HC Deb 14 February 1826 vol 14 cc368-407
Mr. Brogden

appearing at the bar with the report of the Resolutions of the committee on the above acts,

Mr. Calcraft

said, that as he had not had an opportunity last night of delivering his opinion on the nature of the plan proposed by ministers, he would, in as few words as possible, state explicitly what his view of the subject was. He could assure the House that his opinions were not at all altered after hearing most attentively the whole of this protracted discussion. With the greatest wish to concur in the sentiments of the majority on this occasion, he felt, after giving the question the best consideration in his power, that they were going to legislate in a most improvident and imprudent manner. He was not a favourer of that sort of currency which it was the object of the chancellor of the Exchequer to remove. He wished as much as any man for a sound metallic currency; and when misfortunes, such as those which had lately occurred, pressed heavily on the poor, he should exceedingly rejoice if they could be obviated by the operation of a metallic currency. But he thought the House was proceeding to legislate without having made sufficient inquiry into the causes of the present disastrous situation of the country; and he was sure there was no instance on record where the legislature, at an equally momentous crisis, had acted with equal precipitation. Some hon. gentlemen had attributed our present calamities to one cause; others had ascribed them to another. Surely, then, as we were not agreed upon this most important point, it became us to examine into and clearly ascertain it, before we could hope to remove the effects that had been caused by it. He could scarcely convince himself that he was addressing the same body of gentlemen who constituted this House in 1822, and who almost unanimously concurred in passing the act for continuing the issuing of one and two pound notes for ten years from that period. This measure was brought forward immediately after the repeal of the Bank Restriction act, and the minority against it was only six. No one had insisted, that the issue of those small notes was the primary cause of our present distress; and yet the issuers of them were to be dealt with as if this was the case. From the best information from different parts of the country, it appeared that manufacturers were everywhere obliged to discharge their workmen, because they had no currency wherewith to pay them their wages. Yet, in the face of this state of things, we were called upon still further to contract, or, more properly speaking, to cause the entire withdrawal of the small issues of the country bankers; for such must be the immediate effect of this resolution, although by the letter of it, the continuance of the circulation of these small notes was permitted for three years. And how was the deficiency in the currency which would be caused by such withdrawal to be supplied? He was extremely happy that, in the course of this discussion, nothing had been said that could in any way affect the character of the country bankers as a body, although the banking system itself had met with most liberal abuse; and yet it was somewhat remarkable, that hon. gentlemen, who had for years fostered and encouraged this system, should now all at once have discovered its pernicious tendency. The whole system of trade might just as well be found fault with as the banking system; for a nefarious system of gambling had of late prevailed to a most alarming extent in most of our commercial transactions; and some of these wild speculations, he was sorry to say, had been countenanced by members of that House; and, owing to their having been so countenanced, had caused more disastrous consequences than the breaking of twenty or thirty country bankers. He must confess that the division last night had surprised him in the extreme; but he would make bold to say that, notwithstanding the majority, as to the number of votes, was so great in favour of the resolution, the general sense of the House was against it. The course, in his opinion, most proper for the House to have adopted would have been, in the first place to have instituted a most careful inquiry as to the cause of the distress. He himself attributed it principally to the Bank, the bubbles, and the over-trading. A pause in legislation ought, at any rate, to be made, until the present ferment had subsided; for, proceeding to legislate on this point in the agitated state of the country, was like beginning to rebuild a house which had been burnt down before the rubbish had been removed. The Secretary of State for the Home Department had contended, that this measure must be carried "now or never;" but for his part, although he wished the country ultimately to return to a metallic currency, he did not conceive "now" the proper time for doing so. As far as the country bankers were concerned, the issuing of these small notes was the most troublesome part of their business; and he was convinced, that if they were left to themselves, they would, by degrees, withdraw them from circulation; but it was galling to them to have such a resolution as the present passed, which cast a stigma upon them, and obliquely insinuated, that the whole of our present distress was to be ascribed to these issues. He thought it might be as well, however, to let the present, measure pass in silence; as he could not hope to defeat it, when he saw so many hon. gentlemen whose opinions were against it, prepared to give their votes for it. With regard to the proposed plan of joint-stock banks, he was convinced that country bankers of good credit had nothing to apprehend from it; for, after having passed safely through the late severe ordeal, confidence in them would be so strong as to enable them successfully to compete with any joint-stock banks; and, if there could be found gentlemen willing to enter into these last-mentioned establishments, he saw no objection to their formation. He hoped, however, that government, before they passed the present measure, would relieve the Bank from the weight with which it was at present incumbered. The Bank had a duty to perform to the public, and it ought to have its hands untied, so that it might be able to perform it. He did not despair, that, in a mighty country like this, things would settle down to their proper course; that in time the paper circulation would be got rid of; and that, if there was a demand for gold, there would be a corresponding supply—on the old mercantile principle, that when a legitimate demand existed, an adequate supply would come.

Mr. Hudson Gurney

said, in the observations he had to make, he should confine himself to that which was purely practical. He believed, that the amount of gold coin likely to be wanted, in order to replace the one-pound notes withdrawn, had been very greatly under-estimated; as he had no doubt that four-fifths of that which was issued would, in the first instance, be hoarded; and until those persons were supplied who, under the influence of distrust, were thus endeavouring to secure themselves, there could be no free circulation of sovereigns. As he had said before, he was still of opinion, that it was impossible to return to a circulation entirely metallic, unless some alteration took place in the Mint regulations. In that opinion he continued firm; and was decided in his conviction, that if government were to pursue, in their strictness, the measures they were driving forward, they would bring the country to a standstill; but in this, whether he were right, or whether wrong, it had nothing to do with that which he wished more immediately to urge.—The immediate object was, to supply some medium of sufficient security, that could not be run in more rapidly than it was physically possible to meet, and which would not be hoarded. The resolution which went to allow the bankers' notes to pass for three years longer, was, in its nature, nugatory. That species of circulation was discredited in public opinion; and the being thus cried down was nearly tantamount to its immediate suppression. He should, therefore, on the bringing up the report, again move as an amendment, that the words "Bank of England" be omitted; convinced that the only possible way in which the government could carry into effect their own views, would be, in the first instance, to allow the notes of the Bank of England to take the place of the private paper; as then, unshackled by the opposition of any private interests, they might afterwards deal with the matter as circumstances might enable them to do; and, instead of the bankers having an interest in filling the country with their own notes, to the exclusion of gold, they would find them anxious to get coin into their respective districts, and only using the Bank paper, when the other could not be obtained, either in sufficient amount, or with sufficient rapidity. But, above all things, the government ought to make every effort to flood the country with silver. During the times of the Bank restriction, the only real embarrassment known was the occasional deficiency of silver coin to pay the labourer. By the substitution of Bank of England notes for the paper withdrawn, and by throwing into the circulation an ample supply of silver for all minor payments, it was possible that the measures proposed might be carried through; but it was evidently not possible that the operation could be performed in any other manner.

