HC Deb 03 March 1842 vol 60 cc1377-400
The Chancellor of the Exchequer

I am glad that the courtesy of the hon. Gentleman opposite (Mr. French), and of my noble Friend (Viscount Mahon), has enabled me, by postponing their motions, to bring before the House a subject of very great public and individual importance; and that I am now at liberty to recur to the assistance of Parliament for a complete developement of transactions which have engaged a large portion of public attention, and which have been to all those concerned in the administration of the financial department of the country for some months past a source of unceasing labour and constant anxiety. Although the subject has been fully discussed by the public, although the Government have applied themselves to the complete developement of all its circumstances, yet there are parts of the trans action which cannot, in my view of it, be completely developed, without calling on Parliament for assistance. The object, therefore, which I have in view this evening, is to submit to this House the measure which it appears to me expedient that Parliament should adopt, in order that the whole circumstances of the case may be fully known to this House, to Parliament, and to the country. Under this view of my object, it is not my intention to enter into an examination of what may have been the defects of the system under which Exchequer-bills have been here-to fore fabricated or issued, nor to discuss what changes it may be essential to make, either in the law which regulates that issue, or the regulations under which it has hitherto taken place. These circumstances will be proper subjects of future discussion—of discussion when there shall have been time allowed sufficiently to weigh well the recommendations which have been submitted to Government, by the report of the Commissioners—when time shall have been allowed those most conversant with the business of the Treasury and of the Exchequer, to consider what may be the most expedient course to pursue, for the improvement of the law, and for the prevention of fraud, as far as human means can prevent a repetition of crimes similar to those which have been recently committed. Before I explain to Parliament the nature of the measure which I shall propose to them to adopt, I may be permitted briefly to advert to the circumstances of the case and to the position in which we now stand. An extensive fraud—it is generally known to all whom I have the honour of addressing—has been committed, by means of forging public securities, to a considerable extent. That forgery was committed by a breach of confidence on the part of a public officer—by one of those gross violations of duty which, happily, are rare in the annals of this country, but which, in proportion as they are rare, create, when they do occur, a strong sensation and considerable alarm. The mode in which the fraud was committed was simply this:—An individual in the department, in whom was reposed the confidence of his superiors, he having been in the department for eight-and- twenty years, being connected with those who had distinguished themselves, both in the civil and military service of the country, an individual who had enjoyed the uninterrupted confidence of a series of auditors and Comptrollers-general—who had received the strongest testimonies as to his ability and honesty from Lord Grenville, Lord Auckland, and Sir John Newport, from the present Comptroller-general and others connected with the department— that individual presented the melancholy picture of a person violating the most sacred duties, abusing the powers he possessed to defraud the public, in whose service he had been so long employed, and whom he was under the strongest obligations to serve faithfully and with honour. The mode in which he accomplished the fraud was by possessing himself of papers which had been entrusted to him in his official capacity; and having so possessed himself of those papers, by taking them from the office in which he served, in order to forge the name of the noble Lord, whose signature Exchequer-bills were by law bound to bear. He then availed himself of these forged bills as negociable instruments; but, as this was a fraud which, if it had not been committed guardedly and with great precaution it would have admitted of easy detection, the course this individual pursued—assisted by agents whose crime, perhaps, did not equal, but certainly approached near to that of the principal in the transaction—was to give those Exchequer-bills so forged as deposits for loans of money, on condition that the very bills so deposited for loans should be returned to him on payment of the money, or on other Exchequer-bills being given in the room of those which had been originally deposited. Thus by constantly at each successive exchange of Exchequer-bills forging new bills, with a view to replace the forged bills already outstanding, he contrived effectually to prevent the presentation for exchange of the forged bills at the Exchequer-office, and equally to prevent their general circulation among the commercial community of the metropolis. Thus, he committed, in the first instance, a breach of every honourable obligation; and after wards, by an artful concealment of the forged instruments issued, he succeeded in escaping the detection to which a different course would have certainly exposed him. On the 20th October last an individual called upon me at my office, and informed me that an offer had been made to him of Exchequer-bills in deposit for a loan of money, and he told me that the rate of interest offered to him upon the loan, was so disproportionate to the market rate of interest, that he suspected the bills must have been stolen, or that they were the property of some other individual. On that information being confidentially communicated to me, I felt it my duty to make immediate enquiry, and I lost no time in doing so. The result of that enquiry, in consequence of the information given to me on the 20th of October, was, that on the 25th of the same month the whole fraud was developed, and the individuals guilty of it taken into custody. Five days were sufficient between the first suspicion of the offence, and the apprehension of the offender, to bring to light a fraud which had been for so long a period in progress. Do not let the House suppose, that I mention this with a view to claim any credit to the Government, or praise for activity which it may have displayed on a particular occasion. Far from it. I mention it only to remind the House, that if among the many persons who must have had cognizance of this proceeding, there had been found one individual who would have given a public officer information of the offence committed (and it is a suspicious circumstance that there was not one among so many), the offence, instead of being concealed from April, 1836, to October, 1841, would at any intervening period have been effectually discovered. This is an important consideration for the House to bear in mind in the progress of the proceeding which I shall recommend. Upon the discovery of the offence the Government had but one course to pursue. The first thing was to bring to punishment the offender by whose agency the whole proceeding had taken place. The unhappy man made a partial confession of his guilt in the first instance. From that, means were found of getting hold also of the agent who was principally concerned in assisting him in this nefarious transaction. Application was made to the Government by both parties to be admitted to give in formation. Application was made very strongly on behalf of the principal, Smith, that he might receive a remission of punishment if he