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proposed to prevent an injurious issue of paper by persons whose property was not adequately responsible for its value, all would be unavailing, unless the country was relieved from eight or ten millions of taxes-a remission which, he would venture his life upon the assertion, might be accomplished with the utmost safety; leaving all the duties of government to be carried on with much greater ease and with much more public benefit, than they were under the present circumstances.

Mr. T. Wilson said, he was a friend to the general principle of free trade, but that he thought the silk-trade, under present circumstances, ought to be made an exception; or at least that the principle should not be extended to that branch of our trade, while the monopoly of the corn trade was allowed to exist. He would not press the subject at that moment; but, at some future time he should feel it his duty to bring it under the consideration of the House, for he was quite convinced that unless some alteration was made in the corn laws, it was impossible that the silk-trade could go on under the existing regulations.

Mr. John Smith was of opinion, that unless the chancellor of the Exchequer entered into a much more full explanation of his imperfect statement than he had given, the effect would be, to increase that panic and alarm, of the existence of which he must be fully aware. He entirely concurred with the right hon. gentleman, in most of his observations respecting the issue of small notes by private banks, and of the injury which had accrued therefrom in some instances; but, he must remind the right hon. gentleman, that the undefined manner in which he had alluded to the intention of allowing joint-stock company banks, with a greater number of partners, and with, of course, a very large capital, might have an effect injurious to many banks within sixty-five miles of the metropolis, unless he explained immediately the time when this proposition was to be carried into effect. Without such explanation his proposition might create an alarm, and produce a recurrence of the panic which they were all so anxious to prevent. He did hope, therefore, that before the close of this debate the right hon. gentleman would give some explanation on this point. He hoped that in any plan which might be adopted, no privileges would be given that would go to destroy the ancient establish

ments. He himself was a partner in one of a hundred years' standing, which, he would say, had conducted its affairs with character and respectability; but his own interest would never induce him to sanction the system of circulating one pound notes, which was inconsistent with the honesty and integrity of the country. The government should be careful not to do that which had been done in Scotland; namely, to banish every piece of gold out of the country. He threw out these remarks for the consideration of the chancellor of the Exchequer, who, he hoped, would distinctly state when, or whereabout, his plan was to come into operation, in order that establishments of character and credit might not be obliged to enter into competition with those powerful opponents, the joint-stock companies, without adequate notice. Unless he did so, he might be the cause of very serious alarm, and to an extent upon which he could not calculate. It was chiefly with the view of requesting this explanation, that he rose to address the House, but he could not sit down without adverting to that part of the Speech from the throne which alluded to the present state of Ireland. They had been told that his majesty had directed to have carried into effect the recommendation of certain committees, which had sat a year or two ago. He was glad to find that such was the intention of the government. Last year, and the year before, there was a committee of that House; and a more excellent and industrious committee never emanated from the House of Commons. The nakedness of Ireland was exposed, not only to the House, but to all England: all the subjects of complaint were examined, but not to the bottom. He wished to know whether that excellent committee were not to continue their labours? He was sure there was a part of the administration which felt the necessity of probing these circumstances to the bottom; and reasoning from the analogy of other committees, the necessity must be obvious. There was, for instance, the Commission of Education. He was persuaded the right hon. secretary (Mr. Peel), who had resided so long in Ireland, would never have tolerated the iniquitous practices and infamous jobbing, which the report of that commission disclosed, had he been aware of their existence. But, the fact was, the government of Ireland had not the power of going to the

bottom of the inquiry, it must be done by a committee of that House. He presumed that every gentleman who heard him, had read the evidence of the committee of last year. The evidence was extremely long - the report exceedingly short. That committee ought to be renewed, if it were for nothing else than the benefit of an additional report. The inquiry ought to be pursued further, for, in his opinion, it had only been half done.

it his duty to say thus much, in order that it might not go forth uncontradicted, that country banks had occasioned great evil, instead of having materially contributed to the prosperity of the country; and in the hope that, whatever system it might be thought advisable to propose, it would be proposed deliberately; and with a view to the whole of the banking establishments of the country.

