V. CHAP. and afforded them a year of grace. By an Act of 1818 the restriction was continued to the end of the next session of Parliament.1 1819. Treatment of the currency question in 1819. When the Parliament of 1819 met it was no longer doubtful that the question of the return to cash payments must receive some definite settlement. The Opposition were irritated at the delays which had already taken place in dealing with it. The Bank itself demanded an inquiry into the whole subject, and preferred an elaborate investigation of its business to another short and temporary suspension of cash payments. The Government saw that they were compelled to act with decision, and their weakness in the new Parliament made decision absolutely necessary. Nothing, in fact, could be more pitiable than their position in the House of Commons. "The impression of the weakness of Government increases daily,' wrote Fremantle to Lord Buckingham on the 9th of February; and the unity and strength of the Opposition of course improves.' Government is so completely paralysed that they dare do nothing, and it becomes a Government of Committees of the House of Commons.' 'It is difficult,' wrote Charles Williams Wynn2 to the same nobleman, to describe to you the daily increasing appearances of weakness in the Government, which are such as, if I had not seen all I have seen during some years past, would make me think it quite impossible that they should go on for a month. They evidently have no hold on the House.' Their weakness, moreover, was not only observable by experienced witnesses such as Fremantle and Wynn; the Opposition were able to prove their power in the division list. Secret com 3 mittees were appointed in both Houses by ballot to consider the state of the Bank of England. The Oppo 1 Tooke, Hist. of Prices from 1839 to 1847, pp. 132–134. 2 Fremantle sat with Sir J. Nugent, for Lord Buckingham's borough of Buckingham; Charles Wynn for Montgomeryshire. 3 Duke of Buckingham's Regency, vol. ii. pp. 300, 301, 302. They actually defeated compelled them to give sition endeavoured to add Brougham's name to the 2 It has already been stated that secret committees had been appointed in both Houses to consider the state of the Bank of England, with reference to the expediency of the resumption of cash payments at the period fixed by law.' The House of Commons committee chose for its chairman a comparatively young and inexperienced 3 1 Hansard, vol. xxxix. P: 358. 2 Twiss's Eldon, vol. ii. p. 329. Hansard, vol. xxxix. pp. 213, 275. 42. 3 Ann. Reg., 1819, Hist., pp. 33, CHAP. V. 1819. CHAP. V. 1819. statesman, who was destined to prove the first financier of his time. Robert Peel was the eldest son of the first baronet of the same name. His father, like his great Mr. Peel. contemporaries Hargreaves and Arkwright, had begun life in humble circumstances, and by the force of his own industry and abilities had raised himself to affluence. He had the discrimination, at a very early period, to appreciate the talents of his son; and he had the good sense to give him an excellent education. Young Peel thoroughly justified his father's opinion of him. He took very high honours at Oxford, and was almost immediately afterwards brought into Parliament. The ministry, in those days, were always on the look-out for rising talent; and Perceval, who had just formed his administration, asked young Peel to second the address. Sir Robert was gratified at the minister's selection of his son, and wrote Perceval a letter of thanks which it is hardly possible to read now without a smile. If,' said Sir Robert, 'he (his son) has the good fortune to be honoured with your confidence, I flatter myself he will be found deserving of the trust reposed in him. He possesses capacity, industry, and virtuous habits; and, under the guidance of a judicious and well-informed friend, he may become a useful member of society.'1 Most people will think that the second Sir Robert Peel did something more than become a useful member of society. He acquitted himself so well in 1810 that room was almost immediately found for him in a subordinate office in the ministry. On Wellesley Pole's retirement, in 1813, Peel was promoted to the difficult and anxious post of Chief Secretary for Ireland, and in that capacity it became his duty to conduct the Irish legislation of the Government. The retirement, in 1817, of Abbot, the first Lord Colchester, from the Speakership brought Peel into even greater prominence. Abbot had represented the University of 1 Perceval, Memoirs, vol. ii. p. 58. V. Oxford; and Canning was very anxious to succeed him as member for the University. Canning, however, was disposed to regard the claims of the Roman Catholics 1819. with favour; and uncompromising Tories like Lord Eldon and his brother, Sir W. Scott, the remaining member for the University, were determined to prevent the election of any member with Catholic sympathies. Their prejudices prevailed: Canning's name was unfavourably received; and Peel, still young and comparatively obscure, was preferred to him. Two years afterwards Peel retired from the Chief Secretaryship. The causes which led to his resignation were never thoroughly explained; but it is probable that they originated in the Oxford election. Peel did not conceal his dislike of Canning's conduct and policy; Canning was out of heart' at the growing powers of Peel.1 Peel retired; and he was, therefore, out of office at the commencement of 1819. The Government wisely selected him as the chairman of the secret committee appointed to inquire into the affairs of the Bank. Peel professed that he had 'formed no opinion' on the currency question, and that he was open to conviction.' Yet it is probable that the ministry imagined that his judgment would ultimately incline to the continued suspension of cash payments. The majority of the committee was composed of ministerialists, and there was reason to believe that Peel would adopt the opinions which Vansittart had formed in 1810. His father, Sir Robert, was known to be a strong anti-bullionist, and Peel was suspected of sharing his father's opinions. He had voted against Horner's resolutions in 1811; and he afterwards avowed that he went into the committee with a very different opinion from that which he ultimately formed. But the proceedings in the committee induced him to entirely change his views. He was led to concur 1 Liverpool, vol. ii. p. 376. V. 1819. Resumption of ments carried. 39,096,9007. CHAP. in the principles laid down in Horner's resolutions and to advocate the expediency of returning to cash payments. His influence with the committee was so great that the other members were readily induced to adopt his opinions. A return to cash payments was agreed to, and the means of renewing payments in cash alone remained for consideration. The excellent position of the Bank facilitated this object. The liabilities of the Bank on the 30th of cash pay- January, 1819, amounted to 33,894,5801., its assets to The committee recommended that the Bank should be gradually repaid a sum of 10,000,0007. which it had advanced to the Government; and that the resumption of cash payments should be effected by four distinct processes: After the 1st of February, 1820, the Bank was to deliver on demand gold of standard fineness at the rate of 4l. 1s. per oz. in quantities of not less than 60 oz. After the 1st of October, 1820, it was to deliver gold at the rate of 31. 19s. 6d. per oz.; and after the 1st of May, 1821, at the rate of 3l. 17s. 10d. per oz. From the 1st of May, 1823, the Bank was to pay its notes in the legal coin of the realm. The principle, then, which the committee enforced was to compel the Bank to pay bullion, not coin, for large quantities of its paper, at rates diminishing from time to time till they attained the Mint price of gold. The House of Commons unanimously assented to the resolutions which were founded on the reports of the committee. Bills founded on these resolutions were introduced and passed without material amendment; and the Bank, anticipating the decision of the committee, ultimately succeeded in paying cash for its notes, of whatever amount, after the 1st of May, 1821.1 Import decision. The resumption of cash payments is perhaps the most ance of the important incident in the financial history of the present century. The return to a metallic standard was universally agreed to at the time; a departure from a metallic 1 Hansard, vol. xl. pp. 152, 604, 676. Ann. Reg., 1819, Hist., p. 66. |