Commons Sitting of 3 December 1847

MINUTES.
PETITIONS PRESENTED. By Lord A. Lennox, from Plymouth, for Abolition of Freedom from Arrest.—By Colonel Salwey, from William Kinnersley, of Ludlow, for Abolition of Church Rates.—By Mr. Broadwood, and other Hon. Members, against Removal of Jewish Disabilities.—By Sir R. H. Inglis, from Durham, for Inquiry into the Conduct of the Roman Catholic Clergy (Ireland); and from Chester, for Repeal of Tithes Commutation Act.—By Mr. Scholefield, from Birmingham, against the Crime and Outrage Bill, and for Measures of Amelioration (Ireland).—By Sir R. H. Inglis, from Clogheen, for Alteration of Poor Law (Ireland).—By Mr. A. Hastie, from Glasgow, for Inquiry relating to Turnpike Roads (Scotland).

RAILWAYS BILL.
On the Order of the Day for going into Committee on the Railways Bill being read,
COLONEL SIBTHORPconsidered that it was rather late in the day for such interference as would be effected by this Bill; but men might learn wisdom from experience, and he thought the Chancellor of the Exchequer had now found out what he anticipated long ago—that railway speculation had had a very considerable effect in producing the commercial distress which at present existed in this country. He had always anticipated that great evils must arise from the hasty and unconcocted measures of railway extension. He was most anxious to lend his aid to forward
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any measures which would tend to promote the welfare of the country; but he had always apprehended that great evils would arise from those dangerous and delusive schemes which interfered very materially with the interests of private property, and which placed persons who, by their industry, had accumulated a little property, at the mercy of irresponsible and tyrannical bodies of men. The most extensive powers had been granted to these irresponsible companies, which consisted of men of all classes—of some men great in substance—and of some who had capital, and others who were mere shadows—of some without a shilling in their pockets, mere gamblers, and who hoped to get rich by the loss and ruin of other individuals. He had seen in that House, after twelve o'clock at night, when there were only fifteen Members present, some yawning, and some half asleep, measures of the greatest importance with reference to railways agreed to. He wanted to know what Parliament was now going to do with regard to this subject. There were some gentlemen connected with railways for whom he entertained the highest respect; but "evil communications corrupt good manners," and it often happened that a man who sat down at a gaming table without the slightest intention of playing, took up the dice or cards, and became particeps criminis with the rest of the company. The Chancellor of the Exchequer now proposed to extend the time allowed for the completion of railway works for two years beyond the time originally allowed; but he wished the right hon. Baronet would tell the House whether he might not afterwards allow a still further extension—whether he might not give two years more, and two years to that—
"Rusticus expectat dum defluat amnis; at ille
Labitur et labetur in omne volubilis ævum."
He saw that the right hon. Member for Derby (Mr. Strutt) had given notice of a clause to provide that, in awarding compensation to the owners or occupiers of land taken or used for the purposes of railways, the persons by whom such compensation was awarded should, in estimating its amount, have regard to, and make compensation for, the additional damage, if any, sustained by reason of the extension of time for the completion of the works. But he thought the House ought to be told to what extent compensation was to be given, and, above all, when it was to be given. Some of his property had been taken possession of by a railway

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company; but he had been unable to obtain payment for it. He was not, however, actuated by any selfish motives in complaining of the conduct of the companies; but he did say that the measure now proposed by the Government was still more unsatisfactory than the original Railway Acts. The clause of which the right hon. Member for Derby had given notice, applied solely to the owners or occupiers of land; and no compensation could be claimed or obtained by a person who had a small cottage, without any land, which might be required for the purposes of a railway company. He must say he considered that this Bill was most imperfect, and was of a doubtful and suspicious character. This Bill ought to be carefully watched; it looked like a measure brought in by a Government relying on its own strength rather than on the justice of the case. The Committee on the Bill might properly be postponed a little; the House was anxious to resume the adjourned debate, and the Bill was shovelled forward by the Chancellor of the Exchequer to pass almost sub silentio.
House in Committee.
Clauses to the 6th inclusive agreed to.
On Clause 7, providing for compensation to landowners aggrieved by the delay,
The CHANCELLOR OF THE EXCHEQUERproposed to omit this and the next clause, and substitute one in a new form, providing that when compensation should be assessed for the land required for the railroad, regard should be had to the additional damage (if any) caused by the extension of time granted by the Railway Board.
MR. HENLEYobjected that this would allow no compensation for the extension of time where the landowner and the company had already agreed upon terms, where the bargain was "a fact accomplished," where the company had got possession, and would expose the landowner to all the nuisance of a public thoroughfare.
MR. W. MILESfelt convinced that some railway proprietor had had a hand in the preparation of this clause which was proposed to be submitted.
MR. HUDSONwould not deny that he was one of the parties who suggested this alteration; but it would not affect any undertaking with which he was connected. If he had any interest, it was in throwing obstacles in the way of companies that might claim the advantage of this Bill; but he advocated the proposed clause be-
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cause he thought it was fair and right. Nearly the whole expense would have to be paid by the companies, and if the Bill were to stand in a different shape, attorneys would be requiring a jury to assess compensation for the delay in reference to small pieces of land, and there would be such a harvest for the lawyers as the Legislature never before gave. The object was said to be to ease the money market by extending the time for the construction of works; for his own part, he thought that railways would have been better left to themselves, and many bad companies would have fallen through; he believed the Bill would do harm rather than good; but he must admit that the public feeling was against him. At any rate, however, the Bill would make a greater concession to the landowners than was ever made before. He never found he could get possession of any land without paying for it; and most probably in the case of the gallant Colonel (Colonel Sibthorp) some difficulty had arisen on his part; and if he would look into the Court of Chancery, he would find his money there. If a company had made a contract to pay a certain sum on a certain day, this Bill would not release them from it; and justice was due not only to the landowner, but to those who had invested their capital in these undertakings, and to the public, who were to have the advantage of them. The companies ought not to be harassed, nor their money frittered away in law.
The CHANCELLOR OF THE EXCHEQUERsaid, there was no alteration made in the nature of the clause; that was to say, no claim for compensation was given in the substituted clause to parties who were not already entitled to it. All that was intended to be enacted was, that any one who should have to decide upon any claim arising out of the Railway Act, should take into consideration any claim that might arise out of this Act, and award additional compensation. The object of the substituted clause was to comprise the two clauses (seven and eight) into one clause, and to put it more neatly, so to speak.
MR. AGLIONBYobserved, that railway legislation had hitherto failed of accomplishing all the good that the public were entitled to expect in return for the many privileges that were conceded to the beneficiaries of those great undertakings. The utility of railways could not for a moment be disputed; but he was sorry to think that the directors were far from being actuated

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by a liberal spirit as regarded the accommodation they were willing to afford to the humbler portion of the community. Great efforts had been made to secure a third-class train of carriages for the special use of the labouring population; but, although such carriages were, in the strict meaning of the word, provided, yet they were subjected to so many inconveniences, both as regarded the hours of starting and the stoppages, that the benefit was almost neutralised. As regarded Sunday travelling, that in many instances was totally denied to the humbler classes. He would not mention any particular railway; but it was well known that in many instances it had occurred, that where property had been purchased by railway companies, under the assurance that stations should be established, and where parties had disposed of their property on the faith of those assurances, and had given up the accommodation of travelling which they already enjoyed, the railway directors had no sooner obtained possession than they abandoned their original undertaking, and left the parties without any railway accommodation at all. He could mention an instance in the case of a railway not very far from London. He meant the Brighton Railway, and the position was where the road diverged to Godston, from the Brighton Railway. Forty coaches used to run on that road, and a railway station was established there, and existed for five years. Property was purchased in the neighbourhood upon the faith that that station would remain; but what had happened? Within the last month the whole of the neighbourhood had been deprived of that accommodation.
The ATTORNEY GENERALthought that, instead of discussing the construction of the clause, it would be far better for the Committee to settle the principle upon which the clause should be framed. There appeared to be three classes of landowners whose interests were to be considered. The first were those who had made agreements and had received their money, but had not given up their land. These clearly could not be entitled to compensation. The next class were those landowners who had made their agreements, but who were to receive their money when the land was delivered up; and the third class were those landowners with whom agreements would be made after passing this Act. Now, it was for the Committee to determine whether the compensation was to apply to all
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three classes, or to the last two, or to the last class only. He conceived it would be better to determine that question before they entered into a discussion upon the construction of the clause,
SIR G. GLERKthought it would have been much better if the Government had framed the clause in such a manner as not to have left the Committee in doubt whether they intended to compensate all three classes of landowners enumerated by the Attorney General, or only two or one of those classes. It appeared to him that those parties who had already entered into their agreements were entitled to claim damages for the injury they would sustain by reason of the delay in the completion of their contracts.
MR. MUNTZobserved, that much injury might be sustained by a party in this way—suppose a portion of land in the neighbourhood of a factory had been purchased by a company, and notice already served on the party to give up the land, in consequence of which it had been found necessary to erect new buildings, and the necessary contracts were entered into for that purpose; then suppose that, under this Act, the railway company delayed taking that land for two years, would not the party be thereby prevented carrying out his new works? In such a case, the party would be unquestionably entitled to compensation.
MR. HUDSONclearly understood, that where the company had given notice of their intention to take the land, they must go on with the work notwithstanding this Act. Having given such notice, this Bill did not give the company a power to extend the time for taking the land.
MR. STAFFORDremarked, that one of the Members who had not addressed the House on the present occasion was the right hon. Member for Derby, whose name was printed on the back of the Bill as one of its authors. It was not unreasonable to expect that the right hon. Gentleman should explain the meaning of the two clauses to which the attention of the Committee was directed, and that he would so far improve upon the statement of the Attorney General as to declare which of the three courses referred to by the hon. and learned Gentleman the Government would adopt.
MR. STRUTTsaid, he understood that it was intended by the amended clause to convey the meaning of the original clause in an improved form. He could assure the

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Committee that the clause had not been altered in order to suit the views of the right hon. Member for Sunderland.
MR. HENLEYthought that the best course which could be taken would be for the Committee to agree as to the principle which should be acted upon, and leave the Government to embody it in a fresh clause. It was desirable that all the three classes of landholders should have the benefit of compensation; and he was sure that if the principle of compensation should be adopted, no damage would be done, because, if the railway companies should suspend their works, they would erect proper fences to guard against trespassers. He advised the Government to withdraw both clauses, and to bring up a new one embodying the principle of compensation in the report.
The CHANCELLOR OF THE EXCHEQUERunderstood the principle of the original clause to be this, that no landowner not in the situation of a person who would receive notice to offer opposition to a Private Bill for an extension of time, should be entitled to compensation under the present Bill. If the Committee were of opinion that the amended clause did not carry out that principle, he had no objection to frame another clause in which it should be more precisely embodied.
MR. SCOTTapproved of the course suggested by the Chancellor of the Exchequer.
MR. WOODsaid, that there were many cases in which landholders might be entitled to compensation; for instance, a person might have sold his land on condition that a station should be made upon it within a certain time. He was inclined to support the proposition to give compensation to every person who should have a locus standi before a Committee on a Private Bill for an extension of time.
MR. HENLEYhad no objection to limit the compensation to every person who would have a locus standi before a Committee on a Private Bill.
The CHANCELLOR OF THE EXCHEQUERsaid, he would accede to the hon. Member for Oxford's proposal.
MR. RICARDOinformed the right hon. Gentleman, that by adopting the principle which had been enunciated, he would endanger the Bill. No railway company would apply for an extension of time, if that application would involve the reopening of the whole litigation with the landlords. All the attorneys in the country would be busy in getting up actions for
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compensation; and if the damages in any case were laid at only 5l., directors would gladly give 100 l. to avoid going before a jury, or a reference to arbitrators. The whole railway interest would now oppose the Bill, and the Government would find they had raised a monster which they could not easily lay.
Bill went through Committee.
The House resumed. Report to be received.

COMMERCIAL DISTRESS—ADJOURNED DEBATE (THIRD NIGHT).
The Order of the Day for resuming the Adjourned Debate on the recent Commercial Distress, having been read,
The MARQUESS of GRANBYexpressed his fear that the speech of the Chancellor of the Exchequer would not have the effect of restoring confidence to the commercial classes. The Committee would be composed of the most discordant elements, and they were not likely to make their report, or if they made any report, it would not be till after a considerable lapse of time. From the manner in which the Chancellor of the Exchequer had spoken of the Bill of 1844, it might have been supposed that it had existed for half a century. That Bill had lived for three short years, and was adopted by the right hon. the Chancellor of the Exchequer; but he was obliged to disown the adopted child in the year 1847. He said the circulation was paralysed by the state of alarm that existed, and the interference of the Government provided relief. Was not that a distinct admission that the Act of 1844 had caused the pressure and panic? If you felt a pain in your foot, and by taking off your boot you relieved it, would not that prove that the pain was the consequence of the pressure and tightness occasioned by the boot? The right hon. Gentleman went on to say, that, although a relaxation of the Act of 1844 was recommended, yet the Act was not violated. It was impossible to afford a greater proof of the mischievous operation of that Act than the fact that, when it was relaxed, the relaxation did not increase to any great extent the circulation of notes. The right hon. Gentleman went on to blame the Bank Directors for not having, until the beginning of January, raised the rate of discount. At that period they raised it to 3¼ or 4 per cent. It was difficult, however, for the Bank of England to effect any good at the beginning of a drain of

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the precious metals. It was not until the panic had proceeded for some time—until the public were obliged, in consequence of being unable to get their bills discounted by the brokers, to go to the Bank—that the Directors of that establishment could affect the circulation of the country. By the Act of 1844 the banking department of the Bank of England was relieved from the necessity, which it before exercised, of watching over the interests of the country. That department was told that henceforward it was to consider itself in the same light as any ordinary bank of issue. That being the case, they were hound to look to the interests of their proprietary. The Bill of 1844 tied them down in certain cases, and deprived them of all freedom of action. In the words of Lord Ashburton—
—"it became a question between limitation by rule, and limitation by discretion. The limitation by rule would act only in a state of things as invariable as the rule itself."
The right hon. Gentleman went on to say that he did not attribute the distress of the country to the Act of 1844, but to the want of capital; and that that want of capital arose from the immense extension of railways in the country, and the great importation of foreign corn that had taken place. He (the Marquess of Granby) did not believe that the capital expended on railways was lost or withdrawn from the circulation of the country; but he did acknowledge that the exportation of thirty-three millions in bullion to pay for foreign corn, was a very great evil. On this subject there had been some misapprehension as to what the party to which he had the honour to belong had stated. The hon. Member for Surrey remarked, last night, that that party regretted that corn came into this country during a time of famine. He believed that no expression of the kind fell from any one of that party. What they had contended for was, that, if the corn laws had not been repealed, the same amount of corn would have been admitted under the circumstances; but that, whenever admitted, it would be paid for by bullion, and not by our manufactures. And now that their words had proved true, they pointed to the fact, and reminded the country of the evil. But it was said, though this might be the case now, in the time of famine, it would not be so generally. He presumed it could not be meant that it could make any difference whether the importation took place in consequence of a
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diminished crop grown on a certain number of acres, or whether from a diminished supply in consequence of fewer acres being under cultivation, though the crop per acre might be an average one. What must be meant, therefore, was, that the countries from which we imported the corn, in consequence of the suddenness of the demand, had not time to prepare to take our manufactures, and were therefore obliged to take our gold; that America said, "We are very sorry we cannot take your manufactures at present; but give us a little time, we will blow our furnaces out, and destroy our manufactures to make room for yours." But, he would ask, was there any likelihood of their so doing? Did any one really and truly believe that America would exchange her cotton for our manufactures? Mr. Spackman, in speaking of America, said—
—"that although naturally preferring agricultural pursuits, the rapid increase of her population caused her to turn her attention to that which was the natural production of her own soil. Not only did she make wonderful progress in the manufacture of cotton goods, but it was the intention of Congress to increase the import duties in order to pay the expenses of the war in Mexico. This was indicative of her policy to protect herself by all means in her power. In addition to this, her discoveries of coal and iron opened up a new branch of industry to her which bid fair to interfere with an important item of our exports to that country."
There was also a passage in the Times, to which he would beg the attention of the House:—
"The first bar of American iron was made in 1844, and now an American paper said, 'it was made at the rate of 120,000 tons per annum. This would lay four miles of railway per day, or 1,200 miles per year, and hence the prospect of any large importation of iron from Great Britain could hardly be looked for.' In Pennsylvania the anthracite coal, which abounded, stimulated several branches of manufacture. One iron manufacturer in that State consumed 50,000 tons of anthracite and 100,000 bushels of bitumen coals every year."
Was it to be supposed, then, that America would encourage the manufactures of this country in preference to her own? He thought he could prove from the speech of the right hon. Gentleman himself, that the cause of the distress in the country was not the want of capital. The right hon. Baronet bad stated very truly that no measure of the Government could increase the capital of the country. Of course it could not. But, almost in the same breath, the right hon. Gentleman took credit for the suspension of the Act of 1844, which

