Sitting of 9 February 1826

COUNTRY BANKS THAT HAVE BECOME BANKRUPTS.
Mr. Humemoved for a return, "of the number of Country Banks issuing notes that have become bankrupts since January 1816, up to the present time; stating the place where the banks were established, the number of partners in each bank, the amount of debts proved against each, and the amount per cent of dividends paid or declared upon each, as far as the same can be complied with." The House would then have before it, a statement of the extent to which the public banking had suffered by the country system.
Mr. Grenfellwished the account to extend to Scotland.
Mr. Humesaid, he had no objection.
Mr. Maberlythought the account objectionable, as an intrusion upon the affairs of individuals. If the principle wag once established, that any member might move for an inquiry into the private concerns of parties, it was difficult to see where the operation of that principle might stop. How could that House entertain cognizance of the debts which had been proved. He hoped the Chancellor of the Exchequer would not accede to such an improper motion.
Mr. Grenfellwished Scotland to be included, because he was persuaded that a return to the motion, as regarded Scotland, would be nil.
Mr. John Smithsaid, that when an intrusion upon the private affairs of individuals was spoken of, it ought to be recollected of the country bankers, that they had in fact been dealing in that which was the money of the country. Theirs was quite a different case from that of merchants or ordinary traders; and he was therefore disposed to support the motion. He had not until that morning read the correspondence between the Treasury and the Bank; but, in reading it he had been much struck with a paragraph which stated, that the country banks, all of them, without exception, had for some time fostered, supported, and encouraged, a rash spirit of speculation. Now, in the name and on behalf of very many country bankers who claim to be considered men of honour, prudence, and integrity, he called on the chancellor of the Exchequer, to state the grounds upon which he had made that sweeping accusation. At the same time, it would, perhaps, be convenient to the right hon. gentleman to prove to parliament the sound policy of directing public odium against the country banks at this particular crisis.
The Chancellor of the Exchequersaw no objection whatever to the motion. He thought it quite reasonable that the House should be in possession of any facts relative to the number of country banks which had failed. Such a return could do no mischief to parties who might have failed and were in business again. With regard to the terms in which the country bankers were spoken of in the correspondence between the government and the bank, he could have no objection to give every explanation to those who might fancy themselves injured thereby. Most certainly, it never had been the in-

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tention of ministers to convey the slightest imputation against individuals. Their argument went merely to the general system of country banking. And it was difficult to think that any member could have listened to the account given a few nights since by the hon. member for Taunton, of the course which a country banker was compelled to pursue in order to carry on his business profitably, without seeing that the system was calculated to produce the effects adverted to in the correspondence. In truth, an allusion to the system of country banking generally, and not to individuals, was all that ministers had contemplated; and that was the only interpretation which they imagined could be put upon the words in question; but even if the charge had been made against individuals, he could not look at it in the same light with the hon. member for Mid-hurst. Every man who possessed, and traded with, considerable capital, was, more or less, an encourager of speculation; and to say so, was neither an impeachment of his honour or his integrity.
Mr. Calcraftwas happy to hear the explanation given by the right hon. gentleman; but, without that explanation, he certainly should not have understood the expressions, "rash speculations, aided, fostered, and abetted, by the country banks," as exactly placing the country bankers upon that advantageous ground which it seemed they really occupied in the right hon. gentleman's opinion. For himself, however, he denied the fact that it was by the issues of the country banks that the rash spirit of speculation, as it was called, which had existed in the country, and the enterprises to which that spirit had led, had been supported. Seventeen millions of paper could not have been issued by any country banks for purposes of speculation, and that speculation principally carried on in London. For, as fast as a country note made its appearance in London, it was instantly converted into a bank of England note, or into gold, or the banker was discredited. Those speculations, which, joined to the conduct of government, had done so much to disorder the country, never could have been carried on by country bank notes. To the motion he saw no objection. As far, however, as disclosure went, it would do the country bankers no harm, but good. It was well for ministers to talk of country paper! The right hon. gentleman had more
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accommodation paper in the market than all the country banks put together. No circumstance had more contributed to do mischief than the immense amount afloat of exchequer bills. Government, deal as it would with the system of the country banks, would do little good until the issue of exchequer-bills was limited. He could not place much confidence in any set of men who could speak on the 13th of January of the distresses of the country as being over.
Sir J. Wrottesleysaid, that during the last year, the country bankers had been almost the only class of persons who had not speculated. They had been rather the victims of the speculations of others, than speculators themselves.
Mr. Hudson Gurneythought, that though it would be perfectly easy to obtain a return of the number of failures of country bankers, it would be extremely difficult to learn the amount of the dividend they had respectively paid. The object of the hon. gentleman appeared to be, to show the advantages of the Scotch system of banking, as compared with that obtaining in England; both with regard to its general security, and as not being obnoxious to the objections of encouraging undue adventure. But, if such were the hon. gentleman's view, Mr. Gurney said, he must entirely differ with him. There was nothing he should more deprecate than the introduction of the Scotch system into this country, as he was convinced, that its direct tendency would be to the increase of the number of bankruptcies, though not, perhaps, leading to the breakage of so many banks. The Scotch system was one which went, much more than that of England, towards facilitating speculations of every kind; but, it was the customer there who broke, and the banker who swept his securities.
Much had been said, and said very idly, of the degree in which the paper of the country bankers had aided in the delusions and frauds which had been practised an the public; but, in fact, the country banker is, of all mankind, the most interested in preventing speculation. The speculator is his natural enemy. If he gains, the profit is not the banker's; and, if he becomes insolvent, the banker is sure to lose. At the same time, there is an evil in the existing system, for which it seems difficult to find an adequate remedy. The banker allows an interest to the customer; consequently, he must

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employ the money deposited with him; and, when the mass of the transactions of the country are such as they have been of late, it is impossible for him, with the utmost precaution, to avoid entirely the discount of bills, of which the basis may be partly commercial transactions, and partly mere speculation; whilst his circulation will necessarily be proportionably increased by the increased prices of all things, measured in a perpetually increasing medium; and, when any revulsion takes place, it is obvious that the banker must as necessarily pull in his advances, for his own security, with the greatest rapidity with which he can effect it, in order to meet his engagements; and thus greatly increase embarrassment, whenever embarrassment shall be general.
The hon. member then entered into the detail of the successive depreciations of the currency, since 1797. He said, it was agreed on all hands, in the debates of that House in 1812, that the depreciation had reached 35 per cent. Now, he considered that this 35 per cent, or something like it, had hung upon them ever since. At one time, through the abundance of paper circulation, it had spent itself on the currency: at another, when that paper was called in, it had fallen on prices. Then we had commercial embarrassment, and agricultural distress, till the necessities of all men had brought the right hon. gentleman's bill of 1819, by a sort of tacit agreement, into abeyance and commodities paid for in paper, found the prices at which they could be produced under the existing burthens of the community.
For his own part, he sincerely wished the circulation of the country out of the hands of private individuals. But, it was utterly impossible to do away with the paper currency of the country banks, without supplying some other medium, which should sustain prices in a manner to meet this depreciation, which had gone to 35 per cent in 1812; and this could, in his opinion, only be done by one of two measures—the one, the abandoning the law for making gold, at its present standard, the only legal tender; the other, issuing such amount of paper, either by government directly, or by the Bank, as should sustain the general sale value of commodities at something like their understood level.—Mr. Gurney said, that he felt some apology was due to the House, for having taken that occasion of express-
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ing his sentiments on the subject; but as, in the more regular debate on the right hon. gentleman's motion to-morrow, many gentlemen of much more weight would probably be desirous of giving their opinions at length, he might then be precluded from an opportunity of stating what was his decided conviction; namely, that unless some measures of the nature adverted to were entertained, they would bring on an almost universal bankruptcy, and a degree of pressure, to which the embarrassments of 1816, 1821, and 1822, could hardly bear a comparison, and under which, how the multiplied engagements of the country, public and private, could possibly be met, was more than he could comprehend.
Mr. Robertsonsaid, that the system upon which the Scotch banks were conducted, was that of creating an artificial capital, which was lent out in aid of the manufactures and trade of the country. That this system had been productive of great advantages, was proved by this, that it had raised Scotland from being the poorest country in Europe, to the state in which it at present was. The banking system in England was upon a different footing, it had the effect of keeping up a system of trading and manufacture which ministers were using every effort in their power to oppose. When they found that the system now pursued by ministers actually sent twenty four millions a year out of the country without any return, it would be clearly seen that nothing but our banking system could have prevented the present distresses of the country from having come upon her long before. And if ministers persevered in their intended plan of withdrawing the one and two pound country bank notes from circulation, they would aggravate those distresses ten fold. It was to him astonishing that the House should continue to look with silence upon this conduct on the part of his majesty's government; first causing of a great evil, then suddenly changing their measures, and thereby aggravating the distress which their first error had caused. He begged of the House to recollect this argument with respect to our commercial system, that our foreign commerce, including shipping and all, did not amount to more than forty millions a-year, while our manufactures, agriculture, and internal trade and commerce, amounted to one hundred and thirty millions per annum. Such being the case, it became