pleaded guilty, and gave in formation to the fullest extent to the Government. Such an application it was impossible for the Government to accept. It was their duty to develop the whole nature of the transactions; to ascertain the minute facts; to learn how the crime was committed, and how it was so long concealed; but they could never reconcile it to their sense of public duty to permit him, but for whom no crime could have been committed, who was the chief criminal, to escape without punishment. Such being their view, his application was considered one to which no attention could be paid, and the answer was, that the course of law in its utmost rigour must take place. With respect to another individual, the Government dill think it right to confirm the testimony which they had, by admitting him as Queen's evidence. I know, that on that account the Government were subjected to much obloquy, but when I call to mind the great importance of convicting the principal offender—when I bring to mind how essential it was to obtain, as far as possible, a complete knowledge of the full extent of the crime which was committed, I shall be prepared at any time, that it may be questioned in Parliament to defend the conduct of the Government on that occasion. But I do not believe, that any one who entertains a just sense of the situation in which the matter stood will be disposed to call in question the correctness of our conduct, It happened also, that the principal individual—his application for favourable consideration having been refused — himself pleaded guilty. But not, be it observed, until the other party was admitted as Queen's evidence. In consequence of that plea, which the Government have been accused of having procured, but to which they were not accessory in the slightest degree, it has been complained, that that full development of the transaction was prevented which the public was anxious should have taken place. But over that the Government, after placing the party on his trial had no control. Having convicted the principal offender, the next duty which devolved on the Government was to establish public credit, which was considerably shaken by the ex tent to which the forgeries had taken place. To effect this, no other means could be adopted than the difficult and laborious one of calling in every Exchequer bill in circulation, examining them separately in the office from which they had been issued, stamping them with a mark to denote their genuineness, and then re-issuing them to the public. This duty was performed, when the extent of it is considered, in a very few days. And here I should be guilty of the greatest injustice if I did not pay a tribute to the assiduity and zeal of the Comptroller of the Exchequer, who, being called upon to perform a duty in some degree foreign to the office which he held, devoted his whole time for a very considerable period to the personal superintendence of the necessary arrangements. To his exertions on that occasion the public were indebted for the short time which elapsed between the presentation of the bills at the Exchequer, and their re-issue to the public; and, therefore, to their not being exposed for a longer time to the inconvenience which must result from the withdrawal of so large a mass of public securities from circulation. Having provided for this emergency the Government proceeded to another task equally necessary, namely, to institute an inquiry as to what were the official regulations under which Exchequer bills were issued, and to ascertain what were the defects of those arrangements, with a view to recommend such alterations as might be necessary to prevent the occurrence of similar fraud in future. For that purpose they selected individuals, of whom I need not say that as they are distinguished for their ability, so they stand most high in character, as upright and honourable men—men neither likely on the one hand to be influenced by popular prejudice, nor on the other to pay deference to any wish which might be felt in any quarter to conceal whatever might have been amiss, or to keep it back from public observation. To these Gentlemen I cannot sufficiently express my obligations in having at great inconvenience to themselves, undertaken a public duty of so laborious and irksome a character, and having devoted to it so much of their time, I trust ultimately with so much benefit to the public. Now, Sir, I do not mean at the present moment to enter into the question to which their report gives rise. That report is before the House. A time will come when I shall have to submit to the House regulations necessary for hereafter settling the whole question arising upon that report, and then it will properly come under the consideration of Parliament. I may here however remark, as an answer to those who thought the Government desired concealment of what took place in the offices of the Exchequer and the Treasury, and who tax us with having admitted one of the parties as Queen's evidence and induced Smith to plead guilty, with a view to conceal facts, that if any Government had a design of concealing facts occurring in public offices, there could not be a stronger proof of the absence of such an intention than the selection of these Gentlemen to con duct the investigation, of which the results are already submitted to Parliament. Sir, I think the House will admit that the Go vernment have acted with the vigour and promptitude which the case required. But there is something more required in this case, as it appears to me, than the mere examination of official rules, or the conviction of the offender who committed this crime. It must be obvious that, in order to the completion of the crime of which I have given the details to the House, two circumstances were essentially necessary— one was the want of caution, perhaps, on the part of a public department, a want of caution originating in a long series of years of immunity from abuse. For 150 years no offence whatever had been committed of a similar character, nor had anything occurred which could lead to the suspicion that Exchequer bills could be subject to forgery. But something more was necessary to the commission of such an offence than a breach of confidence on the part of an individual in office, or the want of strength in the official regulations by which that individual was bound. I say, and I speak advisedly when I say, that such an offence could not have been committed in the midst of the intelligent community which inhabits this metropolis without there being, I will not say connivance, but some knowledge of the transactions going on at the time which it was the duty of the individuals who possessed it to have communicated to the Government. Why, Sir, what was the result of the first detection of the offence? No sooner were proceedings taken against the individual Smith, than 1 received from various quarters details of suspicious circumstances, which had taken place in antecedent years. One gentleman had a loan offered to him of Exchequer bills, which he was led at once to reject, from the suspicious manner in which it was communicated, though he did not convey his suspicions to others. In other in stances I was informed that a large number of persons were employed in the negotiation of Exchequer bills who were devoid of character and respect in the society in which they lived. With such facts, I say there are circumstances on the part of the public which require to be examined, that we may understand the real nature of this transaction—how the suspicion of a fraud committed by one individual could have been so long entertained amongst so large a number of persons, and so long have escaped detection. It