The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-12-27

thoae snFering. Yet with those advantages-with
an exubera havest-with the consciousness that
the law the severity OF which had before created
such alarm, would be relaxed-the amount OF alarm
which has occurred and the number of suspensions
have reached an exteut infinitely greater than
double the unit of suffering inlS47. (Hear, hear)
The most wonderful thing is, that throughout these
FIVE wonderful years you have had a recurrence OF
events each of which would in ordinary times have
brought about commercial CONFUSION; for during
this time you hava had European war; during this
time you have had two OF the greatest States IN Eu
rope negotiating large loans; you have had three sue
cessve bad haryests in France. Any one of those
instances would In ordinary times, have thrown the
whole fabric down. And. in addition to these, you
have had silk famine, which paralyzing as il did
most important branch Of trade and production.
would have of itself been sufficient to bring about
this commercial CONFUSION. which has been retarded
by the arrival of the treasure. (Hear, hear). The
right honorable gentleman. the Chancellor of the
Exchequer tells that the commercial distress has
been occasioned by the arrangement of capital and
credit. WE'LL it is not for me to dispute the position
Of the right honorable gentleman but will he allow
me to remind him that he Is the frst minister that
ever made such admission as to a commercial
crisis? He is the first minister who ever maintained
that commercial distress had been occasioned by the
arrangement of capital and credit (Hear hcar). IT.
sir, attempted To form idea of the extent of
privaton to which he referred the ina ination of
in this house could possibly see the conclusion
Clear, hear). There waS commercial CONFUSION IN
1887. And to what was II attributed? Why,
to the joint stock hanks issuing many
bank notes. Clear, hear.) And no person was
more distinct in that assertion. person more
precise in charging the crisis to that cause than the
right honorable gentleman the First Lord o. the Ad-
mirsty who has just been cheering the new doctrine
of the treasury bench-that commercial distress is
oecasioned by the disarrangement OF capital and
credit. (Cheers) Well there another CONNER
cal CONFUSION in lS47; and what happened then
In 1925 the commercial convulsion was produced by
the circulation of the notes of country banks in 1887
il produced by the circulation of the joint stock
banks; and in lS47 it was, according to the great
thorities, produced by the Encouragement Of the
bank directors III the circulation of their bank notes.
lHear) In every instance the great authorities have
COMPOUNDED capital with currency; and on every oc
caaon they have attributed to the least influential
form Of credit conse quences which could only be eff
sected by the emp Cvment of capital on colossal
scale, and such dimensions that circulation OF
bank notes could under any circumstances reach
Glheers.) If the House permit me, will show them
-rwhat the msapprehension lies as to the cause
of the difficulty IN der which labc.ing; and
il is in its solution alone thur we can ever find
the means d extricatiag ourselves from those per-
petuaiy recurring panics. Now, sir II Is very
curious thng-and have often wondered at the rea-
son why VIC should persist in such confusion Of
ideas and always mistake capital for currency, and
attribute TO the least powerful instrument the most
powerful re~ults-it is very curious thing in this
country that the two schools of currency, which
agree other single topic, OF one accord on
this, with bat one exceptionab!e point. 1t was at
that time the school arose which has since been so
prominent in accounting for the periodical occur
renee Of commercial distre. 1t was at that time
the Brrring CHAM school arose. Now, sir, their OPT
nions have been predominant IN this House-Dubc
men have accented them, and the origin of those
opinions may be traced to the Bullion act of 1910.
Clear. hesr) / am sure that no one in this house
would speak of the labors of the Bullion Committee
in other than those terms of respect which their in
tellec.ual efforts and public services deserve (Hear,
hear) The Bullion Committee indicated the great
principle upon which The happiness of the commu-
nifty mainly depends-the standard of value. tIlear
hear) The Bullion Committee proved that the
IsSip of IUCODypffiblp must bp lenreCi.ta1
and IN our case was deprecated. ] think, how
ever, il might be shown by fair argument
that the price OF gold in these days was raised
by other causes besides the existence Of
deprecated paper. (Hear.) Because let u suppose
that our paper was deprecated that ii was de-
preciated, think no fair inquirer can deny, was de-
mons!ratcd by thu Sullion Committee-still we mus.
remember that the Bullion Committee sat fifty years
ago, and suppose they were not an exception 10
tie rule which makes time act in enarging the ex.
perience and thereby imprcying the ideas Of men.
(Hear, heaI) IL is not impossible that the Bullion
Committee should have been correct in every conclu
sion al which they might have arrived; and yet could
they have foreseen every consequence that has since
arrived This j. age Of progress. Anything
which passed fifty years ago has been subject in the
interval 10 great modification. Our commerce, our
correspondence. Is established fifty years ago, has
undergone very great change. (Hear. hear.) IL is
pedanty 10 suppose that the Balloon Committee
could have foreseen all the possible consequences
even o. Il. principles which they advanced and es
tab,ished 1nl after al the sharp experience which
yeasS-all the experiments Oh our circuation--an
those commercial crashes which we have sus-
tained-aI the acts which Parliament has
passcd-aftCr all that has been written by me-
who have devoted their attention 10 this sub.
iect-i. i the height Of absurdty 20 suppose
tina; tho science of the currency j. in exactly The
same position when the report Of the Bullion Com
mittee presented 10 the Speaker at the bar OF
he House. (iear, hear) Sir, the Bullion Com
mittee was perfectly right in their principle that
the inconyertihle paper money OF this country had
become deprecated by over isSue; but | think they
rapidly and rashy extended that conclusion to the
bank notes convertible at par-(hcar)-ior ! hold
that there j 4 distinction complete, and which
be established by irrefutabe argument, between pa.
per money sd paper credit. The incouvcrtible notes
are paper money, and may De subject 70 q deprecat
ing influence; but bank notes convertible az par
not be subject TO depreciation. (liear) We have
the return Of the issue Of notes by the country bank
ers for period Of twenty-five years. These returns
emsnate 'front.' believe between 700 and 500 country
bankers, and when you examine them you at once
that there Is some law which regulates the issue
OF bank netcs convertible al par, and which Is too
strong, not only for country bankers. hut for
British Parliaments. clear. hcar) IOu will find
by these re- that AZ different parts % the year
the circulation expands, at another period of the
year d ani hes and at third perod-the middle
term-rcI1s ins quiescent; and that these fuc'u-
atOns correspond with the occupations Of the
people among whom these notes are circulated.
(Hcar heGr) In the spring, when the farmer huys
stock yon find that in the country d-trictsfcr Il j.
IN those districts the main circulation Of the notes Of
country bankers takes can increase Of circua
ton; that nj the close OF the year. when agrcultural
aiiars IN state OF depression, the circulation
falls. and that in the middle OF the year or
about harvest time. the circulation is equal. You
viii md th- state Of things 60 have regularly
occurred for period of a quarter of a century: and
how i il possible 20 observe Phenomenon Of this
kind Occurring with all the regui " of an astrono-
mical phcnomenon-a rising at spring, sinking at
the end Of the year, and ane quality at autumn
vi bout arriving at the conclusion that the law re-
ru ing the circulation Of bank notes IL much too
S,ronr Tor any legislator (Hear hear) No one
can suppose that all the country bankers meet TO
Cuate the circultion in certain manner. OF al
classes 81 men they are the least liable 10 enter
into such combination. These returns show
that II would be impossible for any issuer TO
control the circulation, which depends entirely
the wants of the country. II he attempts forced