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the duty of the landed and manufacturing interests, to check the progress of the evil. But when had there been any discussion upon the subject since the meeting of parliament? There had, indeed, been some motions for the production of papers and returns, but no hon. member had come forward to propose a remedy for the evil. On the contrary, every one seemed anxious to shut his eyes from the view of those miseries, the existence of which no one could deny.
Mr. Tierneywished to ask a question of the chancellor of the Exchequer, in order to solve a doubt suggested by the correspondence between the Bank and government, concerning branch banks. In the answer of the Treasury committee of the Bank to the communication from ministers, they said, "Finding also, that the proposal by the Bank of establishing branch banks is deemed by his majesty's ministers inadequate to the wants of the country, &c." What he wished to ask was, when the Bank made that proposal to establish branch banks, what was the nature of that proposition, and why it was not before the House?
The Chancellor of the Exchequersaid, that no proposition had, in fact, been made in the written communications of the Bank to establish branches of its own institution. Something of that kind might have passed in the course of the discussions, but certainly no direct proposition to establish branch banks of their own had been advanced in writing by the Bank.
Mr. Tierneysaid, that the Bank had said expressly, that the proposal which had been made by them was not one which ministers could adopt, because they considered it inadequate. Certainly, if such a proposition had been made by the Bank, it ought to be known to the House.
The Chancellor of the Exchequerrepeated his denial of any proposition having been made in writing by the Bank to establish branch banks; though, if they had made such a proposition, ministers would have deemed it inadequate to the prevention of a crisis like that through which the country had just passed.
Mr. Tierney.—Then, in point of fact, the Bank did never make any such proposal ["No," across the table]. Then it ought not to have appeared in a written communication of their own that they did.
Mr. Pearsesaid, that the subject might hate been touched upon verbally and iu-
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cidentally, but no specific proposition had been made. The expressions in the answer of the Bank went too far. But, for years past, that plan had been repeatedly a subject of conversation.
Mr. Humethought, that the trading in money ought not to be allowed to individuals, it being a branch of the prerogative of the sovereign. As to bringing before the public, individuals who had been unfortunate, there could be no objection on that ground, as those individuals had already appeared in the Gazette. His object was merely to lay before the House certain facts. That the public had suffered much from the recent failures, by the issuers of paper, was beyond doubt; and those losses ought not to rest upon the poorer classes of the community. He was anxious that the House should see the amount of loss which had been sustained from actual failures.
The Chancellor of the Exchequersaid, he was anxious to explain an observation of his which had been misunderstood by the hon. member for Wareham. That hon. member seemed to be of opinion, that he had thrown the whole blame of the excess of issues on the country banks. He wondered how the hon. member could have so misunderstood him. What he did say, was, that it was not possible to charge the whole evil, or even its origin, on the country banks, or upon any persons issuing paper. The speculations which had brought on the present crisis were of a character necessarily incident to all commercial countries, where there existed a great share of capital and enterprise. In all such cases, individuals would be found ready to take advantage of every circumstance favourable to their own interests. He had further said, that the speculations of 1819, whatever their immediate effect, had been followed by increased confidence and speculation.
Mr. Calcrqftsaid, he was most ready to admit the right hon. gentleman's explanation. He felt it at the same time necessary to say, that the papers on the table went far to strengthen the impression he at first entertained of what had fallen from the right hon. gentleman.
The motion was then agreed to.

SILK TRADE.
Sir T. Lethbridgepresented a petition from certain Silk Throwsters of Somerset, against the importation of foreign Silks.
Mr. Robertsoncalled the attention of the House to one or two facts connected with this subject. It was said, that 30 per cent was a protecting duty for our silks; but he knew that wrought silks could be introduced, both from India and from France, at such a rate as to compete with our manufacturers when putting the raw material into the loom. Would the House, then, allow ministers to persevere in a system which would destroy a trade that the country had been nursing for ages? To compete with the French was impossible. They had a particular kind of silk which they never allowed to go forth but in a manufactured state. Let that silk be brought into our market, and it would be bought up at whatever price by our fashionables. These silks, once introduced, would drive our produce out of the market. Was the English manufacturer, with a load of debt hanging like a millstone round his neck, to be compelled to a competition with the French manufacturer, whose debt sat so lightly upon him that it was not felt as a burthen? Were they to tolerate such a proceeding? Let them call upon ministers to put this part of their new measures at rest. How else were they to get out of the difficulties and distresses under which the country laboured, unless by giving every stimulus to industry, which was at present at a stand. The labouring classes were without employment, and the means of procuring food or raiment; and yet ministers persisted in subjecting the manufacturers to the competition of cheaper markets.
Mr. Baringpresented a petition from Taunton, against the introduction of French silks, which, he said, deserved the serious consideration of the House. The subject, he hoped, would undergo discussion at an early period, seeing that hundreds of thousands of people anticipated ruin and starvation from the importation of foreign silks. It was not now the time for him to go into that discussion; though it would be very desirable if the president of the Board of Trade could contrive to be in his place when petitions of this nature were sure to come on. He hoped to see the question set at rest. The conviction on his own mind was settled long ago. What he wished to see was, whether or no the House would support ministers in their desperate resolution. Great anxiety existed among the silk manufacturers, and
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great hopes were entertained by them, that the House would defend them against the ruin which awaited them from the measures pursued by government. He had no great confidence in that source of relief, when he recollected how his own objections to the measure had fared two years ago. But the public mind should be set at rest. The master silk-weavers could not find employment for their people until their own fate was known. Whether right or wrong, they all said, that if French silk goods were let in, there was no chance of selling a single yard of English silk. He could not approve of hearing them in a committee, because of the delay which would follow. Nor did he hope, if the committee were allowed, that they would be able to make out the case, that it was impossible for the English manufacture of silks to bear the competition of a free trade. The case which they had made out to him had left his mind without the shadow of a doubt. Still, the question ought to be set at rest by a bill. The conduct of government justified a suspicion, that they would not scruple to take liberties with the law. The late order to prevent the issuing of stamps from the Stamp-office, was a direct violation of the existing law. He was anxious to get rid of the one and two pound notes, but he wished to see them abolished gradually, and by legal means. He had to complain of a similar infraction with respect to the silk laws. A duty of 7s. 6d. a pound had been laid upon thrown silk. He had said at the time, that every penny of that protecting duty on thrown silk, must so far sacrifice the interest of the manufacturer. An order had lately gone down to state, that it was the intention of government to reduce that duty 2s. 6d., or from that to 3s., as they found that 5s. was a sufficient protection for the throwsters; so completely ignorant were ministers of that interest, concerning which they were so ready to advise enactments. As if the law and the parliament were as nothing compared with their own notions, they undertook to accept 5s. per lb. upon an article which was to have paid the state 7s. 6d. per lb. This was a strong case; and, like the other, might be justifiable by circumstances. But if so, it was the bounden duty of ministers, to have stated them to parliament, and sought protection from the offended law in a bill of indemnity. The whole trade was unhinged,

