XLIII. 1847. measures you may pass respecting the currency, they will CHAP. inevitably suffer from the consequences of their actions. Thus, in addition to the failure of food, you have speculation running riot, and such an investment in railways that, in the course of last year, applications were made to Parliament which, if all acceded to, would have required £340,000,000 to meet the undertaken engagements. In addition to all this, there was a very great failure of the cotton crop, which has enhanced enormously the price of the raw material of the great staple of our manufacture. How absurd, then, to charge the effects of these great and manifold calamities against the Bank Charter Act! 81. "Are those who are now so ready to throw the blame of every disaster on the Bank Charter Act aware that, in Continued. 1814, 1815, and 1816, when we had an inconvertible paper currency, 240 private banks failed? Recollect what took place in 1839, when the Bank had the power of issuing notes irrespective of the exchanges. Why, the Bank was then reduced to £1,600,000 in gold, and there was every prospect of its being unable to fulfil its engagements. Always bear in mind what was the object of the Act of 1844. The main object of that Act was to insure the convertibility of paper into gold, and to prevent, in times of difficulty and distress, the temptation to which it is so easy to yield, of giving accommodation by issuing paper without reference to the exchanges, and thereby purchasing temporary ease by afterwards aggravating the commercial pressure by a panic which leads to a demand for gold in exchange for paper. It is of the utmost importance that, in those periods of commercial difficulty, we should not be exposed to that other difficulty which so much aggravates the first a run upon the Bank, in consequence of doubts of its ability to pay its notes in gold. What would be the state of affairs now, if, in addition to the state of things so strongly dwelt on on the other side, we had a pressure on the Bank for gold? What would have been the state XLIII. 1847. CHAP. of things if the Act of 1844 had not been passed? Suppose there had been on the part of every country bank, while this riotous speculation in railways existed, a power of fostering it by uncontrolled issues of paper. Would the state of affairs have been as advantageous as it is? Severe as I admit the pressure to be, and deeply as I regret it, yet can any man deny that the Act of 1844, controlling the issues by country banks in a time of rash speculation, affords security for ultimate solvency? Would not speculation without that check, even now admitted to have run riot, have precipitated us to the verge of ruin? 82. "It is said the Government should possess a dispensing Concluded. power to authorise the Bank, under extraordinary eircumstances, to increase their issues. We were decidedly of opinion, when the Bank Charter Act was passed, it should possess no such power. The whole objects of the Act would have been frustrated if it was known that such a dispensing power existed in any quarter. If any functionaries as the First Lord of the Treasury and the Chancellor of the Exchequer-possessed any such power, application would be made to them from all quarters calling on them to exercise it, the precaution which individuals ought to take would be neglected, and every mere temporary pressure would be declared irremediable otherwise than by the exercise of the power so possessed by the Government. We were well aware of the memorial of the London bankers, which recommended the adoption of such a discretionary power by the Government; but we declined to embrace it, being desirous to leave the responsibility of its banking operations to the bank directors, and to control them absolutely, as we have done, only in the issue department. If I thought that any relief would be afforded to the country by a relaxation of the Bank Charter Act, no pedantic adherence to formerly expressed opinions would prevent me from recommending it. But as it is my firm belief, founded on the information at present XLIII. 1847. in my possession, that any relaxation of the Act authoris- CHAP. ing the issue of £2,000,000 of notes on Exchequer bills would only aggravate the evil, and purchase present relief by future suffering, I feel it my duty to give it my most decided opposition. Depend upon it, if you attempt to purchase present relief by endangering the convertibility of paper, you will inflict a severe blow on the prosperity of the country you will shake all confidence in the medium of exchange, and depreciate the value of property of every 103, 105. description."1 Parl. Deb. 690; Ann. xcii. 658, Reg. 1847, 83. followed on this de bate. No resolution of the house followed on this debate, as, in truth, a motion of a mere formal nature was alone Nothing before it when it took place. The decided opinion, however, expressed by Ministers and Sir R. Peel against any modification of the Bank Act had a great effect, and encouraged the directors of the Bank in that steady refusal of accommodation which, while it averted the