LOAN DISCOUNT BILL.

HC Deb 14 May 1847 vol 92 cc856-89

On the Question that the Speaker do now leave the Chair, for the House to go into Committee on the Loan Discount Bill,

The MARQUESS of GRANBY

felt that it was necessary for him to make an apology to the House, for venturing to address it on a subject of so much difficulty. As it was in the power of any person who paid any attention to the subject, without entering into the chemical properties of the soil, to say such and such a soil produces such fruits, and such another soil will not; so he hoped the House would indulge him, if he did not enter into the intricacies of the subject, but contented himself by reviewing the facts of the case as they stood before them, and their financial and social aspect. The question they had to discuss ought not to be confined to the proposition of the right hon. Gentleman the Chancellor of the Exchequer. They ought to take a more extended view, look calmly at the present state of the country, and consider to what extent that state was to be attributed to the banking law of 1844. It had been admitted upon all hands that great distress existed in the country, and that a great deficiency in the circulating medium was generally felt. It was not his intention to occupy much of the time of the House by reading extracts from communications which he had received, to prove the extent and alarming nature of that pressure; but he might be permitted to observe, that the magnitude and extent of the monetary disorganization was painfully attested by a letter received from Mr. Foster, of York. The noble Lord read extracts from the letter in question, and also an extract from the Manchester Courier, detailing the distress which the manufacturing districts laboured under in consequence of the pressure of the money market. The state of trade had become desperate; and in Manchester and the adjoining district of Sal-ford thousands of hands were but partially employed on the short-time system, and thousands of other men wholly without work, while the price of food was rising, and the condition of the people was becoming more calamitous every day. He should not trouble the House by reading further extracts, as it was admitted on all hands that the greatest possible distress prevailed in the manufacturing districts. They had been told that the Banking Bill of 1844 was to saturate the country with gold; but he believed that the statement was made for the purpose of saturating the minds of hon. Members, that the Bill had saved them from great distress. But what were the facts of the case? He believed the Bill came into operation on the 7th of September, 1844. What quantity of gold was in the Bank at that time? In the issue department there was coin and bullion to the amount of 12,657,208l., silver, 1,694,087l.; and coin in the banking department, 857,765l.; making a total of 15,209,050l. But what was the quantity of gold in the Bank on the 24th of April, 1847? There was gold coin and bullion amounting to 7,120,006l.; silver, 1,429,134l.; gold and silvercoin, 664,750l.; making a total of 9,213,890l., so that in point of fact there were 6,000,000l., less of gold in the Bank of England in the year 1847, than there was previously to the passing of the Bank Bill of 1844. Was it then true, or not, that the Banking Bill of 1844 saturated the country with gold? It had been said, how was it possible to foresee what was likely to happen; how was it possible to foresee the famine in Ireland, the failure of the cotton crop, or the inordinate speculation in railways? But he begged to say, those failures and that speculation had not been foreseen. There was the memorial from all the eminent bankers in London alluded to a few days ago by the hon. Member for Shrewsbury (Mr. Disraeli), which was drawn up previously to the passing of the Act. Now, were the Gentlemen who signed that memorial men of no note, or were they persons who did not understand the question? He knew it had been said, the House of Commons was responsible for not having paid attention to that document; but it should be borne in mind that the memorial never had been laid upon the Table of the House, nor never had been fairly before it. It might have been accidentally mentioned, but it never was before the House in a practical shape. But, in addition to that memorial, was there nothing in their legislation of the last few years to lead them to expect what was likely to happen? Were there no other signs in the sky of the tempest that was to be dreaded? What had been their course of legislation for the last few years? Had they not by their measures of 1842 and by their free-trade legislation, induced gold to be taken abroad with one hand, and with the other declared that for every pound in gold taken abroad, not only would they not allow the vacuum to be filled up by another medium of circulation, but they declared that for every pound of gold they would take away its equivalent in Bank paper. This showed that it was quite clear the pressure must have come sooner or later. He knew it was said, if they wished to get back their gold, the only means would be to restrict the issue, and to make money dear and commodities cheap. But he begged the House to consider the distress that must intervene before that could be carried out. Let them remember the great number of mills which would be stopped, the number of manufactories that might be closed, the reduction of wages, and the pauperism that would be entailed upon the country before the measures could come into operation which were to relieve the pressure. He had often heard the popular adage, "Before you get better you must get worse;" but he never heard of a doctor who undertook to make the patient worse in order that he might get better. But how did they propose to get back the gold that had been sent out of the country? The only means for effecting that object would be to send manufactures abroad, and get gold back in exchange. But then, what manufactures were there in the country? They had been told they could not send their railway stock—then what manufactured stock had they? He feared they had hardly any, in consequence of the working of short time. And what raw material had they to work upon? He held in his hand a statement of the quantity of bales of cotton in the markets of Liverpool, London, and Glasgow, in the three years of 1845, 1846, and 1847. There were in the year 1845, 1,624,744 bales; in 1846, 1,556,804; but in 1847, there were only 1,320,944. There were imported from January to the 30th of April, 1845, 727,684 bales; in 1846, 510,750 bales; but in 1847, there were only 487,154 bales. The deliveries were in 1845, 32,220 bales; in 1846, 31,040; and in 1847, there were only 20,273 bales. He would not go into the question of other articles of raw material, from which the manufactures of the country were to be produced; but it was well known that manufactured stocks were low, and therefore it was he feared they would have to wait for some time before the desirable effects that were anticipated could be realized. He was also of opinion that the high price of cotton was not in consequence of the superabundance of money, but owing to the scarcity of cotton. They had been told that one of the great objects of the Bank Restriction Act was to prevent the country banks from issuing more than a certain quantity of paper, and so to give the Bank of England some general control over the issue of paper throughout the country; but no sooner was that doctrine laid down, and the public mind became impressed with the necessity of it, than they found that when the memorial of the bankers was presented to the Government of the day, the answer then made was, "We cannot allow the Bank of England to have the control over the issues." And why? Because it was feared the Bank might avail itself of the permission. Then, again, they heard that another great object of the Bank Restriction Act was to insure the convertibility of notes into gold. This was to be the basis of the currency; but no sooner were their minds filled with the truth of the principle than they heard that a sum of 14,000,000l. was to be issued, not upon the security of gold or silver, but upon Bank securities. If they were to give up that great principle, if they were not to stand by that principle, why did they they not give to the Bank a discretionary power to relieve the country from the severe pressure and distress which it was now suffering. What was the object of money? Was it not to facilitate the interchange of commodities between different companies, of persons, and individuals? But if the population increased, and manufactures increased, did they think the circulating medium was to remain the same, and that, let the circumstances of the country be what they might, that they could not alter the standard of the currency? Or, supposing the population and transactions to remain the same, the circulating medium could be diminished without causing great pressure and distress. In concluding this part of his subject, he could not do better than refer to a speech made by a noble relative of his (Lord Morpeth) in the autumn of last year at Sheffield. The occasion was a great one. There was an immense meeting, and the extinguisher was to be put completely on the Protection party. In that speech he found the following passage:— Now, feeling how much more they have always done, and done so well, I am quite willing to take the injunction of my friends near me, to let them alone and manage their own affairs, which they can do much better than with the help of a meddling Government. But this principle is much more applicable to your own Bank of England, than to our commercial relations with foreign countries. He would read an extract from a speech of the right hon. Baronet the Member for Tamworth, who alluding to a speech of the noble Lord the Member for Lynn, said— The noble Lord had said that if we get the corn of France and the timber of Prussia, the great consideration was, what we should get them to take in return. Why, suppose they took nothing in return, what should we suffer from that? On what principle does the noble Lord think foreign commerce is carried