§ On the motion that the Order of the Day for the House to go into a Committee of Supply, be read,
§ Mr. Hume
said, that for some time past he had felt, and expressed, an anxiety to 4 bring the proceedings of the Bank of England, in as far as they affected the circulation of the country, and produced the monetary crisises which, from time to time, had taken place, under the special consideration of the House. With that view he had given notice of a motion to the following effect:—To move for the appointment of a Select Committee to inquire into the pecuniary transactions of the Bank of England since the resumption of cash payments; and, particularly, to ascertain how far these transactions had produced the alarming crisis of the manufacturing, commercial, and financial affairs of the country in 1825–6, and in 1836–7; and also to inquire whether, as the Bank of England is at present constituted, there ever can be stability in the currency, or confidence in the commercial transactions of the country.This was a question that appeared to him of the greatest importance to the industry and prosperity of the nation; and he regretted, sincerely, that the House had not concurred with him on former occasions, when they would have had ample time to go into a full examination of the whole details of that complicated subject,—the currency. In August 1836, he had moved, as an amendment to the hon. Member for the Tower Hamlets' (Mr. Clay) motion, for the appointment of a Select Committee to inquire into the operation of the Act 7 George 4th, c. 46, on joint-stock banks, "that the Committee should be instructed to inquire into the effect of the clause introduced into the charter of the Bank of England, by which country and joint-stock banks, had the privilege granted them to pay their promissory notes in Bank of England notes, instead of paving them in gold." But his amendment was negatived by 98 to 12. In the following year, on the 6th of February, he had moved, as an amendment to Mr. Clay's motion, for the renewal of the Select Committee on joint-stock banks, "for an inquiry into the state of banking, and the causes of the changes in the circulation since 1833," but the amendment was negatived by 126 to 42. His object was, to extend the inquiry, so that it should not be limitted to the joint-stock banks, but extend to the Bank of England, from whose proceedings he confidently believed, that almost the whole irregularities of the circulation had taken place; and he was anxious to have proved that before the Committee. In 1838, when the Committee was re-appointed, for the third time, he had urged upon the House the pro- 5 priety of extending their inquiries into the proceedings and issues of the Bank of England, as the issues of the joint-stock and private banks had little effect on the circulation in comparison with the issues of the Bank of England. But his motion was also rejected. If the House should be of opinion that the present state of the circulation was not satisfactory; if they should further admit, that since the resumption of cash payments in 1819, they had experienced a constant succession of ups and downs in the value of the currency, by which the value of property of all kinds had been affected,—if, by these fluctuations, misfortunes and losses had frequently as sailed, not only the great commercial and manufacturing interests, but more especially the working classes of this country—if the monetary system of the country, which must at all times have important effects on the condition and comforts of all classes in the community, had been thus in a constant state of variation, and was not now in a satisfactory state, he (Mr. Hume) submitted, that that House ought not to separate until it had fully inquired into the subject. The only proofs of his opinion which he should think it necessary to refer to in the course of the remarks he should now address to the House, or, in the inquiry before the Committee which he proposed, were those to be found in reports on the Table of the House, and to be furnished chiefly by the Bank of England itself. From them he would be able to show how the House might without delay, fairly and boldly meet the difficulties which he believed the commercial and financial interests of the country would soon have to contend against; and Parliament might by the inquiry, clearly ascertain the causes of the ruinous fluctuations that had in 1825–6 and 1836–7 produced such serious results; if the subject was properly investigated he thought that there would be no difficulty in arriving at the conclusion, that the evils which the commercial and manufacturing interests of the country had experienced were attributable chiefly, if not entirely, to the conduct of the Bank. He had been charged with making unfair attacks on the Bank of England. He did not deny, that he had attacked its acts as a public body, because he was convinced that the Directors of that influential establishment had grossly mismanaged the currency of the country intrusted to them. He denied, however, that there was anything unfair in his attack—he did not attack the directors or 6 charge them individually with criminal negligence, or with being actuated by personal interest, or with any intention to do injury to the country; he knew many of them personally and he was ready to admit, that they were as honourable merchants and had as honest intentions as any in the community; but, if he (Mr. Hume) believed and could show, that, by their negligence or ignorance, they had in the management of their affairs deviated from that course which sound principles and a wise policy dictated, he should be guilty of neglect of duty to the House and to the country, if he did not point out the errors and the mischief from such conduct with the view solely of preventing the recurrence of such evils. He did not believe that joint-stock banks had by their issues of paper produced those great evils attributed to them; and, from the first moment his hon. Friend (Mr. Clay) near him proposed an inquiry into the joint-stock banks only, he had said that that inquiry would end in nothing satisfactory, as their operations had not affected the general currency of the country to the extent supposed, or that their issues had produced any of those great changes in the value of money which had in his (Mr. Hume's) opinion been brought about by injudicious issues of the Bank of England. He had always been anxious to support a sound currency; and, therefore, was opposed to the principles of those who were anxious to depreciate the currency by large and unlimited issues of paper. He had always advocated a paper currency convertible into gold on demand; and not issues of notes payable by Bank of England notes; and for his own part, he believed that the country would be much better with an entire metallic circulation, than as at present with a mixed circulation of paper and gold, subject to the great changes and fluctuations in its value which we had experienced since 1821. He should, therefore, now endeavour to point out some of the evil consequences that had arisen from the defective monetary system of the country since 1819; and he should endeavour to show that these were attributable chiefly to the conduct of the Bank of England. He further, asserted, that as long as the Bank of England possessed the powers, and exercised those powers so injudiciously over the currency of the country, no man's property although he might be the most prudent person in the world, was safe, as it was subject to almost constant alteration in value,—sometimes rapidly affected and to a 7 great degree,—as caused, he contended, by the conduct of the Bank. It was, therefore, of essential importance to the best interests of the country that the Legislature should ascertain clearly the state in which the currency had been at different times, during the period he alluded to; and the position in which those interests were placed by those alterations in the value of our monetary system. In the documents to which he was about to refer, every figure and quotation had been carefully made from official papers on the Table of the House. In the first place he contended, that it was the duty of Parliament to take care that the standard of value was maintained at all times of the same value in the country; and that no body of men ought to have the power of altering that standard, or general medium of exchanges which the Bank of England bad; that this was the prerogative of the Crown alone for the general interest, and ought not to be lightly parted with. The Crown, in this respect, should view all persons as on the same footing, and carefully guard against the evils that must result from improper interference with the value of that medium. Parliament should, therefore, in support of that prerogative, prevent the Bank from exercising the baneful influence that it did on the property of the country by varying the standard of value. The Bank, by their proceedings, had at times materially affected the property of individuals, and the intentions of Parliament on this subject, as stated at the passing of Peel's Bill in 1819, had been frustrated by the course which the directors had pursued; and, he feared, at times with the connivance of the Government of the day. In support of the view which he had taken, he should state a number of important facts to the House; and all that he asked was, that the House would allow him to go before a committee, that he might have an opportunity of proving them. He would show, that, in 1819, when the resumption of cash payments was ordered to take place, the matter was thoroughly investigated and undertood by that House; and certain resolutions of the committee then appointed were laid down as rules for guidance in the resumption of cash payments; and he contended, that by attention to these rules, little or no variation in the value of the currency would have taken place. He would show, that those rules were, for a time, attended to with good results, and that it was not till 1822, that the Bank of England deviated in their 8 conduct from them, when it did so in the most open and improper manner; and he (Mr. Hume) was confident he could prove, that it was by persisting in this course, the Bank produced that never-to-be-forgotten disastrous commercial crisis of 1825. To the subsequent proceedings of the Bank of the same character may be again attributed the crisis of 1835; and, by its more recent imprudent conduct in its money dealings, which he should presently explain to the House, it had brought on the present pecuniary difficulties in which the country was placed, and from which it will not be relieved without great loss to the commerce of the country, and much individual sacrifice by the British merchant, manufacturer, and artizan. In conformity with these opinions he should submit to the House four resolutions embodying points, which he (Mr. Hume) was prepared by his inquiry to substantiate. He would read them to the House:—1. That it is the duty of Parliament to provide a currency as a common and universal standard, by which the value of all property may be estimated between man and man; and, to render that standard as little variable as possible.2. That the Bank of England has, in the exercise of the powers and privileges granted by the existing monopoly, deviated from the rules laid down by the select Committee in 1819, and violated the rules of banking (which have been admitted to be the best by its own directors); that it has produced by its operations on the currency great alterations in the value of the standard; by which the Bank has largely profited; and the community have greatly suffered, and been subjected to much distress.3. That the commercial crisis in money matters in the years 1825–6, in 1836–7, and the difficulty in the money market at the present time, have all been occasioned by the Bank's irregular and excessive issues, and sudden and large reduction of paper money, by which depreciation at one time, and increased value at another time, have been produced, and have thereby occasioned great derangement in the commerce of the country.4. That the property and industry of every man in the kingdom has been greatly affected by these excessive variations in the value of the standard of money; and that no man in business, whatever his prudence and circumspection, has hitherto been able, or can in future escape the dangers arising from the injudicious exercise of that power which the Bank possesses, of altering the value of the standard at the will and pleasure of the directors of the Bank.If the hon. Bank Director opposite can 9 materially controvert any one of his statements, he shall be happy to be set right on a matter of such momentous importance to the best interests of the kingdom; but he (Mr. Hume) did flatter himself, that the inferences which he should draw, and the conclusions which he should arrive at, would be so distinct and clear, that the meeting them with mere assertions, as had hitherto been the case, would not be considered satisfactory to the House. He should be ready to alter his opinions if his hon. Friend, the Chairman of the Bank could show that his statements were erroneous; but, if the House granted him the inquiry, he pledged himself that, in three or four sittings of that Committee, he would substantiate the four points he had just stated, so that any Member might judge, as well as himself, of the correctness of his views on the subject. That being the ground on which he asked for the inquiry, he would now, endeavour to show how far the Bank had, from almost the earliest moment after the resumption of cash payments in 1821, violated the recommendations of that Committee. As the motion embraces the period from the resumption of cash payments, it would be proper to see what took place at that memorable period. Sir Robert Peel's committee, in 1819, was of opinion, and recommended, that provision should be made for the repayment of a considerable amount of the debt of Government to the Bank, by paying off securities held by the Bank before the Bank could resume cash payments. The amount of public securities held by the Bank at the time was 22,355,115l. The private securities were 9,099,885l. making together the sum of 31,455,000l. It was considered by the Committee essential to the resumption of cash payments, by the Bank, that the amount of those securities should be reduced. It was of great importance, that hon. Gentlemen should bear these facts in mind. The resumption of cash payments was to take place on the 1st of May, 1821, and on the 28th of February two months previous to that time the Bank had reduced the amount of public securities held by them to 16,010,990l., and their private securities to 4,785,280l., making together 20,796,275l. instead of 31,455,000l., and consequently a decrease of 10,658,725l. of securities. On the 31st of August, 1821, the public securities were further reduced to 15,752,953l., and the private securities to 2,722,587l., making a total of 18,475,540l., and a diminution of near 13,000,000l. On the 28th of February, in the following year, 10 there was a further reduction of the public securities to 12,478,133l., but the private securities had increased to 3,494,947l., making together the amount of public and private securities, 15,973,080l., or 15,500,000l. less than in 1819. This was done in accordance with the recommendations of the select committee. So that between 1819 and 1822, the advances by the Bank on Government securities had been reduced from 22,355,115l., to 12,478,133l., being a difference of 9,876,982l. As cash payments were resumed in May, 1821, and were in full activity in February, 1822, it might be as well to compare the state of things at this latter period with that of February, 1819. In 1819, the amount of the Bank circulation, and the deposits in the Bank, was 31,540,070l.; and as there was not a single gold coin in circulation, this amount represented the total quantity of money, in so far as regarded the administration of the currency by the Bank of England. In February, 1822, the amount of the Bank circulation and deposits was 23,355,290l.; and, therefore, as compared with 1819, there appeared to be a decrease of 8,184,780l. in the total quantity of money. It was important to see how the Bank proceeded in respect to the resolutions of the Select Committee to which he had adverted. If it had kept to its instructions all would have been well; but, the gradual increase of paper money which took place after that time led to the important and ruinous events to which he should now revert. At the time that he had just stated, February 1822, there was already an increase in the amount of the circulating medium, for it should be recollected, that in the period from May, 1821, to February, 1822, the Bank had issued 9,200,640. * sovereigns in exchange for its notes withdrawn from circulation; and this amount of gold being added to the 23,335,290l. of paper, made the total quantity of money 32,357,930l. As far, therefore, as regarded the administration of the currency of the Bank of England, the total quantity of money in February, 1822, exceeded that of February, 1819, by 817,860l.; and if it be considered, that the resumption of cash payments raised the value of the standard about eight per cent., it would then appear, that the real quantity of the circulating medium in February, 1822, exceeded that of February, 1819, by upwards of 3,300,000l.* See Appendix of 1832, No. 76.11 In fact the difference was still greater, because there was more silver in circulation in 1822 than 1819. It was in consequence of this greater abundance of money, and a greater stability of things resulting from a return to cash payments, that the Government was able in 1822 to reduce 160,000,000l. of five per cent. to four per cent. which it had not been able to effect during the eight previous years of peace and the suspension of cash payments. It was also owing to the greater abundance of money, that the Bank, in 1822, reduced its rate of interest in its discount from 5 to 4 per cent.* Another proof of the greater abundance of money was to be found in the comparative prices of 3 per cent. consols, which, in August, 1819, stood at. 71½ per cent., and rose in August, 1822, to 80½ per cent.* Such were the circumstances attending the resumption of cash payments; such the consequences; and such the state of things as connected with the currency up to 1822. But in the following year, 1823, matters were changed, and then came the monstrous operation of the dead weight by which the country lost so much money, independent of its sinister influence on the currency. The payments by the Bank began in April, 1823, and before the end of 1824, it had advanced upwards of 4,500,000l. At this period also the 4 per cents. were reduced to 3½ per cents. This reduction was made to the extent of 60,000,000l., and this was the period when the Bank was guilty of such a complete departure from principle by depreciating the value of the currency. If it had not abandoned the principles laid down in the resolutions of Parliament, by increasing its securities to an inordinate extent, the state of public credit would have been entirely different, and the country would not have had to deplore the lamentable fluctuations in property that ensued. In the following year, 1824, the Bank, in addition to the payments of 6,917,569l. on the deadweight loan agreed to pay the dissentients of the 4 per cents., and in July of that year it had paid to the amount of between 5,000,000l. and 6,000,000l. sterling; and, in addition to this, the Bank also advanced money to individuals on the security of stock, which it had never before done; and thus went on making advances on advances, in all these* See Appendix to Bank Report of 1838 p. 88.