CURRENCY.

HC Deb 22 August 1848 vol 101 cc386-432

MR. HERRIES

would endeavour to confine himself as much as possible to the subject to which he was anxious to draw the attention of the House. The Motion he had to submit was as follows:— That this House will, early in the next Session of Parliament, take into its serious consideration the Reports from the Committee of this House, and from the Committee of the House of Lords communicated to this House, appointed to inquire into the Causes of the recent Commercial Distress, and how far it has been affected by the Laws for regulating the issue of Bank Notes payable on demand. He was satisfied that the country looked with the greatest anxiety to the result of this Motion, and that result would be most unsatisfactory, unless the House expressed an opinion that early in the ensuing Session it would take the subject into its attentive consideration. At this late period of the Session it would be impossible to enter into an inquiry with any satisfactory result. These reports had produced a deep impression on the public mind; the importance of the subject it was impossible to exaggerate; and he could not do better than illustrate that by the words of one who in that House was always listened to with the greatest attention. In 1844, his right hon. Friend the Member for Tam-worth, in introducing the measure to which these reports referred, said— I shall at once proceed to call the attention of the Committee to a matter which enters into every transaction of which money forms a part. There is no contract, public or private—no engagement, national or individual—which is unaffected by it. The enterprises of commerce, the profits of trade, the arrangements made in all the domestic relations of society, the wages of labour, pecuniary transactions of the highest amount and of the lowest, the payment of the national debt, the provision for the national expenditure, the command which the coin of the smallest denomination has over the necessaries of life, are all affected by the decision to which we may come on that great question which I am about to submit to the consideration of the Committee. It was necessary that he should state the history of those Acts, the operation of which had, in his opinion, conduced to bring us into our present position. In 1844 the then Executive Government availed itself of the opportunity which then offered to revise the engagements which it had entered into with the Bank of England—and proposed to the House a plan making great alterations in the engagements then existing between the Bank and the public, for the regulation from that time forward of the currency of the kingdom. In his opinion, the failure of that measure had been demonstrated; and the House should determine, as speedily as possible, whether it should be persisted in or modified or abandoned. He apprehended that the alteration to which the House had assented in 1844 proceeded upon the assumption that it was necessary to introduce some stringent measure, for the regulation of that portion of the currency of the country which consisted in the issue of bank-notes payable on demand. It was assumed that to the unregulated issue of bank-notes some of those convulsions from which the commercial world occasionably suffered were owing—it was assumed that by the imposition of certain regulations on the issue of the bank-note currency, the occurrence of those convulsions would, for the future, be prevented; that too great fluctuation in the interest of money would be averted; that undue speculation would be prevented; and, above all, and as the climax of the benefits to be derived from the imposition of these regulations, that the convertibility of bank-notes would be effectually secured. Many persons, even at that time, were of opinion that the causes alluded to could not be the real causes of those evils; that the currency did not determine the prices of commodities; that to lay restrictions on the currency would not cure those evils, while by circumscribing the issue of notes payable on demand, they would, by the machinery used for that purpose, create dangers greater than any to which the commercial world had been previously exposed. These opinions were held by persons of high authority. They doubted whether the division of the Bank into two departments—the one for the issue of notes, at the same time restricting that issue to 14,000,000l.—the other for the transaction of banking business only, would answer the purpose for which it was intended, and whether, without answering that purpose, it would not in itself give rise to great difficulties. An hon. Gentleman opposite had taken a very prominent part in these discussions; and he was greatly indebted to the labours of the hon. Gentleman for much valuable information. No one had stated more clearly than had the hon. Member for Westbury, in the valuable work which he had published on this subject, the objections which existed to the theory which had been propounded, and the difficulties which might possibly arise if it were attempted to reduce that theory to practice. The hon. Gentleman had been supported out of the House by other able persons. In the House views of a somewhat similar nature had been propounded by two Gentlemen who were at present Members of Her Majesty's Government, and whom he regretted not to see in their places that night. He alluded to the hon. Gentleman the Member for Kinsale, and to the right hon. Gentleman the Commissioner for the Poor Laws. Time had already brought to the test the differences of opinion which then existed. Three years had not elapsed before they were called upon to abandon the measure which had been then introduced. In the course of three years the objections which had been made to the principle of the Bill by the hon. Member for Westbury had been shown to be well founded, and his apprehensions as to the results of the measure had proved too true. It was now demonstrated beyond a doubt that the Act had not succeeded in preventing undue and extravagant speculation. Speculations more extravagant than those which had been entered into since the passing of this Act had been unknown in the commercial history of this country. It had not prevented the most extraordinary fluctuations in the value of money. Within the course of eight or nine months the interest of money, as regulated by the Bank of England, had varied from three per cent to ten per cent. Had it succeeded in securing the convertibility of notes? He thought he should be able to show that it had not. The history of the last six months was alone sufficient to show that all the predictions of those who had warned the country of the possible evils of the change, had turned out but too true. He would not go back to thet ransactions of October—they were still fresh in the recollection of the House, and long would be fresh in the minds of all those who took an interest in commercial matters. In consequence of the events which then happened, the Government had been obliged to step in and to suspend the provisions of the Act of 1844, and the Government had done wisely. Parliament had been called together in November, in consequence of these events. They had been told in the Speech from the Throne that the Members of the Government had taken upon themselves the responsibility of advising Her Majesty to suspend the provisions of the Act of 1844, and the House had decided unanimously that Her Majesty's Government had acted wisely in so doing. His object was, to impress upon the House the necessity of giving an assurance to the public, that it would, on the earliest opportunity, undertake the consideration of the Act of 1844, so far as it operates as a restriction on the currency, for the purpose of deciding whether it shall be continued, or modified, or repealed. When Parliament met in November, unusual haste had been made by the Government to forestall any Motion which might be made on the subject. The Chancellor of the Exchequer had at once placed on the hooks a notice for a Committee of Inquiry. Any attempt, therefore, that might have been made to draw the attention of the House to the subject, would have been met by the reply that a Committee of Inquiry into the subject had been appointed. He did not accuse the Government of any design to throw over the subject to such a late period of the Session that it should be impossible to discuss it; but such had been the effect of the course adopted, and that such would be the effect had been foreseen. Then, with regard to the composition of the Committee, that had been discussed frequently in the House, and had given great dissatisfaction. Twenty-six persons had been appointed on it—a most unusual number. The supposed opponents of the measure appointed on Committee amounted to eight or nine, or at most ten; the remainder were supposed to be favourable to it. At the same time the other House of Parliament appointed a Committee of Inquiry into the same subject, and in the same terms. Both Committees had finished their labours, and they had now before them two reports, one of the Lords and the other of the Commons, and he was desirous that, by the adoption of his Motion, the House should pledge itself to take those reports into its consideration with the slightest possible delay. The Committee of the House of Commons reported thus:— The evidence which has been given as to the effects of the Act of 1844 has been contradictory. Its beneficial effects, as regards the issues of the country banks, have been admitted by many of the witnesses; and although some have suggested an alteration of its provisions, very few have contested the general principles on which it is founded. Your Committee have had under their consideration whether it is advisable that powers should be conferred by law upon the Government to enable them to meet the occurrence of any circumstances which may call for extraordinary interference; but they have come to the conclusion that, looking to the impossibility of foreseeing what the precise character of the circumstances may be, and also what may be the measures best calculated to meet them, it is more expedient to leave to those with whom the responsibility of the Government may rest at the time, to adopt such measures as may appear to them best suited for the emergency. The Committee concluded by saying that after a careful perusal of all the evidence, they were of opinion that it was not expedient to make any alteration of the Bank Act of 1844. The view which the Committee of the House of Lords took of this subject differed materially from the opinion of the Commons' Committee. They were of opinion— That the principle on which the Act of 1844 should be amended is the introduction of a discretionary relaxing power; such power, in whomsoever vested, to be exercised only during the existence of a favourable foreign exchange. They further state in their report— If the Committee considered that the Act of 1844, which they desire to see amended so far as its restrictive clauses are concerned, was essential to the practical convertibility of the banknote, they would hesitate in recommending any change. But it should never he forgotten that the liability of the Bank consists in its deposits as well as in its promissory notes. The legal obligation to discharge both is the same; the failure of either would be equally fatal. The protection given by the Act of 1844 is mainly given to the banknotes, and in some degree at the risk of the deposits. This appears undeniable on comparing the reserve in the third week of October with the amount of private deposits. Had any unfortunate circumstance interfered with the power of meeting the latter engagements, or had not the Treasury letter been written, there seems little doubt of the fatal consequences which must have ensued. Had it been impossible to pay the deposits, a discredit of the bank-note must have been the consequence. Nor can it be rationally questioned but that such a misfortune might have exposed to risk the convertibility of the bank-notes. Here then were the two Committees reporting, the one declaring that it was best to leave things as they were, and the other that it was of importance that the Act should be amended. He should now endeavour to show on what a slender foundation the report of the Commons' Committee rested, and to ascertain how far it was sustained by the evidence which had been given. Many persons who had not read the evidence would be apt to suppose that it led to the conclusion to which the Committee had come, and that the report of the Committee was justified by it. He should endeavour to analyse the evidence, and to show that such a supposition was erroneous. The Committee had examined 26 witnesses as to the Acts of 1844 and 1845, and the two reports contained the opinions of these witnesses. Of these 26 witnesses two were examined exclusively on the subject of the East India trade, and he should, therefore, set their testimony aside. That would reduce the number of witnesses to 24. The House had a right to know the number who gave an opinion adverse to the Act of 1844, and the character of those witnesses. He should divide them into five classes. The first class comprised those witnesses selected by large commercial bodies to represent them in Committee. They were four in number—Mr. Bevan, selected by the London bankers; Mr. Birkbeck, by the country bankers; Mr. Kinnear, deputed by the Chamber of Commerce, Glasgow; and Mr. M'Farlane, from the Chamber of Commerce, Edinburgh. These four were of the same opinion with regard to the Act of 1844—all of them agreed that it had led to a considerable aggravation of the distress of 1847, and were of opinion that it required amendment. The second class were persons presiding over large banking establishments, and were eight in number. Of these three represented the Bank of England, one the Bank of Ireland, and four the following banks:—Mr. Anderson, manager of the Union Bank of Scotland; Mr. Bell, manager of the City of Glasgow Bank, in Edinburgh; Mr. Murray, manager of the Provincial Bank of Ireland; and Mr. Bristow, manager and director of the Northern Bank of Ireland. Of these the three who represented the Bank of England were favourable to the Act, and maintained their opinion, in spite of a severe cross-examination. Mr. Macdonnell, the Governor of the Bank of Ireland, thought there were disadvantages attending it, but did not give an opinion against it. But the other four—Mr. Anderson, Mr. Bell, Mr. Murray, and Mr. Bristow—were decidedly of opinion that the safety of the country required an amendment of the Act. The third class of witnesses consisted of individuals of great eminence and experience in commerce and in the money market of the metropolis. They were Mr. Gurney, one of the greatest money dealers in the world; Mr. Bates, a partner of the house of Baring and Co.; and Mr. Horsley Palmer; and they were generally of opinion that it was inexpedient to continue the restrictions of the Act of 1844, with regard to the Bank, as they now existed. The fourth class consisted of persons engaged in banking and commercial business in provincial towns: they were Mr. Pease, representing the industry of the north; Messrs. Hodgson and Turner, from Liverpool; Mr. Gardner, from Manchester; and Messrs. Salt and Muntz, from Birmingham, all of whom expressed an opinion against the Act of 1844. Messrs. Salt and Muntz were opposed to our whole system of currency—to the Act of 1819, as well as to the Act of 1844; and he would not, therefore, avail himself of their evidence. The fifth class consisted of gentlemen who had studied the subject theoretically. They were Mr. Tooke, well known for his work on prices; Mr. Jones Loyd, and Mr. Taylor. It was hardly necessary for him to say that Mr. Jones Loyd strenuously defended the Act, and was opposed to any change. Mr. Taylor was opposed to the whole of our monetary system, to the Act of 1819 as well as to the Act of 1844. It appeared, therefore, that of twenty-four witnesses, four had given a decided opinion in favour of the Act. He should not avail himself of the witnesses—three in number—who were opposed to the Act of 1819, as well as the Act of 1844, and to our system of currency in general. Deducting these, and a fourth witness, whose evidence he did not take into account, there remained sixteen out of the twenty witnesses whose evidence was to be weighed, who had declared that the Act of 1844 required amendment. But the character of the witnesses ought also to be kept in mind. All those deputed to express the opinion of commercial bodies were against the Act of 1844. Of those at the head of large banking establishments, four were against the Act, and three for it, the three being connected with the Bank of England. The three eminent individuals connected with the commerce of the metropolis who had been examined, were against it, and were of opinion that the safety of the mercantile community required its alteration. Of the six witnesses who represented important establishments in the provinces, excluding the Birmingham witnesses, four were of opinion that the Act required amendment in the sense of a relaxation of its restrictions. Add to these one witness of another class—a great writer on the subject, who was opposed to the Act—and the proportion in point of numbers would be sixteen against, to one for. How, then, could the Committee say that, after a careful review of the whole of the evidence, they had come to the conclusion that it was not expedient to make any alteration in the Act of 1844? He knew how they came to that conclusion. It was by force of numbers. An hon. Member opposite moved in the Committee that the Act of 1844 had greatly aggravated the commercial distress. He had himself proposed a resolution that the report was not in conformity with the evidence; but both of these Motions were lost. It was somewhat strange that the Committee of the Lords—with the same, or nearly the same evidence before them—should have come to a conclusion different from that of the Committee of the Commons. There were three elements on one side of the question which ought to determine ultimately the opinion of the House. The first was the Treasury letter of October. Such a letter would not have been issued had it not been indispensably necessary, and its issue must he taken as a proof that the provisions of the Act of 1844 were inadequate. The House had exempted the Ministers from any blame which might have attached to them for issuing that letter, and therefore he had a right to suppose that the issue of it was indispensably necessary. The second element was the report of the Lords' Committee, declaring that the Act required amendment; and the third was the fact that a great preponderance of the evidence taken before their own Committee was also against that Act. These were the questions before the Committee: the first related to the cause of the commercial distress; and the second, to the effect which the Act had on the regular circulation of notes. He should say nothing about the first part, for none of the witnesses had given any opinion which would justify him in saying that the Act itself had been the cause of that commercial distress. He thought the second branch of the inquiry, namely, the effect of the Act of 1844 on the existing state of commercial distress, and how far that Act had occasioned the same, a most important subject for their consideration. If they were to look to the report of the Committee on that point, they could not fail to be struck by its importance; and it was in reference to the decision to which they ought to come on that subject, considering all the results and hearings of the inquiry, that he maintained it was a question which ought not to be allowed to sink—that it ought not to be quashed or suffered to remain merely as the expression of an opinion upon the table of the House. The House would not ho doing its duty nor satisfying the public, under all the circumstances of the case, if they separated without coming to some conclusion, after a solemn deliberation, upon the Act of 1844. They should express an opinion whether they considered the Act ought to be changed, or whether it was such as would carry the country through another crisis like that which had been passed, and thus give some confidence to the public. When he had introduced that subject in the early part of the Session, he had been met by several objections. It had been said that a Committee had been appointed to consider the matter; and, moreover, that the Parliament was sitting. It was said that it would be still open to the Government to pursue the same course, if they thought it necessary, which they had followed in October, 1847. But he maintained that that was no answer to such a question. Were the Government again to allow a great evil to be done before they interfered, as was the case on the former occasion, to relieve the commercial community from the pressure of a great and imminent calamity? Such was a course of things with which they could not be satisfied. The House ought not to separate before they acknowledged the importance of coming to some decision upon so important a subject. He would not call upon Members who had departed from town to return to their Parliamentary duties for the purpose of discussing that question; but he would urge upon them the necessity of expressing an opinion that it was most expedient that that matter should be taken into serious consideration at an early period next Session. The right hon. Gentleman concluded by moving as stated in the beginning of his speech.