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suspension he said had the effect of mitigating the panic and relieving the country. It was not then the want of capital that occasioned the distress and panic; it was the want of confidence in the Act of 1844. The objection to the corn laws was not that foreign corn would not be admitted during famine prices, but that in consequence of the fluctuation of prices the merchants of this country would not run the risk of bringing it into the market. He believed, however, that the fluctuations in price had been much greater since free trade had been established. Last year the price of corn varied from 40 s. to 120 s., and so much variation, or anything approaching to it, had never taken place before. The right hon. Baronet went on to say, that amongst the earliest and most numerous failures, were the corn factors. He might add to them the merchants engaged in the East India trade; and was not their failure, he would ask, owing to free trade, to the competition which they were obliged to enter into with slave-grown sugar? He held in his hand the contract of the Grantham union, which contained the prices of different articles in October 1846 and 1847. From that contract he learned that the price of sugar was 6d. a lb. in Oct. 1846, and the same in Oct. 1847; so that, while Parliament was ruining the colonies and our merchants, it was not benefiting the labourers by its measures. The right hon. Baronet prided himself on having 8,000,000 l. of bullion in the Bank of England. Of what use was that, when no one could touch it? It would be as reasonable to boast of having in a time of famine 8,000,000 quarters of grain in the Tower, whilst the people were famishing for the want of it. He thought that instead of endeavouring to contract the circulation when gold was required to pay for our imports of corn, we should rather endeavour, by every means in our power, to make the gold in the Bank of England available for the purposes of the country; and we should also increase our superstructure of paper money, so that we might have the larger quantity of gold to pay for our imports. We had lately made a great experiment in this country, by adopting the principle of free trade. That experiment had proved most injurious. It placed our own countrymen, who were saddled with the burden of taxation, in competition with untaxed foreigners, and we had also given foreigners the means of using whatever peculiar advantages we
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possessed. While we provided for taking whatever the foreigner might choose to send us, we omitted to stipulate for the privilege of sending, on the same terms, our own products to the foreigner. He would now ask those who advocated that experiment, on the ground that it would relieve commerce and untie the strings of trade, to join with him in entreating the Government of this country to untie the hands of our manufacturers—to free the commercial classes of this country from the incubus now weighing upon them—to do something more for them than institute a useless inquiry. The mercantile community of this country were in want of immediate relief, and to tell them that they could not get relief until this Committee had reported, was to slight and overlook the most important interests of the country. He would entreat the Government to remember the failures that had already taken place—failures amounting to 15,000,000 l. or 16,000,000 l. He would entreat them to remember that it was not only the merchants and great traders who were ruined by the Bank restrictions, but to them all classes in this country, down to the smallest trader, owed their sufferings. He had been told that of seventy houses in the East India and China trade, seventeen would not survive the present crisis. The noble Lord (Lord John Russell) stated, the other night, that the energy of the people of this country would enable them once more to surmount their difficulties, and that the Government, though they would not assist them with their wisdom, would go along with them. He hoped that the noble Lord would not depend too much on the energy of the people of this country as a means of repairing our present commercial calamities; but that he, as the head of the Government, would, as it was his duty in all our great national emergencies, not only go along with the people in their endeavours to restore their former prosperous position, but would lead them, and do his utmost to remove the difficulties and dangers at present existing in the commercial world. Then would he, in common with the noble Lord at the head of the Government, have confidence in the energy and resolution of the people of this country. Before he sat down, he must say, that if the noble Lord were determined to turn aside from the prayers of the people—if he were determined not to listen to those cries of distress which were arising from all parts of the empire—he,

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for one, would not consent to go into a Committee of Inquiry—he, for one, would not consent to postpone affording relief to the country until that Committee had presented its report, as he did hope and believe that some definite proposition would be made by his side of the House to give immediate relief to the incubus imposed upon the commercial classes by the Act of 1844.
MR. F. T. BARINGsaid: Among the advantages which I hope will be derived from this discussion, one is, that it has already brought before the House the hon. Member for Westbury (Mr. J. Wilson). That hon. Member has spoken so clearly and ably on an intricate subject, that he will always command the attention of the House; but I think that the Amendment which he has moved on the Motion of the Chancellor of the Exchequer is, in some degree, unnecessary. If the hon. Member had had more experience of the practical working of Committees, he would have been aware that it is impossible to limit any inquiry that may be undertaken by the words in which the subject may be referred. In this case, practically, the inquiry will extend to the same range and embrace the same points, whether the words adopted in referring the question are those suggested by the right hon. Gentleman the Chancellor of the Exchequer, or those proposed to be substituted by the hon. Member for Westbury. Any discussion, therefore, of this point, as to whether or not the Amendment is an improvement on the original Motion, is of very little practical consequence; and as the fullest and most ample inquiry is desired, the wider reference to the Committee ought, I think, to be decided upon. I am not very critical on the language; but if I was to object at all, my objection would be that there is no distinct reference to those letters of the noble Lord and right hon. Gentleman which have been the cause of our being called so early together. The Government undertook a very grave responsibility in suspending the operation of an Act of Parliament; no doubt their conduct must incidentally come before the Committee to be appointed. But I should still have preferred that those letters had been specifically referred to the Committee. It is a serious step to suspend the operation of an Act of Parliament. The House should look with jealousy on the exercise of such a power; and Ministers should know that every such step will be most carefully
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looked into by Parliament. But it is not because I object to the course which the Government has taken that I say this. It is with the greatest reluctance that, after listening attentively to the explanation of the right hon. Gentleman (the Chancellor of the Exchequer), I find myself compelled to approve of the course which has been taken. While admitting this, I beg to be understood as regretting very deeply the necessity under which my right hon. Friend found himself of breaking through the law; but I think it must be allowed that, under all the circumstances, the Government had to choose between the strict adherence to an Act of Parliament, and a state of increasing danger and difficulty. And, having decided on moving at all, it seems to me that they gave way just at the proper time. I throw aside, of course, all party feelings, and all those considerations which might spring from political attachment to my friends below me. I will take an impartial view of the case. I do not think they were frightened without reason. Of all those men at whom I would have pointed as not likely to tremble before a little danger, I would first have mentioned the noble Lord and my right hon. Friend. I am assured that when they resolved on violating the law, it was not a small matter which induced them to assume that heavy responsibility which now rests upon them. I will not conceal from myself that the circumstance of their having so given way has had a very great and serious effect, not directly upon the interests of the country, but upon the view which the public will be disposed to take of our monetary concerns, and of the laws which should regulate them. It will not be forgotten that the Bill had to be suspended upon the very first occasion on which it was put to a trial; and this naturally will diminish the confidence which was before placed in that Act. My right hon. Friend, perhaps, did all he proposed to do so far as regards the restoring confidence to the money market; but, in doing that, he has left for himself a still harder task—to restore confidence in the laws which regulate our monetary system. Unconnected in any way with the Administration, I have endeavoured to watch, so far as my limited information allowed me, the working of the Bill of 1844. I have endeavoured to do this fairly, and with no reference to any predisposition I may have had in its favour. When that Bill was passed, I contemplated from its operation

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three different and main advantages; and I have examined the results to see how far my expectations have been realised. One of the objects of the Bill was, that by placing restrictions on the private banks, it would check that over-issue of those banks which had previously either by themselves produced the most serious evils, or had counteracted the efforts of the Bank of England, when, in a time of approaching difficulty, that establishment was desirous of taking proper precautions. And of that part of the Bill, my expectations have been entirely fulfilled. In April last those who doubted the operation of the Bill admitted that that portion of it worked well, and even expressed a wish that so much of it might be retained. There are Gentlemen, however, who have a great objection to the Bill, because it did not prevent speculation. Do they mean that they expected any such effect? If so, I think it was a most unreasonable expectation. Such an expectation was never held out. Perhaps in the speeches when the Bill was under discussion, a sentence here and there may be picked out, inferring that it would tend to restrain excessive speculation. But all the laudatory phrases uttered carelessly in debate are not to be taken as the expectations of the framers and authors of the Bill. We all know that in this House there is a good deal of exaggeration. If the thing we are talking about is a good thing, there never was such a blessing before; and if it is a bad thing, we predict utter and extreme ruin to the country. But there was no real expectation that the Bill would prevent over-speculation. You cannot prevent speculation by any monetary system whatever. Your object was this—that when, from other causes, excitement and over-speculation existed, your restriction should prevent any increased excitement arising from the over-issue of joint and private banks. That was your object, and that you accomplished. There has been plenty of speculation undoubtedly. There has been a good deal of speculation in railways. Now, one thing is very singular in the House of Commons—its shortness of memory, its forgetfulness of what it did a few years ago. Will you have the goodness to recollect what was the great grievance and subject of complaint some time ago? It was, that you had so much capital you could not find any profitable mode of investment for the whole of it. Well, of course, when that was the case, capital found an outlet in every possible direction,
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and you could not but have speculation. And then you had another difficulty; you had a great mass of labour for which you had no employment. Both your capital and your labour were finding channels for themselves in foreign countries. If there was any blessing for which you might have prayed then, it was for reasonable modes of profitably employing your capital, and honestly employing your labour. The blessing eventually came, and you found what you wished for in railways. I am very well aware that railways have been overdone, just as every other speculation is overdone; but I confess, while I am not insensible to the evils arising from over-speculation, that I have considerable doubts of the expediency now of the House or the Government interfering for the purpose of checking or directing speculation. No Act of Parliament can stop speculation. You have it, in one shape or another, from time to time; and if I have read the history of my country aright, I can see no reason to fear but that, so long as you leave us free, there will always be sufficient energy and intelligence to raise us from any of those temporary difficulties resulting from an excess of speculation in which, as now, we may find ourselves. It is only when you enact by law how long the labourer shall work, and how the capitalist shall invest his money, that I begin to doubt of the fortunes of the country. I hope that no such attempt will be made now. A Committee is to be appointed to whom Railway Bills are to be referred, with a view of seeing what is to go on, and what must be stopped. The same thing has been tried before. I was one of the Committee; the proposition never was actually made to the Committee, and I never gave it any encouragement. I am of the same opinion now as I was then. I grant all the evils that may flow from speculation; but I question the wisdom of a Committee of this House telling me—though I am no speculator—or any one else, how we shall deal with our money. I hope, however, if any such recommendation is to emanate from a Committee, this Committee will do its work well—that it will give us some comprehensive report, and tell us on what principles we ought to go. I hope they will do their business in a business like manner. The supposition on which they are proceeding is, that there are too many railways contemplated for the floating capital of the country to provide for; and I expect of the Committee

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that they will enter into all the details, and give us those reasons on which they found this conclusion; what is the floating and what is the fixed capital of the country, and how much is required for our legitimate wants. We are told that the rate of interest derived on loans to railways is so high that we cannot go on with our regular trade; if that be so, the Committee should inform us to what extent they consider the rate of interest may be allowed to rise, and how far capital ought to be free in its investments. Let us know whether we are to have a recommendation of some new usury laws, for the purpose of defending the mercantile and manufacturing interests against railways, on the ground that they monopolies the floating capital. The more I consider this question the more I am convinced that we shall be unable to lay down any well-defined principle to which, under all circumstances, it would be safe to adhere. Just at the present moment it would probably be no very great harm if we decided upon "hanging up" all the Railway Bills; but if you enter upon an inquiry in order to find out what ought to go on and what ought to be rejected, you undertake a task in which you are certain to fail. In the story of Rasselas, there is a philosopher who laboured under the delusion that to him was given the superintendence of the weather: that he was to measure out the sunshine, and the wind, and the rain. The poor old soul lived a very unquiet life; but when he recovered from his dream, he had at least the consolation that he had done no mischief. Now, I do not know to whom is to be intrusted the task of directing the commerce of the country; who is to draw off an excess of money in one direction to force it into another, or who is to bottle up our floating capital, lest it should be too hastily transferred into fixed capital; but, whether Her Majesty's Government or the Committee, they will have to awake some time or other from their delusion, and I hope they will be able to assure themselves that they have done no mischief. There is another expectation which I entertained of the Act of 1844, and this, also, I think, has been realised. Let us remember what took place in 1837–9. The cause of the difficulties in those years was very plain. We had great prosperity in the first place, then came some accidental reason for a turn in the exchanges, and the result was an external run upon the Bank for gold. The
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Bank attempted to set the exchanges right, and ultimately succeeded, but not before the amount of gold left in its coffers was so small that an internal drain would, in all probability, have rendered necessary a suspension of cash payments. This is the real history of the affair. I was not then at the head of the finances, but had the means of knowing what was going on, and remember well the deep anxiety which was then felt, as at one time I saw the Governor of the Bank from day to day. The bullion of the Bank was, in 1839, as low as 2,000,000 l., and perfectly unable to meet any internal drain if it had arisen. In remedying this state of things this Bill has perfectly answered to every expectation. Whether right or wrong in other respects, the effect of it has been to set the exchanges right, with an amount of bullion in the Bank which left them free to act, and, at any rate, free from any fears of those internal drains which at one time were by no means visionary. When I left office I was not free from alarm and considerable apprehension that if our monetary system continued to exist as it then was, it was not at all an impossibility that in the very next season of distress the Bank would stop cash payments. Looking back, then, to the combination of difficulties which we have recently had to struggle against, I will not conceal from the House my conviction, that if all those disasters had come upon you with no other check or precaution than were provided before the enactment of the Bill of 1844, we should now have had to be considering how we should deal with a crisis much more serious and ruinous than that through which we are passing. So far, therefore, my expectations of the Bill have not been falsified. I wish I could say the same with regard to that third anticipation which I formed. Amongst other expectations was this, that the Bank would commence their operations earlier; and, by withdrawing their notes gradually from circulation as the gold was withdrawn from the country, the effect upon commercial people would be gradual and cautious. Under the old system it was said that the Bank neglected the signs of the times, and did not take their precautions early enough, the consequence of which was, that when a time of difficulty and danger came, the Bank sought to save itself at any expense. The expectation—and I do not separate myself from others, for I entertained that expectation—was, that by

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compelling the Bank to take earlier precautionary steps, and by making that measure gradual, the country would have been saved from those convulsive efforts which the Bank was accustomed to make; and crises such as these, although they might still occur, would yet he mitigated in their operation. I admit that that expectation has entirely failed. But still I cannot help feeling that the principle upon which that expectation was founded was correct and true, and the more so when I look at the operations of the Bank itself. I have avoided troubling the House with statistics; but, for the purpose of making myself clear upon this point, I will trespass upon them with an extract, merely requesting the House to observe that I take the figures under the old system. I find, then, that the amount of bullion in the Bank on September 12, 1846, was 16,354,000 l., and that on April 17, 1847, it was reduced to 9,330,000 l.; being a diminution of 7,024,000 l. Now, I take the same dates with respect to the circulation of notes, and I find that on September 12, 1846, the amount was 20,982,000 l., and on April 17, 1847, it was 21,228,000 l.; being an increase of 246,000 l. Now, I do not know what might have been the expectation of my right hon. Friend or of those Gentlemen on the opposite benches who are more acquainted with this subject than I am; but, for myself, I must say, that I never entertained the idea that it would have been possible under the operation of this Bill to have shown such a set of figures. If we could have supposed this possible when we were in Committee in 1840 collecting the evidence upon which the Bill was founded—if a case had been brought before us in which when the bullion had run off 7,000,000 l. the notes had increased 250,000 l.—then I should have said, that such a case was the strongest argument for the alteration of your system, and the strongest reason for a Bill founded upon the principles of the right hon. Baronet. I know I am told, in answer to this, that it is all the fault of the Bank. This answer does not satisfy me. I believe, if we look back, we shall find that the operation of the deposits and the question of the reserve was not sufficiently considered either by those who were favourable or those who were opposed to the Bill. I cannot find in the evidence before the Committee of 1840 more than a few sentences leading me to suppose that danger arising from such a cause was
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contemplated or referred to; yet this was a most important consideration, for it was by the reserve the Bank was enabled to do what was contrary to the spirit of the Bill—when gold was running out not to reduce their circulation by a single pound. I do not think that the system works satisfactorily in this respect; and, in fact, the point did not receive anything like a sufficient consideration. Perhaps it was impossible, before the Bill was in practical operation, to see how the reserve of notes would operate; but it certainly never entered into the contemplation of any one then considering the subject that 7,000,000 l. in gold should run off, and yet that the notes in the hands of the public would rather increase than diminish. Without at present saying whether the expectations I entertained when I supported the Bill, have been disappointed or fulfilled, this much I will say, that I have listened attentively to all the objections which have been offered to that measure by different Gentlemen, and it does appear to me that the grounds upon which the several objections are based, are the most discordant and incongruous that can well be imagined. One Gentleman alleges that this Bill has been the whole and sole cause of the commercial distress; he attributes every evil to the Bill; but scarcely has he sat down before another Gentleman rises, belonging to a school the disciples of which assure us that the Bill is utterly and entirely ineffective. I have heard it distinctly stated, on the one hand, that by the law the circulation was starved, and commerce ruined; and, on the other, that the Bank had no power either to increase or diminish the circulation by a single note. Now, it really would be convenient, before you attack the Bill, to decide whether the Bill is an inefficient Bill, or an over-efficient Bill; for surely it is impossible it should be both. If you believe the accusations against the Bill brought by the Gentleman who ascribes to it all the difficulty and disaster that has occurred—that it has crushed credit and stopped circulation—then what becomes of the arguments of that class of Gentlemen who contend that the Bill is altogether nugatory, and has no effect whatever: or, on the other hand, if the latter position he true, what becomes in turn of the charges of distress and mischief which are laid to the account of the Bill? I do wish Gentlemen would have the good sense to decide what those charges against the Bill really are. But both classes of objectors are anxious to free