† See Appendix No. 94.12 ways until they had depreciated the currency by excessive issues, and got involved in all the evils that followed. The consequences of all this deviation from principle were the foreign loans, bubble schemes, and wild speculations in commodities, that followed; and, in short, a state of things such as had never been witnessed before. Then came the reaction in consequence of the great issues of paper money, and all the disasters of 1825. If the House would take a review of these proceedings it would be satisfied that the committee of 1819 very wisely came to the conclusion that it would be impossible for the Bank to resume cash payments unless it were relieved of a very considerable amount of its Government securities; and, this having been done, before May, 1821, the Bank resumed cash payments with the greatest facility, and every thing went on prosperously until in the year 1823, the Bank commenced a course of operations, by which they retraced their steps, and again so overloaded themselves that in February, 1825, the advances of the Bank on Government securities amounted to 19,447,588l., which was only 2,900,000l. short of the large amount which it held in 1819, which the committee of that year declared to be wholly incompatible with the resumption of cash payments. Indeed the state of the Money Market in February, 1825, was wholly without precedent. The circulation and deposits of the Bank of England amounted to 30,922,540l. During the period between May, 1821, and February, 1825, the Bank issued upwards of 20,000,000l. in sovereigns, * and of this sum at least 14,000,000l. must have remained in circulation in 1825, and which, added to the amount he had just stated, would give an amount of 44,922,560l. of money, besides the circulation of silver. It appeared, then, that when the Bank reduced the advances on the securities from 31,455,000l., in 1819, to 20,796,275l., in 1821, there was a great increase of bullion in their coffers; but, as they increased their advances on securities again to 30,000,000l., the bullion departed from their coffers. A proof that the Bank has the power to keep bullion in their coffers if they act on sound principles. With such an amount of Government securities held by the Bank, and a quantity of money in circulation so greatly exceeding that which existed when the Bank resumed cash payments, can we* See Appendix, No. 7, p. 72.13 wonder at anything however extravagant in the way of speculation that happened? Can we wonder at the schemes and speculations of 1824–5? Can we wonder that the Bank gradually lost all its bullion during that excessive issue of paper, and, in December, 1825, was obliged to issue 1l. notes. Complaints have been made against Peel; but by the proceedings of the Bank and the Government from 1823, to 1825, all the principles laid down by the Committee of 1819, were departed from, and the wise recommendations of Peel's Bill was completely nullified. He (Mr. Hume) submitted, that all these disastrous results prove the correctness of the principles laid down in the report of the Committee of 1819, which, if the Bank had attended to, would have prevented those fluctuations which have taken place in the Money Markets and Commercial world. He had in his hand a paper which showed the great increase that had taken place in the amount of paper money between 1822 and 1824. The average amount of notes of the Bank of England in the year 1822, was 17,862,882l.,* the average amount of deposits was 6,486,950l., making the total amount of the circulation and deposits of the Bank of England, 24,349,832l. The country circulation of Bank notes was 8,316,820l.,* making the total paper circulation and deposits 32,666,652l. He would not admit of a question whether or not deposits should be regarded as a part of the circulation; but as they were payable by the Bank on demand he must consider them as such as much as the paper in circulation. In 1824, the Bank paper circulation amounted to 20,135,342l., the deposits were 10,198,375l., making a total amount of the circulation and deposits of the Bank of 30,333,717l.; at the same time the country circulation in notes was 11,141,422l., making at this period the total paper circulation of the country amount to 41,475,139l. By comparing the amount of money of 1824 with 1822, it appeared that there had been an increase of nearly nine millions in the paper circulation within a period of two years. The net amount of the increase of paper was 8,808,487l., of which there was from the Bank of England, 5,983,885l., and from country banks 2,824,602l.. But this was not all; the stock of bullion held by* See Appendix, No. 82, p. 5.† From Stamp-office Estimates.14 the Bank in February, 1824, was 13,810,060l.;* and in November, the same year, it was 11,448,000l.,† showing a decrease of bullion to the amount of 2,362,060l. The decrease of the bullion must have cancelled an equal amount of Bank notes, which added to the 5,983,855l. increase of notes, makes 8,345,945l., which, with the increase of 2,824,602l. by country banks, made the increase of paper money in 1824, 11,170,597l. as compared with 1822. It was owing to this state of things that, although the Bank in the five years, from 1821 to 1825, had coined 28 millions of sovereigns, yet, within a few months, there was hardly one left to issue: for, by the over-issue of paper and its consequent depreciation, all the gold had flown out of the country. This was a conclusive proof that that state of the currency had produced a complete drain of gold from the country; and if the metalic circulation had been ten, twenty, or 100,000,000l., it would all have been carried abroad, in consequence of the excessive issues of paper by the banks at that period. He believed that more than half the sovereigns issued at that period were shipped from this country as soon as they were issued, us it appeared by the Custom-house returns, that in 1824 and 5, upwards of 2,407,676 ounces of gold, valued‡ at 9,354,868l.—and 14,152,130 ounces of silver, valued at 3,538,032l.— total 12,892,960l. were entered as exported; and a further quantity must have been taken by captains of ships and by travellers which were not entered. This great increase of paper circulation, caused, however, whilst the bubble continued, a great increase of apparent prosperity. This was at the very time when the reduction of the 4 per cents was carried into effect, which also added to the increase in the currency; and it may now be confidently stated, that the reduction of the 4 per cents. could not have been effected if that excessive issue of paper, producing an artificial state of the currency, had not been made. He would now point out some of the effects of this excessive issue of paper by the causes he had pointed out, on the price of Consols and Exchequer Bills. On the 28th of February, 1823, Consols were 73⅛. But, on the 31st of August, they were 82⅞: on the 28th of February, 1824, they had* See Appendix, No. 5.† See Appendix, No. 88.‡ See Appendix, No, 65 and 76.15 risen to 92¾, and, on the 15th of April, to 96¼. or about 23 per Cent. in price in little more than one year. This went on until the end of 1825, when the bubble burst, and Consols and all kinds of property suddenly fell to nearly what they were in February, 1823: on the 28th of February, 1826, Consols had fallen to 77⅛, being a reduction of about 20 per cent. Such great fluctuations had before scarcely ever taken place in war: but in time of peace never. On the 28th of February, 1823, Exchequer Bills, bearing 2d. per day interest, or 3l. Os. 10d. per annum, were at a premium of 8s. On the 31st of August, 1824, they were 39s. premium, with interest at 1½d., per 100l. per day, or 2l.5s. 7d. a-year; whilst, on the 28th of February, 1826, the same Exchequer Bills had fallen to par, and 2s. discount. All these fluctuations in the value of property arose from the great increase and decrease of the currency in 1823–4–5, by the ill-advised proceedings of the Bank and the Government. In this unnatural state of the currency the reduction of the 4 to 3½ per Cent. was effected, and must undoubtedly by all impartial men be considered as a forced operation and little creditable to the Government. He had before stated, the amount of the Government securities in February, 1825, was only 2,900,000l. short of what the committee in 1819, declared to be wholly incompatible with the resumption of cash payments. Now, what was the state of the currency in 1825, as compared with 1824?
But in December, 1825, all the bullion was gone. Thus whilst there appears to have been 3,683,530l. less of paper in 1825, there must have been created in reality 7,764,470l. more Paper in that year, as 11,448,000l. of Bank notes must have been paid into the Bank for that amount of gold
In the last Quarter of 1824 the average circulation of the Bank of England was 20,344,972 The average deposits 10,621,100 Total £30,966,072 (And the stock of Bullion in Nov. 1824, was £11,448,000) In the last Quarter of 1825 the average circulation of the Bank of England was 19,748,840 The average Deposits 7,533,700 Total £27,282,540*Appendix 82, to Report of 1832.16 taken away. If no new Bank notes had been issued, the circulation and deposits would have been reduced by the withdrawing of the bullion, to only 19,518,070l. instead of the 27,282,500l. as stated. The average circulation of country banks during the year 1825 was 14,733,170l., being an increase of 3.590,000l. as compared with 1824.—
To which ought to be added the large increase of Bank note circulation in Scotland and in Ireland, which assisted in depreciating the currency of the country. He might ask, when the standard of value, which ought to be uniform, or subject to as little variation as possible, was increased to the degree be had stated, were the results that had taken place in the commercial world to be wondered at?
To form an opinion of the causes of these fluctuations between 1822 and 1825 in the value of property, it is necessary to know that the increase of the Bank of England circulation in 1824, as compared with that of 1822, was 11,170,597 The increase in 1825, as compared with 1824, was 7,764,470 Whilst the increase of the country banks in 1825, as compared with 1824, was 3,590,748 Making a total increase of Paper of £22,525,815 And if the Paper paid into the Bank for bullion, which in February, 1824, amounted to 13,810,060 be deducted, it will show an increase of 8,715,755 of Paper, whilst there was a decrease of gold of 13,810,060
But the extent of the mismanagement of the Bank of England, assisted by the country banks, cannot be fully understood unless a statement of the transactions for the whole period, from 1822 to 1826, be given, as to bullion, securities, &c.
The Bank had distinct notice of the state of the currency from the decline in the stock of bullion as early as August, 1824. I have stated—
And, by the end of the year, all the bullion was gone. Between November, 1824, and May, 1825, the decrease was 5,031,700l.
(That the Bank had issued upwards of 28,000 of sovereigns in the five years 1821 to 1825,) and on the 25 Feb., 1824, the bullion in the Bank was £13,782,700 on the 26 May 1824, the bullion had declined to 13,007,770 on the 26 Aug. 1824, the bullion had declined to 11,990,700 on the 26 Nov. 1824, the bullion had declined to 11,448,000 on the 26 Feb. 1825, the bullion had declined to 8,857,700 on the 26 May 1825, the bullion had declined to 6,456,300 on the 26 Aug. 1825, the bullion had declined to 3,683,00
Here was due notice given to the Bank, 17 for eighteen months, if any notice of being in an erroneous course could be given.
In the beginning of 1824 the creation of Paper by the Bank had become so large that the currency became depreciated, and the bullion was forced out of the country: and if the Bank had been passive, and cancelled the notes paid in for the bullion, the evil would have cured itself; but, as fast as one set of notes were cancelled in exchange for the bullion issued, a fresh set to the same, or to a greater amount appears to have been issued on securities.
It should be kept in mind, that the paper being always kept in excess, the bullion continued to decrease as has been shown; and, on the sound principle, which must always regulate a mixed currency, it was a mathematical certainty, whether the Bank had coined and issued ten or twenty millions of bullion, it would all go, and the Bank be obliged to stop payment, at last as it did.
By the Appendix, No. 88, to the Report of 1832, it is curious to see how slow the progress of exportation at first was; but that it was rapid after the impulse was given. Notwithstanding the large increase of paper currency in 1824, the decrease of bullion from February to November was scarcely 3,000,000l.; but from November, 1824, to November, 1825, the decrease was 8,000,000l., and the Bank had only 3,000,000l. left; and it is known, that in December the Bank had not half a million of sovereigns in their coffers, and was obliged to issue one pound notes.
It is further to be observed, that whilst there was a decrease of securities from 1819, there was a regular increase of bullion, and vice versa, as appears by the amount of securities held by the Bank from 1819 to February, 1826: and I may observe, that the amount of securities held by the Bank are, with the amount of bullion, the true and only tests of increase of Bank notes.
18 So that every year there was an increase of Paper currency to that enormous amount; and it may be estimated that the increase of paper money proceeded from the Bank making
By comparing the amount of securities, February, 1823, with February, 1822, there is an increase of £2,346,650 Of Feb. 1824, with Feb. 1823, there is an increase of 552,270 Of Feb. 1825, with Feb. 1824, there is an increase of 6,079,330 Of Feb. 1826, with Feb. 1825, there is an increase of 7,967,250 Shewing a total increase of securities between Feb. 1822 & Feb. 1826 £16,945,500
The fluctuations in that period may be thus stated: the circulation and deposits increased 2,569,000l. between 28th February, 1824, and the 28th February, 1826. The securities increased 14,047,000l., in the same period, whilst the bullion decreased 11,351,000l. The consequences of this enormous increase and of the reaction which followed were:—
Payments of the Dissentients to the reduction of the 4 Per Cents. to 3½ per Cent. 5,200,000 Payments on the Dead Weight Annuity (to July, 1825), 6,917,569 Advances by the Bank on Stock, &c.* 2,000,000 Advances on Mortgages, East India Company's & Def. Bills, 1,500,000 Increase of Bills discounted, 1,500,000 Total purchases by the Bank, £17,217,569
That the Government, which in 1824 reduced the 4 to 3½ Per Cents. at par, were obliged afterwards to borrow 8,000,000l. in 4 Per Cents. at 94l., thus losing 20 per Cent. or 1,600,000l. The revenue in 1826 was 2½ millions less than in 1825. The interest on Exchequer Bills was raised from 1½d.=2l. 5s. 7d. to 3d.,=4l. 1s. 3d. per Cent. The 3 Per Cents. fell 20 per Cent., or from 93⅝ on the 28th of February, 1825, to 77 on the 28th of February, 1826. The dockets struck in bankruptcy were 3548, and more than treble the number took the benefit of the Insolvent Act; and private compositions were innumerable. Of country bankers, 80 were bankrupt in 1825 and 1826. In short, it is estimated that 30,000,000l. sterling were lost by merchants, of which 8 to 10 millions by the large importations of foreign articles at high prices, and upwards of 3 millions alone were lost in cotton. But, in the midst of this universal ruin, the Bank of England flourished. In the latter part of the year 1824 the Bank had 11½ millions of bullion, but in the end of 1825 it had none. In the last week of December, 1824, the Bank had circulation 19,445,380l.; but in the last week of December, 1835, the circulation was 25,709,4101., being an increase, as compared with 1824, of 6,262,030l. And therefore the gains of the Bank were upon 17,600,000l., more Paper in circulation in December, 1825, than in December, 1824, without the means of paying one million in specie.
As a proof of the reckless manner in* Appendix, No. 6.19 which the Bank of England made advances on Stock and other securities, he would mention an extraordinary instance, related to him and which he believed to be correct. About this period a plan was brought before the French Chambers for the reduction of the Five per Cents. of that country, and the bill passed the Chamber of Deputies, but was lost by only one vote in the Chamber of Peers. He understood that if that bill had passed, Mr. Rothschild and Mr. Alexander Baring had undertaken by a loan to the French government to assist to carry the plan into effect, and that the former gentleman had made an agreement with the Bank of England, that it should make him advances of two millions on stock. He had heard this from good authority, and it was most fortunate that the bill was thrown out of the French Parliament, as the advance would have been required at the time the Bank of England was in difficulty and it would have greatly added to the disastrous results of that period had it been carried into effect. It had been mentioned, that this state of the money market had produced a great effect on prices of all articles of import in this country in the year 1825, and had led to a great increase in the imports. He would mention a few of the chief articles. Thus there had been an increase of 44 per Cent. in the quantity of flax imported; 71 per Cent. in the quantity of tallow; 81 per Cent. on the quantity of tobacco; 64 per Cent. on the quantity of wine; 52 per Cent. on the quantity of cotton wool; and an increase of 94 per Cent. on the quantity of sheep's wool. This was in consequence of prices in England being so much higher in the depreciated currency than they were abroad. The bubble, however, burst when the Bank ceased to pay in bullion, and the holders of stock of every kind were obliged to reduce their prices to a ruinous extent to obtain money, and many millions value of goods were re-exported to find markets elsewhere, and the whole of the increase of price had been a gain to the foreign merchant and a loss to the British merchant. The official value or quantity of the imports had increased from 37,000,000l. sterling, in the year 1824; to 44,000,000l.. in 1825, and had fallen to 1836 in 1825. But the real value had greatly exceeded those sums by the great increase of price of each article. He trusted that he had proved, that if the Bank had acted on proper prin- 20 ciples in its issues of currency, the commercial losses of 1825 would not have taken place. The Bank had been in the habit of throwing all the blame on the country banks, and he would admit, that these banks were not without blame, though their misconduct were far less than those of the Bank of England, which ought to have set a good example, by checking speculation instead of promoting it. But it will be seen, that whilst the increase in the amount of paper by the Bank of England was 17,206,776l., the creation of paper money by the country bankers during the same period was 6,415,850l., making together 23,622,126l., of which there was cancelled for bullion 11 millions; a part of the remainder was lost by the failure of country banks, and the rest was added to the currency. He had been thus minute in explaining the state of the currency which had led to the crisis in 1825–6, because all the facts necessary for the proof were on record: and he (Mr. Hume) believed, that if inquiry was granted, as he required, that the causes of the crisis of 1836–7, could be as certainly made out. It may, therefore, be proper shortly to notice the proceedings of the Bank after the crisis of 1825–6, up to that of 1836–7. The loss which the public suffered by the crisis in 1825–6, made so strong an impression on the Bank and on the commercial world in England, that, for several years, there was little disposition on the part of the Bank, or of commercial men generally, to speculate; and the approach of the renewal of the charter of the Bank in 1833, and the inquiry expected into the affairs of the Bank, tended to keep the directors more attentive to the state of the currency, and not to risk any derangement by such excessive issues as we have seen did take place between 1821 and 1825; and which have taken place of latter years, and led to the crisis of 1836–7; and also to the pecuniary difficulty of the present time. During the eight years from 1826 to 1833, the money market was pretty steady and quiet, and commercial affairs were not subjected to any serious pressure. If the cause of that steadiness in the currency be sought for, it will appear from the following table, that the amount of securities held by the Bank did not vary at any time in those eight years more than 1,673,450l., or from 25,208,980l., to 23,529,530l.: and the bullion from 10,347,290l., to 5,293,150l., and during the greater part of that time, the bullion was from eight to ten millions.