on? When we buy the brandies of France, they are not given to us—something is given in exchange for them. There is no mode of making purchases but by giving an equivalent for them. Well, but you say we shall sent out gold for them; but do you send out gold to these countries now? I have not seen any diminution in the gold of the Bank of England that could be attributed to this cause. If there has been a decrease in gold, it has been from our internal concerns. I have not seen that any great quantities of it have gone to Prussia. What will astonish you still more perhaps is, that I wish it had. This country would be able to command a sufficient quantity of gold if it were required in the steady and legitimate course of trade. When a regular commerce is carried on, there can be no drain of gold; and even if they take nothing but gold, we can only procure that by transmitting our manufactures for that gold, and then purchasing corn and timber with it. I should not be alarmed, therefore, if there should be an export of gold from this country, knowing that we shall obtain that gold by exchanging our manufactures for it. No such export can take place as will derange our internal affairs, or derange the stability of our commerce. He really thought that the free-trade friends of the right hon. Gentleman had not paid that attention to him, which, from the attention he paid to them, they were bound to do. He thought they should have congratulated the right hon. Gentleman on the way his wishes had been fulfilled. But no expression had yet fallen from any Member of that House, showing any sympathies for the feelings of the right hon. Gentleman. It had been said that it was unfair to refer to free-trade measures in the present circumstances of the country; that the potato famine, the high price of cotton, and the general deficiency in the harvest, prevented the free-trade measure from being fairly tried. He admitted that there was something plausible, but denied that there was anything conclusive, in the argument. Were we importing nothing but food? Was it a drain of gold to supply our deficiency of food, that caused our deficiency of gold? He thought he could show the House satisfactorily that this was not the case. He held in his hand a return of the imports of various articles during 1845 and 1847; and he found that of cotton, clocks, cotton manufactures of Europe, fancy woods, glass bottles, iron, brass, lead, leather, gloves, linen, silk manufactures, brandy, sugar, tallow, woollen manufactures, tin, wood, and a variety of other articles, breadstuffs being entirely excluded, the official value in 1847 exceeded that in 1845 by 4,333,792l. The excess in glass bottles amounted to 7,473l., although the House had been told, when the duty was taken off glass, that we should be able to supply the world. In the article of sugar, which was principally slave-grown, the excess in the imports of 1846 and 1847 as compared with 1845, was 1,175,043l. The articles he had enumerated showed to what extent free trade had injured our own artisans. Cotton, glass bottles, iron in bars, lead, leather gloves, linen, the silk manufactures of Europe, and woollen manufactures, were the articles which interfered more particularly with our native industry. He found that the excess of imports in those articles during 1847, as compared with 1845, amounted to 857,559l. The right hon. Gentleman the Chancellor of the Exchequer, in speaking of the number of labourers employed in railways, stated that for every 1,000,000l. expended, there would be 45,000 employed; and that for every 1,000l. there would be forty-five labourers employed. If, therefore, this 857,559l., which had been taken away from this country, in order to buy those manufactures which were to enter into competition with the productions of our own countrymen, had remained in the country, we could have employed no fewer than 38,590 heads of families. Let no one tell him that the free-trade measures had not been tried. They had been tried, and they had not only been found wanting, but it was found that they had done material injury to the people of this country. His noble relative had also told the people at Sheffield that the sharp cry of the people, under the pressure of famine, would be strong enough to sweep away every obstacle; and that in every year, in every season, in every state of the weather, the ports of Britain should be open for the admission of foreign produce, and that the people of England should open their mouths wide for all this, and that no man should stay it. He hoped that if the people of England opened their mouths then, that they would now open their eyes as wide. He feared that their breeches pockets had been rather widely opened, and that more had come out of their pockets than had gone into their mouths; and he believed that they were now better ahle to judge of the fallacy of the free-trade principle. But it was stated that this famine was not confined to England—that it had extended itself to France, Belgium, Holland, up the Rhine, and up the Danube. In that declaration he heard the echoes of another speech made by his noble Friend (Lord G. Bentinck), and than which a more eloquent speech was never delivered in that House. That speech came back upon his (the Marquess of Granby's) ears like "the remembered tone of a mute lyre." That which had been now stated as a fact was then predicted as what would probably arise. In quoting from Mr. Tooke's prices, he said— In ordinary circumstances we may safely trust to a regular supply from abroad; the discouragement of our home productions may not then seriously affect us; but if a famine arise, then we may have bitter cause to repent the folly of our course, and may find that the encouragement we gave to home productions by the imposition of restrictive duties was absolutely necessary. The more you increase your dependence on foreign supply, the more you increase, in the event of a general pressure, the risk of a monetary derangement. He thought the House ought to congratulate itself that the corn laws were not repealed eight or ten years ago, for if they had been, it was his confident belief that in years where there was no scarcity, they would have put out of cultivation their own soil; and we would, under present circumstances, require five millions of quarters of wheat from abroad more than we were now importing. He did not pretend to say that, in years like the present, we could prevent great scarcity—what he meant to say was, that more corn would be sown in our own country under a system of protection, and that it would be our own fault if we permitted that corn to leave the country in a time of scarcity. We should then have, at all events, all the diminished produce if we chose; but if it was grown abroad, we might not be able to obtain any portion of it. We were told, again, that we could not judge of the free-trade measures at the present time, in consequence of the scarcity being general throughout a great part of Europe, and that those from whom we were obliged to buy wheat were themselves in want, and could not afford to spend money on British manufactures. Now what was the truth? From what countries did we get our corn? Did we get it from countries that were in distress? Did we get it from France, from Belgium, or from Holland? Why, those countries were unlike our own. The rulers of France, whenever a scarcity occurred, and they thought there was any danger of famine, closed the ports. It was not from countries in distress we got our corn, but from countries that had a superabundance—from America and Russia for example. And not only did this do away with the argument, but it told the other way. Undoubtedly there was distress in other places as well as in England. America was able to get a higher price for her corn than if there was no deficiency in the harvest in other parts of the world, and she was therefore better able to buy our manufactures than she would be under ordinary circumstances. Therefore he would say that the argument that we could not now judge of the effect of the free-trade measure was not founded upon truth, and would not bear scrutiny. He thought his noble Friend the Member for Lynn had acted fairly and honestly when he exposed the fallacy, that if you took care of your imports your exports would take care of themselves. He believed the noble Lord was right, and that he had pointed out the true policy in calling upon them to protect our own industry and our own people, and to extend, as contradistinguished to the foreign trade, our colonial trade. When we imported corn or other articles from our colonies, they were willing to take our manufactures in return; but if we went to America, Russia, France, or Prussia, they would not do so. The truth of what the noble Lord said, was now being exemplified; and whatever eloquence might be opposed to it, truth would make its way. He did not know how long we might go on worshipping this idol of free trade which we had set up—he knew not how long our affections might thwart our judgment— how long, like the moth, we might flutter round the candle, and when our wings were burned, offer up our bodies also as a sacrifice. But what he had to say was this— that if they would pass measures causing the exportation of gold and ruinous to our artisans, it was impossible to refuse to give some other circulating medium, instead of the exported gold, in order to al- low our manufacturers and our countrymen generally to employ their capital upon the remnant of the trade left them, or on any other occupations, if they were lucky enough to find them, in which they might employ their capital. Before he sat down, he would venture to express a hope that Her Majesty's Government would not rest contented with merely satisfying and relieving their own necessities, which they could only do at the expense of their country, but that they would listen to the prayers of a vast majority of the intelligent, thinking, and industrious classes of this country, that they would allow them the means of carrying on their business, and employing their workpeople by taking away the restrictive character of the Act of 1844, and by extending the currency.

