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    1210 THE LEA DEB. |No. 404, Dboembk* 19,...

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    The Currency Debates. The Houses Of Parl...

    resumed , with a view to collecting further evidence , and reporting the result to the House in the ensuing session . This recommendation came froni the committee of which Mr . Gladstone and Mr . Disraeli were leading members , and it would no doubt have been carried into effect under ordinary circumstances , the subject being of surpassing magnitude and importance , demanding the best attention of the choicest men in the House .

    . But , strange to say , although events have since transpired of a most distressing character- — although the whole continent of Europe has been convulsed through a commercial crisis , which , beginningin the United States , has , like a contagious pestilence , spread desolation , wherever it has travelled ¦—although this new feature Las rendered that doubly necessary whicli was strongly recommended before , a fierce debate ensued upon the proposition made by the

    Chajstceilok of the Exchequer , that in accordance with the said recommendation a Bank committee should be reappointed . The two principal opponents to the proposition were members of the very committee which . made the recommendation that the inquiry should be continued this session ; and these two opponents of the Ch ancei / lor are entirely opposed to each other— -the one contending that further

    inquiry is unnecessary , because the Act has failed , and should be repealed ; and the other contending that further inquiry is unnecessary , because the Act would be endangered by delay , and because he is anxious to see its principles carried out and more fully developed . The member for Buckinghamshire placed himself at the head of the opponents of Pjeux's bill , hoping to give it a death-blow ; while Mr . Gladstone looked out for

    recruits among the most earnest supporters of the Bill , for fear it should receive any hurt , and conducted them into the same lobby with its deadly enemies . By this desperate and unnatural coalition of friends and foes , a mixed corps of motley opinions were marshalled side by side , to be crushed by an overwhelming majority in the House , and to be wondered at and pitied by all who fondly believed that personal conscientiousness is inconsistent with political immorality—by

    all who feel that no amount of talent can atone for political dishonesty . Among the leading results of the debate is the general admission that the Act of 1844 has effected at least one great work—it has ensured the convertibility of the lank-note . In apite of the prevailing discredit , no one doubted for one moment the ability of the Bank to give gold in exchange for every promise to pay that might be presented to that

    highly respected and well-known , individual , Mr . Matthew Marshall . Even the humblest and most ignorant holder of a Bank of England note knew perfectly well that between it and the gold it denoted there was no real difference , that they were actually identical , that what the gold would buy the note would buy , and bo we were Bavecl the disgraceful spectacle of a run for gold , the humiliation caused by the discredit of our national currency .

    Perhaps the most remarkable feature in the debate is the unanimous admission that banknotes ought to be absolutely convertible into gold ; that sudh a quality is essential to their very nature . Even . Mr . Spooner , who has always been considered as one of the leading champions of the Birmingham school , earnestly repudiated the notion that he was in favour or inconvertible bank-notes and of an unlimited issue . It was amusing to see the simple-minded and straightforward Chancellor oj ? . mie

    Exchequer expressing his regret that lie had fallen into the error of supposing that Mr . Spooker was in favour of an inconvertible currency , and very gravely showing from the evidence of his friend Mr . Twexis , that he ought to be in favour of it , that an inconvertible bank-note is the very type of the school of which he is supposed to be the Parliamentary chief . We repeat it , that one of the most satisfactory features of the debate is the fact , that the House of Commons is

    unanimously in favour of the theory of perfect convertibility of our bank-notes . But while they admit the principle , many of them contend for notions wliich are utterly opposed to it . One is in favour of the State supplying such an amount of circulating medium as is necessary to carry on the transactions of the country Avith ordinary facility ^ even in extraordinary times ; meaning , we presume , for we are left in doubt as to what actually is meant , that the State is to find money for all speculators . Another idea is to uphold the practical and virtual convertibility of the bank-notes—but why the

    speaker would qualify convertibility , which is absolute and positive , by two unexplained expletives , ' practical and virtual , ' he does not state ;—while the crowning idea of the Protectionist ex-Chancellor , or shall we say the ex-Protectionist ex-Chancellor , is issues without limit , on the ground that it is impossible to push out too many notes—that it is impossible to keep in . circulation more than are actually required , and that consequently the Act of 1844 , which imposes a limit with a view to convertibility , is vicious in principle , and ought to be repealed .

    Indeed , the opponents of the Act of 181 . 4 , differing on . a hundred points , are all agreed at least in one particular : they continually avoid putting their views into a practicable shape ; or , perhaps it is more correct to say that they find it impossible for the most part to reduce their crudities into method and order . They would destroy the established system , but they have nothing intelligible wherewith to replace it ; or rather , the greater part would turn , our present distress into political capital , with a view to a new Cabinet , with seats and salaries for themselves and fx'iends .