Mr. Maberly said, he could not express an opinion upon the proposed measures without offering his meed of concurrence in all that had been said of the conduct of the Bank of England, during the late shock to which the public credit had been exposed. He was ready to admit, that in what had been said of that body, justice only had been done them; and even if the right hon. gentleman had gonefurther, he would have been warranted by the course which the Bank had pursued, in circumstances more trying and extraordinary than ever a commercial body, was placed in before. To their energy and determination, although in opposition to their usual principles, was the salvation of the country to be attributed. But, whilst he gave them praise where they deserved it, he was bound to say, that their good intentions might have been more beneficially developed, if they had not crippled themselves by the dead weight on mortgages. This, however, was an abstract operation, and he should not now go into it. All he should say was, that he did not think the difficulties which the Bank had contributed solargely to alleviate were attributable exclusively to the misfortunes of the commercial world, or to the failure of the country banks; for sure he was, that they had been much aggravated by the measures of the right hon. gentleman and his colleagues in deluging the country with so large an issue of their promissory notes. The weight of thirty millions of Exchequer bills was calculated to produce a great languor in the money transactions of the country; and he was sure that, if the Bank of England had not gone into the Exchequer market, and taken up those bills, the panic would have been ten times more dreadful. Indeed, he doubted whether, if this had not taken place, the dividends due in October or January would have been paid. It would be a neglect of duty not to remind the country that it was by the prompt

Mr. Cripps defended the country banks from the imputations to which they had recently been so generally subjected. No one, he said, could judge fairly of their merits, except those who were interested in the subject. The failures that had taken place among them were principally owing to a want of knowledge on the part of those who had the management of the concern: the bankers who hada common share of prudence, had experienced little difficulty in weathering the storm. He did not know that the existence of one pound notes was so great an evil as seemed to be imagined. On the contrary, he was satisfied that their circulation had been beneficial to the public. Whatever might be said of country banks, a great part of the prosperity of the country was mainly attributable to the facilities and the indulgences which they had afforded. He was quite sure, that if the existing system were suddenly altered, or without great deliberation, an effect would be produced on the country which was not at all anticipated. In every part of England, and in the agricultural counties particularly, the country banks had, undoubtedly, lent a large part of their capital on mortgage. But, it by no means followed, that they had not obtained security. If, how ever, they were suddenly driven to call in all these loans, an alarm would be occasioned, the ultimate result of which no one could foresee. The debts due to them might be good debts; but, when the House saw, only six weeks ago, that any man who could not suddenly turn his parchments into gold was a ruined man, they might have some notion of the evil which a precipitate measure might generate. If left alone, eventually they might bring their affairs round; but if suddenly compelled to meet a parliamentary measure, such as that alluded to by the right hon, gentleman, they might be driven to dispose of their property to such disad vantage, as not to be able to pay ten shil-itude with which the Bank had come lings in the pound. He had thought VOL. XIV.

forward that the country was saved from

F

67] HOUSE OF COMMONS,

Address on the King's Speech

[6

the consequences which the Exchequer | their own profits would follow as a matte

bills of the right hon. gentleman had prepared for it. He hoped the experience would not be lost upon the right hon. gentleman; for if by another glut of Exchequer bills commercial distress should again return, the same relief could not be calculated upon from the Bank; since, with the exchanges against us, they would be obliged rather to contract than enlarge their circulation, and the effect would be, to enhance instead of alleviating the difficulty. The dividends then could not be paid, and there would be no alternative but to make the Bank of England commit itself by an over-issue of paper; which would reduce its credit to the level of the country bankers; who, though they might have assets for the discharge of all their claims, were still reduced to the greatest distress, from an impossibility of raising money in London. He could appeal to an hon. director over the way for a corroboration of all that he was saying; if that hon. member felt himself at liberty to speak out.

Mr. Pearse, as one of the directors of that establishment, rose to defend the conduct which the Bank had pursued during the late crisis, and to deprecate the tone of triumph in which the right hon. gentleman had described the result of his late negotiations with that body. The advances which the Bank had made upon stock, and also those which it had made upon mortgages, had been made with a view of alleviating the embarrassments of the commercial and the agricultural interests, and not with any view of beating down the rate of interest of money. The Bank had acted with the utmost prudence and consideration in the whole of the late tremendous convulsion; and he thought that the House would agree with him, that the public had never been brought into any scrape by its proceedings, or when it had got into a scrape by other means, had ever been unassisted by the Bank with the means of getting out of it. He had been connected with the Bank for the last forty years-a period as eventful as any in the annals of the world, and he would solemnly say, with all that experience before him, that he never saw the directors influenced by unworthy motives. In all questions that came before them, they considered the interest of the country as that which was paramount to all others, being well aware, that when that interest was secured,

of course.

