Beaconsfield’s brilliant and satirical sketch of Mr. Vigo’s fortunes in “Endymion” is based on the mania with which Mr. Hudson infected England, and which exhausted the floating capital of the country in a time of famine. In the beginning of 1846, when in obedience to the Standing Order of the House the deposit of 10 per cent. on railway capital had to be lodged with the Accountant-General, the Money Market was greatly alarmed. It
THE BANK OF ENGLAND.
was estimated that £10,000,000 would have to be lodged in compliance with the law on the 29th of January, and on the 10th the Times, in a memorable article, declared that to lock up half that sum for a week in the circumstances would produce “the greatest inconvenience and pressure.”69
It was in vain that the officers of the Crown and the Government were implored by the trading community, who dreaded a Gold Famine, to sanction a deviation from the rigid rule of the Standing Order in face of the exceptional outbreak of an epidemic of speculation. This reached its height, it seems to us, just a month before the Governor of the Bank of England could be persuaded that the potato-rot was rendering famine inevitable. In the quarter ending September, 1845, there were in the market for sale £500,000,000 of stock, scrip, or letters of allotment. The shocking waste of resources that this covered is proved by two sets of figures. According to the Chancellor of the Exchequer, in the years 1842-46, the capital authorised to be raised was in each year respectively £6,000,000, £4,500,000, £18,000,000, £59,000,000, and for the last of these years £126,000,000! In 1842-45 the amounts
THE QUEEN IN THE ROYAL GALLERY, ST. GEORGE’S CHAPEL.
(After the Portrait by G. E. Dawe, 1846.)
expended, however, were only £3,000,000, £4,500,000, £6,000,000, £14,000,000, and £36,000,000. In the latter half of 1846, of an authorised capital of £146,000,000, only £27,000,000 was spent. But in the records of the Victorian epoch there is nothing more curious than this fact—that of the vast sum expended during this mania, one-fifth was spent on buying land and on Parliamentary expenses, and the remaining four-fifths on materials and labour, skilled and unskilled. Some idea of the resources and the folly of the England of Queen Victoria’s youth may be gained from the fact that, during the period 1843-47, £170,000,000 were raised—£130,000,000 by shares and £40,000,000 by loans—in order to open 3,665 miles of railway for traffic.70 It has been said that the Railway Mania was at its height in the quarter ending September, 1845. The Bank rate of interest then stood at 2½ per cent. In November it rose to 3½ per cent., and then panic smote timid investors. They glutted the market with their shares. And yet the curious thing is that the witnesses who were examined before the Committee of the House of Commons on Commercial Distress seem to agree in asserting that the general trade of the country was active at the time, and that very few people had the slightest suspicion that it was utterly unsound. Mr. E. Gardner of Manchester, in his evidence, gave an excellent and vivid sketch of industrial England at this period, when he said: “The commercial difficulty began, I think, about the middle of 1846. A good deal of business was done in 1846, but trade was not in a wholesome state; it appeared to flourish by the great abundance of money, and the great facility in getting long paper discounted.... I think, in the early part of 1846, we were at about the height of our apparent prosperity.... In the manufacturing districts there was a greater supply of goods than was justified by the demand. Immediately after the China Treaty, so great a prospect was held out to the country of a great extension of our commerce with China, that there were many large mills built with a view to that trade exclusively, in order to manufacture that class of cloth which is principally taken for the China market.... This trade turned out most ruinous; the losses averaged from 10 to 60 or 70 per cent.”71 This is a fact which may be commended to the attention of a powerful Party in the latter years of the Queen’s reign which cherishes the perfectly erroneous belief, that an aggressive foreign policy necessarily and invariably stimulates commerce by “opening up new markets.”
No issue of paper money in 1847-48 could relieve a strain due to such causes as these, though some blame must be given to the Bank for not checking the drain of gold by raising the discount rate at the beginning of the year, when the failure of the potato crop in Ireland was manifest. But to issue £2,000,000 of notes without any increase in the real capital of the country, which could alone command foreign produce, would have been an illusory measure of relief. The heated discussions on these and cognate questions ended in May; in June the pressure on the Money Market began to be relaxed, and the crisis passed away for the time—only to reappear, as we shall see, later on in the autumn.
The Education Vote in 1847 raised a great storm of sectarian controversy, not only in Parliament, but throughout the country. The first sign that the State in England gave of awakening to the educational destitution of the country was in 1833, when the House of Commons voted £20,000 in aid of elementary public instruction. In a burst of generosity, £39,000 was voted in 1839. In 1845 the grant was raised to £100,000, but the money could only be shared by Protestant schools, because the Privy Council decreed that no school was to be subsidised unless “the Authorised Version of the Scriptures” was read in it. This of course cut off the Roman Catholics from any participation in the grant; and when, in 1847, the Education Vote came before the House of Commons, all liberal-minded men condemned the sectarian restrictions in dispensing the grants which were imposed by the Government. Sir Robert Peel, Mr. Macaulay, and Sir W. Molesworth all attacked the regulation of the Council, which pressed so harshly against the Roman Catholics; and Lord John Russell was fain to give pledges that the rule would be relaxed. During these debates, some of the High Church Tories, like Sir Robert Inglis, the Member for the University of Oxford, accused Peel of supporting the policy of Toleration in order to conciliate Catholic voters at the coming election. It is curious to note that the plan of the Government, offering equal pecuniary aid on equal terms to all schools accepting Government inspection, was opposed by the Dissenters; and even Mr. Bright declared that it was a dangerous interference with the voluntary exertions of the people to educate themselves. At this time it was thought a lesser evil to let the children of the poor remain ignorant, than to establish a system of education which was made applicable to all sects, by omitting distinctive points of sectarian teaching from the lessons given in the schools. The Dissenters objected to the Established Church getting a new endowment in the shape of grants in aid of their schools. The Secularists objected to public money in any form being spent in subsidising sectarian schools, even though these were under State inspection.
In June the subject of colonisation stirred up some discussion in the country. Ever since Mr. Charles Buller, in 1843, had emphasised the distinction between colonisation and emigration, a party had existed who taught that it was not wise to leave the settlement of our Colonial Empire to the chances of casual or voluntary emigration. Lord Lincoln attempted to enforce their teaching by drawing the attention of the House of Commons, on the 1st of June, 1847, to the importance of this question in its bearing on Irish distress. He moved an Address to the Queen praying her to take into consideration the means by which colonisation might be made subsidiary to other measures for the benefit of Ireland. He urged that the Government should endeavour to direct the surplus or redundant labouring population of Ireland to Canada and Natal, and suggested the appointment of a Commission of Inquiry. The plan was opposed by Mr. Vernon Smith as vague, and as likely to prove too costly for an embarrassed country like Ireland; and by Lord John Russell, who thought that the Colonies would be alienated if the mother country led them to suspect she was exporting to them the dregs of her population. Still, on the general principle that it was well for a weak Government to be conciliatory, Lord John Russell permitted Lord Lincoln to carry his Address, but only on the understanding that it was not to lead to any practical result.