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and the operatives were in the greatest straits. What be wished was, to impress the minds of ministers with the necessity of speedily taking their case into consideration. The petitioners had requested him to remove an impression which had been made by the hon. baronet (sir T. Lethbridge), that they were satisfied with the corn laws. They had directed him to contradict that statement. Their impression, on the contrary, was, that the principle of free trade must be greatly injurious to the general interests, unless it were extended to corn.
Mr. Huskissonwished to excuse himself for not being present sooner. His only apology was, that he had not been absent for his own convenience, but in discharge of the duties of his office, and from which he had repaired to the House. He knew that this apology was inadequate to the occasion; but it was the best he had to offer. As to the order of the Treasury to lower the duty on thrown silk, it was a mistake to state that it was done without authority from parliament. The board of trade having satisfied themselves, that 5s. was a sufficient protection, they had directed so much of the duty to be taken, and that bonds should be given for the excess of 2s. 6d. per pound, should parliament not concur with the government. The House would see at once, that the whole of the duty was secured to the public, should parliament think proper to exact it, and that ministers had by no means assumed a dispensing power over it. He would not now go into the discussion of the deranged state of the trade and currency of the country. When the subject was brought forward in the regular and formal manner, he should be quite prepared to meet the objections to the regulations in the silk trade, and all the other alterations in the commercial system which parliament had adopted. The hon. gentleman himself had given his sanction to much of what had been done; and there certainly was nothing more desirable, than that this matter should be fully discussed in that House.
Mr. Davenportimplored ministers to take the subject of the silk trade again into consideration. He gave them credit for their intentions; but the consequences of their measures were just such as, two years ago, he had predicted. Open the ports of England, he had said, to foreign silk, and the home manufacturer must be ruined. In his neighbourhood, thousands
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were suffering extreme distress; and were chiefly supported by the warrant of the magistrate. This state of things could not last. What was to follow it? Clearly starvation. He called upon the landed and manufacturing interests to induce ministers to forego a plan which must ruin them all.
Sir T. Lethbridgesaid, that the hon. member for Taunton had mistaken his expressions, both as to time and meaning. It was not on a petition which he had presented, but in the course of the observations which were made on the report of the Address that he had stated that which he believed to be perfectly correct; namely, that the great body of the manufacturers took a more chaste view of the corn question than before. He had never taken upon him to say, that the manufacturers would have no complaints about the price of corn, however high; but only that, in the present state of the price of provisions, they did not complain of the Corn laws, but of the destruction of their trade. And, indeed, in their present condition, it would not be surprising if they were to complain of the price of provisions, however low. Yet, to be candid, he could not but look upon this alteration of the silk trade as an outwork to a similar alteration in the Corn laws, which, if not directly touched, was so by a side-wind, tending at no distant period to an open trade in corn. From the distress resulting to the manufacturers from this first attempt, the House might be called upon to consider of a similar alteration in the corn trade. He thought that, if the intentions of government bore that way, the more manly course would have been to begin with the corn trade. For his own part, he must oppose any proposition like that of a free trade of corn. As long as the national debt remained, no such thing could be listened to. The country could not support that competition and its present burthens together. He would be as glad as any to see low prices, but high prices there must be. The prices must be kept up by an import duty, amounting to an absolute prohibition, so long as the interest of the national debt was to be paid.
Mr. Ellicesaid, that the hon. baronet was certainly right in considering this measure as the outwork of an attack on the Corn laws. If the principle of freedom was to be applied to other trades, it ought to be applied to the trade in corn.

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With respect to the case of the silk manufacturers, a great uncertainty prevailed in the public mind upon that subject. He intended shortly to move to have all the petitions referred to a committee. Much useful light had already been thrown on this subject, and much more might be expected. It was the opinion of persons who had the best continental intelligence, that unless there was a great improvement in machinery, and a great reduction in the price of corn, they could not proceed with this bill, without throwing out of employment the great mass of people engaged in the trade. Whether that trade could be built up again, was another question; but the present ruinous effect was clearly contemplated. The bill had, notwithstanding, one good effect. It had induced the silk manufacturers to institute a full inquiry into the state of their trade, and the result was a conviction on their part, that the foreign competition would prove ruinous to the home manufacturer.
Mr. Baringsaid, he had never encouraged this particular measure respecting silk: on the contrary, he was almost the only person who had raised his voice against it from the outset. Still it was rather hard, he must admit, to throw the whole responsibility of the bill upon ministers, since it had passed through the House with almost unanimous approbation. He was old enough to know, that those measures were not always the best and wisest which received the readiest acquiescence of that House.
Mr. Huskissonsaid, he never intended to intimate that his lion, friend had supported this particular measure. All he meant to state was, that the opening of the colonial trade, and the removal of the duty on the raw material, had his hon. friend's approbation.
Ordered to lie on the table.

CORN LAWS.
Mr. Baringsaid, he understood, that a gentleman had lately returned from the Continent, who had been abroad during the whole of last year, under instructions from his majesty's government to collect information on the state of the foreign corn trade. He was anxious to know if that gentleman had made any report upon the subject, and if so, whether and when it would be presented.
Mr. Huskissonhad no difficulty in stating, that the individual alluded to had
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been sent from this country with instructions from government, to obtain information respecting the corn trade of those countries in Europe from which England imported gram. He had returned, after making all the necessary inquiries, and a very few days ago had put into his hands, a report of great extent. It contained 150 folio pages, together with a voluminous appendix. As yet he had been unable to read the report. As far as he knew of it, however, he bad no reason to think that the gentleman had not obeyed his instructions; and if this should continue to be his opinion after a perusal of the report, he knew of nothing which ought to prevent its being laid before parliament.

BANK OF ENGLAND BALANCES, &c."
Mr. Grenfellsaid, that although the accounts for which he was about to move were generally granted without opposition, he hoped, under the particular circumstances of the times, that he should be allowed a brief explanation of his views as connected with them. The accounts referred first to the balances lodged by the government, for the public, in the Bank; and next, to the charges for the management of the public debt, and other services performed by the Bank for the public. It was, perhaps, in the recollection of those who now heard him, that when he had first called the attention of parliament to the affairs of the Bank, the production of these accounts was resisted, not only by that corporation, but by the then chancellor of the Exchequer. After, however, a two or three years perseverance in calling for them, the resistance gave way, and on every successive year that he had since called for them, they were yielded without a struggle. It was thought by many, that the publicity which had been given to the transactions between the government and the Bank had been productive of public good. And, when he considered the approaching period of the expiration of the charter—a charter which he hoped and trusted would expire—he thought that, as the question between the Bank and the public was about to terminate, he should be allowed to say a few words for perhaps the last time, on the state of their affairs. The first class of accounts which he now called for related to the deposits of public money lodged in the Bank for current use, in the same manner as any gentleman kept his

