JOINT-STOCK BANKS.

HC Deb 06 February 1837 vol 36 cc155-202

The Chancellor of the Exchequer

, in rising to move the renewal of the Committee on Joint-stock Banks, said, it would be in the recollection of the House that last Session, on the motion of his hon. Friend behind him, the Member for the Tower Hamlets, a select Committee was appointed to consider the state of the law in relation to Joint-stock Banks. That Committee was generally assented to, and although on the part of the hon. Member for Middlesex, there appeared a disposition to extend its inquiries further than was contemplated by the hon. Member for the Tower Hamlets, there was evinced no desire to resist the inquiry itself. The Committee which was appointed in May, proceeded to apply itself with great industry to the points referred to it by the House. It sat till the close of the Session, and examined vast numbers of witnesses, on whose testimony it was no part of his present business to comment; but the whole of it was before the House. It then became a question with the Committee whether it would be wise or prudent to legislate at that period. The subject was fully considered by the Committee, and the advantages and disadvantages of immediately legislating occupied their attention during two days' deliberation. The opinion of the Committee on the point was stated in the report, to the effect, that they saw so many difficulties in the way of immediate legislation, and so many objections to imperfect legislation, that they preferred recommending that the Committee should be revived in the course of the present Session, and that, in the meanwhile, their report should be circulated in the country. It was in obedience to that recommendation that he now begged to propose the revival of that Committee. He trusted that those gentlemen whose cooperation he had benefitted by in the Committee, that those gentlemen who had acquiesced in the appointment of that Committee, had since the 12th of May seen no circumstance which could induce them to withhold their support from him on the present occasion. He trusted that the experience which they had had in the interval between the close of the last Session and the present period, was not such as to indispose them from at least renewing the Committee. As the proposition he was about to make was for the continuation of the Committee, it would be highly inexpedient on his part to presume any anticipation of what might be the opinion of the Committee on the subject, but he should be greatly misconceived if it were considered that his motion was one made in hostility to the principle of Joint- stock Banks, or the established system. It was well understood that the Act 2 Geo. 4th, was rather considered, when it was passed, as an experiment, and it was obviously necessary that time should elapse before it would be possible to form a deliberate opinion on the subject. Now, however, a great many facts were before them which would enable them to judge whether the practice under the Act in question, and the Act itself, required amendment. The very large majority of witnesses examined on the part of the banks, while maintaining the decided usefulness of a well-understood system of Joint-stock Banking, united in the opinion that the law required amendment, for the protection of the banks themselves, of the people, and for the general protection of the credit and currency of the country. [Hear.] It had been suggested that the Committee should extend the range of its inquiries; but he would appeal from the Gentlemen who cheered to the Gentlemen on both sides of the House who had been on the Committee, and ask them whether the subjects before them had not been in themselves sufficiently complicated and difficult without embarrassing themselves with new and still more intricate and delicate subjects for consideration. It was out of the question to require the Committee to embark upon the whole question of the currency, or the renewal of the Bank of England charter in connection with Joint-stock Banks. He did not mean to say, that it would have been possible to carry on the investigation before the Committee without looking into the effect of the Bank of England circulation in relation to these banks; this sort of incidental inquiry was indispensable to the development of the subject; but to open the whole question of the currency and the Bank Charter in that Committee would only tend in a very great degree to embarrass its proceedings. The House would recollect, that in the last Session his language on this subject had been at all times that of caution and warning; that he had said nothing in any part of the discussions of last year that in the least degree tended to give an exaggerated hope of national prosperity or increased enterprise; indeed, an hon. Member had almost reproved him for his extreme caution in this respect. But, at the same time, the language of caution need not be the language of despair, and he was as little dis- posed to speak despairingly now as then; but in the same spirit of caution he would now entreat hon. Members who might be disposed to extend the circle of the Committee's inquiries to beware lest they thus inflicted a permanent injury on the best interests of the country. He should reserve to himself the full power of addressing himself to the subject of any amendment which might be made upon his motion. It was his intention to propose the extension of the inquiry of the Committee to Ireland. Several circumstances in connexion with the circulating medium in that country, which had taken place in the course of the last six months had been such as greatly to excite public attention. Whatever amendments hon. Gentlemen might be disposed to move to extend the inquiry, with a view to improve the law respecting banking, he begged to say he was himself prepared to extend it to Ireland; and in order to give the Committee the assistance of some Irish Members in the course of its deliberations, he proposed to add to the Committee of last Session four Irish Representatives; two taken from one side, and two from the other side of the House. It was perhaps absurd in him to talk of the two sides of the House in relation to a subject of this nature; for he was bound to say, that in the inquiry of last year all party feeling was completely lost sight of, as it surely ought to be in a question in which were involved interests on such immense magnitude as the banking interests of this country—interests on which the commercial credit of the country was entirely dependent. When such interests were at stake all might be satisfied that no party feelings or differences would be allowed to interfere with the due exercise of the best judgment which each individual Member of the Committee could bring to bear on the subject. He should conclude with moving, in the terms of the motion of last year, that a Select Committee be appointed to inquire into the operation of the acts for promoting the establishment of Joint-stock Banks under certain restrictions in Great Britain and Ireland, and to determine whether it was expedient to make any alteration in the provisions of those Acts.

