BANK OF ENGLAND AND BANK OF IRELAND. (Hansard, 6 February 1844)

§ Lord Monteagle

in rising to move for the returns of which he had given notice, relating to the liabilities and assets of the Bank of England, said he would first remind their Lordships how the matter now stood. When his noble friend Earl Spencer—then Lord Althorp—introduced the bill for the renewal of the Bank charter, he accompanied that bill with another relating to the circulation. From the state of the public business, and also from the misapprehension which prevailed at that period, the second and most important bill did not pass into a law. The Bank charter having been conclusively settled for ten years, no further measure of importance had since been introduced to Parliament. In the course of last Session he took the liberty of adverting to the subject, when the noble Duke opposite said the present Session would be the most convenient time for entering upon this discussion. In that opinion he concurred entirely, but in exact proportion as it was contrary to the public interest to have a premature discussion, it became important that all the information that could properly be given, should now be laid before Parliament, to enable them to discuss it with advantage; and as a question of this description was likely to 270 originate in the house of Commons, it was necessary to consider in what position the two Houses would stand on the subject. In the other House, during the time of the late and present Governments, there had been a mass of most important evidence taken before a Parliamentary committee; that evidence had been partly communicated to the House of Lords, and it was, therefore, important to know whether it was the intention of the Government to institute any inquiry by means of a select committee of that House. In putting the question he was far from expressing an opinion in favour of that course, for he thought the information at present before Parliament was quite sufficient for all purposes of useful legislation; but if a committee were to be appointed, it was clear that it should be done as soon as possible. His question, therefore, was whether it was intended to institute any such supplemental enquiry, and next whether in the event of there being no inquiry of this description instituted, it was the intention of the Government to lay before Parliament any documentary evidence stating the negotiations they had had on the subject with the Bank of England. It was possible, that it might be impolitic to produce some of this correspondence, but if there were any papers in it which indicated the course intended to be taken by the Government and the reasons on which they had come to their conclusion, and were prepared hereafter to defend it, he thought the sooner they could be produced consistently with the public service the better. In the course of the last inquiry, most important and valuable information had been given by men who were qualified, not only as men of learning and science, but also from their practical experience, to form a sound opinion on the subject. Among them were Mr. Horsley Palmer, Mr. Loyd, and others, and these gentlemen advocated most strongly the principle of looking to a central issue of notes. This was, however, misunderstood, and a great outcry was raised on the part of some persons against any measure which contemplated a central issue as being the creation of a monopoly of banking. These Gentlemen, however, and those who agreed with them never dreamed of creating a monopoly of banking. Banking as such ought to be as free as any other trade; but the issue of money, the transfer to a paper cur- 271 rency, the exercise of what in simpler times was a prerogative of the Crown, the power of restraining and regulating by paper the circulation of money throughout the land, was no creation of a monopoly of banking, but only the exercise of that species of general regulation on the part of the supreme authority in the State without which no monetary system could be considered safe, and without which they would cast undue responsibility on the Bank of England. Nothing could be clearer than that if, in a time of exigency, they could reduce the amount of circulation, the effect would be to enhance the value of money; and if all over the land banking establishments existed with unlimited power to issue a paper circulation, the enhancement of the value of money by the Bank of England would be an additional motive for such banks to counteract the action of the central bank, and render the exchanges more unfavourable to the country than it would otherwise be. This doctrine and the prejudices of the public bad hitherto stood in the way of a settlement of the question; but he thought the sooner the terms agreed to between the Government and the Bank were made known, the more likely there was to be produced in the public mind a feeling of satisfaction on the subject. He did not now wish to elicit what the proposition was, nor did he throw out these suggestions with any other view than that of assisting the measure when it should be brought forward. The third question be wished to ask was, whether the alteration in the law which was contemplated on the subject of banking, would apply to Ireland as well as to England. He did not mean as part of the same bill, but contemporaneously, and on the same principle. He was sure, that whatever the plan was, it was important, especially at the present time, to show that the system recommended for this country was of the same character and founded on the same principles as that which was about to be introduced in Ireland. The noble Lord concluded by moving for an Account of the average liabilities and assets of the Bank of England, during the years 1842 and 1843; balance sheet of the public income and expenditure for October, 1843, and 2nd January, 1844; and an account of the sums received from sale of stock, remittances from China, and from property tax, during the years 1841, 1842, and 1843.