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cash account at his private banker's. He remembered that, at one time, the average amount of the public balance so placed for ten or twelve years amounted to no less a sum than eleven or twelve millions a year. Of late years this amount had, it was true, considerably decreased. In 1821, it was diminished to 3,900,000 l. In 1822, to 4,200,000 l. In 1823, to 5,200,000 l. In 1824, to 7,200,000 l. He was quite sure, that no practical man at all conversant with the value of these lodgments, would deny the advantage which they must confer upon the Bank; and he must repeat what he had often asserted, that the nature of the service performed by the Bank for the public, as compared with the profits accruing from the use of such large deposits, was so trifling, as hardly to admit of calculation in any proper settlement of these transactions. It was right to call the public attention to this circumstance; for when the period arrived of the expiration of the Bank charter, it would be for the government to consider what bargain it would renew for the transaction of the public business with the present Bank (for he thought it would still be preferable to deal with them); or whether a second bank on a large scale would agree to give the public a participation in the profits arising from the heavy balances in hand, and take such a sum as 10 or 20,000 l. a year for the management of the national business. At all events, the public ought, whenever the bargain was again made, to receive a large participation in the profits derived from the use of so many millions of their own money. Let them consider how the public cash account stood at the Bank of England. The Bank had advanced 15,000,000 l., the whole of its capital, to the public, at 3 per cent interest, and this large premium they were receiving for the year 1824, while they actually were holders of nearly seven millions and a half of the money of that same public. Surely there ought to be a balance of mutual profit struck, under circumstances like these. The next subject that he wished to refer to was the allowance made by the public to the Bank for the management of the public debt. The trouble of this management consisted in the daily transfer of Stock, and the payment of the annual dividends to the public. It was due to the Bank to say, that the whole of this business was invariably performed with promptitude, exactness,
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and diligence; that, in fact, nothing could be better done; and there was only one complaint to be made respecting it, which was, that the price for the work was much too high. When the charter should expire, he hoped this matter would also be taken into consideration; indeed, on an equitable revision of this part of the bargain, the public ought to save 250,000 l. The hon. member then concluded by moving for the said accounts.
Mr. Pearsesaid, he had no objection, on the part of the Bank, to the production of these accounts; but he would not, on the present occasion, go into the merits of the public bargain with the Bank, or the terms which ought to accompany the contingent respecting their charter. He hoped that important subject would in due time be gravely considered; not as it regarded the Bank itself, but as it would best serve the government and the country. They would at least come to the discussion with the full knowledge of the eminent services performed by the Bank for the public, when that corporation had stood in the gap, and effected what, upon emergencies, legislative interposition would have failed to accomplish. What the consequences to the public would be, if there were not such an establishment in existence in its chartered form, he would leave others to anticipate. As to the allowances to the Bank, it would be time enough to discuss their amount when the charter was under consideration; but really when the hon. gentleman thought proper to estimate the services performed by the Bank, he should not keep back the immense risks and losses which they incurred, in transacting the public business. On a late occasion they had lost by the forgeries of a single person above 250,000 l., and this, too, in the execution of the public business, and so contrived by the individual, that although the strictest inquiry was made into the conduct of the Bank clerks, in no single instance could negligence or impropriety be attributed to any one of them for it. There were other losses of the same character continually happening, which must be taken into the scale of estimating the advantages derived by the Bank from its connexion with the pecuniary business of the public. He regretted the allusions to the charter, and that the existence of it should be imputed as a matter of grave accusation to government. He hoped when the

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proper time for discussion arrived, that gentlemen would not be governed by passion in their consideration of it, but be influenced by the principles of reason and sound sense.
Mr. Humehoped, that the time had come when all those exclusive charters were to be abolished, by which the community at large always suffered for the gain of a few. Full of faults as was the paper lately sent by the government to the Bank, he entirely concurred in that passage of it which put an end to the hope of a renewal of the Bank charter. As the word "lottery" was introduced in the accounts called for, he was anxious to know how it had happened that the pledge given by the government two or three years ago for the extinction of lotteries in that year had not been fulfilled? It seemed to him that these lotteries were to be carried on perpetually; two of them were still advertised. How had this happened?
The Chancellor of the Exchequerreplied, that on the subject of lotteries it was true, and he ought to take blame to himself that it was so, that when he had brought in his former bill, an adequate provision was not made for their speedier extinction. When he had moved the resolution in the year 1823, upon which the lottery bill was founded, he was not sufficiently aware of the mode in which these lotteries were practically conducted. It was never the custom, he had since ascertained, that they should be drawn in the same year, for the service of which they had been voted. The consequence was, that the lottery for one year spread over one or more future years, and hence arose the apparent inconsistency between the pledge he had given and the fact which the hon. member had stated, of the prolongation of these lotteries. There were now, however, only two of them remaining to be drawn, and these must be concluded within the present year, and he pledged himself that they should be the last.
Mr. Robertsoncondemned in the strongest terms the policy of government, in breaking down the old commercial system of the country, to make way for theoretical notions of a mischievous tendency. He alluded chiefly to the condition into which the silk trade had been thrown, and the manner in which government, whilst sweeping away other charters, were ready to set up a charter against that class of traders who deserved their encouragement.
The motion was agreed to.
Mr. Ellicegave notice that on Thursday next, he would move for an account of all the issues of gold coin at the Bank from July 1823 to the 1st of February 1826. In 1823, he believed the 1l. and 2l. notes had been entirely withdrawn from circulation, and he meant to show what portion of the amount had been supplied by specie, for the purpose of exposing the fallacy which prevailed respecting the real quantity of cash required for the circulation of the country. There was a great deal of gold coin, it should be always remembered, which remained in the hands of bankers, without being issued at all in the manner supposed. He should move for these returns, that the House might be in possession of all the information of which the subject was susceptible. On the present occasion, he begged to move for a return of Bank notes in circulation on the 1st and 15th of each month, for six months, to the 1st of February inclusive, and the same return of Bank post bills.
The Chancellor of the Exchequer, while he had no objection to the production of these returns, because, under existing circumstances, he thought a case was made out to call for them, begged to enter his protest against such motions being considered as mere matters of course. Neither the Bank nor the government opposed the production of these returns; protesting, however, against their consent being taken as a matter of course.
Mr. Pearsethanked the right hon. gentleman for the manner in which lie had delivered the consent of the Bank; for certainly this information ought not always to be given as a matter of right. Indeed so impressed were the Bank proprietors of the injury to the public interests which might follow these constant disclosures of the state of the Bank affairs, that they had by large majorities refused to grant them in general courts. The directors were ready to give every necessary information; though he renewed their protest against its being called for as a matter of course.
Mr. Monckcondemned this mystery on the part of the Bank of England, and preferred publicity as by far the better course, both for the Bank and the country. They had the example of the Bank of France in favour of the public inspection of such accounts, and it ought to encourage similar publicity in this country.
Mr. Calcraftsaid, that the Bank proprietors might refuse to call for the accounts, from a confidence in their directors, but it did not follow that parliament should participate in the same confidence. He did not mean to say whether parliament confided, or did not, in that body, for he would decide on each case as it arose. With reference to the stoppage of the stamping of country bank notes, it was, on the part of ministers, a glaring violation of the existing law, and ought not to have been done without notice. Did the government mean to continue the instructions already sent to the board, to prevent the further stamping. If they did, he would tell the right hon. gentleman that the proceeding would cast such a discredit on the country bank notes, as to throw the local circulation in every corner of the kingdom into the greatest confusion. The effect would necessarily be, that the panic, which was said to be subsiding, must become perpetuated. There was no analogy between the mode of effecting this matter, and the regulating the duty on thrown silk; for, in the latter, the thing was cautiously done, and proper security was received from the parties. But was any security here taken for the loss of revenue which the country would suffer from stopping the stamping of country bank notes
The Chancellor of the Exchequersaid, that government had been induced to send that order to the Stamp-office, that advantage might not be taken by the country bankers to get stamped an unusual quantity of notes; by which means the effect of the proposed measure would be forestalled. He did not intend to deny, that the issuing such an order might require an act of indemnity from parliament, but he trusted, when the necessity of the case was taken into consideration, that the House would not impute such a proceeding to any improper motive.
Mr. Calcraftdid not mean to say, that ministers were actuated by improper motives; but he believed that in this, as in many other instances, they had committed a great error in judgment, and fallen into heavy mistakes. Why not have mentioned their intention? The parties would then have, known their real situation? The ministers might rely upon it, that this harsh and abrupt measure would deteriorate the local currency, and keep alive the panic which they thought had subsided.
Mr. Elliceapproved of the course adopted by government. If they had not stopped the stamping of country notes, the consequence would have been, that the country banks might have supplied themselves for a year to come, by which means the laudable intention of government would have been defeated. He granted that such a proceeding was illegal; but, in a case of so much importance, the duty of government was, to weigh what would be of the least inconvenience to the public; and, in his opinion, they had chosen the right course.
Mr. Calcraftwas surprised at the lightness with which his hon. friend appeared to treat the subject. He supposed his hon. friend was not aware that every country bank had taken out and paid for a license, which entitled them to get notes stamped up to next October, under the sanction of an act of parliament. He was glad to see the right hon. gentleman treat the subject more seriously.
Mr. Ellicedisclaimed having recommended the measure; but did not apprehend the same consequences from it as his hon. friend.
Mr. Gordonbeheld the measure with great alarm. From the information which he had received from the country, he could add his testimony to what had been stated by his hon. friend, of the effect which it was likely to have in deteriorating the country bank notes. He regretted that government had taken, upon its own authority, to effect this object in so strong and unconstitutional a manner, without the previous interposition of parliament. He had heard of notes being sent up to be stamped, and which were expected back to meet previously formed engagements. Let the House contemplate the inconvenience which must follow from such a state of things. He hoped ministers would re-consider the matter before it was too late, or else the agricultural distress of 1821 and 1822 would return upon the country with redoubled force.
Mr. Robertsonwas no advocate for the banking system, but must condemn the measures which were in contemplation. After encouraging extensive circulation, it ill became ministers so abruptly to suspend it.
Mr. Monckthought the measure most salutary. In proposing it, government had not led, but followed, the public mind, which was unequivocally in favour of it. The injury done to the private bankers