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the Bank from the restriction, and leave the management of the circulation to them. I cannot but remember what took place in times before the Bill of 1844, concerning discretion vested in the Bank. All the same accusations and objections were then brought forward. Deputation after deputation came up to complain of the misery created by having the fate and fortunes of the commercial world at the disposal of the Bank. Is it so very long ago, that hon. Gentlemen have forgotten the manifesto of the Chamber of Commerce at Manchester? As I find that memories are really short upon this matter, I will state what was the opinion—not of philosophers, not of theorists, but—of practical men; and I ask the House to listen to the sentiments of the men—the first of your manufacturers—commercially representing the opinion of Manchester, the great mart of your cotton manufactures, upon that system to which in the opinion of some—rather hastily formed perhaps—but, at any rate in the opinion of some, we ought to return. They detail first the effects of the measures of the Bank, and then proceed to speak of the powers given them under the old law:—
"That such a power over the property, and, as has been seen, the health, morals, and very lives of the community, should be vested in the hands of twenty-six irresponsible individuals, for the exclusive benefit of a body of Bank proprietors, must be regarded as one of the most singular anomalies of the present day; that the secret acts of these individuals, veiled as they are even from the eyes of their own constituents, should decide the fortunes of our capitalists and the fate of our artisans—that upon the error or wisdom of their judgment should depend the happiness or misery of millions—and that against the most capricious exercise of this power there should be neither appeal nor remedy—that such a state of things should be allowed to exist must be regarded as a reproach to the intelligence of the age, and as totally irreconcilable with every principle of public justice."
That was the opinion of the great manufacturing city of Manchester upon the working of that system which now you speak of with so much attachment—the system of entire discretion vested in the Bank. Prom what I have said, it will be seen that if I am a Member of the Committee about to be appointed, I should not he very likely to enter upon the duties of the inquiry with a very obstinate disposition to stand by any Act I was instrumental in passing, if I thought it wrong. I should go into Committee with a view to ascertain the real working of the Act of 1844, and to give to the inquiry into that Act my best and gravest consideration, with
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the sole view of coming to such a conclusion as truth and experience may warrant. But, at the same time, I cannot sit down without earnestly entreating this House not to be led to a hasty decision by mere language, however effective and eloquent—not to be induced to make a sudden jump either the one way or the other. I entreat it to take time—to inquire diligently and patiently—to ascertain clearly and decidedly, before they act; for of all the plagues that can beset the human mind, none is worse than the fever for doing something without knowing what. Inquire, then, and come to one conclusion or another; you may come to many conclusions and to false conclusions; for you are but men, and your decisions may be wrong. But if you decide without inquiry, then I do not hesitate to say that you are committing an act of criminal negligence, and adopting a course for which there is no excuse. Those who have been engaged in trade—those recovering from recent suffering—must feel warmly, and may allow their feelings to influence their judgment; but you are legislators, and if you allow your judgment to be overborne by your feelings, you at once commit a grave political crime. You are bound calmly to investigate this great political question. You talk of months of time; but months are of no importance compared with that of coming to a right and just decision upon a subject of such momentous importance.
MR. HERRIESsaid, the right hon. Gentleman who had just addressed the House, had recalled their attention to a topic of the most essential importance, and it seemed to him a matter of wonder that no one who had preceded him in the debate had especially drawn the attention of the House to it; for it was, as the right hon. Gentleman observed, a subject of the greatest interest in itself, and also as connected with the conduct of the Government of high importance in a constitutional view. The right hon. Gentleman had very justly objected to the conduct of the Government in not having more expressly brought under the consideration of this House the correspondence which had taken place between them and the Bank—the papers relating to those events which had taken place immediately before Parliament met, and which were in fact the main cause of their having been called together. The noble Lord at the head of the Treasury, as a constitutional statesman, was perfectly right in declaring that the letters which had

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passed between the Treasury and the Bank should be made the subject of special reference to the Committee about to be appointed. But he would not be content with a mere reference to those letters to the Committee. He took it for granted that those letters were connected with a more extended correspondence, the whole of which ought to be brought under the consideration of this House, in order that this House might express its judgment upon the whole of the transaction in question, and its results. He was not offering these remarks in a spirit of party, as a Member of "Her Most Gracious Majesty's Opposition"—he was not cavilling or criticising in the spirit of a partisan; for he was convinced that, from the consideration of such a subject as this, party feeling and party spirit would be, as they ought to be, entirely excluded. Indeed, he could not imagine how, by any ingenuity or party predilection, such a question could become a mere party question. Hon. Members on this side of the House, in many cases, agreed with hon. Gentlemen opposite, and vice versâ. The various opinions entertained upon the general question of the currency, to which this special subject had relation, were distributed through every part of the House. There were men connected with commerce, with politics, and with literature in each division of it, entertaining different views, and maintaining separate theories, who could have no political purpose to advance by the support of them, and no other object than the maintenance of what each believed to be the truth. It was, therefore, in the entire absence of anything like party spirit or ill-feeling towards the Government he said that Parliament ought to be put in full possession of the whole history of those transactions to which the right hon. Gentleman had adverted. He thought that the Government was not only bound to furnish the whole of the correspondence or communications in question, but also to give to the House the fullest explanation of the grounds upon which they had acted as they had done. That was what the House of Commons ought to know. The peculiar circumstances which occurred to induce the interference of the Government, and which had forced them into the course which they had adopted, were, indeed, nothing less than the very pith and marrow of the subject. The narration of the particular grounds upon which the Govern-
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ment had proceeded when they resolved to suspend the existing law, would do more to show them the real working of the Bill of 1844 than any lengthened discussion on the general question of the currency, or the production of voluminous papers, could possibly do. Those disclosures alone could fairly exhibit the cause and manner of the failure of the Bill of 1844. It lay in a narrow compass, and might be shown in one view, or stated in a few words; but in spite of all that had been said about it—in spite of repeated requests and solicitations—the Government had pertinaciously withheld this plain and simple information. What he alluded to was nothing more than a plain but full exhibition of the condition of the Bank at the time when the Government was induced—or, he should rather say, compelled—to write the letters in question. The right hon. Gentleman the Chancellor of the Exchequer had made a very long, able, and lucid speech; but he cautiously avoided throwing any light on this the most prominent and pressing incident involved in the subject of his discourse, he would not say in a disingenuous, but certainly in a very dexterous way, by adverting to it in this fashion—"I was informed, on the 23rd of October, that there was a panic in the city. Persons of great respectability in the city made me acquainted with that fact. Acting on this information the Government thought it necessary to take such measures, with reference to the Bank of England, as might allay this panic." Now, it might be assumed, from the statement of the right hon. Gentleman, that the panic he was called upon to dispel was one of those sudden and unfounded apprehensions which, just or unjust, will sometimes get hold of men's minds—something for which there might be no real ground, but which, although arising from imaginary or fictitious causes, it was nevertheless the duty of Government to relieve. But, was there no foundation for that panic? Was there no panic in the mind of the right hon. Gentleman himself? Did not that panic arise out of some just and reasonable ground for fear? And was not that a fear in which the right hon. Gentleman might himself very naturally participate? If the right hon. Gentleman had thought fit to disclose to them the state of the Bank when all this occurred, the House would have had no difficulty in judging whether this was an absurd panic, or a just and prudential apprehension, which pervaded all the mercantile

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classes of the community. He (Mr. Herries) could tell the House that such was the condition of the Bank at that period, that if the Government had not interposed by an authority to suspend the Act of 1844, the Bank of England would have had no other resource in order to meet its engagements, than the dangerous and doubtful one of forcing its public securities for sale upon the market. The House might easily judge what might at such a state of things have been the consequence of such a step. No; it was not a mere panic that the Government interfered to allay. It was the cause of that panic that they were imperatively called upon to remove. For that purpose their interference was, no doubt, wise, or rather absolutely necessary. On the memorable day which preceded their determination—the 23rd October—two days before the letter to the Bank was written—the real cause of the panic might be seen in the relative state of the liabilities and resources of the Bank under the restrictive powers of the Act of 1844. He would not weary the House with many figures, but would briefly draw their attention to some which, on this part of the argument, were conclusive. There were in the issue department of the Bank, at the period referred to, in bullion, 7,865,000 l.; notes outstanding 21,865,000 l. In the banking department, in bullion, 447,000 l.; and in notes, 1,547,000 l. Against this whole amount of cash in the banking department, they all knew there was an enormous sum both of public and private deposits. The private deposits amounted to 8,580,000 l.; and the public deposits to 4,766,000 l. At this period, the demand for discount by merchants and others of the highest credit was most pressing, and the Bank was utterly unable to give the slightest assistance; for such was its condition, that if only a portion of those who had private deposits there, suppose to the amount of 2,000,000 l., had drawn for them, the Bank must have actually stopped payment. At such a moment they could not have sold their securities, and they had no other means of complying with the demands on them. Now, was not such an event as this—was not such a crisis—the very first subject for inquiry? Was it not of the most urgent importance to ascertain in what manner this crisis occurred, and what the Bank Act had to do with bringing it about? Was it not by inducing this state of things that the Bank Act had brought about this failure
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of credit—this universal distrust—this ruinous want of confidence—at a time too, when, be it remembered, the exchanges were favourable, and the bullion coming in? and, if not, what were the causes of it? The Bank had at that period no other alternative than to go into the market and sell its securities. What would have been the case if the Bank had done so at such a moment? and how would it have affected all those who held securities if the Bank had gone into the market to sell stock of any kind? Such being apparently the consequences of the working of the Bill of 1844, ought not that particular subject to be immediately submitted to the consideration and decision of the Parliament? Perhaps it might be asserted, that the crisis was not the effect of the operation of the Act, but was produced by mismanagement on the part of the Bank. There was a great disposition amongst many in that House to cast upon the Bank Directors the whole of the blame, and to say they were responsible for the occurrence of those disasters, and that the depression of commercial credit was the result of their mismanagement. Now, he was not the apologist of the Bank of England. He did not know the particular grounds of the proceedings of the Directors. He looked in vain for one of them in that House, who was the Member for the city of London (Mr. Pattison), and he felt sure that if that hon. Member were present, he could give a satisfactory answer to those accusations which were thrown out against the Bank Directors. But it was one of the particular characteristics of the Act of 1844, that it should guard the Bank and the public from crises resulting from improvidence and speculation. It was said by its promoters that there would be no need for any great discretion, or the intervention of any prudent counsels or superintendence, upon the part of the Directors or of the Government, for the great feature of the Act was, that the Bank would regulate itself. Well, then, since, according to the framers and supporters of the Act of 1844, there was no need of discretion or superintendence upon the part of the Bank Directors, or of the Government, the failure which had occurred must be inherent in the Bill itself. Although the Act of 1844 had been passed with a very general concurrence of the then existing House of Commons, it could not be said that it had been adopted with unanimity, or that very strong differences of

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opinion had not been expressed upon it. These were maintained, indeed, by a very small but a very respectable minority in this House, when the provisions of the Bill were under consideration. But out of the House a very able discussion of the principles and the theory upon which the Bill was constructed, had long been going on. So far from this Act being deemed a discreet one, or the principles upon which it was based being generally assented to, those principles and doctrines had been pronounced erroneous many years before they were adopted by the head of the late Government; nay, the very results which had occurred since its passing had been most faithfully and minutely predicted by writers of established reputation upon the currency question. He would read to the House some extracts from the works of two writers, Messrs. Fullarton and Tooke. Mr. Fullarton, alluding to the separation of the departments, and the limitation of issues, said—
"When by course of trade the stock of bullion in the Bank shall be reduced to a level nearly corresponding with the amount of the notes in actual circulation, in excess of the 14,000,000 l. issued on credit; when the treasure of the banking department shall be exhausted, or nearly so, and its means of solvency shall have become wholly dependent on the sale of its securities from day to day, then, and not till then, will 'the experiment' be fairly on its trial."
He begged also to quote the following from Mr. Tooke's Inquiry into the Currency Principle:—
"This being the case, the Directors would not have a moment to lose, upon the first manifestation of such demand, without taking measures for retaining or restoring the proportion of their reserve. They must sell securities, or allow the existing ones, if short-dated, to run off, and they must inexorably shut their doors to all applications for advances or discounts. This would, as Colonel Torrens justly observes, operate as a limitation of the power to overtrade in discounts and loans. Most effectual, indeed, would it be, and under certain circumstances of the trade, it would operate with a degree of violence on the state of credit, of which, as it appears to me, Colonel Torrens has no adequate idea. * * * * Before 2,000,000 l. or 3,000,000 l. of bank notes could be forcibly abstracted from the amount in circulation among the public, the pressure upon the reserves of the London bankers would be extreme. They would, of course, to the utmost extent practicable, call in their loans and resolutely refuse further accommodation. Although there is no modern experience of such a state of things, if any merchant banker or money dealer were to have the case laid distinctly before him, could any of them for a moment have a doubt as to the extremity of pressure which it would cause? I am most intimately persuaded that it would be within the mark to suppose that a rate of discount (assuming that
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the doors of the Bank and the ears of the Directors were inexorably closed against all applications) of 20 per cent and upwards would, in many cases, be submitted to, and sacrifices of goods, if any large proportion were held on credit, would be made at a still greater loss. And, after all, it might be a question whether even this effort of the Bank on its securities would be effectual in restoring its reserve in sufficient time to meet the exigency. If such a crisis were to happen, as most probably it would, at the time when the dividends on the public funds became due, the Government would be imperatively called upon to interfere, and prevent so ridiculous, however lamentable, a catastrophe."
Everything which these writers predicted had taken place. Those gentlemen had not only foretold general results from the application of general principles, but they had foretold with precision what had actually occurred. If they had been gifted with foresight they could not have described the result more accurately. The promoters of the Bill could not complain of not having received ample warning of the inevitable consequence of their measure. He must again express his regret that Ministers had not given the House some more precise information of the state of the Bank immediately preceding the issuing of the letter of the 25th of October. He had attempted to obtain that information on the first day of the Session, but was then told that he had put the question at too late an hour, but that had he put it earlier, he would have obtained an answer, for the Chancellor of the Exchequer was perfectly prepared to have given an answer, had there been time. Another attempt was consequently made to obtain the information on the following day, but the House was told that it would be given on Tuesday; when Tuesday came, they did not get it after all. The House was favoured with a general statement of what the Government had done to relieve the panic; but they were not even yet told what the cause of that panic was. Now, that was not the way the House ought to have been dealt with on this important question. He also thought that the able and lucid speech which had been delivered on the first night of this debate by the hon. Member for Westbury (Mr. Wilson) deserved some notice from the Government. But were Her Majesty's Ministers to do nothing in the meantime besides granting this Committee? It was not only possible, but, he said it with regret, in the present circumstances of the commercial world, it was exceedingly probable, that an early recurrence of disasters

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might take place, such as those he had just adverted to, and which would not perhaps end so satisfactorily as those had ended—that a panic might be created, which no letter from the First Lord of the Treasury and the Chancellor of the Exchequer would so easily allay. With that feeling on their minds, the mercantile world were very different from what he imagined them to be, if they would be satisfied to wait for the report of a Committee which was about to enter upon so wide a field of inquiry as that which lay before the one now proposed, even supposing the investigation were to be committed to the ablest men; for, the abler the men, the more disposed they might probably be to enter upon the whole of the very wide field of investigation which would lie before them. He said, then, that it was all but impossible that Her Majesty's Ministers could refuse to take some step in the meantime to prevent the continuance of those difficulties which, as he had endeavoured to show, were inherent in the Act—which were not an accidental occurrence in the course of its operation, but were the necessary effect of its construction and provisions—which had already occurred, and which were likely to occur again. On the first day of the Session he had ventured to ask Her Majesty's Government, if the proposal to appoint a Committee were complied with, as undoubtedly it would be, for no man would willingly oppose it when asked by Government—for there were no factious views or party feelings mixed up with this discussion—he had, he said, ventured to ask Her Majesty's Ministers what they proposed to do in the meantime? The country was at present on the return, he hoped, to a permanent improvement—certainly they were at present in the enjoyment of a better state of things than when the recent unfortunate catastrophes occurred; but there were still elements in the mercantile condition of the country quite enough to awaken in the mind of every man who paid the slightest attention to the subject, the strongest apprehensions that worse times than we had yet passed through might possibly occur. We had yet to receive the news from distant parts of the impression which the calamities in London had produced. The news from India might have a very serious effect indeed on the aspect of mercantile affairs. Would Government, then, leave things as they were? It was said, that Parliament was sitting, and that if any necessity for
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interference occurred, Government would not hesitate to apply for powers to do so. That answer was not satisfactory. What the mercantile community required was, not that there should be power to interfere when an extremity arose, but that there should be power to prevent the necessity of such interposition—not that when the Bank should be found in a critical state on Saturday, the heads of the Government should write another letter on the Monday. The mischief in such a case was actually done by the mere demand for such peremptory interference, which of itself created alarm. He thought it would be better if Her Majesty's Government would adopt some measure to avert this possible evil while the inquiry was pending. The right hon. Gentleman who had last addressed the House (Mr. Baring) had admitted that the Act required investigation; and he had seen from the public papers that a noble Lord, in another place, a Member of Her Majesty's Government, had intimated that some modification of the Act of 1844 appeared to him to be necessary. Why then should there not be some intermediate step taken to relieve the anxiety of the public mind until there was time for some permanent legislation on the subject? If there were to be a discretionary power lodged anywhere to increase the issues upon credit beyond 14,000,000 l., it would be better to lodge it at once by authority of Parliament in the Bank of England until such time as a permanent measure could be introduced. The right hon. Gentleman who spoke last (Mr. Baring) had expressed his surprise at the apparent discrepancy between the state of the bullion and the notes in circulation in September, 1846, and April, 1847; the bullion between these periods having diminished 7,024,000 l, while the notes with the public had increased between 200,000 l. and 300,000 l.; and he grounded upon this a charge of mismanagement against the Bank of England. He was not able to understand the drift of that statement. The Bank was strictly prohibited from issuing beyond the sum of 14,000,000 l., except upon bullion. The Bank might, by its discounts, have affected the pressure upon credit—it might have altered the price of commodities, and, through the diminished price of commodities, and the consequent stagnation of trade, the amount of the notes held in circulation by the public might have been diminished. But he could not imagine in what manner that could have been a beneficial operation, or