The CHANCELLOR OF THE EXCHEQUER

Mr. Speaker, I certainly thought that the debate which has just been commenced by the noble Lord, was to have been a continuation of the debate which took place on Monday night, and that it was to be confined principally to the monetary condition of the country, and to the question whether the House was of opinion that the principle of the Act of 1844 should or should not be adhered to. But, although it is true that the noble Lord, at the beginning and at the end of his speech, has uttered a sentence or two with reference to that subject, the greater part of his speech has been directed against the general measures of free trade, and has referred to the reduction of duties upon the importation of foreign goods, the consequent injury to the English manufacturers, and the drain of gold which he attributes to the importation of foreign manufactures, and not to that of corn and flour. The noble Lord, however, seems to forget for how long a period previously to last August measures of free trade of an extensive character have been in operation, and the very large importations of foreign goods which have taken place for two or three years past; and he seems to forget that up to last August, when the necessity of importing corn was for the first time felt, there was, nevertheless, an unexampled flow of gold into this country. I do not think the noble Lord is very correct in his statements with reference to what has occurred within the last eight months; but certainly he is entirely mistaken as to the events of preceding years. The noble Lord has referred to the misfortunes which might be entailed upon this country by rendering it dependent upon foreign countries for a supply of food. Now, I would ask whether the noble Lord means to say that the supply of food produced in this country has been diminished by the operation of the Act of last year? The noble Lord cannot make such a statement. There has, then, been no diminution of home supply in consequence of our being dependent upon foreign countries; and I should like to ask the noble Lord what situation a great part of the population of this country would have been in at this moment if they had not received from foreign countries, and especially from America, those enormous supplies of food which have kept a large proportion of the people from starving? The noble Lord has quoted some extracts from the speech of a noble relative of his at Sheffield. I confess, I cannot discover what that speech has to do with this question; but I consider that the advice given in that speech to the people of America, was remarkably sound; and I hope they will follow it. I hope that the people of America will cut down their forests and plough up their prairies, and in their place cultivate extensively grain of various kinds by which the people of this country may in future years be plentifully fed. I will not follow the noble Lord opposite in his arguments on the subject of free trade, for I think we have to deal with a subject quite large enough in considering the monetary condition of the country and the state of the currency. With regard to the measures which I have proposed to the House, it is a great satisfaction to me to find that they have met with the universal concurrence of every hon. Gentleman who has spoken on the subject. I may, however, be permitted to refer to some of those topics which were mentioned on a former night, because, in the position which I hold, I consider it essentially necessary that I should state my views on a question of this nature. An hon. Gentleman opposite, the Member for the city of London (Mr. Masterman), has invited me to give an assurance that, under no circumstances, will I ask from the banking department of the Bank of England any deficiency bills in the next July quarter. That is an assurance which I shall certainly not be so indiscreet as to give; but I think the hon. Gentleman may be well satisfied that it is my intention, if possible, to avoid that necessity, for I believe I have taken those measures which, in the unanimous opinion of all who have spoken on the subject, are best calculated to obviate that necessity; and, from the experience of the last week, I hope that the course taken by the Government has also, to a considerable extent, been attended with beneficial effects as regards the state of the money market, which is now comparatively easy. The noble Lord the Member for Lynn (Lord G. Bentinck) has stated that the question upon which the country is most interested is, as to the principle upon which the currency is to be conducted—the maintenance or non-maintenance of the Act of 1844. The right hon. Baronet opposite (Sir R. Peel), who introduced the Act of 1844, has stated most fairly that no affection for his own offspring, as it is termed, should induce him to abstain from candidly considering the subject, if the Government deemed it necessary to call upon the House to revise that Act. I have not the slightest doubt that the right hon. Baronet would fairly act up to that declaration. If the Government considered it advisable to revise the Act of 1844, they would bring the question before the House. But, as I declared on two former occasions, such is not the opinion of the Government. [Sir R. PEEL: Hear, hear!] This is a question in which party spirit never has entered, and I trust never will enter. It is far too important a subject to be made a mere matter of party discussion; and I gave my unhesitating support to the Bill of the right hon. Baronet (Sir R. Peel), although I was not a supporter of the right hon. Gentleman's Government, because, on the best inquiry I could make, and the best consideration I could give to the subject, I had arrived at a deep-seated conviction that the measure of 1844 carried out the sound principles upon which our currency ought to be regulated. I was the chairman of a Committee which had been appointed with reference to the subject, and before which many most able men, well conversant with the question, were examined. I entered that Committee without any great bias, but with an anxious desire to ascertain the truth as far as I could; I left the Committee with the conviction that the principles which were subsequently carried out by the right hon. Baronet's Bill were the sound principles for the regulation of our circulation; and I do not hesitate to say that the opinion which I then formed, remains unshaken at the present moment. [Sir R. PEEL: Hear, hear!] I must say that I am more and more convinced by the discussions which have taken place on this subject of the policy and expediency of maintaining that Act. Nothing can be more remarkable than the extraordinary discrepancy of opinion which prevails among those hon. Gentlemen who have spoken and who have impugned the Act of 1844. The noble Lord opposite proposed simply to repeal that Act, and the hon. Member for Shrewsbury (Mr. Disraeli) took the same view; but a great authority on the subject, the hon. Member for Birmingham (Mr. Muntz), said very truly that the measure of 1844 was indispensably necessary for efficiently carrying out the measure of 1819. To satisfy that hon. Gentleman, therefore, we should have to repeal not only the Act of 1844, but the Act of 1819. But the hon. Member for Birmingham who sat opposite (Mr. Spooner), was not satisfied with the state of the law as it existed before 1819. We should have to go back then to the law as it stood before 1797; but before that period the standard was precisely what it is now—a gold standard with the Mint price at 3l. 17s. 10½d. for the ounce. The hon. Member for North Warwickshire seems to think that there had been a silver standard at that time; but, in point of fact, it was not so, owing during the greater part of last century to the value at which silver was at that time rated by the Mint; and when towards the close of last century it became advantageous to bring silver to the Mint to be coined, the Legislature interfered to prevent it. The result is, that for the last 150 years we have never practically had silver as a standard. In matters of this kind there is nothing so essential as certainty; and I must remind the hon. Member for Birmingham that we have not yet heard from him what he means by a pound. I believe that it will be admitted by all sensible men, that nothing would be so foolish as to repeal the present law, unless we are prepared to state what we would substitute for it. When those Gentlemen who recommend that course, have come to an agreement among themselves, and shall make any definite proposition to the House, we may, perhaps, discuss the question with advantage; but I think it would be little short of sheer folly to disturb the present law with no clear and certain alternative to be adopted in its place. One other proposition has been made, and that is, for the establishment of free trade in banking. I think that, to show the danger of adopting such a system, I need only refer to the example of America. Free trade in banking, that is to say, an unlimited competition of issue, had been established in that country, accompanied by every guard which the ingenuity of the American people could impose upon the administration of the banks, save and except that of insuring a practical convertibility into coin; but in 1837, the experiment ended in an universal suspension of cash payments, and in very general bankruptcy from one end of the union to the other. The hon. Member for Rutlandshire had talked of some scheme for properly limiting the issues; but, until some practical plan is submitted to us, I can form no opinion of its efficiency; and, for my own part, I can conceive none that would answer the necessary object, except some law which limits the issue of paper with reference to the quantity of the precious metals. With respect to the attacks made on the Act of 1844, I do not think that those who have impugned that Act have treated those who promoted it quite fairly; because they have put their own anticipations of what they expected from