He requested attention to this statement, that it might be contrasted with the enormous variations between 1822 and 1826, as well as in periods since 1835—up to this time. It was in 1833 that the renewal of the Bank charter took place, and he looked back with satisfaction to the part he had taken on that subject. He had done every thing in his power to oppose that renewal. The renewal, however, took place, and two innovations were made, to which, on account of their importance, he would refer. The one was, that joint stock banks were established; the other, that the Bank of England paper was made a legal tender instead of cash in the payments of the notes of these joint stock banks. He had at that time pointed out the danger to which the credit of the Bank would be exposed, by the demand for gold in times of pressure; and he foretold as the certain result, that the Bank of England would have to provide bullion sufficient to meet the whole of the paper currency of the kingdom. The House should know what the amount of that paper has been, to enable it to form an opinion of the risk run by this innovation. In July, 1835, the circulation and deposits of the Bank of England, were 29,390,000l., and the country paper 10,939,000l., making the paper circulation in England and Wales 40,329,000l.: and on the 25th of June last, the amount of paper for which the Bank was answerable was 37,927,467l., viz: Bank of England, circulation and deposits 25,668,000l.; and joint stock and private banks on the 30th of March last was, 12,253,467l. In proof of the want of system and principle on which money matters were managed, he might state, that the Bank was lending money at no less than four different rates of interest, an arrangement obviously absurd and mischievous. To the joint stock banks, who agreed to issue only Bank of England notes, as if it were intended as a premium to over issue, they lent money at 3 per cent.; while to another class they discounted it at 4 per cent.; and what 22 could possibly be more absurd than this, that while the Bank was endeavouring to repress its own circulation in London, by raising its discounts to 5, and then to 5½ per cent., it was lending money to these joint stock banks for them to issue at 3 per cent.? This was, in fact, producing the effect which they charged joint stock banks with, and which they should carefully have avoided. It had been expected by Lord Althorp that the publication, monthly, of the amount of bullion in the Bank, would put the joint-stock banks on their guard in respect to their issue of paper money: but the general conduct of the country bankers for their issuing paper money, appeared to be regulated on other principles, and without regard to the state of the bullion in the coffers of the Bank, as was shown by Mr. Gibbins in his evidence before the committee. He was asked,
Amount of Securities held by the Bank of England for eight years. £. Bullion. 1826, Aug. 3 25,083,630 6,754,230 1827, Feb. 27 23,529,530 10,159,000 1828, Feb. 28 23,581,270 10,347,290 1829, Feb. 28 25,384,750 6,835,000 1830, Feb. 27 24,204,390 9,171,000 1831, Feb. 28 25,208,980 8,217,050 1832, Feb. 29 24,333,490 5,293,150 1833, Feb. 5 23,645,000 9,648,000Q. 1291–1306. "For the security of your banking operations, would you like to know a little more accurately, in point of time, what is the state of the assets and liabilities of the Bank of England?"—"No; I should think not. I do not know that that concerns us much. "You do not think that would concern you in your business as a banker?"—"No." "You do not regard it at all."—"No." "If you saw, upon a series of returns from the Bank of England, that the amount of bullion had been gradually lessening, and that there was a drain upon the resources of the Bank of England, do you conceive that that would be a matter to which it would be your duty to give attention, as a practical banker in the country?"—"We have not the charge of providing bullion to pay our notes; that charge rests with the Bank of England to provide bullion." "Does not the state of exchanges and the amount of gold in the hands of the Bank of England affect the country banks of this country?"—"I do not think it does in general; I think it only operates with a very few banking companies.Another just cause of complaint against the Bank was the fluctuation in the amount of its securities. Upon this subject, Mr. Horsley Palmer had given evidence before the Committee, in 1832, to the following effect:—Question 84. "It appears, by the accounts before the Committee, that for the last four years the amount of securities in the hands of the Bank varied very little. Do you consider it important in the management of the Bank to keep the securities at nearly the same amount?"—"As nearly as the same can be managed." "85. What is the reason why you think it necessary to keep the securities at the same amount?"—"Because the public are thereby enabled, without any forced action on 23 the part of the Bank, to act for themselves in returning notes for bullion for exportation, when the exchanges are unfavourable. If the exchanges continue favourable for any great length of time, then the influx of treasure will command an increased issue of paper, and which may derange the proportions; but it does not follow that the Bank ought, upon that account, immediately to extend its issue upon securities. When, however, it is clearly ascertained to be desirable that part of the excess of bullion so received should be returned to the continent, then it may be necessary for the Bank to re-assume its proportion, by transferring part of the bullion into securities, still preserving the proportions of one-third and two-thirds.He (Mr. Hume) desired to state, that the Bank had in this particular also, acted contrary to Mr. Palmer's opinion; for, on the 4th of February 1834, the amount of securities held by the Bank was 24,762,000l., and on the 23rd of September 28,691,000l.;1 on the 2nd of June 1835, the amount was, 25,562,000l., and on the 15th of December, 31,048,000l.; on the 12th of January, 1836, the amount was 31,954,000l., and on the 31st. of May, 26,534,000l., on the 7th of March, 1837, the amount was 30,579,000l., and on the 12th of December in the same year, the amount was 22,727,030l., showing that no less a sum than 7,852,000l., had been drawn in that short period. So great changes were contrary to every just principle of a bank of issue, and was calculated to produce, as it had really done, the greatest evils. Although it was admitted, that the circulation of paper was too large, and that the bullion was therefore leaving the country, yet the proper means were not taken by the Bank to reduce it. Mr. Samuel Gurney had been examined before the Committee, on 7th July, in 1832, as to the best means of reducing the circulation, and the following was the evidence which he gave:—Question, 2589. "Which would be most advantageous to the persons engaged in commerce in London, the Bank selling their other securities in the market, or either raising the rate of discount, or refusing discounts altogether?—Taking for granted that they were compelled to take some severe step, I think the least disadvantageous would be to sell their other securities; I think the most injurious step would be to refuse the discount." 3591, "Would the sale of Exchequer Bills be calculated to produce fluctuation in the value of money you have spoken of?—A sale on the Part of the Bank of England of Exchequer Bills, of course has the effect of lessening the 24 amount of Bank notes, and increasing the value of money." "3552. Is there any measure which the Bank of England could have taken, or can now take, to regulate the exchanges, when such operations are undertaken by this country?—No other measure that I am aware of, than by reducing their circulation, and increasing the value of money in this market." "3553. Is there any measure which the Bank could take to protect themselves from a drain of bullion, when such transactions are undertaken by capitalists in this country?—I do not think they can take any steps to protect themselves, excepting that of reducing the amount of their circulation, and of increasing the value of money.He would also chew that the Bank had no fixed rules for their discounts, but varied them from time to time, at their will and caprice; although Mr. Horsley Palmer had stated to the Committee, in 1832, that the rate of discounts ought not to vary—Question 170. "Do you think it desirable that the Bank should vary frequently their rate of interest with the market rate?—No, I think not, I am of opinion that with the object of keeping their securities fixed and steady in amount, it is not desirable frequently to vary the Bank's public rate of interest.He had in his hand a statement of the causes which led to the monetary crisis of 1836–7, originating in the fifteen millions loan, in 1835, and caused by the misconduct of the Bank afterwards; but he should do no more at present than state, that he was ready to prove, that the whole of that ruinous crisis took place through the same course of mismanagement as that which produced the crisis of 1825–6, and of 1839, and he therefore asked for a committee for that purpose. But before entering into the details of the loan of 1835, which was the origin of the crisis of 1836–7, he would shortly notice the practice of the Bank in giving discounts before that year. In May 1835, the currency was as already stated in a good condition; and, to understand the effect of the notices of the Bank of England for advances on securities during 1835, 1836, and subsequent years, it was necessary to premise, that the Bank, in its regular mode of doing business, was formerly only open to applications for the discounting of bills of exchange not having longer than ninety days to run, and this only to persons who had regular discount accounts with the Bank; but, under the pretence of assisting the money market, during the four periodical shuttings of the different stocks, the Bank for several years previous to 1835, 25 had been in the practice of making advances on long dated bills of exchange, Exchequer bills, India bonds, and other approved securities. These advances were about six weeks at each of the quarterly periods, and were made to all persons indifferently, so that for twenty-four weeks in the year the Bank broke through all its former rules, and also the rules which it observed in granting discounts during the remainder of the year. This was a system which must have the effect of encouraging gambling; for there never was the least difficulty in obtaining money, on Exchequer Bills, India bonds, and long bills of exchange, from private bankers, after the payment of the dividends and the opening of the stocks; but, the difficulty which speculators had, was to obtain money during the shutting and previous to the payments of the dividends, and that difficulty was removed by this new practice of the Bank. The making these advances for so short a period as ten days, by means of which a man might pay off and renew his the loan, at least three times in six weeks, was also, an encouragement to gambling. These practices had been frequently observed upon, and objected to, and the Bank seemed at one time to be convinced of its error; for, if he was correctly informed, from March, 1837, until November, 1838, it made no other advances during the shuttiugs than on such long-dated bills of exchange as did not come within the general rules of the Bank. This being premised, he would now state the last of these periodical notices of the Bank previous to the loan, dated the 29th of May, 1835, which was as follows:—The Governor and Company of the Bank of England do hereby give notice, that on and after the 29th instant they will be ready to receive applications for loans upon deposits of bills of exchange, Exchequer Bills, East India bonds, or other approved securities, such loans to be repaid on or before the 15th of July (six weeks), with interest at the rate of 4 per Cent. per annum, and to be for sums of not less than 2,000l.From which it was evident, and important to be remembered, that the rate of terest, charged by the Bank previous to the loan of 15,000,000l., was 4 per cent, The loan for 15,000,000l. was taken on the 3rd of August, 1835; and, on the 5th of August, the Bank issued a notice precisely similar to the notice he had just read, agreeing to make advances on bills of exchange, Exchequer Bills, India bonds, and 26 other approved securities; such advances to be repaid on or before the 20th of October (76 days or 11 weeks), but with this difference, that interest should be charged only at the rate of 3½ per cent. Upon this notice there were two things to be observed—first, that it was out of the regular course, for in the regular course of business this notice would not have been given till the beginning of September, previous to the shutting for the October dividend; and next the Bank dropped its rate of interest from 4 to 3½ per cent. And this appeared evidently to him (Mr. Hume) to have to have been done to induce the subscribers to pay up the loan in full, because the Government allowed a discount equal to 3¾ per cent. In this state of things it is quite clear, that if payments of the loan were made in full, it must have been owing to the Bank having dropped its rate of interest, by which a profit of ¼ per cent. was, at once, gained by the person getting discount from the Bank at 3½ per cent. and then paying up the loan, on which he was allowed 3¾ discount; as, otherwise, no one would be so mad as to borrow money of the Bank at 4 per cent., which was the previous rate of discount, under the notice of the 29th of May, to get only 3¾ per cent. from the Government: but, notwithstanding this encouragement by the Bank, very little of the loan was paid in full for fifteen days; and then the Bank, as if to encourage the operation, resorted to the unjustifiable and unusual expedient of making advances on stock for on the 20th of August, 1835, it issued the following notice:—The Governor and Company of the Bank of England do hereby give notice, that they will make advances on stock, and other approved securities, such advances to be repaid on or before the 10th of September next, with interest, at the rate of 3½ per cent., and in sums of not less than 2,000l.On the 10th of September following, the Bank again renewed the notice for advances on stock. On the 1st of October, 1835, it again renewed the notice for advances on stock, and other approved securities, to the 20th of October. On the 8th of October, it renewed the notices for advances on bills of exchange, Exchequer bills, East India bonds, and other approved securities to 20th of November, but omitting stock. On the 15th of October, it again renewed the notice for advances on stock and other approved securities, till the 20th of November. On the 29th of October, it again renewed the notice for advances on stock, 27 Exchequer bills, &c., till the 15th of January, 1836 (being for 78 days, or eleven weeks); and this notice was certainly given to refresh the memories of the public, and induce them to apply for further advances; because the former notice of the 15th of October did not expire till the 20th of November. Some time before this last notice expired, the advances on stock, bills of exchange, Exchequer bills, and other approved securities, were continued to the 12th of February. On the 28th of January, 1836, although its securities had increased from 25,678,000l. on the 30th of June, 1835, to 31,951,000l. on the 12th of January, the Bank renewed the notice for advances on stock, Exchequer bills, &c., till the 15th of April, 1836, when it discontinued its advances on stock, after April, 1836. He had no hesitation in pronouncing these different notices to be so many puffing advertisements, to induce the public to apply for advances; and he did not wonder that they should have had the effect, first, to make money plenty and cheap, which produced speculation; and then raised the prices of articles of all kinds: and the subsequent disastrous bankruptcies of so many merchants were only the results of the sudden reduction of the circulation by the Bank when they found the bullion had almost all left their coffers. After the Bank had discontinued its advances on stock, it then fell into the usual way of making advances on Exchequer bills &c., during the shutting. The next notice was on the 2nd of June, 1836, when the Bank began to profit by the stimulus they had given to speculation, and the rate of interest was raised to 4 per cent. to make advances to the 15th of July. The next notice after this was on the 2nd of September, to make advances to the 20th of October, when the interest was further raised to 5 per cent. But, on the 2nd of March, 1837, when the securities had again been increased from 26,534,000l. on the 31st of May, 1836, to 31,085,000l., and the bullion reduced to 4,032,000l., on the 7th of February, 1837, the Bank issued n notice whereby it confined its advances to bills of exchange, having not longer than 95 days to run; and it said nothing of Exchequer bills, India bonds, and other approved securities. The notices afterwards issued by the Bank were very irregular. Notices were issued on the 2nd of March, and 31st of May, 1837, at 5 per cent. discount, and the advances were confined to bills of exchange; but, on the 29th of November, 28 continued at 4 per cent. to February 1838. It is here to be observed, that during that period the securities had been reduced from 30,579,000l. on the 7th of March, 1837, and 22,606,000l. on 9th January, 1838; and the bullion, which was 4,048,000l. on 7th of March, 1837, had increased to 8,855,000l. on 9th January, 1838, and towards the end of February the bullion had increased to above ten millions sterling. But when bullion was in abundance, and the securities moderate, on the 28th of February, and continued on the 31st of May, 1838, the following notice was issued by the Bank, as if again to invite to speculation and to over-issue of paper, by which the Bank always profited:—The Governor and Company of the Bank of England do hereby give notice, that on and after the 28th and 31st instant, they will be ready to receive applications for loans on the deposits of approved bills of exchange, not having more than six months to run; such loans to be repaid on or before the 17th of July next, with interest, at the rate of 3½ per cent, per annum, and to be for sums not less than 2,000l. each.Thus the Bank reduced the rate of interest again to 3½ per cent, as if to encourage discounts, and to give an impetus to its issues of paper money; and continued to act on this principle until the 29th of November, 1838, when an additional stimulus was again given, by notice, to make advances on bills of exchange, Exchequer-bills, India bonds, and other approved securities, continued until the 23rd of January, 1839, (fifty-six days), at 3½ per cent. On the 28th of February, 1839, as if to get rid of the bullion, which had begun to decrease, the same notice was given at 3½ per cent. to be repaid on the 23rd of April, (fifty-four days). I may observe, that although on the 28th of May, 1839, the bullion in the Bank had, by the over-issue of paper, been reduced to 5,119,000l., yet, on the 30th of that month, the same notice was given for advances on Exchequer-bills, India bonds, and other approved securities, but at an increased interest of 5 per cent., to be repaid on the 23rd of July, 1839. On June 20, 1839, the Bank raised the interest, with reference to the preceding notice, to 5½ per cent., and excluded Exchequer-bills, India bonds, and other approved securities. All this time the bullion had been going out until it had been reduced from 10,015,000l. in 6th March, 1838, to 4,344,000l., at which amount it stood on the 20th of June. These were the 29 fluctuations and irregularities, in the amount and value of money, which had brought about the recent commercial money difficulty. It was the excessive and injudicious cheapening of money and encouraging of speculation which had turned the exchanges against us, as they still continued. By advices from Paris received this day, it appeared that the exchanges were as much against England as they had been for months past, and he feared they would not be so easily put to rights. It had been one of the recommendations of the committee of 1832, and it was one of the objects which Lord Althorp professed to have in view in renewing the Bank Charter, that steadiness in the currency should be insured by the operations of the Bank. On the 28th of June, 1833, Lord Althorp said in the House,If the Bank Directors should act upon a principle contrary to that upon which it is generally understood that the monetary system of the country should be conducted, they would find themselves placed in a situation which no man of respectability would wish to stand in.He (Mr. Hume) asserted, that the Directors had acted contrary to that understood principle in 1835–6, and again in this year; and so far from this object having been obtained through the agency of the Bank, he could show, that in every one of its operations, there had been a continual fluctuation, perpetual ups and downs, without any apparent or discoverable principle. And to show the extent of these fluctuations, he would state some of the changes in the amount of Bank notes and Bank post bills in circulation in different years, as follow:—
