HC Deb 11 May 1866 vol 183 cc772-4

I take this opportunity of inquiring of the Chancellor of the Exchequer, Whether there is any truth in the prevalent rumour that Her Majesty's Government have authorized any relaxation of the provisions of the Bank Charter regulating the issue of notes?


The right hon. Gentleman has anticipated the question I intended to put to Her Majesty's Government; but I would also wish to inquire further, whether in the event of their not having already taken measures to afford relief the necessity for so doing is not deserving of their immediate consideration under existing circumstances?


I wish to ask the Chancellor of the Exchequer, whether he is prepared to relax the provisions of the Bank Act in the event of the Bank directors making a proposition to that effect?


In the first place, in reply to the question of the right hon. Gentleman opposite, I beg to state that there is no truth in the statement that Her Majesty's Government have authorized any step to be taken at variance with the provisions of the Act of 1844. In point of fact, they have not arrived at any decision upon the subject of the state of things which prevails in the City in immediate connection with the calamitous event announced yesterday. I may go further and say, that until two hours or two hours and a half ago no representation or formal report of any kind had reached me from the City upon the subject of the existing state of things; but for the last two hours and a half my time has been occupied in receiving information and statements, and, I may add, an important requisition from very influential persons connected with the City. I have seen many of the most influential and respected members of the body of the London bankers on the subject, and I have not yet had time to see, but I expect to see as soon as my engagements in this House will allow me to leave my place, a deputation regularly constituted from the joint-stock banks in London to the same effect. The purport of the statements made by them is that they conceive the state of panic and distress which prevails in the City to be without parallel in the recollection of the oldest men of business in the City of London. They suggest and desire that in some form or other relief should be afforded. But I am not yet cognizant of the actual state of affairs in the City, as it is exhibited from time to time by the accounts of the Bank of England, it being very well known that the reserve of the Bank of England constitutes the principal part of the disposable money of the country, and that it constitutes the stock which is immediately acted upon by any extraordinary demand for money. Before I take any steps in the matter, I should wish to know the precise course of events which have taken place at the Bank during the day; but in referring to the course of events at the Bank do not let it be supposed that I make the allusion as if it were possible to raise any question with reference to the position of the Bank itself. I merely speak of the events that have occurred at the Bank during the day as likely to guide us in the course we may adopt, because the Bank of England is, in reality, the mirror of the monetary slate of the country, and from the the actual trans actions of the Bank we obtain from day to day the most definite account of the condition of the money-market. The representations that have been made to me are of a general and partially indefinite character, while, at the same time, they are representations which, on account of the quarters from which they proceed, are entitled to the greatest weight and importance, and are entitled to the most anxious, careful, and, I may add, the immediate consideration of the Government. Possibly, in as short a time as that during which I have been occupied this afternoon, we shall have acquired very valuable information on the question by which we shall be guided in the course we may adopt. At the present moment I can only say that the condition of things in the City has our most careful and anxious consideration, and that we shall feel it to be our duty to bring the matter as far as in us lies to a wise and a prompt issue. The hon. Gentleman behind me has asked me whether we should consent to suspend the Bank Act in the event of the Directors of the Bank of England making a proposition to that effect. On that question I should wish to make this remark: in the first place, having stated our anxiety to proceed promptly with this matter, I think I had better not answer any question; especially any question relating to the hypothesis of a request by the Directors of the Bank of England, for I have not the least reason to suppose that any request from that quarter is likely to reach the Government.

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