Mr. Ellice

said, that having voted in support of the proposition of the chancellor of the Exchequer, in opposition to certain opinions which he had been in the habit of expressing, he was desirous of explaining to the House the grounds of his vote. He quite concurred with his hon. friend, the member for Callington, as to the distressing examples which the history of our currency afforded of the effects of that nefarious system which now, thank God! they were about to get rid of. When the bill of 1819 passed, he was in a small division; not that he objected to a metallic circulation, but because he wished to have a standard accommodated to the circumstances of the country, and which would keep pace with the contracts of individuals. However, the House passed that bill, determined, at all events, to make the experiment of compelling the country to meet all their engagements, and individuals to fulfil all their contracts, according to the ancient standard. Now, he would ask, what were the consequences of departing from that resolution? The result was, that every departure made it more difficult to approach that period when its provisions could be carried into execution; and, if the postponement which his lion, friend had recommended was adopted, that difficulty would be still more increased, and then, in fact, we might despair of ever arriving at the great object so much desired. There were three periods in which immense quantities of paper had been circulated in the country. The first was in 1813–14; the second in 1817 and 1818; and lastly, in 1824 and 1825. He could not but think there was a great deal in the argument of the hon. member for Taunton, that at the termination of the war there was a great facility of obtaining gold from the continent, as we had means of export then which did not at present exist. In his opinion, therefore, it was snore in the power of the country, in 1815 and 1816, to return to a metallic currency, than it ever had been since. The right hon. the President of the Board of Trade would refer them to the amount of our exports of last year; but, he would ask, how much of them had been paid for? One half of them had gone in foreign loans, which might never be repaid; and therefore no argument could be founded on the amount of our last year's exports, to shew the capability of the country to return to a metallic currency. Much had been said about theory, and the opinion of practical men of business; for his own part, he had listened attentively to what had been advanced, and he believed the House was legislating at present in utter ignorance of consequences. But, was that any reason why we should go on with these pitiful one and two pound notes? Far better, as his hon. and learned friend, the member for Winchelsea observed, to return to a currency which we understood; and if the time should arrive when it should be a question whether the country was able to fulfil its engagements, then let us manfully look at the difficulties, and take measures to provide for them. It was not a little strange, that every time that an approach had been made to cash payments, the country had started back from the prospects which opened. In 1815 and 1816, the pressure was on the agricultural interest. How that had been alleviated, he need not say; but it appeared that, in 1817 and 1818, an immense quantity of paper was issued, and that relieved the distress for the time, to fall again with greater force, at a subsequent period, on some other great interest of the country. The committee of the right hon. gentle- man sat in 1819, the consequence of which was, that we were to return to cash payments. Every one remembered the distress which ensued, and then the country bankers issued their notes. Then followed, in 1824 and 1825, what was called great prosperity. The momentary pressure was removed, but it removed us still further from the object we had in. view. He thought the statement which had been made by the hon. member for Taunton, of the amount of the Bank of England's engagements for the government, was entitled to great attention. In fact, by a paper which he held in his hand, it appeared that the Bank had 700,000l. locked up in Exchequer bills more than had been stated. The honourable Bank director, who favoured them with some explanations last night of the connexion between the Bank and the government, had said, that it had not been the wish of the Bank to advance money on mortgages, or on the dead weight, as it was called; but they had been induced to do so by the representations of the government, who stated it as being for the interest of the country. He wished to know where the blame was to rest. For his own part, he could not attach any blame to the Bank, placed as they were, in a situation of difficulty, with the merchants pressing them on one side, and government on the other. At the time when the resumption of cash payments was first agitated, the Bank declared they could not, with safety to themselves or the country, attempt to pay in gold, unless ten millions of the nineteen millions then owing them by the government, was repaid. Yet the Bank, in 1825, were placed in the same situation, with respect to their advances to government, that they were in when they declared they could not, with safety, attempt the resumption of cash payments. The state of our currency had led to that accumulation of money which finally exploded in all those loans which had exhausted the treasure of the country. When we came to look for all this money to replace our circulation, he agreed with the hon. gentleman, that we should find the country in a very curious situation. Much of the present evils arose from over-speculation, and that was caused by the increase of the country circulation, and the reduction of the interest on the national debt. These were the two causes which drove the money out of this country. Russia, Austria, Spain, and the South American States, Chili, Peru, Buenos Ayres, Colombia, and Mexico, got, in the way of loans, that money which we ought to have at home, but which we could not now get back. These loans were what, in a great measure, produced a scarcity of money, because it was all exported by men who thought that they saw a chance of greater profit by advancing it in foreign loans, than by keeping it at home. His hon. friend, the member for Northampton, had alluded to the late bubbles as one of the sources of the distress, and as being a means of depriving the country of large portions of solid capital. That, with all deference to the enlightened views of that hon. member, he begged leave to deny. Very little money, if any, had been sent out of the kingdom in that way. The fact was, that although large sums were undoubtedly embarked in such speculations, the property only changed hands; the prices or premiums of the shares passed from the pocket of each man to his neighbour, and if many were totally ruined, and tens of thousands expended, the capital still remained in the kingdom. It was in the loans to all the nations of Europe, and all the-republics of America, that the capital was really spent; to them was the gold exported, which the overissue of paper had driven out of the country. And here he would take the liberty of stating his firm conviction, that, although those countries might go on paying the interest of their loans for a while, not one penny of the original capital would ever be recovered. With their establishments, whether of war or peace, they could not pay them; scarcely one of the whole list, could in anyway raise the amount of their revenue so as to discharge an extraordinary demand.—He looked upon the whole question then before them as a struggle between paper, and a something better than paper, and although he did not consider it very safe to touch upon any part of a subject every way so full of difficulty, and in which opinions were so divided, and sentiments so liable to misrepresentation; yet he should not think himself doing his duty, if he permitted the ideas, lately expressed by more than one hon. member upon the subject of the financial state of the country, in case of war, to pass without an observation. Honourable members had asked, what would be the state of the country, if they went to war? The hon. member for Aberdeen said, they could not go to war; that war was impossible. Now, what, he begged leave to ask, was to hinder them from going to war, if war unfortunately should become necessary? The French, in the midst of a national bankruptcy, not only went to war, but carried it on for many years with no ordinary success. If they went to war on the strength of assignats, what was to hinder this country from pursuing the same course? Did hon. gentlemen suppose, because there was a panic among commercial men, and a difficulty in raising money, that the capital and means of the country were wholly gone? Did they suppose a man ruined, because he could not immediately command the means of paying all demands against him? He had frequently asked those who desired him to look at the financial state of the nation, and the overwhelming amount of the national debt, to whom that debt was owing? Why, to themselves—to the nation. They were debtor and creditor; and if ever, unhappily, there should be a national failure, although there would, undoubtedly, be cases of great individual distress arising from such a calamity, yet the nation would still, for all the purposes of war, retain as much power, as ever.