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and on some to which it did not allude.
In the House of Peers, lord King, after ascribing our pecuniary embarrassments to over-issues of paper by the Bank of England, attacked the Corn-laws, and urged the necessity of immediately effecting in them a complete alteration. With this view he moved an amendment to the address, pledging the House to revise the Cornlaws in the course of the session. Lord Grosvenor, and the marquis of Lansdown, without denying that it might be desirable and necessary to agitate the question at a future period, resisted so hasty a proposal, and the amendment was negatived without a division. The principal object, indeed, of the peers who spoke, was, to obtain from the minister some general description of the measures alluded to in the speech, as likely to be proposed for the purpose of preventing the recurrence of such pecuniary embarrassments as now existed. Lord Liverpool ascribed these embarrassments to the mad spirit of speculation which had raged during the last two years—a spirit rendered doubly mischievous by having extended itself to the country, and so affected the issues of«the country banks, that they had increased in afar higher proportion than those of the Bank of England. In 1823 the issues of the country banks had amounted to only four millions; in 1824, when speculation commenced, they rose to six millions; and, in 1825, to eight millions, having doubled in the course of two years. The palliatives, or correctives, which government intended to apply were, first, to prohibit the circulation, after a certain period, of notes under 2/., whether issued by the Bank of Eng
land, or by any private banker: secondly, to increase the stability of private banks, by enabling them to augment their capital; and, with that view, to repeal that clause in the charter of the Bank of England, which made it unlawful for any private banking establishment to consist of more than six partners.
In the Commons, the concurrence in the address was equally unanimous. Mr. Brougham, reserving for himself and his friends freedom of opinion on the various topics of the Speech, when they should be specifically brought forward, believed, that the distress, which now existed, proceeded from causes much more complicated than those to which the Speech ascribed it. He believed it, however, to be universal; and of that universality he dexterously took advantage to combat the opinion of those who derived it from the late introduction of more liberal principles into our commercial policy. "If," said the learned gentleman, "the embarrassment were confined to any one branch of our commerce, for instance, to the silk trade, then an argument might be raised, and, without any great violence to facts, the distress might be attributed to our new commercial policy. But when it is observed that not only silk, but wool, cotton, and linen, are equally affected, it is in vain to deny that the nature of the facts rebuts the assertion of any connection between the present distress, and the principles of free trade."
TheChancellor of the Exchequer followed the same course which had been pursued by lord Liverpool in the House of Peers. While he maintained that many of the causes by which our commercial
difficulties had been produced, were, in their own nature, inevitable, and beyond the control of any government, he allowed that some of them were within our reach, and that their influence might, at least, be modified. The principal of these he held to be the great increase of the issues of the country banks, and the weak foundation, in point of capital, on which many of these establishments stood. The latter was the consequence of the exclusive privileges of the Bank of England; and, looking at the immense extent of our transactions, he was perfectly satisfied that a single com•pany was by no means adequate to the banking purposes of the country, especially in districts remote from the metropolis. The result in such districts was, that banks sprung up conducted on views widely remote from solid principles of banking.
Mr. Hume denied that the pecuniary distresses of the country were to be ascribed to the banking system, and maintained that their true causes were to be found in the pressure of taxation, and the lavish expenditure of the government. The whole empire, in the opinion of the honourable gentleman, presented one scene of extravagant misrule, from the "gold lace, and absurd paraphernalia of military decoration" of the Guards, up to the mismanagement of the Burmese war; and it was a farce to attribute the distress of the country to the banks, or the banking system.
