The Bank Charter Act cannot be maintained... — page 6: what you’re looking at

Machine-transcribed from the original scan — historical spelling and the odd misread are preserved.

6 be prudent, steady, and ample, the other country streams would flow more undisturbed to contribute their succour as well. The Bank Charter Act of 1844 has been fairly tried, and has been found wanting. The Treasury Letters of the 25th October, 1847, and of the 12th of November, 1857, have emphatically decided this. Now, Sir, I fearlessly, but respectfully, maintain, that we require a perfectly new enyraftment on the present system, which has never been properly applied in our paper currency, which is this— contraction in time of ease, and expansion in the time of pressure. And the expanding element ought to be clearly understood and defined, no vagueness or doubt left for the public to solve, when fear and distrust have taken possession of their minds. It appears to me as clear as any fact can be ascertained, as credit rises, the necessity for accommodation decreases; and when credit falls, the more is assistance re- quired. And I feel satisfied, until this simple principle is met and embodied into law, the more frequent and terrible will be our monetary convulsions. There may be Com- mittees of both Houses of Parliament; but however the subject may be discussed there or elsewhere, I feel certain comparatively little will be done if this principle is totally disregarded. Expansion in the time of ease, always proves fatal; but withdrawing assistance in the time of pressure, is tenfold more certain to produce distress and ruin. Pre- vious to every panic, has been the inflation: the great South-Sea bubble itself was blown before it burst; the contemplated reduction of the national debt, at that period, soon roused the dormant speculations of the age. 1720, 1784, 1792, 1810, 1816, 1820, 1825, 1839, 1845, 1847, 1857—all tell the same tale: those periods were but the winding-up of what had gone before—easy money causing yy é over-trading and speculation, the settlement a panic— fear and distrust bringing down the towering superstructure of credit — say to the amount of some hundreds of millions — to the test of reality, pounds, shillings, and pence. These inflations and panics shew but too clearly the ten- dency of all commerce; therefore the law ought to he framed to counteract the evil as much as possible; but the Act of 1844 is the first to encourage the extravagant hopes of the free-trader, by offering him money at a mere nominal interest; and then turns round on him, as if to punish him without mercy for his short-sighted folly. Until 1844, money was seldom under 43 or 5 per cent.; never under 4; but since then we have had it as low as 1} per cent. for commercial purposes; and even at that price it was difficult to find employment for it. Very many prudent com- mercial houses were decoyed into engagements in 1844 and 1846, which the same Act made most ruinous in 1847. Again, the 2 per cent. discount of 1852 in a great measure led to the much higher rate afterwards, and to 10 per cent. in 1857, with the panic. There can be no doubt that a 4 per cent. minimum would secure, on the average for five years, a much lower rate of discount for the public, than following the ebb and flow of the bullion and reserve, which we do now. Sir Robert Peel, in his speech in 1848, in the House of Commons, alluding to the panic of the previous year, said —‘ At all times in the monetary history of this country, a low rate of interest has led to the same commercial depression we now dzplore. Take the history of the last sixty years, and I will shew you that in time of peace, or in the time of war, even before a standard was established, a low rate of interest for money universally led to the same