—But, although there might not be any diminution of power from financial difficulty, as far as regarded their external relations, he saw many reasons against postponing any longer the return to a sound and wholesome state of the currency. If they were to lose the present moment, and pass it by without applying a remedy, they would, at any future period, find the question surrounded with still greater difficulties. This was the fittest of all times: a great portion of the Bank paper had been changed already into gold; they had gone a great way towards the very circulation they wanted; and, he believed he could venture to say, that a very small portion of the country transactions at present were carried on in private bank paper. If, therefore, they did not pass the bill for a year, they would find, at the end of that year, the whole of the country bank paper in as vigorous circulation as ever. The over-issues would again take place; the gold would return to the metropolis, and they would see people once more on the look out for foreigners, to relieve them of their superabundant capital, by way of loan—one very powerful reason, in his opinion, against any postponement of the present measure. He would say a word or two in respect to joint-stock banks. If he were a country banker, he would never become a partner in a bank constituted on such a principle. Neither was it likely that any prudent man would embark in such a concern, where he would be entitled only to a tenth or a hundredth part of the profits, and where the business would be conducted by another person, although the whole of his property would be liable in case of mismanagement or failure. He thought that no dormant partner would sleep very comfortably while engaged in such a concern. If the Bank of England had consented to charter banks some good might have resulted: but as the matter was, he thought we had gained nothing at all. He knew something of Scotch banks, and he would say, that if the mode in which they were conducted was inquired into, their management would be found as bad as the worst of our country banks. The way in which these establishments were conducted, was this: they had from the nature of their composition, immense credit; and, as they allowed interest for money placed in their hands, large sums were vested with them, under the confidence of good security. These sums, in time of war, they placed in the public funds, then very low—say, perhaps, 48—and when, at the return of peace, the same funds got up to 99, then the Scotch banks were in the gain of fifty per cent—and were pointed out as models of good management, although the whole might be the result of mere chance; but when, in time of peace, people sought to realise the profits derived from their funded property, and much larger sums were pressed upon the Scotch banks, then with the funds falling, and the rate of interest low, those banks became as hazardous, and as liable to loss, as even those of the sister kingdom. Large sums, for which they paid interest, were to be applied in some way which would make them advantageous, and as the funds, when falling, could not be thought of, the only way which presented itself for the return, was the discount of long bills—some, even running to two years; and thence arose a series of failures, which had proved as injurious to the Scotch banks as to the English, and which, if rumour was to be trusted, had numbered many of them amongst those which had been applicants to the Bank of England for assistance, that they might not be compelled to sell out their deposits in the funds at the present falling price. That was the history of the Scotch banks; and, from the experience it taught them, the House might reasonably doubt the propriety of permitting large masses of individuals to have the power of affecting the currency. If they did, however, give men a licence to deal in the currency, he contended that, with reference to the ground taken against the interference of parliament, they had a right at any time, not only to stop the issue of the notes under that licence, but also to take into their consideration the whole system of policy pursued by those to whom they intrusted that power whenever the country was overpowered by the quantity of their paper. He could not agree with his hon. friend, the member for Newton (Mr. H. Gurney), that they should put an end to the issue of country small notes, and spare those of the Bank of England; for he could not avoid stating it broadly as his opinion, that the measure they were now about to adopt, was neither more nor less than the full execution of the bill passed by the unanimous consent of parliament, in 1819, and bearing the name of the Secretary for the Home Department. He had not hesitated to assert, that the bill then passed had added full 50 per cent to all the taxes and engagements, whether agricultural or commercial, of the country; but he had, in common with many others, consented even to that sacrifice, in consideration of the vast advantages to be derived from a sound and stable currency. The question was then, as it was now, whether they should consent to part with a little to save all, and whether, as at that very moment, they should suffer themselves to be brought to the verge of ruin, or grasp at any thing as a means of security. He really could not, therefore, understand the principle of agreeing to the restriction of the issues of the country banks, and continuing those of the Bank of England. There might be more security, perhaps, in the Bank; but there was, as they had seen, no more security of their paying in cash. Even the measure brought into that House by a noble lord, Bexley, who had brought forward many other plans which he had never perfected, though it might have been a security for the government, to a certain extent of their issues, could not be any security for that greatest of all advantages—their paying the demands upon them in cash. With respect to Ireland end Scotland, which he understood were to be included at some more remote period in the operation of the present measure; if it was, as he hoped, the intention of the government to establish one general and permanent currency, why should they be excepted even for a short period? What possible injury could be sustained by either by the withdrawal of their paper circulation, and the immediate substitution of even a smaller quantity of specie? If they established a metallic currency in England, how could they reconcile the anomaly of a paper currency on the other side of the Tweed? Even at that moment Scotch notes were in circulation over the greater part of the north of England. That circulation did not, perhaps, amount to more than a million, or a million and a half; but, the smaller the quantity, the greater the easiness of its conversion into gold; whereas, if they did not take that step, the chance was, that it would very much increase, and that the paper currency in the one country would place very much in jeopardy the gold currency in the other. Scotland, he knew, had many powerful advocates in that House; but he earnestly hoped, that if the people of England were to pay, as had been said, a great penalty for the benefit of a metallic currency, Scotland would not be allowed to enjoy any unfair advantage from their sacrifices. If they were to have the free-trade principles carried into full operation, with what consistency could they leave that trade struggling against all the difficulties necessarily attendant upon a great change, to be yet further impeded by a circulation, which at one time may raise wages and all the necessaries of life to a price higher than those of any nation with which they had to compete, and at another reduce them so low as to produce misery and wretchedness amongst every class of society, and unsettle, in either case, all the contracts which may have been concluded before these revolutions took effect I Well had the right hon. the chancellor of the Exchequer observed, that such a state of things unsettled all the engagements between man and man, and led to those over-issues and re-actions which produced such evils as they at that moment experienced. In the case of the silk trade, he was one of those who had hoped that the resolutions of the President of the Board of Trade would not have been rigidly adhered to, until they had seen the benefits which were expected to flow from the alterations of the currency then proposed, and that they would not have pressed the full completion of their principles, until they had bread at the price that was paid for it by those nations with whom they were in that trade to contend. Without that forbearance, he feared that the principles of free trade of the right hon. gentleman could not be carried into execution, without first involving many of the operative classes in misery, and even starvation. If they looked to the standard of prices for the three hundred years previous to 1797, they would find the price of corn as often cheaper, as it was dearer, than that which prevailed on the continent of Europe, and depending very much upon the nature of the seasons; but, by some extraordinary cause connected with the fluctuations of the currency, since 1797, provisions of every kind, as well as com, had been always higher than they were abroad. When, however, they had removed the occasion of these changes, by destroying that artificial state of the circulating medium which had existed, it would appear to him very strange if, with the same standard as other countries, and their skill in agriculture, prices did not right themselves. In that case, there would be no necessity for petitioning for a repeal of the Corn laws; those laws would repeal themselves. It would not then be his task to press upon the attention of the House, the deplorable condition of his constituents, the Silk weavers of Coventry, and humbly implore, in their name the repeal of the Corn bill. No! The member for Suffolk (Mr. Gooch)—thu most virulent of its advocates, and the head of the agriculturists—would be one of the most earnest in his supplications for relief from the consequences of that act. Seventy shillings would be a frightful price, with a gold circulation, at 3l. 17s. 10½d. an ounce; and could only be supported by a scarcity, which would almost amount to starvation. The present measure therefore possessed, in his eyes, the double advantage, of not only being a remedy for distress, which existed now, but still more as guarding against the probability of evils to come.—amounting, as it did, to a virtual repeal of the Corn bill. There was another reason why he desired the immediate execution of the measure, and that was, the weakness which it caused the country to exhibit in the eyes of all Europe. It would seem as if the fabric of their credit rested on a bed of sand. Who could have supposed that, after eleven years of peace, interrupted only by a few rumours at the time of the French invasion of Spain, the English funds would have fallen from 97 to 74, in the short space of eight months? Why, it displayed a feeling of security in their credit, less than was allotted to other nations. France had been said to pay a high interest, and people were advised to beware of the danger; yet the French funds had not varied more than two or three per cent. The Austrian, Prussian, Danish, and even the Russian, funds were considered less liable to fluctuation. What could be said, but that all this proceeded from the vices of a system, which they were now, he ardently hoped, about to put an end to for ever? For who could see, without pain, the funds of England abandoned for those of countries which must, sooner or later, terminate their engagements by a national bankruptcy. It was at length time to do justice to all classes, by freeing them from a species of circulation which produced such fatal consequences, and which induced a man at one moment to consider himself worth a hundred thousand pounds, when, perhaps, before the returning season, he might find himself hardly in possession of half that sum. He felt the difficulty and danger attending the execution of this measure, as much as any man; but he would run all risks, rather than continue the present terrible system.

