V. 1819. treasure having continued during the course of the year CHAP. to increase to an amount far exceeding what it had ever reached, and with few exceptions bearing a larger proportion to the extent of their issues than it had ever borne before, the directors issued a second notice in September 1817 for the payment in cash of all notes bearing date before the 1st January in that year.'1 The directors had fair grounds for hoping that the second notice would occasion no greater strain on the resources of the Bank than the first. The country was regaining its prosperity; and it was naturally expected that the Bank would derive some advantage from the universal improvement. The causes which led to a contrary result cannot perhaps be stated with absolute precision. The Convention of Aix la Chapelle, however, in the autumn of 1818, anticipated the period at which France was to be liberated from her foreign garrisons. In anticipation of the conditions of the convention, and to hasten the liberation of her territory, the French were compelled to raise some considerable loans; and a large portion of the money, thus obtained, was subscribed in this country. Russia and Austria were simultaneously entering the money market ; and the English money market, notwithstanding the failures of the preceding twelve months, was still the richest in the world. Foreign loans, then, of unprecedented importance were suddenly draining the country of a considerable quantity of its capital. Gold was sent out of the country; and the exchanges were depressed. The depression of the exchanges led to a rise in the price of gold, which, for a short time, was quoted at 47. 38. an ounce. The directors of the Bank, with this state of things before them, hesitated to comply with the law for the resumption of cash payments in the following July. The Government admitted the weight of their reasoning 1 Report of Lords' Committee of 1819, p. 3; quoted by Tooke, p. 132. CHAP. V. 1819. Treatment of the currency question in 1819. 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 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 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 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 settlement of the King's sition endeavoured to add Brougham's name to the 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 1 Hansard, vol. xxxix. P. 358. Hansard, vol. xxxix. pp. 213, 275. 42. 3 Ann. Reg., 1819, Hist., pp. 33, СНАР. V. 1819. CHAP. 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. 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 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. 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. 6 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 'Liverpool, vol. ii. p. 376. V. |