PAPERS MOVED FOR. (Hansard, 27 March 1860)

§ LORD MONTEAGLE
, in moving for certain papers connected with Indian Currency, warned the Government that, in establishing banks of this nature, they should take care to effect a responsible—a directly responsible—management. Remote responsibility in such matters amounted to no responsibility at all. He viewed with great apprehension any attempt to substitute for private credit the authority of the State. All experience showed that, to place in the hands of a Government the power of tampering with the circulation, was a course fraught with danger; which must be immeasurably increased, when the weapon was placed in the hands of a Government with almost uncontrolled influence, and at such a distance from the supreme authority as to be practically irresponsible. To confer on the Sovereign power the privilege of issuing promissory notes payable on de- 1326 mand, was a course pregnant with evil, and which must lead to complications dangerous to the security of commercial enterprise, and to the authority of the Crown itself; while to disturb the system of private credit by the establishment of State Banks with the trumpery object of saving a small sum annually, was to sacrifice the greater object to the less. It was by the due use of credit, that the real development of commercial transactions was promoted; and nothing had a greater influence upon a sound system of trade than a sound system of banking. The noble Lord concluded by moving for Copies of all Correspondence between the Secretary of State for India and the Government of India, touching the Establishment of Government Banks; and for a List of all the Banks now existing in India.

THE DUKE OF ARGYLL
said, he had just laid upon the table the Correspondence referred to by his noble Friend. His noble Friend said, he had not wished to enter into the question; but he had, nevertheless, indicated a very distinct opinion as to the issue of a paper currency. He would not attempt to anticipate a discussion until their Lordships were in possession of all the documents. The question was of great importance; it was surrounded with difficulty—and whatever course was taken, it would be necessary for Parliament and the Legislature of India to take sufficient precaution against the possibility of abuse. He was sorry that neither Lord Grey nor Lord Overstone was in the House; for both those noble Lords in 1857 laid down doctrines upon the subject of banking, the very converse of those which his noble Friend had to-night enunciated. Both those noble Lords distinctly held and laid down that it was the especial duty of Government to issue paper-money, and that that great power should be withdrawn from the hands of all private corporations. Without entering into the dark and almost inscrutable subject of Currency, he believed it was as much the duty of Government to undertake the issue of paper-money, as it was to regulate the coinage. For many years high authorities had recommended that a paper-issue for the Indian Empire should be adopted; and under sufficient restraints, and with proper securities, he was of opinion that the measure proposed by the Indian Government would confer a great benefit upon that county, and would effect a considerable saving in 1327 its finances. At the same time he was by no means to be understood as advocating, either for India or for the home countries, a withdrawal of the power of issuing paper money at present exercised with advantage by private corporations.

§ THE EARL OF ELLENBOROUGH
, without presuming to discuss the question till he had read the papers which had been produced, was of opinion, from the nature of Indian transactions, that no very extensive issue of paper-money would probably be required. If the Government sought to make payments in that manner to persons other than those who might wish to avail themselves of the facilities which paper money afforded, very serious consequences must be expected to ensue. He wished to inquire whether the noble Duke had yet received, in any official shape, the statement of Mr. Wilson, the Financial Secretary for India, on which he was exceedingly anxious to offer some observations.

THE DUKE OF ARGYLL
replied, that he had only received a copy of the speech that morning, and had not yet bad an opportunity of consulting his right hon. Friend, the Secretary for India.