1826.
February 12th, 1826
The last three months have been remarkable for the panic in the money market, which lasted for a week or ten days—that is, was at its height for that time. The causes of it had been brewing for some months before, and he must be a sanguine and sagacious politician who shall predict the termination of its effects. There is now no panic, but the greatest alarm, and every prospect of great distress, and long continuation of it. The state of the City, and the terror of all the bankers and merchants, as well as of all owners of property, is not to be conceived but by those who witnessed it. This critical period drew forth many examples of great and confiding liberality, as well as some of a very opposite character. Men of great wealth and parsimonious habits came and placed their whole fortunes at the disposal of their bankers in order to support their credit. For many days the evil continued to augment so rapidly, and the demands upon the Bank were so great and increasing; that a Bank restriction was expected by everyone. So determined, however, were Ministers against this measure, that rather than yield to it they suffered the Bank to run the greatest risk of stopping; for on the evening of the day on which the alarm was at its worst there were only 8,000 sovereigns left in the till.[1] The next day gold was poured in, and from that time things got better.
[1] [Mr. Baring (Lord Ashburton) stated in his pamphlet on this crisis, ‘The gold of the Bank was drained to within a very few thousand pounds, for although the public returns showed a result rather less scandalous, a certain Saturday night closed with nothing worth mentioning. It was then that the Bank applied to Lord Liverpool for an Order in Council to suspend cash payment. A conference took place between Lord Liverpool, Mr. Huskisson, the governor of the Bank, and Mr. Baring. The suspension of cash payments was happily averted, chiefly as it was said by the accidental discovery of a box of one-pound Bank of England notes, to the amount of a million and a half, which had never been issued, and which the public were content to receive.’ Mr. Tooke, however, states in his ‘History of Prices’ (Continuation, vol. iv. p. 342) that the lowest amount of the banking treasure was on the 24th of December, 1825: Coin, 426,000ℓ.; bullion, 601,000ℓ.: in all, 1,027,000ℓ. The passage in the text refers of course to the banking department only.]
In the midst of all this the Emperor Alexander died, and after a short period of doubt concerning his successor it was found that Nicholas was to mount the throne. The first act of the Russian Government was to communicate to ours their resolution no longer to delay a recognition of the independence of Greece, and their determination to support that measure if necessary by force of arms. They invited us to co-operate in this object, but intimated that if we were not disposed to join them they should undertake it alone. The Duke of Wellington is gone to Russia, ostensibly to compliment the new Emperor, but really to concert measures with the Russian Ministry for carrying this measure into effect; and it is remarkable that the Duke, upon taking leave of his friends and family to set out on this journey, FINANCIAL DIFFICULTIES. was deeply affected, as if he had some presentiment that he should never return. Alava told me that he had frequently taken leave of him, when both expected that they should never meet again, yet neither upon that occasion nor upon any other in the course of the seventeen years that he has known him did he ever see him so moved. Lady Burghersh said that when he took leave of her the tears ran down his cheeks; he was also deeply affected when he parted from his mother.
In the discussion which took place on Friday night in the House of Commons, when the Chancellor of the Exchequer[2] opened his financial plan, he is deemed to have made a very bad speech, and Huskisson a very good one. Robinson is probably unequal to the present difficult conjuncture; a fair and candid man, and an excellent Minister in days of calm and sunshine, but not endowed with either capacity or experience for these stormy times, besides being disqualified for vigorous measures by the remissness and timidity of his character. However, though it is the peculiar province of the Finance Minister to find a remedy for these disorders, he may well be excused for not doing that which the united wisdom of the country seems unequal to accomplish. All men agree as to the existence of the evil, and all differ as to the causes of it and the measures which will effect its removal; not one man seems to see his way clearly through the difficulty; however, ‘time and the hour runs through the roughest day,’ and probably the country will what is called right itself, and then great credit will be given to somebody or other who deserves none.
