lowed up by the battles of Pandoo Nuddee and Nujuffghur; Delhi was stormed and captured, its king taken captive, and the three royal princes of the house of Timour shot down by the hand of the impetuous and redoubtable Hodson, of Hodson's Horse. The besieged Residency at Lucknow had been rescued from the rebels, and Cawnpore had been retaken. Before the close of the year which had seen the rise of the revolt, it was unofficially announced that the "neck of the mutiny was broken."

THE manner in which we conducted our | the turn of the tide; successes soon folpreliminary operations against the Sepoy was after the usual fashion in which we are given to begin hostilities, when dealing with an enemy we consider an inferior power. We undervalued public peril; we failed to appreciate the strength and ability of the foe; we were slow to avail ourselves of the communications of the moment; we deemed the struggle to be one of short duration, and that the force we then possessed was sufficient to crush a revolt which would speedily be suppressed. Yet the Indian mutiny was a graver resistance than had been anticipated, and taxed all the energies of the authorities, both at home and in the peninsula, to cope with the difficulties which surrounded them, and at one time almost threatened to overwhelm them. Martial law was proclaimed throughout India, our transports in rapid succession landed troops for active service in the mutinous provinces, and distinguished officers displayed on every occasion the accustomed gallantry of their nation. Still, the rebellion plainly proved, as Mr. Disraeli had contended, that the rise was a national, and not merely a military revolt. The siege of Delhi was long and arduous. The Residency at Lucknow was closely beset by the mutineers. Cawnpore was in revolt, and preparing one of the most hideous revenges that the annals of treachery and massacre have ever had to record. City after city fell into the hands of the rebels, and British authority was openly set at defiance. The work of re-conquest was no slight effort; but happily, though little thanks to the government at home, it was successfully carried through. The victories at Sealcote and Bithoor showed

Whilst these terrible scenes were being acted in the cities and plains of our Indian peninsula, affairs at home had drifted into one of those commercial panics which, according to the statistics of economists, must periodically occur. Failure after failure was announced; firm after firm, hitherto considered solvent, fell into bankruptcy; and banks, one after the other, suspended payment. A reign of commercial terror had been ushered in, caused by the derangement of the American trade supervening upon previous inconveniences created by the mutiny, by the disturbance of the Indian trade, and the wild speculations then being carried on in continental capitals. The first to fall was the Borough Bank of Liverpool, with liabilities estimated at £5,000,000; afterwards the house of Dennistoun, largely engaged in the American trade, failed for upwards of £2,000,000; and then followed the collapse of the Scotch banks-the Western Bank of Scotland and the City of Glasgow Bankbringing down in the crash a host of smaller firms. A worse day than the memorable "Black Friday" had arrived. The Bank of England is the financial

THE EARL OF BEACONSFIELD AND HIS TIMES.

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could found a bank, and issue notes payable to bearer on demand, provided only that those notes were paid in specie upon presentation at the bank which issued them. The same power existed both in Scotland and Ireland.

barometer on these terrible occasions. | of bank notes. Under that law any person Between October 10 and November 18, the bullion in the bank fell from £10,110,000 to £6,484,000; while the reserve of notes fell during that period from about £4,500,000 to about £1,400,000. For some months previously to this date the foreign drain of bullion was accompanied by an adverse state of the exchanges, and a high rate of discount at the bank. On April 2 the rate of interest was at 6 per cent.; on June 18, at 6 per cent.; on July 16, at 5 per cent.; on October 8, again at 6 per cent.; on October 12, at 7 per cent.; on October 19, at 8 per cent.; on November 5, at 9 per cent.; and on November 9, at 10 per cent.