is, therefore, with this view that I shall call upon Parliament to institute a specific inquiry—not to be conducted by a committee of this House, or by a mere commission appointed by the Crown, but by a commission appointed by Parliament to investigate the real nature of these several transactions, to see how business was transacted by those several persons who acted as instruments in the distribution of the forged bills, to know whether they were men of such unsuspicious characters that honest men might fairly have given them credit for fairly possessing the amount of money which they shewed in Exchequer bills, and whether the money advanced on the bills bore an interest beyond the market rate, or what would have been reasonable under similar circumstances, were the transaction an honest one. These, and a variety of other circumstances, require to be rigidly and strictly investigated, before the House can be called on to come to any final decision on the question; nay, before we can understand the nature of the case with which we have to deal. Sir, an inquiry of this kind appears to me to be required by the highest moral consideration. It is essential that the people of the country should know how public business is con ducted which admits of such occurrences; because, if there be a probability that practices of this kind can be carried on to so great a length without exposure, then a different set of regulations may be necessary from what would be required if all persons were careful in examining proceedings in which they engaged. In addition to official rules, there must be the security of general care and caution on the part of the public: or at least, if not care and caution, a readiness to communicate with the Government whenever circumstances occur which raise doubts respecting the conduct of any department in the public administration. Sir, there is, perhaps, another circumstance to which I ought to advert, and which will no doubt be mentioned on the present occasion. It was pressed upon me from the first moment, and by some Gentlemen with great force—it has been urged upon me by the public press, and in various ways. I allude to the claims of parties holding forged bills, for payment of those bills. Now, those claims when brought before me I have met, as I conceive it my duty to meet, by a distinct refusal. I stated to the parties, what I have no hesitation in stating to the House, that to admit claims for payment in a case of this kind is to take from the public the greatest security against a repetition of such offences, and to do all in your power to render future villainy effective for its object. If, as Chancellor of the Exchequer, I once pronounced the opinion that a man, taking a forged public security, was, therefore, to have a remedy against the public, what could I do more effectually to remove all precaution— all ordinary care from individuals receiving such securities—or how could I more effectually encourage individuals in their efforts to seduce a public officer, than by holding out a security that the result of his fraud, however it might terminate, would be his obtaining compensation for the security which he had improperly obtained? There fore, Sir, I have forborne to give the least encouragement to propositions of this kind; and I do most decidedly, if I may be permitted, advise the House and Parliament to weigh well all the considerations of this nature, before they are led away by any statements of individual hardship, or individual suffering, lightly to yield to claims of this nature. Sir, it appears to me, I confess, before the House can enter on a question of the sort, that they must satisfy themselves that there is some distinction to be drawn between the law as it applies to forgery on individuals and on the public. They must also make up their minds to this, that it is not expedient to give the holders of forged instruments a remedy against the individuals from whom they received them, and so on, tracing them from hand to hand up to the individual who committed the original fraud. I do not mean to say that there may not be particular circumstances in which you may not forego a strict adherence to that rule, but in any case I think you should strenuously resist giving any encouragement whatever until the whole nature of the transaction shall be so fully before you, that you are in a situation to form a correct judgment upon it. For, Sir, if it should appear that these crimes have been committed by means of putting confidence in suspicious individuals—nay, in individuals more than suspicious, whose conduct in previous transactions had given a taint to their proceed- ings in the society in which they lived— if it should further appear that there was a species of secrecy enjoined when these bills were deposited as security that was not usual—if it should appear that the interest demanded was greater than under similar circumstances would be demanded in fair and honourable transactions—if it should appear that when a bill escaped from what I shall call the imprisonment in which it was put, a premium was offered to recover back that particular bill, that it might not get into circulation—if there is a possibility that such facts should appear as the result of the inquiry which I propose to the House to adopt, then I think, until these points are made clear, that the House and the Government should most carefully abstain from holding out the slightest prospect of interposing to prevent the ordinary course of law on this subject. With these views, I shall conclude by proposing to Parliament that they should appoint a commission for the purpose of inquiring into the receipt, circulation, and possession of certain forged Exchequer-bills. The hon. Gentleman opposite (the Member for Mon-mouth) has given notice of an amendment on the motion which I am about to propose, for the purpose of referring the matter to a select committee. I presume the hon. Gentleman's object is, like my own, to attain the most thorough knowledge of all the details of those transactions. If, then, I prefer my own motion to that of the hon. Member for Monmouth, the House, I am sure, will give me credit for believing that it is not intended for the purpose of defeat ing any object which is applicable to such an inquiry, but because I believe that the course which I am about to pursue is the one most calculated to ascertain, in the clearest manner, every matter connected with this question, and of presenting it in a manner the most fit for Parliament to adjudicate upon. By appointing commissioners you will have the advantage of the witnesses being brought before them upon oath. You can place on that commission men of the highest legal character—per sons not to be influenced by applications from their constituents, but who, being perfectly free and unembarrassed, can examine into the real circumstances of the case. They will have the fullest powers for doing that; at least I propose, in my bill, to give them the fullest powers to make the most searching inquiry into all points of the case to which I have alluded. I confidently trust, then, that their report will be such as to leave no point unexplained—no part unknown to Parliament and the country, and that the Parliament and the Government will be in a situation to judge what course it will be advisable to pursue, and the most conducive to prevent a recurrence of similar circumstances, as well as for the maintenance of the public credit. The right hon. Gentleman concluded by moving for leave to bring in a bill for the appointment of a commission, with power of examining and inquiring as to the receipt, circulation, and possession, of certain forged Exchequer-bills.