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was not so extensive as was represented; For, without any enactment on the subject, that species of circulation would have ceased to exist before the expiration of a year. Perhaps the measure in question might have been rendered unnecessary by a resolution, declaring that all notes issued since the 4th of February, should be recalled from circulation. In taking it, however, ministers were fully justified.
The motion was then agreed to.

STATE OF IRELAND.
The Marquis of Lansdownwished to ask of the noble lord opposite, how far the suggestions thrown out in the report of the committee of the House on the State of Ireland, imperfect as they were, had been acted upon. He called them imperfect, certainly not from any disposition to speak slightingly of the labours of the persons who composed the committee, of whom he himself was one, but because they were from the nature of the inquiry imperfect, and the committee themselves called them imperfect. However, a great many suggestions of importance had been thrown out on the subject of education and other matters connected with the state of Ireland, and he supposed the king's government had acted upon those suggestions as far as was found practicable. There were circumstances in the state of Ireland which rendered it very desirable that some of the suggestions should be carried into effect without delay. He was therefore very anxious to learn what had been done in pursuance of the suggestions in the report.
The Earl of Liverpoolprofessed himself ready to give the noble marquis every information in his power on the subject to which he had referred. In doing this, he would take the report of the committee for the basis of his explanation, and would go over the points suggested one by one. The first suggestion related to an alteration of the law of landlord and tenant. The subject had been referred to the law officers of the Crown, who had had it for some time under their consideration, and the result of their opinion had at last been

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digested and prepared for the consideration of parliament. What he had to say on the next point was not so satisfactory. The subject of grand jury presentments had been, and still was, under the anxious consideration of government; but it was not in such a state that any measure upon it could soon be submitted to the consideration of parliament. The next point was the criminal and civil business of the quarter sessions, on which he could not say that any thing was done. The next suggestion related to assistant barristers. It was recommended that they should not act as counsellors, and that was agreed to. The next points were the constitution of civil and criminal courts, the process of custodiam, the summary regulations of sheriffs and sub-sheriffs. Upon these points a report would hereafter be made. The next point was the administration of justice by magistrates in corporate towns. On this subject a bill was prepared. The next topic related to fictitious forty-shilling freeholders. On this subject he was not prepared to say that any measure was in progress for the consideration of parliament. Among the succeeding points of suggestion were the extension of public works, additional accommodations for lunatics, and regulations of manor courts. With regard to them nothing particular had been done; but, the two most important suggestions related to tithes and education. Upon the first of these topics he could assert, that the measures which had been adopted by parliament had been most successful; so successful as to exceed the expectations of himself, the original proposer. Returns had been received from all the dioceses of Ireland, with the exception of two. From these returns, it appeared that the act had been carried into execution, with success, in at least one fourth of the parishes in Ireland. But these returns did not afford evidence of all the advantages derived from the measure. The agreements which were made in other parishes, in consequence of the act, but which rendered its operations unnecessary, were to be reckoned among its good effects. The operation of the act had been found most beneficial in the south and west of Ireland; and in the county of Cork, the business of the assistant barrister had been reduced one half in consequence of the absence of tithe causes. With regard to the point of education, it was wished to act on the system suggested,
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but many difficulties had been experienced In Ireland, prejudices were very strong with regard to education, both among Catholics and Protestants. It was therefore thought, that the best way would be to desire the commissioners to try an experiment in some place where it was not likely any resistance would be made to their plan. They readily undertook the task, and had since been employed in endeavouring to accomplish the object. It would certainly have been most desirable if the system originally proposed could have been carried into effect. Many difficulties had occurred; and the misfortune was, that every one had a system of his own. If, however, the experiment was once fairly tried, he had no doubt that it would succeed.
Lord Ellenboroughhad heard with regret what the noble lord had said about grand-jury presentments. He was sorry that no measure was in preparation on that subject. There certainly were not too few, but too many roads in Ireland. These roads were so many jobs, and were managed in such a way that the grand juries had not the means of doing justice. He was convinced that most of the money raised for making roads in Ireland was thrown away, as far as regarded the interest of the public. Part of a road was made this year, and part another; but the benefit which the public was to derive from it was postponed till the whole was completed, which might be twenty years; and till that period he considered the money completely thrown away. In a part where a gentleman resided, the roads were kept in very good order; but it often happened that where the country was populous, they were in very bad condition. With regard to the corporations, he believed the administration of justice was sometimes corrupt, and he thought that inquiry ought to be made into the mode of admitting persons into their freedom. He did not know how far the attention of government had been directed to the question of relief to the poor. For his own part, his opinion was very strong against any thing being done in that way. With regard to the question of education, it was his firm conviction, that until the Catholics gained their rights, they would never agree to any system of education which had been suggested. The public mind was at present greatly exasperated in consequence of the rejection of the measure of last session, and therefore any

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suggestions on the subject were not likely to be listened to.
Lord Clifdenbelieved, that the government would be glad to put an end to the grand-jury presentment system, if they could; but that was not easily accomplished. He agreed with the noble lord in what he had said about the roads, the management of which was often an enormous and shameful job.
The Earl of Liverpoolassured the noble lord, that any suggestion respecting the evils of grand-jury presentments should not be lost. The subject was under consideration. With regard to the administration of justice in corporate towns, whatever evils there might be to complain of, they could not be with propriety corrected by any general laws, because, the rights of corporations were secured by charter. He had no objection to a law to meet particular cases, but a general law would affect those who had discharged their duty properly, as well as those who bad neglected it. Besides, it was to be recollected, that when individuals found themselves aggrieved, they had their remedy in a court of law. He should be extremely anxious to see something done for the poor, if it were practicable. At the same time he was not prepared to say that any thing was practicable.
Lord Ellenboroughsaid, he should not be satisfied with any alteration on the subject of grand-jury presentments respecting roads, unless it was provided that no road should be undertaken except upon the report of a sworn surveyor. He also thought that no road should be undertaken without the sanction of government.
The Earl of Darnleysaid, that no agreement on the subject of education could be expected in Ireland, so long as the Catholics were deprived of their rights. The discontent produced by that denial of justice prevented every plan of reform from succeeding. Let the anxiety of the noble earl opposite to benefit that country be as strong as he asserted it to be, still, so long as the principles he avowed last session were acted upon, it was impossible there could be tranquillity in Ireland. He might as well attempt to erect a perfect building on an insecure foundation. With such an obstacle to improvement, all the efforts of the noble lord must fail. On the subject of education, an opportunity had occurred, before
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the rejection of the Catholic bill, to do much. There was a disposition on the part both of Catholics and Protestants to give way to each other; but the extinguisher on the question of emancipation had put an end to all hope of conciliation. With regard to the poor, he did not think that a system of poor laws ought to be established in Ireland.