So grave was the condition of affairs that government felt bound to repeat the interference of 1847, and suspend the Bank Act. Accordingly, on November 12, a joint letter was addressed by Lord Palmerston and Sir George Cornewall Lewis, the chancellor of the exchequer, to the directors of the Bank of England, by which authority was given to the bank to issue an amount of notes not exceeding £2,000,000 in excess of the proportion allowed by the Act. To understand the nature of this permission it is necessary to be acquainted with the operations of the statute enrolled by Sir Robert Peel. In the course of his long political career Sir Robert had induced the legislature to agree to two important Acts relating to the currency. The first Act was passed in 1819; it restored the currency to its proper metallic basis, and established the convertibility of the bank note. After that Act had been passed, the power of the Bank of England to issue notes was unlimited in point of extent; subject only to the condition of being payable in gold on demand. The power of establishing country banks in England was also unlimited, subject to the privilege which then existed in favour of the Bank of England with reference to partnerships of more than six partners. Such banks, when established, could create any quantity

Such was the state of the law from 1819 to 1844, when Sir Robert Peel introduced his second important Act on the currency. That second Act was to be the complement of the first, and to secure that convertibility of the note which was made legal only by the Act of 1819. It enabled the Bank of England to issue notes on securities to the extent of £14,000,000, together with any further sum which might be required from the lapsed circulation of the English country banks, as to which some detailed provisions were introduced into the Act. It divided the Bank of England into two departments— the issue and the banking departments. And with regard to English country banks, it prohibited any new country bank from issuing notes at all, whilst the country banks existing at the time of the passing of the Act were limited in their issue to the circulation which they then possessed. Similar restrictions were enforced as to the banks in Scotland and Ireland. In establishing this measure the main object which Sir Robert Peel had in view was to provide a security against the excessive issue of paper, and thus to guard against the recurrence of those commercial panics under which the country had at different intervals suffered previously to 1844. He, however, carefully protected himself from pretending that his measure was a panacea against such panics, for he stated that the issue of bank paper was only one of the causes of panic, and commercial disasters might arise from causes which did not lie. within the scope of his legislation. During the panic of 1847 Sir Robert Peel thus defended his scheme: "I say that the bill of 1844 had a triple object. Its first object was that in which I admit it has

failed, viz., to prevent by early and gradual, severe and sudden contraction, and the panic and confusion inseparable from it. But the bill had two other objects of at least equal importance-the one to maintain and guarantee the convertibility of the paper currency into gold, the other to prevent the difficulties which arise at all times from undue speculation being aggravated by the abuse of paper credit in the form of promissory notes. In these two objects my firm belief is that the bill has completely succeeded. My belief is that you have had a guarantee for the maintenance of the principle of convertibility such as you never had before; my belief also is that whatever difficulties you are now suffering from a combination of various causes, those difficulties would have been greatly exaggerated if you had not wisely taken the precaution of checking the unlimited issue of the notes of the Bank of England, of joint-stock banks, and private banks."

the throne the following reasons for the assembling of the Houses :

Circumstances have recently arisen connected with the mercantile interests of the country, which have induced me to call parliament together before the usual time. The failure of certain joint stock banks and of some commercial firms produced such an extent of distrust as led me to authorize my ministers to recommend to the directors of the Bank of England the adoption of a course of proceeding which appeared necessary for allaying the prevalent alarm. As that course has involved a departure from the existing law, a bill for indemnifying those who advised and those who adopted it will be submitted for your consideration." Other subjects were also touched upon. The continuation of the mutiny was deplored, and the gallantry of the troops engaged in its suppression specially remarked upon. Europe was congratulated upon the general peace which reigned. A treaty had been concluded with The effect of the issue of the government Persia, and Herat had been evacuated. letter to the directors of the bank at this Then as to the details of future legislation, critical moment was, according to the chan- the attention of the Houses was to be cellor of the exchequer, favourable. "It directed to "the laws which regulate the diminished alarm," he said, "and restored representation of the people in parliament, confidence and it did not in the smallest with a view to consider what amendments degree endanger the convertibility of the may be safely and beneficially made note, because a favourable turn of the ex- therein;" also the laws relating to real change had taken place, and there was at property were to be amended, and several the time no fear of a foreign drain of gold. branches of the criminal law consolidated. If that authority had not been given, it is certain that the only measure to which the bank could have resorted for its own protection would have been the immediate and total cessation of discounts." stretch of ministerial prerogative, however, called upon the government to demand a bill of indemnity from the legislature, and the Houses were hastily summoned. Parliament met December 3, 1857, and it was understood that its deliberations would be almost exclusively confined to the necessary measures in connection with the Bank Act. The session was opened by Her Majesty in person, who gave in her speech from