Mr. Hume

was fully aware of the importance of the present question, and he begged the indulgence of the House while he made a few observations in relation to it. The right hon. Gentleman had stated that the Committee of last year was appointed with no hostile view towards Joint-stock Banks, and he was not disposed to say it was; but he believed the Joint-stock Banks entertained a different opinion. He would set out by declaring it his conviction that no banking system could be perfectly safe, unless founded on the principle that bank-notes should be changeable for bullion or coin on demand. That was the very essence of the security which the commercial interests were entitled to. Unfortunately the late Chancellor of the Exchequer, in granting the last Bank Charter, consented to the introduction of a clause in which that essential principle was departed from. He took the sense of the House on the Clause to which he was referring, and in doing so told them that it was fraught with evil; that sooner or later even those authorities of the Bank who recommended it to him would regret its being embodied in their charter; that it would most certainly lead to such a surplus of paper, and consequently to such accommodation and speculation, as must eventually endanger the credit of the country. This was the opinion he had expressed in the debates on the Bank Charter, and he would now proceed to vindicate the course he took last Session, when he proposed to extend the inquiry, unless it were apparent that it was proposed for some very different purpose than the one avowed; but here was a question mooted of deep public interest, and he expected that his motion for the omission of the clause he had alluded to would have received some attention from the Committee. He was sorry, on reading the evidence, to find that not a single question was put to ascertain what was the effect of the paper of the Joint-stock Banks being made payable in the country in Bank of England notes. If such a question had been put, the inquiry was certainly not pursued. He had no hesitation in saying he regretted now that his amendment was not carried, and also the manner in which the present inquiry was carried on. He agreed with the right hon. Gentleman that this was a critical period—he agreed with him that mischief or good would result according as this inquiry was proceeded with—but he must press for inquiry when he saw enactments on Banking which he believed to be fraught with the sacrifice of millions of capital. He told Mr. Canning and Mr. Huskisson that they were mistaken as to the sources of the mischief when they were attributing the panic of 1825 to the country banks, without any proof that it was so. He observed, on that occasion, that the whole issue of the country Banks could not possibly produce the least effect on the circulation. The House, he would contend, legislated on wrong information; and let any commercial man look back to the withdrawal of the small notes from circulation, and say whether that had not been productive of the most serious and lamentable inconvenience. The right hon. Gentleman told them that an inquiry into the Bank Charter would be an incidental inquiry; his proposition, however, was not to open the question of the Bank Charter, but only to inquire with a view to ascertain what had been the discretion exercised by the Bank of England. He felt bound to say that he knew no individuals who were more anxious than were some of the official gentlemen connected with the Bank of England to do justice and see the duties of their office efficiently performed, yet he had no hesitation in also declaring that he did not think their proceedings had manifested a knowledge of the principles on which they ought to act, and, therefore, whatever changes had taken place in the currency in the last few years had been owing to the management of the Bank of England, and not to that of the Joint-stock Banks. If he could make that out he hoped the House would go with him in adopting his proposition, which was to extend the inquiry to Banks in general, and to the causes of those changes in the currency which had occurred during the last two years. His object was to show what ought to be the principle of Banking; to show what ought to be the system here and what had been the results from the system adopted here and elsewhere. The right hon. the Chancellor of the Exchequer proposed that the Bank Charter should be the subject of an incidental inquiry; he would have it the subject of their principal inquiry. He was prepared to show that if evils had resulted from a surplus currency, they were not produced by the Joint-stock Banks, but by the Bank of England. If he should show that the evils of speculation had arisen which had led to a sudden restriction of the currency—if he should show that great changes had taken place which had thrown an artificial value of five, ten, or more per cent. on some particular com- modities, and in a few months had depressed them to an equal amount—if he should show that anything had occurred which had interfered with the public credit, and placed it, though it had always heretofore been as high, below the credit of a neighbouring country—if he should show that the interest paid on Exchequer Bills in England was higher than the interest paid on Exchequer Bills in France—if he should show that within the last twelve months the credit of England, as regarded Exchequer Bills and the Funds, was higher than that of France, whereas now it was deteriorated—if he should show the existence of such a state of things, he would ask the House was not that a fit subject for inquiry? The right hon. the Chancellor of the Exchequer said nothing had occurred since the last meeting of Parliament to throw doubt on the utility of the inquiry. Certainly nothing had occurred. His object was, to urge inquiry, not to limit it. When he saw an attempt made to attribute an evil to Joint-Stock Banks of which they were comparatively innocent—he admitted they were not altogether so—he considered himself bound to endeavour to fix it on those whom he considered the real offenders. In characterising the course which had been taken as an offence he did not mean to attribute anything worse than a want of caution and the violation of an important principle. The right hon. the Chancellor of the Exchequer said, they ought to proceed with great caution in an inquiry of this description, inasmuch as the interest of every man in the community was more or less affected by it; he agreed so far with the right hon. Gentleman, and on that very ground would ask the House to go along with him in his proposition. He begged to divert the attention of the House to what must have attracted considerable notice during the inquiry of the Committee of 1819; he referred to a portion of the evidence of Mr. Alexander Baring, who was considered one of the best of the authorities examined by the Committee. A question was asked of him, the object of which was to ascertain whether greater changes in the currency had taken place in France or in England. Everybody knew what changes had taken place in this country from 1797 till the period when the right hon. Baronet opposite (Sir R. Peel) introduced his Currency Bill. He admitted that one of the greatest benefits which had been conferred on this country was that Act of the right hon. Baronet by which he placed the currency on its present footing. Though the sufferings were great through which we arrived at a sound principle, those sufferings could not be fairly attributed to the measure of the right hon. Baronet, but were the result rather of the previous misgovernment. It appeared from the evidence that there was a paper currency in France, but none below the value of 20l. He believed it would be found he had stated the value correctly. The circulation in France was essentially metallic. The paper was issued by the Bank according to the demand, and it was never pushed, as it was in this country, for the purpose of making a profit by the issue, or for the encouragement of speculation. It discounted at all times at four per cent., and was a Commercial Bank. The reduction of the rate of interest by the Bank of England had been the cause of much of the evil of which we had to complain. The reduction of the rate of interest, and the amount of surplus money possessed by the Bank had increased speculation. The Bank of England currency had been chiefly paper. Let any one draw his conclusion from the results of the system in France, as compared with the results of the system in this country—let him make that comparison, and reconcile his mind to our system if he could. France had stood the shock of two invasions— she had to pay immense sums to the allies in the course of a few years—she had to bear up against the importation of corn to an immense amount, in consequence of the failure of her corn crops—she also suffered at another time from the failure of her wine crops, which were equally important to the industry of that country. Surely this would have been enough under other circumstances to have deranged her whole monetary system. Notwithstanding, however, that she had had these large sums to pay, no such changes in her currency, no panics, had occurred in that country as had taken place in England over and over again. The Bank of England availed itself of its assets to derive profits, and in doing so occasioned that excess in the currency which led to a restriction, and, the restriction being suddenly felt, a panic took place. By such management as was seen in 1825, as well as at the present period, the whole com- mercial community was, as it were paralysed. These were periods of the utmost danger; no man knew what to do, and no man knew what might be the result. He was anxious that they should look, not to Joint-stock Banks under the idea that they had created the difficulty, but that they should inquire into the proceedings of the Bank of England, which he believed in his conscience had occasioned it. He would have them ask themselves how it was that a wealthy country like England should be in a tenfold degree subject to these violent changes, while France, while Holland, while every other country, except America, remained undisturbed; and America had followed in a degree the steps of England, in consequence of the facilities which existed of her getting money from this country; she had suffered, but from the information he had obtained from an American paper he had received this morning, he believed her sufferings were entirely at an end. The great advantage which the commercial world enjoyed in America was, that they were enabled to borrow money at three per cent., while, if it were to save the first houses in London, no money could be borrowed here below the rate of five per cent. for a period extending beyond three months. He sincerely wished, that the Chancellor of the Exchequer would take a lesson from their mode of proceeding in America, and place the merchants of England in a similar situation to that of which the former enjoyed the benefit. He was desirous that the Committee should extend their inquiries with a view to ascertain the causes which had led to this state of things in England. For his part, he would state without hesitation what appeared to him to be the cause. He dated the commencement of the present panic to the 15,000,000l. loan which was raised in this country in 1834. It would be recollected what was the situation of the country when the vote for the West-India loan was passed. It was upon the circumstances which arose immediately subsequent to that vote that he founded his complaint against the discretion conceded to the Bank of England. On the 30th of June the Bank of England had a circulation of 29,000,000l., and the circulation of the joint-stock banks, according to the report, amounted to 10,939,000l. The circulation of joint-stock banks was in reality considerably greater than the report alleged. For the year ending the 28th of December, 1833, the aggregate of the issues of the joint-stock banks, as stated in the report, was 10,152,000l.; and for the year terminating on the 25th of June, 1836, it was alleged to have amounted to 12,302,000l., showing an increase of between 1,000,000l. and 1,500,000l. But it is worthy of observation that the periods at which the amounts were selected were the months of December, March, June, and September, within one week of the times at which the dividends were paid? and the issues of the banks were therefore taken at those periods of the year when the amount of their issues was necessarily the smallest. In consequence, therefore, of the dividends not being taken into account, there was never less than 4,500,000l., sometimes 5,000,000l., to be added—a sum which was uniformly issued during the week after the estimates were taken, for the purpose of paying the dividends. The Committee had in no part of their report stated, or in their evidence elicited this important fact, without a knowledge of which it was impossible to form a correct judgment on the subject. Having guarded the House against this error, and shown that the amount of the joint-stock-bank issues were nearly 1,500,000l. greater than the report stated, he would revert to the subject of the conduct of the Bank of England in relation to the West-India-Loan Fund. A paper which was laid on the table of the House by the Chancellor of the Exchequer at the period to which he referred contained these words:—"It is desirable to effect this loan with as little disturbance to the currency of the country as possible." For which purpose, in the preamble of the 3d and 4th of William 4th were inserted these words:—"The payments of this compensation to be made out of the instalments as they become due." He had before him a list of the awards made by the Commissioners for Claims to Compensations; and he had also a list of the payments, in making which the regulation properly introduced into the preamble of the Bill had been departed from. On the 16th of August, when the last five per cent. was paid, the amount of payment was 4,500,000l., and the amount of award 4,700,000l. But although there had been a great regularity of payment, there had been no regularity of distribution, and hence the panic which followed. This he would endeavour to explain to the House. The Bank Directors had commu- nicated to the Chancellor of the Exchequer their resolution not to give any accommodation; and they were perfectly right, for by restraining the disposition to make advances they did much to prevent irregularity. But the consequence of this was, that the contractors screwed down the Government to the utmost; they felt that the Government had no choice but that of treating with them, and therefore they drove a harder bargain with the Minister, by which naturally the public suffered. When, however, this damage to the public had been effected, then, and not till then, but just then, within one week namely, a notice was issued by the Bank, signifying its readiness to make advances on all good securities, at the rate of 3¼ per cent. Here was a temptation, and one difficult of resistance to the holders of omnium, to come forward and pocket ¼ per cent. But this was not all; it threw the whole sum of money into the coffers of the Bank, although the awards had not been made, they actually getting at one time, 11,000,000l. As the Chancellor of the Exchequer got the money, he paid it into the Bank; the Bank began to feel the redundancy of its capital; it began to feel that appetite for lending which was so natural to men having a surplus at their disposal, and accordingly loans were most readily granted. But what was the consequence? Why, that the same money was actually paying, at the one and the same moment, two distinct interests. No bank was ever known to have had such assets; at one time they had amounted to 20,000,000l.; an increase certainly, as could be proved by figures, on what they had previously possessed, but then one half of it was a loan of public money. When the notice of the willingness of the Bank to discount was made publicly known, there were also certain limitations announced, beyond the pale of which its assistance was not to be expected. These limits, however, did not fix any maximum boundary to loans; no, they merely fixed the minimum, but of a fixation of maximum they bad no idea. He who wanted a sum less than 2,000l. could not get it; but he who wanted a sum above that, even were it half a million, could obtain it. This, of course, induced private bankers to make deposits of stock, or any other securities, with the Bank, and get advances on them, for the Bank discounted at 2½ per cent., and they, the private bankers, at five per cent. With the advances thus made, with this lucrative getting into debt, the private bankers furnished the means of starting railroads, and other speculations, which many regarded with so much apprehension. But, without attempting to determine whether or not those apprehensions were just, one thing at least might be asserted—the stimulus they had received was produced, not by the expenditure of private capital, but by the mal-administration of public funds. Up to that time, the Exchequer had been accustomed to draw on the Bank, and the money had been going out—that is, the Bank was placing itself under the obligation of taking up, if called on in 1833, 10,000,000l.; in 1834, 8,000,000l.; and in 1835, 6,000,000l. thus making a reduction of 4,000,000l. But on the 30th of June, of that year, they had 29,369,000l. out in circulation; for, of course, the notes which were out must be paid in metal, if sent in. When he had notes of the Bank of England, they became his debtors for the amount of those notes, and those notes were to him, as against them, what his checks were on his private banker. There was certainly one species of deposits which was not likely to undergo conversion often, and that was the species which represented trust-monies; but then the amount of trust-monies was never very large, and, as it varied but little, might be treated after the fashion of mathematicians, when dealing with what they termed constant quantities, and be disregarded. During the whole of this period, the exchange had been adverse to this country, yet in August their liabilities had increased to 36,600,000l., and in the following January, the aggregate of all demands against the Bank, amounted to 36,421,000l. So little judgment, so little discretion, had they shown, that, although constantly losing money, they had increased their circulation to an excess of 7,000,000l. above that of the previous June. What was the consequence of all this? Why, that panic which in August last had so extensively prevailed, and which, even at the present moment, had not wholly subsided. In August, a disinclination to deal with American bills was manifested; then there followed a reluctance to discount generally, without reference to the class of bills. This feeling, of course, did not remain confined within the walls of the Bank of England, but was disseminated throughout the coun- try. If the Bank would not discount for private bankers, private bankers could not discount for their customers, and thus the whole country felt the mischief of the unwillingness, or the inability. Hence the present restriction of discount, which was not confined to Joint-stock Banks only, but extended to banks of all kinds, no matter how the capital by which they were supported was contributed. The Joint-stock Banks would bear comparison with the Bank of England; for what was the fact? Their liabilities in 1835 were, in round numbers, 10,000,000l., the present; excess above that sum 1,300,000l.; while the excess on the part of the Bank of England was 7,000,000l. And what was the amount of the difficulties under which the Joint-stock Banks were labouring?—800,000l. only. If, then, the culpable excess of circulation on the part of the Joint-stock Banks was only 800,000l., the danger produced by this was nothing compared to that caused by the Bank. In January,1837, the liabilities amounted to 31,776,000l., which was 2,500,000l. more than the sum to which they had reduced them in 1835; but if there were a diminution of obligations to the amount of 2,000,000l. and an increase of circulation to 2,500,000l., it was not possible that gold could remain. The bullion had been reduced from six millions and a quarter to four millions and an eighth. There had been a diminution in the bullion to the amount of two millions, and an increase of two millions in the circulation. What did the Chancellor of the Exchequer say to this? Why, his only answer was this—that there was a complaint from every part of the country that the Joint-stock Banks had not capital; that they ought to have paid up their capital; and not having done so, they, therefore, were not in a condition to meet their issues. What, he (Mr. Hume) asked, was the condition of the Bank of England? Why, they had not one shilling of capital; it was all lent to the Government. This was a matter which the Chancellor of the Exchequer was bound to look to. He could tell the right hon. Gentleman, that if he permitted the present system to go on, unless that system was changed, very considerable danger must follow, and they would have to interfere with the public credit. It was on this account that he considered the sound policy was at once to look the danger in the face. Last year the hon. Member for the Tower Hamlets referred to this subject, and alluded to the difficulties likely to occur to their state of credit. The right hon. Chancellor of the Exchequer was quite right in saying now, that he had at the period referred to expressed a doubt as to the state of credit leading to danger and difficulties. His (Mr. Hume's) answer was, that there would be no danger and no difficulty if the Bank had acted as it ought to have done. It had been said, in answer to the hon. Member for the Tower Hamlets, that the best security for the public was the discretion of the able and honest men who acted as the managers of the Bank. Now, he should wish to know how the Bank allowed two and a half and three per cent. on deposits, while upon Exchequer Bills there was only two and a quarter. Public credit had been injured. It was, he considered, the duty of the Chancellor of the Exchequer to have prevented this, knowing, as he must have done, the continual drain of gold that was going on. When the Chancellor of the Exchequer found that Exchequer Bills were at a discount, they ought to have been instantly raised instead of allowing the matter to proceed as it had done. By not doing so, the Chancellor of the Exchequer had to do that doubly which there would have been no necessity for if done at the proper time. What situation, then, did they come to? The Chancellor of the Exchequer paid 228,000l. discount for the loan, and the consequence was, the money was paid into the Bank, which they lent; the Chancellor of the Exchequer then paid 450,000l. interest: thus, upon both transactions, there was a loss of 700,000l. to the public. He had already shown that the present difficulties were to be attributed to the excess of currency and not to Joint-stock Banks, and that that excess was to be attributed to the Bank of England. The House, under these circumstances, ought not, he considered, to be led away by any inquiry into the state of Joint-stock Banks. There had been no failure of Joint-stock Banks. As to the Bank which had been assisted by the Bank of England, he considered the latter establishment would lose by giving that assistance. The Bank of England, he had no hesitation in saying, had endangered the public, and their issue of paper in that matter, would be yet found to be a drain on the public. It would, he thought, be much better to have let the Joint-stock Bank take the consequences, than for the Bank of England to run any risk. Now, he observed, there was no inquiry as to private Banks. Had no private Bank failed? Why limit the inquiry when the House entered in to it? He felt no hesitation in saying, that he had made out a case of complaint against the Bank of England. He had shown that there had been a loss to the public in the dealings on the Exchequer Bills. They paid more as interest now than was paid in France, a thing that never before occurred in the history of England. Did they want capital in England? No. Did they want enterprise? Did they want prudence in the management of their own affairs? No; but there was a body over whom they had no control, that raised and depressed at their will the value of currency, and of course of every commodity in the country. He wanted to have, then, an extended inquiry, to ascertain whether or not such a state of things was for the advantage of the public. No man could be more happy than he should be, if it were proved that his opinions were erroneous on this subject. As to the facts upon which his opinions were founded, they could not be disproved, because they were in the Returns then before the House. He was quite sure that the public who were so deeply interested in this subject, would not be satisfied unless they looked at existing evils as they really were. They should front the danger—they ought not to leave it behind them; to do otherwise was not the way to pilot the vessel in safety. If the Chancellor of the Exchequer would take his advice he would ascertain what were the real causes of the difficulties under which they had now been labouring for upwards of a year. He intended to move, as an amendment, that there be a general inquiry into the state of banking, and the causes for the changes in the circulation for the last two years. It had been suggested to him that the inquiry ought to be extended to December, 1833, as the documents before them referred to three years instead of two. He, therefore, should alter his amendment, so that the inquiry into the state of banking would be from December, 1833. He meant that they ought to go into a general inquiry as to the state of banking in Great Britain and Ireland, because he could not understand, if a system of banking answered well in one country, why they were not to have the benefit of that experience in another. Having used the word "currency" in his amendment as originally written, he wished to say, lest there might be a mistake on the point, that it was not to the currency but to the circulating medium, that he wished the inquiry to be directed. The hon. Member concluded by moving, that there be an inquiry into the state of banking and the causes for the changes of the circulation since 1833.