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otherwise than calculated greatly to aggravate the existing pressure upon commerce and credit. It appeared from papers before the House, that notwithstanding the changes made by the Bank in their rates of interest or discount, the paper held in circulation by the public had not materially varied during the period between the spring and the autumn of the present year. The fluctuations were not greater than 220,000 l. or 300,000 l. upon about 20,000,000 l., and therefore not of a nature to affect the public convenience, or to indicate any variation in the state of trade. This was rather a subject for satisfaction than otherwise. He saw no reason, therefore, in this respect, for the indignation which his right hon. Friend had directed towards the conduct of the Bank. He must say, when he considered the great varieties of opinions that were entertained on this subject—and especially when he considered that there were some high authorities arrayed against him—he had been led very seriously to reconsider his own opinions; but the more he reflected—the more he weighed the differences of opinion—the more he was compelled to come to this conclusion, that the Act of 1844 was founded upon a mistaken opinion—and especially that those provisions of it which related to the separation of the two departments of the Bank, and the consequent limitation of the circulation, was a fundamental mistake. He was satisfied that the day would come when Parliament would again be called on to interfere. There was one thing he contemplated with more than common dread, and which had been shadowed out by one of their ablest writers on this subject. That writer, Mr. Fullarton, had expressed a fear that, when this measure was found to fail, there might be a rush throughout the country, not merely for the amendment of this Bill, but for the destruction of the foundation of our existing monetary system. It might come to this—indeed he had already seen symptoms of it—he had heard speeches which indicated that there was a tendency in the public mind to overthrow the foundation of that system as established by the Bill, of 1819. At the same time, he could not easily be induced to believe that the House or the country would consent to forego the solid basis on which our currency was at present founded. Among the amendments or modifications of the existing Act—some one or other of which the very general voice of the coun-
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try appeared to call for—it had been suggested that a remedy for its present dangerous restriction might be found in an extension of the maximum within which the issue department of the Bank was now confined; such as the raising it from 14,000,000 l. to 16,000,000 l., or even 18,000,000 l. But he was confident that no such modification would suffice to render the Act free from danger; and he was equally convinced, on the other hand, that no maximum, of any amount that could be fixed upon, would be consistent with the sound principles of political or monetary economy. But he was unwilling to pursue this subject further on the present occasion. He was clearly of opinion that the first and wisest step for the House to take, would be to lift off the heavy restrictions which the law of 1844 imposed upon the commerce of the country. Let them impose what regulations upon the discretion of the Bank they pleased, and doubtless many modifications and amendments might be suggested; but, with these modifications, let them restore their system to the state it was in before, and then they would be in an infinitely safer and better condition than they were now. He hoped that the suggestions which he had thrown out, of an intermediate suspension of the measure, would not be disregarded. He observed, that an hon. Gentleman had given notice of a Motion to much the same effect; but he was sure that Her Majesty's Ministers could devise an infinitely better course than it was in the power of any individual to do. There was no disposition, he believed, in any part of the House to take it out of their hands—no ambition to be the authors of any remedial measure. He, therefore, would earnestly and strenuously urge upon the Government to defer to the state of public opinion, which he was bound to say was against them, on this question, as he was satisfied that an intermediate suspension of the Bill would restore confidence to the mercantile world, and would prove satisfactory to the country at large.
LORD J. RUSSELLsaid: Sir, we have had, no doubt, in the course of this discussion, a great variety of opinions; many topics have been touched upon which should not come naturally within the scope of this debate; some novel opinions have been thrown out, and there has been a great deal of discursive disquisition. I am happy to find, therefore, that in following the right hon. Gentleman, I follow one

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who has kept himself within the limits of that which is properly the subject of debate, and who has given opinions which, whether I agree with them or not, at any rate must be listened to with the greatest respect, coming as they do from a person of his influence, his experience, and his knowledge both of the financial and the constitutional history of this country. I must, however, state at the outset, that the conclusion to which I should wish to bring the House, is one very different from that at which the right hon. Gentleman seems to have arrived. He prays you at once, whatever else you may do—whether there is to be an inquiry or not—whether you ask for papers or not—be the conduct of the Government blameable or praiseworthy—that at all events you will take off the restrictions which have been imposed upon the Bank by the Act of 1844; and he asks you, in the name of commerce, to do this in order to give this security to mercantile transactions. Now, I must say, considering the difficulties of this subject—considering the perils to which we were exposed by that system to which the right hon. Gentleman wishes us to return—considering the conflict of opinion that exists upon the question—it would be the height of madness for you at once to decide, without inquiry, that you will abolish a system which was adopted with general consent in 1844, and at once, without inquiry, put an end to an Act of Parliament. But, with a view to produce general mercantile confidence, I think the proposition is still more objectionable, because it is admitted by the right hon. Gentleman that you may come, as the result of an inquiry being made, to approve of the Act of 1844, or that some other results may be come to with respect to our monetary system; and what the right hon. Gentleman wishes in order to give confidence is this, that we should repeal the present system—that we should repeal the present law; but that what we may put in its place shall be matter of doubtful speculation for the next year to come. Sir, I cannot conceive a proposition which would tend more to disturb the mercantile interest—which would tend more to throw doubt upon our course during the next year—which shall more induce mercantile men to say, "Let us pause in our business, and refrain from giving orders to our correspondents until we know what is to be put in the place of that which the Parliament has abolished." Sir, I wish, following my right hon. Friend
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the Member for Portsmouth, and the right hon. Gentleman who has last spoken, I wish to speak upon the question as dispassionately as they have done; and certainly, I need hardly say without regarding it as a question of party interest or of party passion, but looking at the question in this point of view, I think that our survey would be very incomplete, if, looking only to what is the immediate cause of the meeting of Parliament and of the present debate, we do not likewise look to what occurred, a few years before, in similar instances of convulsion in the country. A very few years after 1819 this country found itself in a state of great prosperity. That prosperity—the general inflation of credit—led, as it had done on previous occasions, and as it has done more than once since—it led to improvident speculation; it led to plans and projects which I think Mr. Canning once aptly described as "bubbles of vapour soaring to the skies, which the puncture of a pin brought down to the earth." The convulsions which followed were of extreme danger, and inspired throughout the country considerable fear. The managers of the Bank consulted Lord Liverpool, Mr. Huskisson, and Lord Ashburton. They certainly could not have found better advisers. But I must state that they found the affairs of the Bank to be such, that as my right hon. Friend the Member for Coventry (Mr. Ellice), mentioned the other night, and as it was related the other night by Lord Ashburton, the Governor of the Bank exclaimed, with transport and delight—"The clock has struck, it is now Saturday evening, and until Monday morning there can be no farther drain of bullion issued from the Bank." The result of the counsels during the intervening Sunday was, that the Bank was found to be in possession of so small an amount of bullion—it was stated officially at the time to be one million, but Lord Ashburton said from his own recollection, it must have been much less—and, therefore, the managers were advised to make a large issue of bank notes. That was a bold and a sure course taken on a great emergency. But no man could wish that the country should again be placed in a position of so much danger; and though we escaped in 1825 with great loss, with great sacrifice of property—with great alarm—though we escaped the ultimate crash and destruction consequent upon the failure of the Bank, yet no man could expect that such a course would a second time be equally successful,

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and every one must wish that such a catastrophe might rather be avoided by precaution than averted by any desperate effort. In 1837, again, we had considerable panic and distress, owing to the credit given by our merchants to parties in America. In 1839 we were in such a state that my right hon. Friend the Member for Portsmouth, who was then officially connected with the financial affairs of the country, stated that the slighted internal drain would at that time have suspended cash payments. That again was a state of great danger. It occurred under the operation of the Act of 1819. And I must now state to the House what on these two separate occasions was the amount of bullion which in no long course of time had gone out of the Bank, and the treasure which they left in the Bank coffers, at those periods of panic and general distress. In 1824, in the month of February, the amount of bullion in the Bank was 13,810,00 l., while the amount of the Bank circulation at the same period was 19,736,000 l. In the month of August, 1825, the amount of bullion in the Bank was 3,634,000 l., while the amount of the Bank circulation at the same time was 19,398,000 l.; so that, while the amount of bullion had diminished more than 10,000,000 l., the amount of circulation had only diminished to the extent of 300,000 l. In the month of March, 1838, the amount of bullion in the Bank was l0,015,000 l., while the amount of Bank circulation was 18,600,000 l.; while in the month of September, 1839, about a year and a half afterwards, the amount of bullion in the Bank was 2,816,000 l., and the amount of Bank circulation was 17,960,000 l. Thus, again, the Bank had allowed its bullion to fall from 10,000,000 l. to 3,000,000 l., while its circulation only diminished to the extent of 640,000 l. Now, I must say, considering that such was the conduct of the Bank under the operation of the Act of 1819, and considering that the effects were such in 1825 that we were, as Mr. Huskisson stated, within four-and-twenty hours of a state of barter; and it is certain that the Bank had prepared a notice that its payments were to be suspended for a time—considering that in 1839 we were in such a state, that, according to my right hon. Friend, the slightest internal drain would have suspended cash payment—and many persons who were in the habit of considering the subject attentively did confidently expect that a suspension would have taken place
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—I think it was not unnatural that a Committee of this House, in 1840, and that the Government of the country in 1844, should have endeavoured to find whether, by an alteration of the system, that which all persons who consider the subject on right principles wish to preserve—the convertibility of the bank note—might not be rendered more secure. Now, it appears to me, and, notwithstanding the right hon. Gentleman's speech—notwithstanding what he has said of popular opinion—it is my conviction, that, to a considerable degree, the Government of 1844 did succeed in giving greater security to the convertibility of the bank note, and did avert some of those evils which, in all probability, would otherwise have arrived. I think that this follows from the paper to which the right hon. Gentleman has referred. We were, as I have stated, in 1825 and 1839, almost on the point of suspending cash payments; and if the drain had been continued for a very little longer, it would have been impossible to issue coin from the Bank of England. But there is no danger of such a convulsion at the present time. The amount of bullion in the Bank diminished, indeed, as my right hon. Friend the Member for Portsmouth showed, from 16,000,000 l. to 9,000,000 l. I will not at the present moment—I may refer to it afterwards—but I will not at the present moment discuss whether the Bank ought to have taken proper precautions before April last. But about the month of April last a very remarkable letter appeared in the Times newspaper respecting the drain of gold that was then going on, and the Bank Directors immediately began to change their course by limiting their discounts to a certain extent; and the circulation was diminished from the month of April to the beginning of June by about a million and a half. There was considerable panic and distrust at that time. But, at the same time, my belief is, that if the enactment of 1844 had not been in existence—if the Bank Directors had not had that Act before them—it is very probable that they would have allowed the drain of gold to go on, and we should again have had, as we had had on two former occasions, a panic and distrust with but about two or three millions of gold to withstand the drain that would have been created. The lowest amount that the Bank has held this year has been somewhat under eight millions. Circumstances might have occurred of another kind likely to produce a

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greater drain on the Bank; but the precautions that were taken between the months of April and June to preserve the amount of gold, prevented the convulsion which was so near occurring in former years. But, Sir, there is another question upon which I do not wish to give any opinion, as it is a question which should be referred to the consideration of the Committee, in order to see if any further precautions can be taken. The right hon. Gentleman has referred to what took place in the month of October, and to the letter which my right hon. Friend wrote to the Governors of the Bank, and he says that we have not stated the circumstances connected with that letter. I thought my right hon. Friend had stated very clearly and in great detail the circumstances of that case. But, however, I will refer to its main features now. There had been in the year 1845–6, as in the year 1825 and in the year 1836, a very flourishing state of things—there had been such an abundance of capital that those who had it were anxious to place it out at 2 per cent interest, and could hardly obtain that. There was, concurrently with such a low rate of interest, a great flow of speculative investments, and with that there was, as there always has been in such cases, a somewhat wild spirit of speculation. Now I do not mean to say that it is a matter of blame that, in many cases, those who entered into those speculations, did so without any solid foundation for their calculations. I remember a right hon. Member (Mr. Tierney), with much shrewdness, saying in this House, "he who in one year is a rash speculator, was the year before an enterprising British merchant." And so it is said that—
"Great wit to madness ever is allied,
And thin partitions do their bounds divide."
One person may be most fortunate in his speculations, although those speculations might in themselves be wild; and another, who might have had as good reasons for his expectations, might be cruelly deceived by reverses. Things no doubt occurred this year that I do not believe are to be imputed as blameable either to the Government or to the persons concerned. We had had a very great failure of the potato crop. We had had in the beginning of the year, as I stated in this House, renewed symptoms of the disease. Letters came from all parts that the disease was making rapid strides. We thought it necessary—and the House agreed in that opinion—that
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the corn laws should be suspended. Many persons thought that it was probable that there would be very high prices of corn, and they entered into very large speculations. It is well known that in the neighbourhood of Drogheda the potato disease was arrested a fortnight after it had commenced. Although we had a backward spring, we had so warm a summer, and such favourable weather, that we had not only a plentiful but an early harvest. The natural consequence was, that the speculators who had brought in a very large supply of corn, expecting high prices, found that it was impossible they could receive anything like the prices on which they had calculated; and when they came to sell it, great loss was sustained by those parties. That was one cause why very considerable distress fell upon the mercantile community; and a combination of other causes coming together produced that which one alone would not have sufficed to produce. Take the railway speculation, for example. I believe that this country would have continued a very flourishing country if we had not been subjected to the misfortune of the failure of the potato crop last year. The expenditure on railways would have been kept within due bounds, and I believe it would not have been found too great for the floating capital of the country. But when you had to add to an immense railway expenditure 33,000,000 l. for corn, and when you had other circumstances to produce distress, it can be no matter of surprise that the whole commercial world felt the difficulty of procuring money, and that capital became scarce, and that which a few years ago was to be had by any one at 2 per cent, could not be had for 5, 6, or 7 per cent. Hence great embarrassment to the commercial world. Now, let us look to the position of the Bank, without giving any positive or dogmatic opinion on the subject. It has long been the decision of Parliament that we should not embark on the dangerous sea of a State currency. We place the dispositions of that part of the currency which consists in paper convertible into coin in the hands of a great Bank, which has to a certain degree, and within a certain limit, a monopoly. That Bank, naturally enough, consisting of persons who are mercantilely interested in it, performs on ordinary occasions merely the duties which are owing by them to their proprietors. They discount paper, and obtain, in so doing, the interest of the day; and few persons criticise

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in that respect the conduct they pursue. With regard to commerce in general, and without entering into the technical question as to what is currency and what is not, it is evident that a great part of the transactions of the country are carried on by means of commercial paper—by means of bills of exchange, which are discounted and re-discounted, and go from market to market, and from merchants to manufacturers, so that a great part of the manufactures of the country rest on the credit that is given to that paper, and the facility with which it is passed from hand to hand in the pursuits of industry. But when there arise failures in the mercantile world; when, owing to those speculations into which people have entered—whether justly or not—being unsuccessful, one house falls after another, panic begins, and general distrust follows, and the commercial world in general, not knowing which house will stand or which house will fall, have recourse to the Bank of England, which they regard as a machine to be put in operation for the advantage of the public, and not for the advantage of the particular proprietary to which it belongs. Now, I have seen on many occasions that if the Directors of the Bank were only to consider their own interest, they would act with caution, would hesitate very much in giving discounts, and act like other prudent private bankers in such circumstances. But then they are told, "You must consider the interests of the public, and not your own; everybody in Liverpool, and Glasgow, and Manchester looks to you at this moment to support some great firm in danger, or some important bank in peril, and by whose failure the industry of a whole district will be arrested unless you give them assistance. "I must say that the position of the Bank on such an occasion becomes exceedingly difficult and complicated. If by our legislation we had provided that the Bank should at all times consider the interests of the public, and not of their proprietors; if, on the other hand, the public were generally agreed that the Bank should look to its own interest only, and that on occasions of distress no man need go to the Bank for any other accommodation than he would have as a customer in ordinary times; in either of these cases their duty would be simple, and the problem easy to solve. But, acting at one time as proprietors, employing the money in their hands and the balance in their exchequer to objects of mercantile
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profit, and then being suddenly called upon to consider the great interests of the State, their position is difficult and perplexing beyond what can he easily explained. While, therefore, with respect to particular cases, I should, along with others, criticise the conduct of the Bank, and say, perhaps, that at one time they have fixed the rate of interest too low, and at another time that it would have been better to have diminished their circulation—while I may make these criticisms, at the same time I am desirous to make every allowance for the position of the Bank, considering the double duties they have to perform—duties that have been imposed upon them by the State, and which they can hardly perform at once to satisfy the State that they have looked only to the interests of the public, and to satisfy their proprietors that they have been doing their duty to those who hold shares in the Bank. Well then, what was the position which the Bank held in the beginning of October this year, after the pressure and commercial distress began? Let me say, once for all, that I do not believe that the Act of 1844, or indeed any other Act with regard to currency which the Legislature could pass, could prevent commercial panic and convulsions. If it was said—as it may have been in the course of the debate which took place when that Act was passed, though I believe it was not said in the speech of the right hon. Gentleman (Sir R. Peel) in proposing the Bill of 1844—if it was said that it would prevent those commercial panics, I think that may be fairly put down to the tendency which exists to give credit to Acts passed by Parliament for doing more than they can perform—giving them, in short, credit for doing that which no Act of Parliament can ever perform. It was so in the case of Catholic emancipation, when they heard very much of what that measure was to do for Ireland, and it was the case with various other Acts which have been passed by a majority of this House. [Mr. DISRAELI: Free trade, for example.] I will say, just in a parenthesis, that I believe free trade is calculated to produce great benefits, and will ultimately produce benefit to the country; but that the advantages derivable from free trade, like those of every other measure, have been greatly exaggerated, I have no doubt. But to return to the subject. What we had to hope from the Act of 1844 was not that it should prevent commercial panic and convulsions—not that it should pre-