Mr. T. Wilson

said, he had listened, with great attention, to the speech of the hon. member for Coventry, and, although he agreed with him upon some points, he could not but say there was a great deal of inconsistency in his reasoning. At one time, he said the evil proceeded from a reduction of capital, at another, from over-speculation and redundance; and, while he argued that there was no apprehension of the contempt of the nations of Europe, or of any attempts upon the peace of this country from the state of its finances, he, the next moment, deplored the existence of that contempt, and expressed his dread of its effects; first saying, that the evils of the day would go to the root of credit, if not put a stop to; and Then asserting, that our credit was already lower than that of any nation on earth. He did not mean to follow the hon. gen- tleman through all the details of his speech. Although admitting the evil, he thought they were about to apply a violent remedy. The object of his rising was, not to protest against the act of the government, for that, he believed, would be in vain, but to put the House in possession of a fact which had doubtless come to their knowledge, though perhaps in a more mitigated shape than he was about to represent it. It was his painful task to inform them, that the distress in the city had greatly increased during the last few-days, and that failures were talked of which would produce effects, in the commercial world, of which that House, nor even mercantile men themselves, could form a conception. He therefore took leave to ask the chancellor of the Exchequer, whether, persevering in his present intentions, in regard to the circulation of the country, he was prepared to say, that any measures were in the contemplation of government for the relief of the existing commercial distress? He wished to state what he meant by the word distress. Many reflections had lately been cast upon mercantile men, as visionary speculators, as a set of schemers, as persons who had voluntarily brought upon themselves the evils of which they complained. He would admit it, for argument's sake, to be true; but he would say, that such a state of things had been brought about, first, by the extraordinary quantity of the circulating medium permitted by government to exist in the country; and next, by the mercantile world taking advantages of that quantity. The government had been enabled by that profusion of money, to make various reductions in the burthens of the country, by reducing the rate of interest upon the debt, and thereby relieving the people from various oppressive taxes. Now, he would ask, whether, the ministers of a country which was purely commercial,—of a country which they had declared to be in a proud and flourishing condition,—of a country which they had announced to be enjoying a revenue so productive as to enable them to reduce the weight of its taxation, and a prosperity so general and solid as to induce them to change the narrow system on which its commerce had hitherto proceeded for a more generous and liberal system;—he asked, he said, whether the ministers of such a country were now prepared, because a change had taken place in the flattering picture they had drawn of it, to turn round and say to the merchants whom they had hitherto lauded for their activity and enterprise, "You are a parcel of fools and blockheads: instead of trusting to the delusive prospects which were spread before you, you ought to have disbelieved them; instead of embracing them with ready confidence, you ought to have had your doubts and misgivings?" Unfortunately, they had done otherwise; and he therefore came down to the House, and on behalf of the merchants of London, claimed relief from the government. He claimed it, however, not merely on behalf of the merchants of London, but on behalf of the merchants of the country, on behalf of the country itself, on behalf of the revenue, on behalf of the ministers, whom he had hitherto always felt proud and happy to support. He said "hitherto;" for though they had been excellent pilots during fair weather, he was afraid they did not know how to steer the boat in which he was embarked with them, during the raging of the storm. He would shortly state the mode in which, and the reasons why, relief ought to be administered to the distressed part of the mercantile community. Instead of dealing in idle and superfluous words, he would found the whole of his reasoning on a single fact. Cotton, it was well known, was a necessary staple in this country. He would admit, for the sake of argument, that the merchants of Liverpool, Glasgow, and London, had traded very improperly during the last few months in this article; and that they had bought for ten-pence and a shilling, that which, in ordinary times, cost no more than five-pence or sixpence a pound. Could it be wished, that the price of cotton should be reduced still lower? Was the offering of it at that price a sin for which they ought to be punished? Why, they could not find a market for it at that price; no, nor at any price. Let them look at what had been done in the crisis of 1793, when a loan of 50 per cent was made, by means of commissioners, to such merchants as were distressed for want of it, upon a deposit of goods or other security. Those who asked for a relief of three-pence a pound on what cost sixpence a pound, were, he thought, entitled to receive it. When a man, who was ready to deposit 100,000l. worth of goods, asked for a loan of 50,000l. to preserve himself from being involved in bankruptcy and ruin, he was entitled to receive the protection which he asked; if not for his own sake, at least for the sake of his clerks, of his connexions, of his correspondents, of his bills, which, if they were protested, would be sent back to Glasgow, to Liverpool, and elsewhere, and create misery and disaster wherever they went. His situation, as one of the representatives for the city of London, might perhaps blind him to the importance of the question he had asked; but, if he had any common sense whereby to judge of it, he was fully justified in saying, that there never was a crisis which more imperatively demanded from the government the extension of some aid to relieve it. He asked for no paper relief; he wanted relief for solid property. When a man came forward with such property, and asked for a loan, not greater in amount than a half or a quarter of the value of what he deposited, surely he was worth saving, and deserved the relief for which he prayed. He hoped he had not framed his question in any manner that was at all disrespectful or offensive to the right hon. gentleman; but he wished to know whether the right hon. gentleman was prepared with any measure to relieve the distress which he had described?

The Chancellor of the Exchequer

said, that though he had no reason to complain of the manner in which the hon. member had shaped the question which he had put to him, which was certainly neither disrespectful nor offensive in its terms, still he could not help reminding the hon. member, that if he thought his majesty's ministers were such unskilful pilots in a storm, he ought not to have contributed to support them in the management of the boat during the fair weather. He did not pretend to say, that those who supported the measures of ministers were responsible for the errors of those measures, in case they proved injurious instead of beneficial to the community—by no means; the responsibility was with government, and from that responsibility neither he, nor any member of it, wished to shrink; but this he did say, that it was a little too hard to be reproached for the weakness and impolicy of their measures, by those who had been the first to support them. Whether the present ministers were qualified to weather such a storm as now raged, it would be presumption in him to decide; but this he felt himself justified in declaring that he had endeavoured to learn something of the nature of the storm, and that the measure which he had introduced to meet it was the result of the practical experience which he had acquired of its force and violence. That measure, upon general reasoning, he conceived to be just and salutary, and he was corroborated in that opinion by the view which he had lately taken of the distresses of the country. He could have no objection to answer the question which had been put to him by the hon. member. The question which the hon. member submitted to the consideration of his majesty's ministers was this—that they should follow the course which had been adopted during the distresses of 1793, and should issue, through certain commissioners, a quantity of Exchequer bills to individuals applying for them, on the credit of their goods or of other securities. Now, in cases of this kind, the members of government were placed in a painful predicament. They were surrounded by scenes of distress, of which the colouring was not softened by those who described them. They were told that it was their duty to afford instantaneous relief, and that, too, in a particular way; and if they ventured to look beyond the mere moment—if they exercised the forecast of cautious and prudent men—and if they considered not only the immediate effects of their compliance with the applications made to them, but the result of such compliance as a precedent, they were accused of a want of sensibility to the distresses of the country; they were taunted with a want of knowledge of the true interests of the nation; and every reproach was heaped upon their heads, which it was possible for one set of men to utter, and for another set to bear. He did not complain of this, because it was one of the inconveniences which naturally attached to the responsibility of ministers. He thought it, however, right to say, that it was the duty of ministers, not merely to look at the representations of distress which were forwarded to them, and at the relief which particular measures were calculated to administer to it, but also to bind up their corporeal agency to resist the requests founded upon them, if they were convinced, in their consciences, that a compliance with them would be productive of more harm than good to the community at large. He was of opinion, that compliance with the proposition which the hon. member for London had made, would not be productive of any material benefit. The hon. member had defended that proposition, by a reference to what had been done in the year 1793; and, undoubtedly, there were other cases besides that, in which the species of aid which he recommended had been granted. The circumstances, however, of those cases differed widely from the present. The main causes of the difficulties of former periods, was the external policy of the country, and the danger of internal dissentions arising out of the pressure which that external policy had occasioned to the manufacturing classes. They had something peculiar in their character, and would not afford a perpetual precedent for future advances of a similar nature. But, in the peculiar case which the hon. member for London had stated, where distress arose from overtrading, which had led to the purchase of goods at high prices—indeed, at such high prices that, upon the hon. member's own showing, they could never be repaid by the proceeds derived from the sale of them—in such a case, if they were to follow the course which the hon. member suggested, he knew of no case in which they would not be drawn, by parity of reasoning, to a similar result; and then he knew not by what process of legislation, by what deliberative contrivance, they could prevent such fluctuation of prices as the country had lately witnessed from recurring periodically. For, under such recurring periodically. For, under circumstances, every man who was induced by a desire of gain to enter into excessive speculations would reason thus with himself—"True it is, that I may fail; but then I know that I have relief in the sympathy of the public, and in the feelings of government, and of parliament. I care not for the consequences of my schemes; if they succeed, the gain is my own; and if they fail, I have relief from government." Such would be the reasoning of individuals. But the present was not an individual application; it had nothing to do with the situation of the hon. member who had made it more than with that of any other gentleman who represented commercial interests. It was a proposition of such a nature, that a compliance with it would be injurious to the public, and prejudicial to the real interests of commerce, to a degree that would not be at all compensated by any benefits which the temporary relief that it might administer to the distressed would confer. He therefore was bound to say that government would not acquiesce in the proposition. At the same time, if by any relief which could be administered in the money-market—if by any absorption of that species of securities which were now circulating at a low rate of interest, to be effected by the assistance of the Bank, any pressure could be removed—if the issue so created should find its way through the ordinary channels of commercial intercourse to those who stood in need of relief, that would be a mode of proceeding which, though it might not be immediately effectual, might afford some slight relief, and would be a mode of proceeding which the government would leave the parties interested in it to take, without any objection. If the Bank would administer that species of relief, he, as a member of the government, would have no hesitation, at a future period of the session, to apply to parliament for a grant to repay it any advances which it might eventually have occasion to make. In what other way the government could interfere, with propriety, he confessed he could not see. If the effect of this declaration should be to deprive the government of the confidence of those who had hitherto supported it, he should regret the circumstance; but he could not consent to purchase the confidence of any class of individuals, by acquiescing in a request which he was, in his conscience, convinced would be more dangerous than beneficial to the interests of the country.

Mr. T. Wilson

said, that when he spoke of his confidence being lessened in ministers, he was not speaking of his confidence in the wisdom of their general policy, but of his confidence in their wisdom as to this particular measure.

