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THE

ANNUAL REGISTER,

FOR THE YEAR

1826.

THE

HISTORY OF EUROPE.

CHAP. I.

State of the Country-Meeting of Parliament King's Speech and the Address-Measures proposed for relieving the Commercial Distresses-Prohibition against Stamping small Notes-Mr. Hume's Motion for Returns of Bankrupt Country Banks Bill brought in to prohibit the Circulation of small Notes after Feb. 5th, 1829Exception in favour of the Bank of England-Mr. Hume's Motion to require Security from Country Banks-Reasons for limiting the Bill to England Scottish Banks.

TH

HE commencement of the present year was marked by a continuance of that depression in manufactures and commerce, which had prevailed at the close of the preceding. The demand for the labour of the artisan had not yet revived; and want of employment, and its concomitant misery, were the results. Neither had private credit been yet restored; the failures of private bankers, VOL. LXVIII.

both in the metropolis and in the country, continued to multiply, though much less rapidly, than in the end of 1825; and the universal distrust which existed, by limiting the facilities of obtaining discounts and advances, deprived commerce of its natural aids, and increased the difficulties of the trader. The ship-owners, likewise, were suffering from the in◄ ability to procure freights, an in

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ability occasioned by the foreign markets being glutted, and by there being, therefore, a scarcity of employment for ships, because there was a cessation in the demand for the articles which ships were to convey. There was thus throughout the whole community a great deal of pecuniary embar rassment, of comparative privation, and of positive suffering. No man, indeed, who looked impartially at the causes which had led to such consequences in the mercantile and manufacturing world, could see in them reason to doubt the solid resources, or the public credit of the country; and, except that the ship-owners ascribed their difficulties to the changes lately introduced into the navigation laws, and that the unemployed artizans of Lancashire rose riotously, on one occasion, for the destruction of machinery, there was no spirit of discontent, nor any tendency to disturb the public peace. The lower classes, in particular, bore their sufferings with a quietness and resignation which ensured universal sympathy; in every quarter of the empire, liberal subscriptions were cheerfully made to alleviate the distress of the poor: still this distress existed widely and severely, and doubts and difficulties threw a gloom over the manufacturing, the trading, and the monied interests of the country. Such was the state of things, when Parliament was opened on the 2nd of February, by commission; temporary indisposition having prevented his majesty from attending in person. The Speech from the Throne was as follows:

"My Lords and Gentlemen; "We are commanded by his Majesty to inform you, that his Majesty has seen with regret the

embarrassment which has occurred in the pecuniary transactions of the country, since the close of the last session of Parliament.

"This embarrassment did not arise from any political events, either at home or abroad: it was not produced by any unexpected demand upon the public resources; nor by the apprehension of any interruption to the general tranquillity.

"Some of the causes to which this evil must be attributed, lie without the reach of direct parliamentary interposition, nor can security against the recurrence of them be found, unless in the experience of the sufferings which they have occasioned.

"But to a certain portion of this evil, correctives, at least, if not effectual remedies, may be applied, and his Majesty relies upon your wisdom to devise such measures as may tend to protect both private and public interests against the like sudden and violent fluctuations, by placing on a more firm foundation the currency and circulating credit of the country.

"His Majesty continues to receive from his Allies, and, geneally, from all foreign princes and states, the strongest assurances of their friendly disposition towards his Majesty. His Majesty, on his part, is constant and unwearied in his endeavours to reconcile conflicting interests, and to recommend and cultivate peace, both in the old world and in the new.

"His Majesty commands us to inform you, that, in pursuance of this policy, his Majesty's mediation has been successfully employed in the conclusion of a treaty between the crowns of Portugal and Brazil, by which the relations of friendly intercourse long interrupted be

tween two kindred nations, have been restored, and the independence of the Brazilian empire has been formally acknowledged.

"His Majesty loses no opportunity of giving effect to the principles of trade and navigation, which have received the sanction of parliament, and of establishing them as far as possible, by engagements with foreign powers.

"His Majesty has directed to be laid before you, a copy of a convention, framed on these principles, which has recently been concluded between his Majesty and the king of France; and of a similar convention, with the free Hanseatic cities of Lubeck, Bremen, and Hamburg.

"His Majesty has likewise directed to be laid before you a copy of a treaty of amity, commerce, and navigation, concluded between his Majesty and the republic of Colombia, the ratifications of which have been exchanged since the close of the last session. For the carrying into effect some of the stipulations of this treaty his Majesty will have need of your assist

ance.

"His Majesty regrets that he has not to announce to you the termination of hostilities in India: but the operations of the last campaign, through the bravery of the forces of his Majesty and of the East India company, and the skill and perseverance of their commanders, have been attended with uniform success, and his Majesty trusts that a continuance of the same exertions may lead, at no distant period, to an honourable and satisfactory pacification.

"His Majesty's attention has been directed to the consideration of several measures, recommended in the last session of Parliament,

for improving the condition of Ireland.

"The industry of that part of the United Kingdom, his Majesty has the satisfaction of acquainting you, is in a course of gradual and general advancement an advancement mainly to be attributed to that state of tranquillity which now happily prevails throughout all the provinces of Ireland.

"Gentlemen of the House of Commons,

"His Majesty has directed the estimates for the year to be prepared and laid before you.

"They have been framed with an anxious desire to avoid every expenditure beyond what the necessary demands for the public service may require.

"His Majesty has the satisfac tion of informing you, that the produce of the Revenue in the last year, has fully justified the expectations entertained at the commencement of it.

"My Lords and Gentlemen, "His Majesty deeply laments the injurious effects which the late pecuniary crisis must have entailed upon many branches of the commerce and manufactures of the United Kingdom.

"But his Majesty confidently believes, that the temporary check which commerce and manufactures may at this moment experience, will, under the blessing of Divine Providence, neither impair the great sources of our wealth, nor impede the growth of national prosperity."

The Address was moved in the Lords by earl Verulam, and, in the Commons, by Mr. Stuart Wortley. In neither house did it encounter any serious opposition, although much discussion took place on every topie to which it alluded,

and on some to which it did not allude.

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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 venting 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 a far 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 21., 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 concur◄ rence 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."

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The Chancellor 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,. in evitable, 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 company 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.

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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 occa

sioned 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 mort-< gages, 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.

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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 and two pound notes was a nuisance; but the withdrawing of them from circulation required much caution, and

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