MR. H. DRUMMOND

said, that the right hon. Gentleman the Member for Stamford, who had just sat down, had treated the House on the 22nd of August, with a rechauffé of all the debates on currency and banking and commercial distress that had taken place for some few years past; and he thought it necessary that they should pledge themselves to give the subject next year their very serious consideration. It was such a very lively subject that they must pledge themselves to be composed to a very serious mood when they came to consider it. Now, for his part, he knew nothing so dull, dry, and uninteresting; and as to coming to a final settlement upon it, seeing that the ques- tions of banking and currency had for one hundred and fifty years past occupied the attention of every Legislature, and had not yet been satisfactorily adjusted, he did not know how they were to come to a last final settlement. But the right hon. Gentleman complained of everything. He complained of the composition of the Committee, and he built greatly upon the fact that the bankers and commercial gentlemen objected to the Bill. But that would be an equally valid objection to the Bullion Report of 1810, or to any other Act connected with the subject; for there was no Act to which there could not be found abundance of objectors amongst commercial men. He did not see what good could be effected by the House giving such a pledge as that required by the right hon. Gentleman. Sufficient for the year were the debates thereof; and he would not promise to go next year into the same question again.

MR. NEWDEGATE

said that the hon. Member for West Surrey tried to laugh the question out of the House. His speech just amounted to—"Lord! what a bore is this currency question. Thank God we are near the holidays. Let us have no more about it." But he (Mr. Newdegate) thought that was not the way to treat the discussion of a system which had involved the suspension of 143 first-rate commercial houses in the months of October and November, 1847. It would not do to laugh such a matter off. The country now presented a most alarming aspect. There was a frightful deficiency in exports; but the deficiency in amount was nothing to the depreciation in value. And in case the present untoward weather should seriously injure the crops, and thereby render the necessary import of grain, and consequent export of bullion, of the present year vastly greater than that of the last, he trusted that the Government would not allow Parliament to disperse without holding out a hope that they would be ready to discuss the great question as soon as Parliament was reassembled, when they recollected the melancholy and distressing effects upon trade from similar causes last autumn. Now, how had this question been dealt with by the Committee, selected at the instance and by the force of a Government majority to investigate it? Had that Committee shown that zeal or diligence which might have been expected in so momentous an inquiry? The Committee on Commercial Distress had sat more than five months, and examined twenty-six witnesses; whilst the Committee on Sugar and Coffee Planting had sat thirty-two days, and examined eighty-eight witnesses; so that the latter Committee, in two months and five days, had examined more than three times the number of witnesses examined by the Committee on Commercial Distress, which had sat more than five months. He was happy to say that there was another place where inquiries of this sort were conducted in a different manner. No man could read the report of the Committee of the House of Lords upon this subject without seeing that they had most carefully and minutely embraced this question as it affected the Act of 1844; that they had expressed their opinions clearly and decidedly upon it; and backed those opinions by statements of facts received from men who must be looked upon as among the most eminent financial and commercial authorities to be found in this country. He (Mr. Newdegate) could not say he thought the inquiry searched deep enough; for the real difficulty, he believed, originated in the Acts of 1816 and 1819, to which the Act of 1844 was by its author termed merely a supplement; but in tracing the effects of this Act of 1844, the Committee of the House of Lords had proceeded much farther than had the Committee of that House, and had expressed their concurrence in the statements of those witnesses who had declared it to be their opinion that the restrictions on the Bank of England against the free use of silver bullion, as a basis of issue, amounted to a denial of one of the most legitimate means of carrying on commercial transactions. That Committee had declared that they thought the limitation to 14,000,000l. was an untenable principle, inasmuch as it was unquestionably adapted to inflict on this country very serious consequences at periods of such emergency as that under which they suffered during the last autumn. If the Committee of the House of Lords, therefore, were correct in the opinion they had expressed, the retention of this limitation to 14,000,000l. was evidence of a marked determination to produce distress, unless this country should be disposed to sacrifice immense amounts of its capital and property to procure bullion. They were tied down, in fact, by this system to a dependence on the foreign exchanges and the balance of trade. The hon. Gentleman then contended, that such had been the effect of the system, that up to the 5th of July last the prices of commodities and the remuneration of labour had never recovered from the depression of last winter; and if it was the will of Providence that the present harvest should be an unfavourable one—that there should be not only a bad harvest, but a failure of the potato crop—he asked the House whether they would not at once say that they would be ready to take into their consideration this great subject as soon as they should meet again; and he put it plainly to the Government, whether they were or were not prepared, in the meantime, to extend to the commercial interests of this great country that assistance to which they had so strong a claim, and which had been tardily yielded under the pressure of imminent danger to the solvency of the Bank last autumn. In referring to the value of British and Irish manufactures and productions, the hon. Member here proceeded to show the great depreciation which had taken place in them during the last and the present year. He found that the average real value of our exports in the two years ending with the 5th of July, 1846, was 58,884,404l., and that the average official value of the same was 133,037,945l He found, too, that the average real value of our exports for the two years ending with the 5th of July, 1848, was 55,938,764l., their average official value for the same period being 130,026,408l. It appeared, consequently, that there was a falling-off in our exports, in the second period, below those of the first period, of 2,945,640l. (real value); and also a diminution of the quantity (or of official value) of only 3,011,537l., instead of 4,807,364l., which would have been the diminution in the quantity, had the price, as indicated by the real value, remained the same as in the first period. As it was, however, this statement showed a depreciation of 7 per cent. But if they compared the exports of the two years of the last period with each other, they would find that they exported—