it into the mouths of the promoters of the measure, and when they find that their own expectations have not been realized, they turn round and complain of having had delusive hopes held out to them. No stronger instance of this can well be conceived than that which has been stated both in and out of the House, and which has been repeated by the hon. Member for Montrose, that expectations were held out that after the passing of the Act of 1844, the Government was never to have recourse again to the issue of deficiency bills. Since the debate on Monday, I have referred to both the speeches made on the occasion of that Act by the right hon. Baronet the Member for Tamworth, the authorized expositor of the objects of the measure, and I cannot find that a single syllable on the subject dropped from that right hon. Gentleman. I cannot find that any other person referred to that subject except myself. I do not pretend to be the expositor of the Bill, but it was my fortune, from circumstances, to take a somewhat prominent part in that debate in 1844. I find that I was the only person who, speaking on that occasion, referred to the subject of deficiency bills; and I then said what I referred to on Monday night, namely, that under the operation of the Bill, the Bank of England might, without difficulty, and with advantage to the public, continue its former practice of making advances to the Government out of its means as a banking establishment. If this were, as I believe it to have been, the only observation made on the point at that time, it is hardly fair in those who impugn the Act to turn round on those who promoted it, and accuse them of holding out expectations directly the reverse of their expressed anticipations. I never was more surprised at anything than at the charge made against me by the hon. Member for Huntingdon on Monday night, namely, that I had been guilty of some concealment in not mentioning my probable want of advances from the Bank upon deficiency bills for the April quarter; because, if I hold a strong opinion upon one point more than another, it is on not only the inutility but the absurdity of concealment. I think that there is nothing-more wise than the most open and frank dealing in all matters of this kind; and if I had been asked the question, I should not have had the slightest hesitation in telling the contractors what my probable demand for deficiency bills was likely to be. I communicated to the Bank, I believe in the month of January, that I should probably require about the usual amount of deficiency bills for the next payment of dividends, and I should not have had the slightest hesitation in saying as much to the contractors if they had asked me. If they were deceived, they were deceived by themselves, because, in every quarter since the passing of the Bill, with the exception of one, there has been an issue of deficiency bills; and if they were so shortsighted as to conclude, from one instance, that there never would be deficiency bills again, when in every preceding quarter but that one there had been deficiency bills, I cannot blame myself for having deceived them. In the course which I adopted, my object was to disturb as little as possible the ordinary course of monetary transactions. That a loan always does more or less disturb those operations, is undoubtedly true; but I made the amount of the loan as much and no more than I thought I should want for the, demands of Ireland up to the harvest. I arranged also the instalments of that loan as equally as I could over the time, in order that it might be paid up with as little pressure and disturbance of monetary operations as possible; and I never intended that any mode of payment should be adopted which should, in any way that could be avoided, interfere with what would have taken place if the loan had not been made. Now, what were the two requests made to me by the contractors which I did not accede to? One was, that the instalments should be spread over a larger space of time; and the other, that they should be allowed to pay up their instalments on discount. As far as the public was concerned, the probable effects of the two propositions were contradictory. If the contractors were not to pay a part of their money until after the period which I named to them, I should not get my money when I wanted it; and if they were to pay up on discount, with a longer period for the payment of the loan, it might be necessary for me to pay a larger amount in discount on account of the longer time allowed for payment of the instalments. This was the only possible effect of the two propositions taken together. The proposition of a longer period for the payment of the instalments was, so far as the interests of the public are concerned, totally inconsistent with a concession to enable the contractors to pay up on discount. I did not at that time consent to the allowance of discount, because it was not necessary for me to have the money so promptly, and I felt that the payment of a large sum of money in that way might have some effect in deranging the money market. Circumstances have, however, changed, and I have adopted the course which has been explained to the House, of giving inducements for the paying up of the instalments, by allowing discount, in order that the balances may be increased for the July quarter. The noble Lord seems to think it perfectly certain that the amount of the pressure could have been foreseen. I, as well as others, had foreseen long ago that there must be a large importation of corn, which would cause a drain of gold from the country, and that always causes a pressure. Nevertheless, even so late as February or March, no one anticipated the severity of the pressure which has since taken place, arising, I believe, in no inconsiderable degree from the alarm which was excited in the mind of the public by their observing, in the published accounts of the Bank of England, the small amount of notes in reserve which appeared on the 17th April. This again has been attributed to the existence of deficiency bills; but a moment's consideration must show hon. Gentlemen, that whether the sums paid to the receivers of dividends are provided out of balances in the hands of the Bank to the credit of Government, or out of advances made on deficiency bills, precisely the same amount of notes must be paid out of the Bank, and the existence or non-existence of deficiency bills makes no difference whatever in the amount either of the notes with the public or of those in reserve. Hon. Gentlemen have also taken a most exaggerated view of the effect which deficiency bills produce on the accommodation to the public, afforded in the way of discounts or advances on private securities. If the Bank has Government balances in its hands, it is not to be supposed that they will remain in the shape of bank notes in the till of the Bank; of course they will be invested in some kind of securities; and when the time for payment of the dividends arrives, those securities must be realized to a certain extent, in order to enable the Bank to pay the dividends. If it so happens that the balances have been employed in discounting bills, then the accommodation thus afforded to the public by means of the money of the Government must be curtailed for the short period during which the creditor of the Government is receiving the money due to him every quarter. Take the last quarter for example. I had apprized the Bank early in the quarter of the probable amount of deficiency bills for April; and in January and February they sold public securities with the view of being prepared for this demand; but towards the end of the quarter, they applied the money so procured in discounting bills. But they might have done precisely the same thing with an accumulation of Government balances; and if they had done so, then the same result would have followed, and when quarter-day came, the accommodation thus afforded to the bill brokers must, to exactly the same extent, have been withdrawn for the time. If the Bank has a large reserve, the existence of deficiency bills produces no effect; and if the Bank does not keep an adequate reserve, then the Government balances do not obviate the necessity of withdrawing for a short time, during payment of the dividends, a part of the accommodation previously afforded on private securities. I think, therefore, that to attribute the whole of the pressure in the beginning of April to the existence of deficiency bills, is to take a most exaggerated view of the state of things. I will now state to the House what, on former occasions of pressure, has been the amount of deficiency bills, and the amount of accommodation afforded to the public chiefly in the way of the discount of bills. The amount of private securities does not correctly indicate the bills discounted; but in all probability the difference in the amounts in the different years is mainly in the amount of bills under discount at the respective periods. Comparing the last two periods of pressure, both of which happened to be coincident with the payment of the dividends, it will be seen that a very much larger amount of deficiency bills was issued by the Government, and, at the same time, a smaller amount of accommodation given to the public than during the present pressure; and yet I never heard then the extreme outcry which is now raised against deficiency bills. I will observe, that the amount of circulation at the two former periods included the Bank Post Bills, and does not do so for 1847; so that I am entitled to deduct about 1,000,000l. from the amount of circulation which I shall quote, both for 1837 and 1839. I will read a return showing the amount of circulation, deficiency bills, &c, at the several periods referred to:—

Date.	Circulation.	Deficiency Bills.	Private Securities.
1837.	£.	£.	£.
January 10	18,776,000	4,800,000	17,900,000
January 17	19,033,000	4,380,000	17,000,000
1839.
October 15	17,646,000	4,376,000	13,100,000
October 22	17,716,000	4,211,000	12,100,000
1847.