Mr. Robertson

said, he had listened with eager attention to the speeches of his majesty's ministers, in which he could not discover any effectual plan for the relief of the distresses which afflicted the country. He had, from the commencement, been the person—almost the only person—who had come boldly forward to blame the ministers for the situation in which the country was placed. That it was daily declining in prosperity, and from no cause more so than from the operation of the measures lately introduced by those ministers, was a conviction strongly impressed upon his mind. It was difficult, he was aware, to adduce proofs of the declining prosperity of the country; however strongly impressed he might be with the opinion that it was in a worse condition than it had formerly been in. One proof, however, of that declining prosperity would be found in a comparison between the available capital of the country, for the various purposes of its enterprise and industry, in 1812, and at the present period. In 1812, Mr. Colquhoun estimated the total of this active floating capital at 430,000,000l. The price of grain at that time was exceedingly high; wheat being from 130s. to 140s. a quarter. This writer took a certain per centage of an average of different years, and these were the results for 1812. The amount of this floating capital was at present only 330,000,000l. Now, if we had never adopted the unfortunate new system upon which our commercial affairs were conducted, the whole of this capital would have remained in the country. Since the last peace, capital to the amount of 256,000,000l. had gone out of it; leaving, therefore, little more than seventy millions to carry on the industry, and promote the prosperity of the country—a capital totally inadequate for the purpose. It was impossible that with so small a capital, a country of such diversified and extended interests could go on prosperously. Now his majesty's ministers had been mainly instrumental, by the measures which they had recommended, in reducing it to this depressed state. He alluded particularly to the mischievous encouragement which had been given by them in the course of the last session, to the mad speculations which were now so universally condemned. Many of those speculations, which had been brought forward under the name of joint-stock companies, were absolutely illegal before the last session; now, not only did the ministers refrain from opposing them, but, by the repeal of the bubble-act, they opened a door to the very evils which they now felt it necessary to prescribe a remedy for. If the ministers had then done what he considered to be their duty, by preventing those wild speculations, the country would never have been reduced to its present condition. It now, however, behoved them to look a little beyond the present exigency. The measure which was proposed was calculated, he admitted, to relieve the distress felt by the commercial interests; but it was not to those interests that the distress was confined. The manufacturing interests were not exempt from suffering, and the amount of those sufferings was too likely to increase. A great change had taken place in the condition of the mercantile and manufacturing interests of the country. That change had been produced by the new system which he deprecated, and the consequences of it must, he feared, become still more serious than they had hitherto appeared to be. There were now, in fact, no foreign merchants in England; but the manufacturers were obliged to unite the character of merchants with their own. Such was the nature of existing restrictions, that the property of merchants was locked up in docks, and otherwise, and they were unable to advance their capital for the relief and advantage of the manufacturers, as in better times they had been used to do. The distress which this had occasioned amongst the manufacturing classes of the community was daily spreading; and unless something should be done effectually to arrest its progress, the consequences must be so serious, that it would be impossible to apply a remedy to them. For this purpose, none appeared to him at once so simple and effectual as the advance of Exchequer-bills. It was clear that the commercial men could not make any thing like adequate advances. The labouring class must, therefore, inevitably be deprived of employment, and the landed interest must suffer from the decreased consumption which would ensue. Nothing but the aid of government could prevent this. If they did not step forward, rents could not be paid, and before the end of the year the whole country, from one end to the other, must be reduced to a condition of the most disastrous kind; and how long it might continue no man could tell. At present this might, perhaps, be prevented; but the longer relief should be delayed, the more difficult would it be to apply it. With respect to the measure before the House, he was friendly to its principle; but he thought this was not the time for carrying it into execution, because, at present, he would rather enlarge than contract the circulation; rather assist than impede any thing like a return to a state of confidence in the commercial world. It would be in vain for ministers, after what he had said, to give out, at any future time, that they had not had warning, not only of the dangerous state to which the country was reduced, but of the inevitable ruin which must follow, if they did not exert themselves to avert it. The peace and welfare of the kingdom were involved in the course which ministers might now pursue.

Sir Henry Parnell

said, that his vote of the preceding night must have sufficiently testified his approbation of the principle of this measure. But, allowing that it, and the other proposal in respect to the banking establishments, would produce a good effect, as he thought they certainly would do, he did not believe they would place the banking system of the country, as a right hon. gentleman seemed to have insinuated, on a permanent and secure footing. He thought people would greatly delude themselves who should permit government to persuade them, that these two plans would do what government said they would do. Seeing what effects the conduct of the Bank of England had always produced on our commercial system at all seasons of similar distress, he confessed his firm conviction that such security as was desired for the future, was and would be unattainable, until their exclusive and mischievous privileges should have been finally got rid of. He knew that this was not a subject well adapted for desultory discussion j but even those hon. gentlemen who were most opposed in opinion upon questions of a nature like that now under consideration, were agreed as to the great extent of the mischief that had resulted from the conduct of the Bank during the past year. In the years 1783, 1793, and 1797, the course which it had pursued, had been precisely the same as in these days: namely, it had gone on in a course of over-issues. And the evil of our banking system, generally speaking, had been, that when it should have been most cautious and sparing of its circulation, it had been most lavish of it; and when commercial embarrassments required that it should be most liberal of its paper, it had been most careful to withhold it. He was satisfied that, until the extensive privileges of the Bank of England were got rid of, in the city of London, as well as throughout the country, there would remain a power of doing mischief, and of increasing the malady under which the pecuniary resources of the empire seemed to labour, that would be acted upon. To the mode in which the gentlemen who conducted the affairs of the Bank of England endeavoured to discharge their duty, and to the correctness and integrity of their motives, he gave every credit. But, seeing that this company, which consisted of an amazingly numerous body of proprietors, had the power of issuing paper to an enormous extent, it would be folly to Suppose that they would not issue it when there was a profit (profit being their object, and a very legitimate one) to be made upon such issue.—He would beg to ask why the late Mr. Ricardo's plan of paying notes upon demand in bars of bullion, should not be adopted?—For his own part, he thought, that every objection which applied to the insufficiency of the gold currency, would be obviated by such a mode of proceeding, particularly now, when the small notes were to begot rid of. Why the plan had not been again acted upon, he was at a loss to conceive. With regard to that plan which had been pressed upon the attention of the House by his hon. friend (Mr. Baring), namely, the plan for employing silver, it appeared to him that it might be adopted without resorting to an alteration of the Mint regulations. He should consider that any interference with the present Mint regulations would be most unwise and injurious. But, though he was not friendly to making silver a legal tender, or altering the standard so as to admit it, he saw no reason why the Bank should not pay in silver bars; the rate at which such bullion was to be taken being previously fixed according to the relative values of gold and silver. And if at any time great fluctuations should take place in the prices of these metals, provision should be made to meet them, so as to obviate any injurious consequences. He had been surprised that no gentleman, on this question of general distress, had attributed some portion of the prevailing difficulties to the existence of the usury laws. If the hour had permitted him, there was no topic upon which he should have felt more disposed to enlarge. In Mr. Tooke's excellent work upon the currency, he mentioned that, during the late pressure, stock and property were sold for money at a loss of from 20 to 30 per cent more than they would have been subjected to in the course of ordinary stock and commercial transactions against time; indeed, he had himself been told by a banker, that he knew of cases where parties had been obliged to sell at a loss of 70 per cent on such property. Why, then, should the usury laws, when a crisis of such a nature might again happen, be suffered to remain? Looking, however, to the opposition which had been made to their repeal by the country gentlemen, he would only ask, whether it might not be very possible so far to remodel them, as to re- lieve the commercial world? Let them, for instance, remain except as to discounts.—On the whole, the three measures he was prepared to recommend, were—first the doing away with the Bank monopoly altogether, and extending, the privilege of enlarged partnerships to London banks; secondly, the allowing banks to pay in bars of bullion; and thirdly, the repeal of the usury laws. As to the Bank monopoly, his opinion was, that the loss sustained by the country, from the fluctuations to which the mismanagement of their paper issues gave rise, was so great, that no sum of money could be named, as a fit compensation to the Bank for surrendering their privileges, which ought not to be willingly paid by the country.

Mr. Alderman Bridges

was of opinion, that great evils had resulted to the country from the principles of free trade. Very large importations had taken place, and the foreign merchants drew their bills at such short dates, that great sacrifices were necessary to meet them. He knew one house on which bills had been drawn for a million of money for wool alone. The distress at the present moment was very great, owing, perhaps to overtrading; but that spirit of over-trading he verily believed, was excited by the conversion of the 4 per cents. He thought government might afford essential relief by a timely issue of Exchequer bills. The merchants had plenty of property, but there was no sale for it; and therefore it was of no use for them to look at their books. If they had goods to the amount of half a million, they might as well have so many stones from the street, if money could not be raised upon them.