STATE OF THE CURRENCY.
The Marquis of Lansdownrose to call the attention of their lordships to one of the most important questions which could be brought under their consideration. He intended to submit to them a series of motions, the object of which would be to reach the source of that embarrassment, which had prevailed, and still prevailed in commercial affairs. In doing this he was desirous of offering a few observations for the purpose of expressing the opinion which he entertained on the subject. He was the more desirous of submitting these few observations to their lordships, because he entertained an apprehension, that in the opinions he had formed on the subject, he had the misfortune to differ, respecting the causes of the present crisis, from some persons in that House, and also out of it, for whose opinions he entertained the highest respect. Before he proceeded further, he begged it might not be understood, that he intended to suggest, or that he expected, through any of the documents for which he should move, to reach any thing like a remedy for the existing evil. His opinion, founded upon what he conceived to be the nature of the evil, was, that it must be allowed to work its own cure. The state of the currency had turned the exchanges against the country, and gold disappeared. There was an accumulation of stock, and the consequence was, that any man who purchased at a maximum, and sold at a minimum was ruined or injured. The embarrassment would continue until, going through the whole community, it should be corrected by that increased demand which would be produced by the reduction of prices. Then would return, not that artificial prosperity, which had been witnessed, but that real prosperity which the country was capable of attaining, under its present state of taxation. He believed it was the opinion of the king's ministers themselves, that no adequate remedy could be applied to the evil. Concurring in this opinion, he thought that no time should

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be lost by parliament in investigating the cause, and if no remedy could be found, to endeavour to prevent the recurrence of one of the most tremendous and searching convulsions ever experienced in any country, and that in a time of profound peace. There were two classes of evils, both of which might be referred, in some degree, to the same cause, and yet they were in their consequences essentially different. The first was the state of the currency, which, running into excess and causing the exportation of the precious metals, affected prices and the state of the exchanges. These constituted a class of evils by itself, but one which it was the duty of parliament strictly to investigate, in order to prevent its return. Another evil attending the state of the currency was, the insecurity with which it visited the lower orders of the community, by depriving them of the value of their labour and the profits of their industry. Important as the first class of evil was, this was by far the most serious grievance of the two. When he recollected the important prerogatives of the Crown—and all prerogatives of the Crown existed only for the benefit of the subject—none appeared to him more valuable or more efficacious than that of coining money, which, interposed as a shield between ignorance and fraud, protected those persons, and secured to them their humble earnings. Those who depended upon their labour ought to be protected from being involved in the ruinous consequences of speculation. The state of the currency, however, exposed those classes of persons to ruin who had no share in speculation, and who ought not to be placed within the reach of the evils which it occasioned. He would ask any of their lordships who had happened to be in a country town when one of those failures had taken place, whether he could bring to mind the scene of complicated misery, and distress which he must have witnessed, without feeling that it was incumbent on him to do all in his power to prevent a recurrence of the most dreadful calamity to which a community could be exposed. If one of the hundreds of thousands who had been exposed to this evil had been stopped in the highways and robbed of his property, such an event would have fixed the greatest stigma on the energy of government and the foresight of the legislature. And, where was the difference between being thus
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robbed, and being despoiled of property by the operations of an excessive paper currency? There was said to be this difference between the two cases—that the persons attacked on the highway would have the means of defending themselves from attack whilst the community had no means of escaping from that which, sooner or later, was sure to fall upon them, in the shape of one of the greatest evils which it was possible to be subjected to. The evil consequences of the system to which he alluded were felt in all their severity by the labouring classes. In country towns local paper was usually the only currency in which they were paid for their labour. If they refused to receive the paper in payment, they must go without the reward for the labour to which they were entitled. The state of the currency as connected with the issue of small notes was, therefore, a subject which called for the serious attention of parliament. The motion with which he should conclude, was not intended to attack in any way the measures which government were about to propose for the consideration of parliament. With regard to the proposed measures respecting the issue, or rather the prevention of the issue, of small notes, he thought it would be more difficult for ministers to show good grounds for having authorized the continuance of that issue, at a time when the benefit of a metallic currency had been obtained, than to prove the necessity of putting an effectual stop to any further issue. He trusted, therefore, that their lordships would second the views of government by repealing a measure, which in an ill-advised hour, parliament had been induced to adopt. He concurred in the desire expressed by the noble earl opposite, to check the issue of small notes; and he believed there was no person who had read the papers on their lordships' table, but must be of opinion that the excessive issue of small notes had had the effect of driving the precious metals out of the country, as well as of raising prices during the last two years. This observation applied more particularly to the notes of country bankers. The effect produced by an excessive issue of small notes had been correctly described in a pamphlet which had already been noticed in terms of great praise in that House, and which proceeded from a gentleman who united in an eminent degree practical knowledge with theoretical accuracy. He

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meant Mr. Tooke. That gentleman had justly stated, that the effect of such an excessive issue of small notes was not only to form an addition to the general capital of the country, but to operate immediately as an addition to that part of the capital which was employed in speculation; and, in proportion as it operated to swell the amount of capital devoted to speculation, it had a direct tendency to raise prices in an artificial degree. The only circumstance which had surprised him, and doubtless many of their lordships, in the progress of the evil was, that under a state of law which provided for a metallic circulation, and for the convertibility of paper into specie, the check presented by that conversion had not sooner operated. That, perhaps, was to be accounted for by this circumstance—that a large artificial addition to capital having been created by an excessive issue of paper, a considerable time must elapse before the cause of the increase could be correctly ascertained. The first effect of an issue of country bank paper was, to create an artificial abundance of capital; the accumulation of capital caused a reduction of the rate of interest; by the reduction in the rate of interest facilities were afforded for speculation; speculation produced an effect upon prices; the alteration in prices checked the progress of mercantile exports, and that caused the precious metals to be sent out of the country. Then ensued that lamentable distress which arose from an accumulation of stock purchased at high prices being obliged to be sold at greatly reduced prices under the Influence of alarm. That he believed was a correct statement of the train of events which was always liable to proceed from a paper currency, such as that which was permitted to exist until 1833. He therefore thought it was the duty of parliament to check the issue of small notes as speedily as was consistent with safety; and the mode in which the noble earl proposed to effect that object was, as far as he understood it, extremely proper. He understood that the noble earl intended to propose, that no more one and two pound notes should be allowed to be issued, and that the currency of those already in circulation should be limited to three years. He must, however, take that opportunity of stating, that whilst he concurred with the noble earl as to the expediency of stopping the issue of small notes, he had
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heard with great surprise, of a step taken by government which he conceived to be unnecessary, and unconstitutional, for the purpose of defeating an existing law. What made the matter worse was, that this proceeding had taken place during the sitting of parliament, without any communication having been made to it. He could not see why, if government had the power to dispense with an existing law without the intervention of Parliament the same dispensing power might not be applied to other laws, and though perhaps judiciously exercised in the first instance, grow up into a system of interference with established laws on the part of the government, which would have the most dangerous results. It was therefore the duly of parliament to reprobate the first instance of the exercise of such a power. He must deeply regret, if ministers considered it necessary to suspend an existing law, that they had not communicated the fact to parliament, and at least obtained the sanction of a resolution for the course which they had pursued. He hoped that ministers would come to parliament for a bill of indemnity, for having done that which, however expedient, was constitutionally wrong. With respect to the measure of stopping the issue of small notes, he entertained no apprehension from it. It was, he knew, the opinion of many, that a paper currency, subject to all the evils to which it was liable, was nevertheless a species of accommodation, of which the country with its existing amount of taxation stood in need. That was a most important point for consideration. But it would become their lordships, before they concurred in the continuance of that great evil, to weigh well the value of the accommodation which it was calculated to afford. After the most attentive consideration, he could not bring his mind to believe, that it was at all advantageous to enable a person to do that without capital which should only be done with capital—that it could be beneficial, by throwing artificial capital into the market, to produce a rise of prices, which must, upon the artificial capital being withdrawn, be followed by a corresponding fall. He knew of no system of legislation which would prevent such an artificial rise of prices from being followed by a revolution, bringing ruin and destruction along with it. It being admitted, that the effect of an issue of paper was to raise prices for a time, it remained to be considered, whe-