Mr. Kemble

had been requested, before the commencement of the Session, by certain gentlemen, to present a petition on their behalf to the House. Having, how ever, found that there was a rule which, without the recommendation of Government, precluded him from doing so, he had waited until the right hon. Gentleman made his statement before he should refer to that petition. He must say, that with the greater part of what had been stated by the right hon. Gentleman he most fully concurred. There was, however, one part of the observations of the right hon. Gentleman with which he did not agree; and, but for this, he should not have risen. It was with reference to the imputations which the right hon. Gentleman the Chancellor of the Exchequer had cast upon the holders of these Exchequer-bills. He would venture to say, on their behalf, that some of the holders of those Exchequer-bills would be found among the most respectable and honourable men that this great metropolis could produce; and he only hoped the House would suspend their opinion on the transaction under discussion till that full inquiry which the right hon. Gentleman proposed had taken place. He had been made acquainted with circum stances attending those transactions, but it would be unjust to the parties themselves to enter further into the discussion of them at present. He could only say, if the right hon. Gentleman gave the consent of the Government to having that petition to which he alluded presented, it would be seen that the course intended to be pur sued by the right hon. Gentleman was just such a one as the holders of those bills would require. He was not at liberty exactly to read the prayer of the petition, but he might be allowed to read what was the conclusion of that petition, supposing that he were permitted to present it. From it the Government would see that the holders of the bills in question demanded nothing more than a strict and rigid inquiry into this affair—an inquiry which was due both to themselves and to the public at large. The petitioners went on to say, each for himself, that their conduct in the receipt of those Exchequer-bills, and the advances they had made on their security, had been an honest bonâ fide proceeding, perfectly regular, and in the ordinary course of business; and therefore they solicited from that honourable House, through such means as its wisdom might suggest, a most scrupulous and effective investigation into all the circumstances of the case, so far as they were concerned, and they were willing to state all they knew about it on oath, and to produce all books, papers, and writings, connected with it in their possession; for they made this appeal to the honourable House, confident that the result would fully satisfy the House that the conduct of the petitioners, in the receipt of such bills, had been honourable, regular, and unexceptionable in every respect. He confidently believed that the gentlemen who signed that petition had nothing to keep in the back ground. They desired and expected a rigid examination, such in fact as the Chancellor of the Exchequer proposed. He would not now enter into details, as the House was not in possession of materials for discussion; he would content himself with merely re marking, that the speech of the right hon. Gentleman showed that an inquiry was demanded, not only for the sake of the public, but that it would be unjust to the holders of the bills if it were refused; considering, moreover, that those frauds had been committed by persons in the employment of the Government. He had now only to notice the amount of interest charged on those bills. It would appear that the interest charged by the lenders was no more than according to the money rate at the time the advance was made; and he would remind the House, that the great corporation of the Bank of England, four times a-year, advertised to lend money, for a limited period, at 5 per cent. on Exchequer-bills. The petitioners should not be blamed for doing what the Bank of England did; and if they in any instance had taken higher interest than 5 per cent., he would remind the House that they had done so under the sanction of the Legislature, which had relaxed the usury laws for the benefit of trade, and had legalised that which before was not lawful.

The Chancellor of the Exchequer

was only anxious to say this, that when he alluded to persons, holders of the bills, who had acted fraudulently, he was alluding to cases that were present to his mind, and with respect to which he had information; but he never meant to allude to the whole body of the holders as being guilty of participating in the fraud. That was not his intention; and he should be very sorry if it went abroad that he had expressed an opinion of that nature. What he referred to were cases within his own knowledge.