April 10.	20,403,000	2,475,000	18,136,000
April 17.	20,242,000	1,315,000	17,111,000

Comparing 1839 with 1847, it will be seen that the circulation was about 3,000,000l. higher at the latter period, while the deficiency bills were from 1,900,000l. to 2,900,000l. less, and the private securities about 5,000,000l. more. To suppose, then, that owing to the amount of deficiency bills in April, which is so small as compared with the amount in previous times of similar difficulty, the private accommodation was very much reduced, is to attribute a great effect to a very inadequate cause. Some hon. Gentlemen who have come forward as the self-constituted defenders of the Bank of England, have put into the mouth of the advocates of the Act of 1844 charges against the Bank of England which they never made. We have been charged with blaming the directors of the Bank for lowering the rate of interest in August. The hon. Member for Huntingdon himself blamed the Bank for doing so. The right hon. Member for Tamworth has disclaimed having referred to this point; neither have I said a word on the subject. The hon. Member for Huntingdon also imputes to me that I blamed the Bank for not raising the rate of interest earlier in the last quarter. I have said nothing on this question. With respect to the directors of the Bank of England, I believe that they have used their best exertions to promote the interests of the country; and nothing is further from my wish than to impute blame to them, or to speak otherwise than respectfully of those gentlemen. Still, I am not to be debarred from expressing my opinion on their conduct, if the public interests seem to me to require that I should do so. What I did say, was in answer to a position assumed by the noble Lord the Member for Lynn (Lord G. Bentinck), who, late one night, asked me what was to be done in consequence of the contraction of the circulation produced by the Bank acting in compliance with the principle of the Act of 1844; to which I answered, that there was no such contraction of the circulation. That is a matter of fact beyond dispute, for the returns show that the amount of notes with the public wore very nearly as high in April as in August last, although the bullion in the Bank had been diminished to the extent of nearly 7,000,000l. It is clear, therefore, that the Bank had not acted in accordance with what the noble Lord assumed to be the principle of the Act of 1844, namely, reducing the notes with the public in proportion to the drain of bullion. Indeed, the hon. Member for Shrewsbury (Mr. Disraeli) demonstrated most clearly, in the comparison which he made of the drains of 1836 and 1839 with that of the last eight months, that for a certain time the same course had been pursued in all, namely, that the usual accommodation had been afforded for a considerable period of the drain, and then had been suddenly checked. The hon. Gentleman might not be very correct in his figures, but I do not wish to stop to dispute them, for I am not arguing merely for the sake of answering an opponent. The hon. Member is perfectly right in saying, that the amount of note circulation might have been higher than it in fact was at the commencement of the drains in 1836 and 1839, if the Act of 1844 had been in force. This, however, would not have been the case for any long time, either in 1836 or 1839, from the circumstance of the bullion in the Bank being lower in amount in both those years at the commencement of the drain, than it was in August last. I admit, therefore, that for a certain time, even the Act of 1844, if it had been in force at that time, might not necessarily have produced so early a contraction of the notes with the public as was desirable; and the hon. Gentleman has shown, that in 1847 the drain of bullion has not produced a corresponding contraction of the notes with the public, or what is commonly called the circulation, up to the month of April. But the noble Lord and the hon. Gentleman cannot have the benefit of the argument in both ways; it is not competent for them, taking a prominent position in impugning the Act of 1844, to advance diametrically opposite assertions, and the one to find fault with the Act because it produced a contraction, while the other argues that it did no such thing. The argument used by those who advocated the Act of 1844, was not that it would necessarily produce the effect, but that its tendency would be to produce the effect which they held to be essential, in order to prevent the severity of the pressure which always has followed a drain of gold namely, an early, gradual, and steady pressure from the commencement of the drain. But the truth is, that in this case, as in former instances, the pressure came after the usual accommodation had been extended for a longer period than it ought to have been, and that the screw was put on, as it is termed, not only severely, but suddenly. I believe that in this year the pressure would have been less severe, if it had been more gradual; and this is not my own opinion only, but one of the largest bill brokers in the city said to me, that they could have borne this, and even greater pressure, if it had come upon them more gradually. The difference, however, between this and former cases is most important, and it is this—that the pressure, though severe, was brought on when the amount of bullion in the Bank was large, and when there was no fear of insolvency or doubt of the convertibility of the notes. The pressure for gold in the most critical period of the year 1825 was not from abroad; for the exchanges were in our favour: the main demand for gold then was stated by Mr. Horsley Palmer, in his evidence before the Bank Committee of 1832, to have been owing to the discredit of country paper. In December, 1825, a large bundle of 1l. Bank of England notes was sent down to Norwich, and the tender of them by the country banks there immediately checked the run in that part of the country. There is no analogy between that case and the present; we are now protected from the danger which arose in 1825. The hon. Member for Huntingdon has borne the most decisive testimony to the beneficial effect of the Act of 1844 on the country circulation; and he attributes to it the safety from much over speculation to which in the last two years we probably should have been exposed but for its operation. The present drain is not an internal drain from discredit of the paper, but entirely for foreign export; and this can only be met by actually sending gold out of the country. I need not repeat, that the risks we have run in former years, and the experience of the United States, abundantly prove, that unless a drain of gold for foreign export is accompanied by a contraction of the paper circulation, there is no security for the convertibility of the paper. The truth, however, is, that the apparent defect in the working of the Act of 1844, in this respect, is owing to a misconception of the effect which it was professed that its provisions would accomplish. No little confusion has occurred in the minds of many Gentlemen, from the difficulty of separating the two departments of the Bank from one another in considering this subject. I expressed my regret in 1844, and the right hon. Baronet, the other night, almost concurred in this view, that the function of issuing notes had not been entirely separated from the Bank of England. I admit that, at the time, there were strong practical objections to doing so; but I am afraid that so long as the two departments of issue and banking remain within the walls of the same establishment, Gentlemen will not, even in their own minds, make that complete separation which in fact exists between the issuing functions of the Bank, and what is properly its pure banking business. If the issue of notes was made by the Mint, or a department of the Treasury, this confusion would be avoided; and it would be seen that the notes issued by such a department, and which would be returned as circulation, would increase or diminish with the increase or diminution of bullion in that department. All that the Act of 1844 proposed to accomplish in this respect, was to make the paper vary as a purely metallic circulation would do; and if all that has taken place in 1846–7 might, and in the same circumstances probably would, have taken place with a purely metallic circula- tion, then the Act of 1844 has, during that period, accomplished all that could be expected of it. Now, the same circumstances which have taken place in the last two or three years, might equally have occurred with a purely metallic circulation; with a free Mint, to which everybody might carry bullion to be coined, and when everybody might melt or export the coin. What, in such circumstances, determines the amount of coin? It is the amount of capital which, in the shape of precious metals, each individual, or rather the aggregate of individuals, chooses to divert from profitable employment in trade, in order to have it in the shape of coin, for the purpose of facilitating their ordinary transactions. Now, it is evident that in 1845 and 1846 there was a larger amount of bullion in this country than was required for the purposes of trade; for an immense quantity was accumulated in the cellars of the Bank of England, having been carried to the Bank, and exchanged for bank notes. The same quantity would, under a purely metallic currency, have been carried to the Mint to be coined. I do not mean to say that this would have been so to quite the same extent, for the facility of demanding paper for gold and gold for paper is greater than that of coining gold and melting coin; but, nevertheless, this would, to something like the same extent, have been the effect of the great influx of gold. There would, then, have been nearly the same quantity of coin struck at the Mint, under these circumstances, as there actually was under existing circumstances of bank notes demanded of the Bank in exchange for gold. What then would have become of this quantity of coin? The quantity of the notes obtained by carrying gold to the Bank was larger than was required, in point of fact, by the wants of the public for their ordinary purposes. It is equally evident, then, that there would have been, in this case, more coin in existence than was required for the purposes of circulation; and it must therefore, according to the ordinary mode of carrying on business, have accumulated in the tills of bankers, probably to a large amount in that of the largest establishment of the kind; that is, the Bank of England. No doubt it would not have been made evident to the eyes of the public