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ther the average of prices might not be as great under a metallic currency. Suppose a commodity which, under a paper currency, sold at one time for 100 l., and at another for 50 l., should, under a metallic currency, sell at two different periods for 90 l. and 60 l.; the average was the same, and it was certainly more advantageous to the interests of the community, that a steady scale of prices should exist, than that a constant fluctuation of price should take place, occasioned by a system of paper issues, which had the effect of driving the precious metals out of the country, and thus producing a sudden vacuum, under the influence of which prices fell much lower than they ever could under a metallic circulation. The alarm which some persons felt at the proposed limitation of the paper currency was, he was convinced, perfectly groundless. A great deal of the apparent prosperity of last year, by which many persons were deceived, was manufactured for the occasion. As was the case with all articles of spurious manufacture, its acquisition proved to be a loss rather than an advantage. This was not the case with prosperity founded on a solid basis—the result of real capital in the market, capable of being immediately realized in the form of a metallic currency. The subject of the currency branched out into many different parts, with respect to each of which a variety of opinions was entertained. One of the most extraordinary opinions he had ever heard was that which some persons entertained; namely, that this, the most opulent country in the universe, could not procure such a share of the precious metals, distributed through the world as would enable her to carry on her commercial transactions. He knew that such an opinion was contrary to fact, and he derived his knowledge from accounts on their lordships' table, and from others which were within the reach of every one. It was proved by experience, that when any occasion for it existed, a flow of gold into this country never failed to take place. In deference to that species of mystery with which the Bank of England liked to surround itself to a greater degree, perhaps, than was expedient, he would not particularize dates; but he would confidently state, that on one occasion the Bank was able in the course of two years to increase a treasure of less than three millions of gold to one of fourteen millions. He therefore felt no
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apprehension of a scarcity of the precious metals. He, however, wished it to be understood, that he reserved himself with respect to the question of the effect of the amount of taxation taken in connexion with a metallic currency on the general means of the country. Whilst he entertained the opinion which he had expressed, of the propriety of checking the issue of small notes of country banks, he was equally desirous to see the Bank of England deprived of the power of circulating notes of the same kind. And this brought him to the consideration of the share which the Bank was supposed to have had in contributing to the crisis of last year. Having arrived at that part of his subject, it would be most unfair to pass by the opportunity of stating, that in the recent transactions between government and the Bank, with respect to the surrender of part of the privileges of that body for the purpose of facilitating the formation of solid banking companies, and the readiness which they had displayed to meet the public necessities, did them great honour. Giving them praise on that account, he was disposed to go further, and say that the Bank directors deserved great credit for the promptitude with which they endeavoured to arrest the effects of the late panic by a great issue of small notes. But, having said thus much, it would be uncandid in him not to add, that the Bank, in the first instance, so far from having arrested the progress of the late evils, had increased them by the extent of its issues of paper. He believed it would appear that in 1825, but more particularly in 1824, whilst the country-bank paper was increasing, considerable additions were made to the issues of paper and discounts of the Bank of England. After the language which was held by the highest authority of the Bank some time ago, he had a right to state, that the period to which he had alluded was not the proper time in which such issues should have taken place. It was a time when an efficacious check upon paper circulation might have been administered by the Bank, and could not have failed to produce a most salutary effect. He would explain the allusion which he had made to the words of an individual connected with the Bank. During the progress of that inquiry in which their lordships were engaged some time back, and the result of which was, known by the name of the Bullion report, one of the highest persons connected with

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the Bank, when asked what he considered to be the criterion (independently of the exportation of the precious metals) of an excess in the issue of paper currency, replied, "a state of trade in which money is hawked about every-where, and many persons are induced to undertake uncertain and imprudent speculations." He would ask whether, independently of the exportation of the precious metals which was actually taking place in 1824 to South America, a more accurate description could be given of the state of trade and speculation in England at that period, than was to be found in the words which he had just quoted. Money was then hawked about every-where, and the most imprudent speculations were going on. He had a right, therefore, to say, that it was deeply to be lamented that the Bank did not at an earlier period adopt measures for narrowing their paper-currency, and diminishing their discounts. His object was, to obtain an account of the amount of issues of small notes from the Bank during the last two years, in order to show the effect which those issues had produced upon prices. He was inclined to hope much from the abandonment of part of the Bank's privilege. With respect to the measure which would require country bankers to give security, it appeared to him to be attended with so much difficulty in its application, that he doubted whether it could be carried into effect. He thought that much more good would be effected by giving publicity to the transactions of public banks than by requiring securities. This would operate as a check upon improper conduct, whilst it would leave them in full possession of their funds, which would, in a great degree, be tied up under the proposed system of securities. He hoped, therefore, that the noble earl would abandon that part of his plan. He ventured to suggest, that it would be expedient, that wherever country-bank notes should be issued, there they should be made payable. Such a provision would remedy the inconvenience which had been found to result from country banks establishing branch banks in different towns, which issued notes payable only at the fountain head, or original bank.—He had now stated the observations which occurred to him with respect to the measures which it was the intention of ministers to propose. Many persons, he was aware, were of opinion that the effect of those measures would be
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to bring back the currency to the state in which it was placed by Mr. Peel's bill, and that it would, in that event, be impossible for us, with the existing load of taxation, to fulfil our pecuniary obligations. These same persons approved of the artificial paper currency, because they considered that it enabled them to fulfil those obligations which otherwise they could not do. He was unwilling to admit the possibility of the country being incapable of fulfilling all its engagements. If he could entertain such an opinion, he would say, in God's name declare the fact, and adopt a system of policy applicable to the situation in which we were placed. Proceed upon fixed principles, but abandon a system which caused perpetual revolutions, creating at one moment a state of artificial prosperity, and at another plunging the interests of the country into a state of unnatural depression—a system which scattered ruin through every part of the community, depriving every man of the means of knowing the value of the currency, and making him liable to have the produce of years of industry almost valueless. He hoped and believed that the measures to be proposed by ministers would have the effect of putting an end to a system which produced such calamitous effects, and of placing the banking establishments of the country on a solid foundation. The intended measures would not, he understood, apply to Scotland or Ireland, but he trusted to see, at a future period, some measures founded on similar principles applied to those parts of the country. The noble marquis concluded with moving for, "1. An account of the number of Bank of England notes in circulation on the 15th of February, May, August, and November in each year, from 1819 to 1825, distinguishing the notes for 5l. and under; and a like account of notes of the banks of Scotland and Ireland. 2. An account of all the notes issued by country bankers in England, Scotland, and Ireland, from 1819, up to the latest period. 3. An account of the number of bankrupts in England, Scotland, and Ireland, from 1819 to the latest periods at which the return could be made, distinguishing those who were bankers. 4. Copies of all charters granted to banking establishments during the same period."
The Earl of Liverpoolsaid, he did not feel it necessary to trouble their lordships with more than a few words on the present occasion; first, because it would be his