Mr. Leader

did not mean to detain the House, but he could not resist making one or two observations on what had fallen from the right hon. Gentleman, as well as the hon. Gentleman opposite. The Chancellor of the Exchequer almost seemed to forget, that there were two questions of carelessness here. Carelessness on the part of those who were holders of Exchequer-bills, and carelessness in the Exchequer-bill office itself. The hon. Member for Surrey, who was interested for some of the holders of the Exchequer-bills, had stated that of which he entertained no doubt— namely, that there were innocent holders of Exchequer-bills. Many had come fairly by these bills, and might claim compensation on that ground; but then he must say, on the authority of a banker who sat in that House, that there had been heard in the City for some time rumours that there was something wrong about the Exchequer-bills; and this banker told him that he had himself a very narrow escape from them. He had the Gentleman's per mission to state the facts, but not his name. Now, the Gentleman was a Member of the House, and if he stated anything incorrectly the gentleman could contradict him. [Laughter.] He did not intend what he had said to have caused a laugh. That Gentleman stated, that shortly before the discovery of the Exchequer-bill fraud, a person had come to him and said that he wanted a loan of 60,000l., or any part of 60,000l., on a deposit of Exchequer-bills. Exchequer-bills were, at that time, at a premium of from 12s. to 15s. The person wanting that loan offered 6 per cent. interest, money at the time being easily procured on good security, such as Exchequer-bills for 4 per cent, The banker having considered that subject, thought there was something about the transaction that he did not like, and told the person making the application, that if he was in want of money, he had better sell the bills than borrow money on them at such a rate of interest. The same person afterwards went to one of the greatest capitalists in London, and made the same proposal. The answer of the capitalist was the answer of the prudent banker:— "You cannot afford to give such an amount of interest; if you want money so very badly as you represent yourself to do, you had much better sell the bills." Now, he thought, that when persons holding forged Exchequer-bills could be proved to have received them under such circum stances, they could have no claim whatever for compensation; for whatever might have been the amount of carelessness of parties connected with the Exchequer-bill-office, they could not excuse the gross carelessness of parties receiving Exchequer-bills under such circumstances. But, while the Chancellor of the Exchequer had been properly severe on those who had taken Exchequer-bills under suspicious circumstances, the right hon. Gentleman had not been sufficiently severe on the carelessness exhibited at the Exchequer-bill-office. He thought, that from the documents before the House, from the letter of the Comptroller-general, and likewise from the report of the commissioners, the country had a very fair subject of complaint against the Exchequer-bill-office. He wished to ask the Chancellor of the Exchequer if the statement which he was able to make was correct or not. He had been informed that at the time when the Exchequer-bill-office was remodelled, a person acquainted with that department had called the attention of the persons in authority to the fact, that Mr. Beaumont Smith was possessed of a great deal of power, and that there was no check upon him, and his was the only department on which there was no check. He believed that the present Comptroller of the Exchequer was at that time the Chancellor of the Exchequer [" No, no."] At least, that noble Lord was then connected with the Treasury, and that the representation to which he referred was not attended to. If the representation were made, he did not know why it was not attended to, or why such powers should have been left to Mr. Beaumont Smith. As to those powers it was plain that they had been monstrously abused. It was not necessary for him to mention other instances of carelessness, as they must come before the commissioners at the proper time. All he should now do was to call the attention of the Chancellor of the Exchequer to the fact, that there was such carelessness in the Exchequer-bill-office as to justify the public in believing that much compassion should be felt for the innocent holders of Exchequer bills. There was no care as to the stamped paper of the Exchequer-Bill-office, whereas the paper of the Bank of England was treated as so much valuable property before, as after the signature. There was great carelessness in this respect; and the feeling of the public was, that there was not pro per attention on the part of the Exchequer-bill-office, and the consequence was, that great hardship and serious injury were inflicted on the holders of Exchequer-bills, who were suffering on that account.

Mr. Blewitt

said, there were one or two points on which he wished to set the House right. The right hon. Gentleman, the Chancellor of the Exchequer, had spoken of the Exchequer-bills in question as forgeries; but he begged to say, that it was not quite clear as yet that they were forgeries; for he was perfectly satisfied from what had already transpired, that Mr. Beaumont Smith had had many opportunities of obtaining the official signatures to these bills; and, therefore, had no need to commit any forgery. He was, therefore, of opinion, that as a reasonable doubt existed on that important point, the parties holding these bills should, as a matter of justice and right, have the benefit of those doubts. Having made these observations in justice to those persons, he had only to add, that he fully concurred in the motion of the right hon. Gentleman.