Mr. W. Williams

rose to second the motion. It must be evident to every one in the House that an inquiry was necessary into the proceedings of joint-stock banks, for at present the House had no information whatever. But he hoped the Chancellor of the Exchequer would not object to this amendment; for although the joint-stock banks had contributed towards producing the direful distress which the manufacturing, trading, and commercial classes were suffering, yet the part they had had in it was very small compared with the Bank of England. He considered the imprudent conduct of the Bank of England, in the management of its issues, the entire cause of the difficulties which ex-existed. The joint-stock and country bankers had undoubtedly extended their issues, but it was in consequence of the way being led by the Bank of England. He had a return showing the state of the circulation of the Bank of England for three or four years, and he thought such a want of management, and such a reckless disregard of the interests of the country, had never been shown by any public body in-trusted with the management of its financial resources. On the 28th of December, 1833, the issues of the Bank were 32,600,000l., and their stock was 10,000,200l. On the 28th of March, 1835, being 15 months afterwards, their issues were 28,124,000l., being a reduction in those 15 months of not less than four millions and a half; going on to the 26th of December in the same year, a period of nine mouths, there was an increased issue to the extent of 8,800,000l., making an increase of considerably more than one-fourth of their circulation. This was produced by the cause mentioned by the hon. Member for Middlesex—by the avarice of the Bank, in getting a small profit on the interest offered by the Chancellor of the Exchequer, and no doubt a large proportion of the increase of 8,800,000l. was produced by that. But what was the consequence to the country? An advance in prices, until, in September last, the price of every article of import was raised from 40 to 100 per cent. In the article of cotton, there was an advance of 80 per cent. When we had to pay high prices for the material which came to be manufactured here, foreign nations would never give us a corresponding price for the manufactured article. The consequence was a falling-off of our trade. In January last the circulation of the Bank of England was 31,000,000l., and they had 4,000,000l., to pay that amount, being very little more than half a crown in the pound, to pay their engagements. He asked the right hon. Gentleman was any corporation to be permitted to produce so much mischief to the country and to every branch in it? Why were they all to be in such a state of alarm and uncertainty? The right hon. Gentleman told them indeed that he saw no ground for despondency. He (Mr. Williams) should like to know how the Bank issues were to be regulated—how, by reducing the circulation to such an extent, they were to bring the prices of all com. modifies down, so as to turn the exchange in their favour? He asked the hon. Gentleman if he did not see any ground for despondency in looking to the consequences of such a state of things? The distress, in his opinion, was only in its commencement, if the right hon. Gentleman did not give to the question proper consideration. What had been done in 1824 and 1825? They all recollected the effects then produced by the Bank of England upon the interests of the country. He remembered to have heard it stated by a Minister of the Crown in that House, that this great commercial and manufacturing country "was brought within eight and forty hours of bankruptcy." What was the answer of their leading men? One of their directors stated before the Committee, he understood, that at last they had discovered the safe principle upon which to regulate their issues. They had discovered the proper mode of regulating them, and that if they kept gold in their coffers one third of the amount of their issues, they would be always safe. He admitted that they would; and the Bank went on for some time upon that principle. But what was the condition of the Bank of England now? Instead of having the one-third of the amount of their issues in gold—they had in gold only about the one-seventh or one-eighth of their issues. He asked, was that a state of things that ought to be allowed to continue? Ought a great country like this to be thus drove about from pillar to post, and nothing fixed, regulated, or certain? He had watched the proceedings of the Bank of England and its issues for the last ten years, and he took upon himself to say this, that the Bank had been so changeable—so much up and down in their issues, that no man could engage in any commercial or trading transaction for six or nine months and be able to tell what the result would be—whether it would be allowed to be advantageous, whether it would bring to him a large profit, or be attended with very great loss. In a country like this, some certain principle ought to be laid down. The currency was the measure of all property. The prosperity of this and every other country depended much upon this, that they should keep the currency in such a state as it would not vary, as it had been continually varying, under the management of the Bank of England. He hoped the House would institute a thorough and searching inquiry into the causes of the present evils, and whether they had been produced by the management of the circulating medium. Such an inquiry ought at once to be instituted; its result, he trusted, would be to have a regular currency established.

Mr. Robinson

was desirous to take that opportunity of offering a few remarks on the question before them. The proposition of the Chancellor of the Exchequer was for the revival of the Committee of last year, which had been appointed on the motion of the hon. Member for the Tower Hamlets. The hon. Member for Middlesex proposed, not merely that the inquiry should be extended to Ireland, but that it should embrace the entire monetary system of the country. Now the House had repeatedly refused to grant an inquiry into the general system of the currency of the country. He did not mean to discuss whether the House had acted wisely or not in refusing that inquiry. He would not then say whether the currency was in a satisfactory state or not, or whether it might not be improved; but he would state that if an inquiry was to be granted it ought to be granted directly to that effect, and not be ingrafted on a motion of the nature of that before the House. But even though a direct motion was brought forward, he would still object that such an inquiry should be confided to a Committee so constituted as the present. He freely admitted that the present Committee were perfectly competent to enter upon the question as limited by the motion of the Chancellor of the Exchequer; but he must deny that a Committee so constituted was competent to enter into the whole question of the currency and monetary system of the country. If the Committee of last year were revived they might expect that the result of the inquiry and the report would, during the present Session, lead to some system of legislation with respect to Joint-stock Banks; but if the proposal of the hon. Member for Middlesex was carried into effect, and the Committee pursued the more extensive inquiry, they would not be able to come to any satisfactory decision, and the Session would pass away without any advantage being derived from their inquiry. He was enabled to state, with respect to Joint-stock Banks, that some legislation was necessary on the subject. He differed from the opinion of the hon. Member for Middlesex that Joint-stock Banks could with safety be left to themselves. He certainly admitted that it might be safe to leave Joint-stock Banks of deposit to their own system of operation; but with respect to Joint-stock Banks of issue, they were so mixed up with the general concerns of the country, and so intimately connected with its commercial affairs, that it was the duty of the Legislature to deal with that branch of the subject. He would not say a word with respect to the conduct of the Bank of England, or how far the conduct of the Directors of the Bank of England might have contributed to the recent derangement of the commercial interests of the country. His hon. Friend the Governor of the Bank of England was present, and if he felt disposed to offer any remarks upon the subject he would listen to them with great pleasure. He did not want to enter into any vindication of the conduct of the Bank of England but, as a commercial man, he had particular opportunities of knowing that during the late crisis the commercial interests of the country were materially indebted to the Bank, and the public inconvenience would have been materially aggravated but for the conduct of the Directors of the Bank of England on that occasion. He was at a loss to know how far the Bank of England was chargeable for any of the inconvenience of a metallic currency. No doubt they might sometimes be chargeable with too much enlarging, or too much restricting, the currency, because being the largest establishment in the country, all the other banking establishments looked to its operations to guide them how to act. The hon. Member for Middlesex had kept out of view the derangement that might result from the extension of the currency without limitation. Another great bank —the London and Westminster Bank-had lent to a bank in Manchester 150,000l., and the bank at Manchester was compelled to have recourse to the Bank of England to prevent it from stopping payment. Private and Joint-stock Banks went on increasing and limiting their issues by the example of the Bank of England; and so long as they had a metallic currency co-existing with the circulating medium, so long they would be subject to this fluctuation. He would not go into the general question, but if the House were disposed to consent to the revival of the Committee of last year he certainly was of opinion that the inquiry should be limited to the proposition of the Chancellor of the Exchequer. The hon. Member for Middlesex had gone at great length into the question. He was not disposed to follow the hon. Member throughout all the arguments he had urged, but he could not avoid noticing some fallacies which had been made use of by the hon. Member with respect to the commercial interests of this country and of France. The hon. Member for Middlesex had said that the public credit of this country had always held art eminent position, beyond that of any other country, yet that our credit had been impaired, whilst the credit of France had maintained its ground. Now this admitted of a very simple solution. This country was the general mart of all the commerce of the world, and a large portion of the commerce of Europe and America centered here. There could be no doubt that the late derangement of commercial interests in America had contributed to the difficulties that had been felt here. France had remained in a great degree free from any participation in those circumstances, and that accounted for this country having suffered some inconvenience from which France remained free. Without entering into the merits or demerits of the Bill of 1819 be quite agreed with the hon. Member for Middlesex, that it ought to be an inquiry with the Committee how far it was advisable to have followed up that measure two years afterwards, by the suppression of the one and two pound notes, and how far it was advisable that this Bill should be repealed. He thought that the fact that one and two pound notes were circulating in Scotland and Ireland was a sufficient ground to make that part of the subject enter into their inquiry. He would not go into any discussion of the advantage of allowing the notes of the Bank of England of 5l. and upwards a legal tender instead of gold, but he was satisfied that the advantage of that measure had been fully proved during the late panic, and whatever difference of opinion might have existed with respect to the renewal of the Bank charter, he certainly thought that there could be no difference with respect to the advantage of making the notes of the Bank of England a legal tender instead of gold. In conclusion, he had no objection to the limited inquiry. He considered it would be advantageous to inquire into the whole system of Joint-stock Banks, and to determine how far the Legislature should interfere on that subject; but he was decidedly averse to entering upon the more extensive inquiry asked for by the hon. Member for Middlesex, and which could only have the effect of increasing existing difficulties and creating alarm in the country.