Mr. Cripps defended the country banks from the imputations which had been cast upon them. He said that only those could judge fairly of their merits, who were deeply interested in the subject. The failures, which had taken place among them, had been chiefly occasioned by want of knowledge on the part of individuals by whom banks were managed; but those which had been conducted with prudence and good sense, had experienced little difficulty in weathering the storm. If the existing system were to be altered suddenly, or without due deliberation, and if the country banks were driven to call in precipitately the loans which they had made upon mortgages, an effect would be produced upon the country which no one anticipated, and an alarm would be excited, the consequences of which no one could foresee. Mr. Smith, likewise, though favourable to the removal of the restriction on the number of partners in private banks, foresaw, that the new companies to be formed would necessarily lessen the public confidence in all the ancient establishments; and therefore urged that the time when the proposed measure was to come into operation should be stated, in order that the ancient establishments might be prepared against the powerful competition of the new Joint-stock companies. Mr. Maberly, and Mr. Baring, spoke in terms of high eulogy of the conduct of the Bank of England during the dangers of the crisis which had just gone by. "Their conduct" said the latter hon. member, "had been what every one must applaud. It was impossible for any public body, for any set of men, to have acted with more honour, promptitude, or good sense, than the Bank evinced upon that emergency." In regard to the measures now proposed, he had long been convinced that the existence of the one aud two pound notes was a nuisance; but the withdrawing of them from circulation required much caution, and
ought not to be enforced, until the fever, which at present afflicted the mercantile world, had subsided; for the country was now in that state in which it rather required additional facilities, than that those already in existence, should be limited. Another measure of great importance to the object in view would be, to compel the country banks to make returns of the numbers of their notes in circulation at stated intervals. It might be objectionable to require returns of their whole assets; for the banker might complain that such a proceeding would injure his credit. But to a mere statement of the amount of notes which he had in circulation, there could be no well-founded objection; while, from such returns, parliament would know with certainty the facts upon which they were legislating, instead of being confined to the loose data with which they were now obliged to remain contented.
The mention made in the Speech of the conclusion of a treaty with the republic of Columbia, called forth, in the course of the discussion, many expressions of admiration at the masterly and cautious policy by which Mr. Canning had solved the difficult problem of connecting ourselves with the new governments of South America as independent states. The treaty, however, which had been concluded, under our mediation, between Portugaland Brazil, andwhichsecuredthe independence of the latter, and its separation from the crown of the former, did not meet with equally unmixed approbation. Mr. Baring regarded it as only making this country a party to any future contingency which might arise, tending to a
re-union of the two countries under one sceptre. Mr. Brougham expressed his hope that it never would be ratified, but for a different reason. The treaty contained an article by which the parties to it mutually bound themselves to give up each to the other, all subjects of either taking refuge in the territory of the other, who might be accused of high treason. This article Mr. Brougham denounced as an infamous provision, and "as a revival and extension of our own worst law on the Statute-book, the Alien bill," and he sincerely trusted that it would not receive the sanction of the government of this country. Mr. Canning said, that he entirely agreed with Mr. Brougham as to the character of the stipulation to which he had alluded, and that there were ether stipulations which were equally objectionable. Without imputing blame to those who negociated it, he would only say that it had been negociated without instructions from the government at home, and was contrary to their views. For that reason it had not been ratified, nor would it be ratified.
Although it was not till the 10th that the propositions for proscribing the small notes, and enlarging banking partnerships, were formally brought forward, they were, in the interval, incidentally the subject of frequent discussion. Government, having resolved to prohibit the issue of small notes stamped after a certain period, and apprehensive that, in the interim, they might be stamped to any extent, had given orders immediately to put an end to the stamping of such notes. On the 8th, Mr. Calcraft inquired whether this was the fact; and being answered by the Secretary of the Treasury in the affirmative, he declared it to be a most unconstitutional exercise of power, and brought it again before the House on the following day. It was a step, he said, which not only added to the panic already produced by the contemplated measure of government, but was likewise a most illegal act, and a gross violation of justice. Ministers ought either to have passed a short bill through parliament authorizing the step which they had taken, or, at least, ought to have informed parliament that it had been taken. The individuals, whose interests had thus been sacrificed, had licenses from government, for which they had paid, and which permitted them to issue their notes till the 10th of October. They had proceeded under the solemn guarantee of an act of parliament; and yet government, by prohibiting the stamping of the notes, had deliberately violated that statutory guarantee. Mr. Gordon expressed the same sentiments, and deprecated the plan of withdrawing the notes from circulation.
