HC Deb 26 July 1832 vol 14 cc801-8
Mr. Easthope

rose to move for certain Returns, with a view of showing how far the panic of 1826 was attributable to the system adopted by the Governor and Company of the Bank of England. He was of opinion, as the period when the Legislature were about to decide upon the Renewal of the Charter to the Bank was drawing nigh, that it was of the utmost importance to ascertain, by an examination of every circumstance which might in the remotest degree have reference to the system of banking, how far the parties seeking for the renewal were entitled to the confidence of the country. On the occurrence of the panic in 1825, the House might recollect, a great diversity of opinion as to the extent to which that unfortunate event was attributable to the Bank of England prevailed. It was stated at the time, by the Governor of that body, with a view to its exculpation, that in neither the years 1825 nor 1826 had there been any considerable increase or decrease in the amount of the currency sent into circulation, and that all the fault of the transaction was attributable to other causes, and principally to the country banks. In both Houses of Parliament the statement of the Governor was repeated by the supporters of the Bank, and was looked upon as affording for its conduct a complete justification. There were others, however, who did not hesitate to assert that the mismanagement of the Directors of the Bank of England was the main cause of that panic. On reference to the debates of that period, that opinion was expressed by Members who were always considered to be great authorities upon the subject, from their immediate connexion with commerce. Without troubling: the House with a full list of those who supported that opinion, he would merely mention the hon. member for Thetford (Mr. Baring), Mr. Tierney, Lord Liverpool, and the then Chancellor of the Exchequer, now Lord Goderich. It was with a view of ascertaining the real state of the case that he proposed to move for such information, which, if produced, could not fail to have that effect. He thought it was of paramount importance clearly to understand what part the Bank had taken in the affair, for, according to that, the opinion of the Legislature ought to be guided as to the degree of trust which could fairly be reposed in the body. It was probable that it would be argued against his Motion, that Parliament ought not to pry into private concerns, but he denied that, at the present period, anything relating to the Bank ought to be private. The country was called upon to make a very serious and a very important decision as to the renewal of the Charter; and until that decision was made, the affairs of the Bank ought to be considered, in every sense of the word, public. It was also probable, his Motion might be met by a reference to the labours of the Secret Committee then sitting upon the subject of the Bank, but, as a very short period would elapse previous to the necessary decision of the question, he conceived the public mind ought to be enabled, by the possession of every information, to approach it with that degree of consideration which its importance so well merited. No person could say, that the Bank was not intimately connected with the interests of the country. Upon this point he would read some extracts, which expressed his opinions more powerfully than he could convey them to the House by his own words. On the 2nd of February, 1826, the present Lord Chancellor (then Mr. Brougham) expressed himself to the following effect: 'Much had been said upon the proceedings of the Bank of England during the late panic. Without wishing to throw blame upon the conduct of that body, he could not help expressing his conviction, that an end must come to that sys tem which exerted so powerful an influence at present, not only upon the money market, but on the whole trade of the country. Some change ought to be effected, by which the interests of the whole empire, together with the fortunes of every family in it, should be drawn from the absolute control and direction of four and twenty men.'* The late Lord Liverpool also said: 'He did not mean to join in the reflection which the noble Baron had cast upon the Bank of England; but he was perfectly satisfied—and he had entertained the conviction for years—that the country had grown too large, that its concerns had become too extensive, to allow of the exclusive privilege of the Bank of England. The privilege of the Bank might have been highly useful in the early period of our commercial transactions; but the country was now too large for any one such exclusive establishment. The Bank of England's privilege operated in a most extraordinary, and, he thought, a most unfortunate manner for the country.' † Lord Goderich, then a Member of the House of Commons, expressed similar opinions††. From these extracts, and from many other passages which he could read, it was quite evident that the late Government had come to the determination not to make any application for the renewal of the present exclusive privileges of the Bank when they should expire. An impression had gone abroad that the present Government intended to propose the renewal of these privileges, but it would require very strong grounds indeed, to satisfy the people of England of the propriety of continuing the monopoly described by the late Lord Liverpool. He must again urge the reasonableness of laying before the House all the information that could possibly be given, while the inquiry was going on before the Committee, because it would necessarily sit but a very short time longer, and this was not a subject upon which a hasty and undigested opinion should be formed. If it could be shown that danger would result from the production of the information which he sought, he should be the last man to require it, but if not, the House ought to be put in possession of it. A strong feeling of the great importance of this subject had alone influenced him to press for the production of information. The hon. Member concluded by moving "That there be laid before this House an account of the amount of the promissory-notes, and bank-post bills, of the Governor and Company of the Bank of England, in circulation on the 1st day in each month, during the years * Hansard (new series) vol. xiv., p. 39, † Ibid. p. 19. †† Ibid. p. 51. 1824, 1825, and 1826;—of balances and deposits upon accounts; distinguishing those of the Government from those of private individuals, at the same period; of bullion, and gold and silver coin, of whatever description, held by the Bank of England; distinguishing the quality of the same, being the property of the Bank of England, and not belonging to other individuals, at the same periods;—of sums advanced to the Government by way of loan, or otherwise; setting forth the description of security held for the same, at the same periods;—of the amount of Government securities held by the Bank during the same period, and not included in the aforementioned Return, setting forth the description of the same;—of sums which the Bank of England were under advance by way of mortgage or security on land or other real property, or by way of any other description of loan, on the security of real property at the same periods;—of sums which the Bank of England were under advance to individuals on the security of funded property, Exchequer bills, or Indian bonds, at the same periods; and, of the amount of bills of exchange held by the Bank of England under discount at the same periods."