Mr. Gisborne

said, that as between the limited inquiry proposed by the right hon. Gentleman the Chancellor of the Exchequer, and the more extended inquiry proposed by his hon. Friend the Member for Middlesex, he could not for a moment entertain any doubt. It seemed that the Chancellor of the Exchequer, not satisfied with the limits proposed by the inquiry, wished them to be still further contracted, for he said that they had no right to inquire into the proceedings of banks which were not banks of issue merely on the ground of Joint-stock Banks being Banks of issue. He would maintain the right of the House to institute inquiries with respect to the proceedings of all banks, and he could state that many of the most important Joint-stock Banks were not banks of issue. If this were to be an inquiry he was ready to maintain that it was even more important that those banks should be inquired into than those which were banks of issue. This reason involved in his mind in the strongest possible degree the propriety of including the Bank of England in the inquiry. With respect to banks which were not banks of issue the Bank of England was immediately interested; and it would, therefore, be an absurd proceeding to inquire into the one set of banks without inquiring into the other. This would be proved by referring to the answer given by Mr. Gibbons (1,059) before the Committee, in order to shew the connexion between the Bank of England and those banks which were not banks of issue. He said that inducements were held out by the Bank of England to Joint-stock Banks which were not banks of issue. He wanted to know whether this was not an operation as dangerous and as necessary to be inquired into as any that could arise out of the issue of notes? But this was not the only mode in which the Bank of England was connected with Joint-stock Banks. The Bank cast a particular stigma on all those banks that did not enter into a bargain with them. Not only would the Bank of England not discount their bills for them, but they would not even discount bills for an independent customer, if such bills bore the indorsement of those banks. He would ask the House, with this intimate connexion between these banks, whether they would agree to the limitations proposed by the Chancellor of the Exchequer, or the still stricter limitations suggested by the hon. Gentleman the Member for Worcester (Mr. Robinson)? He had resisted the renewal of the Bank charter. He had seen periodically for many years the Bank getting into troubles and difficulties, and he ventured at the time upon a prediction as to what would be its future fate. He had not waited long for the verification of that prediction. The reason was, that the Bank had placed on its shoulders that for which they were totally incompetent. The Bank of England, being desirous of securing their monopoly, and of keeping up an adulterous connexion with the Government, continued to bear the burthen. The consequences were inevitable. He hoped he would not be considered as speaking disrespectfully of the Committee if he drew the attention of the House to their Report. His objection to it, and to the inquiry, in the first place was, that it led to expectations which it was impossible to satisfy. The object of the inquiry was, no doubt, to form a ground-work for legislation. The Committee consisted of the same Members, with the addition of four Members, because Ireland was included in the inquiry. He found thirteen different points enumerated by the Committee, and suggested as topics for legislation. He apprehended that if they were going to legislate they would do so for the protection of some one. They must either Legislate for the shareholders, or for those who did the business, or lastly they must legislate for the public; that was the country generally. As far as legislation could be applied to the two first objects, it was, in his opinion, altogether illegitimate; he considered it totally impossible to promote the interests either of the shareholders or the directors by dictating to them how they should conduct their business. The right hon. Gentleman the Chancellor of the Exchequer had forgotten that for many years Joint-stock Banks were disallowed, and that, therefore, in their childhood he ought to have expected some freaks. The right hon. Gentleman would not let them get wise by experience; he (the Chancellor of the Exchequer) was determined to make them wise by Act of Parliament. But the two species were dissimilar—one inch of the wisdom of experience was worth a fathom of Act of Parliament wisdom. There were, as he had stated, several topics for legislation pointed out by the Report of the Committee. He found, from a question asked of the Chancellor of the Exchequer, in page 39, that it was contemplated having the aid of a settlement devised by competent authorities, in order to see that it contained no clause unjust between the proprietors and the directors. Now he (Mr. Gisborne) held that this was a business with which that House had no concern. The business of that House was to give the most direct remedy against fraud of every kind, and to give the greatest facilities for the recovery of debts, but they had no right to interfere in the transactions between man and man except when they interfered with the public. The Report of the Committee complained of the amount of nominal as compared with paid-up capital. He should like to know why banks should not have the power of keeping up as much capital as their business required. The Report also complained that the law did not impose any restrictions on the amount of the shares subscribed. Was it reasonable that there should be any such restrictions? The Report also complained that the law did not enforce any rule respecting the nominal amount of the shares, or respecting the amount of capital paid up before the commencement of business. With respect to this point he had looked into the evidence, he had read the whole of it carefully, and he would venture to say that there was nothing in the evidence to establish a better conduct in the slightest degree on the part of the banks of large shares as compared with those with small shares, or between those which had a large proportion of their capital paid up and those having a smaller paid-up capital. If the evidence did not furnish any ground for such a conclusion, did the manner in which the different banks were conducted do so? He would refer to the case of the Stourbridge and Kidderminster bank. This bank had two branches and four agencies. The amount of the nominal capital is 250,000l., consisting of shares of 25l. each. Nine thousand shares had been issued, and the amount paid has been 5l. per share, amounting to a capital of 25,000l. This bank never discounted bills. The manager appeared to have a great horror of discounting bills. The manager, in conclusion, stated, that since the bank had been established they had not incurred any loss from discounts or otherwise; that they had not a single overdue bill, and that their returns showed an excess of assets over their liabilities of 62,386l. or 17,386l. above their paid-up capital. The next instance was that of a bank conducted on an entirely different principle, namely, the Birmingham Banking Company. They had no branches. They had no reserved shares. The capital was 50,000l. in 50l. shares, and it was all paid. This bank discounted largely, and re-discounted extensively, with the Bank of England; yet this bank had, since its commencement, paid an annual dividend of ten per cent. on its capital. The hon. Member referred to the evidence of Mr. Samuel Gurney, who, in reply to the question whether a well-conducted bank ought not always to have a quantity of Exchequer Bills on which to rely in cases of difficulty, answered, that "bills of exchange are quite as good a security in time of difficulty as Exchequer Bills; in most respects better." Now there were two banks conducted on distinctly different principles, and if it were left to the Committee to decide, which they would establish as a model, it would be difficult to determine to limit the operation of a Joint-stock Bank to one particular system. The shareholders ought to be the best judges of their own interests, and it would be most injudicious to interfere unless it could be shown that the public interest required it. There were several other points indicated in the Report as topics of legislation. With respect to the publication of the liabilities and assets to the shareholders at large, that would not be advisable, as the information might not at all times be trustworthy, and only calculated to mislead. He trusted that the proposed limited inquiry would not be assented to by the House. The next point of the law referred to the non-payment of doubtful debts. How could any one judge, he should like to know, whether parties gave in a proper account of bad debts or not? He thought it was unwise to make such a point a subject for legislative enactment, for it was in reality impossible ever to decide with certainty concerning it. There were four or five other points referred to by his hon. Friend, which he thought were completely out of the scope of the notice of the House. The real objects to be aimed at were to obtain a direct remedy against fraud, and to derive the readiest and most efficient mode to recover debts. He was sure that any attempt to legislate beyond that, could not. be made with advantage. Another reason against the interference was, that the modes of conducting those banks were so various that it would be found exceedingly difficult to come to a right and definite conclusion on that point by itself. For instance, some banks were accustomed to hold Government securities, whilst others transacted business without them. How could the House legislate on such a point, when conflicting testimony could be brought forward in favour of both practices? Again, there was the question of discounting bills. His hon. Friend near him (Mr. Hume) was against the practice, while others on the Committee would, he doubted not, be found in its favour. Here, again, how could legislative enactments be framed to meet the question? He could not perceive, in looking over the evidence, that this could be considered a safe or useful subject of legislation. The Chancellor of the Exchequer had asked, with the most infantine simplicity, several questions on this subject, which betrayed, he thought, most groundless fears. He inquired, for instance, if a banker in Cumberland should establish an agency in Cornwall, and should make his notes payable at Newcastle, would it not be a hardship on the persons in the neighbourhood? He could assure the hon. Gentleman that no fear need be entertained on that head; for if one note was issued from the bank in Cornwall there was no danger of a second one being taken. For what would be done in the case alluded to? Why, the person who holds the note goes to another bank, and demands cash for the note; this is at once acceded to, for the Cumberland banker is considered a safe man. The holder of the note is charged the postage to Newcastle and back, amounting to 3s., to which, if 1s. is added for commission, he will have to pay 4s. for the 5l. note. Did the right hon. Gentleman think that this would be an inducement to him to receive a second note from the same quarter? The right hon. Gentleman's fears were entirely visionary, and still he had repeated his inquiries on the point just alluded to at least a dozen times. He felt sorry to have been obliged to take up the time of the House with so much dry detail; but he had thought it absolutely necessary, in order to show that the inquiry could not prove useful. He thought it would be exceedingly unwise to renew the Committee, for it would only excite expectations which could not be realized. He would therefore move the previous question, and if supported by many of the Members he would divide the House; but, if not so supported, he should rest contented with having proposed what he thought would best contribute to an effective and impartial treatment of the question, and would support the motion of the hon. Member for Middlesex.