Sir Robert Inglis

remarked, that the motion now in the hands of the Speaker, begged the question which ought to be the subject of inquiry; and that was, whether the bills withdrawn by the Government from the hands of the holders were, or were not, forged. He had had communication with several gentlemen on this subject, but he had entered that House utterly unfettered as to the course he might take, and until he had heard the statement of his right hon. Friend he had not come to any determination upon the matter. The right hon. Gentleman had drawn an analogy which had previously been drawn by a high authority, and, notwithstanding the combined authority of both, he thought the analogy was entirely fallacious. The analogy was instituted between the holders of those spurious bills, and those who were holders of forged bank-notes. The distinction between the two cases was this, that the forged bank-notes did not come from the Bank at all, while the bills which were the subject of this motion were actually issued from the Government department which had the issuing of them. Whether they came out by one door of that department, or by another door, whether on the right hand, or on the left, whether by a breach of confidence or not, they came forth from the Exchequer. The bills, as he took it, were perfect in every respect but the signature. The paper was the Government paper, the seal was the Government seal, and the office from which they were issued was the Government office for issuing them. [No, no.] That might be a matter for inquiry. He was not aware, that the point was one that had been contested; with the single exception of the signature being forged, the issuing of these bills appeared to him to be the act of the officer of the department to whom it properly belonged to perform that act. He felt, that his right hon. Friend had prejudiced the case by drawing an analogy be tween bank-notes being forged, and by saying, that it would be an encouragement to fraud, if a bank were to pay a bonâ fide holder who presented a forged instrument. But this was the case of an instrument brought to the Government by whom it had been issued.

Mr. F. T. Baring

had a very few words to say on this subject. He entirely concurred in the propriety of the course suggested by the' right hon. Gentleman. He was glad that the right hon. Gentleman had felt it to be his duty to originate a commission with full powers to investigate this subject, which, upon every ground, required, in his opinion, a full and complete investigation. For that purpose, too, he preferred a commission to a committee. It had been properly stated that if a committee of that House had been appointed, it would be impossible for gentlemen not to be worried by applications; and whether or not they were swayed by these applications, it would be impossible to disabuse the public mind of the impression that parties had been screened, or that there had not been a sufficiently pressing inquiry into the conduct of all parties, that is, supposing the inquiry to be conducted by Members of that House. He should not have added a single word on the subject, if it were not for what had been said by the hon. Member for Westminster— that a communication had been made to the Treasury, at the time of the arrangement of the Exchequer office, with respect to Mr. Beaumont Smith, and the power that he had. He was at the Treasury at the time, and most of the arrangements were carried into execution by himself, he being then Secretary of the Treasury, and he could assure the House that the first time he had ever heard of the slightest information or fact that could excite suspicion in his mind, was not until he saw that the Government was taking measures to pursue an inquiry into this matter. Up to that time there had not been a single hint of any kind to the Government of any fraud being carried on with regard to Exchequer-bills. He had himself the personal arrangement and personal selection of the officers, and he could state distinctly that no recommendation of any kind was attended to, from the chief clerk down to the lowest officer, except those made by Mr. Bedford and Mr. Bully, the proper officers of the Exchequer. Every endeavour, every care, had been bestowed in selecting the most fit officers. No re commendation of any kind had been at tended to except through the public department. Unfortunately this was an in stance that the greatest care could not al ways secure a good public servant; for if there was one individual more than another into whose character and conduct a particular scrutiny was made, it was with regard to this very Mr. Beaumont Smith. It would, he thought, be better not to follow the hon. Baronet opposite into the discussion as to whether the Exchequer-bills came from one door or another of the office. He did not wish to say any thing which might lead to the discussion of a question which was not properly before the House. He entirely concurred in the course proposed by the right hon. Gentleman. He apprehended, from the statement of the right hon. Gentleman, that the inquiry was to be as to facts, and the evidence on which those facts rested; but he took it as a matter of course that it was to be referred to the commissioners to ascertain whether parties were entitled to compensation.

The Chancellor of the Exchequer:

Certainly not.

Mr. Leader

conceived that, according to the evidence, Smith had absolute power, and there was no check upon the exercise of that power.

Colonel Sibthorp

had the greatest de sire that a complete investigation should take place as to this important affair, and he confessed, that had not his right hon. Friend the Chancellor of the Exchequer given notice to move for a commission this evening, he would have most cordially seconded the motion of the hon. Member for Monmouth. He thought the measure which his right hon. Friend proposed would be one more likely to succeed in procuring a strict, clear, and impartial examination of all the facts of the case. From the evidence of Lord Monteagle, he thought it quite clear that there had been a want of proper supervision in the office in which Beaumont Smith had been first clerk. He also found that Lord Monteagle had signed Exchequer-bills in places where he had no access to documents which could enable him to decide whether the bills so submitted to him were genuine or not. In taking up the question as he had done, he could have no motive but the one of doing his duty, but when he looked to the acts of Parliament for regulating the business of the Comptroller-general and Assistant Comptroller-general, under whose superintendence the office was placed, he found that their provisions had been violated. The two assistant comptrollers had also signed twice as many bills as the noble Lord himself. He was exceedingly glad the House had sanctioned the measure under which the investigation was to take place, and he called on the right hon. Gentleman to suffer no want of the strictest and most impartial examination, and to let truth be known, let the blame attach to whom it might, whether to the parties who had raised money on the bills, or to those who were charged with the management of the offices. Such an investigation should be carried on with the greatest strictness, and brought before the public with all possible care, and then it would be made evident that means had been taken to arrive at the truth.