in the same way, for there might have been no returns of bankers' reserves; but I think there can be no reason for doubting that such would have been the course of things. It is equally evident, that if such had been the case, the drain since August might have been met by a diminution of the gold in the reserves of the bankers, and that the quantity which was passing from hand to hand with the public (which is now represented by the notes with the public) might have remained undiminished up to the present time. Everything, therefore, which for the last eight months has taken place under the Act of 1844 might equally have taken place under a purely metallic circulation; and it is therefore beyond dispute that the Act of 1844 has not failed in accomplishing that which in this respect it was calculated and intended to effect, that is, to make the paper circulation vary as a metallic currency would do. But this was always stated with other matters to be a secondary object of the Act—the main and primary object of which was to maintain at all times the practical convertibility of the bank note, and the complete identity of the pound in paper or in coin, with the standard pound of 123 grains of standard gold. The noble Lord has fallen into an extraordinary mistake as to the meaning of convertibility. He seems to think that there is no convertibility so long as 14,000,000l. of notes are issued on security. But this is not what convertibility means. The meaning of the convertibility of the paper circulation is, that at all times we should be able to obtain a sovereign for a note. It is quite an error to suppose convertibility to mean that, whatever amount of notes there are, there should be the same amount of gold. In that case there would be little or no advantage in a paper circulation. But by means of the Act of 1844, grafted on that of 1819, we have an indefeasible security for the practical convertibility of paper into a coin of a certain standard, and for the maintenance of that standard as invariable as the nature of things will admit. I shall be glad to hear from the hon. Member for Birmingham, when he tells us what his pound is, how he proposes to keep it invariable in value. Every witness examined in 1840 and 1841, whatever view they took of the currency, attributed the utmost importance to doing this, even though they failed in showing how it was to be effected. The hon. Member for Warwickshire, however, differed in one respect from the hon. Member for Birmingham. The latter declined defining the pound. The Member for North Warwickshire told us what a pound was; he said a pound was "a certain definite quantity of gold," but he differed as to the amount of gold at which the standard pound ought to have been fixed. I know what is meant by this standard, but I am at a loss to understand what is the meaning of the hon. Member for Birmingham (Mr. Spooner). My hon. Friend the Member for North Warwickshire has given it as his opinion that the Act of 1819 established the standard; he agreed that it was right to have established a pound of a given definite quantity of precious metal; but he would have had this quantity less than was fixed by the Act of that year. The Act of 1819 established that there should be 123 grains of gold in the pound. The hon. Member for North Warwickshire would not have had so many. But the Act of 1819 did not create the standard. It only established by law what had been established in fact two years before. The faith of Parliament was pledged to restore the old standard at the peace; and in point of fact, in 1817, two years before, the old standard was practically restored. The Bank of England, as the hon. Member for Birmingham would find, had paid, in the year 1817, according to the old standard. Mr. Tooke, a high authority on these subjects, stated that the Bank might have bought gold at 3l. 17s. l0½d. for the ounce, and that it was only the price they fixed that kept it above that amount; and they paid, in that year, a considerable amount of gold for their notes. To have established in 1819 that the standard should be 100, or any less number than 123 grains of gold to the pound, as suggested by the hon. Member for North Warwickshire, would have been no cure whatever, no remedy, and no safeguard against the present state of things and the pressure caused by a drain of gold for export in exchange for the commodities of other countries. The hon. Member took for granted that a pound would always be a pound; and if the standard had been fixed at 100 grains instead of 123 grains, he supposed that, as a coin representing a pound's worth, the pound, containing this smaller quantity of gold, would still serve all commercial purposes. It seems to me, however, that the merchants on the other side of the Atlantic were a great deal too acute to take a pound, whatever might be its value as bullion, for a pound of the old standard; and I apprehend, that in exchange for their commodities, cotton, or corn, or whatever else they might be, they would always demand, when they trafficked for a pound, that such a coin should be of the standard of 123 grains. They would require precisely as much gold in exchange for a bale of cotton as they do now, whether it was called the same number of pounds as now or not. Then, if my hon. Friend admits this, the inevitable consequence is, that the same quantity of gold will go out of the country, whatever the pound is called. Supposing, to make the matter more simple, that a half sovereign were called a pound; instead of 7,000,000 pounds which had gone now—7,000,000 times 123 grains, or 14,000,000 pounds, according to the altered denomination, would have gone—or, in other words, precisely the same number of grains or weight of gold would have gone out of the country. And therefore, really, when the hon. Gentleman argues that it would have been possible to prevent that drain of gold under which we have been suffering, merely by calling another quantity of gold, some quantity less than 123 grains, a pound, he is substituting shadow for substance, and imagining that by varying a name he can alter the reality. Gold is of no value as coin in the exchange of commodities with foreign nations. Its only value in that respect is as an article of trade, and its value, therefore, in our trade with America must be estimated not as a coin but as a commodity. There is not the least doubt that if a less quantity of gold had been put into a pound in 1819, debtors in that year would have paid their debts with much more facility. That would be the case so far as concerned all debts contracted previous to 1819; but there would be no difference as to debts contracted subsequently, if the standard remained the same, for they would be measured both at the time when they were contracted, and when they were paid, by the same standard. If now the standard was to be altered, and if a debt contracted when a pound was valued at 123 grains was to be paid when a pound had decreased in value and represented only 100 grains, it is perfectly obvious that we should be doing neither more nor less than cheating our creditors. I have gone, I am afraid, into this question at much greater length than I had intended; but it is a subject in which I have always taken the greatest interest, and on which I think it very important that the objects to be attained by the Acts hitherto passed for regulating the currency of the country should not be misunderstood. The principles of the currency are indeed the subject which hon. Gentlemen, who entered into this debate, principally intended to bring into question in the present discussion, and I have attempted to express my own views on the different points which have been raised. I will now advert shortly to the present state of the country, and the causes which, in my opinion, contribute to produce that state, which no one more sincerely laments than myself. Dissatisfaction has been expressed that I have not before adverted more particularly to these circumstances; but hitherto I have not thought that it was my duty to go at any length into this subject. I have already stated most distinctly that I do not think the pressure which pervades the country generally is of a character for which anything can be done by the Government. I have adverted to the pressure on the money market; I have pointed out what I believe to be the immediate causes of the difficulty; and I have stated, at the same time, on the part of the Government, what are the measures which would be introduced with a view to alleviating that pressure. I have since shown that those measures have been attended, in a great degree, with the beneficial effect which had been anticipated from them; but I have always declared that the general pressure which extends over the country is one beyond the means of a Government to alleviate; and I have invariably expressed an opinion that any legislation, professing to interfere in such circumstances, is empirical and unsafe. The Government has not been prepared to grant the only assistance which they have been pressed to give; for, although suggestions were made by various parties in many shapes, they all came to this when the proposals were fairly sifted—that Government should repeal or relax the Act of 1844. That is the only practical course which has been urged on the Government; and I have stated from the first, as I state now, that we are not prepared to take such a step. I find, however, that, not in this House but elsewhere, Government has been accused of want of decision and want of firmness on that point. Why, the very first time that the subject was mentioned by me, and that the suggestion to which I refer was made, I stated, distinctly, that the present pressure was owing, not to the Act of 1844, but to the neglect of the real principles of that Act. I afterwards, on the next occasion on which I had to express an opinion, most clearly declared that the Government was not prepared to adopt the measure then urged. And I certainly should be surprised if any Gentleman, with whom I have had interviews on this subject, should say that he had left me under the impression that the Government was about to repeal or to relax the Banking Act. My conviction is, as I have said before, that the general pressure was not caused by that Act, and that the repeal of the Act would not in any degree tend to afford relief under present circumstances. Now, the question has been raised and has been gone into by several hon. Gentlemen, as to the causes of the present distress of the country; and I will, therefore, briefly lay before the House the conclusions to which I have come