But the extent of the fluctuations in the issues of paper by the Bank would appear, when he afterwards stated the amount of bullion and of securities. The circulation and deposits of the Bank, from 1834 to this time, had fluctuated greatly. In 1834, on the 1st of July, the amount was, 35,991,000l.; and, on the 16th of December, 30,560,000l., a decrease of six millions. In 1835, on the 28th of July, 30 the amount was 29,833,000l., and, on the 15th of December, it was 35,050,000l., an increase of more than five millions. In 1836, on the 8th of March, the amount was 34,705,000l., and, on the 15th November, it was 30,225,000l., a decrease of near six millions. In 1838, on the 1st of May, the amount was 30,090,000l., and on the 25th of June, 1839, 25,668,000l., a decrease of four and a half millions—thus always varying to a great extent. Let the House compare these fluctuations just enumerated, with the comparatively slight changes in the amount of the circulation of joint-stock banks and of private banks in the same period, and say how far the joint-stock banks deserve the censure cast upon them. The hon. Member read the following table:—
Dec. 20, 1823, £17,575,000 Dec. 24, 1825, £25,611,000 Increase of Bank Notes and Bank Post Bills in 24 months.£8,036,000 June 16, 1827, £20,503,010 Decrease of Bank Notes in 18 months.£5,107,960 April 18, 1829, £20,750,600 Increase of Bank Notes in 22 months.£247,020 June 26, 1830, £19,978,550 Decrease of Bank Notes in 14 months.£771,510 Feb. 4, 1832, £19,156,990 Decrease of Bank Notes in 20 months.£821,560
RETURN OF THE CIRCULATION OF PRIVATE BANKS AND JOINT-STOCK RANKS, THREE MONTHS, ENDING— Private Bank. Joint-Stock Bank. Total. 1833 Dec. 28 £8,836,803 £1,315,301 £10,152,104 1834 June 28 8,875,795 1,642,887 10,518,682 ——Dec. 28 8,537,655 2,122,173 10,659,828 1835 June 27 8,455,114 2,484,687 10,939,803 —— Dec. 26 8,334,863 2,799,551 11,134,414 1836 June 25 8,614,132 3,588,064 12,202,196 ——Dec. 31 7,753,500 4,258,197 12,011,697 1837 July 1 7,187,673 3,684,764 10,872,437 ——Dec. 30 7,043,470 3,826,665 10,870,135 1838 June 30 7,383,247 4,362,256 11,745,503 ——Dec. 31 7,599,942 4,625,546 12,225,488 1839 Mar. 30 7,642,104 4,617,363 12,259,457
It thus appeared, that the greatest variation in the amount of private and joint-stock circulation was from 10,152,104l. to 12,259,467l. or 2,107,363l. It was wonderful, considering what the conduct of the Bank had been in forcing out the money—considering what temptations it had held out to private banks to extend their issues, and to individuals to engage in wild and hazardous speculations—that both joint stock banks and individuals had not yielded to the temptation to a much greater extent than they had done. All his statements were drawn from public documents, from reports of committees, and other official sources. He put forward nothing in the way of figures that he believed could be disputed; and resting upon these proofs, he asserted, that the Bank of England had acted in a manner widely different from what ought to have been the conduct of a great public body, holding the power over the currency of the country, and the influence which the Bank held. It was necessary 31 to know the amount of bullion held by the Bank to meet the demands that might be made by the holders of the thirty-seven or forty millions of Bank notes in England and Wales, to be able to judge of the principle on which the Bank Directors acted, and how far they had succeeded in keeping a steady amount of bullion, to meet those demands. It appeared that the amounts of bullion in the hands of the Bank varied to a great extent.
The lowest, Dec. 28, 1833 £10,152,104 The highest, Mar. 30, 1839 £12,259,467 Increase £2,107,363
Amount of Bullion. On Dec. 20, 1823 £14,142,000 Fluctuations. Dec. 24, 1825 1,027,000 Decrease in 24 months. £13,115,000 June 16, 1827 10,677,000 Increase in 18 months. 9,650,000 April 18, 1829 6,104,000 Decrease in 22 months. 4,573,000 June 26, 1830 11,795,000 Increase in 14 months. 5,691,000 Feb. 4, 1832 5,088,000 Decrease in 20 months. 6,707,000
Thus between the 20th December, 1823, and the 24th of December, 1825, the amount of bullion in the coffers of the Bank had varied from upwards of fourteen millions to little more than one million; and in the period between December, 1833, and June 25, 1839, it had twice varied from about ten to four millions. The fluctuations in the price and interest of Exchequer bills were also considerable. They were as follow:—
Bullion Average of three Months On Dec. 28, 1833 £10,200,000 Variations. March 25, 1835. 6,295,000 Decrease in 15 months. £3,905,000 Nov. 26, 1836 8,014,000 Increase in 12 months. 1,719,000 March 7,1837 4,048,000 Decrease in 12 months. 3,976,000 April 3, 1838 10,126,000 Increase in 13 months. 6,078,000 June 25. 1839 4,344,000 Decrease in 14 months. 5,782,000
It may be observed, that those six months averages gave an imperfect view of the constant fluctuations in the price of 32 Exchequer bills, which are nevertheless considered to vary less than any other public security, and are sought for accordingly: although during this period Exchequer Bills have been more than once at a discount.
EXCHEQUER BILLS, AVERAGE OF SIX MONTHS. At Premium At Interest per diem. 1830, Jan 5 78s. to 79s. 2d. and 1¾d. — July 5 81s. to 80s. 2d 1¾d. and 1½d. 1831, Jan 5 26s. to 29s. 1½d. —July 5 10s. to 9s. 1½d. 1832, Jan. 5 9s. to 10s. 1½d. —July 5 12s. to 10s. 1½d. 1833, Jan. 5 40s. to 50s. 1½d. —July 5 53s. to 54s. 1½d. 1834, Jan. 5 46s. to 48s. 1½d. —July 5 51s. to 53s. 1½d. 1835, Jan. 5 40s. to 41s. 1½d. —July 6 31s. to 33s. 1½d. 1836, Jan 5 15s. to 18s. 1½d. —July 5 15s. to 17s. 14s. 1½d. 1837, Jan. 5 32s. to 34s 1½d. —July 5 32s. to 34s. 1½d. 1838, Jan. 5 50s. to 52s. 1½d. —July 5 71s. to 74s. 2d. 1839, Jan. 5 67s. to 66s. 2d. —June may be quoted 10s. 20s. 1½d.
The securities in the hands of the Bank show, with more accuracy the amount of issues or loans by the Bank, and the variations in their money transactions much better than the others; and, to those, therefore, should be directed the special attention of Members to enable them to judge. The fluctuations from 1819 to 1826 have been already stated; and from a comparison of the amounts of Bank securities in different years since 1832, it will be seen that the fluctuations were excessive. The amount of securities was on—
May 1, 1832 £23,896,000 In 1832 the greatest fluctuation was £1,189,000 Dec. 4, — 22,707,000 April 2, 1833 24,289,000 Charter granted in 1833 697,000 Aug. 6, — 23,592,000 Oct. 1, — 24,244,000 March 4, 1834 25,547,000 1834 3,144,000 June 3, — 27,812,000 Sept. 23, — 28,691,000 Dec. 16, — 26,362,000 June 2, 1835 25,562,000 1835 3,099,000 Oct. 20, — 28,661,000 Jan. 12, 1836 31,954,000 1836 4,801,000 June 28, — 27,153,000 March 7, 1837 30,579,000 1837 7,852,000 Nov. 14, — 23,985,000 Dec. 12, 1837 22,727,000 Dec. 11, 1838 20,707,000 1838–9 3,127,000 June 25, 1839 23,934,000
It would be further seen that, on 11th Dec. 1838, the amount of Bank securities was 20,707,000l.; and, although the exchanges were against England, and the bullion going abroad, the Directors had continued to issue money at 3½ per cent. on approved securities, so that, when the next return was made in June, 1839, the securities had increased to 23,934,000l. In other words, they had forced out money, and increased the paper circulation to the amount of more than three millions, although all the time the Exchanges were against England; and he believed that, if there had been weekly returns, it would appear that the circulation had been increased by nearly four millions during part of that period. One of the effects of this increase of the circulation was to raise the price of corn, and of every other article, for example, of upland cotton in the Liverpool market from 6½d. to 9½d. per lb.
The highest,—January 11, 1836, £31,954,000 The lowest,—December 11, 1838 20,707,000 The greatest difference £11,247,000
33 It was necessary, after these general statements of fluctuations in the amount of securities, circulation, and bullion, to give a short abstract of the conduct of the Bank since 1837, to prove, that the directors might have avoided the present difficulty, into which they have placed the commerce and manufacturing interests of this country, if they had acted on the rules laid down by Mr. Horsley Palmer and other well-informed men, and been attentive to the foreign exchanges and to the state of bullion in their coffers; and he might venture to say, that no other body of men could be found to proceed so blindly, as they had done, with all the signs of approaching danger about them. On the 7th of February, 1837, the amount of securities in the Bank was 31,085,000l., and the amount of bullion in the coffers of the Bank was 4,039,000l. During that year, the amount of securities was gradually reduced, until on the 12th of December it stood at 22,727,000l.; and, it should be observed that, as the securities were reduced, and the issues of paper cancelled, the bullion increased, and on that day amounted to 8,172,000l.; for 14 months, from January, 1838, to March, 1839, the securities scarcely ever exceeded what they were in December, 1837; and the amount of bullion had remained steady. On the 11th of December, 1838, the securities amount only to 20,707,000l., and the bullion to 9,362,000l. From September to December in that year, large importations of corn had taken place, and the exchanges had been from August against England, yet, without occasioning any reduction in the amount of bullion in the Bank. The harvest had greatly failed, and every man in the country knew that large importations of corn must take place to supply the deficiency of this country; and it might have occurred to the Bank directors that, with an adverse exchange existing for six months against us, caution was requisite to preserve the bullion, and to take measures to meet the drain of gold by the adverse exchanges. Opinions had been given by eminent men before the committee in 1832, that the continuance of adverse exchange was a proof that the currency was in excess, and that a reduction of the amount of paper currency was the best means of correcting the exchange: But the Bank directors, instead of adopting that course, took the very reverse, and on the 28th of November, advertised, as has been already stated, to lend money at 31 per cent. on security of Exchequer Bills, India 34 bonds and, other securities to an unlimited amount: and they continued to lend though at increased rates of interest, until they increased their securities to 23,934,000l. on the 25th June last, having by that means increased their issue of Banknotes to the amount of 3,227,000l.; the exchanges continuing against England all that time. As was to be expected the bullion disappeared as fast as the notes were issued, as follows:—
And he believed the amount of the bullion in the Bank, at the time he spoke, did not exceed three millions, as the amount quoted was the average of the three months of a descending series. After such mismanagement of the currency of the country, and the distress it had brought, and must further bring, on the industry of the country, ought the Chancellor of the Exchequer, if he consulted the public interest, to refuse the inquiry? Ought the House blindly to support hint in his opposition to the inquiry, when the Bank had so conducted itself? He would state to the House how very different Lad been the conduct of the Bank of France. It appeared from the evidence of Mr. A. Baring, before the Lords' Committee of 1819, that even in a period of panic and considerable pressure, the Bank of France never reduced or increased the rate of its discounts of commercial bills. All they did, in order to check excessive speculations, was, to reduce the period of discounts from ninety days to sixty, and for a short time to forty-five days. From the year 1819, until the present time, the Bank had never increased the charge for discounts, but had preserved an uniform rate of four per cent all that time, and had never refused to dicount any commercial bills with proper indorsement; and he believed, that the Bank of France really gave much more assistance to the commerce of the country than the Bank of England did. During the whole of the political disturbances in 1830 they had steadily continued in that course. He had lately examined that bank, and he would mention to the Chancellor of the Exchequer, the answer of the governor to him, when 35 he asked whether there would be any objection to his seeing the accounts of the bank—"None at all; our house is a house of glass. Every man may see our transactions." In fact, the transactions of the Bank of France are every day printed, and returns of them made to the Treasury. These accounts are regularly made up, showing every shilling received and paid during the day, and the amount of discounts under every head; in short, the whole daily transactions of the bank are regularly entered and printed yearly to the world, so that there is no mystery, and the greatest confidence in the operation of the bank accordingly existed in France. On a late occasion, when the Belgian Bank failed, and a run took place, on the banks in Paris, in consequence of the erroneous principles on which Laffitte's bank was conducted, there was considerable pressure. But all that the Bank of France did was to re-discount some of the notes of Messrs. Laffitte's bank at forty-nine days, and thus gave efficient assistance and stopt the run. That was all that had been done to place the currency of Paris in its proper state, while we were undergoing most severe attacks upon our property by the most erroneous currency arrangements of the Bank of England, which was the parent, instead of being the preventor, of speculation. While the Bank of England had been discounting and lending at 3½ per cent., 4 per cent., 5 per cent., and 5½ per cent., the Bank of France, avoiding such variation and its evil consequences, had continued its discounts at four per cent. When commercial men in France wanted money they went to the bank and got discount without difficulty, the result of which was that the amount of discount in the French Bank was much more than that of the Bank of England. He complained, that the Bank of England, by lending money at times at low interest, often lower than the market price, on stock and other securities, did in reality urge to over speculation by merchants, and to over issues of paper by joint-stock banks; and, having got the country into great excitement of high prices and apparent prosperity, altered their plan, reduced their discounts, raised the interest, and, to prevent the exhaustion of their bullion, suddenly cramped the whole of the commercial transactions of the country. The Bank of France did no such thing. He (Mr. Hume) also complained, that the Treasury was, by the present system, dependent on assistance from the Bank: 36 the Bank was made subservient to the purposes of the Government; and the Government, in return, subservient to the purposes of the Bank. The Chancellor of the Exchequer was dependent every quarter-day for the advances which were made to him from the Bank, to pay the dividends of the public debt. He thought this a state of things which imperatively called for a change. It appeared to him to be very important, that the House should not separate without understanding the principles on which the Bank had acted, the manner in which it had used the power over the currency and the exchanges, and the consequences of their conduct. However late the period of the Session, therefore, he thought, that it behoved Parliament to examine, and see whether or not the Bank had fallen into any mistake; and if it had, in what manner a remedy could be applied, and how the recurrence of similar mistakes could be prevented. He thought the Bank directors themselves ought to be glad to have their errors, if they had committed any, pointed out. The late period of the Session ought, therefore, not to be a valid objection to entering upon the inquiry which he proposed. If the House saw the danger in which the commerce of the country; and, he would add, the finance and credit of the country, were placed by the irregular and improper proceedings of the Bank, he felt confident, that they would not think of separating until an inquiry was made. He had before stated, that in the last week the Chancellor of the Exchequer could not have paid the dividends on the public debt without money from the Bank; and let us suppose the Bank to have no gold in its coffers at the next quarter day in October, how would the character and credit of the country be injured, if the Chancellor of the Exchequer had not gold to pay the dividends—and he would add, that that was possible, nay, probable. He would undertake to provide the committee with all the materials which they would require in order to come to a decision. He would pledge himself, that the inquiry need not occupy them more than fourteen days. He wanted no evidence to prove his case beyond what the records of Parliament and the books of the Bank could supply. He would be prepared, from public documents alone, to substantiate every one of those important statements which he had made to the House. The hon. Member concluded by moving, as an amendment on the motion for the reading the Order of the Day, that 37
£. Bullion. On the 11th Dec., 1838 The amount in Securities was:— 20,707,000 and 9,362,000 On the 8th Jan., do. 21,680,000 and 9,366,000 On the 5th Feb., do. 22,157,000 and 8,919,000 On the 5th March do. 22,767,000 and 8,106,000 On the 2nd April do. 22,987,000 and 7,073,000 On the 28th May do. 23,543,000 and 5,119,000 On the 25th June do. 23,934,000 and 4,344,000A select committee be appointed to inquire into the pecuniary transactions of the Bank of England since the resumption of cash payments; and, particularly to ascertain how far these transactions had produced the alarming crisis of the manufacturing, commercial, and financial, affairs of the country in 1825–6, and in 1836–7, and at the present time: and, also, to inquire whether, as the Bank of England is at present constituted, there ever can be stability in the currency, or confidence in the commercial transactions of the country.