	Real Value.	Official Value.
5th July, 1846–1847.	£58,142,465	£128,974,357
1847–1848.	53,735,064	132,078,459
Difference.	£4,407,401	£3,104,102

This, as they would observe, showed a falling-off in our exports in 1847–1848, as compared with the preceding year, of 4,407,401l. in real value, while the official value—the test of quantity—showed an increase in 1847–1848, over 1846–1847, of 3,104,102l. in quantity, indicating a depreciation of 26 per cent, or about 13,000,000l. sterling; and if they added to this the diminution of real value, or money received for the exports of 1847–1848 below that of 1846–1847, amounting to 4,407,401l., they found a loss upon the export trade of this year alone of 17,000l. as compared with last year. Now he believed it was impossible that they could dispute the accuracy or the fairness of that estimate; and he had adduced it for the purpose of following it up with the expression of a hope that, with the evidence of such a sacrifice before them, that House would not be tempted by the hon. Member for Surrey (Mr. Drummond) to laugh off this question, or thus to insult the feelings of the suffering commercial interests of this country. With reference to our imports, too, he found that while the importation of corn had this year diminished below that of last year by 4,040,367l., our imports of other foreign goods had, on the contrary, increased by 6,766,210l. (official value). When he showed them, then, that the imports of this year had not fallen short of those of the last, notwithstanding the diminished importation of grain and bread stuffs, but still largely exceeded the value of last year's imports—when he showed them also the great falling-off which had taken place in our exports, and the great depreciation of their value—and when they knew that, by the bad currency system of this country, its prosperity and the employment of its people depended on the balance of trade bringing to these kingdoms a great amount of bullion, by which alone our industry was unshackled from the forced lethargy inflicted upon it by the refusal of banking accommodation and monetary means, which our present system entailed when bullion was abstracted from the country by an adverse state of the exchanges—he asked them if the prospect of a failing harvest, and the importation of a great quantity of corn, for which they would have to pay, not in manufactures, but in gold—he asked them if such a prospect for this autumn did not amply justify the right hon. Gentleman the Member for Stamford in praying that House to give an assurance that, at the earliest possible period, the important subject which he had brought under their notice should receive their serious consideration? But, then, he was to anticipate, perhaps, that some hon. Member would get up and ask what the currency had to do with this. The right hon. Baronet the Member for Tamworth himself might, as on a former occasion, say, perhaps, that "ho hoped there would be an export of bullion, as it would lead to an increased demand for our manufactures." He (Mr. Newdegate), however, did not find that such increased demand for our manufactures followed the great export of gold of last year—bitter experience had shown them the contrary. [An Hon. MEMBER moved that the House be counted, but there being more than forty Members, Mr. NEWDEGATE resumed his argument.] He would take the hint which had been given, and sooner than that any abrupt termination of this discussion should take place, he would at once resume his seat, apologising to the House for having so long trespassed on their attention, and trusting that they would not allow themselves to be deterred, by ridicule, or by attempts to "count out," from the consideration of a subject, their neglect of which they could not themselves justify, and the people of England would not excuse.

The CHANCELLOR OF THE EXCHEQUER

said, that no man entertained a stronger opinion than he did on the importance of a discussion relating to the monetary laws of this country, and no question of greater moment could possibly occupy the attention of the House. He did not deny the right of the right hon. Gentleman to introduce this question as early as he pleased next Session; but the course which the right hon. Gentleman was now taking, seemed to him most extraordinary, and, as the hon. Member for West Surrey had said, a most fruitless course. The right hon. Gentleman would have it in his power at the beginning of the Session to bring the question before the House in any shape which he might think proper; and he could not conceive what possible advantage the right hon. Gentleman could gain by a Motion pledging the House to take the subject into consideration early next Session. The right hon. Gentleman did not advance a single step towards the consideration of the question. It might also be inconvenient to give a pledge which circumstances might render it difficult to fulfil; and yet, whether the pledge was given or not, it would be equally in the power of the right hon. Gentleman to bring the matter under the consideration of the House. The right hon. Gentleman gave no reason for asking the House to make such a pledge, and declined even to state his own opinions on the matter. He should not recommend the House to negative the proposal of the right hon. Gentleman, but he should take another course, and move the previous question; thereby expressing the extreme inconvenience of pledging the House in one Session to consider any subject in a subsequent Session. The right hon. Gentleman objected to the formation of the Committee; but when he looked at the divisions, he thought he must be acquitted of the charge that he had named a Committee with an overwhelming majority in favour of the Act of 1844. It turned out that the most trying questions were carried only by a majority of two. The right hon. Gentleman seemed to think that the report of the Committee ought to have proceeded upon the opinions expressed by a majority of the witnesses examined, and that no discretion whatever was to be exercised by the Committee. But when was it ever heard of that a jury was debarred from taking into consideration the value of the evidence given before them? If a Committee was not to come to a conclusion opposed, if necessary, to the opinions expressed by the witnesses, it was perfectly useless to appoint any Committee as a deliberative body, and the only thing necessary would be to appoint a shorthand writer to take down the evidence. He did not think that the appointment of this Committee had been without advantages. His wish was that the evidence taken before the Committee should lay before the House facts which would enable them to come to a conclusion on the subject; and when the proper time arrived for bringing the question before the House, for the purpose of obtaining a practical decision upon it, he had no doubt that the value of this information would be appreciated. The right hon. Gentleman had stated that the commercial distress of 1847 was not traceable to the Act of 1844. [Mr. HERRIES: With one qualification.] He admitted the qualification, but it did not affect the general question. That declaration of the right hon. Gentleman was quite borne out by the evidence given before the Committee, though it was not consistent with the language held in November, 1847, when the commercial distress was attributed to the Act of 1844. The report of the Committee of the House of Lords, to which the right hon. Gentleman had referred, assigned precisely the same causes for the distress as did the report of the Commons' Committee; but stated them more fully. Among other causes to which the distress was attributable, the report of the Lords' Committee referred to railroad calls; and he mentioned this because both his hon. Friend the Member for Westbury and himself were blamed for presuming to think that railway calls withdrew capital from other pursuits. Mr. Anderson, who was examined before the Committee, said that the houses which had failed in Scotland had been generally engaged, more or less, in railway speculations. With regard to the Act of 1844, Mr. Gurney said distinctly that, in his opinion, it had nothing to do with the commercial distress. The failures, he stated, were not owing to that Act at all. The hon. Member for Warwickshire said that the Act of 1844 had caused the failure of thirty-three solvent firms; whereas Mr. Gurney's evidence showed that up to the end of September the Act had nothing to do with the failures; and almost all the great houses alluded to by the hon. Member failed before the end of September. The evidence of the Governor and Deputy Governor of the Bank of England, of Mr. Gurney, and others, bore him out in saying that the pressure in April, 1847, arising from the importation of food, was no more than was required to adjust the foreign exchanges. All the evidence taken before the Committee showed that any interference on the part of the Government at that time would have been most unwise. Mr. Glyn considered that the pressure in April, 1847, arose principally from the large importation of corn and other necessary articles of food, and that the foreign exchanges having been affected by the operation of those causes, "the pressure was necessary, and was carried only to the extent required for the proper readjustment of the foreign exchanges." It was true that afterwards, in October, there was great alarm; according to the evidence before the Committee, in the middle of October, 1847, a great change took place; but before that time the Government was not justified in interfering. On the 25th of October the letter of the Government was issued, and the Committee had expressed an opinion in favour of that letter; and he thought the evidence taken before both Houses confirmed that opinion. He admitted that there was to be found in the evidence opinions adverse to the Bill of 1844; and no evidence upon this point was entitled to more weight than that of Mr. Gurney. But Mr. Gurney said he was favourable to the principle and theory of the Bill, at the time it passed; and it was only from experience under the Bill, that he had come to a different opinion. But the grounds which Mr. Gurney had assigned for his opinion did not support it; and this showed that it was the duty of a Committee not to take the opinions of witnesses, but to weigh the facts upon which they founded their opinions; and he said that the Committee were bound to come to a conclusion opposite to that of some of the witnesses, on the very facts and grounds they had themselves stated. With respect to the operation of the Act of 1844, in the case of a drain of gold and adverse foreign exchanges, all agreed; the right hon. Gentleman and the House of Lords' Committee agreed that in the event of a drain of gold, contracting the issue of paper was the only legitimate remedy; and that, if the Act of 1844 was not law, such contraction ought to take place. The hon. Member for Warwickshire had denied the possibility of an issue of paper raising prices. [Mr. NEWDEGATE: No, just the reverse.] Then, under certain circumstances, if the issue of paper tended to promote undue speculation, that would be mischievous to the country. If there were any point upon which the witnesses agreed, it was in respect to the advantage which the Act of 1844 provided by limiting the issues of country banks. Now, if the unlimited issue of country banks was an evil, which had produced mischief, the issue of paper by the Bank of England, without being cheeked by the deposit of bullion, would produce similar effects. The Act of 1844 was charged with not providing for the exigencies of private credit; but the Act of 1844 did not impose any unnecessary restriction; if extraordinary circumstances arose, they would be provided for. The evidence of Mr. Glyn showed that the crisis of October, 1847, was very like that of 1825; the notes in the hands of the public at that time amounted to 4,000,000l more than the circulation required. Mr. Horsley Palmer said "he believed that there were nearly 2,000,000l. of notes issued in October, 1847, merely for the maintenance of credit, and not required for circulation." To come to the question of the means necessary to support credit in cases of extreme panic and alarm, different persons entertained different opinions upon this head, and he should like to hear what the doctrine of the right hon. Gentleman was. Mr. Took deprecated the issue of paper to support credit, and contended that it was no part of the functions of the Bank to support public credit, and that they departed from their proper functions when they attempted to do so, except in times of panic and alarm, which were exceptions from all rule. He should be glad, therefore, to know the principles which the right hon. Gentleman proposed to lay down for such cases. In extraordinary times extraordinary measures must be resorted to. In October, 1847, to what extent did the necessity exist, and under what circumstances not applicable to other cases? Let them read the evidence of Mr. Anderson:— Were those houses which have suspended payment during 1847 and 1848, generally engaged in railway speculations?—Yes, almost in every case, more or less. Their accounts have, I suppose, a good deal come under your notice?—Yes; when I say railway speculations, I should perhaps say speculations in shares as well as railway shares; but the railways were the great source of speculations? Did you find that parties drawing bills took unusual means of obtaining money for the purpose of carrying on railway speculations?—Yes; a considerable part of the loss sustained by the bank with which I am connected, arose from that cause, from parties ostensibly drawing bills for their business transactions, which turned out upon their failure to have been drawn against railway speculations; they were represented to be business bills, but in reality they were drawn in order to support speculations in railway shares. Will you explain how that was done?—A cotton manufacturer connected himself with a cotton twist dealer, and the one drew bills upon the other, which we supposed were for the purchase of twist for his manufactory, and it turned out to be nothing of the kind, but merely connected with speculations in shares. This was a fictitious credit, B drawing on A, and A drawing on B, until at the end the bubble burst, and this would ever be the case where the issue of paper was not based upon bullion. The right hon. Gentleman proposed to depart from the law, in order to support credit, by relieving the Bank of England from the restrictions imposed upon it by the Act of 1844; he (the Chancellor of the Exchequer) objected to that principle, and he thought it extremely important that the Act of 1844 should be maintained. If paper was to be the representative of gold, he wanted to know the relation which the right hon. Gentleman wished should subsist between them? The right hon. Member was content with the Bill of 1819; but the witnesses said, "If you wish to have the Act of 1819, you must have the Bill of 1844, for, without the Bill of 1844, the Bill of 1819 could not be carried out;" and that was his opinion; that the Act of 1844 was the necessary complement of the Act of 1819, and indispensable to carry its principle into effect, namely, the convertibility of paper into gold. All authorities had agreed that it was unadvisable to leave the regulation of the currency to the discretion of the Bank of England, and yet that was the proposition contained in the Lords' report. On the whole, the best course which could be taken was to leave the Act of 1844 untouched; and if any case of emergency should arise similar to that of 1847, the Government would on their own responsibility do what might seem best to them under the circumstances. That view of the question was confirmed by the evidence which Mr. Gurney gave before the Committee. Having now expressed the opinions of the Government upon the subject, he felt it unnecessary to occupy the attention of the House at greater length, and therefore would conclude by saying that whenever the right hon. Member for Stamford should think proper to bring the question forward again with a view to a practical result, he (the Chancellor of the Exchequer) would be prepared to discuss it to the best of his ability.