The Chancellor of the Exchequer defended himself by the plain prudence and absolute necessity of the measure. In the discussion upon the Address, the plan of government had been opened sufficiently in detail to enable the country bankers to see its object, and understand its bearings. There was thus every reason to apprehend, that they would take advantage of the interval to stamp their notes to an indefinite amount; and it was, therefore, impossible for ministers to allow the stamping of of such notes to go on, without rendering their intended measure altogether nugatory : they would have been guilty of absurdity and inconsistency, if, having resolved upon the
measure, they did not follow it up. What they had done in taking this step, might perhaps require an act of indemnity; and if it did, he trusted the House would have no difficulty in acceding to such a bill. Mr. Kllice said, that he held the measure in question to have been illegal; but he held it likewise to have been prudent and necessary. He was at a loss, however, to imagine, how, after government had intimated their intention of putting an end to these notes, the putting an end to them on Monday, or on Tuesday, could occasion any serious alarm. He could easily imagine how the intimation of an intention to put an end to the notes at all might produce alarm, but not how an act, the only effect of which was, to put an end to them a day sooner, or a day later, could produce that effect.
On the same evening, the marquis of Lansdown called the attention of the House of Lords to this prohibitory measure; and said, that, favourable as he was to the plans which government had in view, he felt it his duty toreprobate such an exercise of the dispensing power, and that, too, at a time when parliament was sitting, as a most dangerous precedent to the constitutional liberties of England. Lord Liverpool answered that government had not taken the step in question, until a day was fixed for the introduction of a bill into the other House of parliament upon the subject; nor had it even then been resorted to, until his majesty's government had reason to believe, that, if they had not resorted to it, there were individuals who would have left no means untried to defeat the measure then in progress; and this was done not upon light grounds, but upon the strongest* evidence that there existed a design to obstruct the intentions of parliament. If it were asked, why a short act of parliament was not introduced with reference to this prohibition, he would reply, that there did not remain time for it; as even the short delay necessary for such a purpose would have given an undue advantage to bankers residing near the metropolis.
Mr. Hume moved, on the 9th, for "returns of the number of country banks issuing notes which have become bankrupt from January 1816 to the present time, stating the place where such banks were kept, the names and number of partners in each, the amount of debts proved, and the rate of dividends paid in every instance, as far as these particulars can be ascertained." The only opposition made to the motion proceeded on the ground of its being an attempt to investigate private affairs, and to bring before the House matters, of which the House could take no cognizance. The motion was agreed to; but it brought on a discussion regarding the character of the country banks, and the share which they had borne in producing the late embarrassments. Mr. Smith, adverting to the opinions contained in the communication from the Treasury to the Bank directors, on 13th January, that these embarrassments had found their source in a rash spirit of speculation, and that this spirit had been supported, and encouraged by the country banks, begged leave, in his own name, and in the names of the country bankers, whether in or out of the House, to give to that assertion a most distinct and unqualified contradiction. He described them as a class of men of the highest pruej honour, and integrity; and
the chancellor of the Exchequer, and his friends, if they persisted in their rash and unadvised opinion, ought to state the facts from which their sweeping conclusion was derived; for there was no policy in blinding the public to the true causes of the distress, and no honesty in unfairly directing the weight of its odium against the country bankers. -if
The cause of the country banks was likewise steadfastly maintained by Mr. Calcraft, Mr. Gurney, and Mr. Robertson. So far, they said, from the assertion being true, that these banks had encouraged wild speculation, they had either effected positive good, or were, at least, unable to effect mischief. It was impossible to suppose for a moment, that speculations to the amount of seventeen millions, existing in the heart of the metropolis, could have been produced, or supported, by the issues of country banks; for the moment a country note arrived in London, it was converted into cash, or Bank of England notes, otherwise the issues would instantly fall in credit. It was utterly impossible for the country bankers to force into circulation a sufficient quantity to aid speculation to that extentin which government seemed to believe. Any spirit of speculation which the country banks might ever have encouraged, was not one of recklessnes and wildness, but an animating and advantageous spirit, which had long operated most beneficially in promoting our commercial prosperity. The country bankers stood in no need of a vindication either of their prudence, or their integrity. Undoubtedly in a body of seven hundred persons, there might be some fools, and some knaves; but, for their number, they were equal to any class of the