to procure low prices in con-
junction with high taxes—(dear, hear) which would be
found impracticable. However, there seemed to hp
nobody to oppose the plan ; it was supported by the
country gentleman, who, he predicted would eventually
se(fer from it.
Colonel SIBTHORP objected to the limitation of the
circulation of notes; the one pound notes were palled
dirty paper; but he had alwap found them very useful
paper,-,-(Laeghter.) He had every confidence in the
Right lion. Baronet, and in hi§ knowledge of this ques-
tipn, but he eould 1-m see that there was any reason for
limiting the paper circulation of the country. Great as
he believed the talent of the Right Hon. gamnilt be,
he thought his present mpc,slire a komew4t wild one.
Mr. HUME explained that he had never been an ad-
vqcete of a paper currency. ,
After a fogywor.ds from
iir 4. .13x.ET, in answer to
a question prom Mr. MOR IS,
Mr. MUNTZ said the Right Hon. Baronet had
thing persunal—(Langhtel.)—but
charged him with cheating or robbing; he did not know
Fbether he meant any
tits exertions w re ant beht of Ole rorp to' pteVent
;tent ?An bent tcheilted '' ail Abed, 's. fry Itlsyta"
:, . e e . .. .4.
the Right--Hon.
„aropeee corn: aw, Ana with 1112 ino-oeyslew; s ey
f
certainly would e.--Caear, hear)
e.:!*._av_a -r..:T_P.Tis
..,aa mz...,a
questioned
Baronei's definition of a pound, which he took as
the basis of his principles. But if the correctness of the
Right Hon, Baronet's pretalees were granted, the just