MR. SPOONER

said, he approached the subject with unfeigned embarrassment, not on account of its difficulty, not because he felt any doubt as to the opinions which he had so long entertained, but because he knew that he differed from a largo number in that House for whom he entertained the greatest respect. The right hon. Chancellor of the Exchequer thought his right hon. Friend the Member for Stamford had not laid any grounds for the Motion which he had submitted. In his opinion he had had very strong grounds. It was not that any immediate practical consequences were expected to result from it; but the public expected some pledge to be given as to whether the question was to sleep and slumber on, or whether the House was prepared to give that consideration to the subject which, whatever might be the feeling of the House, the nation regarded as one of deep importance. His right hon. Friend never asserted that the Act of 1844 was the sole cause of the distress which afterwards occurred, but that it greatly aggravated that distress, and increased the panic, which would have existed, but not to the same extent, without it. He differed altogether from the right hon. Chancellor of the Exchequer as to the policy of leaving the power of authorising extraordinary issues entirely on Government responsibility. The law, in his opinion, should he so constructed that under no circumstances should its suspension he required. It had been asserted that the right hon. Baronet the Member for Tamworth, in introducing the law, contemplated its possible suspension; but was it to be believed that he would have secured the acquiescence of the House if he had told them that it was but a fair-weather measure? Why, they were told that it was to stop panics and create certainty in commercial transactions. It was to tell the country what a pound was. Talk of convertibility and public faith indeed, when a latent power, unseen and unknown, was suffered to exist, empowering the Minister of the day to change and alter the law as he might think fit, according to the emergency! But the Chancellor of the Exchequer had told them that nothing short of such an emergency as that which had lately occurred would justify a Minister in taking such a course; so that on the recurrence of a similar state of things they were again to behold a sacrifice of 250,000,000l of property. They had been told that Mr. Gurney approved of the principle of the Bill; but in his evidence that gentleman said that the extent of insolvency and number of failures were greatly increased by the additional pressure occasioned by the Act of 1844. The evidence of Mr. Horsley Palmer was to the same effect, and was corroborated by all the other witnesses, except the four who supported the Bill. Mr. Jones Loyd was a man entitled to every respect; but he was the author of the Bill, and no man was disposed to give up his own crotchets. The hon. Gentleman then referred to the evidence given by Mr. Jones Loyd before the House of Lords, for the purpose of showing that even he was of opinion that in certain circumstances a relaxation of the Bank restriction might safely be made. He objected to any system under which such deviations from the avowedly laid down rule were permitted, and under the effect of which their commerce and manufactures were at present suffering. A monetary system ought to be so arranged as to regulate itself, and prevent such crises of ruinous distress as this country had recently experienced; and it would have been far better if the Chancellor of the Exchequer had met the Motion with a direct negative, declared that the Act of 1844 was right, and that he was determined to abide by it. The House would bear in mind that there was at the present moment a large mass of the labouring population out of employment, and that it was most dangerous to allow them to swell the numbers of discontented and disaffected persons with which the country was at present afflicted. He should find it necessary, however, to illustrate his opinions by reference to a much earlier period than the Bill in question. He must begin his history at a period still further back—at the period of 1810–11. He was, by means of those facilities which are allowed to strangers, an anxious auditor of the debates which took place in 1810–11. He formed his opinions then, he had maintained them ever since; and he claimed that attention for his opinions which was duo to their being formed, and consistently entertained through a long and not idle life—a life chiefly spent in commercial pursuits. To all the principles which were then laid down by Mr. Horner, he (Mr. Spooner) gave his unqualified assent. That distinguished man then told the House that the time had come when the depreciation which had been going on, must he arrested; that, if not arrested, it would involve the nation in inextricable difficulty; and he called upon the House to state a time when they would return to cash payments. The Minister of the day—an able and an excellent man—and one who could never be referred to in that House without deploring his untimely fate (Mr. Spencer Perceval), that Minister met the proposition of the hon. and learned Gentleman in a manner that was unworthy of him, a manner with which he totally disagreed, and a manner that could not be supported by argument. He met it with a declaration that there was no depreciation, and that a one pound note and a shilling were, for all legal purposes, equal to a guinea; and, following up that declaration, it was resolved that there should be no alteration in the currency. The same question was ably handled by a gentleman whose talents and whose worth had, perhaps, never been surpassed, and by one whom he especially revered, because, though so much his junior, he even then honoured him (Mr. Spooner) with his friendship—he alluded to the late Mr. Henry Thornton. That gentleman, in perhaps the ablest speech that was ever made upon the subject, agreed in all the principles that were laid down by Mr. Horner; but he disagreed with him in his practical conclusions, and in that disagreement he (Mr. Spooner) thoroughly concurred. Mr. Thornton showed that it was impossible to carry out those principles so long as the country was in a state of war. But he did more. He showed that even then, though the depreciation had not nearly reached the point to which it afterwards descended, and though the debt was not nearly equal in amount to that to which it afterwards increased, yet he laid down the principle that justice to debtors as well as creditors was involved in the question; and he hazarded an opinion, namely, whether, considering the extent of depreciation and the amount of debt, justice had not even then passed over to the side of depreciation. This state of things went on till 1819 without any inquiry as to the effect the measure would have on the debts and credits of the country. Mr. Harmer, a Bank Director, examined before the Committee of that year, was expressly told that his advice was not asked as to the measure, for upon that the Government had made up their minds; and all they wanted to inquire about was the best mode of carrying it into effect: without any other inquiry they returned to that system which in 1797 Mr. Pitt found it necessary to abandon, while the national debt had in the mean time been increased threefold, and the depreciation, though perhaps no accurate estimate could be formed of it, had gone on increasing to an enormous extent. Ever since that time they had never had real regular permanent prosperity; but the history of the country had been a series of alternations of prosperity and distress. In 1816, they prepared for an alteration of the standard, and then, for the first time, they adopted a standard which had never before been used in this country. Before, they had a conjoint standard of gold and silver, so that the debtor had the option of paying in silver as well as in gold—he might pay in the cheapest coin he could get, and that which was least likely to leave the country, for silver was much surer to remain in the country than gold. But there was another alteration in the standard, and one which was more important still. Formerly, gold and silver, when once coined, must remain coin for ever; they could not be melted down—at least it was forbidden by law; and though he was aware it was sometimes done, yet it was never done by persons who had any regard for moral character —it was done at considerable risk, which was only incurred for the sake of a great profit, and the high rate of profit constituted a guard against melting. But now, coin was left to be dealt with as a mere matter of profit; and a profit of 6d. in the pound would be enough to send all the coin out of the country. In 1819 the Act of 1816 first came into operation. In 1820, every one, at least every one who is old enough to remember the period, must be aware of the distress which then occurred, and which continued down till 1822, when Lord Castlereagh told them the distress arose from the too sudden application of the Currency Bill of 1819; and he introduced some palliatives, some modifications, of the measure, but still the Bill itself remained unrepealed. The principle upon which he acted, was largely to increase the Bank issues, with a view to restore confidence, and to stimulate what his Lordship called "wholesome speculation." This was followed by the ephemeral prosperity of 1825, when Mr. Robinson, now the Earl of Ripon, made his celebrated speech of that year. He (Mr. Spooner) was among the right hon. Genman's auditors on that occasion, and he well remembered the remarkable words in which he affirmed the sure and certain prosperity we enjoyed, "not evanescent, but founded on a rock—a prosperity dispensed through the ancient portals of the constitution to a grateful, a generous, and a loyal people." And yet, in the beginning of the year 1826, the same Minister came forward to depict the heavy calamities which had befallen the country—the anvils all silent, the cotton-mills all closed—and this was within a period of six months after the right hon. Gentleman's glowing description of the sure and certain prosperity which he said the country was basking in. He stated these things to show that all these calamities which had befallen the country might be traced back to the Bill of 1819. He might be taunted then with the inquiry, what would be do? Would he propose that debtors should pay less than they had contracted to do? His right hon. Friend (Sir R. Peel) if he would permit him to call him so—would ask him, as he had asked him before, "What is a pound?" That question was easily enough answered. He would tell him that a pound was a piece of gold of a certain value, and stamped in a certain way; and having given that answer, he would ask what that had to do with the question? The real question was, what ought the pound to be? and he said that in 1819 they should have made that inquiry. They should have asked what was the pound in which the 800,000,000l. of national debt was created, and in which all the other debts and mortgages through-out the country were created. They were then told that the difference to