Imágenes de páginas
PDF
EPUB

circulation of the Bank of England in 1820, was 23,875,000l.; in 1822, it was only 18,000,000l. a larger difference in the total amount of circulation than could possibly be produced by the proposed mea sure: yet not only had that deficiency been supplied, but, during these three years, twenty-five millions in gold had been coined.

The withdrawal of the small notes, therefore, while it gave security equally to the bank which issued, and to the party who held them, would not operate injuriously on the currency, or on the trade and manufactures of the country. There were two ways of effecting this withdrawal. The one was, by enacting that no small notes should be stamped after a certain future period: the other, by allowing those already in circulation to run a certain course till a fixed period, and prohibiting any new ones to be created. The first of these modes might lead, in the course of three years, the proposed period, to very unsatisfactory results; for, if the power of stamping were to remain unlimited during that period, so considerable a number might be stamped as to subject the country, in its ultimate endeavours to get rid of them, to all its present evils. It was intended, therefore, to propose, as a more convenient, effectual, and expeditious plan, that no new notes at all should be stamped, and that those now in circulation should, at the end of three years, be allowed to circulate no longer. In consequence of certain differences which distinguished the banking systems of Ireland and Scotland, particularly the latter, from that of England, the enactment would not, at present, be extended to either of the two former parts of

the empire. He concluded with moving the following resolution"That it is the opinion of this committee, that all promissory notes payable to the bearer on demand, issued by licence, and under the value of five pounds, and stamped previous to the 5th of February, 1826, be allowed to circulate until the 5th of February 1829, and no longer.

Mr. Baring took the lead in opposition to the measure. He objected to it as being both utterly inadequate to meet the evils complained of, and ill-suited to the present situation of the country. Neither could he agree in ascribing the embarrassments, which had arisen, entirely to speculation or over-trading; for much of it had been owing to the conduct previously pursued by the Bank. At the end of 1822, and in 1823 and 1824, the Bank had accumulated in its coffers a large amount of specie; during that period, its dividends were raised from 8 to 10 per cent after large bonuses had been granted to the proprietors; and, in the mean time, the notes of the country bankers were increasing, an issue of Bank of England paper always tending to increase the issue of country bank paper.

In consequence of the quantity of money thus in the market, interest fell to four, and three and a half per cent; and every person, who had money to lay out, apprehensive that he might not be able to put it out profitably at all, did invest it for so long a period, as to expose them to the full action of the change which followed. But the Bank of England soon discovered its error, by its specie being drawn out. It then suddenly contracted its issues; and those, who, the week before,

could not tell what to do with their money, could not now tell where to find money. The Bank, no doubt, acted in perfect good faith; it was their first duty to take care of their own interests, but still the consequences were the same. The London bankers now called upon their correspondents the country bankers, who again called upon their customers, and every creditor upon his debtor, although a short time before every one had been anxious to invest his money. This state of things brought to the ground all those of feeble credit; and, in the next place, many who had been supposed to stand firm and upright. Then came panic; and the country bankers being themselves called upon, were compelled to call on those who were indebted to them; and even the man who did not actually want money, called for it, to provide for that event, which, in the then state of things, might occur in a single day. The Bank was too much fettered by its advances to, and agreements with government, to meet the casual embarrassments which might from time to time arise. It ought to have available possession of all its means; for, being the heart of the circulating medium, if it was unsound, the most perilous evils were inevitable. If the Bank had been unincumbered by government, it could have come to the assistance of the people with resources adequate to the emergency, and put a stop, at once, to the rising distress. That distress, which was more intensely felt than government seemed willing to believe, would be increased by the proposed measure, for the country was not yet in a situation to bear it. The very exertions of the country bankers to prepare for the