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vent speculation, or save those who had been carrying on speculations from the consequences of their own acts—but the chief object that you had to attain in a currency measure was, that when these convulsions should happen, the currency should not be in effect destroyed—that the convertibility of your bank note into coin should not be lost during the commercial convulsion—that, in short, the commercial convulsion should not sweep along with it any currency convertible into coin. That effect, as regards this Act, has in the main been successful; but the right hon. Gentleman says that we have not said what was the state of the Bank when we proposed to interfere; and then the right hon. Gentleman, contradicting immediately his own assertion, read from the Gazette returns of the exact state of the Bank at the time the Government resolved to interfere. Why, Sir, the state of the Bank was this: In the commencement of October, if the Bank had considered merely its own interests, it would have been, as I have said, very cautious in its discounts. It would have allowed the public to repay the advances already made without making any fresh loans, and thus it would have been in a state of perfect security, with a sufficient amount of reserve. But, to give some ease—to give some relief—to the suffering commerce of the country, the Bank did make very large advances. Of course they judged for themselves as to whether the houses to which they made their advances were solvent or not. They made their advances to houses only which they considered solvent; but, at the same time, it cannot be denied that very large advances were made. Up to the middle of the week that ended on the 23rd of October, the Bank thought that the difficulties might be got over; but greater difficulties began to exist, and a much more fearful tone of correspondence began to prevail on the Monday, and then we began to suspect that the danger was imminent. There arose a great panic and distrust in the country, and more especially there occurred that case to which the right hon. Gentleman referred—the breaking of a bank at Newcastle—and the great run which a large, powerful, and wealthy bank in that place sustained, and on which the industry of the entire neighbourhood depended. The gentleman who was agent for the Bank of England at Newcastle not only advanced all the means he possessed, but sent for 40,000 sovereigns from London to assist
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the bank to get over the difficulty. The difficulty was surmounted; but, at the same time, there were rumours (and, I believe, well-founded rumours) that in other parts of the country similar difficulties might and would arise. The state of the Bank was, as the right hon. Gentleman has stated, that, while the bullion in the issue department was 7,865,000 l., the amount of notes and gold and silver, taken together, in the banking department, was 1,994,516 l. Of notes alone there was 1,547,287 l. Now, in this state of things, I confess it appears to me that if there should arise a similar instance of a run upon banks—if a pressure upon the commercial world in any of our great cities should occur, and application should be made to the Bank of England, and this application should be refused, there would be not only panic, but a dreadful convulsion in the country, which could not fail very much to affect likewise the metropolis; and, finally, even the Bank itself, in these circumstances, could hardly be safe. Now, the opinion of the Bank was not that which I have just stated. The opinion of the Bank, which they conveyed to us in a formal resolution on the 25th of October, was, that, as far as the Bank was concerned, they could comply with the provisions of the law, and maintain their position. At the same time, the Governors of the Bank frankly confessed to us, that, if such cases as those I have alluded to occurred, or such cases as occurred at Liverpool, they could not give further accommodation, and they might possibly be obliged, in the position to which I have referred, to restrict further the accommodation they had already given. In these circumstances, we did consider that the time had arrived in which, in order to prevent great difficulty—to prevent the increased panic and the evils that were sure to follow from a perusal of the returns that would have appeared in the Gazette of the following Friday—we thought that it was necessary to take some extraordinary measure. I must say that, in the general course of this debate, the prudence of our so acting has hardly been disputed. My hon. Friend the Member for the Tower Hamlets (Sir W. Clay), to be sure, threw some doubts on that point; but I own that nothing that has occurred has the least tended to shake my opinion that it was a step well calculated to restore confidence; and, although the authority of the law could not in any way be impaired without producing considerable evil, yet that evil was very much less than the mis-

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chief and disorder that would have occurred if we had not interfered with the operation of the Act. Some parts of the letter we wrote to the Directors of the Bank have been very much blamed. It is said we ought not to have mentioned any particular rate of interest. Why, I must confess that that which I had before my eye during the whole of that anxious time, was a danger that we might, by mistake—by some false step—encourage the continuance of unsound speculation, and thus put the security of the convertible currency into the greatest danger. At the moment we wrote, the exchanges became in our favour—large quantities of gold came in; and it is probable that, if there had been time, even without any extraordinary measure, the Bank would have been in a condition to extend its discounts, and to give further relief to the commercial interest. I own that I had the fear before my eyes, lest, by any imprudent measure, we should stop that course, turn the exchanges against us, and thereby produce a state of things from which it would have been hardly possible to escape, without, on the one hand, a very sudden contraction—such a sudden contraction as to produce the greatest mischief—or, on the other hand, without that which I consider the greatest evil as regards this subject—the suspension of cash payments by the Bank. It was with those feelings that I willingly agreed to take that step which, I admit, is contrary to all rule, authorising the Bank to extend its issues beyond the fixed amount. It could not fail to be thought advisable that this measure should operate in favour of those who really wished to have the power of drawing, so that there should not be a rush for accommodation on the Bank; that the exchanges should continue in our favour; and that the influx of gold should not cease. That has been the consequence, as we anticipated. The influx of gold has risen to nearly 11,000,000 l., and the reserve in the Bank is no less than six millions. I think, if we had not inserted that condition in our letter, that such advantages would not have been secured. In taking that step our object was, on the one hand, to restore confidence, and on the other hand, not to establish a confidence which should give rise to such improvident speculations as would have turned the exchanges against us, and prevented the influx of gold. Sir, in this respect I think, whatever may be said of the measure, in this respect, at least, it must
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be allowed to have been successful. But then the right hon. Gentleman says, he wishes that some measure could be adopted by which a recurrence of the commercial difficulties that induced us to issue that letter might be prevented. The hon. Member for Huntingdon (Mr. T. Baring) the other night called upon us to say whether we meant to allow the occasion to pass without proposing some precautionary measure, and suggested—I don't recollect the words—that the Bank should be at liberty to assist such commercial houses as might require aid. When I am asked this question, I am obliged, on the other hand, to ask the right hon. Gentleman and the hon. Gentleman, whether they have clearly fixed in their own minds what it is that they do ask, and to what end it might lead? They are both of them advocates—I give them perfect credit for sincerity in their advocacy—but they are both advocates for a currency convertible into bullion on demand. They would see with dread anything like a suspension of cash payments. Yet there must be some mode by which such an occurrence must be prevented. You may say this is an artificial system which exists under the Act of 1844—that that breakwater which has been erected is useless and mischievous. But I cannot help saying, that there must be a certain degree of prudence on the part of the Bank, otherwise you will not escape the mischiefs which led to the suspension of cash payments at a former period. Mr. Pitt, when he required large loans from the Bank, and thereby obliged them to have recourse to measures of which they did not approve, did not intend that those measures should end in a suspension of cash payments. It was no part of the policy of that Minister, who conducted the financial and commercial policy of this country with such enlightened views and with such steady aim, following the course he took in 1784 and 1793, to resort at last to a paper currency not payable on demand. That could be no part of his policy; neither will I presume to say, that in 1797, when carrying on the difficult operations of a war, he may not have been forced, from circumstances, to resort to that extreme, that very disastrous step. It may have been necessary to avoid greater evils. But let us reflect that the same danger which was incurred in that instance, by requiring large and continued loans from the Bank, would be incurred, if you required from the Bank, without regard to prudence and discretion,

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that it should make advances to commercial houses. I am perfectly persuaded, if that were the course you pursued, that however much you declared yourselves friends of a system based on convertibility, you would arrive at a state of things which would issue either in a sudden and violent convulsion, or in that suspension of cash payments which was acknowledged to be so great an evil. I come now to the question as to the policy which the Bank and country should pursue. The right hon. Gentleman has spoken of different courses maintained by writers of great eminence and experience. I don't wish to enter into those questions of theory discussed by Tooke and Fullarton on the one hand, and by Jones Loyd and Norman on the other. But what most concerns us is the practical course to be followed. And as regards that practical course, though those authorities differ as to the Act of 1844, I find no great difference. Mr. Jones Loyd thinks the separation of the issue and banking departments, and the provision that the Bank should issue only 14,000,000 l., and that the rest of its issue should be upon bullion, is a wise provision. Mr. Tooke thinks it mischievous; but I think they are both agreed as to what the practical conduct of the Bank should be—that when the Bank finds a very considerable drain of gold going on for some time, and the exchanges advance, measures should be taken—gradual and prudent measures—by which that drain may be stopped. With the permission of the House, I will read two or three passages from Mr. Tooke, in speaking of what took place in 1838 and 1839. He says—
"It was an error of the Bank, in 1839, to have been perfectly quiescent until a loss of treasure, from 9,336,000 l. to 5,119,000 l. had taken place."
He afterwards observes—
"In a work published in the spring of 1838 I took occasion to observe—'That as fur as the eventful experience of the last fourteen years—viz., since 1824—can serve as a guide for judgment, there appear to be good grounds for believing that not less than 10,000,000 l. can ever be considered as a safe position of the treasure of the Bank of England, seeing the sudden calls to which it is liable.'"
How does he propose that the Bank should Act?—
"The plan which I would propose is, that when the tide of metals sets fully in again, the Bank rate of discount should be kept so steadily above the market rate as progressively to reduce the securities through that channel, without increasing them by other investments. The effect of this would be to insure a replenishment of their coffers
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to 10,000,000 l.; and, with the purpose of endeavouring to preserve that amount on an average, it would not be expedient on the part of the Bank, to take any active measures for the increase of its securities."
But his plan is to reduce the securities, and thus keep 10,000,000 l. in its coffers. Mr. Jones Loyd, in his pamphlet, says the consequences of a sudden alarm cannot be overlooked. I have not got the passage to quote; but it is to a similar effect. He gives it deliberately as his opinion, that instead of waiting until a sudden alarm and a consequent pressure have arisen, the course of the Bank should be circumspect and gradual. He says that in the year 1838 they should have commenced gradually to diminish their discounts, and so have placed themselves in such a position as to have accumulated so large an amount of gold as would have rendered it impossible that they should have been reduced to the position which they occupied in the year 1839. I admit that it is a question fairly open to discussion, whether the positive enactment of 1844, or the hypothetical course proposed by Mr. Tooke, can render it easily practicable for the Bank to pursue such a course; but I believe I am fully warranted in asserting that no man who ever wrote or spoke on the question of currency—no man I mean of authority upon that question—ever arrived at any other conclusion than this, that when a drain of gold is coming on, and a time of danger is at hand, the Bank should then pursue a course of prudent management so as to keep, if not ten millions, as Mr. Tooke would advise, at least a very considerable sum in their coffers. It may be doubted whether the Act of 1844 provides for that exercise of prudence by any certain means. I own I am apt to think generally that upon this subject, as upon most others, you require not only a rule which is founded on wisdom, but also persons fully impressed with the value of that rule to administer the law. I do not repose much confidence in, nor do I give much credit to any law on such subjects as the present, unless it be administered by persons who act in the spirit of that law. For this reason I am of opinion with my right hon. Friend who brought this matter under the consideration of the House, that it is highly desirable that these two questions should be seriously inquired into by the Committee proposed to be appointed: first, how far the law of 1844 is efficient for its purpose; and, secondly, whether we might not obtain a more steady manage-

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ment of the Bank than we are likely to realise from the votes of Gentlemen who, instead of attending regularly, attend but occasionally, and who have various opinions and diverse theories on the subject which engages their attention. But whatever you do on this subject, I do hope that the House will not consent to adopt the advice of the right hon. Gentleman opposite by taking a precipitate and unpremeditated course. I feel the truth and prudence of the observation made by my hon. Friend the Member for the Tower Hamlets, that although from the year 1810 to the present time this subject of the currency has engaged the attention of some of the ablest men this country has ever produced—although the currency laws have been directed by the views of a Grenville, a Huskisson, a Horner, a Canning, and of many of the most talented men now living—the matter is so difficult, so complex, so intricate, that there are still certain truths to be learned concerning it. I believe it to be possible to make some modification in the measure of 1844, which may cause the currency to work more successfully than heretofore. This expectation I certainly do entertain; but while I avow it, I am bound to say that I believe the Act of 1844 to have been a very great improvement indeed upon the Acts which preceded it. I believe that it has, to a very great degree, answered its purpose; and that since its enactment you never have been in the position of being afraid, from one day to another, that there might occur such a drain on the Bank, that not one sovereign should be left in its coffers; and furthermore I believe, that although it has not prevented a commercial convulsion, it has done much in the midst of that convulsion to keep the currency secure from the contagion of the dangers and evils by which it was environed. I think it a wise course to appoint a Committee to consider all these matters calmly, soberly, and gravely—to go cautiously and prudently through all the difficulties and intricacies by which they are surrounded, and not by any sudden and precipitate resolution to make men doubt whether you will keep up the convertibility of the paper currency, and preserve your standard.
MR. REYNOLDS, from the commencement had been an anxious and attentive listener to the debate, for he was desirous of collecting the opinions of as many hon. Members as possible, on what must be admitted on all hands to be
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a question of the very last importance. He did not concur unreservedly with those who maintained that the Act of 1844 was in all respects radically bad, and ought to be repealed. He was of opinion that it contained some good elements, mixed up and amalgamated with others of a very deleterious character. In fact, he thought that it was full of those imperfections which were incidental to every act of human legislation. The House would have to decide whether that Bill, being now upon its trial, was to get a fair trial, or whether it was to be condemned without a full and impartial hearing. He remembered, that when the Act of 1844 was under the consideration of the House, he was one of those who were under the impression that it was a Bill exclusively intended to regulate banking in Great Britain. The author of it, the right hon. Baronet opposite (Sir R. Peel), expressly stated, that it was designed to regulate the banking operations in England and Wales, and that no portion of it was to affect Ireland and Scotland. The Irish community, sharing in that belief, did not feel themselves called upon to interfere one way or the other in the passing of the Bill. They were under the impression that in 1645, and not till then, the House would have to consider the question of Irish banking. In that year the right hon. Baronet introduced a Bill to regulate the issue of bank notes in Ireland. When that Bill arrived in Dublin, it was read clause by clause, and many of its provisions were objected to. A meeting of the merchants and traders of Dublin was held to discuss its objectionable points, and he had the honour to be one of a deputation which was appointed to wait upon the right hon. Baronet, to draw his attention to those portions of it to which the commercial community of Ireland felt that they had a right to take exception. He was sorry to say, that all that he succeeded in obtaining from the right hon. Baronet in return for his representations was what he understood the right hon. Baronet was very remarkable for—extreme courtesy and exceedingly great patience. There was no part of the United Kingdom which had suffered more from bungling legislation in banking than Ireland; and he was sorry to say that, from the time of Ireland's legislative connexion with England, the system had continued with very little improvement. Indeed, he found some difficulty in calling to mind any occasion in which that legislative connexion

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had been productive of any benefit whatsoever to Ireland. Certainly the banking system in Ireland had been but very little improved by it. Previous to 1825 there was no joint-stock bank of issue in that country, except the Bank of Ireland. In the provinces, as well as in the capital, that establishment enjoyed an undisputed monopoly. In 1825 the want of banking accommodation was so severely felt all through Ireland, that the 6th Geo. IV., cap. 42, became law. It permitted the institution of joint-stock banks in any part of Ireland distant fifty miles from the metropolis. Under that Act the Provincial Bank was established in the year 1834, and at a later period was founded the National Bank, which he had himself instituted, and which now had forty branches and a circulation of about one million. In 1845 the right hon. Baronet brought in a Bill which, inter alia, abolished the monopoly of the Bank of Ireland as regarded the prohibited circle, and permitted that any bank of issue beyond that distance might have a branch in Dublin. Still, however, the law did not permit the establishment in Ireland of any new bank of issue. He complained of that clause, and contended that men should be permitted to associate together to give additional banking accommodation to those within the heretofore proscribed circle; and the only satisfaction he could obtain from the right hon. Baronet was, that of being referred to the 10th Clause of the Act of '44, which had this merit, at least, that it was brief, and would not occupy a long time in reading. It was to the following effect:—
"And be it enacted, That from and after the passing of this Act no person other than a hanker, who, on the 6th day of May, '44, was lawfully issuing his own notes, shall make or issue bank notes in any part of the United Kingdom."
He complained that it was not a fair way to deal with the important interests of Ireland to make them depend upon a clause in an English Act of Parliament passed a year before. He represented then, as he now represented, that the people of Ireland had got no notice of that clause at the time it was about to be passed, and that, in equity and fair dealing, they ought not to be bound by an Act of Parliament of which they knew nothing. The right hon. Baronet courteously rejoined by reminding him in the coolest possible manner, that it was the duty of Her Majesty's subjects to read all the Acts of Parliament—a duty which was all very well in theory, but
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which he feared it would be found rather inconvenient to reduce to practice. It was arranged by the Bill of the right hon. Baronet, that the average circulation of all the joint-stock banks should remain as before—Bank of Ireland, 3,706,000.; other banks, 5,565,000 l.; making in the aggregate 9,270,000 l. He told the right hon. Baronet that he was tying up the circulation; for that, although he enlarged the sphere of action by abolishing the prohibited circle, he gave no additional power, and that that would never do. These and other defects he (Mr. Reynolds) pointed out, and he took the liberty to prophesy that neither the Bill of 1845 nor that of 1844 would be found to work well, and, unlike other prophets, he had lived to see his vaticinations verified. The debates of the last three nights had vindicated his character as a prophet, and established it beyond dispute. To the Bill of 1844 he objected, because, although it gave powers of contraction, it gave none of expansion. The right hon. Baronet met that objection by saying that it was not true, inasmuch as that the Bill contained a clause enabling the Bank to increase the issue to the extent of any bullion it might have on hand; but surely that was anything under the sun but a satisfactory explanation. It was of little advantage to a banker to permit him to issue notes to represent bullion, because what he made by interest would be destroyed by the locking up of the bullion. What a favour the right hon. Baronet conferred on the banker! Did not everybody know that the profit and advantage of banking consisted very much in trading on your credit, in contradistinction to your capital. He would not call the Bill of the right hon. Baronet tinkering legislation—for that would be against all order—but he would take leave mildly to designate it as patchwork legislation, which amounted to an undue interference with the legitimate rights of bankers. Fault had been found by some Gentlemen with the letter that had been issued, while others believed that it was a necessary document; he believed so, although when that letter reached the Irish side of the Channel they argued, he presumed, in an Irish manner upon it. They said, "This is very odd—this panic in England is created by a scarcity of money, or rather, to speak more plainly, by the dearness of money, and this letter makes it dearer; it was 6 per cent, and it is now increased to 8 per cent." The State physician had administered that medi-