Mr. William Williams
seconded the motion. He regretted that so little interest had been taken by the public upon a subject of so much importance. He knew of no question which deserved more attention from that House and the public. It was one deeply affecting the property of country, which was subject, at present, to such sudden fluctuations of value. At one period, every interest of the country was in a state of prosperity, the working classes were employed, and the manufacturers reaping profit; whilst at another period, and frequently, in a few months, adversity commenced, and went on advancing, until, at length, all interests felt it, and the country was in a state of depression, the working classes being thrown out of employment, or the wages of those who were in employment considerably reduced. In course of time, they saw the country again gradually restored to prosperity, but it so happened, that it never remained in the same state for two years together. There was evidently some great cause for those changes, and some remedy should be sought for them. He had paid great attention to the changes which had successively taken place, and his opinion was that they had been altogether occasioned by the mismanagement of its issues on the part of the Bank of England, and the great powers which had been given to the Bank. He thought the connection subsisting between the Exchequer and the Bank of England, was another cause of many of the aggravated evils of which the country complained. Those who recollected the stoppage of the Bank, would recollect the evils it produced, and that when the difficulties occasioned by that event were over, a great rise took place on account of increased issues. From that time until 1810 every thing went on well. At that time Bank notes became depreciated, and a committee was appointed to inquire into the cause of the depreciation. This committee recommended a return to 38 cash payments; but this was ridiculous at a time when guineas were valued at twenty-eight shillings. He would go to the next period, when distress was caused by the withdrawal of paper-money. Seeing the folly of any attempt to resume cash payments, the Bank of England began to limit their issues, and consequently there was a depreciation in articles of every description, and manufactured articles of every kind fell remarkably in price: a great number of failures took place, and the working classes were thrown into the greatest distress. Well, in a short time the Bank resumed their issues, and high prices immediately followed. In 1819 the measure commonly called Peel's Bill was introduced. By this bill it was proved, that from and after 1823, no notes of the Bank of England, of less value than 5l. should circulate. All would recollect the great pressure which followed, and which caused the bill to be abandoned. The greatest part of abandoned. The greatest part of the pressure of that bill fell upon the agricultural interest, and the bill was repealed in 1822, a year before the period fixed for the final withdrawal of small notes. A great abundance of paper-money was then thrown into circulation, and the prosperity of the country rose to a great height. Various schemes were eagerly entered into for the employment of capital, such as the North American scheme, the mining scheme, and at the same time the country readily granted various nations throughout the world a great amount of loans. Commodities rose in value fifty, and in some instances 100l. per cent., and at the same time a great quantity of bullion was exported. The bank, seeing the danger that was likely to arise from this excited stated of things, began to drawn in its issues. The panic of 1825 was consequently produced, when every description of property connected with trade and manufactures, fell to nearly one-half; nearly on hundred banks failed throughout the country; and merchants, manufacturers, and traders of every description, suffered to such an extent, that it might be almost compared to a general confiscation of property. What was the expression at that time made use of by that distinguished man, than whom no person better understood the question—he meant Mr. Huckission—who said that the mismanagement of the Bank of England, had brought the country within forty-eight hours of a state of barter. After 39 the country had come to its lowest point, things began to mend. Mr. Canning then had a bill passed, which placed Peel's Bill on its original footing. Various periods of distress had occurred successively up to 1836, and he contended that in every instance this distress was consequent upon a contraction of the Bank issues. In the latter end of 1836, owing to the mismanagement of the Bank affairs, a period of distress was produced. To show that mismanagement, he would refer to the Bank averages. On the 3d of July 1835, the circulation of the Bank was 29,269,000l., and the amount of bullion in the Bank was 6,219,000l. On the 14th of January, 1836, about six months after, the circulation was 36,431,000l., and the amount of bullion was 7,076,000l. Thus, though there was an increase of circulation to the amount of 7,162,000l., the increase in the amount of bullion bore no comparative proportion to the increase of circulation. He recollected, that at the time he gave notice of a motion with respect to Exchequer bills, and was prevailed on to give it up by remonstrance from all sides of the House, that it would produce most injurious effects, as the Money Market was at the time in a state of depression. From July, 1835, to the middle of the year following, articles rose in value to the extent of from thirty to even fifty and in some instances seventy per cent. It was lamentable to see the indifference that prevailed with respect to this subject, which was important to the interests of every man in the community. One of the great causes for the increase of circulation that took place in 1836 was the inducements held out by the Chancellor of the Exchequer to make up the West-India loan of 15,000,000l. Some of the West-India claims having been adjudged at the time it was felt desirable to employ this great amount in some profitable manner, and money was offered in all manner of ways, so that it was possible to get an ordinary bill of exchange discounted at the rate of 2l. per cent. He differed from the hon. Member for Kilkenny, who said, that two thirds of the foreign corn imported into this country was paid for in bullion. Now, he had the best reason to know, that nearly the whole was paid in bullion. This was a lamentable fact, for in former years the corn imported was principally paid for in our manufactured produce. He contended, that if the Bank of Eng- 40 land acted with prudence, and on the principles stated by one of their own directors at the time, that the Bank applied for a renewal of its charter, much of the evil that had taken place might have been avoided. He maintained, that the country ought not to be left exposed to continued danger by the manner in which the affairs of the Bank were conducted. The country ought not to be left in a state of ignorance on this subject; and even though the Chancellor of the Exchequer should oppose the motion, it was the duty of the House to support the motion and to grant the inquiry sought for. There were various points of view in which this question might be considered, and one was with respect to the connection between the Bank of England and the Exchequer. The Government were obliged to borrow money from the Bank to pay the quarterly dividends, and in consequence of this the dividends due on the 5th were seldom paid before the 10th or 12th of the month. He found in a return before the House, that in 1838 the amount of deficiency bills (those bills on which the Government borrowed money from the Bank) was 25,590,000l. This was at the close of last year. He contended, that the amount of these bills bore a very high proportion to the amount of the year's revenue. He contended, that this connection between the Bank and the Exchequer operated as an evil. And all this was done by a company consisting of twenty-four irresponsible merchants. As to the half-yearly meetings in the Bank parlour, they were mere farces. Some very civil persons assembled there to ask the governor questions, and to receive information which he was most desirous to communicate, but no information was ever obtained which would he of the slightest advantage to the general proprietary or the public. He thought it was not right, that the Government of this country should be placed at the mercy of such a body. As his hon. Friend had almost exhausted the various topics incidental to this subject, he should only trouble the House with one more observation. With reference to the money lodged in the savings' banks, which amounted to twenty-two millions, he thought, that was a subject which ought to be immediately inquired into. Let any one consider what, in the present times of pressure, must be the consequence of any 41 sudden run upon the savings' banks. The Chancellor of the Exchequer had the oilier night alluded to the deposits in these banks as indicative of increasing prosperity in the working classes. But that increase afforded no test of the state of the working classes, as the great majority of the depositors in savings' banks were people of comparatively affluent circumstances. He had heard of persons who had deposited in those banks sums to the largest extent allowed in the names of every member of their families, for the purpose of deriving a larger amount of interest than they could get by investing their money in Government stock. This was not to be wondered at, considering the fluctuations which had occurred during the last few years in the value of Government stock. In 1825, Consols rated at ninety-four and a-half, in the same year they fell to seventy-seven and-a-half. In the following year they began at seventy-three and-a-half, and in 1827 they rose to eighty-seven and a-half. In 1829, they begun at ninety-four and a-half, and fell to seventy-seven, showing fluctuations of from fifteen to twenty per cent. He thought, that these matters should be looked into; he wished, that the savings' banks should be made what they were intended to be—a benefit to the industrious classes. He was afraid, that we were rapidly approaching the gulf which threatened us when Mr. Huskisson alleged the country to be within forty-eight hours of a state of barter. He thought, that the Representatives of the people were accountable to the people, and should narrowly watch their interests. He thought a Committee of Inquiry should be immediately appointed, and that their duty should be to suggest some means of placing the circulation in a state of greater security than it enjoyed at present.
§ Mr. Thomas Attwood
had heard with great satisfaction the observations of his hon. Friend, in nearly the whole of which he concurred; but he wished to say a few words as to an error into which he thought his hon. Friend had fallen. His hon. Friend had attributed the various scenes of distress which had at different times occurred in this country to the conduct of the Bank of England, and that the Bank might have prevented them. In his opinion prevention was impossible under the circumstances. The fact was, that the Bank of England had all along been merely an engine in the 42 hands of Government, and had often been obliged to ruin thousands of families in its own defence. His hon. Friend had accused the Bank of increasing its issues in 1816. Why, if it had not done so, the most powerful imagination could not paint the horrors which would have ensued. In that terrible year a law was passed enabling the Government to borrow six millions, and Lord Liverpool increased the circulation of Bank of England notes from twenty-three to thirty millions. By these means, and by the Bank Restriction Act, the distress of 1816 was averted, and the prosperity of 1817 and 1818 produced. But this prosperity soon passed away, and the Bank was again obliged to produce distress in the country in 1818, 1819, 1820, and 1821, to save themselves. At that time Lord Castlereagh came home from his negotiations, and to remedy the then state of things introduced in one day five monetary measures into that House—one to renew the issue of one-pound notes for eleven years, another to enable Government to borrow ten millions dead weight loan, another for a loan to enable Government to pay off the five per cent. dissentients, and lastly, one to enable the Bank to lend money to the India Company and to landowners on mortgage. He thought he had now shown that the Bank of England in relaxing the screw, as it had been termed, had not done it, as his hon. Friend seemed to imagine, with a dishonest view of bolstering up its own dividends, but merely as a consequence of the necessity imposed on it by the Government. So far from that, the Bank directors remonstrated with Lord Grenville on the proceedings of Government. In his opinion the Bank directors had always done their duty. He had watched them narrowly, and he had never detected them in making dishonest returns, or in availing themselves of their knowledge to advance their own personal ends. When the Bank directors remonstrated with Lord Grenville, and told him that his acts were bringing the country to ruin, his answer was, "What have you to do with the country? Mind your own business. We are the persons to take care of the country." This was the answer of an ignorant old man to a set of the best-informed men in the country. In 1825, in the panic, the directors consulted Mr. Huskisson as to what should be done in the crisis, and he told them to put a bit of paper over the door stating that they had stopped payment, and would resume shortly, This was the 43 answer of a man so much lauded as a statesman. If the Bank directors had taken his advice, the country would have been reduced to ruin. He then told the directors how the crisis was to be avoided. He told them to get the one-pound notes into circulation, and also to get nine millions of thousand-pound notes ready. He denied that the Bank direction was accountable for the evils that had at different times affected the commercial interests of the country. The Government issued the one-pound notes to remove a pressure, and shortly after Lord Liverpool, by a a gross breach of faith, brought in a bill withdrawing them from the circulation. All he blamed the Bank of England for was, not remonstrating more strongly with the Government. The directors should have said to the Government—"You owe us thirty-six millions, pay us that sum in sovereigns, and then withdraw the one-pound notes." If the Bank directors had used this language the Government would have been taken completely by surprise, as, if they had put the fee-simple of England and of India into the market, they could not have raised the money in twelve months. The Bank directors would have thus prevented a measure which had produced a depreciation of wages and a loss to the industrious classes equivalent to four hundred per cent. In 1837, during the commercial distress, the public press was continually calling on the Bank to restrain its issues, but if they had done so Government could not have got on with the business of the country. The Bank of England had been compelled by the Government to put on the screw. By so doing they had ruined the most flourishing of our merchants; they had deprived thousands of families of bread; and millions of the industrious population of England had in consequence suffered severely. [Laughter.] The hon. Member for Leicester laughed at that; if he did, he would not be again returned for that borough at the next election. [Mr. Easthope—No, no.] Well, perhaps it was at his manner that the hon. Gentleman laughed. However, the Bank of England was now called on to pull in. it was pulling in. It had raised the rate of interest to live and a half per cent. But why did not the Bank of England then demand from the Government the payment of the debt due to it? The Government owed the Bank of England 30,000,000l. Why did they not demand that sum to be paid in gold? Of course the right hon. Gentleman, the Chancellor of the Exchequer would 44 persuade them not to claim such an amount of sovereigns at his hands. But if the Rank listened to the seductions of the right hon. Gentleman, though it might be peace between them, as far as the people were concerned, discord and anarchy would prevail to a thousand times greater extent than it at present did. He was sorry the Bank had taken this course, if he were the adviser of the right hon. Gentleman, he would recommend him to say to the country—"I will relax the screw if the workmen still continue to find prices rise. I will give an order for the one pound notes, and if they cannot be paid in gold I will give you an order for a Restriction Act." Now, he would be bound to say, that that very day, or yesterday, the right hon. Gentleman had borrowed 5,000,000l. at least. The Bank had complete power over him, and if they had not lent him the money consols must have been down to thirty. Under these circumstances he hoped the screw would not be put upon the nation. If it were, the result would be a general insurrection in the country. It would not be a touch and go. No such thing. It would be a general insurrection. It had not been his intention to trespass on the House any longer, but really it occurred to him that hon. Members had eyes, but saw not; ears, but heard not; hearts, and they would not feel; heads, and they would not understand. They had been tampering with this matter for years. They had listened to the public press; they had worshipped the dicta of that man of talent, Mr. Huskisson; and at one time nothing would go down but that we were over-trading, overpopulating, and over-producing. It was then said—"Only get rid of the surplus food, and don't produce quite so much, and we shall be rich." Just as if we did not want all the wealth we could make, or as if we were like so many flies in a sugar bottle, smothered in our own sweets. Those were the arguments that prevailed from 1816 to 1819. Well, that doctrine did not answer. He was almost ashamed to tell what followed. Lord Liverpool found out, as he thought, what was the real cause of the mischief. Lord Liverpool came down and said, the one-pound notes did all the mischief. So that was rectified. He found, however, that would not do, and when the panic of 1825 came, he said he had found out another secret—that it was not the one-pound notes merely; but, said Lord Liverpool, "You have no idea what a set of men these country bankers are; for 45 what do you think these country bankers in their cunning have done? Nothing less than made a run upon the Stamp Office; But with all their cunning we are too wise, too skilful for them, and we have made the other House give us an Act of Parliament to stop this run." Well, within two short months after this Act was passed, Lord Liverpool came down and said he had found out another secret. The country bankers were the plague of his life; they were always at their infernal tricks; and he had just discovered that they were deluging the country with their provincial one-pound notes. But ha, of course, was ready for them; he was up to their tricks, and so he gave the Bank of England six months longer to prevent the country bankers from starving the country. Then the country banking system was attacked, and it was said, what we wanted was the Scotch system of banking. Oh, for the Scotch system! Yes, that was the very beau ideal of banking, and so a Joint-stock Banking Act was passed. Well, they had that till 1836, and it did act in relaxation of the rule; for he knew one joint-stock bank which had applied no less than 4,000,000l. sterling in the employment of labour. But