the debtors did not exceed 4 per cent; but he believed there was not a man who would now be bold enough to say that that difference was less than 30 per cent. Those who advocated an alteration of our monetary system were charged with injustice. He repudiated that charge, and fixed it upon those who maintained the present system. In 1819, when in practice you adopted the present standard of value, you declared that the only difference the alteration would make in the value of property would be 4 per cent; and you then thought you were doing justice by so establishing that standard. If you thought you did justice then, how can you say you are doing justice now by maintaining that standard, which no one will at this time assert has affected the value of property less than 30 per cent? It is evident, therefore, that a great mistake was committed in 1819—a mistake perpetuating a great injustice upon the debtor interest of the country. You did not intend to produce the effect you have produced. The debtor interest, misled by your statements, acquiesced. Is it right to hold that interest to a bargain made in ignorance of the effect it would produce? Is it safe to the creditor interest to endeavour to force the full completion of that bargain, which never can be carried out without general ruin? He regretted that the right hon. Baronet the Member for Ripon was not in his place. He did not mean to taunt him with anything that he had published in his celebrated pamphlet on this subject—he wished to refer to a conversation which passed in that House; and he felt there was no breach of confidence in alluding to it, for the whole passed in open conversation. It was after the evidence given by Mr. Pease, which he conjured hon. Members to read, of the injurious effects of this Bill in the North of England. He (Mr. Spooner) turned to Sir J. Graham and said, "What do you think of the evidence of Mr. Pease?" He said, "It is very alarming—it is very distressing." "Ah," rejoined he (Mr. Spooner), "it is your fault, Sir James; if you had but maintained your first conviction—if you had been true to your principles, you might have been Prime Minister at this day; and you would have saved your country, which is now involved in all this distress." What was his reply? He said, "I have not altered my opinions on the Bill of 1819. I said it was a dead robbery then, and I say it now—I remain still of the same opinion which I published, that the Bill was a dead robbery of all the debtor interests of the country." It was true, the right hon. Baronet went on to say, that it was done—that the system had gone on so long, they would now create fresh injustice by undoing it. With that opinion he entirely disagreed. It was not done—it was far from being done. They had never seen the Bill of 1819 extensively brought into operation for more than three or four years at a time; and so soon as things began to find their level, as it was called, under that Bill, dire necessity compelled them to relax its operation; that was their real position, and that led him next to consider the question of the exchanges. They were told they must regulate their issues by a watchful and careful attention to the rate of the exchanges. If so, he should like to know what they were to do during the next winter. Was there a man in that House who had taken the least pains to ascertain the state of the crops, who anticipated anything else for the coming winter than an immense importation of foreign corn? and how was that to be paid for? Perhaps some hon. Gentleman opposite would suggest, by their manufactures. But, he would ask, did their manufactures go out when they last had occasion to import foreign corn? No; their bullion would be required. The right hon. Baronet near him (Sir R. Peel), said, "Let the gold go out, he wished it might go; it would come back again." Aye, it would come back again, he had no doubt; but at what cost? The system under which we were acting had lately produced a reduction of 250,000,000l. in the value of property, in order to secure an amount of 15,000,000l. of gold in the coffers of the Bank of England. This was no imaginary loss, but was provable by carefully considered statistics. He did not mean to say that such a sum went out of the country; but the catastrophe that took place shook the credit of the country, and with the credit of the country prices fell, so that the endeavour to get back the 15,000,000l. of gold had actually cost the country 250,000,000l. But there were still other circumstances to be considered—were the Irish to be allowed to be down and die? Why, the whole country would resound with cries of shame upon the Minister who should leave the Irish to be down in despair. But with the present system of currency, he defied them to send the money which would be necessary for their relief. It was true that gold might be employed to bring corn into the country, but as the gold went out, the notes would flow in; and he must remind the House that upon the supply of notes depended, in great measure, the employment of the poor throughout the country. So that while they brought foreign corn into the country by the contraction of the paper money, they deprived the poor of the means of purchasing it; and even checked the manufacture of those articles which must ultimately be exported to bring back the gold. You may bring in the bread, you may show the suffering labouring classes the loaf; but the very means which enabled you to set the loaf before them, took away the means of purchasing it. Those who agreed with him were asked would they support an unlimited issue of paper money? He had explained his own views of this subject in the resolutions which were published in the first report of the Committee. The right hon. the Chancellor of the Exchequer stated, that the Bill of 1844 was intended to prevent speculation. [The CHANCELLOR of the EXCHEQUER: No!] He was much mistaken if the right hon. Gentleman did not make an appeal to Members whether they would, by rescinding the Bill of 1844, encourage unlimited speculation. He would make this appeal to his right hon. Friend (Mr. Herries), but that he observed he was now reposing in unlimited slumber. The right hon. Gentleman the Chancellor of the Exchequer, when he spoke against overtrading and speculation, forgot that it had all arisen under the very Act which he was defending. And he also omitted to state, that had the Bank of England, during the late crisis, been empowered to make use of the gold in their coffers, they could have materially lessened, if not wholly averted, the panic which had been so destructive to the commercial world. Yet we were told we must come again to the extreme point before the Government would feel itself justified in interfering as they did last autumn. Unless the currency were extended, a heavy responsibility would rest upon the Government. But the necessity of preserving convertibility was urged in objection to this act of justice. His idea of convertibility was that a note should always be convertible into what a man wanted. If it were a legal tender, if it would pay all taxes and all debts, and purchase what any man required, that was sound convertibility, not into gold only, but into all the practical necessities and purposes of life. He implored the noble Lord not to be led away by the vain philosophy of the day; but, like Mr. Pitt in 1797, to rise above the trammels, and adapt his proceedings to the circumstances of the times. Let the gold go abroad to bring in food, but at the same time let there be a circulating medium issued by Government, and limited by Parliament to the amount of annual revenue—this would, in fact, be guaranteed by all the property of the country—and then our labourers would find that we were not only able to afford them the moans of procuring food in abundance, but to dispense a large and liberal measure of relief to Ireland, and turn that discontented population into a peaceful and loyal people, and meanwhile a stock of manufactures would be accumulating, which would enable us to get back our gold again. He trusted that Parliament would not separate while Members had nothing to tell their constituents but that, when famine threatened, proposals for measures of relief were met with the previous question—that the Ministers were hesitating and doubting that they had no opinions—and that at the approach of the storm they dared not pledge themselves to any course of conduct that might avert it. If that went forth among the people, despondency would be the consequence, and there was no knowing what might be the result. There was a remedy; let them apply it. Let them call forth the energy of the people by setting the credit of the nation free.

SIR ROBERT PEEL

Mr. Speaker, I was quite prepared to hear my hon. Friend the Member for North Warwickshire take credit to himself for entire consistency on the subject of the currency; I was quite prepared to concede it to him; but I confess I was not prepared to hear him declare that he had been a disciple of Mr. Horner, and that he still adopted every principle for which Mr. Horner contended. My hon. Friend says, indeed, that he differed from Mr. Horner as to his practical conclusion; but he assures us that in every word and in every letter of each of the thirteen or fourteen preliminary resolutions on the subject of the standard of value moved by Mr. Horner in 1811, he unreservedly concurs. Why, Sir, if there be any medium of communication between those who live and those who have departed from amongst us, Mr. Horner must now be shuddering in his grave at hearing the hon. Member's representation that the principles of Mr. Horner were in precise accordance with his own. What must be his amazement at hearing the hon. Gentleman professing to be his disciple, and at the same time contending that the circulating medium ought to represent—not gold, not silver, not capital, not anything tangible; but that which is worse than nothing—the debt of the country. Your expenditure is now 50,000,000l, and to that extent my hon. Friend would issue inconvertible paper. Add 10,000,000l to that expenditure, no matter whether the resources of the country can bear the additional charge, and 10,000,000l. more of inconvertible paper may be, according to my hon. Friend, safely and prudently issued. There need in that case be no limit to lavish expenditure—no limit to the incurring of debt; the ready means of meeting every charge are at hand—a fresh issue of inconvertible paper. My hon. Friend says the amount of that paper is limited; but limited by what? It may increase with increasing expenditure. 60,000,000l. of paper may be issued with as much safety as 50,000,000l., provided only that the amount does not exceed the sum which is required to meet the public necessities, and that the paper, after its issue, is receivable at the Exchequer in payment of taxes. The more you expend, the more paper you may issue; and as my hon. Friend thinks that plenty of money is a never-failing source of prosperity, there not only is no check upon expenditure, but a direct premium upon it. Your paper issues would be inconveniently restricted by economy.