Mr. Secretary Canning said, that al though he had not expected that any dif ference of opinion would have been excite by the speech of his right hon.friend, still, a some strange misconception had arisenupo several of the topics contained in it, he wa anxious to state to the House the manne in which he had himself understood them The House had been addressed by tw hon. members from different sides of th House, who had both evidently miscon ceived the meaning of his right hon. friend The misconception of one of the hon. gen tlemen was perhaps natural, and at an rate might be accounted for; but, how th misconception of the other had arisen, was impossible for him to imagine. Th hon. gentleman opposite seemed to appre hend that his right hon. friend had a pla for erecting joint-stock banking companie or corporations, which would swallow u all the existing establishments. Now, th plan of his right hon. friend went no fur ther than to take off, with the consent o the Bank of England, a few years soone than it would otherwise expire, a prohibi tion, of which the effect, by the concurren opinion of all who had spoken upo the subject, was to make weakness, instea of strength, an inherent quality in the sys tem of country banking. It required no the agency of his right hon. friend, tha the evil which the hon. gentleman appre hended should take place in the yea 1833; that there should then be no longe any privilege in the Bank of England t prevent more than six persons from be coming partners in the same banking con cern; that that privilege should ther cease with the existence of the Ban charter; and that such corporations and joint-stock companies as the hon. gentle man appeared so much to dread, should then rise up in all parts of the country But, under what circumstances, he would ask the hon. gentleman, would that evi occur, supposing the present law to remain unaltered? On the one hand, the privileg of the Bank of England, which prevented the spreading of a wider basis for the transactions of country banks, would con tinue to exist till the year 1833; and, on the other, there was by law in the country banks an unlimited power to issue smal notes up to precisely the same period Now, if the undoing of the privilege of the Bank of England was so fraught with mischief as the hon. gentleman seemed to

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FEB. 2, 1826.
think, how would that mischief be aggra- | selves. Now, if the establishment of either

vated, if it were to operate upon an un-
limited and unrestricted issue of country
bank-notes? His right hon. friend had two
objects in view in the measure which he
proposed. The first was, to accelerate the
period in which the prohibition was to be
removed, which, as he had before said,
entailed weakness upon the country banks;
and the second was, by limiting the issues
of those banks, to make the new power
given to them operate with less suddenness
upon the existing establishments. Whether
the consequence of withdrawing the pri-
vilege of the Bank of England would be
that new banks would be created all over
the country, or that the ancient and long |
established ones would widen their foun-
dations by coalescing with new partners,
he could not pretend to decide positively
at present. The hon. gentleman seemed
to assume that the latter consequence
would take place, but, as appeared to him,
without sufficient reason. He could see
no reason why, when the power of widen-
ing the basis of country banks was given,
it should not operate to add a seventh, or
an eighth, or even a tenth partner to the
existing establishments, rather than to
create new establishments all over the
country, to rival and extinguish the old
ones. Surely, every establishment would
have the power, either by an accession of
strength, or a consolidation of interests,
to guard against the evil which the hon.
gentleman appeared to apprehend. With
respect to the idea of his right hon. friend
pressing his measure unawares upon the
country, he must say that nothing had
fallen from him which indicated any such
intention; and, if his right hon. friend had
not dwelt more at large upon the details
of his measure, it was, that it had been so
often before parliament, or at least so long
before the public, that it was only neces-
sary to refer to it, to bring it to the minds of
gentlemen who were at all acquainted with
the subject. There was another point
which the hon. gentleman appeared to
have overlooked in his view of the ques-
tion. If it were an evil, it was one that
the Bank could create at present on any
day in the week; for it could create branch
banks in all parts of the country; and if
there was a necessity for a more solid
system of banking, the alternative was,
either that the Bank of England should
establish branch banks throughout the
country, or that power should be given to
other parties to establish banks for them-