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cine; and when he (Mr. Reynolds) made that observation on receiving the intelligence, a friend of his, an eminent physician, who was standing by, remarked, that it was a good phrase, for there were some diseases that baffled all attempts at their professional treatment, and probably the State physician had acted upon the principle of counter-irritation. It occurred to him that that was counter-irritation; and he rejoiced, as a Member of that House, and as a British subject—being proud of the name—that there was wisdom enough in Her Majesty's councils to issue that letter: and he would be glad to know what the result would have been if the letter had not been issued? At all events it seemed to have accomplished its object, and to have restored confidence. He believed that the issuing of that letter was tantamount to the repeal of the Act of 1844; at all events it would be admitted that it had destroyed the infallibility of that Act. Let him (Mr. Reynolds) be not understood as using this observation in any sense indicative of anger or ill will towards the enlightened statesman who was the author of that Bill. Not at all; on the contrary, he believed that, under existing circumstances, he and those who co-operated with him did the best they could; and he (Mr. Reynolds) hoped he would live long enough to see him repealing or at least modifying the clauses of that Bill; and that although he was the author of it, he would act with respect to it in the same enlightened spirit that had governed his conduct on many and many an occasion; and that as soon as he was convinced that anything in it was wrong, he would cease to persevere in it. He spoke with perfect sincerity when he declared that he could never forget his enlightened and glorious conduct in carrying the measure for the emancipation of himself and those who coincided with him in creed; and he should always recollect the right hon. Baronet's conduct with feelings of gratitude. He gave the right hon. Baronet full credit for that—he also gave him credit for his recent struggles to emancipate corn—and he hoped he should also see the right hon. Baronet emancipate the banking trade. Now, he asked, could any man who advocated free trade in corn oppose free trade in money; for he contended that money should be as free as corn. He would again call the attention of the House to the deplorable condition of Ireland. With reference to banking, the effect of the Bill on Ireland had been to legalise a
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monopoly. It prohibited the establishment of any bank of issue except those then in existence, and it contained this defect—that if any one of those banks then in existence wound up its affairs, no provision was made by the Bill to permit the existing banks to take that bank, and a blank was thus created. He rejoiced that a Committee was about to be appointed, and that the right hon. Gentleman (the Chancellor of the Exchequer) had promised that both Scotch and Irish banking matters would be taken into consideration. He thought that promise was likely to be kept, and he trusted that good results would follow from it. The Chancellor of the Exchequer had accounted for the late panic by which so many of their merchants had been exhausted, by saying that the panic might be traced, first, to the quantity of corn they were obliged to import in fifteen months, and the quantity of money invested on railways. With regard to the investment on railways, he found no fault with that investment; for although the entire of that sum was not likely to be immediately reproductive, the greater part of that sum was so, and the railways themselves would lay the foundation for future prosperity. But as regarded the Committee, that appeared to be a matter deserving of their consideration. What did they find? They had imported corn to the extent of 33,000,000 l., and how much of that corn were they obliged to pay for for his starving and destitute fellow-countrymen? Now, he believed he was not much wrong in this calculation, that out of the thirty-three millions that had been paid for corn, at least half of that sum was expended in corn for Ireland; and the reflection on that expenditure created this feeling in his mind, that they owed the disarrangement of their monetary system to the destruction of the potato crop in Ireland in the years 1845 and 1846. Prior to that period they had enjoyed in England great commercial and manufacturing prosperity. Money was cheap—there appeared to be no apprehension of a panic. Their commercial and manufacturing interests might be compared to a well-appointed coach on a well-macadamised road. They had the coach well-appointed, four capital horses, a good whip on the box, and they were trotting at the rate of ten miles an hour, when the potato rot set in and the linchpin got out, and the coach was upset. They were there now, he understood, to reinstate the linch-pin. He was not at all surprised

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that this great commercial disaster had occurred. He did not mean to say that they were perfectly sound before they lost the linch-pin; he believed they were not. He believed they were in a state approaching to decay, and probably the upset might ultimately serve them, and he believed and hoped it might; but he was surprised the disaster was not greater; he was surprised they had not suffered more, and they would have suffered more (any other country in Europe that met with such a calamity would have suffered more) if it were not for their almost inexhaustible resources. How were they circumstanced with Ireland before this disaster? Thus: her hardworking and wretched population lived exclusively on the potato—they sent their butter and pork and beef and corn of all descriptions to England, to the extent at the least of 15,000,000 l. per annum, and they took no gold from England in exchange—they took their woollens, and their cottons, and their silks, and their Birmingham and their Sheffield and their Staffordshire ware. From the finest articles to the humblest articles of furniture in Ireland, it was a matter of fact that almost the entire was of British manufacture. The destruction of the potato crop had put an end to that export, and they had a double draw upon them—they were obliged to send from 16,000,000 l. to 20,000,000 l. worth of foreign corn to feed the Irish people; and they ceased to receive the 15,000,000 l. worth of Irish food in exchange for their manufactured goods. It occurred to him that that was a solution of a portion of the problem; and he trusted that those figures, although put forward by so humble an authority as he was, might have their due weight, and form an ingredient in the case of Ireland in that House, and be the means of directing the serious attention of that House to the necessity that now exists for the better government of Ireland, in order at all events that her resources might be developed. Ireland was the best market they had; there was no part of the habitable globe that consumed so much of their manufactures on such advantageous terms as Ireland. He had no anxiety that Ireland should consume the manufactures of any other country—he preferred that she should consume the manufactures of England rather than those of any other country, so long as she was to continue in her present degraded condition; but he was more anxious that she should manufacture for herself. It was not his object to create
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any unkind feeling elsewhere—he hoped it was unnecessary for him to say so. Whatever influence he enjoyed in his own country he had invariably used to neutralise and subdue unkindly feelings towards England, believing that the interests of both countries were so closely interwoven that in fact the people of Ireland were on their own account deeply interested in promoting the prosperity of England.
SIR R. PEELthen rose and said: I trust, Sir, that any observations which I may have to make upon the subject under the consideration of the House will be made in that temperate and dispassionate spirit which characterised the speeches of the noble Lord (Lord J. Russell), and my right hon. Friend the Member for Stamford (Mr. Herries); and I cannot but express, in common with the House generally, my satisfaction at the return to this House of my right hon. Friend, and my congratulations that, by his return, the House will have the benefit, on matters of this kind, of his great intelligence and great practical experience. Before I address myself to the immediate subject of the debate, I wish to clear the way by referring to a charge which was made against me last night by the hon. Member for Stafford (Mr. Urquhart), and which has been repeated tonight, certainly in the most courteous manner in which it is possible to prefer such an accusation, by the hon. Member for Dublin (Mr. Reynolds). The charge made by both those hon. Gentlemen is this—that in bringing forward the Act of 1844, as the organ of the Government I gave a public assurance that the banking interests of Ireland and of Scotland should not be affected by the measure, but that it should refer exclusively to this part of the United Kingdom. The hon. Member for Stafford went so far as to say that an insidious advantage had been taken of Scotland—that the suspicions and jealousies of the people of Scotland, particularly excitable upon the subject of banking and of 1l. notes, had been allayed by the assurance thus given by me; and the hon. Gentleman declared, in very figurative language, that the banking system of Scotland had received a "stab in the dark." He supported that charge by reference to the 10th Clause of the Act of 1844, and having asserted that I had publicly declared in 1844 that the banking system of Scotland was not to be in the slightest degree affected by that Act, he inquired, "What would the House think of the right hon. Gentleman, who, having

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given that public assurance, inserted in the Act surreptitiously the 10th Clause, which provided that no banker not issuing notes in May, 1844, in any part of the United Kingdom, should be allowed thereafter to issue notes?" The hon. Gentleman supported that charge by reference to the speech which I made, and he quoted an extract from that speech to this effect:—
"Of Ireland and Scotland I have made no mention. I propose to reserve for separate legislation the state of the currency in each of those parts of the United Kingdom."
And certainly from that quotation from the Act, supported by that reference to the speech, the House might infer that the accusation was well founded. But what will the House think of the hon. Gentleman, who having read the passage above mentioned from my speech, omitted to read the next, which is to the following effect?—
"The prohibition against the establishment of new banks of issue will extend both to Scotland and Ireland; they also will be included in those enactments which will require the performance for the future of certain conditions preliminary to the formation of new joint-stock banks."
Could there be, on the part of a Minister bringing forward a measure, a more distinct, public, formal avowal, that, although the currency—the currency under 5l. in Ireland and Scotland—was to be reserved for separate legislation, yet that enactment which applied to this country in respect to the prohibition of new banks of issue, should extend to the whole of the United Kingdom? But, moreover, not only was that intimation given by a speech, but it was necessary to found the Bill of 1844 upon preliminary resolutions, to which the consent of this House was required; and the eighth resolution, which I moved on the night when I brought forward this question, and which resolution was unanimously assented to by this House—not on the night on which it was offered by me, but after the interval of some days—after it had been printed, after it had been communicated to the Scotch bankers, after it had been published in every newspaper in the United Kingdom—the eighth of the resolutions on which the Bill was founded was to this effect:—
"Resolved—That it is expedient to prohibit by law the issue of promissory notes payable to bearer on demand, by any bank not issuing such notes on the 6th of May, 1844, or by any bank thereafter to be established in any part of the United Kingdom."
Now, I think that I shall have satisfied
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the House that if "a stab" were given to the banking system of Scotland, at any rate it was not given "in the dark;" and as the hon. Gentleman says, that he undertook by a letter, written in 1844, to enlighten the people of Scotland on the subject of the Bill of 1844, and to warn them of what might happen in 1845, I will repay his attack upon me by giving him this friendly advice—that when he next addresses the people of Scotland upon the subject of any Bill, or of any resolutions that may be pending in this House, he will have the goodness to read the documents on which he comments.
To address myself now to the immediate subject under discussion. The practical question upon which we shall be called upon to vote, is whether or no a Committee shall be appointed to consider the commercial distress, including the laws which regulate the banking system of this country. Sir, when the Executive Government of the country appeals to the House of Commons for the exercise of those powers of inquiry which peculiarly belong to the House of Commons, whatever opinion as individuals we may entertain with respect to the probable advantage of the inquiry, it is difficult on the part of the House of Commons to resist that appeal. The functions of inquiry are constitutional functions committed to us; the Executive Government is of opinion that there is not ground for legislation without inquiry; the Executive Government asks our assistance; and, for one, I consider it impossible to refuse that appeal. An Amendment has been moved upon the Motion of the Chancellor of the Exchequer, for restricting the inquiry specifically to the question how far the distress has been caused by the laws which regulate banking. I have had experience enough to know that there is no practical difference between the two proposals. If the hon. Gentleman's Amendment were carried, it would be quite impossible to exclude from the inquiry thus nominally restricted any matters which any hon. Member in that Committee might consider to be the causes of distress. When I remind the hon. Gentleman that in 1836 a Committee was appointed with a specific object of inquiry, namely, the laws which regulate banks of issue; and that that Committee sat during the whole of 1836, was reappointed in 1837, and did not report till August 1838, I think he will be convinced, with me, that no practical

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object is gained by imposing any limitation upon the subjects of inquiry. I therefore shall vote for the proposal of Her Majesty's Government, thinking that if there is to be an inquiry, no assignable causes of the present commercial difficulty and distress ought to be, or can be, excluded from that inquiry.
Sir, I have no desire to devolve upon other parties, upon whom it does not justly devolve, any share of the responsibility which attaches to me for the part which I have taken, either in respect to the restoration of the standard in the year 1819, or to the attempt to mitigate those evils which accompanied our system of banking and currency previously to the year 1844. I did no more than my duty in 1819 and in 1844 in calling the attention of the House to those subjects; and not only I do not wish to devolve upon others the responsibility for the measures then adopted, but, on adverting to those measures and carefully considering their effects, I do not in the slightest degree regret the course which was taken either in 1819 or 1844. But I must submit to this House, whether it is quite respectful to the character of deliberative assemblies, to attempt to make individual Members responsible for some of the most important measures that ever were submitted to Parliament, and which received the cordial support of Parliament? Individually, you, the Members of this House, are in no degree personally responsible for acts done by your predecessors; but in your corporate capacity you are the House of Commons, the same House of Commons which for years has been called upon to deliberate on public affairs; and nothing could more tend to depreciate the character of the House of Commons and the character of the House of Lords, than to countenance an impression that upon matters of this kind, involving the most important public interests, the legislative assemblies of this great empire adopted measures proposed by some individual Member without due consideration, and seek to relieve themselves from the responsibility of having accepted and adopted those measures, by the plea of ignorance or inattention to their duty. Why, what is the truth with respect to these measures of 1819 and 1844? In 1819 the measure for the restoration of the standard was proposed by me, a private Member of Parliament, unconnected by office with the Government; it was the result of the inquiries of two Committees,
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one in the House of Commons, one in the House of Lords. The report of the Committee of the House of Commons recommending the restoration of the standard, was carried with only one dissentient voice; the report of the Committee of the House of Lords was, I believe, unanimous. As the organ of the Committee of the House of Commons, I proposed in 1819 the measure for the restoration of the standard of value. There was not one single division against the principle of the Bill. So far as the principle was concerned, it received the unanimous concurrence of the House. Objections were stated to details of the measure by the Member for Coventry (Mr. Ellice), and also by other Members; but, if I recollect right, upon the question whether the Bill should be read a second time—whether the Bill should be read a third time—there was no division whatever. In the House of Lords the Bill also received unanimous acquiescence, excepting indeed that one Member of the House of Peers did move an Amendment. The Bill proposed that cash payments should not be resumed until 1823; Lord Holland proposed as an Amendment, that cash payments should be resumed in 1820. He was not content to wait till the year 1823; and the only record of an adverse opinion in the hereditary branch of the Legislature is one of dissatisfaction with the late period at which the Act was to come into operation. Now, as I am firmly convinced that the restoration of the standard of value, and the mitigation of those evils which were inseparable from inconvertible paper, were wise measures, necessary for the security of property, and for the just remuneration of industry, do not suppose that by referring to these facts I am trying to relieve myself from any responsibility on account of the Act of 1819, I have no such desire; but I cannot consent to relinquish for the Act of 1819, the weight and authority which it derives from having received the almost unanimous sanction of both Houses of Parliament.
I now come to the Act of 1844. There had been a Committee in 1840 and 1841, over which the right hon. Gentleman the Chancellor of the Exchequer most ably presided, which had inquired into and reported to the House on the subject which now engages our attention. In 1844 the Bank Charter was about to expire; some proposition it was necessary to make as to that charter. The choice lay between the renewal of inquiry, or the proposal of a

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specific measure for the consideration of Parliament. Now I wish to call the attention of the House to this fact, that in five preceding years five Committees sat for the purpose of investigating this subject, of collecting information, and reporting their opinions thereupon to the House. Those Committees sat in 1836, in 1837, in 1838, in 1840, and in 1841. Notwithstanding their minute and protracted inquiries, I have heard it said that the subject had not been exhausted, and that the measure of 1844 was not based upon a sufficient inquiry. Yet antecedent to the measure of 1844, there had been an extent of inquiry on the subjects of currency and banking which ought to have sufficed. I find that by the first of these Committees not less than 3,000 questions were put; we have in the year 1836, 3,000 questions, and 3,000 answers; in the next year, 1837, the Committee which then sat, put 4,570 questions, and received as many answers. But that was not sufficient, for we have in the year 1838 a further supply of questions and answers to the extent of 1,700 of each. Questions and answers without end, but with no practical result from those apparently interminable investigations. In the year 1840, as the period at which the Bank Charter Act could expire drew near, another Committee was appointed, over which the right hon. Gentleman the Chancellor of the Exchequer presided with great ability. At that time we had all the information which could be elicited by above 9,000 questions. In 1840 we had 3,859 questions more, to each of which long and reasoned answers were given. In 1841, the Committee was again appointed, and having increased the sum of questions to 14,000, closed its labours without any practical result. It might then at all events have been concluded that inquiry into the subject was exhausted. The Committees had examined Mr. Tooke, Mr. Jones Loyd, Mr. Horsley Palmer, Mr. Page, and others, the organs of every class of opinions. It was then decided by Her Majesty's servants to submit to Parliament measures for the regulation of the currency and for the renewal of the Bank Charter. They invited the House of Commons to come to some practical decision on the subject; and I must be allowed to say, with respect to the measures proposed to Parliament in 1844, that there has not been within my recollection any measure of equal importance carried by a larger majority. On no occasion did more than
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thirty oppose the progress of that measure. In the House of Lords it was carried unanimously, at least without a division. I say again, therefore, that the Houses of Parliament—after the means of information placed within their reach—cannot with any justice allege, that they were betrayed into a hasty and ill-considered judgment. I am quite ready to admit that the whole subject is now open to reconsideration. It would be absurd for any one to demand on such a subject identity of opinions with those held in 1844. Nothing could be more injurious to the public interest, than that Members of this House, if honestly convinced of their error, should refuse to come to a different conclusion now from that at which they arrived when they legislated on the subject in 1844. It would be perfectly justifiable for this House, if they should see reason for doing so, to adopt a different measure; but it would not be creditable to the House of Commons to say—"we gave our consent in 1844 blindly and inconsiderately to the measure proposed to us by the Minister; and we hold him, and not ourselves, responsible for its adoption." There has been some misapprehension respecting the objects of this Act. I do not deny that one of the objects contemplated by the Act was the prevention of the convulsions that had heretofore occurred in consequence of the neglect by the Bank of England to take early precautions against the withdrawal of its treasure. I did hope that, although there was no imperative obligation on the Bank of England to take those precautions, that the experience of 1825, 1836, and 1839, would have induced that establishment to conform to principles which the Directors of the Bank acknowledged to be just, and which they had more than once professed to adopt for their own regulation. Sir, I am bound to say that in that hope, that in that object of the Bill, I have been disappointed. I am bound to admit, seeing the extent of commercial depression which has prevailed, and the number of houses which have been swept away—some of which, however, I think were insolvent long before the Bill came into operation, and others of which became insolvent in consequence of the failure, of those who were connected with them, and were imprudent in their speculations—I am bound to admit that that purpose of the Bill of 1844 which sought to impress, if not a legal, at least a moral obligation upon the Bank to prevent

