inquired whether the noble Marquess or the Government had received any report of a meeting of merchants and bankers of the city of London on the distressing state of the money market? Yesterday it was very bad, and it was still worse the day before; and the worst accounts were received from Lancashire and Yorkshire. It appeared that numerous orders had been received from America for woollens in the West Riding, and for cottons in Lancashire; yet the manufacturers could not execute these orders, and were even obliged to stop their mills. Now, as by the visitation of the season we had been compelled to send, day by day, for fresh supplies of food from America, the happy circumstance of these 425 orders would have enabled us to get this food without the payment of bullion; but as these orders could not be executed, it had become necessary to send bullion. His belief was, that the great remedy would be found in both Houses of Parliament not allowing any Railway Bill to pass in future without a clause extending over a longer period the time of payment of instalments. With the old railways they could not interfere, because to do so would be breaking contract; but in future it ought to be a principle that not above a certain amount of instalments should be required to be paid up within the year. The noble and learned Lord proceeded to say, that, to his certain knowledge, the best paper in the city of London was refused at the end of last week and the beginning of this at 12 and 13 per cent discount. In a very short time, the instalments would be called for under the new Railway Acts: and there was such a necessity for avoiding forfeiture, that Parliament might make what terms they pleased. This suggestion came from him backed by a very high authority in the money market and the city.
§ The MARQUESS of LANSDOWNE
was understood to say, that within the course of a few hours the noble Lord at the head of the Treasury had been in communication on this subject with a very respectable portion of the merchants and others in the city; but he (the Marquess of Lansdowne) was not prepared to state what was the result of that communication.
§ LORD ASHBURTON
was understood to observe, that any disorganization of the monetary interest in the city affected the country generally, and that the whole of the difficulty arose from the restrictions on its issues imposed on the Bank in 1844. A sudden stoppage of accommodation, on the part of the Bank, had taken place, with something like 10,000,000l. of bullion in the coffers of the Bank. It had hardly ever been known that there was so large an accumulation of bullion. The whole of the confusion had arisen from the restrictions, which had left the country in the predicament of having only 2,500,000l. in the Bank disposable, while there were 10,000,000l. of bullion in its coffers. The whole scheme rested on a mistaken theory, in his opinion, though the Act, no doubt, had the sanction of the late Government, as well as of the Members of the present Government, besides some of the highest authorities on the subject in the country. In 1844, he had stated to their Lordships 426 that the measure would work pretty much as it was now working. It was a great mistake to suppose that any additional accommodation given to the country must be shown in an additional issue of bank notes. The amount of notes had varied but little; it had been sometimes at 20,000,000l., sometimes 20,400,000l., and sometimes 20,500,000l.; but it had never reached 21,000,000l.; but the private securities had varied from 12,000,000l. up to 18,000,000l. On the 29th of August, 1846, the public accommodation was 12,000,000l.; in April, 1847, it was 18,000,000l.; but the whole amount of notes issued, instead of increasing, had decreased in that period. Any apprehension of the issue of notes increasing in proportion to the amount of the accommodation given by the Bank, was incorrect. He thought it impossible that the Government should sit down with things as they were at present, when, for the first time in the memory of most of their Lordships, Exchequer-bills had been at a discount for weeks and months together. The question was one of much importance; and if it had not been for fear of occupying too much of their Lordships' time, he should have been sorry to pass it over in so slight a manner as he had done.
§ EARL FITZWILLIAM
thought the Government were exceedingly indebted to the noble Lord for turning the attention of the House to this subject in rather a different point of view from that which had been taken by the noble and learned Lord. He thought nothing could be worse for the country than that it should take for granted that the present state of things arose from one simple cause, and that cause the railways.
§ EARL FITZWILLIAM
had great doubt on the point. The same cause had existed in the last Session of Parliament; but not being accompanied by certain other causes now in operation, had not produced the effects that were now observed. His hon. Friend had said, that the Bank Act of 1844 had the concurrence of both the leading parties in Parliament, and of many other parties of high authority in such matters; but he (Earl Fitzwilliam) thought he had observed that Parliament never legislated worse than when the two leading parties in the State, by accident, concurred in any particular opinion.
observed, that what 427 he had said that night was in continuation of what he had said on a former night on the same subject.
§ LORD WHARNCLIFFE
rose simply to state his view to be, that the causes which his noble Friend near him (Lord Ashburton) had assigned, were really not those which had led to the present unfortunate state of the money market. In his opinion, the Act of 1844 was founded on sound and just principles. If there had been no such regulation of our monetary system, it was his belief, and that of very well-informed parties who had communicated with him, that the country would have been in a very much worse position than at present. The amount of liabilities in the banking department in August last had been reduced by April very considerably. Looking at what had passed within the last eight months—considering the vast sums invested in railways—and the high price of grain, owing to the great demand in consequence of the famine in Ireland—it was to him a matter of surprise that the country was not in a worse condition than that in which it now was placed. He believed that but for the security afforded by the Act of 1844, the pressure would have been greatly aggravated.
§ LORD ASHBURTON
spoke in explanation, and was understood to complain of the conditions imposed upon the Bank by the Charter of 1844. With a reserve of more than 10,000,000l. of bullion, the Bank was restricted in affording accommodation to the commercial world, so as greatly to embarrass the trade of the country. By its charter, the Bank was compelled to adopt the same course under every possible variety of circumstances; it adopted the principle of Le Sage's Doctor Sangrado, and applied the same remedy to every disease.