The sun. [volume] (New York [N.Y.]) 1833-1916, 1876-01-25
Sir Robert Peel. banking Act.

Sir Robert Peers Banking Act.
In regard TO the English Bank act OF
1874, we have said that Gov. TLDEN Tin
considerably asserted that it WINS intended
to avert the tremendous vicssitudes in
business TO which all commercial countries
are subject" We mildly denied the fact,
and expressed the opposite opinion from
Gov. TILDENs, who holds that the bill is
failure and with this view our friends
Of the Financial Bulletin do not agree
Let us see what Sir ROBERT PEEL intend
ed by the act ut the time, and what he
said and others said after it's temporary sus-
pension in 1SlS, which was the first trial of
its merits.
In writing TO the Governor OF the Bank
of England in 1874. Sir RoBERr PEEL said:
I'VE are taking every precaution against the recur
renee OF pee npary crisis j. may occur 10 spite Of
den eIplo sion, and as little smenabie TO control"
This does not look rs though the author
of the bill expected "to av crt the tremen-
dous vicisntudes in business 10 which all
commercial countries are subject" He
was perfecting a banking measure, the
primary object Of which was 10 insure the
convertibility of the paper circulation,
and for the rest, doing what he could.
Now, let us see what he thought of his
work afterwnrd, and what some others
thought. In August, 1913. Parliament re-
viewed the measure. In that debate Sir
Robert PEEL said
said that the bill OF 1874 M, cauted degree Of
pressure which would not otherwise nave taken place.
Iheheve u has that u compelled the bank In April.
April namely TO resirct tie discounts TO the
enforced BY on isti. which prevented assrse
OF pressure ten times severe that would have been
deferred for only very short period Of time"
The House committee of twenty-six re-
ported, after Ave months deliberation,
against any change in the bill, and Sir
RoBERr PEEL sustained the report.
So much for his opinions on the measure,
at tho time II was passed in 1914 and after
ward on It's proposed revision in isis.
The committee of the House OF Lords re-
ported ut the same time THAT the pro-
visions OF tho act Of 1SA arc iudiciously
adapted to secure the primary object of
the convertibility Of the bank note
The five leading directors of the Bank OF
England testified before the House com
mittee in favor of maintaining the act of
1874, without the slightest alteration"
The Governor and Deputy Governor of
the bank testified in regard to the opera
ton of the act, that "nothng could have
worked better than IL has done"
And now we are told by Gov. TIIDEN
that the bill is an admitted failure. and by
the Financial Bulletin that Sir RoBERr
PEEL acknowledged II to be such. In the
review we have referred to, Parliament de-
liberated on the measure. and refused to
even modify II. lis old friends all stood by
il, and it remains on the statute book with
out any prospect of repeal We submit that
we have made IL very clear that both the
Governor and the Bulletin are mistaken.
We must say one word TO illustrate yet
further the absurdities into which men will
allow themselves 10 be drawn by their
preirdices. The Bulletin quotes from Lord
AsHBuRToN that the net OF 1874 was Sc
rious aggrava,ion, If not, indeed the actual
cause, Of the distress we now Lls4sl expe-
renee" 1t was then and more clearly now,
known that the disasters in England in
1S47 and 1S4S were owing to the Irish famine
and the gigantic railway speculations OF
the period. Mr.. ANDERSON, the Manager
OF the Union Bank of Scotland, testified
before the Bank COMMITTEES, in 1913, " that
the houses which suspended payment dur
ing lS41 and 1S4S were generally engaged IN
railway speculatons" The Chancellor of
the Exchequer, taking up the other branch
OF the case, said that 81 the great pressure
OF ls47 arose from the importation Of food,
and the necessity which thereby arose to
rectify the disturbance in the foreign ex-
changes"
The world has long since fully recognized
the causes OF the great revulsion referred
to, rs here stated; yet the Financial Bull
letin quotes Lord AsHDuRToN approving
| ly, in attributing tins gigantic national
disorder to the passage of the Bank act.