My hon. Friend has another theory. He contends that any amount of circulation is safe that has for its basis the land and property of the country; and this is the doctrine of a disciple of Mr. Horner.

MR. SPOONER

I strictly limited it to the amount of your expenditure.

SIR R. PEEL

I thought I heard my hon. Friend mention the acres of the country, and the realised capital of the country, as a perfectly safe and sufficient foundation for a corresponding amount of currency. But even with my hon. Friend's explanation, his doctrine is sufficiently alarming. His inconvertible paper, limited by nothing but the extent of the public necessities, will be quite as bad as inconvertible paper issued ad libitum upon land and capital. The real value of such a currency will soon be correctly estimated in foreign countries, and will be sensibly felt by those who rely on the wages of labour for the means of subsistence.

But how does my hon. Friend reconcile these theories with the principle laid down in Mr. Horner's resolutions? From the practical conclusion, namely, the resumption of cash payments at the end of two years, he dissented; but he says there is not a firmer friend to the principles for which Mr. Horner contended. I shall surely startle my hon. Friend by reminding him of those principles. He must have forgotten the transactions of 1810.

MR. SPOONER

No!

SIR R. PEEL

Very well, then, I will read to my hon. Friend some of the resolutions moved by Mr. Horner, to every word and letter of which he did and still does so entirely subscribe. This is the first resolution:— That the only money which can be legally tendered in Great Britain for any sum above twelve pence in the whole is made either of gold or silver; and the weight, standard, and denomination at which such money is authorised to pass current, is fixed, under His Majesty's prerogative, according to law. The other resolutions establishing the leading principles in respect to the circulating medium were the following:— 7. That under the laws which constitute the established policy of this realm in regard to money, no contract or undertaking for the payment of money, stipulated to be paid in pounds sterling, or in good and lawful money of Great Britain, can be legally satisfied in gold coin unless the coin tendered shall weigh in the proportion of 20/21 parts of 5 dwts. 8 gr. standard gold for each pound sterling; nor in silver coin, for a sum exceeding 25l., unless such coin shall weigh in the proportion of 20/62 of a pound Troy of standard silver for each pound sterling. 8. That the promissory notes of the Bank of England are stipulations to pay, on demand, the sum in pounds sterling respectively specified in each of the said notes. 14. That during the continuance of the suspension of cash payments, it is the duty of the Directors of the Bank of England to advert to the state of the foreign exchanges, as well as the price of bullion, with a view to regulate the amount of their issues. 15. That the only certain and adequate security to be provided against an excess of paper currency, and for maintaining the relative value of the circulating medium of the realm, is the legal convertibility, upon demand, of all paper currency into lawful coin of the realm. My hon. Friend says, that previously to the resumption of cash payments, there had been a great depreciation of paper as compared with gold; and that in 1819, when Parliament resolved to restore the standard of value, reference ought to have been had to that depreciation, and that the public creditor who had advanced his money to the State in a currency of smaller value, had no equitable right to recover the principal, or to be paid the interest of his debt, in a currency of the full value; that the pound he advanced was not the pound of twenty shillings of lawful money, but a pound of fifteen shillings, or some other such amount.

Now, it certainly would have been possible to make some arrangement of this kind—to have formed an estimate of the extent to which the depreciation of paper had been carried during the suspension of cash payments, and, on the restoration of cash payments, to have made a corresponding reduction in the value of the currency in which the then existing public engagements were to be discharged. Such an arrangement, I say, would have been possible. Whether it would have been equitable is another question. When Parliament borrowed money of the public creditors during the war, they reserved no power to discharge the debt in other than the lawful coin of the realm. The suspension of cash payments was avowedly a temporary measure, continued from time to time, with a distinct announcement on the part of Parliament that they should be resumed six months after the ratification of a definitive treaty of peace.

Does my hon. Friend recollect the 9th Resolution of Mr. Horner? Is it one of those, every word and letter of which it seems that he has approved? It is to this effect— 9. That when it was enacted that the payment of the promissory notes of the Bank of England in cash should for a time be suspended, it was not the intention of Parliament that any alteration whatever should take place in the value of such promissory notes. My hon. Friend will perhaps say, that whatever might be the legal obligation, the engagement, whether expressed or implied, was an impossible one; that the notorious fact of depreciation ought to have been recognised; and that, on the resumption of cash payments, the public creditor should have been compelled to receive the bonâ fide equivalent for that which he had lent. Now, I will take my hon. Friend's own estimate of the extent of depreciation. It shall have been twenty-five per cent if he pleases. In that case 15s. of sterling money will repay the debt of a nominal 20s. borrowed in paper during the suspension of cash payments. What would have been the effect of a monetary settlement founded on this basis? The debtor would no doubt have received a proportionate benefit; an amount of taxation less by 25 per cent would have sufficed to pay the interest of that part of the national debt which was incurred during the period of depreciation; but all other interests would remain unaffected. You would have called 15s. by the name of 20s., and so far as the discharge of debt previously incurred is concerned, 15s. would discharge the functions of a pound; but in every other subsequent transaction, in every subsequent dealing between man and man, the intrinsic value of the silver or gold which it contained would regulate the real worth and efficiency of the new pound as an instrument of exchange. Does my hon. Friend suppose that in the adjustment of the foreign exchanges, for instance, the pound of 15s. would be counted for anything more than 15s.? that you could buy from the foreigner more than throe-fourths of the goods which you buy for the pound sterling of the present day? Nay, in your own domestic transactions, always excepting the payment of debt incurred, there will be nothing gained. If the paper money is to be convertible into coin at the will of the holder, you may if you choose call 10s. by the name of a pound; but there will remain the same danger of excessive issue, the same risk of a monetary crisis, the same demand for timely precautions, the same necessity for contraction and for severe pressure, if those timely precautions be neglected.

It may be thought by some that these are needless comments on the doctrines of my hon. Friend—that those doctrines meet with few supporters. That may be true so far as this House is concerned. In this House my hon. Friend may be in a small minority; but out of this House, of those who talk about the currency, and write about the currency, the vast majority is with my hon. Friend. Nine tenths of those, out of this House, who want a change in the currency want substantially that which my hon. Friend wants, namely, issues of paper without the check of convertibility.

There was a witness before the Committee of the Commons whom I consider to be a fair representative of the prevailing opinions on the currency—a gentleman of the name of Salt. Mr. Salt gave his evidence with great fluency—with evident conviction of the truth of the doctrines he maintained; nor was he deficient in that quality of boldness in the avowal of his opinions, which has been ascribed to-night to the Chancellor of the Exchequer. Mr. Salt did not, I apprehend, seek to intrude his opinion on the Committee. The report says:— Deputations from Liverpool and Birmingham had communicated with the Government during the period of difficulty; and your Committee thought it best to commence their inquiry by examining certain witnesses connected with Liverpool and Birmingham. And among others Mr. Salt.

In Mr. Salt's opinion, paper money ought to be issued till you have restored prices to a remunerating level. I asked Mr. Salt whether there might not be a difficulty in determining whether prices at any given time were remunerating or not: whether the trade which was remunerating to a man possessed of capital and skill, might not be a losing trade to him who had neither one nor the other? Mr. Salt at once solved the difficulty by answering— The test I would give would be when all the labourers are taken into employment." … "It is necessary (he said) that the money should be maintained in the country in sufficient amount to employ all the labourers of the country. That I might not misunderstand or misrepresent the opinions of Mr. Salt, I put these questions, and received the following answers:— Will you state whether I correctly understood you as saying that national paper should be issued ad libitum till the period when prices were remunerative, and every industrious, able-bodied man found in full employment?—Certainly. When that object had been achieved, you would fix your standard at that point?—Yes. Now, these are not the personal opinions of Mr. Salt, but the opinions of the Birmingham school of currency.

I asked Mr. Salt— Is there not an association in Birmingham on the subject of the currency?—Yes. Though some individuals may differ from the views which you have expressed, are they not the general views of the Association?—They are. Did you ever hear any one dissent from them? —I think not; at any rate, those who have dissented have ceased to dissent.

MR. SPOONER

There were other questions put to Mr. Salt on that point.

Sir R. PEEL

There were: questions put by my hon. Friend, and I will not fail to read them. My hon. Friend, I know not why, seemed ashamed of Mr. Salt as the organ of the Birmingham school: he was very anxious to extort from Mr. Salt an admission that the opinions he gave were not sanctioned by that school. The House shall judge of his success. Mr. SPOONER: Have you ever laid before a meeting of the Currency Reform Association your theory about the average value of metals forming the basis of the standard?—I have, When was that done?—I cannot say exactly; but we have talked it over several times. Did you ever get a vote of approbation upon it?—No. Finding Mr. Salt thus pressed by my hon. Friend, I came to his rescue with this question:— Sir R. PEEL: But did you ever find anybody successfully contend against those views?—No; I never heard anybody attempt it. Thus ended the examination of Mr. Salt, who retired triumphant from the Committee. Perhaps my hon. Friend thinks that Mr. Salt, like himself, is a disciple of Mr. Horner.