danger from themselves, did so only by spreading it fearfully throughout the community. Some gold arrivals, however, came opportunely at this time, which postponed the risk ; and the Bank directors, encouraged by this circumstance, at the suggestion of the Chancellor of the Exchequer, considerably augmented their discounts, which had the effect of materially relieving, in the mean time, the pressure on the money market, and postponing, till the end of autumn, the catastrophe which was approaching. on it. 84. This debate, however, is highly interesting, not merely as containing an admirable summary of all that either was Reflections or could be advanced on either side of this all-important subject, but as evincing a striking instance of the rhetorical skill of the very eminent statesman who took so prominent a part in defence of the Bank Charter Act. It is not easy to say which is most to be admired—the cogency of the arguments adduced on his own side of the question, or the skill with which he evaded every consideration which tended to the other side. Sir R. Peel observed, with truth, that one cause of the monetary crisis XLIII. 1847. CHAP. of 1847 was the country having "run riot" in 1845 with railway speculations; but he forgot to add, what was equally true, that that very "running riot" had been induced by his own measure in reducing the deposits on railway shares from 10 to 5 per cent, and the effect of the Bank Act itself, which immediately threw down the rate of discount from 4 to 2 per cent. He dwelt with justice and force on the aggravation which the railway mania would have received from an unlimited, issue of notes by irresponsible country bankers when it was going on; but he seemed to be insensible to the far more serious aggravation which it had received from that Act, which compelled the Bank to purchase every ounce of gold brought to its doors, and thus rendered inevitable the efflux of notes, whether required or not, simultaneously with the influx of foreign treasure. He dwelt on the vehement excitement and excessive undertakings of the last three years ; forgetting that this excitement, and the demand for labour consequent on it, had been the subject of constant and just self-congratulation by him when it was going on, and was ascribed by him entirely to his own Free-trade measures. He described, with force and justice, the grievous nature of the deficiency of £16,000,000 in agricultural produce, which had arisen from the potato rot in Ireland, and the necessary derangement of the currency which resulted from the purchase of so large a part of the national subsistence with gold; forgetting that this casual and passing calamity was what his Free-trade measures had rendered the chronic and settled malady of the country. He dwelt on the inconveniences arising from the high price of cotton, in consequence of a shortcoming of the crop in 1846;* forgetting how much the effects of that scarcity had been XLIII. aggravated by the Free-trade measures which had ren- CHAP. dered the importation of that article so immense in the two preceding years. 1847. 85. The crisis having by these means been postponed, Parliament had leisure to attend to various matters of lesser Debate on the Navigabut still great importance. The first of these was the tion Laws. Navigation Laws, which were violently assailed by the Liberal party, with Mr Ricardo at their head, as prejudicial to British shipping, and in an especial manner inconsistent with the spirit of the Free-trade principles and cheapening system which had recently been introduced. The motion for a committee was strongly opposed by Mr Liddell, who contended that the Navigation Laws were the main stay of our commercial superiority, and the only secure bulwark of our national independence. The motion was supported by Sir R. Peel, and carried by a majority of 155 to 61-an ominous division, and which first rung the knell of that shipping system which Sir R. Peel ad- Parl. Deb. mitted to have been "much older than the Protectorate, 1058; Ann. and almost simultaneous in origin with the military and 105, 107. commercial marine of the country."1 1 lxxxix. Reg. 1847, en's bill labour. Inferior in general importance to the vast question of 86. the Navigation Laws, another of still more pressing in- Mr Fieldterest to a large and interesting portion of the community to limit was happily brought to a close during this session of Par-factory liament. The FACTORY QUESTION, involving as it did the Feb. 6. number of hours when operatives, and especially children, were to be employed in manufactories, had been long and warmly agitated in the country; but the extreme anxiety which it excited on both sides, and the great interest at stake in the issue, had hitherto prevented any satisfactory arrangement being effected on the subject. Mr Fielden, however, brought the matter to an issue by a motion, brought forward on the 6th February, which was to the effect, that "the labour of young persons between the ages of thirteen and eighteen be limited to twelve hours a-day, allowing two hours out of the twelve for |