Mr. Hume seconded the Motion.

On the Question being put.

Lord Althorp

said, that his hon. friend (Mr. Easthope) had himself, in the beginning of his speech, anticipated an objection to his Motion, for which, in the course of his arguments he had not been able to suggest an answer. That objection was, that as there was at present a Secret Committee engaged in inquiring into the affairs of the Bank, and the whole question of the Renewal of the Charter, it would be most inconvenient to produce the papers which the hon. Gentleman asked for. But he was ready to admit, that if the Committee should eventually make a Report, without laying before the House all the information upon which they should have founded their decision, then those Returns might very properly be called for. He thought that his hon. friend was rather impatient for the production of those papers, as he must be aware, that the present Session could not close without some Report being made by the Committee. The hon. Gentleman had said, that the public ought to have time to weigh the reasons upon which any recommendation of the Committee might be founded, before the House should come to any definite measure upon that recommendation. Now, he (Lord Althorp) could not admit that the hon. Gentleman had a right to assume that it was not the intention of the Government to give the public ample time to consider the grounds of any resolution to which the Committee might come, before any steps should be taken in consequence of the Report. His hon. friend must be aware that it was the duty of the Committee to lock back earlier than the panic of the year 1825; and that, of course, they would bring forward as much of the information which they might obtain in the course of that inquiry, as could be required for the satisfaction of the House and the public. He would also beg leave to say, that his hon. friend had no right to assume that the Committee would not see the necessity of producing only such pans of the information submitted to them, as could not be injurious to the interests of individuals. He did not feel himself at present called upon to discuss the question whether the Charter ought to be renewed or not. The Committee would have occasion, in a short time, to report to the House the progress of the inquiry, and he therefore thought that it was not too much to ask his hon. friend to have so much confidence in the Committee as to suppose, that, if they thought it safe to lay before the House the evidence for which he asked, they would do so. The hon. Gentleman seemed to think that another advantage would be derived from the production of those Returns, inasmuch as he supposed that they would support his view of the question respecting the renewal of the Bank Charter. Now, they might have that tendency, or they might not. He was not prepared at present to give an opinion whether they had or not; but he thought, in either case, that it was much more expedient that the whole of the evidence bearing upon that question should come before the House at once, than that it should be produced in parts and at intervals. But yet, if the Committee should not produce all the information necessary to enable the House and the public to judge correctly of their decision, then he would say, that it was the duty of his hon. friend, or of any other Gentleman, to move for any papers which he might think necessary for the further information of the House. He begged to assure his hon. friend, that his opposition to the Motion did not proceed from any unwillingness to give the most ample information. On the contrary, he was most desirous that the House should be made fully acquainted with every thing which might enable hon. Members to judge correctly of all the bearings of the question, and he was satisfied that, when the Report of the Committee should be laid on the Table, his hon. friend would have no right to complain of the insufficiency of the evidence. But at present he must oppose the production of the Returns moved for, as premature and inconvenient.