intended change, had already aug mented that distress. They were indeed preparing; but they were doing so by screwing almost to destruction every farmer, manufacturer, and other customer in the country, from whom they could get their money. Many of the country bankers had already secured the means of meeting this new order of things in part; but if parliament were to allow them longer time, they would be able to afford relief to the many poor and deserving people, whom otherwise it would not be in their power to assist. The important question was, not what was theoretically the best, but what was the safe course, and what, under all the circumstances, it was possible to attain; and the general distress that pervaded the country districts was the first thing, to which, in discussing questions of this nature, parliament was bound to attend. The proposed measure would do little or nothing, and the little it might do, would be an aggravation of the evil. He would recommend them to establish banks, either by Joint-stock companies, or on the common principles on which they at present stood, but so as to induce persons of capital to become bankers; next, to introduce silver as a standard of the currency no less than gold, which would at all times enable them to purchase gold, and would tend to retain more gold in the country; and lastly, to relieve the Bank from those incumbrances which had hitherto, in consequence of its pecuniary connections with government, weighed upon, and controlled it.

The resolution was likewise strenuously opposed by sir John Wrottesly, alderman Thompson, alderman Heygate, and Mr. Wil

son, one of the members for London. But their opposition was almost the only thing in which they, and other members who spoke on the same side, agreed. Some held that the measure in contemplation would be wholly in operative to give any effectual relief; others, that it would be positively mischievous; and a third party, while admitting that the principles on which it proceeded were sound in themselves, thought that the present state of the country required its postponement. They treated as visionary the scheme of increasing the number of partners in private banks, as a means of security; because it was not on the number of partners, but on their prudence, and their mode of conducting business, that the credit of a country bank depended. The country bankers, sir J. Wrottesly maintained, instead of having excited a mad spirit of speculation, were the only persons who had not speculated; and, in reality, were obliged, from a regard to their own safety, to discourage all dangerous speculation on the part of their customers. In point of fact, moreover, where did this spirit of speculation commence? It first shewed itself in Manchester and Liverpool, in a district where no local notes circulated. The cotton speculations in these two places were the very first heard of; and yet in neither of them did a single country note circulate. The next point at which this spirit was manifested, and at which it had led to its unhappiest results, was, not in the country where the notes in question circulated, but in the heart of the city, on the stock exchange of London. In 1720, the only year in which the country had been overrun with wild spe

"

1

culations, such as had been recently witnessed, there were no country banks, and no country paper; and in 1797, when the Bank stopped payment, there were no country notes, and no small notes even of the Bank of England. In the face of such facts it was impossible to charge the present distress upon the conduct pursued by the country bankers. It was the failure of seven London bankers that had occasioned one half of all the fail ures in the country: the capital, the cash, and the bills of more than an hundred country bankers had been placed in the hands of London bankers; and the only surprising thing was, that a greater number of the former had not failed in consequence. And, in so far, again, as the distress might have arisen from overtrading, how were the country banks to be made responsible for the failure of specu lations in cotton, or tallow, or spices?

It was farther urged, that the very essence of the present pecu niary embarrassments, consisted in the curtailed state of the currency; and the direct tendency of the proposed measure was, to increase them, by curtailing it still more. Taking the currency at twenty millions, and the deduction to be made on account of the recent failures at three millions and ‹à half, the effect of the scheme in contemplation would be to cause a still farther deficiency, and reduce it to about ten millions, with which it would be impossible to carry on the trade of the country. Although a respite of three years was pretended to be granted to the small notes, yet the adoption of the reso lution would be almost tantamount to driving them immediately out of circulation; because every

[ocr errors]

banker, who entertained a due regard for his own credit, would be compelled to take measures for withdrawing his notes as expeditiously as possible. These had been issued, in reliance on the stability of the system, and on the faith of acts of parliament which ought to be as inviolate as the charter of the Bank; and they had been advanced to promote the most laudable objects, to assist individuals in carrying on useful improvements, and in supporting industry. These sums must now be called in, and the course of industry, in numberless channels, must be stopped. A banker could not draw in four or five hundred pounds without throwing four or five persons out of employment: this was already going on all round the country, in consequence of the manifesto against the banks con tained in the correspondence between government and the Bank of England, and still more in consequence of that arbitrary and illegal act, by which ministers, by their own mere will, had prohibited immediately the farther issuing of stamps. The extent, to which the evils arising from this compulsory contraction was spreading, and might spread, no man could pretend to calculate; nor ought the House to be surprised, if it should turn out, that they were leading rapidly to consequences of which the House would be very unwilling to hear. How was the gap thus made in the circulation of the country to be filled up? At the termination of the war, there existed a strong desire to return to a metallic currency; and, during the first years of peace, there was a great facility of obtaining specie. But the case was altered now. No country could obtain it, without