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the necessity for measures of extreme stringency by timely precautions, has not been fulfilled. Sir, I must contend that it was in the power of the Bank, if not to prevent all the evils that have arisen, at least greatly to diminish their force. If the Bank had possessed the resolution to meet the coming danger by a contraction of its issues, by raising the rate of discount, by refusing much of the accommodation which they granted between the years 1844 and 1846—if they had been firm and determined in the adoption of those precautions, the necessity for extrinsic interference might have been prevented; it might not then have been necessary for the Government to authorise a violation of the Act of 1844.
Sir, it has been said that the avowed object of that Act was to establish a complete control over the operations of the Bank of England—to discourage all rash speculations—to prevent the recurrence of panics in the monetary and commercial circles, such as occurred in 1836 and 1839. Now perhaps I may be allowed to quote what I said in the course of my speech upon the second reading of the Bill, as to its object. I said—
"The Ministers were not wild enough to suppose that this measure would prevent all undue speculation, or insure an invariable paper currency; but there was a species of speculation dependent on an undue issue of paper which they hoped the measure would check. Speculation could not be prevented in a commercial community, but it might be aggravated by a species of paper credit within the control of Parliament; and though Ministers did not aim at checking legitimate speculation—though they admitted they could not prevent illegitimate speculation—which was perhaps necessarily incident to mercantile enterprise, particularly in a country like this; still they asked Parliament, by assenting to this measure, not to aggravate evils which it could not control, nor refuse to check those which came properly within its jurisdiction."
I say, then, that the Bill of 1844 had a triple object. Its first object was that in which I admit it has failed, namely, to prevent by early and gradual, severe and sudden contraction, and the panic and confusion inseparable from it; but the Bill had two other objects of at least equal importance; the one to maintain and guarantee the convertibility of the paper currency into gold—the other to prevent the difficulties which arise at all times from undue speculation being aggravated by the abuse of paper credit in the form of promissory notes. In these two objects my belief is, that the Bill has completely succeeded.
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My belief is that you have had a guarantee for the maintenance of the principle of convertibility, such as you never had before; my belief also is, that whatever difficulties you are now suffering, from a combination of various causes, those difficulties would have been greatly aggravated if you had not wisely taken the precaution of checking the unlimited issue of the notes of the Bank of England, of joint-stock banks, and private banks. The hon. Member for the city of Dublin (Mr. Reynolds) has spoken of the grievous injury sustained by Ireland in consequence of an interference with the constitutional privilege of the Irish banks to conduct their banking concerns as they pleased. I must say that the hon. Gentleman's authority in that respect was somewhat weakened by his explaining that privilege to be, that bankers in Ireland might conduct their operations, not upon capital, but upon credit. Now, with very high respect for the hon. Gentleman, to which he is no doubt entitled as the founder of the National Bank, I will tell him, with all suavity and courtesy, that in his banking capacity I would rather have his capital than his credit. I will give the House a specimen of the injuries sustained in Ireland by this interference with the privileges of Irish banks. If there ever was a country the poorer classes of which have suffered misery and misfortune from the abuse of banking, it is that very country of which the hon. Gentleman has spoken. I will show you what it is to establish unrestricted banking upon credit, and not upon capital. I will quote the authority of an Irishman, of Sir Henry Parnell, whose attention had been much given to these subjects. I will read to you what he says respecting the injury Ireland has sustained not by the limitation of the privilege, but by the failure of the banks in that country:—"Those failures (he says) might be described in a few words"—and certainly more emphatic words for the description of misery I think were never contained in so short a space—"There were, in 1804, as appears by the report of the Committee on Irish Banking Affairs, fifty registered banks in that country. Since that year a great many more have been established." I should think twenty more, making about seventy banks in the whole. Sir Henry Parnell writing in 1827, says, "With the exception of a few that withdrew from business, and of four banks in Dublin, three in Belfast, and one in Mallow, the whole

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failed, one after the other, involving the country in immense distress." The whole! ["Hear, hear!"] I recollect myself, the failure, on almost the same day, at least within the same week, of ten or eleven banks in Ireland. I think a little later the failures amounted to twenty or twenty-one, these banks having an extensive circulation, and possessing the entire confidence, not only of the email farmers, but of the peasantry and cottiers in that part of the country through which their circulation extended. I was in the west of Ireland on that occasion, and I could hardly conceive such desolation and misery as that which was caused by the failure of those banks. I am sure there are many Irishmen who now hear me who will admit that it is almost impossible for me to overstate the evil consequences that resulted from those failures. When the hon. Gentleman tells me, speaking of joint-stock banks in Ireland, that the universal practice previously to the Act of 1844 was for those banks to keep in their coffers one-third of gold in reference to the total amount of their issues and liabilities, I am placed in rather an embarrassing situation. Certainly some of those banks communicated to me the amount of their usual stock of gold. My impression is totally at variance with that of the hon. Gentleman as to the amount of that stock. What! was it, then, the practice of the joint-stock banks in Ireland to have in their coffers gold equal to one-third of the aggregate value of their deposits, liabilities, and promissory notes? Had the hon. Gentleman told me that their stock of gold was even one-tenth the amount of their total liabilities, I should have thought it was much more in correspondence with the fact. But, one-third? Why, if that were so, the Act of 1845 would be a great benefit conferred upon the Irish joint-stock banks. If their practice was to keep so large a proportion of gold in their coffers as compared with their total liabilities, then the Act of 1845 relieved them from a very great burden which their own discretion had hitherto imposed upon them. It afforded them facilities for extending their circulation which they had not enjoyed previously to the year 1845. If the statement of the hon. Gentleman be true, it is quite clear that the good sense of the Irish banks had established precautions against the demand for gold far beyond those which the Act of 1845 contemplated. But were there no exceptions from these
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wise rules? Did the hon. Gentleman ever read the history of the Joint Stock Agricultural Bank of Ireland? Does he think that that bank ever kept in its coffers gold to the amount of one-third of its total liabilities? Does he, in fact, know that such was the course which any bank in Ireland pursued? There is a general disposition to blame the Act of 1844. The real truth is, that you are suffering all the difficulties that arise from a diminution of capital, and from a contraction of credit, and your first impulse is to visit with blame that measure which, in point of fact, has prevented your difficulties from being ten times greater than they would have been. Some eighty years ago, the greatest writer that ever treated upon the subject of political economy—the author who stands in the same relation of pre-eminence to all those who have subsequently written upon that subject in which Sir Isaac Newton stands to his followers, in the sublimer science of astronomy, made the following observations:—
"No complaint is more common than that of a scarcity of money. Money, like wine, must always be scarce with those who have neither wherewithal to buy it, nor credit to borrow it. Those who have either, will seldom be in want of the money or of the wine which they have occasion for. This complaint, however, of the scarcity of money is not always confined to improvident spendthrifts; it is sometimes general through a whole mercantile town and the country in its neighbourhood. Over-trading is the common cause of it. Sober men, whose projects have been disproportioned to their capitals, are as likely to have neither wherewithal to buy money, nor credit to borrow it, as prodigals, whose expense has been disproportioned to their revenue. Before their projects can be brought to bear, their stock is gone, and their credit with it. They run about everywhere to borrow money, and everybody tells them that they have none to lend."
That is the precise condition in which we are at present. We are running about to borrow money, and everybody tells us they have none to lend. The dearth of money is a dearth of capital. You blame the law, or you blame the Government, because they cannot supply you with that which you really want—available capital to meet your exigencies. Nothing can be more delusive than the expectation you entertain, that if either Parliament or Government should give way to the foolish demand of increasing the currency, they would thereby supply the want of capital. The increase of currency would but retard the true remedy. The vis medicatrix is the contraction of engagements—the actual suffering that follows improvidence and ex-

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cess—by preventing the operation of that remedy, more paper would only aggravate your evils; that is to say, if you intend to maintain a convertible currency. From what has this dearth of capital arisen? Why is it that commerce is restricted, and solvent men have not the means of meeting their engagements? The causes have been assigned with so much distinctness and ability, and the causes so assigned appear to me so reasonable and so just, that I am scarcely justified in dwelling at any length upon them. There is nothing novel in our present position. At all times in this country a low rate of interest, and a period of apparent prosperity, have led exactly to the same depression. When you attribute commercial distress to free trade, and to the Act of 1844, how do you account for this—that if you review the history of the last sixty years, at periods when protection was at its highest—in times of peace, in times of war—before the standard was disturbed—in the time of inconvertible paper currency, as afterwards when convertibility was established—that prosperity and a low rate of interest have led to exactly the same pressure and the same want of money you are at present experiencing? Take the year 1784. The standard had not been altered, either in respect to the gold or silver coin; yet in 1784, in order to protect the convertibility of its notes, the Bank of England was compelled to refuse advances on the Government loan, and to reduce its notes in circulation from 9,000,000 l. to 6,000,000 l. Previous to 1784 there had been years of prosperity, years of great speculation; but as the consequence of that undue excitement, you had the pressure that followed it, and a course of violent action on the part of the Bank, in order to protect its treasure from exhaustion. Take the year 1793; here again the standard had not been disturbed; the paper currency was then convertible. In 1792, before the war broke out, you had had a period of great prosperity; the distress began to be felt at the latter end of that year. Allow me to read an account of that distress, and you will see how exactly it corresponds with the distress of 1846. Mr. Tooke says—
"From the operation of causes which I shall not pretend to explain, the unprecedented number of bankruptcies in November, 1792, was prodigiously exceeded in number and amount by those which took place in the spring and summer of this year—105 in March, 188 in April, 209 in May, 158 in June, and 108 in July. Many houses
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of the most extensive dealings and most established credit failed; and their fall involved vast numbers of their correspondents and connexions in all parts of the country. Houses of great respectability and undoubted solidity, possessing ample funds, which actually did, in a short time, enable them to pay every shilling of their debts, were obliged to stop payment, and some bankers, who, almost immediately recovering from the first panic, resumed the regularity of their payments, were obliged to make a pause. * * * * * It was impossible to raise any money upon the security of machinery or shares of canals; for the value of such property seemed to be annihilated in the gloomy apprehensions of the sinking state of the country, its commerce and manufactures; and those who had any money, not knowing where they could place it with safety, kept it unemployed and locked it up in their coffers."
Is not this an exact description of the present time? Does it not exactly correspond with the state of things in 1846? In what respect is it different? Again, take the year 1810; you then had almost the command of the commerce of the world, and you had all the advantage, if it be one, of an inconvertible paper currency; but the same causes, speculation and the abuse of credit, led to exactly the same evils that occurred in 1792. In 1819 the standard was restored, and promissory paper was made convertible into gold at the will of the holder. You are invited to repeal the Act of 1844. By that repeal you will restore to the Bank a discretion unlimited and uncontrolled; you will restore to the joint-stock banks their privilege of making unrestricted issues; and you will, I presume, permit the revival of private banks, and give to them the right of unrestricted issues also. Before you do this, you will, I trust, read the accounts of the transactions of the Northern and Central Bank—of the Norwich, of the Manchester, and of other joint-stock banks which issued notes professing to be convertible into gold at the will of the owner. You will find that non-restriction on issues, though accompanied by convertible paper, did not prevent a series of abuses which, when stated to the Committee, induced it to determine that the public security required a change. The simple repeal of the Act of 1844 will be the restoration of full discretion to the Bank of England, without any legislative control. In 1826, the Bank of England had that unlimited discretion. I will give you an account of the state of affairs in 1826, when no such restrictions as those imposed by the Act of 1844 existed, to fetter the power of the Bank; I will take the testimony of a most unexceptionable authority, whose name will command universal

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respect—Mr. Alexander Baring, now Lord Ashburton. He thus describes the undue excitement and delusive prosperity of 1826, in terms which would, with almost equal fidelity, describe the state of affairs in 1847. He says—
"He had no hesitation in attributing the distress of the country to the extent to which the paper circulation had been pushed about eighteen months ago, and for which the country banks, and, he was sorry to say, the Bank of England, were answerable. The Bank of England, by the facilities which they afforded, had been the authors of that dangerous redundancy of money that gave rise to the wild speculations which abounded in every part of the country. It seemed as if Bedlam had broken loose on the Royal Exchange. The same frantic spirit overran the country. The bankers in London, and their agents in the country, and the customers of both, were actuated by the same universal desire to put out their money in whatever way they could. Then, all on a sudden, the very reverse of this system came into practice. A panic seized the public. Men would not part with their money on any terms. Men of undoubted wealth and real capital were seen walking about the streets of London not knowing whether they should be able to meet their engagements next day. The over-issue by the country banks was the main cause by which the distress had been widely spread. If this crisis were allowed to pass without. speaking the truth, it would be only laying the foundation for future evils. Houses which were weak went immediately; then went second-rate houses; and, lastly, houses which were solvent. All confidence was lost, and scarcely one man could be found to trust his neighbour. Men were known to seek for assistance, and that too without effect, who were known to be worth 200,000 l."
Such was the state of things in 1826. In 1836, the same causes had a similar result. I heard the President of the Chamber of Commerce at Manchester attribute to the conduct of the Bank the loss of 40,000,000 l., sustained by the mercantile and manufacturing interests, on the great materials alone of manufacture in this country—cotton, wool, and silk. In 1839, your difficulties returned, and you were obliged to apply for the intervention of the Bank of France, for the gold in the coffers of the Bank of England was reduced to 2,000,000 l.; and the danger was again attributed to the departure by the Bank Directors from the rules which they had themselves established. Thus you find that in successive periods—namely, in 1784, in 1793, in 1810, in 1826, in 1836, and in 1839, there were certain causes in operation. Distress was preceded by prosperity which led to a monetary crisis; by a low rate of interest; by the facilities for credit. You had a state of very active speculation leading to the contraction of immense engage-
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ments; and when they came to be tried by the test of a metallic standard of value, you find a sudden collapse, and a season of stagnation and distress. The same cause, in my opinion, is operating now. There has been, in consequence of the state of prosperity, and the low rate of interest which prevailed, undue speculation. There has been, besides this, recently adopted a mode of conducting business—devices for issuing paper—a system of re-discount of bills—which I believe to be novel in our commercial history. In this great commercial country you have erected a vast superstructure of paper currency and of paper credit on a smaller basis than any other European nation. This country and the United States attempt with a small comparative amount of the precious metals to maintain without discredit an enormous extent of promissory notes and of paper credit generally. Such a system gives, no doubt, great facilities for enterprise, but it has at the same time some counterbalancing evils. With the facilities for enterprise, the largeness of your credit, and the prodigious extent of your colonial empire, temptations are held out, and opportunities offer, for extravagant speculation when there is a low rate of interest prevailing; and if the tendency to such speculation be not checked but encouraged by that great establishment which is the centre of your commercial credit, the Bank of England, the consequences are inevitable. Establish what system you please, the stagnation of trade and monetary difficulties will follow the state of excitement. You will not incur the expense of greatly extending the basis on which your paper circulation rests. You are now calling for relaxation, you want more paper, and if you succeed in your demand you may rest assured that the more frequent will be the recurrence of a crisis like the present. The United States attempted the same thing. Notwithstanding the enormous resources of that great country—its growing commerce, its peculiar advantages from a boundless and fertile territory—because it trusted too far to paper currency and paper credit, such evils as you experience have fallen repeatedly upon it. This is the true state of your affairs; and the great object which you have to keep in view, is to reconcile a vast extent of paper circulation, and all its undoubted advantages, with that principle which is essential to its permanent credit, the guarantee of certain convertibility. It was

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not until after your experience of those evils which flow from the abuse of paper credit, that you were led to accede to any proposal that had for its object the prevention of their recurrence. When the remembrance of those evils was fresh on your minds, you willingly agreed to measures which tended to fetter the issue of paper, and to impose restrictions on the Bank of England and every other bank. It is, no doubt, painful to refer to the affairs of individual houses; but I have no hesitation in saying, that if the commerce of the country be conducted on such principles as recent disclosures would denote, then you may in vain look to any legislative regulation, as a substitute for common sense and discretion, to prevent the recurrence of such calamities as we have recently witnessed. When I see the insolvency of a house, whose name I shall not mention, though it has been published in the newspapers, of which the liabilities amount to 50,000 l., and the assets to 3,000 l. I cannot but say that if that be the practice of your commerce, then do not complain of the Act of 1844, or of any other measure as the cause of your embarrassments. I ask, is it not monstrous that the standard of value in this country should be tampered with in order to facilitate and to uphold such transactions as these? What security can legislation give to a bank that with 600,000 l. of paid-up capital, lends 500,000 l. of it to a single commercial house? What answer is it that the shareholders reposed unbounded confidence in their directors? Why did they not take an active part in the conduct of their own affairs? The bank fails, and then, like the gentleman whose liabilities were 50,000 l., with assets only to the amount of 3,000 l., they cry out, "This infernal Act of 1844 is the cause of all our difficulties. We want money, and the Act of 1844 prevents us from obtaining it." I say, on the contrary, you may thank the Act of 1844 that your difficulties are not aggravated tenfold. Just consider what would be the state of affairs if such banks as the Northern and Central Bank, and the Manchester Bank, and the Norfolk Bank, had been left at liberty to foster all this speculation by an unlimited issue of paper. Still I do not despair that the native energy of this country will be sufficient to meet the difficulty. You will, no doubt, have the same prophecies of ruin you have always had on the like occasions—you will be told that the sun of Eng-
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land has set—because solvent persons cannot get credit, and money cannot be had for less than 10 per cent. You will be told that the commerce of this country cannot be conducted if persons in trade have to pay 10 per cent interest for money. The commerce of this country must pay for money what money is worth; and if it be very inconvenient to pay such high interest, I ask what law can prevent it? Will you make the usury laws more stringent? It is very doubtful whether the restrictions imposed already in this respect have not acted more injuriously than otherwise on the parties for whose benefit the usury laws were intended. In 1825 and 1826 many houses of respectability were said to have sunk in consequence of the restrictions imposed by the usury laws then in existence, they having been prevented by those laws from obtaining money by paying for it what it was really worth. Those who obeyed the law would not lend the money at the legal rate of interest; and those who evaded the law required, in order to cover the risk, a greater amount of interest than they could have commanded if no restrictions had existed. It is no doubt unusual that persons engaged in commercial enterprise should have to pay 8 or 10 per cent interest; but no issue of bank notes will prevent this when there is a dearth of capital. While capital is scarce, pass what laws you please, you must pay for the use of capital according to its improved value. But, as happened at antecedent periods, the native energies of the country would have enabled us to bear all this without that severity of suffering which we now endure, if, in the midst of distress caused by undue speculation, there had not supervened an unforeseen cause which has aggravated ten times the difficulty which would otherwise have been felt. Three and thirty millions of money has been sent out of the country within a few months, or little more than a year, for the purpose of providing subsistence for the people. Under any circumstances, even in times of great prosperity, such a drain must have been injuriously felt. But when the exhaustion of capital for the purpose of purchasing food comes upon us, concurrently with the exhaustion of capital in consequence of improvident commercial engagements, it does require all the energies of this country to bear up against the double simultaneous blow. But concurrently with these two, which I conceive to be the main causes of the distress, there