Mr. Ricardo

would only ask the Go vernment to bring in their bill as soon as possible.

Mr. Wakley

said, that many hon. Members did not fully understand the statement of the right hon. the Chancellor of the Exchequer. The question was this: was the commission to extend its enquiries to all the circumstances under which the bills were issued, or merely as to how the holders had become possessed of those bills? If the inquiry were to be restricted to the last point, he did not believe that the public would be satisfied. His own opinion was, that the people of this country were quite prepared for Parliament to give remuneration to bonâ fide holders. The people of this country would consider the character of the Government and of the Legislature to be lowered if they allowed any party to lose, in consequence of gross mismanagement in a department of the Government. Conceiving then as he did, that the impression on the public mind was, that the bonâ fide holders of what had turned out to be spurious Exchequer-bills should be compensated for their loss, he thought that the public was entitled to the fullest and most searching investigation as to the manner in which those bills had been issued from the Exchequer-office, or wherever else they might have come from; the public had a full right to be informed of every matter connected with their issue; and if it should appear that that issue of spurious bills had been the effect of any negligence or mismanagement at the Exchequer-office, the public thought that the bonâ fide holders of these bills should not suffer in consequence. In the discussion which must ensue, they would have the opportunity of finding out what was meant by the word responsibility—Government responsibility. He had often wished to find out the true test of the application of the phrase. They often heard such expressions as "this is done upon the responsibility of Government," or "that is done on the responsibility of Government." Well, he supposed that the Exchequer-bills in question had been issued upon the responsibility of Government, and he wished exactly to know what the assertion really meant. He wished to know whether or not it meant that the parties who might be convicted of behaving improperly should be punished. He was not desirous that they should undergo any very acute degree of mental suffering, but he did not approve of the pockets of the people suffering from the faults of certain parties. He, therefore, thought that if any negligence should be discovered as having existed in the Exchequer-bill office, the word "responsibility" should be used in its true meaning. He was anxious for the result of the promised investigation, and if it should appear that negligence had existed, and yet that the parties involved in the charge had escaped, he could only say that the opinion of the public as to the value of the expression "responsibility of Government," would be very much lowered.

Mr. S. Worthy

said, his object was to call the attention of the House to a part of the subject which appeared to him to have been overlooked in the discussion. Hon. Gentlemen had directed their attention to the mode in which the issue of the bills in question was said to have taken place, and to the nature of the fraud committed, subjects which would be made matter of further inquiry. But there was another part of the question upon which a few explanatory words were due to the House. He thought it would be as well if his right hon. Friend would explain the steps which had been taken to verify the authenticity of the bills at present in circulation. They knew that certain steps had been taken with this view, but the public might have more confidence in the result of those steps, if it were shown that real means existed for the satisfactory elucidation of the subject. He believed that such would be found to be the case, but still some explanatory statements would prove satisfactory. Another subject to which he would briefly allude was, that it was well known that Government was exposed to considerable obloquy for its step in impounding the spurious Exchequer-bills presented. He had no doubt but that good reasons could be pointed out for the course which had been pursued—but still blame had been cast on the Government for pursuing a course which, as the holders of the bills in question believed, had cut off their claims for compensation on the country.

Sir R. Peel

rose to make a few observations with reference to what had fallen from the hon. Member for Finsbury (Mr. Wakley). That hon. Gentleman had asserted that the country was prepared to give compensation to the bonâ fide holders of spurious Exchequer bills. Now, he hoped the House would not at once give its sanction to any such principle. It was most desirable to have a full and searching inquiry into the circumstances connected with the issue of the bills in question. It was quite clear that the principle eon-tended for by the hon. Member, ought not to be established until the full facts of the question had been laid before the House, His right hon. Friend (the Chancellor of the Exchequer) had been quite misunderstood, if it was implied from anything which he had said that he meant to state that all the holders of spurious bills were to be charged with negligence, much less with criminality. But still there might be cases in which criminality might be proved, and he was, therefore, most anxious that the House should be well assured of the facts of the case, by means of the most searching inquiry, before they proceeded to discuss any matter relating to compensation. The hon. Member for Finsbury had inquired whether the investigation of the commission moved for would be a complete one. He apprehended that it could not be otherwise. The commission would have power to protect the Crown, as well as to guarantee the interests of individuals; and it would have full power to call for persons, papers, and records—to inquire how the bills came into the possession of the several holders—and generally to as certain all the circumstances of the cases presented to its notice. He did not think it either necessary or expedient to go further into the question at present. With reference to the question put, as to the means which the Government had taken to inquire into the genuineness of the Exchequer-bills at present in circulation, he would merely refer to the premium at which Exchequer-bills stood, as a pretty plain proof that the public was satisfied with the means which had been taken to ascertain their authenticity. To go through the exact mode by which the point in question had been ascertained, would, he thought, answer no good purpose. The public, he repeated, was satisfied that the investigation had been an effectual one. He trusted that the House would avoid giving expression to any opinion with reference to compensation to the holders of spurious bills. It was a subject involving extended interests, and of much importance. It would come legitimately under the notice of the House at a future period. He trusted, therefore, that the House would avoid expressing any opinion upon the subject of compensation until the full facts of the subject should be before it.