Mr. Villiers

thought, that if the hon. Member for Worcester would sanction an inquiry into the Joint-stock Banks, and into the effects of the suppression of one pound notes in 1823, and that he was not averse to the whole truth being disclosed respecting the operations of banking in this country, there was something whimsical in his opposition to the amendment of the Member for Middlesex. He was anxious for the truth to be elicited, and, therefore, should vote for that amendment. He did not expect much good from the revival of this Committee, if the inquiry was to be confined to the operations of Joint-stock Banks, for he was afraid that, from partial evidence, no rules could be deduced that could have any general ap- plication; and, if the Committee had it not in view to devise regulations which should affect all banking establishments in the country, he feared that their labours would be of very limited utility, and that it would tend to confirm an impression that already prevailed, that this inquiry was promoted rather with the view of restricting one branch of the trade in order to favour the other, than of promoting the public welfare. He thought that Parliament could usefully apply itself to discover on what principles banks should be regulated, with the view to their advantage and their safety; but when they had made such discovery, he was more disposed to leave the enforcement of those principles to free competition than to legislation, for sure he was, that the more the public were encouraged to lean upon Parliament for the regulation of their interests, the more careless and incautious would they become. He thought the evils now imputed to Joint-stock Banks were greatly over-rated, and their advantages greatly under-rated, and the difficulty of legislating for such evils as they were chargeable with, was shown by the various nostrums which were prescribed for their remedy. Every person was confident in his own, but not many agreed with the other. His hon. Friend, the Member for the Tower Hamlets, had no less than three, which he proposed to combine—paid-up capital, unlimited liability, and complete publicity. Now he had seldom heard any commercial man agree to them all, some disapproved of all, and he was more disposed to agree with the latter than the former. The great evil was thought to proceed from these banks being allowed to issue notes; but their issues not forming above one-fifth of their liabilities, their improper use of this privilege did not amount to more than one-fifth of the evil to be apprehended. If it was an object to discover the real cause of these disturbances in the currency (and which now appear to be of periodical occurrence), why they should inquire into the mode in which the Bank of England had exercised its powers and its privileges. To inquire into Joint-stock Banks, and omit the largest of them all, which was the Bank of England, was, in his mind, a perfect delusion. He believed that most men who had written, and who had thought upon the causes of these commercial panics, had agreed in tracing them to the arbitrary and inconsiderate operations of the Bank of England; and until that establishment was placed upon a different footing, he saw no reason why the same calamities might not recur. The fault, in his judgment, was, that the Bank of England was given exclusive privileges, which led the country to depend upon it to regulate the currency, and at the same time it was left with all the interests of a private trader; the result was, that its interest and its duty were in constant conflict, and the commercial classes were made the victims. Until the currency of this country was made to depend upon some sounder system than this, he could only expect a repetition of those panics of which we heard so much, and which must be attended with such serious injury to trade. On these grounds he should support an extension of the inquiry.

Mr. Warburton

did not agree with his hon. Friend, the Member for North Derbyshire, in most of his propositions. The question before the House, as it appeared to him, was not whether they should legislate on the subject of Joint-stock Banks, but whether they should have a Committee of Inquiry on the subject—whether there were not in existence evils arising out of the conduct of Joint-stock Banks, which, for the sake of public information and security, it was desirable to inquire into. The evils attributable to Joint-stock Banks were, it appeared to him, of a very different nature from those which could be laid to the charge of the Bank of England. Amongst the charges against the managers of Joint-stock Banks was that of want of integrity in their proceedings; but he had never heard, amongst all the charges against the Bank of England, that of any want of personal integrity on the part of its governors. A want of prudence had occasionally been attributed to them, but it had never been alleged against them, that they had mismanaged the funds intrusted to them by their customers, for their own personal benefit. He would not deny that the Bank of England might not be so perfect in its control of the currency as might be desirable, and that a time might come when it would be advisable to inquire into such a question. At the same time, however, he would observe, that whilst the greatest good which could be expected to result from such an inquiry, was that of forming an efficient board, to control the currency, with as much equality as possible, the greatest evil which might be apprehended from bringing on such an inquiry, at an improper time, was such a general feeling of alarm amongst the public, as might cause a stoppage of payments at the Bank. For his own part, he did not think that at the present moment, it would be desirable to take up such an inquiry, and therefore he should not vote with his hon. Friend the Member for Middlesex. Whenever the fitting moment arrived, however, for such an investigation, he should be ready to support it.

Mr. Thomas Baring

said, that the hon. Member for Derbyshire had opposed all interference in Joint-stock Banks on the ground, that they were yet in their infancy, and that they would improve by experience. But would it not be useful to apply to them some control, as was done to other things not advanced beyond childhood? He thought that a great difference might be seen in the constitution of Joint-stock Banks and those established on the old system. Joint-stock Banks advertised capitals of millions, and proceeded to business when only thousands were paid up. This appeared to him a strong distinguishing feature in the system of Joint-stock Banks. This might certainly make inquiries into the nature of these establishments necessary. With respect to the inquiry being extended to the Bank of England, if it could be proved that there was any intention of violating the charter, then he should think the inquiry necessary; but if there was not some great and decided change intended by that body he could not see that the inquiry could lead to any practical result. If there was any intention of giving any additional powers he thought the House ought to inquire into the nature of those powers, and their effect on the Bank of England; but if the powers it already possessed were wielded with foresight and discretion any further inquiry on the subject would be useless. But it appeared that no such increase of power was contemplated. He agreed with the hon. Member for Middlesex in his remarkson the fluctuations which took place so frequently in the circulating medium. He thought, also, the hon. Member's observations on the subject of publicity of assets were worthy of observation. Indeed, sufficient proof of the necessity for such publicity had lately been given. He also thought the allusion made to the rate of exchange with America, and the em- barrassment in the commercial affairs of that country, was not uncalled for. There was one point on which the Chancellor of the Exchequer had dwelt to which he was desirous of referring. That right hon. Gentleman had spoken with some complacency of the caution which he had given last year on the subject of speculation in Joint-stock Banks. He certainly had made some remarks of a cautionary character; but not in such explicit terms as that they could be laid hold of and be of service; he had merely said that that state of things could not last for ever. An assertion so vague could scarcely be of much service. He thought the House undoubtedly ought to pay attention to the subject of Joint-stock Banks, for he felt assured that the public would not trouble themselves much about the matter. Each person would continue his speculations, flattering himself that he had so well and so safely disposed of his money that his particular speculation could not fail. He thought, therefore, that if the House in general should say that a floating debt of thirty millions ought not to be allowed to remain without some legislative interference being made respecting it, such interference would meet with the approbation of the sound-thinking part of the community. He certainly thought that inquiry should be instituted.

Mr. Clay

said, that the observations which he had intended making were in a great measure superseded by the remarks which had already fallen from his hon. Friend to the right (Mr. Hume). He was decidedly of opinion that, if any inquiry was useful it should not be limited to any particular banking establishment, but extended to the whole system. He also begged to say from what he knew of the state of the money market, and of the state of public opinion on this question, that this inquiry was imperatively demanded. The hon. Member for Derbyshire whom he did not see in his place, had stated that this inquiry could be of no public service. If he (Mr. Clay) thought that the hon. Member gave expression to the sentiments entertained by any considerable number of the persons interested in Joint - stock Banks, when he stated this opinion, he for one should consider it as the strongest possible reason why the inquiry ought to be proceeded with, and he would further add, if such opinions were entertained by the parties to whom he had referred, it was anything but creditable to them to attempt to arrest the progress of this investigation, and, for his part, he certainly had imagined that the re-appointment of this Committee would not have been opposed. He thought so because it must be apparent to every one, from what had recently taken place, that the most searching inquiry was necessary. With regard to the argument that the Legislature had no right to interfere between one individual and another, he admitted that it might hold good if those concerned in Joint-stock Banks were to be the only sufferers by their operations; but when the whole community was affected by them, and when the entire fabric of commercial credit was liable to be shaken by the acts of those bodies, he conceived that the Legislature had not only a right but it was their bounden duty to interfere. He concurred with the hon. Member for Wolverhampton that Joint-stock Banks had conferred great benefit on the community; but in order to render that benefit permanent it was necessary that the public mind should be satisfied that they rested on a secure foundation, and this confidence could only be established by the most searching inquiry into the principles on which the transactions of those concerns were conducted.

Mr. Pattison

was understood to state, that it might perhaps be expected that he should express his opinion on the question before the House. He felt that he was placed in a most awkward predicament, from being unaccustomed to address them. He would, however, simply advert to a few of the topics touched upon by hon. Members who had preceded him, and in the first place, he must observe that he could not concur in opinion with those who thought that sufficient cause had not been shewn for this inquiry. Events which had taken place during the recess, in his opinion fully justified the re-appointment of this Committee. With respect to the observations of the hon. Member for Coventry, in reference to the management of the Bank of England, he considered them uncalled for; and he could only tell that hon. Gentleman, who thought fit to find fault with the management of the Bank, that the accounts of that establishment had been regularly published—that its affairs were conducted under the auspices of Government—and that all its transactions were in strict conformity with the rules and regulations prescribed by the Legislature. If, then, there were any grounds for this accusation why was it not brought forward before, and why should the present moment be selected for the attack? When the proper time arrived, the Governors of the Bank would be ready to meet any accusations which might be brought against them, and he had no doubt but it would then be satisfactorily shown that those charges of mismanagement were without foundation. He repeated, that sufficient cause had not been shewn why this inquiry should not take place. He would, therefore, support the motion for the re-appointment of the Committee, and, if the Joint Stock Banks were not conducted on the principle admitted by the Legislature, that principle must be altered.