giving its value in commodities. At the end of the war, our manufactures, still in their prime, while those of the continent were only beginning to recover from a long period of languor, commanded every market, and enabled us to obtain our gold. But at present the manufactures of the continent and America were springing up all around us; every year we were more and more excluded from foreign markets; and, in fact, the inability to dispose of our commodities, formed one of the most aggravated features of the existing distress. In such circumstances, it would be most unwise to adopt a measure, which, besides injuring an individual class, would necessarily tend to increase public calamity. As a measure of present relief, it was mischievous and inappropriate; and as a measure of prospective security, it would be nugatory.

The resolution was supported by Mr. Huskisson, Mr. Peel, and Mr. Canning. They denied that to ascribe much of the distress which had prevailed to the issues of the country banks, was to attack the character of the persons connected with these establishments, or that any thing had occurred to justify the extreme sensibility which had been manifested on their behalf. In the class of country bankers, unquestionably, were to be found individuals of as high character as

in

any other that could be named; but this could be no reason, why the system, on which men, who, in some respects, filled the office of public functionaries, were acting, should not be discussed with perfect freedom; nor could the country bankers complain of being illtreated, in being held unfit to exercise-as they virtually did the

1

prerogative of the Crown in regard to the currency. With regard to the measure itself, it was not in tended so much as a remedy for existing evils, as a preventive against their future recurrence, by bringing the currency, to a certain extent, to be a metallic one, and especially that portion of it which alone supplied the wants of the lower classes. All experience proved that this restoration of a metallic currency could not be effected, so long as small notes were allowed to be circulated: a permanent state of cash payments could never exist by their side. If, in any country there be a paper currency, of the same denomination with the metal currency, the paper and the coin will not circulate together, but the latter will be expelled by the former. If crown notes, and halfcrown notes, were issued, crowns and half-crowns would disappear; and if the one-pound notes continued to circulate, a sovereign would become a rarity. There never was a gold circulation in the country, except in Lancashire, where no country notes existed; and when, in 1822, and 1823, the Bank of England was most anxious to supply the country with gold, the sovereigns sent down by one mail coach returned with the next. Great sacrifices had already been made to effect the introduction of even the partial metallic currency now in existence; and these sacrifices had been made in vain. A large supply of gold was obtained at a great expense, and was obtained only that we might see it depart and be compelled to purchase it again at a double expense; nor could the currency of the country ever be placed on a solid basis, unless country banks were prohibited from issuing notes, except

ing such as were of a considerably higher denomination than the current coin, so as to save it entirely from the competition of the paper currency. The principle of the measure, therefore, could be re sisted only by those who held that the pecuniary relations of the country were best secured by proscribing a metallic currency. Its necessary effect, again, would be to give solidity to the banks themselves, by compelling them to maintain a portion of their circulation in gold, instead of worthless paper; and thus, even where a failure took place, that extensive misery, which such an occurrence produced among the lower classes, would no longer return; for the security of the poorer classes in such cases lay in the absence of small paper. Let the Bank of England retain in its hands as much gold as might be necessary for the ordinary operations of commerce, for such demands as the exigencies of government might require, or to adjust an unfavourable state of foreign exchanges. Let every country bank be governed by the same rules, and compelled to keep an amount of gold proportioned to its operations; and thus would be created a sensitiveness to occurrences likely to cause a pressure on the country banks, which would tend to the security of the whole kingdom. The issues would be kept within bounds, and gold would be kept in the kingdom. To judge of the unsoundness of the present system, it was only necessary to look at the fact, how easily many of the country banks had, at all times, been overturned. In 1793, there had been one hundred failures among them; in 1810, there were commissions of bankrupt issued against twenty-six ; in 1811,

« AnteriorContinuar »