now, after having blamed all these plans in succession, they began to blame the joint-stock banks. For the last two years they had been blaming their own pets, and what was the consequence? The ruin of thousands of affluent men, and of multitudes of the working classes dependant on them; and now, because they could not turn the screw any tighter, they at last turned round and blamed the Bank of England. Why should they blame the Bank of England? Why forget the simple fact, that for twenty years their laws had been attempting an impossibility—the impossibility of paying off 800,000,000l. of standard debt in standard gold, and that to raise the interest of this debt they had imposed strangling taxes on the industry of the country also, to be paid in standard gold? How could the revenue flourish when the industry of England was strangled under the pressure of this infernal screw? They had no right to blame the Bank of England. The real subject of blame was the law. He would support this inquiry, because he was quite sure that if they put him upon the committee, which, by-the-by, he was sure they would not, for they had never put him on any such committee since the manufacturing committee of 1833, when he made all the witnesses prove that what they 46 called prosperity was the payment of five per cent. interest after the entire and irrecoverable sinking of the capital employed by them, so he was assured they would not put him on the committee; and that was the case with the manufacturer now. He never could hope to draw out his capital. It was not so, perhaps, with the agricultural interest to-day, but if the screw were enforced, it would be to-morrow. Let them, therefore, attack the law. As to the Bank of England it had been the mere tool in the hands of the laws, without power to do otherwise than it had done. Well, now he thought he had done all he could for the Bank of England. He did not believe that the Bank of England had in its hands, at this moment 1,000,000 sovereigns. He said so from the documents. According to the last quarter's statement they had 4,500,000 sovereigns, 4,300,000 sovereigns being the average of the three months. Now, knowing the reduction to have been at the rate of 1,000,000l. per month, it followed that there were 7,000,000l. in the Bank three or four months ago. Take, then, the average between 7,000,000l., the highest, and 4,000,000l., the lowest, and the average result would leave the Bank 2,000,000l. It was impossible that the Bank of England could have more than 2,000,000l. in their coffers now, unless, indeed, they had gone humbling themselves to the Bank of France, as they did in 1825, when the Bank of France lent them a million of sovereigns, taking our Exchequer bills as securities, with a lien on the British Treasury. If the same thing had not been repeated it was impossible that the Bank of England could have more than 2.000,000l. of bullion in its coffers. If it had 2,000,000l. part of it was in silver and part in the branches. Now, there were ten branches, and allowing 50,000 sovereigns for each, at the lowest, that left only 1,500,000l., of which allowing, as the most probable proportion, 500,000l. to be in silver, they would only have 1,000,000 of sovereigns left in their possession. Under these circumstances they were justified in making efforts to get back the sovereigns. But it was not right that the nation should be the victim of those efforts. Let the Government be the victim. Let them bring down the right hon. Gentleman's salary. Let them confiscate it. Let them confiscate the salaries of his colleagues, but let them not confiscate the property and the industry of the people. Do not make the working classes bear it. Do not let the House en- 47 courage the Bank of England to turn the screw more severely. Instead of 5½ per cent., if the Bank would take his advice, they would bring down the rate of interst to 3 per cent. to-morrow. He had no more to say but that he would cordially support the motion of his hon. Friend the Member for Kilkenny, though, could he consistently with the rules of the House have done so, he should like to have extended the proposed inquiry into the Bank of England as at present constituted, by adding the words "under the present state of our laws and monetary system."
The Chancellor of the Exchequer
said, he should occupy the attention of the House but a very short time, endeavouring to confine himself expressly to the particular question, in place of answering the very loose and discursive speech of the hon. Gentlemen who spoke last. The hon. Gentleman, whether he spoke in attack or defence of the Bank of England, seemed to him to be equally unfortunate; but more especially his defence was so extraordinary, that he was sure the gentlemen connected with the Bank of England would feel it to be their duty to repudiate that defence on the principle on which it was urged. But if the hon. Gentleman had not succeeded in his attempted defence of the Bank of England, he had, on the other hand, brought forward so many new charges against it, that no kind of inquiry would be consistent with his accusation, but a coroner's inquest. He could assure the House that he was not about to follow the hon. Gentleman through the whole of his speech; though there were some of the hon. Gentleman's statements which, if not contradicted at once, and contradicted in the most decisive manner, by those who had the means, might lead, not certainly in that House, but probably in foreign countries, where their debates might be read, to considerable misapprehension. The hon. Gentleman had declared, that the effect of the conduct of the Bank of England, about twenty years ago, was to reduce wages, and the prices of everything that was valuable in the country by the amount of 400 per cent. How the hon. Gentleman could make this out he could not tell, but certainly the conclusion was not founded on the facts which the hon. Gentleman brought forward, or on any facts whatever. Again, the hon. Gentleman took upon him to say, that the Bank could not possibly be possessed at the present of above 1,000,000 sovereigns. This was not only not supported by facts, but it was directly contrary to the 48 facts. Now, he came to the practical subject before the House. He hoped, that neither the House nor the public would conceive, that there was any indifference on the part of her Majesty's Government or any want of conviction of the importance of this subject. He was fully persuaded, that a more important subject than the conduct of the Bank of England, involving, as it did, the monetary concerns of this country, could not possibly occupy the attention of any set of men; but it did not necessarily follow, that because the subject was important, the motion was one which must necessarily create an interest in the House, and the cause of the lack of interest among hon. Members, in relation to this debate, he believed to be because, in the minds of the great bulk of the Members, the appointment of this committee did not appear to be expedient. At the present period of the Session, and in the present circumstances of the country, this, he was persuaded, was the feeling of the great mass of Members. What was the motion itself? They were to inquire into the pecuniary transactions of the Bank of England since the resumption of cash payments, and they were more particularly to ascertain how far these transactions produced the alarming crisis of the manufacturing, commercial, and financial affairs of the country in 1825,1826, and in 1836, 1837; and also to inquire whether, as the Bank of England was at present constituted, there ever could be stability in the currency, or confidence in the commercial transactions of the country. So this inquiry had no limits; it went to include the whole transactions of the Bank, involving the whole question of public credit, as well as the whole of the questions of our mercantile affairs throughout the land; and this too extending itself over the whole course of nineteen years, and including two periods of commercial pressure; the whole concluding with a sweeping inquiry as to how far the present system of managing the Bank of England was or was not adapted to the wants of the country. Why, if ever there was a subject, which, if entered upon, must needs branch into innumerable sources of inquiry, and those of no ordinary difficulty, it was this. But the hon. Member sought to justify himself by saying, that he could assure them that he would not call a single witness before the committee, but that from written documents, and from them alone, in fourteen days he should be able to show the committee the conclusion to which it ought to 49 come. Now, it was easy so to talk. It was quite likely that his hon. Friend, who could apply great industry to any subject, and who had applied great industry to this, might be able to come to a conclusion in fourteen days; but did not the hon. Gentleman think, that whatever conclusion he might come to in that time, would preclude other hon. Members from coming to the conclusion entirely opposite? But if they opened the question at all, would it not require many times fourteen days to determine how it would be necessary to proceed, in order to oppose what might be advanced on the other side; and would it not be necessary to examine witnesses before they could come to a satisfactory conclusion? The impossibility, therefore, of bringing such an inquiry to a satisfactory issue at the present time of the Session, he considered to be a sufficient objection to the motion. But he confessed that he had another objection. The time might come when, previous to making any change in our banking system, a searching inquiry ought to be made into the whole question, of the manner in which the Bank of England has managed the monetary affairs of the country, and on what terms it might be proper to renew the engagements of the country with the Bank. Nor was he prepared to say that under certain circumstances and in certain events it might not be proper to inquire into the whole subject of banking in the country. But if such an inquiry would be proper at any time, it was not so at this time, at a moment when the exchanges are unfavourable, when a considerable diminution had taken place in the bullion in the Bank of England, when the value of money was increasing greatly, and when the effect of stirring the subject would be to impede commercial transactions, and to create great and general distrust and confusion. Last year he had seen no objection to the inquiry, if there were no objection on the part of the Bank. So matters had rested; but it was one thing to undertake that inquiry, had it been commenced in the course of last Session, in quieter times, and it was another to go into the inquiry at a period when it was impossible to bring it to any advantageous result, when they could not complete the inquiry, and when it could not lead to any practical measure. On these grounds he should resist the inquiry. Then, at the close of his motion, the hon. Member for Kilkenny suggested, as a fitting subject for inquiry by a Committee of the House, the general principle of the con- 50 stitution of the Bank; he purposes to examine whether the constitution of the Bank of England, as at present existing, was or was not likely to conduce to stability in the currency, and confidence in the commercial transactions of the country. With respect to an inquiry into the general principles of banking, though he entertained the highest possible respect for Committees of that House, so long as they confined themselves within their just functions, yet there were matters which he thought could not be very advantageously inquired into before a Committee of the House of Commons: such was the scientific principle which should regulate the banking system. He doubted very much whether the House or the public would ever receive so much information from any report of a Committee of that House as from the writings of men on a subject which they understood, and on which they wrote dispassionately, and which were diffused, commented on, and left to produce their effect on the public mind. Taking, as an example, the question of the establishment of one central and exclusive bank of issue, the most important question connected with the issue of money, or rather the coining of paper money, as important a question as could engage the mind of a man, and the pivot on which this question would hereafter turn; supposing that question to be examined as an abstract theory before a Committee, he asked the House of Commons and the public, whether or not they were more likely to be instructed by the report of that Committee, or by the writings of Mr. Lloyd, Mr. Horsley Palmer, of Col. Torrens and Mr. Tooke, which had been canvassed by public opinion, and brought to the test of judgment and inquiry, and the truth of which theories they had had the opportunities of discovering by their application to practice? Were they not much more likely to profit by the inquiry, if considered as a matter of science by such a discussion, than by the examination before a Committee of the House of Commons? He did not quarrel with the present discussion of the question, because important matters might be thrown out which it might be advantageous to the Bank to take into consideration. There might be valuable suggestions thrown out by practical men, but even in respect to many of these suggestions, he should say, that they were not a matter for discussion before a Committee. There was another important question mooted by the hon. Member with regard to the constitution and proceedings of the Bank a France; but 51 he did not think they would get twenty Members of the House of Commons to look into that question at that period of the Session in such a way as to lead them to any practical results. He should have expected, that when the hon. Member alluded to the Bank of France, he would have alluded to one principle of their establishment, which he thought was an important one, and deserving of imitation. Standing, as he did, in the presence of two hon. Friends of his, who had both filled the office of governor of the Bank of England, he could not be thought to speak disrespectfully of either the one or the other, or of any Gentleman who had filled the office; but when the hon. Member for Kilkenny had spoken of the Bank of France, he thought he might have remarked upon one peculiarity of that establishment; namely, the permanence of the office of Governor. He was for the democratic part of our Constitution, as well as for the aristocratic and monarchical part; but he doubted very much whether democratic institutions were usefully applicable to national banking establishments and whether a system of continued vicissitude and the periodical election of the individual who was to be at the head of the Bank, could be advantageous to the Bank itself, or could lead to its stability. He thought the stability of the Bank of France was secured by the unchangeable nature of its management. Some Gentlemen might think that vicissitudes of political government might be a great benefit; others might think the reverse. But who can defend a periodical change in the government of the Bank of England? He had endeavoured to show, that there were reasons why this committee ought not to be granted. The hon. Member for Birmingham had bestowed his censure in no sparing measure upon some of the highest names connected with the finances of the country. It was not for him to vindicate them; their names were a sufficient vindication; but there was a principle involved in his censure which he thought could not be too strongly disclaimed on the part of the Government. The hon. Member said, "Lord Grenville had behaved in the most cruel and hard-hearted manner to the Bank; he told them not to interfere with the business of the country; but to mind their own business," and the hon. Member said this was cruel. The hon. Member had also said the same of Mr. Huskisson. If there were one principle more than another which ought to be adhered to, he thought 52 it was non-interference with the affairs of the Bank. If the Bank got into difficulties, and trusted to the Government to extricate them, if they looked to the Government to allow them to issue 1l. notes (the hon. Member's wild wish), if they expected, that Government should be ready to come down with a Bank restriction, and should extricate them from all difficulty—if that were the principle of government advocated by the hon. Member, and Lord Grenville and Mr. Huskisson were to be blamed for not taking that course, he must say, that the hon. Member understood the principles of government very differently from his understanding of them, and the hon. Member called on the Government to take a step which he should be very sorry to advise. A statement had been made by the hon. Member for Coventry, with regard to the savings-banks, on which he thought it right to undeceive the hon. Member and the public, as that again was a very important and most delicate question. The hon. Member had said, but he was sure had said it inconsiderately, and that on reflection, he would confess, that he did not mean what his words implied, he had said, that he thought it the duty of that House and the Government to do away with the savings-banks. [Mr. W. Williams, first inquire into them.] The hon. Member then went on to say, that the principle of the savings-banks was, in previous times, misapplied, and that parties took an improper advantage of the system. Suppose he were to admit to the hon. Gentleman, that in some instances such might be the case, by the present limitation of the amount of deposit, this abuse could not go to any extent. He had before him the returns contained in the last volume of statistical tables, and he found, that with respect to England, the total number of depositors in savings-banks were 506,273, and that amongst that great number of depositors there were only 2,936 who held 20l. each in the savings-banks. Now, was it not quite clear to the hon. Gentleman, that the system of fraud of which he spoke could not exist to any great degree, when out of 506,000 depositors, only 2,900 deposited the extreme amount allowed? It was perfectly clear, that the hon. Member was under a mistake. The hon. Member for Kilkenny complained of the operation of the West India loan. The plan he had adopted for paying off the last portion of 5,000,000l. of that loan was by creating stock, and transferring 53 the stock to the parties according to their relative interests. If that plan had been adopted with the previously raised 15,000,000l., there would have been no disturbance in the money-market, all would have gone on as quietly with respect to the 15,000,000l. as it had done with respect to the 5,000,000l. He ought not to be taxed with the consequences of this loan. He was compelled to make it by a law passed before he filled his present office. He had no choice. He had shown, that the proposed inquiry could produce no good; he had shown, that it involved the transacactions of the last twenty years, and that an inquiry at this time could produce no practical benefit. He had not volunteered the defence of the Bank of England; there were those in the House who were responsible for the Bank, and who were more competent to speak to their conduct than he was. He did not say that the Bank, any more than any other institution, was infallible; the directors were liable to faults; he would in conclusion, take upon himself, to repeat, that no inquiry could be entered into now with any practical advantage, and he put it to Gentlemen connected with commerce generally, whether they could believe that this inquiry could be entered into left incomplete without producing inconvenience to the public interests.