Sir F. Blake

observed, that liberality appeared to be the order of the day; the ministers had adopted a liberal policy, and their adherents were determined not to be behind-hand with them, for they were liberal also; but their liberality was in the abuse of ministers, whose policy did not suit their narrow views. Every body was now liberal in turn. Even the gentlemen on the ministerial benches had been liberal on many occasions; but on none had they been more so than in their censures on ministers for their conduct in the present crisis. So far from having any objection to this, he was delighted to see it, and he would encourage the hon. member for Grampound to go and tear the ministers to pieces [a laugh] He assured the right hon. gentlemen, he did not mean it literally. For his own part, he returned his thanks to ministers for the conduct they had pursued, and requested them to persevere in the liberal line of policy which they had adopted, notwithstanding the gloomy apprehensions which some gentlemen seemed to entertain. Something had been said of a combination. He knew of none; but if there was a combination, he did not know upon what grounds it could be objected to, when its end was the good of the country. He hoped that, although present circumstances might render the temporary suspension of the measures to which he alluded necessary, ministers would, as soon as it was practicable, proceed to carry into active operation the principles of free trade without any restriction whatever.

Alderman Heygate

said, that the ministers, in the opinions which they expressed, and the conduct which they proposed to adopt, neither consulted the interests of the country, nor agreed with those who usually supported them. The aristocracy and the landed interest, by whom all the measures of ministers were usually upheld, were, upon this occasion, wholly at variance with them. Every body out of doors was of a different opinion from them, and every one who spoke plainly, did not scruple to say that the people were to be sacrificed to a cold-blooded theory. Excepting the members of what might be called the Political Economy Club, there were no persons to be found who approved of ministers on this occasion. Every body else believed that the country was on the eve of a convulsion, and that the measures proposed were calculated to hasten it. By whom were the proceedings of ministers approved? Who supported and cheered their statements? Not those who Bat beside them, and who were usually the most vehement of their cheerers; but those who, at other times, were their bitterest opponents. The fact could not be disputed, that the country was reduced to a degree of suffering wholly unprecedented. Ministers might carry the measures which they proposed in that House, but he defied them to carry them into effect generally. Nothing could be more disgraceful than the want of a proper circulating medium. Exchequer-bills were at a discount of 20s., and could hardly be sold at all. The best securities were not saleable. Where such a state of things existed, there must be something wrong. He was unwilling to be the evil prophet, but a convulsion was at hand. If hon. members could but see the letters of that morning's post from various parts of the country, which be had perused, they could not doubt the speedy approach of ruin, unless immediate relief came to their aid. He charged ministers with a want of sympathy for the distresses of the people. He regretted it, because he wished to see them popular. The manufacturing and the monied interests were now suffering. The agriculturists thought they were well off, because the blow had not yet come upon them; but he was convinced that their suffering was only suspended, and that another year would not pass before they would be visited with their share of the calamity.

Mr. Hume

wished that the worthy alderman, while he was abusing the system of political economy, had pointed out what particular part of the system he objected to. If the worthy alderman alluded to the measures adopted by ministers with respect to free trade, he could by no means agree with him. Those measures had met with the general approbation, not only of parliament, but of the country. He could not suppose the country would show such a want of good sense as to turn round at the present moment, and find fault with the operation of those measures. With respect to the present measures of government, he thought they were ill-timed; but ministers were placed in a situation of great difficulty, and it was hard to say what ought to be done. The worthy alderman complained of the principles of political economy; but he hoped that within his own domestic arrangements things were well conducted; that his expenditure did not exceed his income, and that he adopted the best means of providing for his own comfort and independence. If he did so, he acted upon the principles of political economy, which he so much abused; for just in the same sense were they applicable to the affairs of the state. It was not the fault of government that things were not on a proper footing. When they proposed a useful measure, in stepped the worthy alderman, and exclaimed against it. When they abstained from so doing, he equally censured them: so that it was impossible to know what he approved of, or condemned. Before he lavished his censure upon the system of political economy, he was bound to show what better system he would substitute for it. As a remedy for the evil now pressing, some called for an issue of Exchequer-bills. Now, the Exchequer-bills already in circulation were, at a discount, and if the amount was augmented, the depreciation would be increased. The result would be, that the revenue would be collected in government paper, and ministers would thus be left without means. He should be sorry that the transactions of the government should incur the risk of being interrupted by the issue of Exchequer-bills. He was sure the Bank would afford all the assistance in their power, and would not suffer the public securities to remain in a state of depreciation if they could help it. It was hard upon ministers, in their present difficulties, that they should be taunted on the score of their liberal system of commercial policy, by persons who had no projects of their own to suggest.

Alderman Wood

was afraid, that the observations of his worthy brother alderman about the want of cheering would not have much weight with the cabinet; for if ministers did not get many cheers, they got what they liked much better, a vast majority. Although the present state of affairs was certainly very distressing, it was better to let matters go on without any legislative interference. An issue of Exchequer-bills under present circumstances would, he thought, produce no benefit, and be contrary to the established principles of political economy. The worthy alderman must have known that two great houses, intimately connected with foreign loans, had that day failed. Foreign stock, too, had fallen very low. Under these circumstances, an issue of Exchequer-bills, though it might afford some relief, could only do so at a loss of from 30 to 40 per cent. Although he differed from his worthy friend on this point, he admired his speech of last night; that was to say, he did not admire the whole of it, for it was too long; but some parts of it were well worthy of attention. His worthy friend had stated, that on a former occasion he had driven the right hon. Secretary for Foreign Affairs out of the House, by one of his speeches. His speech of last night had produced the same effect upon him. He could not stay to hear it, but he had voted with him.

Alderman Heygate

said, he had never meant it to be understood that he had actually driven the right hon. Secretary out of the House. All that he had intended to say was, that in consequence of his speech, the right hon. Secretary had left the House without voting. In answer to the hon. member for Aberdeen, he begged to state, that he objected to the principles of free trade being applied to this country, which, on account of its burthen of taxation, could never compete with foreign rivals.

Mr. Attwood

said, the worthy alderman who had just spoken (Wood) was of opinion, that it would be contrary to the established principles of political economy, for the government to adopt the recommendation of his hon. friend the member for Sudbury, and to interfere to relieve the embarrassments of the merchants by loans of Exchequer-bills on the security of goods. He would not dispute that point with the worthy alderman, but he entirely agreed with the hon. member for Montrose, that such a measure would greatly embarrass the government. As merchants borrowing such Exchequer-bills would carry them to the market for sale; but, in the present scarcity of Bank notes, no sale could be effected, except at a great depreciation. Exchequer-bills were now at a discount of 20s.; additional sales would reduce them greatly below that rate, and throw back Exchequer-bills on the government in payment of taxes. The measure proposed would relieve the merchants at the expense of the government, and he therefore was not one of those who entertained expectations of the government adopting any such measure. But, though he did not expect to see the government, for the sake of relieving the merchants, voluntarily placing themselves in a situation of being exposed to difficulties, similar to those which now oppressed the mercantile body, yet, he confessed, that he should not regret to see them placed by compulsion in that condition. What he desired to see was, that the Bank of England should, in the present emergency, transfer to the relief of the merchants the assistance which they had lent to the government—that the Bank should realize at once, all the Exchequer-bills, and all other saleable government securities which they held, without regard to the depreciation of their price, or the consequent embarrassment of the Treasury. Let the Treasury be left to get out of that embarrassment in the best way they were able, but let the Bank assist the merchants liberally and boldly, by lending to them, on the security of goods and merchandize, the money which they would thus draw in from their advances to government. If it were contrary to any principles of political economy for the government to give extraordinary assistance to the merchants, in a state of commercial difficulty such as the present, it was at least a legitimate proceeding for the Bank to give such assistance. That was opposed to no principle of political economy. The Bank was a commercial establishment. It was precisely such an establishment as the commercial body was entitled to look to, for extraordinary assistance in a crisis of extraordinary emergency. The goods of the merchants were unsaleable. Bills of exchange founded on sales of goods, did not consequently exist, except to a reduced extent. It was a period, therefore, in which the Bank was called on to go out of their customary rules of advancing to the merchants on bills of exchange only, and to afford relief by making advances directly on those goods, on the sales of which bills of exchange were in ordinary times founded. This was a measure in opposition to none of those principles or rules which lately gentlemen had shewn a great disposition to govern themselves by, rather than by the dictates of sound discretion or practical experience.—Having made this observation, he could not sit down without calling the attention of his majesty's ministers to the present condition of the monied operations of the metropolis, which had very recently become subject to additional embarrassments, of the extent of which it was fit they should be apprized. In his experience, he had never known the pecuniary engagements of the metropolis proceed with greater difficulty, or labour under more severe embarrassment than at the present moment, except during that short period, early in December last, which immediately preceded what was called the Panic. What the original cause of all this had been was not a question into which he would now at all enter. Differences of opinion existed on that head; but it was agreed, he assumed, that the state of things which existed during the panic was one of great calamity, and greater dangers; and he would venture to say, however it had in December originated, that the present difficult condition of the money market in London could not exist for one week longer, without witnessing again that state of things being fully re-established. To this condition, therefore, he took the liberty of calling the attention of his majesty's ministers. The amount of Bank notes at present existing in the circulation of the metropolis, was plainly inadequate to carry on its pecuniary operations and engagements; and he recommended that some steps should be adopted to supply at once this deficiency, and to render Bank notes attainable with less of difficulty and of sacrifices than at present, by those who had undoubted securities to give in exchange for them.

