The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-12-27
THE MONEY CRISIS.
Speech of DiTasli in the British Parliament--
Opinions in France on the Crisis in tho
United States Operations Of the
Credit Mobilier,

DISRAELTS SPEECH ON THE REvULSION
In the English House of Commons on the llth
inst, the Chancellor Of the Exchequer, announced
yesterday, moved for O select committee TO inquire
into the operations of the Bank act Of 1884, and Of
the Bank act of Scotland and Ireland Of ls45; and
that the committee be instructed to inquire into the
cauSeHpf the recent commercial distress and TO in
vestfHRte how far il has been affected by the laws
for regulating the issue Of bank notes payable on
demand.
SPEECH OF MR.. DrsRAELI
Mr. DIsRAELI said-It seems to me that the argu-
ment of the Chancellor Of the Exchequer rests on
rather an inconsistent basis. The right honorable
gentleman rose and he acknowledged, without any
qualification, that it was his opinion that the pre-
sent commercial distress originated in disturbance
Of capital and credit. why" then says the right
honorable gentleman is attention attracted to
the subject Of currency?' Why, sir, would
really suppose that the right honorable gentleman
had Forgotten for the moment the circumstances IN
der which Parliament had assembled, and the reason
for meeting at this inconvenient time of the year.
Consider what has occurred i'm the commercial world
during the last year. was in the House when the
crises OF lS47 and Of 1897 took place; have read OF
what took place in 1925; but nothing in those years.
equals whnt has occurred IN this country IN The last
month. In 1925 there was great deal of over
trading and speculation and 1t was chiefly excited
by the fact that the commercial relations with the
Spanish American States were, for the first time,
ded relations with the United States of America In
1s47 you had famine coincident with an invest
ment OF the ready and floating capital Of the country
in public works But in all those cases there were
one or two great causes of suffering, which, though
intense, was partial. But in this crisis it il not
limited to this country You have suspension in the
United States-you have commercial republic
which bases all its operations on metallic currency in
state OF bankruptcy. In ece,y country IN Europe
there is disturbance Of credit; in mdny credit is
PROSTATE. The whole of the Baltic trade is pros
trate. IL extends even to SPAIN the south OF Germa
ny the centre of Europe and the are in
definitely greater in England than yhara In
the amount OF the liabilities Of houses that had failed
was seventeen millions sterling. called the atten-
ton Of the House the other night 10 late failures To
the amount of forty-hve millions-a sum more than
double the other. IL seems to me, therefore, that it
s the duty of Parliament to inquire into the causes
of this strange convulsion. Hear hear, from the
opposition) should have agreed TO proposition
TO inquire into the causes of the commercial Distress
but not TO an inquiry into how far that commercial
distress has been occasoned by the circulation OF
bank notes. In lsi7 such a committee was appoint
ed and sat thirty seven days and its only effect
10 divert the attention of the house from the cons
deration Of the act OF 1874 The same result will
follow IL you appoint similar committee. | consi-
der the primary of the present disturbance Of
capital and credit thronghout the world TO be the
great discoveries of the precious metals which have
taken place OF late years take the year 1852 as
the eliminating point. In fs5i-52 we had, think.
f22 900 900 of bullion In the Bank of England and
had an extremely low rate Of interest, not more,
certainly than per cent This not pecu-
liar to England but was the case in every great
country Of Europe-in America, Also which had
been acted upon earlier than we had been
by the Californian discoveries. Now, sir from
1913 TO the present time not less than $50 900 900
1870 0o0,0 600 Of gold have been poured into Europe.
What was the consequence There was idea
prevalent in every country that the time had ceme
when agrcat change in the value OF money was
about to take place, and the opportunity which
offered oy the increased capital OF executing those
public works which had long been desired in many
countries was readily seized In the first instance
you bad railroads throughout Europe. France exc
cuted those great lines In the south OF France with
which gentlemen are familiar France erected pub
lie buildings which even Louis XIV. and the first
Emperor Napoleon, whatever had been their will
bad never been able to execute. You hni a ns,o
Paris built. In fact, there hardly any country
in America or Europe in which there was not !.
great investment OF capital in the same way. IVen
sty, upon these immense Investments there ras a su-
psrsfrucfnrs Of speculation IN the shares Of the rom
pan,es rhich nds The necessary consequence of the
first Investment A new class OF monetary iusti,u-
tions was established in order 10 collect
the savings and supertiuous cash in the
world and invest them in these undertakings.
hilier was established. Gentlemen are perfectly
well acquainted with the character Of those ins,iu-
tions. We have criticised them in this country; we
have lmpugned the principles on which they were
founded; we have expressed our suspicious Of the
large dividends they distributed 10 their sharehold-
ers; We have denounced their investment of capital
and their advances ~ interruptions ecklesa impro
vident and unprincpcd. But think from what
haa more recently occurred In this country, while
we were 40 consciously aware Of the mote In our
neghbor's eye we were not, perhaps, sufficiently
conscious Of that which, In our own sight was
equally and perhaps embarrassing. Well, sir
these great undertakings stimulated consumption:
and this great stimulus 70 the consumption increased
the price OF all produce In the world. But. gentle
men the same as gambling In shares arose upon the
construction Of public works an gambling in produce
arose upon the stimulated consumption Of the world
and you bad that extraordinary rise In produce
which astounded and perplexed the world and which
wa- attributed without perhaps sufficient considera
tion to the mere fact Of the increase In metallic
treasure. tIear hear) Now what was the oonse-
gsence Of this state of things' You have had be
fore IN this country and In Europe oyerrading-you
have had speculatons-you have had reckless invest
ment but the thing never lasted more than a couple
Of years at the longest. Bat this went on. II was
considerable in 1862; year after year II gradually in
creased; year after year these undertakings through
out the world were carried on by an application Uf
capital and by combinations OF credit which in ex-
tent never were equalled In the world before. |
have very recently made some Inquiries into
tile management, and only three days ago case
was brought under my notice which appeared TO me,
and will. think. appear TO the House, very re
mafkabie one; and yet II Is one which am told Va
by no means singular, showing the manner in
which credit Is condccted on bills throughout the
world. A merchant in New York drew on a mcr-
chant in Hamburgi the latter declined 70 receive
the bn unless he also received the invoice. This
was acceded TO, and the invoice was sent 10 him.
Now, what the invoice IL an invoice FOR
q cargo Of wheat bought at St. Fernando, in Cafor-
MIA. and despatched 10 Melbourne. The merchant
at Hamburg accepted the bill, and the moment he
did 80 he drew on merchant IN London who
drew other bills, and having converted them
into capital took up the bill which the gentle
man had drawn In America. Therefore, the result o
the transaction IL this: A merchant In London sup
plies capital for commercial speculation from Cali
fornia 10 Melbourne being totally ignorant OF the
nature Of that transaction, whether the cargo was
good one, whether II purchased by fair dealer.
or whether the party who supplied u was fair
dealer, and then you are surprised that House in
It 4 now most curious thing for the houses to in
quire why has all this gone TO such an extent and
to such durationl (Hear, hear) think ! can
point TO the cause Of this: thear hear) For the
last fhres uears ,ce hare been me ere Of greaf
crash: but at the exact moment when exchanges
were turning, when accommodation was being re-
fused when the crisis was A hand, and those ac-
ouainted with affairs we're looking about with terror
and alarm, came those golden galteons from Ausfra-