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duty at a very early period to submit to the consideration of the House one of the measures of which he gave notice on the first day of the session; and secondly, be cause, having listened with the utmost attention to what had fallen from the noble marquis, there was hardly a sentence which he had uttered, with which he was not disposed entirely to agree. So long as the Bank of England continued under restriction, parliament had a right to call, from time to time, for the accounts of the Bank, in order that they might be fully acquainted with the proceedings of that body; but the restriction having expired, and the Bank being under no control, he did not conceive that parliament was entitled to call for information from them as a matter of course. The information which the noble marquis sought for might, however, be obtained, though perhaps not so completely, from the Stamp-office. But though he did not consider the motion a matter of course, yet, connected as it was with a great legislative measure about to be submitted to parliament, with the concurrence (with respect to one of its branches) of the Bank itself, he thought their lordships had a claim to any information which might enable them to form a correct judgment on the subject; and he thought it would be most ungracious on the part of the Bank to throw any unnecessary obstruction in the way. He was happy to say, however, that the Bank directors entertained no such disposition. They thought that, under the special circumstances of the case, parliament ought to have the information which was sought for. The noble marquis had alluded to a transaction with respect to which he felt that a considerable degree of responsibility attached to his majesty's government. He alluded to the stopping for the present of the stamping of any one or two pound country-bank notes. The measure was not adopted, until notice had been given to parliament of the intention of government to effect such an object by legislative enactment; and it was only resolved upon in order to prevent the views of parliament from being defeated whilst the bill was in progress. The proceeding was not adopted upon light grounds. Government had positive information that there existed an intention of doing that which would have thrown considerable obstacles in the way of the measures which it was the object of ministers to recommend to parliament. If he were asked, why he had not adopted
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the course of applying to parliament for a short bill to sanction the proceedings which had been adopted, he would reply, that that step could not have been taken without the greatest partiality and injustice. The bankers near the metropolis would have got their notes stamped whilst the bill was passing, an advantage of which the bankers at a more distant part of the country could not avail themselves. Under these circumstances, it was considered advisable to adopt the measure without any previous application to parliament. It was done to prevent the desirable object which government had in view from being defeated.
The Earl of Lauderdaledenied that the issues of small notes had the effect of driving the metallic currency out of the country. The present distress, in his opinion, was not occasioned by the currency so much as by the spirit of extravagant speculation which lately prevailed throughout the country. The withdrawing of nineteen millions, which was the amount supposed to be withdrawn from the circulation of the country, was the true cause of the calamity. That these speculations had been indulged in was no fault of his. He had done all that lay in his power to warn the public from entering into these rash and hazardous enterprises; as had also the noble and learned lord, whom he regretted not to see now on the wool-sack. As to the Scotch banks, they were certainly found by experience to be established on principles of perfect security; but he was apprehensive, if the intelligent persons who introduced the system of Scotch banking were brought up to the bar of this House and examined, that they would admit that the Scotch system was, in many respects, incompatible with the commercial transactions of this country, and unfit to be introduced into England.
The Earl of Carnarvonsaid, he approved highly of the plan of extending the number of partners in banking establishments, and agreed also in the propriety of each of the partners of such establishments being made liable, in the whole amount of his property, for the concerns of the Bank. This would create a class of merchant bankers who would have an interest in attending to the affairs of the Bank, and would operate as a check against over-issues. Accompanied with these measures, he would be glad to see the country return to silver as the stand-

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ard of the currency, such as silver was at the old Mint-price. This would, in his opinion, place the currency on the most satisfactory footing. As to the proposed measure of withdrawing the one and two pound notes from circulation, it was, in his opinion, by no means calculated to remove the evils by which the country was afflicted. The adoption of this measure would operate injuriously to the farmer, and to the humble class of agriculturists and dealers, who principally carried on their business by means of the one and two pound notes. Great injury would be done generally to the community by withdrawing so large a sum as six or seven millions from the circulation of the country. This inevitable evil would follow from it, that it would contract the circulation of the country at a time when it required an extension. Whatever might have been the evil consequences of over-issues, the distress under which the country laboured must be augmented to an incalculable degree, unless parliament went to the root of the evil. That the withdrawing the one and two pound notes from circulation, and the substitution of a metallic currency, did not go to the root of the evil appeared from the letter of the first lord of the Treasury, and the chancellor of the Exchequer, to the Bank directors. It was there stated, that, "though a recurrence to a gold circulation in the country, for the reasons already stated, might be productive of some good, it would, by no means, go to the root of the evil." Here then, upon the acknowledgment of these gentlemen, the withdrawing of the one and two pound notes would not be an effectual remedy for the distresses. The letter proceeded thus:—"We have abundant proof of the truth of this position, in the events which took place in the spring of 1793, when a convulsion occurred in the money transactions and circulation of the country, more extensive than that which we have recently experienced. At that period nearly a hundred country banks were obliged to stop payment, and parliament was induced to grant an issue of Exchequer bills to relieve the distress. Yet, in the year 1793, there were no one or two pound notes in circulation in England, either by country banks or by the Bank of England." As the distress prevailed, therefore, when one and two pound notes were not in circulation, the House ought to pause before it gave its assent to a measure which would with-
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draw so large a sum from circulation. At the period of the South-Sea scheme, there were no one or two pound notes, yet then there was distress. In 1793 was there not distress? And at various other periods, was not distress as great and even greater, than at present? As, then, these evils existed when small notes were not in existence, he was unwilling to give his assent to the abolition of the small notes, without some further information. For his part he did not see the great evil of a paper-currency. At the time of the Bank restriction in 1797, the business of the country was chiefly transacted in paper, and during the subsequent progress of the war, down to the resumption of cash payments, a paper currency was maintained, without our experiencing such distress as we did at present. To prevent over-issues, means should be devised to prevent a greater circulation of paper than there was metal in the country to meet it; and if this were done, he saw no objection to the circulation of notes whether of great or small amount. As to extravagant speculations, at present, there was no very buoyant spirit of that kind afloat. The calamity now complained of was, not that there was too much gold, or too many notes, but that there was neither one nor the other, and the currency of the country was at a stand. An objection had been made to small notes, that by extending our circulation, they had a tendency to diminish the interest of money. Now, even if that were the case, it did not weigh as an objection with him; for in all states in prosperity, and where there was much money and much commerce, money was held at a low rate of interest; whereas, the interest of money was always high where there was little money, In all the proposed alterations of the currency, we should never omit to bear in mind that enormous weight upon the country—the national debt. When it was considered that the interest of that debt was to be paid, the effect of withdrawing six or seven millions from circulation must be most injurious. The effect of such a contraction of the currency must be, that the chancellor of the Exchequer would next year be obliged to state that the revenue of the country was not sufficient to discharge the interest on the national debt, and the expenses of the establishment. We were now in the tenth year of peace, and there was no likelihood of our being able to do more, during the

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probable period we might continue at peace, than supply and relieve our immediate exigencies. The currency of the country had gone through every variety of fluctuation—it had been over and over again tried in the crucible—paper was converted into gold, and gold again into paper, and still a new change was found necessary. In Scotland, an approved system of Banking had been brought to the test of experience. This was admitted in the letter of the noble earl opposite. "In Scotland there are not more than thirty banks; and these banks have stood firm amidst all the convulsions in the money-market in England, and amidst all the distresses to which the manufacturing and agricultural interests in Scotland, as well as in England, have occasionally been subject." And it was not a little extraordinary, that whilst ministers were inducing the people of England to abandon a system which sanctioned a small note circulation, they admitted the efficacy of such a system in Scotland; He would wish to see banking establishments of equal solidity in this country. He was persuaded that in returning to a metallic currency, every relation between landlord and tenant, and between man and man, would undergo a considerable change. When their lordships assembled next year, he should be happy to find that the government had funds sufficient to meet the yearly expenditure. In order to embrace the whole of the question, he would move for a return of all the notes issued by the Bank of England and the country banks since the year 1790.
The said motions were agreed to.