I will now address myself to the question immediately under discussion, the Motion of my right hon. Friend (Mr. Herries). My right hon. Friend says there is an intense anxiety throughout the country on the subject of his Motion; he says the country will be deeply dissatisfied if it be met by the previous question. But why should the intense anxiety be relieved by the success of the original Motion? My right hon. Friend proposes that we should give a pledge for the next Session: not a pledge to alter the law, but merely to take the subject into our serious consideration. When next Session comes my right hon. Friend, or any other Member, can compel us to do this by a simple notice. What do we gain by any previous pledge? Now, this House, by the proceedings of the present Session, has not greatly added to its reputation for the practical discharge of business. We have been more remarkable for the length of discussion than for the progress of successful legislation. Many measures introduced at the commencement of the Session have been abandoned, not because they met with serious opposition, but because so much time has been spent in debate that it became physically impossible to pass them. We have arrived at the 22nd. of August, and not having fulfilled our engagements for this Session, my right hon. Friend asks us to enter into new ones for the next, to draw a bill on the future, payable six months after date. And this is to be done to relieve the intense anxiety of the public. What will the public care for our pledges for the future? What proof have we given to the public that we share in this intense anxiety? My right hon. Friend's Motion stood for Tuesday last; but on counting the House thirty-five Members only were present, and the Motion was deferred until this night. In the course of this night the attendance was so limited that an attempt was made to count out the House, which failed, because there were forty-two Members who thought it worth their while to be present. What weight will be attached to resolutions for the future passed by such numbers, and under such circumstances?

And what are the arguments by which my right hon. Friend supports his own Motion? He says the vast majority of the House are gone away, that serious deliberation is out of the question—nay, he indulges in metaphor, he calls the House a wounded snake dragging its slow length along. Then being thus mutilated, had we not better creep out of public notice as quietly as we can? Why give ourselves the airs of a boa constrictor? Why enable my right hon. Friend to complete his quotation by ending the song of the Session with his own very "needless Alexandrine?"

I should be sorry, however, to rest my objections to the Motion of my right hon. Friend merely on account of its being inopportune. When the time for discussion shall arrive, I shall defend to the utmost of my power the Bill of 1844, and the restrictions which it imposes. Even now I will shortly advert to the character and extent of those restrictions, which are presumed to be so intolerably severe. The Bill of 1844 permits the issue of 33,000,000l. of paper without the previous deposit of a single ounce of gold, as a security for its convertibility.

The Bank of England may issue of bank notes	£14,000,000
The private and Joint Stock Banks of England	8,600,000
The Banks of Ireland	6,300,000
The Banks of Scotland	3,100,000
Add the Seven-day and other Bills of the Bank of England	1,000,000
Total	£33,000,000

The whole of this amount of paper may be issued by these banks collectively without the previous deposit of a single sovereign. All that the Act of 1844 requires is, that if an additional paper currency beyond the 33,000,000l. be required, the excess shall be issued upon coin or bullion. Suppose that, in addition to the 33,000,000l. of paper above referred to, an issue of 15,000,000l. is required to conduct the monetary transactions of the country, the 15,000,000l. of paper must be secured by a previous deposit of the precious metals. The total issue of paper will thus be 48,000,000l., the whole payable on demand at the will of the holder, and based upon a foundation in coin of less than one-third of the aggregate amount. Is this an intolerable restriction on the issue of paper money?

You object that the 15,000,000l. of gold and silver are a dead weight, a useless and unprofitable incumbrance for which no value is received. They are no such thing. In the first place, the notes issued as an equivalent, being the certificates that the coin is deposited, form a part of the circulation of the country. But, in the second place, look to the extent of paper credit in this country. (I am not speaking of bank-notes merely, but of all transactions resting upon credit, of promissory paper of all descriptions): look to the extent of speculation, to the manner in which business has been conducted by mercantile houses of great eminence, and then judge whether a deposit of the precious metals, intended to maintain the value of that portion of your paper credit which constitutes the currency of the country, can be deemed a useless incumbrance. I so totally differ from those who consider the necessity for making and maintaining that deposit to be the cause of undue pressure, that I contend that it is in consequence of that deposit, in consequence of the confidence which it inspires, that the issuers of paper are enabled to give an amount of accommodation which they could not otherwise give consistently with their own security. But the accommodation has not been sufficient to prevent calamitous failures and severe commercial distress. It has not; but is the Act of 1844 responsible for this? What was the evidence given by Mr. Anderson and Mr. Glyn and others thoroughly acquainted with commercial credit, and the transactions connected with it? Mr. Anderson, the manager of the Union Bank of Scotland, was asked, "Were the houses which suspended payment during 1847 and 1848 generally engaged in railway speculations?" He answers, "Yes, almost in every case more or less." Mr. Anderson said, that a considerable part of the loss sustained by the Union Bank arose from parties drawing bills ostensibly for their business transactions which in reality were drawn to support speculations on railway shares; he said that such bills were drawn to as great an extent as discount could be got for them, and that the practice continued until the general crash came.

Mr. Glyn, speaking of the houses connected with the East India trade and the Mauritius trade, said, "that with some few exceptions (and there were exceptions), he was not prepared to say, those houses ought not to have failed"—"that so far as he was connected with any of them, there is none that ought not to have failed."

What law can be devised that shall prevent the natural consequence of extravagant speculation in railway shares, or the failure of houses which are insolvent through their own improvidence? That natural consequence is commercial distress—distress extending to houses that are solvent and not improvident—and there may be, and probably will be, no remedy for that distress, without passing through the ordeal of what is called restriction and pressure.

But the Bill of 1844 has, it is said, caused a degree of pressure which would not otherwise have taken place. I believe it has; that it compelled the Bank, in April, 1847, to do that which it ought to have done before April, namely, to restrict discount, and to raise the rate of interest, and that it was the salutary pressure, enforced by the Bill of 1844, which prevented a degree of pressure ten times more severe, that would have been deferred only for a very short period of time.

My right hen. Friend has referred to the recent reports of the Committees of the two Houses. I shall not advert to that of the Commons' Committee, because I cordially concurred in every word of it; but I shall impugn the report of the Lords' Committee. I shall earnestly deprecate the adoption of the recommendations of that report, the ability of which I do not contest. Of that report I may say with truth, that it is drawn up by no friend of the Bill of 1844. (I treat the report of course as the report of the Committee which adopted it.) I do not say that it is a report prepared in a spirit of unfair hostility to the Act of 1844; but it is prepared in a spirit which insures the full exposure of any defects which there may be in that Act. The report, however, declares that— Many of the provisions of that Act are, in the judgment of the Committee, as well as in the judgment of the great majority of the witnesses, judiciously adapted to the purposes for which they were framed.

They are judiciously adapted according to another passage in the report— To secure the primary object of the convertibility of the bank note.

Now, the Act of 1844 contains many important provisions. There is the limitation of the issues of the Bank of England, to 14,000,000l. upon securities; the separation of the two departments of banking and issue; the weekly publication of the transactions of the Bank; the limitation of the issues of all other banks in England and Wales, to the average amount of their issue for a preceding given period; the prohibition to establish new banks of issue in any part of the united kingdom. It is to be regretted that the Lords' report does not specify the particular provisions of the Act of 1844, which, in the opinion of the Committee, "are judiciously adapted to the purpose for which they are framed."

In two instances the report recommends a modification of the Act. It suggests, first, an extension of the issue of bank-notes upon silver, relatively to gold; secondly, the introduction of a discretionary relaxing power to be intrusted to the Bank of England, but to be exercised only during the existence of a favourable foreign exchange. The first suggestion is of little comparative importance. No great advantages in my opinion would accrue from extending the power of issue upon silver; but whether the issue take place upon silver to the amount of one-fourth or one-fifth of the total amount of bullion is in point of principle a matter of indifference.

The other suggestion, the giving a discretionary power to the Bank to relax the restrictions which are imposed upon the Bank, I consider most objectionable. I consider it to be at variance with experience, with reason, with the evidence of the witnesses most competent to give an opinion upon the question at issue. Why, in 1844, did you impose restrictions on the Bank? Because the experience of preceding years—full knowledge of the course pursued by the Bank when the Bank had unlimited authority—a deep sense of the evils which had arisen from the uncontrolled power of the Bank in 1825, 1837, and 1839, convinced Parliament of the necessity of subjecting the Bank to peremptory restrictions. There was, in 1844, an almost unanimous impression, without which the Act of that year could not have been passed, that the discretionary power of the Bank had been improvidently exercised and ought to be controlled by law.

But it is said—The law so controlling the Bank has failed; it has been necessary to suspend it; the act of suspension is a condemnation of the law, and Parliament must make such provision as will prevent the necessity of another unauthorised suspension. I do not deny the possibility that that which has occurred may occur again; that it is not absolutely impossible that there may again be such a combination of peculiar circumstances that the exercise of extraordinary authority may be upon the whole a less evil than the rigid adherence to the letter of the law. But I contend that it is much wiser to leave the responsibility of such interference in the hands of the Executive Government, in the confidence that it will not he assumed excepting in a case of absolute necessity, than to confer by law a dispensing power upon any body of men, and to define the circumstances under which it may be exercised. In the first place, the knowledge that that dispensing power exists, and the hope that it will be exercised, will lessen the inducement which the commercial world would otherwise have to make preparation, each within his own sphere of business, for a coming period of pressure. In the second place, the giving of the dispensing power to the Bank, with a limitation of its exercise to a certain state of things, namely, that of favourable foreign exchange, will alter the relation in which the Executive Government now stands to Parliament, and will make it much more difficult for the Government to assume such a responsibility as that which it lately assumed.

If the law be left unaltered, the Government may fairly presume, that should an absolute necessity for its intervention arise, Parliament being satisfied of the necessity, will again sanction, as it has lately sanctioned, the exercise of extraordinary authority. But if you provide a dispensing power by express enactment, commit that power to the Bank, and specify the circumstances under which alone it can be exercised, the Government must consider such provision in the light of a legislative declaration against the assumption of extraordinary authority, whatever may be the circumstances which may call for it.

It is no impeachment of the law, no conclusive argument for the repeal or alteration of it, that an extraordinary combination of unfavourable circumstances has compelled the suspension of it. The possible necessity for extraordinary intervention, in order to meet the danger of such an event, or to counteract the effect of wide-spread panic, was not unforeseen. Mr. Huskisson observed many years since— That by a possible combination of things the Bank might be driven to part with its last guinea not only without having checked the drain, but with the certainty of increasing it in proportion as their notes were diminished.

He says expressly— That the possible cases which may call for the extraordinary intervention of power are not capable of being foreseen or defined by law.