as regards this most important point. I entirely concur with the noble Lord, that one of these causes is to be found in the present high price of one staple article of manufacture, viz., cotton; and that this high price of cotton is the result, not so much of the abundance of money, as of the deficient supply of the article. The noble Lord has stated truly that this high price has entailed great suffering on our manufacturing population, inasmuch as the master manufacturers have been under the necessity of diminishing the number of hands ordinarily employed by them; but certainly the remedy recommended by the noble Lord for the mischief is the strangest that I ever heard. The remedy suggested is that the laws regulating currency should be relaxed; and this is urged, though it is acknowledged the price of all articles would be raised by doing so. Such a course could only be succeeded by a rise in general prices; and thus the noble Lord would pursue a policy which would inevitably defeat his own object, by causing a rise in the price of cotton from this cause, beyond that which it already bears, to say nothing of the effect which this would inevitably have in raising the price of corn and food. Another cause—and this is more general in its operation—the absorption of capital in railway enterprises, has been frequently dwelt upon. I have stated before, that the want of capital which is now experienced, to carry on ordinary concerns, arises in some measure from parties having money locked up in railway shares; that is to say, in a description of security which the holders cannot realize at the moment when they most need the money. Let not the House understand me as saying anything against railways; I merely call attention to this fact; and it is undeniable, that there is a large amount of capital locked up in securities which cannot be realized when a pressure in the money market renders it desirable to have money at hand; that, on such occasions, such capital cannot be made available for the purposes of the owners in their commercial or manufacturing business, in consequence of being so locked up. The best proof of the want of capital is the high rate of interest. Some hon. Gentlemen have remarked that the high rate of interest is a complete proof of a deficiency in the circulation. This is one of those mistakes which I should not have expected to be made in the House of Commons at the present day. It is perfectly notorious that a high rate of interest often exists when there is a large amount of notes in circulation, and a low rate of interest when the circulation is limited. If the history of the circulation were traced for the last few years, it would be found that a high rate of interest nearly as often coexisted with a low amount of circulation, as a low rate of interest with an extended amount of circulation. But the prevalence of a high rate of interest does prove that there is not ready and available at the time, for the purposes of those who need it, the capital which they want to borrow; and they are therefore willing to pay a high rate for the use of it; such has been the case from the commencement of this year. If there is, as I believe to be the case at present, a deficiency of capital available for the purposes of meeting the wants of the merchants for carrying on their trade, and of the manufacturers for the production of their goods, and also for meeting the calls on railroad shares, from too much of the floating capital of the country having been already invested in those undertakings, or advanced on railroad debentures, the House may be assured that the deficiency will not be supplied by an issue either of 5l. notes or of 1l. notes. They constitute circulation, not capital. It is capital, and not circulation, which is required, and capital is not created merely by an issue of paper. The main and prominent cause of the pressure, however, is the want of food. That is an indisputable fact; and when it is considered what quantities of food have been imported in the course of the last twelve months, to say that the pressure is not properly attributable to such a cause, does seem the most extraordinary delusion under which a noble Lord or an hon. Gentleman could labour. The noble Lord talked of the importation of foreign clocks and other articles which form a comparatively insignificant part of the trade of the country, and kept in the background the immense importations of food. The loss from the failure of the potato crop in Ireland has been estimated at 16,000,000l.; but that is far below the mark; for, besides the failure of the potato crop in that country, there has been a considerable deficiency in the crops of barley and oats. Nor was the failure of the crops confined to Ireland; potatoes have failed to a great extent in England and Scotland. So have the oat, barley, and bean crops; and I am afraid that the produce even of the wheat crop, when thrashed out, has not equalled the expectations which were entertained at the time of harvest; and the deficiency of the other ordinary articles of food must have caused a larger consumption than usual of wheat. The quantity of corn, therefore, which it was necessary to import into this kingdom, could not but be very considerable. The quantity actually imported does exceed all the calculations made by the most sanguine. But it must also be borne in mind, that not only have large quantities of grain been imported, but the prices have been very considerably enhanced by the competition of other countries. France, Portugal, Prussia, the German States on the Rhine, are all competitors for supplies of grain for food. Though in most cases this country has been first in the market, and has obtained by far the largest supplies, yet it must pay in proportion to the largeness of those supplies. Then the question arises, how is the price to be paid? It is for a time paid in gold. But it must ultimately be paid in goods, as even the hon. Member for Huntingdon admits—in the manufactured produce of the country; because every country must pay for what it obtains with its own produce. There has been hitherto payment, to a considerable amount, in gold; but there are favourable signs as to the prospect of demand for our goods, and I hope that the period of paying in our own manufactures, instead of in gold, is at hand. The exchanges are turning in favour of this country. Every packet from America brings accounts of improved quotations. By the last packet, intelligence has been received that the exchange had risen from 106½ to 107. At this rate it is not worth while to send gold to America. Sooner or later, I repeat, payment must be made for the supplies of grain received in this country in its own manufactures. If that which is the commencement of the real payment is postponed, matters will only be made worse. The sooner the real payment begins the better; for then the pressure on our own resources will be lessened. It is stated that there are no large stocks of goods in this country. So much the better for the men who are employed in manufacturing goods. If large orders, as I am informed, are arriving from America, the time may not be so distant when the aspect of matters will be changed. The noble Lord talked of the men working short time. I hope this will not long be the case, and that employment will become more general. I shall indeed be sorry, if the Bill of the hon. Member for Oldham passes into a law, that the power of producing goods should be diminished precisely at the time when it is most desirable to increase our means of payment in manufactured articles. Although, however, there are these symptoms of improvement, I should not think myself justified if I said that I did not expect that we shall have hard times to go through. I should feel myself as little justified in encouraging sanguine hopes as in exciting gloomy anticipations. It is impossible that so great a visitation as has overtaken the country can occur without bringing privation upon all. I have not so little confidence in the energy and stubborn perseverance of Englishmen as to apprehend that they will be subdued and overborne. It is our duty to bear with resignation the visitation which has been inflicted on us. We must do our utmost to alleviate the distress of those who are most exposed to suffering; and above all, we must beware of doing anything which might endanger the prospect of a certain supply of food. The noble Lord indicated an opinion that we ought to prevent our corn from being exported. So fatal a mistake as that of prohibiting the export of grain could not be committed. So long as those who send corn to this country are allowed freely to export it, England will be the depôt of corn for the whole Continent; and grain will be exported from it, or not, according to the state of prices in different countries. But this great advantage we gain to ourselves by this conduct, that we ensure the possession of the supplies in our warehouses, at our own door, and can avail ourselves of them to a certainty on paying the price which can be obtained in the general market. If any prohibition is imposed upon exports of grain, corn will go elsewhere; it will not be accumulated here, and we should lose the advantage of having it in the country to meet our wants when necessary. Other expedients have been suggested for the purpose of affording relief in the present state of the country, to which, however, I will not refer at this late hour of the night. The one great expedient at which hon. Gentlemen have pointed in this debate, is the alteration of the currency. I believe that we could do nothing so unfortunate as to take a step which would, in my opinion, tend to aggravate the pressure on all classes of the community. If we were to begin tampering with the currency, we should add to the causes of pressure already existing an element of uncertainty which would affect all mercantile arrangements, and which would produce the still worse effect of raising the price of food and of other articles of consumption. If we were by such a measure to alter the value of every. article in the United Kingdom, disturb the prices of goods and the wages of labour, and derange commercial transactions of every sort and kind from one end of the country to the other; if we voluntarily and deliberately add this element of confusion and distraction to all that press upon us already, we should voluntarily and deliberately increase an amount of distress and of difficulty already existing, of which it is not easy to calculate the magnitude, and which it may require all our patience to bear, and all our exertions even to mitigate.