    Another result of the debate is the general conviction that our present position has nothing to do with our currency laws . In England we have a limited circulation , in the United States there is an indefinite circulation , in Hamburg a purely metallic circulation . In each case , although the currency systems are entirely unlike , the crisis is similar in character , and in each case it will be found that the cause of the distress is substantially the same—the undue expansion of credit , the large amount of mercantile accommodation paper afloat .

    The newly appointed committee will have ample work on hand ; among other subjects the following must coxwe under their consideration . If the Act of 1844 is to be continued , isit to be strictly enforcedforthe future , or is there to be a permanent relaxing power ? and if so , wheTe is this relaxing power to be placed ? If in the Government , no more legislation appears to be necessary , for it has already been twice exercised by the Executive .

    Some persons are of opinion that it should be committed to the Bank itself—in other words that the Act for regulating its issue should be violated at the discretion of th © very body that it is intended to control . On this point the committees of the two Houses of Parliament have reported opinions exactly contradictory , and it ia obvious that it ia a large and difficult ; subject requiring calm and deliberate investigation . No donijt an inquiry will bo made as to

    the expediency of altering the amount of issues upon securities . The common feeling seems m favour of extending it . The Manchester Chamber of Commerce and , if we mistake not , some of the Directors ' of the Bank of England , would rather diminish it j the more cautious say , " Let well alone V The banking systems of Ireland and Soot * land demand careful scrutiny . There is the question to be considered whether

    Government should take security for the issues made by all banks . The Bank of England pledges securities for its 14 , 475 , 0002 . issuewhy not extend the principle and protect thepublic against loss from a spurious currency in ¦ the- provinces ? Mr . G : la : dston : e would go further and afcolisk all country bank issues , but the weiglit of authorities is against him . The time may come when such a stepwill be desirable , but it has not yet arrived .

    Another point which - will come under the attention of the committee , and which will probably form the subject of an early legislative enactment is , the making Bank of England notes a legal tender in Ireland and Scotland , as they are now in England and Wales . This measure would have the effect of increasing our store of bullion in London , as the Scotch and Irish banks could meet tue

    currency throughout the whole kingdom . Earl Grey would have us introduce one-pound notes in England—others would abolish them in Scotland : on this point additional light isrequired . But no question will be of deeper interest than the inquiry into the causes of the commercial disasters of 1857 , and the distress resulting from them . The nature and extent of our trade Avith . the United States ; the system of credits by which London is mado the centre of commerce for all the

    worldthe great clearing-house for the settlement of transactions between all nations ; the production and distribution of the precious metals ; the effects of the Russian , Chinese , and Indian wars ; the failure of European silk crops and vintages , combined with the indifferent wheat harvests of the past years ; foreign loans and foreign railways ; the new system of allowing lai'ge interests on deposits payable at call , or at a short notice—a system which , by competent authorities , is considered

    to be pregnant with danger , —all these are questions of the deepest interest , and will , no doubt , receive the earnest attention of the new Bank Committee . Their report will be anxiously waited for , and earnestly studied by the whole nation , who will , meanwhile , be collecting and sifting evidence for itself ; j ) rejudging , indeed , many points , but with that spirit of candour and love of truth that distinguishes the English people , willing to be taught , and ready to correct its opinions by the help of well-arranged facts , and

    welldigested conclusions drawn from those facts * II will be time to meet the evils of our day by legislation , when we have ascertained what is the nature and cause of those evils , and how far legislation can euro them . Until then , we can afford to wait ; and perhaps by that time Mr . Diskaeli and Mr . Gladstone will not only agree in differing from the majority of tho Houae , but will also not differ

    as to the principles upon which our currency is to bo founded and maintained . They may , perhaps , after hearing further evidence , be able to hit upon some brilliant niodo that shall at once develop tho principles of Pisel ' s Act , and afc the samo time render thorn nugatory ; they inay bo nblo to devise a plan ^ ibr restricting tho issuo of bank-notes by Imposing a Parliamentary limit , so as not to in-

    1210 The Lea Deb. |No. 404, Dboembk* 19,...

    1210 THE LEA DEB . | No . 404 , Dboembk * 19 , 1857 .

• Citation
  • Leader (1850-1860), Dec. 19, 1857, page 10, in the Nineteenth-Century Serials Edition (2008; 2018) ncse-os.kdl.kcl.ac.uk/periodicals/l/issues/cld_19121857/page/10/