Mr. Cayley

said, he agreed with the hon. Member for Middlesex, that the inquiry should be extended to the affairs of the Bank of England. The difficulty which the Bank of England had to contend with under the present system was, that it had to attend not only to its own interest—to bank stock, for instance, as well as other property connected with that establishment—but also to the interests of the mercantile body. The Bank on the late trying occasion had acted with great humanity, and had attended to its own interests as well as the great interests of the public, without drawing the cord too tight. But he would now ask what was the danger to the Bank at present? The danger arose in a great measure from the circumstance, that the exchanges were not favourable, and, consequently, so long as this was the case the necessary result must be, to create derangement, to a certain extent, in the affairs of the Bank. In the crisis of 1825, the state of the exchanges was not so bad or so injurious to the Bank. On that occasion, the rate of exchange had been unfavourable for only six months; whereas, when the difficulties commenced last autumn, it had been unfavourable for twelve or eighteen months, and then, as in 1825, the Bank was compelled to make the greatest exertions to stave off the evil day, and to counteract the evil arising from the price of commodities being higher than the standard of value. He considered it impossible that the standard of value could be higher than the prices of commodities, unless the circulation had diminished in order to raise the price. He therefore supported the inquiry, while at the same time he expressed it as his opinion, that the Bank of England could not have managed in any other way than they had done for the last few months. In the autumn, the Bank was in a most perilous state. He considered it was yet in greater peril still at the present moment; and was it then wise and prudent to wait till they got deeper into the mud before they instituted inquiry?

Mr. O'Connell

said, that the question before the House was really whether the inquiry should be as extensive as the hon. Member for Middlesex had called for. He did not think that anybody had intimated the least intention of opposing an inquiry. One Gentleman had argued against it, but he did not say, that he meant to vote, against it. If the inquiry implied hostility to Joint-stock Banks—if the Chancellor of the Exchequer had stated a case of misconduct against the directors of Joint-stock Banks, he (Mr. O'Connell) should feel it to be his duty to negative the motion. He had heard something of that kind from the hon. Member for Bridport, but nothing from the Chancellor of the Exchequer. He was for inquiry. If inquiry was to imply Legislation according to the report, he would be decidedly against it; but he thought that inquiry was necessary, because it should be courted by those who asked for public confidence, and in the next place, the notion that Joint-stock Banks contributed to the evils of the present state of affairs, was a reason why there should be inquiry. His own opinion was, that instead of increasing the distress, they tended to mitigate it, and afforded a ground of security never before introduced into the banking system. A Joint-stock Bank had stopped in England and Ireland, and private Banks had stopped. The Bank of Carlisle had stopped, although it had been many years in existence, and we were told its creditors would receive 14s. or 15s. in the pound. There would be no loss upon the stoppage in England, and he was thoroughly convinced there would be no loss upon the stoppages in Ireland, because the number of individuals was such, that with a small loss to each, they would cover the public loss. To talk of Joint-stock Banks increasing the evil could have no other meaning than this, that their issues pressed upon the Bank of England. That they filled up the channel of circulation which he said was wanted, was proved by what had fallen from the hon. Member for Yar- mouth, who said, that we were in a state of great prosperity at the time the inquiry was first instituted, and therefore the Chancellor of the Exchequer should have seen that adversity would follow. What species of country was it in which prosperity was a symptom of distress and ruin? If there was no other reason for inquiry, was not that a reason? Must there not be something rotten in the sys tern? You are too prosperous, and therefore you must come to misery at once. When Dr. Majendie set about dissecting a dog, he nailed his nose to a board, and then dissected him. The Directors of the Bank of England were in that situation— they were nailed by the nose. The gold standard had been introduced—too dear an instrument of exchange for such a country as this—and it had nailed them. They were not to consider how the price of every other article varied, and the price of gold varied; but by a kind of equivocating species of policy, they were to indulge in the malady until it gained a kind of feverish strength that was not health. In that situation they were placed, not by any misconduct or fault of theirs, but by the fault of the system which the Legislature would not look directly in the face. In what a situation were the two countries! It was said there was an union between England and Ireland. Accordingly, we had here a Government Bank. How were they off in Ireland? They had a national Bank. For what purpose? For the sole purpose of monopoly. Within a district of fifty miles of Dublin, no man could issue notes except the Bank of Ireland. Yes, five or six individuals might, but if you increased the security, by having more liable for their payments, in proportion as you increased the security, you diminished the right to issue. The House was aware that the Bank of England last autumn raised the rate of discount to five per cent. while the Bank of Ireland discounted at three and a half; and at the same time the Joint -stock Banks discounted good paper at six per cent. What was the consequence? Bills came from Lancashire and other parts in England, and were discounted by the Bank of Ireland at three and a half percent.; the person who got the bills discounted went next door and got gold, and Ireland was thus drained of gold. When a panic took place in consequence of the excitement caused by the Duke of Wellington's coming into office, it was neces- sary to send over a million to Ireland; and what would be the consequence if it should be necessary to send over gold now when there was little more than four millions in the Bank? Some hon. Members approved of inquiry, but objected to the time. He could see no reason in that. Why not have inquiry now? Why should it be postponed? The hon. Member for Bridport and the hon. Member for the Tower Hamlets, said there was danger. Was the Bank of England in danger? If so; that was an imperative reason for inquiry. If the Bank were in danger, was not the community also in danger and was it not the most rational way to get out of the difficulty by meeting the danger at once? The great danger arose from the apprehensions of the public, and the best way to dispel those apprehensions was to ascertain what the real evil was. Hon. Members had spoken of the importance of establishing great principles. Now, nothing was worse in many instances than great principles for individual injury. He believed, the great principle sought to be established in 1819 had caused more danger and more injury to many individuals than any other of a similar nature. It spread its influence over a vast number of individuals, and reduced many who had been living in wealth and affluence to the greatest distress. He therefore wished for inquiry. The Chancellor of the Exchequer said inquiry would come incidentally; why should it not come directly? Let the inquiry commence without delay; and the more extensive it was, the more would the public mind be disabused.

Mr. Crawford

bore testimony to the correctness of the illustration given by the hon. Member for Derbyshire of the success of the Birmingham Joint-stock Bank. He was not prepared to address the House, as he had not had the honour of being upon the Committee. He had, however, endeavoured to make some estimates of what might be the probable profit of a most prosperous bank. He left a large margin when he said that ten per cent. of that profit could not arise upon a banking principle unless it were from the sale of the credit of the banks, instead of money on discount. So far as the debate had gone, it did not appear that the House had been put in possession of one important fact respecting circulation—viz. the amount of paper created by re-dis- counts, acting upon prices just as much as bank rates acted upon prices. Without meaning to define to what extent the present evils had been produced by the circumstance of Joint-stock Banks lending credit, instead of lending money, he thought he might say, that such a practice would account for the state into which the country had been thrown.

Mr. Poulet Thomson

observed, that the hon. Member for Derbyshire had brought forward the Report of the Committee, and had objected to its being re-appointed, because he objected to the recommendations of the Committee. The Committee advised, in their Report to the House, the re-construction of the Committee of last Session for the purpose of acquiring further information before they could recommend any course of legislation to the House. With respect to what had fallen, as to the Committee reporting that legislation, was unadvisable; he need only refer to the evidence of Mr. Moore James, who said, in reply to the question, "Is this a portion of the law, which, in your opinion requires amendment? It does." He believed that hon. Members would find few witnesses who considered legislation unadvisable, though they differed as to the mode. If it were advisable, then, to legislate on the subject, was it not better to re-appoint the Committee? Every friend of Joint-stock Banks ought to assent to the inquiry. All must be aware that these banks had borne up well, and had gained credit under the trial. As a friend, therefore, to Joint-stock Banks, he should vote for the proposed inquiry. Whatever difference of opinion there might be as to the construction of some of these banks, it could not be denied, that the large numbers of persons of wealth and respectability who engaged in these establishments formed a new feature in the banking system of this country. No doubt such a number of persons of this class created a greater degree of security and no man entertained a doubt that paper had been pushed farther than it ever had been before. The credit of the Joint-stock Banks undoubtedly produced such a result; and he agreed with an hon. Member who stated, that great disadvantage might arise from the market being overflooded with paper at one time, and too much curtailed at another. But that was an evil which could not be guarded against: no Act of Parliament could make people wise. If people were so unwise as to act in the manner his hon. Friend had described, he believed no legislative measures could be found to make them act more prudently, and prevent them running into such evils. Of this, however, there could be no doubt, that numbers of persons embarking their whole fortunes in such establishments formed a great guarantee for their stability and good management. If the House were to adopt the proposition of the hon. Member for Middlesex, it would be impossible to say how far the investigations of the Committee might extend. See what a field of inquiry would be open to them. They would have to inquire into the state of bullion; they would have to inquire into the state of the coinage; they would have to determine whether it were advisable to have a silver standard, or a gold standard, or a mixed gold and silver standard, or no standard at all. Nothing could be more injudicious than to found a proposition for so extensive an inquiry on a motion, the object of which was merely to revive a Committee on a small branch of that inquiry. He objected to the motion of the hon. Member for Middlesex, also, on the ground that the words of that motion went much further even than his hon. Friend himself wished. He objected to the motion, because the Committee for the renewal of which his right hon. Friend had moved would have quite enough to do if they were confined to the investigation of the state and conduct of Joint-stock Banks. But it had been argued, that it was impossible for such a Committee adequately to discharge the duties intrusted to it, without making an inquiry into the state and conduct of the Bank of England. Why his right hon. Friend had admitted, that, so far as the Bank of England was connected with the Joint-stock Banks, an inquiry must be made into the conduct of the Bank of England, but no further. In his opinion, it would be highly inexpedient to go into an extended inquiry with reference to the Bank of England. A time of difficulty—not of difficulty in the condition of the Bank of England, but of difficulty in the condition of the commercial world— was certainly not the time to choose for entering into a solemn investigation of the whole state and conduct of the Bank of England. Nothing could indeed be more unadvisable. He did not wish to impede the operations of the Bank of England, nor did he wish to mix up that House with the concerns of the Bank of England. He wished the Bank of England to be allowed, in the faithful and honorable discharge of its duties (and he was quite sure that it would discharge its duties faithfully and honorably), to take its own uninterrupted and independent course. An interference with that course would not be wise, and would not be treating the Bank of England with the justice and fairness to which it was entitled. He would not enter into the various questions which had been raised by the hon. Member for Middlesex, and other hon. Gentlemen. He would not inquire whether the recent commercial pressure might or might not have been obviated by more early assistance—he would say nothing on the general question of our currency—and he would conclude by expressing his earnest hope that the House would not agree to the motion of his hon. Friend, the Member for Middlesex, but would confine the inquiries of the proposed Committee within the limits recommended by his right hon. Friend.