Dr. Bowring

thought the ends of justice would be satisfied by the course adopted by the right hon. Gentleman. He hoped no time would be lost in carrying through the bill, in order that the com mission might proceed with their inquiries as soon as possible. If the Government could communicate anything further with reference to the character of the commission, he was sure in the present stale of affairs it would be received by the public with the greatest satisfaction.

Mr. Turner

wished to know what steps had been taken with the view of ascertaining the amount of spurious bills issued. It was possible that Rapallo might have carried off large quantities with him He wished also that when the decision of the commission should have been come to, and which he hoped would be as speedily as possible—if that decision should be in favour of compensation to the holders— that then a time should be appointed for the settlement of their claims, and a period should be fixed beyond which no application should be received. After the opinion expressed by the right hon. Baronet at the head of the Government, he felt it would be exceedingly unbecoming in him to pro long this discussion; but there was a circumstance that had occurred within his personal knowledge some years ago, which as somewhat analogous to the present case, he should take that opportunity of mentioning. About twenty-five years ago, it happened that 1,000 1l. notes in blank, having been incautiously left on the counter of the Tenbury bank, were stolen. It was matter of notoriety in the neighbourhood that the circumstance had occurred, and in the course of two months after wards, nearly the whole of those notes were returned and presented at the bank, forged. It became, therefore, a question with the proprietary of the bank, with which he was connected, how far the public had a right to call upon them for payment under such circumstances, and they certainly did come to the conclusion that they should, and they did, pay those notes. That they considered but justice, and he had no doubt that ample justice would also be done in the present case.

The Chancellor of the Exchequer

said, that the hon. Member for the West Riding of Yorkshire had alluded to the impounding of the forged Exchequer-bills. He could only say in reply, that it was considered to be most expedient not to leave masses of such bills in circulation; and as he had been assured by the highest legal authorities that the course most proper to he adopted was, that of impounding the 1 spurious bills, directions to that effect had been given and acted upon. Notice, how ever, had been given to each of the holders of the detained bills that if they were required for the purpose of furthering the ends of justice or the claim of their proprietors, the bills in question would be at all times accessible for such purposes. The best proof of the correctness of this statement was the fact, that parties had actually obtained their bills for the purposes alluded to, and, when those purposes had been answered, had again re turned the bills to the Exchequer-office. As to the question put, with respect to the time when claims of compensation would be settled, supposing the commission to decide in favour of that compensation, he begged leave to state, that the hon. Member for Truro, in putting the question, had misunderstood the sphere of operations of the commission. The question of compensation was not to be referred to the commission at all.

Mr. Blewitt

hoped the right hon. Gentleman would not prejudice the claims of bonâ fide holders by describing, in the title of his bill, the spurious bills as "forged."

The Chancellor of the Exchequer

could see no difficulty, if the clauses of the bill were altered in that respect, to have the title modified accordingly.

Sir R. Inglis

hoped there would be no objection to introducing the word "issue" before "receipt and circulation."

The Chancellor of the Exchequer

had no objection to that alteration being made in the resolution.

Mr. Blewitt

gave notice that when the bill was brought in he should move that the word "forged" be expunged.

Mr. Kemble

put it to the right hon. Gentleman whether "repudiated" would not answer his purpose quite as well as "forged." He felt the inconvenience of prolonging the present discussion, or he could state facts which had come to his knowledge which would convince the right hon. Gentleman that they should not by the use of any word imply at once that these bills were "forged."

The Chancellor of the Exchequer

apprehended that the title would by no means bind the House; if the details were altered in committee the title might afterwards be altered in conformity with them. He could state very good reasons why the word "repudiated" should not be substituted.

Mr. Hawes

said, that an effort would be made, by those claiming compensation, to prove that the bills were not forged.

Sir T. Wilde:

Why not use the words "alleged to be forged" That description would meet the views of all parties.

The Chancellor of the Exchequer

did not think' "alleged to be forged" would be an improvement. It might happen that many genuine bills were "alleged to be forged," and the commission would so far be pursuing an irrelevant investigation. He would take the point into consideration, but would rather not alter the phraseology until he was perfectly aware what the effect of the alteration might be. In the meanwhile, as the title did not affect the possibility of making any alterations in the provisions of the bill which might be thought necessary, he would certainly rather adhere to it as it was.

Mr. Hawes

understood the right hon. Gentleman to insist on the retention of the word, not as a declaration on his part, or on the part of the Government, that those bills were forged—that matter being left open to the consideration of the House.

The Chancellor of the Exchequer

said, he left that question entirely open to the consideration of the House. He adhered, however, to his own title, until he should be satisfied that it was wrong. If the House altered the bill in committee, the title, as he had already stated, might be changed as well.

Leave given to bring in a bill for appointing commissioners to inquire as to the issue, receipt, circulation, and possession of certain forged Exchequer-bills.