And— That the application of the remedy must be left to those who may be at the head of affairs, subject to their own responsibility and to the judgment of Parliament.

I may, perhaps, without presumption, refer also to the letter which I wrote to the Governor of the Bank, at the time that the Act of 1844 was under discussion, expressing similar views. I observed in that letter— My confidence is unshaken that we are taking all the precautions which legislation can prudently take against the recurrence of a pecuniary crisis. It may occur in spite of all precautions; and if it does, and if it be necessary to assume a grave responsibility for the purpose of meeting it, I dare say men will be found willing to assume such responsibility.

A pecuniary crisis may recur; but recent events have only confirmed my previous impression that it would not be wise to attempt, by legislation, to provide a remedy. In all that is the subject of legislation, as in mechanism, and every thing connected with human contrivance, you take precautions against the dangers and evils that may arise from ordinary causes of disturbance; but it is no argument against those precautions, that some unforeseen event may disturb all your calculations, and compel the application of extraordinary remedies. Take the case of a complicated piece of machinery: you may provide a remedy for friction, or for any derangement proceeding from ordinary causes; but sudden explosion may baffle all your precautions. Commercial panic is like sudden explosion, as little amenable to any control, as difficult to be provided for by previous contrivances of human skill. Take the case of law. The presumption is that all law ought to be strictly obeyed; but circumstances so extraordinary may occur that the violation of law may be a venial, nay, a praiseworthy act. The other day, for instance, if the report of the newspapers be correct, a military officer having Mr. Smith O'Brien in his custody, brought him to a railway station, and finding a train ready to start for Limerick, desired the driver to start instantly for Dublin instead. The driver refused, telling the officer that he was not amenable to his authority. The officer produced a pistol, threatened to blow out the brains of the driver if he did not obey, and was obeyed accordingly. Now, this was a very extraordinary, but a very justifiable exercise of power. There was a suspension of the railway regulations; but it does not follow that they were unwise regulations, or that having been suspended they ought to be repealed. Neither does it follow that provision should be made for a similar contingency in future, that there should be an attempt to define by law under what circumstances military officers may countermand railway trains, and may threaten to blow out the brains of engine-drivers.

It may be in such cases as those to which I have been referring, and in cases of commercial panic also, that the remedy will be effectual for the very reason, that it has not been provided beforehand. It not only may be better calculated to meet the exigency of the case, but the moral effect of the remedy, the effect on the minds and feelings of men, may be increased on account of the sudden assumption of an abnormal and irregular authority by those who are responsible for the public safety.

I repeat, then, that experience and reason are opposed to the suggestion in the Lords' report. How far is it supported by the testimony of those witnesses examined by the Lords' Committee, who must be considered the very best authority on such a subject? The Committee examined five of the Directors of the Bank, the Governor and Deputy Governor of the Bank, Mr. Cotton, Mr. Norman, and Mr. Horsley Palmer. Being Directors of the Bank they are those whom the law controls, and they can have no prejudice in favour of restraint upon their discretion. They are also the best judges of the nature and extent of the demands which are made upon them in times of pressure to extend accommodation, and of the necessity of interposing the barrier of law against the too ready compliance with such demands. The Lords' Committee profess entire confidence not only in the integrity and good faith with which the transactions of the Bank are conducted, but in the increased knowledge of the Directors produced by experience and discussion. And certainly, if the judgment be formed on the evidence given before the Committee by Mr. Cotton, Mr. Norman, and the Governor and Deputy Governor of the Bank, that expression of confidence is fully justified. It is impossible to read the evidence given by those gentlemen, and not be struck by their intelligence, acuteness, and the exhibition by them of every quality which can fit them to superintend such an institution as the Bank of England. But the evidence of each of them is decidedly adverse to the recommendation of the Committee; it is in favour of maintaining the Act of 1844 without the slightest alteration. The Governor and Deputy Governor of the Bank declare that in their opinion "nothing could have worked better than it has done." Mr. Cotton thinks "that the Act has conferred inestimable benefits, both upon the banking operations of the country, and also upon business." Mr. Norman "would consider any alteration in the Act of 1844 highly inexpedient."

Mr. Horsley Palmer's evidence is certainly less favourable to the Act of 1844, but even that evidence scarcely supports the recommendation of the Committee. Mr. Horsley Palmer does not object to the principle of the Act of 1844, of fixing 14,000,000l. as the issues upon securities and the remainder upon bullion; but he objects to the want of power to relax that principle when the circumstances of the country will enable the Bank to do so, without endangering the convertibility of the bank-note. Mr. Horsley Palmer admits at the same time "that the power of relaxation goes far to destroy the principle of the Act, which renders it extremely difficult to say what should be the regulation, and when it should be acted on?" Being asked "If the restrictions imposed by the Act of 1844 were accompanied with a power of relaxation on the part of the Bank Directors, would it not be as if no restrictions existed?" he answers "Certainly." Such are the opinions of those of the Bank Directors who were examined by the Committee of the Lords. Such also are my reasons for thinking that the recommendation of that Committee that the Directors of the Bank should be intrusted with a power to relax the restrictions imposed upon the Bank in respect to the issue of paper money, is unsupported by evidence as well as by reason and experience.

I shall conclude with an earnest hope, that when the House shall again address itself to the consideration of this great question, with a view to some practical issue, they will bear in mind the great truths by which legislation on our monetary system should be governed—that they will bear in mind that trade is not carried on with paper money but with capital, or with credit, of which capital is the foundation—that the arbitrary issue of paper money is no increase of the wealth of the country—that the rate of interest must vary with the value of money and the demand for it, and cannot be permanently regulated by the Bank of England—that fixity in the value of the currency, that is, of the coin, or of the note which represents coin, and a guarantee that the note shall be at all times convertible into the precious metals, are essential to the welfare of all classes, but especially of that class which is in the receipt of the wages of daily labour. Depreciate the value of your currency, and the prices of all articles of subsistence will speedily follow the change; but there will be no corresponding rise in the rate of daily wages. The two shillings or three shillings a-day will continue to be paid long after they shall have ceased to command that amount of the necessaries and comforts of life which they did command before the period of depreciation.

This House will, I trust, continue to insist upon the maintenance of the standard of value, and upon the guarantees for the instant and certain convertibility of paper into coin. Those guarantees you cannot have without restrictions upon the issue of paper. You cannot have them without pressure in the time of commercial discredit. Early pressure—pressure compelled by law—if it be not induced by prudence, so far from being the great evil which some consider it to be, may be the only preventive of great future disaster—the only certain means of maintaining entire confidence in the paper circulation of the country.

MR. MUNTZ

would admit that, if it was proper to pass the Act of 1819, it was necessary to pass that of 1844 to prevent vacillation on the part of the Bank. In evidence given before a Committee of the House, before the latter measure was introduced, he had stated his opinions that the Bank should keep 500,000l. of its circulation in gold. But he had always thought the Act of 1819 a gross injustice, and it would continue so till prices were reduced to the level of 1819, which was the level of Continental prices. Were the law carried out to the letter, it would produce an explosion. If the pound sterling were to be converted into the precious metals at what he thought a just rate, a great stimulus would be given to the industry of the country; the result would be a higher scale of nominal prices. It had been said that the Act of 1844 had not aggravated the distress last year; but if not, why were its provisions relaxed? And how did it happen that the moment the relaxation took place the distress abated? For his own part he wished the Act had never been touched. It was a disgrace to the country to have a law that required touching. If it had not been interfered with, his belief was that the question would have been settled in a week, and hence he was sorry that it had ever been meddled with at all. The country might possibly allow another relaxation to take place; but he felt convinced that they would not bear it above once more, for their eyes were fast opening to the true merits of the question.

MR. HUME

had been anxious to hear the speech of the right hon. Baronet; but he confessed that, looking to what was expected from this Bill, and what he had just stated to the House, he was utterly at a loss to understand the right hon. Baronet. Much time had been taken up by the right hon. Baronet in stating the principle on which our currency was based; but that was not the question before the House on the present occasion. The Motion of the right hon. Gentleman the Member for Stamford did not require the House to go back either to 1811 or 1819. The right hon. Baronet had spoken lightly of the report of the Lords' Committee; but it was nevertheless an honest report, and in accordance with the evidence that was laid before the Committee. He agreed with the right hon. Baronet, however, that the recommendations of the Committee were exceedingly vague. The Committee were all agreed, however, that the Acts of 1844–45 did greatly aggravate the distress when the time of pressure came. Although there had been a great jumble on the part of the supporters of the measure of 1844, as to what was expected from it, and what had been its result, he begged to say, that if there was any one principle more intelligible than another in that measure, it would allow no interference with its operation; and yet ruin stared the country in the face till interference took place. This showed that it was founded on a wrong principle when it required such interference. The right hon. Baronet seemed determined to maintain the principle of his Act; he was unwilling to yield, even although every fact was against him, for, with the exception of the Bank Directors, all the other witnesses were opposed to him. With respect to the report of the Committee of that House, it was right that the public should know that the numbers in its favour would have stood exactly twelve to twelve but for the accidental absence of two Members; and taking this fact in connexion with the bearing of the evidence, it could hardly be expected that the public could have much confidence in the report. With respect to the Act of 1845, relating to Scotland, he ventured to say that there never was a more uncalled-for piece of legislation in the world. Not one single soul in Scotland was found to support it; and all the Scotch witnesses who were examined before the Committee spoke of its bad effects. After the best consideration which he could give the subject, he did not hesitate to confess his belief that the measure from which so much good had been expected did really aggravate the evils that it was intended to remedy, and he, therefore, was clear in the conviction that it was quite right to draw the attention of the House to that subject.

MR. HERRIES

was satisfied, from the course which the present discussion had taken, that he was justified in bringing forward the Motion which he had submitted to the House, and he felt quite confirmed in the opinion that the question could not rest where it now was. In bringing forward the present Motion, he wanted to show that the report was not in conformity with the evidence; that purpose had been fully answered, and he should certainly draw the attention of the House to this question early in the next Session of Parliament.

Motion accordingly negatived.

House counted out, and at Two o'clock adjourned.