The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1844-06-18 00:00:00

THE LIVERPOOL STANDARD.

HOUSE OF LORDS.-THURSDAY.

Lord CLARENDON elicited from Lord Aberdeen some
interesting information upon the respective relations of
France and Spain and Morocco. The quarrel of the lat-
ter power with Spain he considered as in a fair way of ar-
rangement, ho,h parties having accepted the mediation of
Great Britain, and he had reason to believe that, in spite
of the skirmish which had taken place, no serious inter-
.uption to the existing good understanding between France
and Morocco was to be apprehended.
Lord MONTEAGLE then rose, and in a very long speech
endeavoured to make out the proposition that protecting
duties are injurious to all classes, but most especially
to those whom they profess to protect.
The motion was opposed, on the part of the govern-
ment, by Lord Dalhousie, who gave place to Lord Cla-
rendon. Lord Colchester, the Duke of Richmond, Lord
Wicklow, the Marquises of Lansdowne and Winchilsea
followed ; and after a short reply by Lord Monteagle,
their lordships proceeded to a division, negativing the mo-
tion by a majority of 109.

HOUSE OF COMMONS.—THURSDAY.
On the motion, in the House of Commons, for the se-
cond reading of the Bank Charter Bill.
Mr. HAWES proposed a resolution that no evidence
bad been laid before the House to justify the interference
of the legislature with the circulation of the banks of
issue. He maintained, that in order to warrant such an
interposition there ought to have been proof of some de-
preciation in our paper currency ; but that no such proof
had here been given. He contended that prices had never
been proved to rise and fall with the increase and contrac-
tion of the circulation; and he produced a table of prices
to verify his argument. He asserted that if the present
small-note circulation were withdrawn, its place would be
supplied, and much more injuriously, by a paper credit in
the shape of small b lls of exchange. In past seasons of
pressure, as in 1823 and 1839, assistance had been given
to credit by the Bank in a way which bad been approved
by the highest authorities ; but, under the proposed plan
of contraction, if like seasons should recur, such assistance
could not again be afforded. The present corn-laws
would be a disturbing cause to your currency, but that
would give him an additional argument for demanding
their repeal. He feared that the references which the
Bank would have to make to the government would in-
troduce an evil not hitherto known in the city—the mix-
ture of party politics with banking affairs.
Mr. HASTIE seconded the motion:

Mr. GOULBURN considered the speech of Mr. Hawes
as an objection to the whole plan. It would have been
more manly to mole that the bill should be read a second
time on that day six months than to let the bill pass with
this kind of slur upon it. One of the main articles whose
cheapness Mr. Hawes had relied on, to show that prices
were not raised by excessive issues of paper, was sugar ;
but the cheapness of sugar was owing to the peculiar cir-
cumstances of the maritime supremacy of England dur-
ing the war. Did Mr. Hawes forget the difficulty which
from time to time had occurred in maintaining the con-
vertibility of paper, which he admitted to be indispensa-
ble ? Did he forget Mr. Huskisson's declaration, in 1825,
that the country was reduced almost to a commerce of
barter ? To guard against the recurrence of such evils it
was necessary to introduce a measure like the present;
and he considered the evidence taken before the Banking
Committees had supplied the house with amply materials
for judging of this bill. He restated the principle of
the measure as before explained by Sir R. Peel, and
called upon the house to sustain it.
Sir W. CLAY and Mr. HUME spoke against the motion
of Mr. Hawes, and Mr. WODEHOUSE in favour of it.
Mr. C. BULLER thought that Mr. Hume, to be consis-
tent with his speech, ought to have voted for Mr. Hawes's
motion. According to Sir R. Peel, this would be a cure
for all the evils of our complicated commercial state; but
he could not regard it in that point of view. He was not
prepared to agree that the American disasters arose mainly
from excessive issues ; he imputed them rather to wild
speculation. Nothing could be more absurd than the old
policy of parliament in restraining the number of partners
in banking concerns; the reversal of that policy by the
legalization of joint-stock banks had worked well in point
of security for the public, whatever losses might have
been sustained by the shareholders. The most objec-
tionable part of the present plan appeared to him to be
the suppression of the issues of country banks. It was
' not a sound principle to limit speculation, by excluding a
particular form of credit : worse forms were sure to be
substituted. One would suppose to hear in these discus.
sions that all the great speculations had been effected with
bank-notes ; but the fact was that the amount of bills of
exchange in circulation during the year 1829 was upwards
of £132,000.000 sterling, while the amount of bank. notes
was only £25,000,000 or £26,000,000. The clearing-
house daily settled about £3,000,000, with cash to the
amount of only about £200,000. In fact, the evil lay
much deepzr than legislation could go—it had its roots in
the cupidity and folly of mankind. Suppose you succeed
in extinguishing the notes, the result would be only a
complicated system of credits in each neighbourhood,
resting not on the solvency of the one bank, but of its
many customers respectively. He questioned the accuracy
of Sir R. Peel's list of bankers who had failed, and argued
that but a small proportion of them were issuers of notes.
It had been said that the banker was induced to make
advances by the facility of issuing his own notes, when,
but for the notes, he would have lacked the means; but
this was an error, for if his regular circulation was
£lO,OOO, and he issued £20,000 beyond that amount to
a borrower, a few days only would elapse before the sur-
plus £20,000 would be returned upon him. He objected,
then, to this bill—first, because it was delusive ; secondly,
because he thought it would introduce objectionable forms
of credit; thirdly, because it sacrificed private interests
without a clear ground of public necessity. It was obvi-
ous that the object of Sir R. Peel was to put an end to all
issues except by the Bank of England. The bill proposed
to fix, as the maximum of each banker's future circulation,
the average of his circulation during the last two years.
But why should the average between the highest and the
lowest point in time past be fixed as the highest in time to
come ? In Lancashire there was no circulation but of
bank-notes, yet the bankruptcies in that county we:e just
as numerous as in counties where country notes were cir-
culated. He complimented the government upon their
adoption of the opinions of the Political Economy Club ;
this very measure was the invention of Mr. Jones Loyd ;
but, on banking, the club was much divided. How much
better would it be if the government would adopt those
opinions in which the club were unanimous—for instance,
their views on the subject of the corn laws I
Sir R. PEEL commented upon the inconsistencies of the
speakers who had preceded him. The arguments of most
of them went substantially, though not professedly, to the
rejection of the metallic principle. He exposed the futility
of any reference to the prices of particular articles as a test
of the value of the currency. He appealed to the example
furnished by America while the control of a central bank
subsisted there, and to the warning held out by the con-
sequences which had followed the removal of that control.
He quoted the opinions of Mr. Gallatin and Mr. Web-
ster, that convertibility was not, by itself alone, a sufficient
security against overissue. In each of the commercial
crisises of this country there had been an overissue of
most injurious magnitude. lie knew perfectly well that
the Bank of England, under the worst of those circum-
stances, could have tna'ntained the convertibility of its
notes ; but how frightful was the cost of that mainte-
nance ! The present measure proceeded upon the princi-
ple of a wholesome precautionary distrust of the Bank.
With respect to country paper, it was said that the want
of accommodation would be seriously felt. But he had
shown that an issue of only £1,300,000 supplied the whole
of that great circle round London of which the radius was
65 miles. And if country banks should not be prepared
to give accommodation, would the Bank of England refuse
to make proper advances ? In some of the greatest ma-
nufacturing districts more than five-sixths of the notes in
circulation were those of the Bank of England ; such was
the case at Gloucester ; so at Manchester, where the cir-
culation was of such vast extent ; so at Liverpool. It was
, said that the noteholders of joint-stock banks bad sus-
tained no loss. Perhaps not, after four or five years of
pressure upon every individual shareholder; but many of
those banks were founded in fraud, and had failed under
the most disgraceful circumstances : and he did feel that
it was justifiable and necessary to protect the poor man,
who had no opportunity of receiving their notes, the retail
dealer, the servant, and the labourer. He trusted that no
further opposition would be offered to this bill, even by a
small minority. Four times iu the last twenty years events
had occurred in the monetary affairs of this country which
proved the necessity of the present precaution ; and,
though that precaution could not control illegitimate spe-
culation, the government felt it their duty to interpose as
far as it was in their power, a check to those mischiefs
which it was possible to restrain.
After a few words from Colonel SIBTHORP and two
other members, Mr. Hawes's motion was rejected by a
majority of 185 to 30.