§ Sir J. Reid
said, four hours and a-half had been consumed in this debate, and he had never passed that space of time more uncomfortably. Many complaints had been made against the Bank of England; he regretted that those complaints were so general, but considering where they arose, he really felt less on the occasion than he should have felt had the complaints arisen from other sources. He was quite sure the House would not wish him to go into any details at that time of the night, because he should in all probability have to go back to a very distant period. But at the same time, as complaints were made with reference to the circulation of the Bank, and as an hon. Member had stated it to be the cause of the distress which existed, he had got an account of the circulation of the Bank of England, being the average of six years from 1833 to 1839, ending at the 5th of April in each year, which he would read to the House; and it was a curious circumstance to observe the closeness with which various amounts approached each other, On the 4th of April, 1833, the 54 amount of circulation was 18,900,000l.; in 1834, 18,900,000l. in 1835, 18,500,000l.; in 1836 18,400,000l.; in 1837 18,300,000l.; in 1838 18,300,000l. in 1839 18,400,000l. He thought that on showing the closeness to which the circulations in these respective years came, there could be no complaints made that the Bank had been the cause of any overtrading by its issues, although his right hon. Friend opposite, if he might be allowed to say so, had attributed in a very great measure to the excess of issue the overtrading which had taken place. He had got the average amount of circulation for thirteen weeks previous to the above mentioned dates, taken before April, 1833, to April 1839, in each year, and, without troubling the House with going into particulars, the amounts were 19,300,000l., 19,600,000l., and so forth; and came so closely to each other, that with all their disposition to find fault they had not the opportunity of doing it. Then, he took also the average amount of each year ending the 5th of April, beginning at 1833, and ending at 1839, and the amounts were 18,200,000l. 18,600,000l. 18,500,000l. and so it went on, and the difference was so small as to be scarcely worth notice. There was an observation which the hon. Member for Kilkenny had taken the liberty of making, at which he had felt excessively annoyed. The hon. Member for Kilkenny had said (he had taken it down in writing to prevent mistakes), "that the Bank directors in the course they had pursued were instigated by private interests." Now, he did most unqualifiedly and respectfully, but at the same time wishing the hon. Member to feel it, throw back the imputation with scorn. He thought it his duty at his time of life, and with the experience he had had [Hear, hear!]—yes, he would repeat, at his time of life, and with the experience which he had had, after living on terms of intimacy with twenty-four as honourable gentleman as were to be found in this kingdom, not to allow any hon. Member to make a statement of that sort to produce an effect in that House, or in the country, by asserting for a moment that any individual of that court was instigated by private motives. There was another remark which the hon. Member had thought fit to make, and which he (Sir J. Reid) would take the liberty also of setting him right upon. The hon. Mem- 55 ber, said that he had reason to believe, that the bullion in the Bank amounted only to 3,000,000l.; now that was not the fact. He was not going to tell the hon. Member what bullion there was in the Bank. He had said that during 1836, when difficulties existed in the commercial world, he considered the Bank in a difficult position; but he thought it only a passing cloud; he said so now. It was his firm conviction and belief that the present difficulty was a passing cloud, and that this cloud which overhung them had not been produced by any act of the Bank, but by nothing more nor less than by the balance of trade being against the country. He knew, as a merchant, that the trade of the country was improving; he knew also, that as the exports increased the money would be returned; and he had no more doubt—no more anxiety—about seeing everything rectified than he had of seeing the sun rise to-morrow morning. There was another inaccuracy in the statement of the hon. Member for Kilkenny in his taking the amount of circulation. He had taken it at different periods when the dividends were paid; but the hon. Member's object ought to have been to take the averages, instead of which he had made a gross error in taking the amount at the period he ought not to have selected. After the very disagreeable discussion—he could not help calling it so—which had taken place, and he regretted exceedingly that he was one of the very few concerned in that evening's debate; but at the same time he did not hesitate to say that the Bank of England Directors were not in any manner nor in any way to be blamed. He must say, that he was convinced and satisfied that before the Speaker left his Chair, which in all probability he would be glad to do in a few days, that all would be right again. If he had said anything to annoy the hon. Member for Kilkenny he should be very sorry for it, but he did not like the hon. Member's assertions to go forth to the country, alarming people for no cause whatever, and he had thought it right and fair, and proper, in his situation, as Governor of the Bank of England, to make known their feelings, and he was satified that all who were competent to judge thought as he did.
§ Mr. Grote
wished to say a few words for the purpose of explaining why he could not support the motion for inquiry of his hon. Friend. He was one of those who 56 believed that a committee of inquiry would be attended with very salutary and valuable consequences; for he thought there was much in the conduct of the Bank which provoked inquiry, much for which the Bank was really to blame, and a great deal more that the Directors were censured for because their conduct was not perfectly understood. In all these points of view he thought a committee would be useful; but he could not conceal from himself, that at this period there was no hope of a committee prosecuting this inquiry with the least chance of arriving at a satisfactory conclusion. If his hon. Friend had made his motion at an earlier period of the Session, he should have lent him his best support to obtain the committee he now asked for; and he could not help thinking, that all the experience which they had had of former committees confirmed the view of his hon. Friend and his own as to the usefulness and instruction which the country derived from such inquiries. He was quite sure, that the committee of 1832 excited more discussion, and disseminated more sound and proper notions on the subject of the currency, than any writings or pamphlets could effect; and although he quite agreed with the right hon. the Chancellor of the Exchequer as to the superiority of pamphlets and such works for the purpose of deciding conflicting opinions on the currency, yet the right hon. Gentleman must recollect that there were a great many important documents, a great many facts and statements, which could only be brought out before a committee. Until the committee of 1832 sat, was there ever such a large body of facts, or so much concentrated evidence collected as would lead the public to arrive at a just conclusion on the subject of the currency. Besides, the committee of 1832 was attended with this important point, that it induced Mr. Horsley Palmer to lay down the principle according to which, in his opinion, the circulation of the Bank ought to be managed. That most important principle of management had, he was sorry to say, been greatly and unwisely departed from since; and one reason which would induce him to support the nomination of a committee, if the motion had been made in time, was, that the conduct of the Bank directors may be fully and fairly canvassed, to be subjected to blame where it deserved censure, and to 57 be explained where a good reason could he assigned for their proceedings. His hon. Friend had brought before the House a number of very valuable facts and statements, in the long speech which he had made. His hon. Friend had particularly referred to the maintenance of a uniform rate of interest by the Bank of France as contrasted with that of England. It seemed to him, that nothing was more unreasonable than the maintenance of a uniform rate of interest. One of his complaints against the Bank was, that it tended too much towards an unfair rate of interest, and that it was unwilling to make use of that bill, passed specially at its instance, for the purpose of saving itself, when the safety of the currency required such a step. His hon. Friend thought, that the Bank had exhibited too great anxiety to maintain large dividends by increasing the circulation. He really believed, that the directors were not blameable to the extent charged, but he did believe they did not apply themselves to contracting the currency as early as they ought. It was very natural that the directors, being merchants and interested like all around them in having the money market easy, should be prevented by their sympathies from checking the drain of gold at first, and should hesitate to proceed to a proper extent when more harsh measures became necessary. His hon. Friend had also alluded to the fixed bargains made between the Bank and the joint-stock banks. He believed these bargains had the unhappy effect of depriving the Bank of that control over the circulation which it ought to enjoy, because, when called upon by the necessities of the country to contract the amount in circulation, the directors were restrained by these demands from the country banks, which they could not resist. His hon. Friend wished to limit the business of the Bank to bills of exchange, and to exclude Exchequer Bills. If the security was equally good, he was perfectly indifferent to its nature, but if his hon. Friend should substantiate the charge that the circulation was increased beyond what it could fairly bear, in order to accommodate the Government, he should assent to his views. But, per se, he thought one security as little objectionable as the other. The continuance of the present drain illustrated in a forcible and painful manner, the mischievous working of those Corn-laws to which the 58 attention of Parliament had been so earnestly called. He recollected, that in the observations which he had addressed to the House, he dwelt particularly on the impending risks which then threatened the commercial world, a drain being perfectly inevitable from the working of that system, pernicious in this as in every other respect. He knew that there was a great difference between a wise and a badly managed system of banking; but he thought that the Bank and the joint-stock banks were much more largely blamed than they deserved for causing commercial distress.
§ Mr. W. Attwood,
expressing, as he believed, the opinion entertained by the commercial community in general, entirely acquitted the Bank of England of the imputation of having, in any degree, been influenced by motives of private interest. The directors of the Bank of England were men chosen from amongst the most eminent of the mercantile body—were accustomed to the vicissitudes of trade, and knew its wants; they were, therefore, as capable as any men of properly directing a great establishment like that over which they presided; and he firmly and thoroughly believed, that they were not justly liable to the imputation which had been thrown out against them of being influenced or governed by motives of private interest. With reference to the present motion, although he was not prepared to support it, he must, nevertheless, say that he thought the House was indebted to the hon. Member for Kilkenny for giving them the opportunity of discussing so important a question at the present time. He must further say, that he thought no charge could properly be brought against the hon. Member, either as to the form of the motion itself, or to the period at which it was brought forward. The Chancellor of the Exchequer had observed, that an inquiry of the nature proposed would only tend to create mistrust, injury, and doubt, and to add to the doubt and despondency which now unfortunately hung over the commercial world. He could not assent to that proposition; he did not believe it to be accurate. If the period were one of considerable commercial embarrassment, it appeared to him that that fact rendered it fit for the House to take immediate cognizance of the circumstances which had led to that embarrassment, rather than allow the session to close without making 59 any inquiry at all. The only embarrassment that could possibly arise from an investigation would result from the disclosure of this fact, that there was not in the coffers of the Bank of England a sufficient supply of bullion. But if, as the Governor of the Bank (Sir J. R. Reid) had informed them, there was no deficiency in the supply of gold, then he could not conceive what possible harm could result from the inquiry, He thought it the duty of the House to consider at once what the difficulties were in which the commerce of the country was placed, rather than to turn their faces from the impending danger, and to wait until they were actually plunged into the abyss of misfortune before they considered the means of extrication or relief. To show what was the present position of the commercial affairs of the country, as connected with the proceedings which the Bank of England had thought it necessary to adopt, after the drain which had taken place upon its bullion, he would read a short passage from a pamphlet, called "the Banker's Circular," which had been much referred to by Gentlemen on both sides of the House, and which in the mercantile world was considered a very high authority, as containing the correct expositions of banking affairs in general. The statement in the Banker's Circular on the 21st of June was to this effect—We have made very diligent inquiry as to the state of business amongst commercial men, bankers, bill-brokers, &c., and we find this to be the fact, that the Bank of England refuses to discount bills which come through the medium of Joint Stock Banks, or speculators in corn or cotton: these commodities, as well as colonial produce, were marked for reductionNow he prayed the House to bear in mind for a moment the import of the observation "these commodities are marked for reduction." He begged the House to consider for a moment the meaning which that expression conveyed to every merchant who had any dealing in these commodities. It meant this, that upon the stock which those merchants held they might anticipate a loss of 15, 20, or 25 per cent. It meant that the Bank of England had come to the decision that, in order to save the commerce of this country, it was necessary there should be a fall in prices: to what extent that fall was to go was another question. It appeared, however, that the means taken by the Bank of England to 60 produce a fall of prices were especially directed against corn and cotton. He would ask the Governor of the Bank whether that was not the fact?—whether it was not especially the intention of the Bank to produce a fall in the prices of those two commodities? [Sir J. R. Reid: I assure the hon. Gentleman that the Bank had no such intention.] Then he understood the hon. Gentleman that it was not the intention of the Bank to apply to those commodities any regulations which would not equally apply to other commodities. He was glad that the Governor of the Bank of England had made that declaration, because an impression to the contrary had prevailed to a very great extent amongst commercial men, and had been circulated in every newspaper in the metropolis. He was glad, therefore, that the Governor of the Bank had taken the opportunity of contradicting it. There was, however, another impression very prevalent in the mercantile world, namely, that the Bank of England had imposed a restriction upon the discount of bills connected with joint-stock banks. He apprehended that that was a fact which admitted of no doubt or discussion. The rule adopted by the Bank of England he believed to be this—that no bill, however great or undoubted its validity, presented to the Bank for discount, should be discounted by them if it bore upon its back evidence of having passed through a joint-stock bank. He called upon the House to consider the position in which the directors of the Bank of England were placed in reference to these joint-stock banks. They stood in the position of rivals, and it had been imputed to the directors of the Bank of England, that they regarded the joint-stock banks as likely to become competitors for that peculiar circulation which hitherto had been their exclusive privilege. Such being the case, it was found that the Bank of England, at a moment when it was pressed for bullion, considered itself compelled to adopt towards those rival banks measures which they, as competitors, would regard as almost personally hostile to themselves. He was convinced that the Bank of England was influenced by no such motive; but a suspicion that it was, would certainly be the result of its mode of proceeding. When the House saw the Bank of England compelled to adopt measures of so forcible a nature, and 61 threatening to adopt others of a still more forcible nature; when the House saw the difficulties of the position in which the regulators of our circulation found themselves placed; then might the House judge for itself, whether it were or were not expedient that these matters should be brought under consideration; whether it were or were not proper that the House should have the opportunity of examining into them. The Chancellor of the Exchequer opposed the appointment of a committee; first, upon the ground that it would serve only to create doubt and mistrust; and secondly, because it was a pity to discuss these topics now, when the subject of the renewal of the Bank Charter would come under the consideration of the House at no more distant period than the year 1842. Were the three intervening years of no importance? Upon a matter so delicate, so important, was a delay of three years of no consequence? Because an inquiry would necessarily take place in 1842, did it therefore follow that there should be no inquiry meanwhile? Because difficulties were found to exist in 1839, was no remedy to be devised till 1842? With respect to joint-stock banks, it was impossible to know what might arise. It was supposed that greater security was afforded to the public by the registry of the proprietors of these banks than by private banks. But a case had recently arisen which gave a different character to this matter. Parties had gone to the Stamp-office and found names enrolled as proprietors who denied all liability. They admitted that they had applied for shares, and that shares had been assigned to them, but they had never paid any deposit, and therefore had never incurred any liability. Thus the public had no longer any confidence that the parties enrolled at the Stamp-office were proprietors of those banks. He mentioned this to show the difficulty of legislating upon subjects of a novel character; which, when brought into practical operation, presented difficulties that were almost impossible to be anticipated. It was always impossible to lay down any positive direction to insure the proper action of a new system; therefore became highly essential on the part of the Government, when they thought fit to introduce new bodies of persons acting upon novel principles, to keep an eye upon their proceedings, and be prepared to adopt such regulations as 62 might be found from time to time expedient. While speaking on this subject, he would advert for a moment to a principle which had been recently met by the Bank of England, and by those who thought proper to interfere with its proceedings—he meant the principle of publicity. One of the greatest improvements which it was thought could be introduced, was the principle of publicity in the accounts of the Bank of England. It was said, that when the Bank of England was required to publish an account of its circulation, securities, deposits, and bullion, the effect would be to render it impossible that any difficulty would again take place in the circulation of the Bank, and any necessity arise for the Bank to introduce measures for the contraction of the currency. But had that effect been produced? The House would remember that when the committee sat on the subject of the Bank Charter, a prediction was given by one of the most important, experienced, and influential witnesses who were examined before it. He alluded to no man of speculative opinions, but to Mr. Rothschild, the greatest practical banker in this country. He was examined on this question of publicity, and was pressed very hard by the committee to give his sanction to the principle. His answer was—It may be very well for the Bank of England to publish their accounts, while they have a stock of bullion amounting to ten millions—being one-third of their liabilities; but for my part, I should be very sorry to be the Governor of the Bank of England if I had to publish an account of the Bank when the stock was below five millions, because I should then be under very great apprehensions of stopping payment; unless I had in my pocket at the time an order of the Chancellor of the Exchequer to stop my issuing any more bullion when that period arrived.It was an objection to the motion made by the hon. Member for Kilkenny, that it embraced too long a period, and that the inquiry would be too extensive. He thought that if there were any inquiry at all it ought to extend over a long period, because, during the last fifteen or twenty years many new measures had been adopted, the effect of which it was predicted would be to prevent those violent fluctuations in the circulation that had previously occurred, and the consequences of which they had so much reason to apprehend. Yet, notwithstanding every mea- 63 sure that had been adopted—notwithstanding the publication of accounts—notwithstanding the abolition of one pound notes, and the establishment of joint-stock banks; and, notwithstanding the last and most favourite measure of all—the making of the Bank of England notes a legal tender—fluctuation had been as frequent—danger as great, and the consequences as mischievous as when they first entered into this career. The hon. Member for Kilkenny had, therefore, strong grounds for imagining that some blame might be attributable to the Governor and Directors of the Bank of England; and if it were not expedient during the present Session, to enter into the inquiry he proposed, yet he thought the House ought to bear the subject in mind, and at a future period take it fully into consideration.