Mr. Pearse

said, he concluded that, when the hon. member for Callington recommended the Bank to pursue the course which he pointed out, he imagined that they had not at their disposal the means of assisting the distresses of the country, and of performing their duty to the public. If the hon. member entertained any such idea, he could assure him it was completely erroneous. Within the last six weeks the Bank had, in the most unlimited manner, assisted in relieving the distresses of the country, in so far as they had been brought to their knowledge. They still continued to feel the same desire to assist the mercantile interest. At the present moment, the discount of merchants' paper by the Bank was going on to the utmost possible extent, provided that paper was good. The tendency of the measures adopted by the Bank during the existing distress, had all along been, to afford the utmost facility, consistent with security, to the discounting of merchants' paper. But all the assistance which could be afforded by the Bank was not sufficient to meet the public difficulties. There was a class of merchants possessing great property, who yet were not in a situation to present bills to be discounted. To this class accommodation might be granted in the best manner, as had been done on former occasions. He agreed with the chancellor of the Exchequer, that the measure to which he now alluded should not be too frequently adopted. It should only be resorted to in extreme cases, and not when individuals might have been induced to enter upon extravagant speculations, in the hope of obtaining assistance from that very measure. He thought, however, that the difficulties of the present period formed a case which would authorize the adoption of the measure in question. It was notorious, that, at the present moment, merchants of the highest respectability were in a state of the greatest embarrassment, being left without the means of carrying on business. He was aware that the Bank had lately received many anxious communications, in consequence of which, they had done all that it was in their power to do. He, however, suggested as a more immediate mode of granting accommodation to merchants, that government should issue Exchequer-bills under commissioners, as had been done before. He would recommend that the bills thus issued should not bear the same interest as those issued by government, but should be delivered at the highest rate of interest; namely, five per cent. One reason he had for wishing the Exchequer-bills to bear that interest was, that they would then never, in all likelihood, find their way into the Bank. The bills would call forth the money which was at present locked up. Many country bankers had at present large sums in their hands unemployed. They would not discount merchants' paper, and did not like to lend money on the Exchequer-bills at present in circulation, on account of the low rate of interest which they bore. If commissioners were authorized to issue Exchequer-bills, of the description he had mentioned, to the amount of five millions, the measure would have the effect of restoring confidence throughout the country. So effectually did he think the measure would tend to the restoration of confidence in pecuniary transactions, that he was of opinion the commissioners would not find it necessary to issue more than half the amount of bills placed at their disposal, and that half never would find its way into the Bank, but would be taken up by parties who now kept their money locked up; in what he had said, he expressed only his own individual opinions.

Mr. W. Smith

said, it had been observed, that, because the men now in difficulties were merchants, they deserved every assistance that could be afforded them. Now he was not convinced of the justice of that argument. He did not see why, because men expended their capital in the purchase of goods, they were therefore entitled to relief in a greater degree than any other men who expended their capital in a different manner. It had been said, that it was the duty of the government to afford relief to them, but he thought that the cause of the distress should be first inquired into; if that distress bad arisen from the act of the go- vernment, or from the consequences of any measure which they had adopted, then, undoubtedly, government were bound to afford them relief; but if, on the other hand, it had arisen from a general indulgence in the spirit of speculation, the government could not be under any such obligation. The hon. member for Callington had spoken of the duty of the Bank to expose government securities in their hands for sale at any price, and to afford relief by the produce of the sales. He thought the Bank were bound to do no such thing, and that by such an act they would be unwisely diminishing the value of those securities. It appeared to him, that there was a large quantity of goods in the market, the owners of which were distressed for want of money to pay those bills that they had wantonly incurred, but their inability brought distress on great numbers of men who had taken no part in these improper transactions. The chancellor of the Exchequer seemed to conceive that the government were not bound to afford this relief, because, by so doing, they would give such encouragement to speculation that there would be no knowing where it would end. Now, he thought that principle of the right hon. gentleman was carried too far, for it amounted to this—that if speculation could be encouraged by a knowledge of the speculator that he would be assisted in his distress, he would speculate on the mere hope of getting back one half of his capital. That supposition, the House would see, was involved in absurdity; for it presumed, that a man would speculate on the prospect of a loss of 15 per cent. It appeared to him, therefore, that though the government ought not to look after individual distress, yet that, when that distress was so general as it was at present, they ought to turn their minds to the consideration of some substantial and immediate relief.

Mr. Huskisson

observed, that, as the debate had been exclusively confined to that part of the House which considered itself purely practical in the matter in question, he would not travel out of the line which had been pursued, after the example of the hon. member for Coventry, who had entered largely into the consideration of general merits. He begged to call the attention of the House to the situation in which the question had been placed by the great practical authorities who had addressed themselves to the government and the Bank, as the two parties from whom they expected measures of relief to proceed. One of the members for the city had asked a question of his right hon. friend the chancellor of the Exchequer; but, in putting the question, he, as was very often the case, had pointed out what kind of answer he wished to receive. The question was, whether government intended to issue additional Exchequer-bills, which the hon. member said would afford effectual relief to the mercantile interest. The hon. member for Callington (Mr. Attwood), who was always considered a great practical authority on questions connected with commerce and currency, instead of recommending an additional issue of some millions of Exchequer-bills, said, that the Bank ought immediately to sell all the Exchequer-bills and government securities which they now held. Now, as such a sale could produce no other result than that of drawing into the coffers of the Bank the money of the purchasers, that result would be diametrically opposite to the one desired by the hon. member for London. The opinion of the hon. member for Callington was, that the hands of the Bank should be strengthened, by throwing their securities into the market at any loss whatever. What was the principle on which this was to be done, or what were the difficulties that might be connected with it, he should not now discuss; but he thought that he had shown sufficient for the purpose of justifying his majesty's ministers, when he had thus proved, that, if they were blamed for not coming down at once with effective measures, many of those practical men, who were the most prompt to blame, were not agreed amongst themselves, as to the measures that ought to be pursued; and not only so, but that, following their own particular theories, they came to conclusions diametrically opposite to each other. If there was any thing which could add to the distress of a commercial country, it was the circumstances which had occurred within the last day or two, and which had been alluded to, with respect to the difficulty of procuring bills of exchange to carry on the common mercantile transactions of the day. The great pressure of distress arose immediately from this difficulty; for if bills of exchange, which were the ordinary medium of carrying on the commerce of the country, could be procured, the Bank was perfectly ready and willing to extend every facility which they could properly afford the mercantile interests of the country.—The difficulty was, that there was such a mistrust, and such a want of confidence among commercial men at that moment, that bills of exchange could not be procured, and therefore there were no intervening means of procuring from the Bank this medium of their assistance. That the country must be in a much greater state of distress, and must be much more in need of assistance, when these bills ceased to perform their ordinary functions, there could be no doubt; and the question was, how that distress could be remedied. The hon. member for Callington saw no difficulty in affording that remedy, if the Bank would take goods as a security; but he bad observed that that was contrary to the principles of political economy.

Mr. Attwood,

in explanation, said, he had been entirely misunderstood. What he had said was, that for the Bank to lend money upon goods, in an emergency such as the present, was not contrary to any principle of political economy.