Mr. Hume

thought, that the Motion ought to be complied with, and that the noble Lord (the Chancellor of the Exchequer) had said nothing to explain the inexpediency of granting the Returns. If, indeed, the noble Lord had said, that the information asked for was already before the Committee, or that it was intended to be submitted to them, then he (Mr. Hume) would say, that the Motion ought not to be persevered in at present. The information called for by his hon. friend was such as ought to be laid before the House from time to time; and every bank—much more a bank possessing so extensive a monopoly as that of the Bank of England—ought to be required to lay before Parliament, every six months, a similar account of its proceedings and condition. If he was lo understand that those papers would be included in the Report of the Committee, he would not object to the Motion's being withdrawn for the present.

Mr. Warburton

suggested, that the Motion should be withdrawn for the present, with the understanding that the production of the papers would not be refused, should the hon. Member (Mr. Easthope) feel it necessary to ask again for them.

Sir Henry Parnell

, as a member of the Committee, expressed great doubts that it would be possible for the Committee to get through so much of the inquiry as would enable them to draw up a Report before the end of the present Session. He therefore was of opinion that the papers ought to be produced. A report had gone abroad, that the Government meant to renew the Bank Charter, which ought to be confirmed or contradicted as speedily as possible.

Mr. Irving

said, that the inquiry, as far as it had proceeded, was prosecuted in as judicious a manner as, under the circum- stances, could be expected. He believed that when the evidence came to be laid upon the Table of the House, the public would pronounce a similar opinion. With regard to the rum-ours and statements that had been published in the newspapers, much had been circulated that was erroneous; and the characters of these rum-ours and statements was, he thought, a compliment to every member of the Committee, for it showed that none of them had disclosed what had been laid before them. If the hon. Gentleman who brought forward the Motion conceived that the information to which he had adverted had not been called for in the course of inquiry, he would say that he was mistaken. He felt anxious to reply to some parts of the hon. Gentleman's speech, but the peculiar situation in which he stood must prevent him from doing so. He concurred with him in thinking that no subject ever came before the House that more immediately concerned the interests of the country than the one in question. The labours of the Committee would, he trusted, afford to the mercantile world satisfactory proof that they had pursued an equal and regular course, in order to procure the best information. Of what the Government might do, he was ignorant, but he understood that the public at large had no reason to apprehend any evil consequences from the inquiry.

Mr. Courtenay

entirely concurred in what had been said by the noble Lord, the Chancellor of the Exchequer. He wished however to correct one remark of the hon. Member. He begged to ask the hon. Gentleman who had brought forward the Motion, whether he were right in understanding him to say, that the late Government had intimated a determination not to renew the Bank Charter?

Mr. Easthope

said, that the words he had cited were used by Lord Goderich, who was a member of the late Administration.

Mr. Courtenay

apprehended that the hon. Gentleman laboured under a mistake. Lord Goderich was a member of the present, and not of the late Administration. He could undertake to say, that the Government of the Duke of Wellington came to no such determination as the hon. Member alluded to.

Mr. Alderman Thompson

had no doubt that, whatever might be the decision of the House respecting the Renewal of the Charter, the Bank of England would most readily acquiesce in it. With regard to the present Motion, he considered it ill-timed.

Sir Matthew White Ridley

was of opinion, that it would be prejudicial to the public interests to grant the desired information in the present stage of the inquiry. He hoped his hon. friend would rest satisfied with having made known his intentions, and abstain from pressing his Motion.

Mr. Easthope

, in reply, defended his Motion, and stated that it was to Lord Liverpool's Government he had referred on the point of refusing to renew the Charter. The words of Lord Goderich's communication were, that "there was no intention of extending the present period of their chartered rights.*" After the statement of the noble Lord he should not press his Motion to a division.

Mr. Courtenay

did not affirm or deny anything about what Lord Goderich might have said, but only spoke of the late Government. He would observe, however, that he believed that Lord Goderich's speech, which had been referred to, alluded to a proposal made by the Bank, to give them at that period, a continuation of their Charter for ten years; but as the matter had nothing to do with his argument he had not entered into it.

Mr. Easthope

would again say, that Lord Goderich's declaration was, that Government had decided not to recommend to Parliament the Renewal of the Bank Charter.

Motion negatived without a division.