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has been another, namely, the application of an unusual amount of capital to a new species of enterprise, namely, the construction of railways. Now, Sir, I do not estimate the injurious effect of that application of capital so highly as some hon. Gentlemen have done. I think that, under ordinary circumstances, such an application of capital might be advantageous. You are, by the extension of railways, laying the foundation of great future prosperity; and, in estimating the present embarrassments caused by the sudden application of so much capital to this enterprise, you must at all events deduct that amount of pressure which would have followed from the application of a large amount of that capital in the formation of foreign railways, and the promotion of other foreign enterprises. I believe that if you had not had the demand for food from abroad, and the sudden contraction of credit in consequence of improvident commercial enterprises, you would have been able to bear the demand for the capital that has been applied to railways. The capital thus applied, is not a dead loss. The time will shortly arrive when these railways will be completed without loss, I trust, to those who have thus employed their capital. When I think of the saving of time and expense in the transit of goods and passengers which will be effected, I cannot doubt that railways will ultimately prove the source of improvement and prosperity to the country. But at present, I admit, the cost of their construction so operates as to increase the pressure arising from other sources. A banker is but the intervening agent between those who possess capital and those who want to borrow it. The banker receives deposits from every class, and heretofore has been accustomed to devote the bulk of those deposits to the promotion of commercial enterprise. Suddenly there comes a large demand for money to promote a new species of enterprise. This leads to a new application of capital, a diminution of deposits, a contraction of the amount of money heretofore available for ordinary commercial purposes, and of course increases the difficulties under which we labour. But of the three causes which have operated concurrently, the last—the application of capital to railways—has been, in my opinion, instrumental in a minor degree in causing your difficulties, and the stagnation which you now experience.
I must say a word with respect to the
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letter to the Bank of the noble Lord and the right hon. Gentleman. Not being in the habit of reposing my confidence in them, nor being in the sense of party one of their ordinary supporters, I feel bound to state my concurrence when I agree with them. I do then cordially approve of the course which Her Majesty's Government took on the occasion which led to the issue of that letter. I think they were perfectly right in not issuing the letter sooner than they did. The true remedy for the state of things under which the country is suffering, is individual exertion, the limitation of engagements, thec essation of all demands which can be postponed; and if the Government had at an earlier period signified their intention of relaxing the law, they might, in my opinion, have materially discouraged those individual exertions which must be, after all, our main hope. But when there occurs a state of panic—a state which cannot be foreseen or provided against by law—which cannot be reasoned with, the Government must assume a power to prevent the consequences which may occur. There is the necessity for a discretion which I think was properly exercised in the present instance. It was better to authorise a violation of the law, than to run the risk of the consequences which might have ensued if no intervention on the part of the Government had taken place. I consider that the issue of that letter was not an impeachment of the law. I entirely differ from those who contend that its issue is a conclusive proof that there ought to be a discretionary power invested by law in some authority to meet cases of panic. The case of panic cannot, in my opinion, be provided for by law. It is one of those cases the precise character and circumstances of which cannot be foreseen; and, as Mr. Huskisson says, not legislation, but the discretion of the Government, must meet it. Sir, I think that the Government were justified in issuing that letter. I think that, having issued, it they acted with the strictest regard to constitutional principle in forthwith summoning Parliament. If there had been a violation of the law, the first appeal to Parliament must have been for indemnity; but it turns out that there has been no violation of the law; and I know not how Parliament can give indemnity for not violating the law. I think Government were perfectly right in suggesting to the Bank the rate of interest at which, after the date of the letter,

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accommodations should be granted, and that it would have been unwise to trust the Bank with an unlimited discretionary power. There would have been a pressure on the Bank, and its natural sympathies would have been with those whom they saw suffering; and the better course was for the Government which undertook to sanction a violation of the law, if necessary, themselves to prescribe the condition on which the law should be violated, rather than to throw on the Bank the responsibility of fixing the rate of interest. The demand of a high rate of interest, whether with or without the sanction of the Government, was a necessary consequence of permitting the Bank to violate the law.
Sir, I will not now discuss the question—of course it will be considered maturely in the Committee—whether there should be any modification of the Act of 1844. I should be acting a part unworthy of a Member of Parliament if I permitted any dread of a charge of inconsistency to prevent me from giving a full consideration to the whole of the subject. My own impressions, I admit, are in favour of the maintenance of the great principles of that measure. I think that you ought to continue the restrictions on private and joint-stock banks. I think you ought to require of these banks to bear some share of the expense of keeping in reserve a stock of gold. I think also that if you do not impose the identical restrictions now imposed on the Bank of England, some restriction you must impose; for, after the experience of 1826, 1836, and 1839, I, for one, am not content to leave the regulation of the monetary concerns of this country to the uncontrolled discretion of the Bank. In 1844, the general conviction was that it ought not to be so left; and I, for one, know no better mode of imposing restriction than that which was devised by the Act of 1844.
Sir, I heard, with great satisfaction, the speech of my right hon. Friend (Mr. Herries), in which he declared his inviolable adherence to the principle of a metallic currency. I have no great apprehensions on that head. If I thought that some of the opinions which I have heard delivered in the course of this debate were likely to prevail, I should indeed feel the greatest anxiety with regard to the security of property, and to the stability of commercial enterprise. I think I heard from the hon. Member for Wakefield, last night,
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a recommendation that the Government should pay off its debt of 14,000,000 l. to the Bank, and should pay it in inconvertible paper. Sir, if the Government is to set the example of paying its just debts in inconvertible paper—in paper for which there is to be no other equivalent than some other paper—if that is to be the example set by the Government, I foresee that individuals in a similar difficulty will be glad to profit by that example. But I cannot believe that this House will sanction such an injustice as that the Government shall pay the Bank the amount of a public debt in inconvertible paper. The Member for Stafford proposed that we should have convertible paper, but with a fluctuating standard. What is the meaning of that? The meaning practically is the system of assignats. To pay off notes in gold, at the market price of gold, is nothing more nor less than this, to depreciate the value of the gold by the issue of the paper, and to pay your debt in the depreciated value caused by your own issue. If you are to issue paper without limit, and to redeem the paper in gold, at a price of gold to be determined by reference to paper, there can be no assignable limit to the depreciation. If you issue a fixed amount of paper currency, no doubt there may be some limit to its depreciation, but an unlimited paper currency, to be paid in a fluctuating standard, moans neither more nor less than the restoration of the system under which the paper currency of France, hearing a certain nominal value, was depreciated some 400 or 500 per cent. Sir, my security against all these projects is in the necessity for filling up the blank which follows the words "I promise to pay." I care not how you fill up that blank, provided that you really intend to maintain a convertible paper currency, because I know, however you fill it up, precisely the same consequence will result with regard to every person in the community, except, indeed, to him who is in debt. If you promise to pay two pennyweights of gold instead of four pennyweights, your promissory paper will just have credit for what it is really worth, and no more. There will not be the slightest difference as to facilities for getting money—there will not be the slightest additional security against stagnation in trade; not only the foreigner but the inhabitant of this country will estimate the value of the paper according to the real value of the coin of which it is the representative; and unless

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he stand in the situation of a debtor he will gain no advantage whatever. Now my firm impression is, that this House will imitate the example of its predecessors. In 1822, when this House was about to enter into an inquiry into commercial distress, it assented to a Motion made by Mr. Huskisson, and resolved—
"That this House will not consent to make an alteration in the standard coin of the realm."
Again, in the year 1833, upon the Motion of Lord Althorp, the House re-affirmed that resolution. If there should be a necessity for it, I feel convinced that the House, on an enlarged consideration of public policy, will re-affirm those resolutions. Rely upon it there is absolutely nothing in the argument that the commercial transactions of this country have so increased, that the ancient standard is incapable of being maintained. The hon. Member for Westbury has justly observed that we are in error when we speak of the price of gold, and that a promissory note is nothing else but a promise to pay a certain definite weight of gold. Sir, the definition which the hon. Gentleman gave is perfectly correct. The promissory note is a promise to pay a definite weight of gold, and price does not enter into consideration. You may call a 5l. note by the name of a 10 l. note, but you will not in the slightest degree alter the real value of your currency. When you reflect what, under the present standard of value, has been the increase in the prosperity of this country—when you find, with the present standard of value, the decennial increase in the declared value of your exports, which I think in ten years ending in 1831, was not more than 36,000,000 l., which increased in the next decennial period to 46,000,000 l., which in the three last years was not less than 59,000,000 l.—you will find a conclusive proof that the ancient standard of value is not incompatible with the greatest enlargement of your commerce. Whatever, therefore, may be your opinion of this law of 1844, my hope is, that this House will show the same regard to justice and good faith which have been shown by their predecessors—will bear in mind that whether the policy of the Act of 1819 was or was not a wise policy, the transactions that have been entered into since 1819 are as ninety-nine to one of the transactions before that period that remain unclosed—that their regard for good faith—their regard for the permanent interests of the country—their regard, above all, for the
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condition of those who earn by their industry the wages of labour—will induce this House of Commons to uphold the standard which, after long struggling, has been established and maintained by the wisdom of Parliament.
MR. STUART MR. STUART moved that the debate be adjourned.
The House divided on the question:—Ayes 45; Noes 257: Majority 212.

List of the AYES.

Baillie, H. J.

Hudson, G.

Baring, T.

Ingestre, Visct.

Bentinck, Lord G.

Knox, Col.

Blewitt, R. J.

Masterman, J.

Bremridge, R.

Moore, G. H.

Broadwood, H.

Muntz, G. F.

Brooke, Lord

O'Connor, F.

Cabbell, B. B.

O'Flaherty, A.

Cobbold, J. C.

Prime, R.

Deering, J. P.

Renton, J. C.

Disraeli, B.

Rufford, F.

Forbes, W.

Scholefield, W.

Fox, S. W. L.

Scott, hon. F.

Granby, Marq. of

Smyth, J. G.

Greene, Capt.

Stafford, A. O'B.

Grogan, E.

Stephenson, R.

Hamilton, G. A.

Tollemache, J.

Heald, J.

Waddington, D.

Henley, J. W.

Wakley, T.

Herries, rt. hon. J. C.

Walsh, Sir J. B.

Hildyard, R. C.

Willoughby, Sir H.

Hildyard, T. B. T.

TELLERS.

Hindley, C.

Stuart, J.

Hodgson, W. N.

Newdegate, C. N.

List of the NOES.

Abdy, T. N.

Burroughes, H. N.

Adair, H. E.

Buxton, Sir E. N.

Adair, R. A. S.

Campbell, hon. W. F.

Anson, hon. Col.

Cardwell, E.

Anson, Visct.

Carew, W. H. P.

Attwood, J.

Caulfield, Col.

Bailey, J.

Chaplin, W. J.

Baines, M. T.

Childers, J. W.

Baring, rt. hon. F. T.

Clay, J.

Barnard, E. G.

Clay, Sir W.

Barrington, Visct.

Clerk, rt. hon. Sir G.

Bell, J.

Clive, Visct.

Bellew, R. M.

Cockburn, A. J. E.

Benbow, J.

Cocks, T. S.

Birch, Sir T. B.

Coke, hon. E. K.

Blackall, S. W.

Colebrooke, Sir T. E.

Bolling, W.

Coles, H. B.

Bourke, R. S.

Conyngham, Lord A.

Bouverie, E. P.

Coope, O. E.

Bowring, Dr.

Cotton, hon. W. H. S.

Boyd, J.

Courtenay, Lord

Boyle, hon. R. E.

Cowper, hon. W. F.

Brackley, Visct.

Craig, W. G.

Bramston, T. W.

Cubitt, W.

Brisco, M.

Davie, Sir H. R. F.

Brocklehurst, J.

Dawson, hon. T. V.

Brotherton, J.

Deedes, W.

Brown, H.

Denison, J. E.

Bruce, Lord E.

Devereux, J. T.

Buller, C.

Divett, E.

Bunbury, E. H.

Drumlanrig, Visct.

Burke, Sir T. J.

Drummond, H.

673

Duckworth, Sir J. T. B.

Labouchere, rt. hon. H.

Duff, G. S.

Langston, J. H.

Duke, Sir J.

Lemon, Sir C.

Duncan, G.

Lennox, Lord A.

Dundas, Adm.

Lewis, rt. hn. Sir T. F.

Dundas, Sir D.

Lewis, G. C.

Dundas, G.

Lincoln, Earl of

Dunne, F. P.

Lindsay, hon. Col.

Du Pre, C. G.

Littleton, hon. E. R.

Ebrington, Visct.

M'Gregor, J.

Edwards, H.

M'Naghten, Sir E.

Ellice, right hon. E.

Magan, W. H.

Elliot, hon. J. E.

Mahon, The O'Gorman

Evans, J.

Maitland, T.

Evans, W.

Marshall, J. G.

Ewart, W.

Marshall, W.

Fagan, W.

Martin, J.

Farrer, J.

Martin, S.

Fergus, J.

Matheson, A.

Ferguson, Sir R. A.

Matheson, Col.

Ffolliott, J.

Melgund, Visct.

Fitzpatrick, J. W.

Moffatt, G.

Fitzroy, hon. H.

Monsell, W.

Fitzwilliam, hon. G. W.

Morgan, H. K. G.

Foley, J. H. H.

Morpeth, Visct.

Fordyce, A. D.

Morison, Gen.

Forster, M.

Noel, hon. G. J.

Fortescue, C.

Nugent, Sir P.

Fortescue, hon. J. W.

O'Brien, J.

Fox, R. M.

O'Brien, Sir L.

Freestun, Col.

O'Brien, T.

Gardner, R.

O'Connell, M. J.

Gibson, rt. hon. T. M.

Ogle, S. C. H.

Gladstone, rt. hn. W. E.

Osborne, R.

Glyn, G. C.

Paget, Lord A.

Godson, R.

Paget, Lord C.

Goulburn, rt. hon. H.

Paget, Lord G.

Gower, hon. F. L.

Palmer, R.

Grace, O. D. J.

Palmer, R.

Greenall, G.

Palmerston, Visct,

Greene, T.

Parker, J.

Gregson, S.

Pearson, C.

Grenfell, C. W.

Pechell, Capt.

Grey, rt. hon. Sir G

Peel, rt. hon. Sir R.

Grey, R. W.

Perfect, R.

Guinness, R. S.

Peto, S. M.

Gwyn, H.

Pilkington, J.

Hall, Sir B.

Plumptre, J. P.

Hanmer, Sir J.

Plowden, W. H. C.

Hastie, A.

Power, Dr.

Hay, Lord J.

Power, N.

Headlam, T. E.

Price, Sir R.

Heathcote, Sir W.

Raphael, A.

Herbert, H. A.

Rawdon, Col.

Hervey, Lord A.

Repton, G. W. J.

Heywood, J.

Reynolds, J.

Hodges, T. T.

Ricardo, J. L.

Hogg, Sir J. W.

Ricardo, O.

Hood, Sir A.

Rice, E. R.

Hornby, J.

Rich, H.

Howard, hon. C. W. G.

Robartes, T. J. A.

Howard, hon. E. G. G.

Robinson, G. R.

Humphery, Ald.

Roche, E. B.

Hutt, W.

Romilly, J.

Inglis, Sir R. H.

Russell, Lord J.

Ireland, T. J.

Russell, F. C. H.

Jackson, W.

Salwey, Col.

Jermyn, Earl

Sandars, G.

Jervis, Sir J.

Seaham, Visct.

Jervis, J.

Seeley, C.

Keogh, W.

Seymour, Lord

Keppel, hon. G. T.

Seymour, Sir H.

King, hon. P. J. L.

Shelburne, Earl of

674

Sidney, T.

Tynte, C. J. K.

Simeon, J.

Verney, Sir H.

Slaney, R. A.

Vivian, J. H.

Smith, rt. hon. R. V.

Walmsley, Sir J.

Smith, J. A.

Walpole, S. H.

Smith, M. T.

Walter, J.

Smith, J. B.

Ward, H. G.

Smollett, A.

Watkins, Col.

Somerton, Visct.

Wawn, J. T.

Somerville, rt. hn. Sir W.

Welby, G. E.

Spearman, H. J.

West, F. R.

Stanley, hon. E. J.

Westhead, J. P.

Strutt, rt. hon. E.

Willcox, B. M.

Stuart, Lord D.

Williams, J.

Sturt, H. G.

Wilson, J.

Sutton, J. H. M.

Wilson, M.

Talfourd, Serj.

Wood, rt. hon. Sir C.

Tenison, E. K.

Wood, W. P.

Tennent, R. J.

Wortley, rt. hon. J. S.

Thicknesses R. A.

Wyld, J.

Thompson, Col.

Wyvill, M.

Thornely, T.

Young, J.

Thornhill, G.

TELLERS.

Towneley, J.

Hill, Lord M.

Turner, G. J.

Tufnell, H.

Amendment moved by Mr. J. WILSON withdrawn.
Original Motion for the appointment of a Committe carried.
House adjourned at half-past One o'clock.