THE CHANCELLOR OF THE EXCHEQUER
moved the appointment of a Select Committee "to inquire into the operation of the Bank Act of 1844 (7 & 8 Vic. c. 32), and of the Bank Acts for Ireland and Scotland of 1845 (8 & 9 Vic. c. 37, 38)." The right hon. Gentleman said the Motion was similar to one to which the House 193 agreed in the last Session. The Committee was then appointed, but only one witness had been examined when their further proceedings were interrupted by the dissolution of Parliament.
§ MR. ROEBUCK
wished to know whether it was the intention of the right hon. Gentleman to move that this should be a Secret Committee? The last was a Secret Committee, and it was a sort of hocus pocus which he did not understand.
THE CHANCELLOR OF THE EXCHEQUER
said, it had been the uniform practice of the House to have Committees of this description Committees of secrecy. The only difference between Committees of secrecy and Committees not of secrecy, but which excluded the public during the examination of witnesses, was, that in the former case Members were not able to go into the room while the examination of witnesses was proceeding, find, therefore though there was something very awful in the sound of the term "Secret Committee" there was very little difference between a Committee of secrecy and another Committee. He did not attach any importance to the Committee being a Committee of secrecy and it was merely in deference to the practice of the House that he moved it should be so in the last Session. There was nothing in the relations between the Government and the Bank of England which the Government desired to be concealed; but he believed it was thought questions might be asked reflecting on the credit of particular establishments, or involving matters which it might not be desirable to have discussed in public during the progress of the inquiry, and considerations of this kind had led to the adoption of the precedent to which he had alluded. Hon. Members would see, if they referred back, that in old Committees of this sort even witnesses had requested that their names might be suppressed and initials only given; but the weekly returns of the Bank of England had given more publicity to financial matters than had formerly existed, and if it was the general opinion of the House, he would accede to the request that the Committee should not be one of secrecy.
§ MR. MALINS
said, he rejoiced that no time had been lost in proposing the reappointment of this Committee, but he should have been glad if the Government, taking into consideration the difficulties existing in the money-market, had brought forward a measure on their own responsi- 194 bility, because he did not think that the labours of the Committee would lead to legislation during the present Session. At present a state of things existed which was most detrimental to the commercial interests of the country. The rate of discount of the hank of England on the 21st of March last was 6 per cent, and on the 2nd of April it was raised to 6½ per cent, at which rate it had since remained, and one day last week the Bank of England had refused to make any advances upon Government securities. It was most essential that in a commercial country money should be procurable at an easy rate, and if the present state of things continued it would be the destruction of small operators. What had led to the present state of things was the absurd division, by the Act of 1844, of the Bank of England into two departments. As he had explained on a, previous occasion, the only resource which the Bank had to operate upon was its reserve notes, and those were at present reduced to £3,500,000, and hon. Gentlemen conversant with those matters would agree with him that when the amount of reserve notes fell below £5,000,000 commercial transactions in this country could never be carried on with advantage. He would venture to say that war taxation had not been so much felt by the commercial community as was the present high rate of interest. Its effect was to make the rich richer, and the poor poorer, and the Government would find that the commercial interest were beginning to be alive to the importance of the question. The subject seemed to him to be of such importance that he had felt it his duty to offer a few remarks to the House, and his principal object in rising had been to express the hope that the Government would lose no time in bringing forward a measure upon the subject, and that they would not consider that having appointed this Committee they had discharged all their duty. His suggestion was that we should have by law the power of relaxing the Act of 1844, and so important did he consider the subject to be that unless he saw the progress made by the Committee was such as to enable the Government to legislate during the present Session, and if the existing pressure in the money-market should continue, he should before the close of the Session bring the whole subject under the notice of the House, and submit to it a Resolution for its approval.
§ MR. T. HANKEY
said, that from the 195 observations which had fallen from the hon. and learned Gentleman who had just spoken one would be inclined to conclude that absolute ruin had been brought upon the mercantile community by the operation of the Act of 1844; but he, for one, did j not believe that the general rate of interest had anything whatsoever to do with the working of that Act. He did not wish that the opinion should prevail out of doors that great commercial distress existed when such was really not the case; and in corroboration of his opinion upon the subject he might add, that when in Manchester the other day, he had been informed, upon the best authority, that the high rate of interest had had no effect whatsoever upon trade, which was in a most thriving condition in Manchester, Liverpool, and in other great commercial towns. His own experience in London went to confirm that statement. The object of the Committee was merely to inquire whether the provisions of the Act of 1844 had been carried out.
§ MR. HUDSON
expressed it to be his opinion that to make the proposed Committee one of secrecy would be an useless proceeding, inasmuch as the Committee of 1844, of which he had been a Member, had been a Secret Committee, and yet all the evidence which had been taken before it had been published to the world. Sir R. Peel had attended most assiduously upon that Committee, and the acquisition of a great deal of information had been the result of its labours. He therefore could not understand why further inquiry into the subject should be instituted, and he thought that the Chancellor of the Exchequer should at once legislate with respect to it, if legislation should be deemed to be necessary.
§ MR. A. AYRTON
contended that the proposed inquiry should be conducted with the utmost vigour and should embrace within its scope every subject connected with the Bank of England, and the relation which it bore to the trade and commerce of the country. He was of opinion that, as there was no necessity for immediate legislation upon the matter, it would be highly inexpedient that the Chancellor of the Exchequer should at once introduce any measure in reference to the Act of 1844. The Bank Charter was now granted in perpetuity, but with the liability to be redeemed whenever Parliament should deem it desirable to take that course, and he might state that he had been in com- 196 munication with many gentlemen of considerable authority upon the question in the City of London who believed that that charter might be altogether abrogated with great advantage to the community. There were others, however, who thought that the Bank of England should be charged with the management of the whole currency of the kingdom, with such intended powers of control as would enable it to relieve the existing commercial distress. He was not one of those who deemed that such a scheme would be attended with much success, but, as men of great practical experience differed in opinion, it was, at all events, desirable that the Committee should pursue their labours energetically, and that legislation should be proceeded with in no hasty spirit.
§ Motion agreed to.
§ Select Committee appointed. [See p. 223.]