the consequences which the Exchequer 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 al leviating 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, 1 their own profits would follow as a matter of course. Mr. Secretary Canning said, that although he had not expected that any difference of opinion would have been excited by the speech of his right hon. friend, still, as somestrange misconception had arisenupon several of the topics contained in it, he was anxious to state to the House the manner in which he had himself understood them. The House had been addressed by two hon. members from different sides of the House, who had both evidently misconceived the meaning of his right hon. friend. The misconception of one of the hon. gentlemen was perhaps natural, and at any rate might be accounted for; but, how the misconception of the other had arisen, it was impossible for him to imagine. The hon. gentleman opposite seemed to apprehend that his right hon. friend had a plan for erecting joint-stock banking companies or corporations, which would swallow up all the existing establishments. Now, the plan of his right hon. friend went no further than to take off, with the consent of the Bank of England, a few years sooner than it would otherwise expire, a prohibition, of which the effect, by the concurrent opinion of all who had spoken upon the subject, was to make weakness, instead of strength, an inherent quality in the system of country banking. It required not the agency of his right hon. friend, that the evil which the hon. gentleman apprehended should take place in the year 1833; that there should then be no longer any privilege in the Bank of England to prevent more than six persons from becoming partners in the same banking concern; that that privilege should then cease with the existence of the Bank charter; and that such corporations and joint-stock companies as the hon. gentleman 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 evil occur, supposing the present law to remain unaltered? On the one hand, the privilege of the Bank of England, which prevented the spreading of a wider basis for the transactions of country banks, would continue to exist till the year 1833; and, on the other, there was by law in the country banks an unlimited power to issue small 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 think, how would that mischief be aggra- | vated, if it were to operate upon an unlimited 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 privilege 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 foundations 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 widening 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 necessary 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 question. 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 selves. Now, if the establishment of either 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 itself of this part of its privileges. It was idle to say that the privilege was odious-it 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 minister-and that he believed the same 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 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 order to make a bargain with the public 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. 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 lautlable; 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 with which the House had nothing to do, 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 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 declared that they would not advance a 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 extrava gant speculations, did so upon their own risk and responsibility; and that it was the fixed resolution of his majesty's go-sures of the last war, he congratulated vernment not to extend any pecuniary him upon it, as he would have the opporassistance to the difficulties which were tunity of coming back upon it on the first likely to arise out of them.* As far as set speech he might make. But, as the the voice of government could be heard, hon. member would have a future opporit was heard through the country clearly tunity, which he had no doubt he would and intelligibly, and the more clearly and embrace, of bringing all the subjects the more intelligibly, because the declara- which he had that night mentioned regu tion did not grow out of any measure in larly under their notice, he hoped he which the government took a part, but would not think him (Mr. Canning) diswas fastened accidentally on a measure respectful, if he passed by them at prewith which it had nothing to do, and was sent without remark. The hon. member not therefore made to be treasured up had told them, that the Speech of last for such a crisis as had now occurred, but year was contrary to the truth, and that to prevent its occurrence. Unfortunately, the Speech of this year was inconsistent that warning had been disregarded: the with fact. What nice metaphysical disdifficulties which had been anticipated had tinction there might be between "consubsequently arisen; and it was a little trary to truth," and "inconsistent with too hard that the government should now fact," he for one could not see. Perhaps be taunted for a want of caution, on that the hon. member, as lord rector of a learned very topic on which it had spoken so very Scotch university, was gifted with acuter explicitly. His majesty's ministers were perception, and could enlighten the aware that the present topic was that to House upon this distinction without a difwhich the minds of men were most in- ference. There were, however, some tensely directed, and to which the con- propositions in the speech of the hon. sideration of parliament must naturally member, upon which he should venture to and inevitably be called, immediately af- retort the hon. member's own expressions. ter its assembling. There was no want The hon. member said, that there had been of attention to that topic in the Speech no reduction of taxation since the war. which they had that night heard from the This assertion he would venture to say Throne. If the House measured it by its was "contrary to the truth," as all the proportion to the whole Speech, hon. world, with the exception of the hon. members would find that it occupied the gentleman, knew that there had been a greater part of it, and that it threw every reduction of taxes to the amount of other topic into the shade. It was felt by twenty-seven millions. The hon. memevery member of the cabinet, that every ber then proceeded to say, that although person in the country was anxious to no reduction of taxation had taken place know how this great subject would be during the ten years since the war, the treated: and they had determined that reductions during the last five years had the most manly mode of treating it been fewer than before; that was, in plain would be, to treat it as the most urgent English, that they had been fewer than and important subject which parliament none. This assertion, therefore, he would could have under its consideration.