Mr. Huskisson

begged pardon of the hon. member, but he had understood him to say, that if government could not take goods, the Bank might; but that the measure was contrary to political economy. Whether or not it was contrary to political economy, there was a more practical objection to it; such a proceeding was contrary to their charter; the Bank could not deal in goods, nor lend money upon goods. The question then was, what could be done to supply a more abundant circulation? Now, if there was one of the principles of the committee of 1819 in which all agreed, it was this—that if a circulation was furnished by bank notes to supply the exigencies of commerce, and the wants of the country, it was immaterial whether it was supported on the credit of one species of security or another. In other words, it was immaterial whether the number of bills of exchange was greater in proportion to government securities, or vice versâ. As far as the currency was concerned, it was immaterial. In other respects, indeed, there might be objections; but, provided the circulation was supplied, and commerce was relieved from embarrassments, it was immaterial whether the Bank supplied issues of notes on bills of exchange or on other security. Then, if the Bank of England, which was not so choked up as had been asserted, as not to be able to supply aid to the circulation,—if the Bank felt it expedient to buy exchequer-bills in the market, in consequence pf that species of security being so much depressed, those purchases would throw a farther amount of currency into the country, and thereby afford it relief. This was the foundation of the plan of his right hon. friend. The hon. gentleman who spoke last had said, that if we created a precedent which went to allow a party who had speculated to excess to come and ask for relief, it would be highly impolitic. His right hon. friend had admitted, that men would speculate more readily if they knew that, under loss, they would be sure to find relief. He admitted, that if we once taught the extravagant trader and the speculator, whenever they embarked in rash schemes, that, should they not get out in time (for that was the object of most of the parties) they might always expect to obtain an asylum in government, it was as much calculated to encourage speculation as the poor-laws were calculated to encourage vagrancy, and to discourage honest industry. Therefore, if the Bank, being at liberty, and if it had the means, would issue, until relief be felt by the public, an additional quantity of paper, he thought it might be done with perfect safety, under the arrangements made between the Bank and his right hon. friend, and his noble friend at the head of the Treasury. This plan did not exactly follow the precedent of the hon. member for London, and, indeed, it would be difficult to do so; but, such was the extent of the difficulties at present existing, that immediate relief was necessary; and he was of opinion that a measure, which might commence to-morrow morning, was better than one which, however excellent in other respects, was distinguished by this great objection—that it could not be adopted until it had passed through all the branches of the legislature. Under these circumstances, he was of opinion that, as a relief of some kind was immediately necessary, the best course was that which had been proposed by his right hon. friend, and which, compared with every other, was the freest from inconvenience and danger.

Mr. Ellice

said, that the commercial world was now in a complete state of disorganization, and that the evils which had taken place in London were rapidly extending themselves all over the country, which, unless some relief was speedily afforded, must soon be in a state of general bankruptcy. He must do the right hon. gentleman the justice to say, that he had conducted himself with great candour. What he had stated in the House, he had stated in the interviews which he had had with him. He was aware that the Bank of England could not legally advance money on goods; but he thought there was some difference between the Bank advancing money on exchequer-bills alone, and advancing it on them with the further assurance of goods; and he believed that, although the advance on exchequer-bills might relieve the money market, and enable some stock-jobbers to carry on their speculations with greater facility, no relief would be afforded to those who required it quite as much, if not more, and who had no exchequer-bills to offer as security. He did not wonder at the difficulty of procuring bills of exchange; for, in times like the present, men were as jealous of their credit as of their capital. He had never been of opinion that relief could be extended expressly to merchants on the security of goods, but he thought the announcement, that some relief would be afforded them, would be almost in itself sufficient. He admitted that commercial men and country bankers were equally oppressed with present difficulties; and he would put a case which would show the effect of the relief to be afforded. Suppose a country banker had a mortgage offered to him, and he lent money upon it, perhaps with the view of getting his notes into circulation on such good security; suppose that, after this loan made by the country banker, times of distress like the present should arise, and his London banker would advance nothing on his account, he would be unable to pay his own bills which, in a moment, might be poured in upon him—he might say that in six months he could get in the money on this mortgage, but his creditors could not wait till that time arrived. Now, if he could get exchequer-bills on this mortgage, he might go to his London banker, and on their security, he could obtain those advances which would not only enable him to meet his own bills, but afford the greatest relief to the people of his neighbourhood, and neither the mortgage nor the exchequer-bills would ever come into the market. He was acquainted with a case which had occurred during the distresses of 1793, where a party derived support in a moment of great emergency from the deposit of exchequer-bills, which were lodged under lock and key; and, when the advance was paid, the bills were returned. He believed that this kind of relief was now much wanted. The country at large required something which should give an assurance that business would be kept up in its ordinary manner. It was now no longer a question in Yorkshire, who would pay his bills; for men there looked at each other almost with the consciousness, that they were equally incapable of meeting the demands made upon them. He saw all the difficulties which had been stated by the right hon. gentleman, but still he thought some facility of the kind he had proposed, might be afforded. We must get through this pinch as well as we could, and, for his part, he did not believe, that if government consented to issue five millions of exchequer-bills, more than two millions would be asked for, and that even of that number, not half would ever come into the market.

Mr. Pearse

complained of the manner in which the Bank had been spoken of on former occasions, and observed, that their conduct had not arisen from a desire of profit, but had been caused by the particular circumstances by which they were surrounded.

The report was then brought up. On the motion that it be read,

Mr. T. Wilson

observed, that the temporary aid by an increase of bank paper, would not afford relief to all those who were in need of it. If ministers would now declare, that they would grant relief in the old way, that declaration, circulated throughout the country by the press tomorrow, would revive confidence. The assurance of relief was almost all that was wanted.

On the report being read,

Mr. Attwood

said, he had heard with surprise the assertion of the right hon. gentleman (Mr. Huskisson), that the "Bank of England were prohibited by their charter from lending money on goods. The confidence with which that erroneous assertion was made, had induced him to refer to the charter of the Bank up stairs. It contained no such prohibition. He would, for the satisfaction of the right hon. gentleman, in his own justification, read to the House a clause in the charter which distinctly recognized the power of the Bank to lend money on goods and commodities of whatever kind.

On the first resolution being read a second time,

Mr. Hudson Gurney

rose, for the purpose of proposing the amendment which he had moved on the preceding evening, in the committee; namely, to omit the words "or by the Bank of England;" the object being to retain in circulation the one and-two pound Bank of England notes, in order to prevent a total want of circulating medium in those districts where either the bankers had failed, or where the bankers notes should have been withdrawn. The hon. member said, he could not sit down without expressing his entire concurrence with every thing that had been stated by the honourable Bank director opposite (Mr. Pearse). He must say, that ever since he (Mr. G.) had had the honour of a seat in that House, the Bank of England had been most injuriously, he might say, most shamefully treated. Had it not been for the manner in which the Bank had come forward, and the measures they had taken, during the last six weeks, the country would have been in a state of indescribable embarrassment.

Mr. Wodehouse

said, he was satisfied with the amendment proposed by his hon. friend, the member for Newton. There was at present a great and alarming evil weighing on the country. Merchants were not able to keep their engagements, and any measures which gave us safety, would be a positive blessing. It was the duty of the legislature, under such circumstances, not to waste their time in idle and fastidious cavilling, but to adopt speedy and efficient measures. The only objection to it, he believed, grew out of the scrupulousness of gentlemen as to parliamentary consistency; but, though he had as great a regard for parliamentary consistency as any man, when founded on conviction, yet he thought it was not inconsistent, in some cases, for parliament to retrace its steps. He had sat in two small minorities on the subject of Mr. Peel's bill, and he was persuaded that measure had never been adequately and completely understood. He thought it would be no imputation on the consistency of parliament to reconsider that measure. He wished not to be understood as stating this with any view of opposing ministers. He was ready to give them all the support in his power, to enable them to relieve the country from its present embarrassments. He saw a motion announced for the repeal of the assessed taxes, and when that or similar motions were made, he should be prepared to vote against them. But he thought government had taken a contracted view of this important subject; and he urged them to reconsider their determination. Unless the amendment of his lion, friend received the concurrence of the House, he thought that the distress of the country during the next six months would be insupportable.

The gallery was then cleared for a division, but none took place, the amendment being negatived, and the original resolution agreed to by the House.