Sir Robert Peel

felt it his duty to support the motion of the right hon. the Chancellor of the Exchequer. It was certainly of great importance to the commercial and banking interests of the country that Parliament should at an early period of the Session pronounce a decisive opinion as to whether or no it could interfere with them by proposing any new restrictions on Joint-stock Banks; and if Parliament decided that it could so interfere, it ought to make known with as little delay as possible what would be the nature of those restrictions, because the very suspense of the question was pregnant with almost as much evil as unwise legislation upon it could be. A Committee had been appointed, witnesses had been examined, but the Committee had informed the world that it had not time to conclude its inquiries, and therefore it proposed to renew its inquiries; and now the consequence was, that no one could determine that he might safely enter into a connexion with any banking establishment—not because his prospects of the new regulations might materially affect his speculation, but he would be unwilling to engage in it while such an inquiry was pending. It was, therefore, highly necessary that Parliament should, without delay, decide what could be done, and what it intended to do. He was, therefore, unwilling to devolve on the Committee more than was necessary for the object of inquiry: if the inquiry were to be carried out into every branch of banking affairs, and into the minutiœ of the currency question, they might go on ad infinitum. If they were to appoint a Committee to investigate the operations of the whole of the English banks, the Irish banks, the Scotch banks, public banks, private banks, Joint-stock banks, and all the various banks in the kingdom, there would be no end to the inquiry, there would be no one subject settled, and no pretext would be wanting for postponing a decision. Therefore, while he was for a full inquiry into the subject, he would have it limited to a special object. There were two propositions before the House besides the original motion. There was the proposition of the hon. Member for Middlesex to multiply the objects of inquiry; and there was the proposition of the hon. Member for Derbyshire, which went to deny the right of the House to make any inquiry into the subject at all. To neither of those propositions could he give his consent. He had already stated the reasons which induced him to oppose the motion of the hon. Member for Middlesex. To the principle involved in the proposition of the hon. Member for Derbyshire he could by no means agree. The hon. Member for Derbyshire contended, that as it was generally allowed that Parliament ought not to attempt to instruct or control persons, generally, in the management of their own business, so it ought not to interfere with the management of Joint-stock Banks. But the cases were widely different. Parliament had already interfered with reference to Joint-stock Banks, and having so interfered, it was entitled to carry that interference further. If the persons who were engaged in Joint-stock Banks were to be considered the best judges of the manner of carrying on their own business, why had Parliament restricted them in various ways? Why were they prohibited from issuing five-shilling or half-crown notes? The moment that Parliament interfered with them in one respect, it acquired the right or contracted the obligation to interfere with them in any other respect in which such interference might be considered advantageous to the public. No one could deny, not only the right, but the sound policy and justice of acting on this principle. For instance, could any man doubt that the recent transactions of the North- ern and Central Banking Company justified an inquiry into the nature of those transactions? Where a company had been invested by the Legislature with the power of coinage, or with the power of issuing money—a power affecting the interest not merely of the shareholders, but of those who took their notes—and when that Company was found to have made an application to the Bank of England, and to have declared that they should be ruined unless the Bank advanced them a hundred thousand pounds, surely that was a very different transaction from a speculation in sugar or tobacco. The moment that the Legislature devolved upon any body of men the power of issuing money (a power absolutely regal in its character), that moment it acquired the right of taking care that the interests of those whom such a proceeding affected should be protected. The hon. Gentleman opposite said that no one could doubt the disinterested and judicious conduct of the directors of the Joint-stock Banks. He doubted it. He had not so much confidence in their wisdom as the hon. Gentleman had. The hon. Gentleman opposite had spoken of two banks that had been well conducted. But could the regulations observed by those two banks be enforced on others? Look at the report of last year, and let any man say whether he could place implicit confidence in the sagacity of Joint-stock Banks. It appeared that the managers of one of them stated that every year they had large dividends, they had great profits, but though they had bad debts to the amount of 20,000l. or 30,000l. they never took any account of them, and their shares were at a premium of ten per cent. How did that state of things arise? By the power which Parliament had conferred upon the parties. The difficulty which private banks felt in conducting their business proved that fact. He would not say anything of the wisdom of that course, but having given such a power virtually or directly, legally or practically, they ought to inquire into the operation of it. Then, another hon. Gentleman had gone to the other extreme; he had said that all inquiries were good, and, so far from denying to Parliament the right of inquiry, he was for carrying it to the fullest extent. While one hon. Gentleman deprecated all inquiry, the other wished to have an inquiry into everything, not excluding the affairs of the Bank of England itself. Now, with regard to the conduct of the Bank of England, as far as its relations to the Government were concerned, that had been recently the subject of two inquiries. He recollected sitting on a Committee, three years since, day after day, which was appointed for the purpose of inquiring into the whole of the transactions of the Bank of England as far as they related to the Government, and, in consequence of that inquiry, the Bank charter was extended, and he apprehended that no man intended to propose to revise the Bank charter. But they had a right to ascertain in what manner it would be affected by the subject of inquiry. Even then, there would be no necessity, he would venture to sty, to go into that part of the operations of the Bank of England which related to the Government, or any of its operations, only so far as Joint-stock Banks were concerned. If, in the course of investigation, it should be stated, that the Bank of England, and not the Joint-stock Banks, had caused certain evils, then it would be difficult for the Bank of England to resist any further inquiry as to the truth of that statement. The permission to Joint-stock Banks to pay in Bank of England paper instead of gold might be very proper and profitable or not, but, as far as the inquiry had gone, that question did not appear to have been put. That might be because the Committee had not sufficiently performed its duty, or had not thought it necessary to inquire. [Mr. Hume had himself put the question to a witness, who had objected to it.] If such a question were put and objected to, nobody could deny the power of the Committee to enforce an inquiry into the subject. The question was not whether the power given to Joint-stock Banks to pay in Bank of England paper diminished or extended credit, but whether it had not a tendency to increase the danger to credit, and whether the evil concomitant with making fluctuations in the value of money was not a greater evil than the facility of doing it could be beneficial? Although he must contend that every relation of the Bank of England with Joint-stock Banks must be, as far as necessity required, intruded upon, he should vote for the original motion, dissenting, as he did, from both amendments. The hon. and learned Member for Kilkenny re-opened the whole question, but the Bill of 1819 had been so often discussed, that he should decline entering upon it on this occasion. He should only refer to one position which the hon. and learned Gentleman had taken up, namely, that it was very wise in times of prosperity to look forward to times of difficulty and danger. He would just remark that the evils, if evils had arisen, were not to be attributed to the Bill of 1819. If they chose to have a large quantity of convertible paper, and then to have a metallic standard, whether gold or silver, or both conjointly, they could not have a large mass of paper converted into a metallic standard without the risk of a reaction. But the reaction that followed the Bill of 1819 was not the effect of that Bill, but of the foreign exchanges, and, whatever might be the present prosperity, or the future adversity, they were bound to look at the foreign exchanges; and if they did, they could not help looking out for the time of possible danger. If the hon. Gentleman meant to have a paper currency to an indefinite extent, and not to have it convertible at all, then, perhaps, there would be no necessity for his looking out for times of danger. But even then his hope of eternal prosperity would be very delusive, for there would be a progressive rise in prices, and a progressive decrease of trade, so that not looking out for danger would not be the way to avoid it. With regard to the evils of the Bill of 1819, he never denied the extent of individual distress occasioned by it, and he had never contemplated that distress without regretting the serious injuries that ensued; but he thought the system which rendered that Bill necessary, and not the Bill itself, ought to be made responsible for those evils. He did not believe any measure was ever proposed which was so conducive to the comfort of the labouring classes as that which compelled those who employed them to pay them their wages according to a certain fixed standard.

Mr. Wakley

maintained that all who voted for inquiry limited to Joint-stock Banks implied at least, if they did not directly aim, an attack on the character of those institutions. There might be defects in their constitution, but they were parts of the old system of banking, and the Joint-stock establishments had gone far to remedy the evils formerly complained of. If the present inquiry were restricted to the Joint-stock Banks, Parliament would, in his opinion, act most unfairly by them; why should they victimise those institutions while it was notorious to every man of common sense and memory that the old system which they had tended so materially to alleviate led to calamities to which, under the new state of things, they could find no parallel? The hon. Member for Bridport had taken a very singular view of this question, deprecating as he did all inquiry into the state and management of the Bank of England, although he admitted that great evils existed, and that the time might come soon when a searching inquiry should be instituted. That hon. Gentleman, he believed, was a profound senator, and also learned in medicine. He would put this question to him—suppose he had some disease originating in the defective state of his circulation, spreading funguses and excrescences over his whole system, what would be thought if he said to his medical adviser, "I have a radical defect in my circulating medium; I desire you will cure me speedily and effectually, but I positively interdict you from going to the heart, the fountain of all circulation; there may be a disease of the heart; it may be proper to institute inquiry at some future time, but for the present, and for reasons best known to myself, I positively prohibit you from extending your observation into the source of all the disease, the fountain of my existence and energy?" He maintained that the seat of all the evils at present felt was to be found in the defective state of the Bank of England. If there were no derangement at that great fountain of our circulation, it would be utterly impossible for the monetary concerns of the country to be so much distracted. He called upon the House, looking at all the interests involved in this question, to proceed boldly and fearlessly, not upon any miserable, piddling, patchwork system, but generally and practically with a view to the discovery and successful application of the best remedy that could be found for the acknowledged evils of the present system. He for one should cordially support his hon. Friend, the Member for Middlesex, in the amendment he had moved.

Mr. Pease

disclaimed everything savouring of hostility towards Joint-stock Banks. Of their value, no one in his opinion could entertain a doubt, provided they were properly conducted. Those, therefore, which were conducted upon a sound and prudent system had everything to hope from the proposed inquiry, while, on the other hand, the public should be put on its guard against such as were established upon another footing. The hon. and learned Member for Kilkenny (Mr. O'Connell) deprecated the carrying out of principles which might be attended with great private injury. But if it were maintained that ground for inquiry into the conduct of the Bank of England arose out of the circumstance of their having recently assisted the Northern and Central Bank, would the Bank parlour not thereby be put upon its guard as to the principles and conditions on which they would grant similar relief to other important interests; and might there not be thus produced a deluge of misery in Ireland which he would shrink from combating? He for one was at a loss to know what object could be gained by extending this inquiry to the Bank of England. They had already all the elements of the information required. They knew the amount of deposits, the amount of circulation, of bullion, of securities, and they all knew the rate of interest. The Joint-stock Banks had recently grown up; the state of their affairs called for investigation, in order that the country might know whether the sound principles on which they were instituted had not been departed from; and as the present Committee would have quite enough to do, the inquiry being restricted as the right hon. Gentleman proposed, he protested against its being extended generally into the banking system of the country, and particularly to include the recent conduct of the Bank of England.