-He venture to call "inconsistent with fact" trusted it would be thought that he had [a laugh]. He took these assertions as now gone far enough in his observations fair specimens of the other topics in the upon this subject; because, if he went hon. member's speech-topics, which he further, he must be carried into a wide supposed were only mentioned by the field of observation, into which he had hon. member, as preludes to future deneither the inclination nor the power to bates, on which, when they should arise, enter at that moment. An hon. gentle- he would endeavour to set the hon. mem. man opposite, who had addressed them on ber as right with regard to his arguments, the third bench, had left untouched no as he had now set him right with regard topic which had been agitated either dur- to his facts. One question had been asked ing the last war or the present peace. him by an hon. and learned gentleman, to [Mr. Hume observed, that he had not which he should take the present oppormentioned the last war.] If the hon. tunity of giving an answer. The hon. member had omitted to rip up the mea- and learned gentleman had asked him, whether the treaty between this country and Brazil had not been refused ratification? He entirely agreed with the hon. * See the Speech of the Earl of Liverpool vol. xii. p. 1194. 1 and learned gentleman as to the character of the stipulation to which he had made reference. Nothing could be more objectionable, or more impossible for his majesty's government to adopt. There were likewise other stipulations in that treaty to which he should be equally unwilling to give his assent. The fact was, that the treaty had been negociated without any instructions, and, even contrary to the views which the English government entertained upon such subjects. Yet though it had been negociated without instructions, if it had been unexcep. tionable, it would have been ratified by this government; but objectionable as it now was, he had no hesitation in saying that it never had, and never would be ratified. He had only another observation to make before he concluded, and that was, that under the pressure now existing in the country, he could not think it advisable that the state of the Corn laws should be brought under consideration during the present session. Mr. Calcraft contended, that the distress under which the commercial world was now labouring had not been entirely occasioned by excessive speculation and over-trading. The government and the Bank, by contriving to beat down the rate of interest, had done far more mischief than the present system of country banks. Why had nothing been said against the London banks? It was their stopping which had stopped the country banks, and the evil ought to be attributed to the right cause. He defended the country banks. From the great competition among them, it was mere matter of option whether a man took their notes or not. If he did not like them, he might take them to their banking-house and compel them to pay him in specie. What objection was there to this part of the system? Of the whole number of country banks, not one-tenth had stopped; and of those which had been compelled to suspend payment, many had paid, or would be enabled to pay all demands upon them. He would be the last man to allude unnecessarily to distresses which all must deplore; but when so much had been said respecting the failures of the banks, he might be permitted to remind the House that there had been other failures with which the country banks had no connexion, and which had been the occasion of infinitely greater distress, than all the country banks put together. The system which the Bank of England had adopted, of lending money on mortgages, and on the security of stock, was the beginning of the distress. When they found that, owing to the state of the money market, people could get money at so moderate a rate of interest, that the Bank could not make that profit by their notes to which they thought they were entitled, then it was that they placed themselves in competition with the other bankers who were lending money at a smaller discount. He did not wish to detract from the merit which was fairly due to the Bank, but he felt it his duty to animadvert thus freely upon what he took to be a principal cause of the existing distress. The Chancellor of the Exchequer said, that the hon. gentleman was mistaken if he imagined that he had recommended an issue of one pound notes as a remedy for the present distress. It would have been preposterous for him to do so; because he had already stated his belief, that the issue of one pound country bank notes had contributed to the existing evils; and this observation applied with equal force to the Bank of England. Mr. Grenfell said, he felt it due to the Bank of England to say, that when the distress was at its height, the directors had come forward in the most liberal manner, and thrown themselves into the breach, to avert, as far as they could, the danger which threatened the country. Mr. Baring said, that the chancellor of the Exchequer, in omitting to state at what time he intended to carry his measure into effect, had prevented the House from judging of its expediency. It would make a great difference whether it was to take effect within two years or within six months from this time. It could not be denied that the present state of the country was ominous. He had no hesitation in attributing that distress to the extent to which the circulation of paper money had been pushed about eighteen months ago, and for which the country banks, and, he was sorry to say, the Bank of England were answerable. He did not mean now to discuss at any length that responsibility; but as this was, in his opinion, the only part of the conduct of the Bank that was liable to animadversion, he thought it would be neither just nor prudent to withhold this observation. The Bank of England, by the facilities which they afforded, had been the authors of that dangerous redundancy of money, that |