§ Mr. Clay
hoped that the House would indulge him while he stated the reason why he could not support the motion of the hon. Member for Kilkenny. He disclaimed attributing misconduct to the Bank of England, but there could be no doubt, he thought, in the mind of any man that, in their character of directors of a great commercial body, very great mistakes had been committed by them in the management of the currency. To recur, for instance, to one great period, he could not conceive that there was now any doubt that they exceedingly misunderstood their own position and the aspect of affairs in the year 1824, and the early part of 1825. Again, in the year 1836, he thought they did not, at a sufficiently early period, take warning of the signs of the times. They also, in the same year, committed a great oversight in those fixed bargains which they made with the joint-stock banks. He was the more inclined to notice that point, because it was one to which he himself, in moving for a committee on joint-stock banks in 1836 particularly called the attention of the House. So, again, during the past and present year, the existence of the demand of foreign corn was not sufficiently regarded by them. But it was because he thought these matters were already sufficiently known, that he considered the motion of his hon. Friend unnecessary, especially when he had told them that it was not his intention to call any witnesses. He thought the errors of the Bank of England were attributable to the inconsistent functions it had to discharge. It was impossible that one and the same body 64 could act as bankers and as conservators of the currency of the country. On the one hand, they had to consult the interests of the proprietors, and, on the other, the interests of the public. Now, it was impossible that the two interests could coincide. They were almost necessarily opposed to each other. It was often the interest of the public that the currency should not be extended, while it was invariably the interest of the proprietors that it should be. Again, as men of business and as merchants sympathizing with the interests of the commercial body to which they belonged, it was almost impossible that they could properly and wisely discharge their functions as conservators of the currency; because, when it was proper for the public interest, that they should contract the circulation, there was almost always an absolute demand upon them to enlarge it. His hon. Friend had stated the inconvenience arising from the conduct of the Bank, but he had not indicated a remedy. He therefore, on the whole, concurred with the Chancellor of the Exchequer that little good could possibly result from the appointment of a committee of this nature, particularly at this late period of the Session. He thought the judgment of the public on these matters was at length taking a right direction. He believed that the judgment of the public at large was, that the charge of the currency was too vast and too important to be confided to any body of men, whether corporate or joint-stock banks. He believed that the public were begining to feel that a function so important as that of taking care of the currency, on the right discharge of which not only the prosperity of the country at large, but the fortune of every individual it might be said in a great degree depended, ought not to be left to any men or body of men, but ought to be left to the control of the supreme authorities. Whatever benefit or advantage there might be accruing from the substitution of paper for gold, as a currency, ought to belong to the people. When the time should come for discussing the question of the renewal of the Bank Charter, he trusted it would be perceived, that it was out of the power of the Bank of England properly to take charge of the currency, but equally out of the power of either private or joint-stock banks to exercise any salutary influence or control over it.
§ Mr. Easthope
would only occupy for a short period the time of the House, after its attention had been so long devoted to the discussion of the motion of his hon. Friend, and after the natural impatience which had been expressed by the Chancellor of the Exchequer to proceed to the other business of the night: still, he could not suffer this question to pass without making one or two observations upon it. He should make no profession of eulogising the directors of the Bank, nor should he follow the example of the hon. Member for Birmingham in arraigning them as the authors of the sufferings of individuals, of the most extreme and aggravated character that it was possible to describe. The hon. Member had thought proper to notice a smile into which he was betrayed. If that hon. Gentleman was not conscious of any other cause that could excite a smile than the woes and sufferings which he depicted and deplored, then he must, at once, own his disinclination to supply him with what he should certainly have thought had been a more obvious and intelligible cause. He deeply lamented, that a question which ought to be regarded apart from all personal considerations should almost always be mixed up, not only with expressions of great apprehension on the part of the directors, but with feelings of injustice towards them, and with imputations upon them that were most undeserved. So far as his knowledge of those gentlemen went, he did not think there could be found in the city of London a like number of men who would more honestly discharge the duties that might devolve upon them. For his own part, the objections he entertained were not against the personal conduct of the Bank directors, but against the system of the Bank. To that system he was most determinedly opposed. He considered the directors to be placed in a most anomalous situation. He hoped it would not be long before he should have the satisfaction of hearing, that even the Bank directors themselves refused to continue in a position in which it was impossible that they could discharge their duty to the Bank proprietors with justice, and their duty to the public with safety. He had always considered that the Bank directors ought to be only bankers; that they might be able to do their duty to the proprietors by all fair means, and realise the greatest profits they could by fidelity and diligence. 66 But they were placed in a situation which often required them to overlook and to oppose those interests—they were placed in a situation in which they were called upon to make great sacrifices. Was it wonderful, then, he would ask, that, pressed as they were by the individuals by whom they were surrounded—by the desire to promote the interests of the proprietors—by the knowledge of and the regard they entertained for those men with whom they co-operated every day, they should be led to mistake or overlook the great public duty imposed upon them—that of regulating, faithfully and properly the currency of the country? He believed that the time was coming when, as his hon. Friend, the Member for the Tower Hamlets had stated, the country would begin to feel and to understand the effects of the hot and cold fits to which it was every now and then subject, and the true causes of the sufferings which had been so strongly described by the hon. Member for Birmingham, but which causes seemed to be so little understood by that hon. Member. He was anxious to see all such debates, as the present, take a practical turn, and he trusted that it would lead hon. Members to inquire into the manner in which the state and condition of the Bank was communicated to the public. He would ask, whether this was now done in that practical form which was calculated to produce the greatest amount of public good? The hon. Member for Greenwich (Mr. W. Attwood) had referred to the opinion of a gentleman distinguished for his Keenness, and for his extraordinary sagacity in the money market, and who had strongly objected to the plan of a clear and faithful publication of the condition of the Bank. Could they doubt, however, that Mr. Rothschild had certain and quick information on the subject, not necessarily from any corrupt method of obtaining it, but from his shrewdness, his intelligence, and his attention? Who could doubt his habitual knowledge of the actual quantity of gold in the Bank? And was there any doubt that he regulated his commercial transactions and the business of his office by that knowledge which it was competent for such a man to learn; every man of industry and care ought to have an opportunity of knowing and of regulating his own business by the same means. He wished to see every merchant 67 who would take the pains able to watch the amount of the bullion in the Bank as easily as the time by the clock. Mr. Rothschild had done so, and he had succeeded. How many individuals were there with fair intelligence, and possessing faculties and facilities which ought to make them successful, who, by overlooking this, had been brought to ruin! Was the present a system of publicity which the public could understand without a great degree of attention and sagacity not ordinarily found at the Royal Exchange? He believed not. If there was to be useful publicity, ought it not to be as plain as possible, so as to enable all to understand it as well as a person of the extraordinary keenness which characterized Mr. Rothschild? He hoped, that even before the year 1842, if the House should come to an agreement as to the inadequacy of the present hocus pocus system of a three months' average publication for public security—if they saw that it was calculated to mislead a man of ordinary sagacity—that its mystery excited fear and apprehension, instead of inducing care and vigilance—if such should be the general opinion, he hoped the Bank would offer no objection to the adoption of a plan so clear and so simple that any merchant might understand it as constantly and readily as he would learn the hour of the day. With regard to the expansion and the contraction of the currency, the hon. Member for London (Mr. Grote) had, he believed, explained this in a manner which admitted of no refutation. No doubt the Bank directors, even in the steps of contraction they had recently taken, had had many struggles and much conflict before they came to that decision. How often had the country suffered from such delays? He did not impute this to any corruption, but it was the natural consequence of the feelings which beset men situated as the directors were. The regulation of the currency ought to be intrusted to men who had nothing else to do; the managers of the currency ought to have no other duty to discharge—they ought to be responsible to the public and to the public alone; and he hoped that the time would shortly come when it would be found impossible to invest with the control of the currency any persons engaged in business, however competent they might be. The present functions of 68 a bank director were incompatible: the bank of England could not, with security to great public interests, be at once a bank of issue and a bank of deposit. The more frequently this subject was discussed, the oftener it was submitted to the test of inquiry, the sooner would the House arrive at a sound conclusion; the discussion would lead to great public good, and the evils inflicted on the country would be removed. The object of his hon. Friend, the Member for Kilkenny, was to invite inquiry. If his hon. Friend should press his motion to a division, he should feel it his duty to vote with him, although he concurred in thinking, that the short period of the Session now remaining would scarcely furnish time sufficient for a full and fair inquiry. He ventured to suggest, that his hon. Friend should look rather to inquire at an early period of the next Session, and then so frame his motion, that every thing which surrounded the question should be closely examined, that the sufferings of the people from this source should no longer be permitted to endure, which he could scarcely anticipate until the House of Commons should come to the consideration of the question with that solemnity which the subject demanded. He could not sit down without referring to the opinion of the Governor of the Bank of England, that the cloud which now lowered over thorn was but temporary. He hoped sincerely, that such might be the case. It was certainly true, however, that this cloud could not pass away till the price of commodities was reduced to such a level as to bring back the gold. Whether the Governor of the Bank was in possession of any peculiar knowledge upon this point, he could not tell, but he hailed the expression of his hope of returning security with the greatest pleasure. The price of commodities must, however, be reduced by the conduct of the Governor and his colleagues to a limit that should bring foreign purchasers to our markets, and this reduction must be made, whatever individual suffering it might create, and whatever the consequences to innocent parties might be. He was sure, that this was not a situation in which the directors of the Bank would wish to be; and he hoped, therefore, to see the day when these Gentlemen themselves would seek to be relieved from the anomalous position in which they were now placed.
§ Mr. E. Turner
was understood to support the motion of the hon. Member for Kilkenny, though he feared it was too late for inquiry this Session. He was nut aware till this evening, that so much injustice had been done by the Bank of England.
§ Mr. Wallace
would vote for the motion of the hon. Member for Kilkenny with the greatest satisfaction, and the more so, because the hon. Member had, on two former occasions brought this subject under the consideration of the House, and because on each occasion he had been told, that the proper time was not come. It had been said, that the Bank directors were attacked, but such was not the case. They attacked the system of the Bank, and not the directors, and that attack he thought was not made without good grounds. The directors were, he believed, highly honourable individuals, but they were only men and merchants, and they must feel as men and merchants. The whole system, in his opinion, was bad, and it was high time to commence an investigation into its operation with the view to apply a remedy. If a committee were granted, he was sure the hon. Member for Kilkenny would, in the few weeks of the Session which remained, make out such a case as would create a strong feeling in the country, and force the Government to place the currency in a sound state. He should therefore give his vote in favour of inquiry.
§ The House divided on the original question, that the Order of the Day be read:— Ayes 93; Noes 29: Majority 64.
|List of the AYES.|
|Adam, Admiral||Currie, R.|
|Ainsworth, P.||Dalmeny, Lord|
|Attwood, W.||Darby, G.|
|Baines, E.||Douglas, Sir C. E.|
|Baring, F. T.||Eaton, R. J.|
|Beamish, F. B.||Egerton, Sir P.|
|Berkeley, hon. C.||Ferguson, Sir R. A.|
|Bernal, R.||Filmer, Sir E.|
|Blackstone, W. S.||Fremantle, Sir T.|
|Blair, J.||Freshfield, J. W.|
|Bridgeman, H.||Gordon, R.|
|Broadley, H.||Graham, rt. hn. Sir J.|
|Brodie, W. B.||Greene, T.|
|Brotherton, J.||Grey, rt. hon. Sir G.|
|Bruges, W. H. L.||Grimsditch, T.|
|Burroughes, H. N.||Herries, rt. hon. J. C.|
|Cave, R. O.||Hinde, J. H.|
|Clay, W.||Hindley, C.|
|Clerk, Sir G.||Hobhouse, rt. hn. Sir J.|
|Courtenay, P.||Hodgson, R.|
|Hogg, J. W.||Praed, W. T.|
|Hoskins, K.||Pryme, G.|
|Hotham, Lord||Reid, Sir J. R.|
|Howard, F. J.||Rice, E. R.|
|Hughes, W. B.||Rice, rt. hon. T. S.|
|Hutton, R.||Roche, W.|
|Ingestrie, Viscount||Russell, Lord J.|
|Inglis, Sir R. H.||Rutherfurd, rt. hn. A.|
|Kemble, H.||Shaw, rt. hon. F.|
|Knightley, Sir C.||Sibthorp, Colonel|
|Lushington, rt. hn. S.||Smith, J. A.|
|Mahon, Viscount||Spencer, hon. F.|
|Mildmay, P. St. J.||Stewart, J.|
|Morpeth, Viscount||Stuart, W. V.|
|Morris, D.||Stock, Dr.|
|O'Ferrall, R. M.||Style, Sir C.|
|Ossulston, Lord||Talbot, C. R. M.|
|Palmer, G.||Tennent, J. E.|
|Parker, J.||Thomson, rt. hn. C. P.|
|Parker, M.||Troubridge, Sir E. T.|
|Parker, R. T.||Warburton, H.|
|Parnell, rt. hn. Sir H.||White, A.|
|Pattison, J.||Wilbraham, G.|
|Pease, J.||Williams, W. A.|
|Peel, rt. hon. Sir R.||Wyndham, W.|
|Pendarves, E. W. W.||TELLERS.|
|Pigot, D. R.||Stanley, E. J.|
|Power, J.||Steuart, R.|
|List of the NOES.|
|Aglionby, H. A.||Philips, M.|
|Attwood, T.||Redington, T. N.|
|Blake, M. J.||Roche, E. B.|
|Chalmers, P.||Salwey, Colonel|
|Darlington, Earl of||Scholefield, J.|
|Duke, Sir J.||Sinclair, Sir G.|
|Easthope, J.||Somerville, Sir W. M.|
|Ewart, W.||Thornley, T.|
|Fielden, J.||Turner, E.|
|Finch, F.||Turner, W.|
|Hector, C. J.||Vigors, N. A.|
|Jervis, S.||Williams, W.|
|Langdale, hon. C.||Wood, G. W.|
|Muskett, G. A.||Hume, J.|
|O'Brien, W. S.||Wallace, R.|
§ Order of the Day read.
§ House went into Committee of supply, and several sums were voted.
§ House resumed.