MR. HENLEY

thought the right hon. Baronet had followed the example and acted on the tactics of the right hon. Baronet on that side of the House. He had led them away from the main question, from the beginning to the end of his speech, and had brought into the discussion the value of the standard of 1819, and the question of tampering with the currency—a plan that had been too successfully employed in every discussion of this kind; in the same way, fishermen muddled the water, that the fish might not see what they were doing. He did not understand any alteration of the currency except paying 15s. in the pound instead of 20s. If it came to that, they had better do it openly; but it had not come to that, and he felt no wish of the sort. He must say, that on this occasion the right hon. Gentleman, as well as other hon. Gentlemen, had singularly evaded the one question the country wanted to have solved. Everybody admitted there was a great demand for money in consequence of the construction of railroads and the high price of food. The noble Lord (Lord G. Bentinck) had expressly stated the failure of the supply of food as the great cause of the pressure; though he was stated by the right hon. Gentleman to have attributed it to other causes, the noble Lord only named other causes as being added to the great one, and aggravating the pressure. But men were asking themselves this—with trade admitted to be in a healthy state, with no speculative purchases, with the prices of food natural—for, though high, they were raised by the scarcity of produce—why was it, with 9,000,000l. of gold in the Bank, business was strangled, and could not move? That was the question every one was asking, and no one who had yet spoken had attempted to answer it. The right hon. Gentleman on a former occasion said the Bill of 1844 had nothing to do with it; he denied having ever said anything against the Bank; but in his speech that night he had nearly repeated his former statement. Then he wished the House not to confound the banking department of the Bank of England with the issue department; he wished they were separated, and then there would be no confusion about them. He (Mr. Henley) thought there was some confusion in the mind of the right hon. Gentleman on this subject, as well as in those of other hon. Gentlemen. The real question was, had the fixing a certain limit to the notes the Bank of England might issue on socialities, proved satisfactory to the trading interests of the country? They had introduced into this debate every subject that could lead the mind away from the question, the convertibility of notes, the taking gold to the Mint, and having it coined into sovereigns, which had nothing to do with the matter: the question was, what ought to be the issue on securities? It was said, the Bill had secured a convertible paper currency—on what principle? The most solvent party in the State issued 14,000,000l. on securities; but they allowed the country banks to issue 8,000,000l. on nothing. The right hon. Gentleman spoke of the run for gold in 1825; but that run was not on the Bank of England; it was on the country banks: that run was not stopped by sovereigns; it was stopped by Bank of England notes. [The CHANCELLOR of the EXCHEQUER: That is just what I said half an hour ago.] No; if he understood the right hon. Gentleman, he said the object of the Bill of 1844 was to make notes convertible into gold, and that by that Bill they had escaped the run of 1825; but, he repeated, that run was not upon the Bank of England at all: it was on the country hanks, because the public had no confidence in their notes; but they were perfectly justified as soon as they got Bank of England notes for them. A large portion of the commencement of the right hon. Gentleman's speech was occupied, not with a defence of the Bill, but a defence of himself; he said he had been censured for issuing deficiency bills, and he went at great length into the history of the transaction. He did not think the right hon. Baronet more to blame than all other Chancellors of the Exchequer; they were generally out at elbows by quarter-day; it was "a way they had," and he would say no more on the subject. But the right hon. Gentleman should not, in a delicate and insinuating manner, censure the Bank for not foreseeing what nobody foresaw. In March and February nobody suspected a pressure. Those capitalists who advanced to the right hon. Gentleman the loan, and who were quite as well informed on money matters as the Bank of England, did not foresee it, or the right hon. Gentleman would never have got it at the rate he paid for it. He would not have been so unwise as to reject the discount clauses, and now have to come down and ask for them. Another subject which had been introduced into the debate, as a sort of puzzle, was the question of circulation. What was wanted by the country was—if he might use the phrase—a sort of small change. For what was the circulation of the country? It was not the 19,000,000 or 20,000,000 of bank notes; it was the countless millions of bills. These represented the capital and property of the country; the bank notes were merely that portion of it which enabled men to exchange the other masses of capital. The question with him, and those who thought with him, was not whether the Bill of 1844 should be repealed wholesale. He believed that the evidence had fully established that the issues of the country banks wanted regulation. Now, that was part of the Bill of 1844. Men might differ whether these issues were regulated with the degree of stringency which was desirable. For his part, he thought that a kind of bribe had been offered to the existing country banks to hold their tongues, by giving them a monopoly for ten years. He put it to the House, whether it was possible in such a matter as bank notes that they could take the hard and defined limit of 14,000,000l., and say that that should be the exact quantity which the varying circumstances of the country neither more nor less should want? When it was admitted that in some cases 100,000l. more might save the country, would they say they would always adhere to it? Suppose it should please God to inflict another bad harvest upon us, was the Government prepared to maintain this Bill in all its stringency? With our granaries completely empty—with no prospect of corn for us—so far as we knew—abroad, the right hon. Baronet looked forward to terrible times if it should please God not to give us a good harvest. Were the merchants and people of this country to be told that under no such circumstances would the Bill be relaxed? No human being could predicate what the harvest might be either here or abroad. This question must be answered—were the Government to reserve the power in their hands to relax the Bill if they should see cause, or were they prepared to stand by it under all circumstances? It had been stated by merchants in that House, that at that very moment their orders for corn were suspended because they could not negotiate their bills. The question was one from which they could not escape. The Government must be prepared to look it fairly in the face. He was one of those who were anxious to pay 20s. in the pound. He recorded his vote in 1844, that it was an unwise thing to attempt to fix a definite limit to that which could not be closely defined. It was his firm and deliberate opinion, that if a second bad harvest should occur, they would be forced to break through this Bill; and if they looked back to former experience, they would find that it often happened that a bad harvest did not come singly; on the contrary, it frequently happened that there were two or three bad harvests consecutively. He prayed to God it might not be so at the present time; but they were never sure of what might happen. With various degrees of intensity they had quarrelled with the discretion of the Bank. They said that the Bank was not to be trusted, and that it was necessary to place its issues of paper in such a position that it could not abuse it, and that the ensuring of the convertibility of bank notes was the great reason for bringing forward the measure of 1844. The hon. Member for Huntingdon (Mr. T. Baring), the right hon. Member for Tamworth (Sir R. Peel), and the hon. Member for Clitheroe (Mr. Cardwell), had all spoken of the discretion of the Bank. It seemed now that to render the measure tolerable they were to rely on the discretion of the Bank. He did not say they should not speak of that body; but if the trade of the country was to be made to depend upon a judicious exercise of its discretion, was it wise or prudent to fetter the directors in such a manner as to run the risk of their strangling the trade of the country? These views were not new to him. He felt them very strongly in 1844, and he felt them strongly still. The vast amount of authority which was brought to bear in support of the measure of 1844, and the almost unanimous assent of the House to it, carried it to the country with a great measure of favour. He did not think, however, that the evidence of the Committee had justified that Bill. He admitted that that evidence had fully established the fact, that the issues of the country banks required to be placed under control; but the propriety of limiting the circulation of the Bank of England in the manner which that measure had done, was a very different question. He, for one, had always doubted the wisdom of it; and he hoped another bad harvest would not give them another proof of its bad effects.

Bill considered in Committee to be reported.

House adjourned at half-past Twelve o'clock.