were likely to be ruinous to the existing establishments, which he denied, that ruin was equally inevitable, whichever side of the alternative was taken, whether the Bank of England was the agent for such branch establishments, or whether advantage was taken of the Bank of England withdrawing its privileges for the purpose of allowing others to establish banks, taking and absorbing the old banks, or coming into collision with them, if so it turned out; which he for one considered very unlikely. The country was in this situation, that one of these measures it must embrace-either it must permit the Bank of England to exercise its privilege of establishing branch banks all over the country-which would be equally fatal, if the competition of confidence and capital can be fatal, to the old establishments, with the creation of new banking corporations, -or, it must adopt the plan of his right hon. friend for taking advantage of the Bank of England's surrender of its privilege to establish new banks, on a wider basis, not so formidable as rivals as the Bank of England, nor possessing that quality of repulsion to existing establishments which it did-or, thirdly, the country must remain in its present situation, with a clear view of all the mischief resulting from its present insecure and insufficient system of banking. Between these three alternatives, if he might be permitted to use such a solecism, the House and the country had now to choose. As to the last of them, he believed that there would be no difference of opinion. The House seemed inclined to agree, that it was not that measure to which it would resort. As to the other two, it was clear that the latter he meant that of incorporating more than six partners into each establishment-would, even on the principle avowed by the hon. gentleman himself, be more effectual for the purpose which it was intended to answer, would be established with the least shock, and would be best calculated to save the interest of existing establishments. It was impossible to discuss this subject without feeling it to be due to the Bank of England to say, in addition to the praises which had been bestowed on it with no niggard hand for its conduct in the administration of its affairs that nothing became it more than the grace with which it had consented to strip itsel of this part of its privileges. It was idle to say that the privilege was odious-i order to make a bargain with the pub-minister--and that he believed the same

was idle to say that it was a monopoly: it might be both odious and a monopoly; still it was an inherent privilege of the establishment. By law they had it; and from the possession of it not even the boasted omnipotence of parliament could disturb them. It was an unfair view of human nature and of the principle of possession, to treat such a sacrifice with levity. Such a rare occurrence as the voluntary abandonment of a possession, which was not merely a grace or ornament, but was valuable as a source of profit, deserved the highest panegyric. The Bank of England might have kept it, because they had it-because the law had given it them-because no man could extort it from them. The Bank of England might have kept it in

to think, that ministers were extremely culpable for not discouraging the wild spirit of speculation which had contributed so much to the present distress, and that they were wanting in their duty, because, when the various schemes of last year were discussed, they did not attend in their places to give a detailed opposition to every one of them. Now, it appeared to him to be a convenient and seemly rule, that those whose duty it was, to attend to the public business of the country, should abstain from taking an active part in the consideration of any measure which merely affected individual interests. He would say for himself, that he had always endeavoured to act by that rulethat he had never given a vote on any private business since he had become a

lic for some other consideration. The Bank of England might have kept it in order to prevent the rivalry of the country banks, which they might apprehend in those parts of England of which they had hitherto had the exclusive possession.

rule to have been followed by all his colleagues. It appeared to him, he repeated, that such was the safe and seemly rule of conduct; because, if he could reconcile it to his sense of duty to break through it in one instance, he might be

They might have kept it without assign-induced to break through it in more; and

ing any cause for so doing, except their own will; but they had yielded it up to the public for reasons which did them immortal honour. If they had yielded it unwillingly, their conduct was the more laudable; if willingly, still credit was their due, because they had studied the public interest first, and had seen that their own individual profit was ultimately involved in it. They had consented, for reasons

a practice might thus grow up, from which many suspicions might arise, unjust and unfounded, as they would be at present, but still impossible to be entirely avoided. But, he would ask, had there been no warning given to the country on the part of ministers? Had there been no occasion, during the fever which existed last year in the public mind, in which the king's government had de

with which the House had nothing to do, ❘clared that they would not advance a

to a measure to which they had formerly refused their consent, unblameably he had no doubt. They had now done that which they had long been solicited to do; and having done it, his right hon. friend meant to draw from it an advantage-not unkindly, not ungenerously, not in a spirit of triumph over the Bank, as had been that evening suggested. He could assure the House that no such feeling existed in the breast of his right hon. friend, but that his right hon. friend was ready, upon all occasions, to render justice to the Bank, for the manner in which it had conducted this discussion, and also for the conclusion to which it had consented to bring it.-An hon. gentleman who had spoken early in the debate, had made, among a variety of remarks, which he did not intend to notice at present, one which he could not allow to remain unnoticed. The hon. gentleman seemed

farthing to the aid of any difficulties which might ensue from excessive speculation? He might now, as a matter of history, allude to what had occurred on a former occasion in another place. One of his majesty's ministers, he meant his noble friend at the head of the Treasury-speaking as the organ of that department of the state, and also in his capacity as a member of the government, had taken an opportunity in March last, not many weeks after the commencement of the session, and before one single bill had passed, to hold out to all who were engaged in those speculations, that they were running wildly into them; that it was the essence of a free government not to interpose any legislative let or hindrance to the current of individual enterprise and industry; that those who entered wildly into extravagant speculations, did so upon their own risk and responsibility; and that it was

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