QUESTION. (Hansard, 19 April 1860)

§ THE CHANCELLOR OF THE EXCHEQUER

said, he would answer the last question first. The course to be taken on the subject of inland bonding depended a good deal on what the House had voted or might vote in connection with the Customs' Duties Bill. As soon as that Bill had passed the House, which he hoped would be very soon, he would state what he proposed with respect to inland bonding.

In reply to the Question as to the liabilities of income tax collectors and their sureties, the House was aware that the appointment of collectors, and the arrangements in general, were not under the direct control of the Executive Government, but 2005 under the superintendence of local authorities. But there was some misapprehension in the hon. Baronet's Question. The appointments of collectors were not permanent appointments, but were made from year to year; the bonds were taken from year to year; and consequently the liabilities of the sureties of the bonds could not be carried forward from year to year. A great deal of attention was therefore requisite on the part of the local authorities to see that the bonds were kept up, and that the sureties were renewed with the appointments. But this was a part of the system somewhat difficult to work under the superintendence of the local authorities, and he thought that the attention of the House might be advantageously called to it—he hoped during the present Session; for the liability of tax-payers to be called on for second payments was a most serious matter, and the state of the law was not satisfactory.

As to the order of business, he proposed to take the Committee on the Customs Bill if he could do so by eleven o'clock. If not, he would not that night proceed with any of the measures under his care, except the Bill for repealing Sir John Barnard's Act. The Refreshment Houses and Wine Licecnes Bill could not come on; he would place it for Monday, and then state when it would be brought forward.

The next Question was that of the hon. Member for Greenwich (Alderman Salomons), who asked if his attention had been directed to the Bank Return in The Gazette of Friday last? It had; for as the hon. Member correctly stated, that Return was regarded by the whole mercantile community as an index to the state of the country, and undoubtedly it was the duty of a person in his position to keep it in view. The principal facts relating to that Return were well shown in the Parliamentary paper moved for by the hon. Member himself, and published that morning, by which any one would at once see the most material facts. The first page of that paper showed that the diminution in the Bank reserve was almost entirely caused by the withdrawal of notes of £1,000 each. The notes of that description held by the Bank at the last Return amounted to £1,927,000 only; while on the 11th April, the date of the previous Return, they were £3,585,000. So large a difference as that having occurred in a single denomination of notes was of itself a demonstration which supplied the answer to the latter part of the 2006 hon. Gentleman's Question—namely, that the diminution of the reserve was not produced by the ordinary requirements of trade, but by some special operation. The latter part of the Question seemed, however, to imply that that result had been produced by some concerted action on the Bank's reserve, and with the view to produce a disturbance in the currency. He was not prepared to give any decided answer upon that point, further than to say that he did not think it was a "concerted action" in the natural interpretation of the words—namely, an action determined on by a combination among a variety of parties. There was no variety of parties; for it was entirely owing to a proceeding of a single house of great eminence and enormous transactions, which had thought fit, in the exercise of its own discretion, to adopt measures that had had that effect. There certainly was intention, though, perhaps, it did not amount to concert. The hon. Gentleman asked if this had been done in order to produce a disturbance of the currency of the country. He should go beyond his duty if he gave an opinion on that subject. Nothing would be more inexpedient than for the Chancellor of the Exchequer to presume, by opinions given in that House, to interfere with the freedom of mercantile houses carrying on their ordinary business, who might do what was not prudent or imprudent, and who might take measures which they were perfectly free to take, but which, if they were of great extent, might injuriously affect the public interests. Every customer of a Bank was free to do what he liked with his balance, whether that balance was at a private bank or the Bank of England. On this, and on more general grounds, it was not fitting in him to pronounce an opinion on the matter. He had, however, seen the Governor and Deputy-Governor of the Bank of England, and one of the partners in the house of Overend and Co.—the house concerned—who, he must say, had invited communication, and had stated all the facts, and their view of the case, with the most perfect frankness. The Bank of England being a public institution, if there was anything to blame in its conduct, it might be a very proper subject of complaint in that House. But all persons were agreed that there was nothing that could be made the subject of censure in the proceedings of the Bank for the last fortnight. On that he believed there was unanimity of opinion. 2007 On the other hand, if the proceedings of a private house had been imprudent or injurious to the public interests it would be a very bad way of curing that evil if the Chancellor of the Exchequer should presume to pass sentence on their proceedings. It was within the knowledge of all that whatever had been done in this case had been done, not so much as a private transaction, but rather in the exercise of the power which every mercantile house might think itself entitled to exercise in order to expose what it might think wrong in the existing state of the law, so as to bring into view what it might consider a public evil, and thereby to produce and promote a disposition to apply a remedy to that evil. He gave no opinion on the existence of any such public evil. The state of the case he apprehended to be this. After the crisis of 1857, the Directors of the Bank of England were gravely impressed, as all must be, with the extreme inconvenience and mischief that resulted from repeated suspensions of the law at the discretion of the Government: yet the Bank of England and the Government had jointly found that that suspension was unavoidable, under the circumstances of the crisis when they occurred. The Bank of England had subsequently a rule for what he might term, not invidiously, the exclusion of a particular class of traders from discount; because the Directors of the Bank thought that such a rule was necessary to enable that establishment, under critical circumstances, to maintain their position, and to preclude the necessity of the interference of the Executive Government for the suspension of the law. The parties affected by that rule, on the contrary, thought that it was a very bad and injurious rule—that it tended very greatly, not only to their inconvenience, but to that of the public—and that it tended to throw what they considered their legitimate business into the hands of the Bank of England. These were very grave matters on both sides. They might well deserve careful investigation, but they were matters lying far above the region of the mere selfish or personal interests of any mercantile establishment whatever: they, in fact, cut deeply into the whole question of the policy of the present law; and nothing should be said tending to prejudge such a question. But this ought to be said in justice to the Bank—that everybody admitted that they had acted with the most perfect propriety and prudence under the circumstances of the 2008 case; and in justice, on the other hand, to the house of Overend, Gurney, and Co., that they had not the smallest objection to giving publicity to all the circumstances, because they consider that they have acted within their own right and discretion, and likewise in conformity with what they believe to be the public interests. Under these circumstances he did not think it necessary to go further into the matter.