This

Upon the motion of the address Mr. Disraeli (December 3, 1857) exhaustively criticised the different clauses in the royal speech, and commented severely upon the conduct of ministers. He complained of the government not having made itself sooner acquainted with the state of the commercial world, and thus have obviated the extreme course which had been adopted. The House had been asked to grant a bill of indemnity to ministers for having violated an existing law. It was too often the fashion of the House, when a bill of indemnity was the question, to treat it as a very light matter. It was generally sup

Three committees, continued Mr. Disraeli, had already been appointed, and yet nothing definite had resulted from their deliberations. A crash came, and lo! another committee was to be appointed. Such a shifting and evasive course should not be pursued. A currency established upon just principles exercised the most general influence that could affect society, and the government should have made up their minds upon the subject. It was not a question of inquiry, but of action. Were min

posed that, when such a bill was asked for, it would be conceded as a matter of course, that no opposition would be attempted, and therefore it was a matter which was treated lightly. Yet the fact was that a bill of indemnity was of so grave a character, that it should never be so treated. When accorded, it should be accorded liberally and even generously, but never lightly. Ten years ago, under similar circumstances, a bill of indemnity had been asked for and had been granted. To repeat that sanction they had now assembled. Before com-isters going to stand by the Bank Charter plying with such a request, he thought it should be the duty of parliament to require a frank declaration from the government of the circumstances which had induced them to recommend their policy, and of the reasons which they believed sufficient to render the pursuance of that policy necessary. He regretted that the chancellor of the exchequer had stated that he would move for a committee to consider the operation of the Bank Charter Act of 1844. "Now," said Mr. Disraeli, "we shall be doing exactly what we did in 1847. In 1847 the country was panic-struck and half ruined. Parliament was called together, and the country looked to it for the expression of some distinct opinion. A committee was appointed. Ten years have elapsed. The same occurrence takes place. Parliament is again called together; and what is parliament, and what are ministers-the most influential members of parliament about to do in the difficulty? Again they are going to evade doing that which is the duty of every statesman in this countryto lay down in this House the opinion which they have formed on this subject, and to call on the House to maintain that opinion. Instead of that and I deeply regret it-we are to have another committee on the Bank Charter Act of 1844; and I suppose that in 1867, after a repetition of the same mischance and the same miseries, the same fruitless and bootless process will be adopted of appointing a committee on that subject in this House."

Act, or were they not? That was the question the country wished them to answer. If ministers were going to stand by the Act, then he, personally, should hesitate before granting the bill of indemnity, because he did not think they were then justified in departing from the letter of the law. If, on the other hand, ministers were not going to stand by the Bank Act-if they had a policy, if they came forward and said they were prepared to make amendments with respect to that Act, and because they were convinced that such amendments were necessary, they did not hesitate at a moment of emergency to recommend the suspension of the law-then, said Mr. Disraeli, the bill of indemnity should be granted without reserve or reluctance, and the House wait for the proposition the government would make. But if, after all the country had gone through, they were to do exactly that which they were doing before those commercial difficulties occurred, it appeared to him that they should forfeit the confidence and respect of the country. Was the Bank Charter Act of 1844 to be upheld as it then stood? Was it to be amended, or was it to be abandoned? Those were questions ministers should frankly answer. In his opinion nothing was more injurious to the principles of currency than to allow a law to exist which, in moments of emergency, was always suspended, and which, in moments of tranquillity, was always submitted for investigation to parliamentary committees.