The Chancellor of the Exchequer

said, in reply, that he did not see any reason from the statements which had been made, and the arguments which had been adduced in the course of the discussion, to induce him to alter the course he had taken the liberty of suggesting at the outset—that the inquiry should not extend to the Bank of England, and its proceedings, save and except where the Bank of England connected itself with the Joint-stock Banks; for, undoubtedly, wherever its proceedings told upon or influenced their proceedings, both must be connected together; in fact, it was impossible to separate the one from the other. But, although he was not prepared to recommend an inquiry into the conduct of the Bank of England before a Select Committee, although he did not think it neces- sary to enter into a vindication of the proceedings of the Bank upon the present occasion, yet he must be allowed, in common justice, to say, that the Bank of England had not been fairly treated by some hon. Gentlemen who had spoken in the debate. The very contradiction of the charges brought against the Bank of England was, if not a complete defence of the course taken by the Bank, at least in some degree an answer to the objections which had been urged. It had been suggested, that the Bank had acted wrongly in the assistance they had afforded, at a time of great emergency, to the Northern and Central Bank; he should like to know how the argument would have stood if the Bank had not come forward, not for the sake of that establishment—not for the sake of an establishment which had misconducted its own proceedings, but for the sake of the public interests that must have been involved? Would it not have been said, that the Bank of England, jealous of the Joint-stock Banks, seized the first opportunity—not doubting its solvency—without any fear as to their realizing the amount of their advances—the Bank of England seized the first opportunity to crush a rival establishment, and compel Parliament to look at the whole question of Joint-stock Banks under a new and more formidable aspect? Suppose that Bank, with forty branches, had failed, by reason of the inertness or disinclination of the Bank of England to afford it any assistance—suppose that failure had been followed by that of other Banks, would they have heard so much as they had during this discussion, in defence of the system of Joint-stock Banks? Justice ought to be done to the Bank of England in a case of this description, and the principles on which it had acted should not be entirely overlooked. Observations had been made with regard to the extension of the operations of the Bank of England in the provinces, by the establishment of branch banks. But if there were anything wrong in that, the Government of the present day, and their predecessors in office, were equally to blame with the Bank. The establishment of those branches in the provinces originated with Lord Liverpool's Administration, when the Bank of England was not only invited, but induced by various considerations, to follow that plan; and yet they were now taunted, because they had adopted the course recommended by the Legislature. Was that acting justly by the Bank of England? With reference to the observation which had been thrown out by the hon. Member for Yarmouth (whose opinion he was always disposed to treat with profound respect),he had taunted him (the Chancellor of the Exchequer) with having met this subject last year in the language of caution, but that he should have been more precise in the language he had used. On the occasions to which reference had been made, namely, on the 6th and 12th of May last; now what were his (the Chancellor of the Exchequer's) words? Why, on the 6th May, on making his speech on the budget, he had said— "I cannot sit down without again stating, that, whilst we have the greatest reason to be grateful for our present state of prosperity, at the same time, there are indications, at the present moment, which call for every hon. Gentleman's close inspection. The House must see, in the great extent of speculation which prevails, in the number of Banks which are rising up in all directions, grounds for the exercise of vigilance, caution, and prudence." Then, on the 12th May, on the occasion of the discussion upon the motion of the hon. Member for the Tower Hamlets (Mr. Clay), his remarks were to this effect—"The House is aware, that a general spirit of speculation is abroad; that Joint-stock Companies are formed for all kinds of purposes, some for purposes to which such co-operations are by no means applicable; and the House will feel that this rage for speculation will hardly fail to extend itself to the banking business as well as others.

In proportion, then, as we allow the application of the Joint-stock principle to sound and legitimate objects, we are bound to see that, under the colour of Joint-stock Banks, the country is not imposed upon by a number of bubble companies, representing no property, and incapable of affording the smallest security." He was, therefore, at a loss to conceive how any caution could, by possibility, have been given in more direct terms. But he must beg more particularly to call the attention of the House to the declarations made by the hon. Member for Middlesex, on the 6th day of May last. On that occasion, the hon. Gentleman, in addressing the House, said—"On the whole, I think we ought to be gratified with the real state of the industry and commerce of the country. The right hon. Gentleman seems to anticipate some great and unfortunate crisis from the extensive spirit of speculation which now pervades the country. I confess that I have no fears upon that score. As long as the Bank of England continues to be conducted upon the principles upon which it now is governed, there need be no apprehension of a crisis, or of a panic." There were several other topics, particularly in regard to Exchequer Bills, to which he wished to advert, but at that advanced hour he was unwilling longer to detain the House. He could not, however, sit down, without deprecating most earnestly the tone of the observations made by the hon. Member for Coventry (Mr. Williams), which were at once unjust, impolitic, and capable of great misrepresentation out of doors. Comparing the engagements of the Bank with the present extent of bullion, the hon. Member drew the inference, that the Bank could only pay 7s. 6d. in the pound. Such a statement going forth to the world, without contradiction, was liable to great misconception among the vulgar. It was quite unjust; it proceeded upon a mistaken view of the case—as if bullion were the only assets which the Bank had to meet the liabilities. It had been said that every one who voted for the restricted inquiry, indicated distrust of the Joint-stock Banks. He, for one, repudiated that principle. If he were asked, whether he had confidence in all Joint-stock Banks, undoubtedly that would be a confession of faith, too unbounded for him to make; but he was anxious to see whether they required amendment, and how it could be best applied. Before he sat down, he was anxious to call the attention of the House to a very interesting document which he held in his hand. It had been published to the world, in the shape of a commentary on the report of the Committee which sat upon this subject last Session. It stated in terms, that the Northern and Central Bank of England had 1,200 partners, whose whole property was liable to the debts of the concern; that the paid-up capital amounted to 700,000l.; that it was, in fact, safer therefore than the Bank of England; that its chief dealings being with its own partners, and their connexions, added to the probability, that in the event of a panic, the run would be, not to take money out, but to put money into it for security. Such was the description which had been given after the publication of the evidence; they were told, that the only danger was the intense anxiety on the part of the public to rush to it with deposits and overwhelm it, like Tarpeia of old, with bucklers of gold. He repeated that, in his opinion, there was no necessity for any inquiry into the concerns of the Bank of England, an investigation having lately taken place upon that subject. A great distinction existed between Joint-stock and private Banks. In the latter instance, individuals were using their own capital for their own purposes, without any aid of law; but the former were the mere offspring and creatures of the law, and it behoved Parliament to see that they were properly and judiciously regulated.

The House divided on the original motion:—Ayes 121; Noes 42: Majority 79.

List of the AYES.
Adam, Sir C.	Gordon, hon. W.
Agnew, Sir A.	Grattan, H.
Alsager, Captain	Grote, G.
Angerstein, J.	Hamilton, G. A.
Bagshaw, J.	Hamilton, Lord C.
Baines, E.	Hawes, Benjamin
Bannerman, A.	Hector, C. J.
Barclay, D.	Hinde, J. H.
Baring, W. B.	Hogg, J. W.
Baring, T.	Horsman, E.
Barnard, E. G.	Houstoun, R.
Bellew, R. M.	Howard, R.
Berkeley, hon. C.	Howick, Viscount
Biddulph, R.	Hutt, W.
Bish, T.	James, W.
Bowes, J.	Jephson, C. D. O.
Bramston, T. W.	Ingham, R.
Brocklehurst, J.	Irton, S.
Brownrigg, S.	Labouchere, rt. hn. H.
Chalmers, P.	Lawson, A.
Chichester, J. P. B.	Lefroy, right hon. T.
Clay, W.	Lennox, Lord G.
Clive, Lord Viscount	Loch, J.
Clive, hon. R. H.	Longfield, R.
Cooper, E. J.	Lowther, J. H.
Cowper, hon. W. F.	Lucas, E.
Crawford, W.	Maclean, D.
Dalmeny, Lord	Marjoribanks, S.
Davenport, J.	Maule, hon. F.
Dick, Q.	Morpeth, Viscount
Donkin, Sir R.	Murray, rt. hon. J. A.
Dundas, J. D.	O'Connor, Don
Eaton, R. J.	O'Ferrall, R. M.
Elley, Sir J.	Ossulston, Lord
Ellice, right hon. E.	Oswald, J.
Fector, J. M.	Packe, C. W.
Fergus, J.	Parker, J.
Fergusson, rt. hon. R.	Parrott, J.
Fort, J.	Pattison, J.
Fremantle, Sir T.	Pease, J.
Freshfield, J.	Peel, right hon. Sir R.
Gaskell, D.	Perceval, Colonel
Gladstone, W. E.	Philips, M.
Gordon, R.	Poulter, J. S.

Power, J.	Stewart, P. M.
Pryme, G.	Strutt, E.
Ramsbottom, J.	Thomson, rt. hon. C. P.
Reid, Sir J. R.	Thompson, Alderman
Rice, right hon. T. S.	Troubridge, Sir E. T.
Richards, R.	Tulk, C. A.
Rickford, W.	Vere, Sir C. B.
Robarts, A. W.	Vesey, hon. T.
Robinson, G. R.	Warburton, H.
Roche, D.	Wason, R.
Rolfe, Sir R. M.	West, J. B.
Rushbrooke, Colonel	Williams, R.
Sanderson, R.	Wood, C.
Seymour, Lord	Wortley, hon. J. S.
Shaw, right hon. F.	Young, J.
Smith, J. A.	TELLERS.
Stanley, E. J.	Steuart, H.
Stewart, J.	Baring,—

List of the NOES.
Attwood, T.	Hindley, C.
Bewes, T.	Holland, E.
Blake, M. J.	Leader, J. T.
Bowring, Dr.	Lewis, D.
Brady, D. C.	Lister, EC.
Brotherton, J.	Marsland, H.
Cayley, E. S.	Molesworth, Sir W.
Collier, J.	Nagle, Sir R.
Cookes, T. H.	O'Brien, C.
Elphinstone, H.	O'Connell, D.
Ewart, W.	O'Connell, J.
Fielden, J.	O'Connell, M.
Finn, W. F.	Potter, R.
Fitzsimon, C.	Roebuck, J. A.
Forbes, W.	Thompson, Colonel
Gillon, W. D.	Wakley, T.
Gisborne, T.	Williams, W.
Gully, J.	Wortley, Lord
Hall, B.	Young, G. F.
Harland, W. C.
Harvey, D. W.	TELLERS.
Hastie, A.	Hume, J.
Hawkes, T.	Villiers, C. P.