[2] [Right Hon. Frederick John Robinson, Chancellor of the Exchequer from January 1823 to April 1827; afterwards Viscount Goderich and Earl of Ripon.]
February 20th, 1826
The Small Notes Bill,[3] as it is called, lowered the funds and increased the alarm among the monied men. Numerous were the complaints of the inefficacy of the measure for present relief, numerous the predictions of the ultimate impossibility of carrying it into effect. In the City, however, on Thursday afternoon things began to improve; there was more confidence and cheerfulness. On Friday evening the Chancellor of the Exchequer comes down to the House and surprises everyone by abandoning one part of his plan, and authorising the Bank to issue one pound notes till October. The immediate cause of this alteration was a communication which Hudson Gurney made to the Chancellor, that if he persisted in his Bill he should send up 500,000ℓ. which he had in Bank of England notes and change them for sovereigns, and that all country bankers would follow his example. From this he found that it would be impossible to persist in his original plan. The great evil now is a want of circulating medium, and as the immediate effect of the measure would be another run upon the Bank, and that probably all the gold drawn from it would disappear—for men now are anxious to hoard gold—this evil would be increased tenfold. The whole country is in distress from the absence of circulating medium for the common purposes of life; no country banker will issue notes, for they are instantly returned upon his hands and exchanged for gold. The circulation of country notes being generally confined within a very limited extent, the holders of them can easily present them for payment. The circulation of a quantity of Bank of England paper will relieve the immediate distress arising from this necessity, and the difficulty of exchanging them for gold will ensure the continuance of their circulation. When men find that they must take notes, and that gold is not to be had without so much pain and trouble, they will be contented to take the notes to which they have been accustomed, and will MR. ROBINSON’S SMALL NOTES BILL. think the paper of their own bankers as good as that of the Bank of England, besides the advantage of being less exposed to the losses arising from forgery. This is the argument of the opponents of Robinson’s Bill. It is generally thought that the Ministers have disgraced themselves by their precipitation and by the crudeness of their measures. Hitherto they have done nothing towards removing the present distress, or satisfying the minds of men, but the contrary. Robinson is obviously unequal to the present crisis. His mind is not sufficiently enlarged, nor does he seem to have any distinct ideas upon the subject; he is fighting in the dark.
[3] [On the 10th of February the Chancellor of the Exchequer moved in Committee ‘That all promissory notes payable on demand issued by licensed Bankers in England or by the Bank of England for less than 5ℓ. shall not be issued or circulated beyond the 5th of April next.’ Mr. Huskisson made an able speech in support of the proposal, showing that the inflation produced by the small note paper currency had greatly contributed to cause and aggravate the panic (‘Huskisson’s Speeches,’ vol. ii. p. 444). Mr. Baring, afterwards Lord Ashburton, opposed the restriction of small notes, but with small success. The period allowed for the contraction of their circulation was, however, extended to the 10th of October.]
Everybody knows that Huskisson is the real author of the finance measure of Government, and there can be no greater anomaly than that of a Chancellor of the Exchequer who is obliged to propose and defend measures of which another Minister is the real though not the apparent author. The funds rose nearly two per cent, upon this alteration in the Bill before the House, on account of the prospect of an abundance of money. Still it is thought that nothing will be sufficient to relieve the present distress but an issue of Exchequer bills. So great and absorbing is the interest which the present discussions excite that all men are become political economists and financiers, and everybody is obliged to have an opinion.
February 24th, 1826
I have been since yesterday the spectator of a melancholy scene and engaged in a sad office. Arthur de Ros,[4] who was taken ill a fortnight ago, became worse on Monday night. After this time he was scarcely ever sensible, and yesterday, at a quarter-past two, he expired. After they had given up all hopes they were induced again to suffer them to revive from the disappearance of the most unfavourable symptoms; but this was only the weakness which preceded dissolution, and a few moments after his brother Henry had told me that he did not despair he came and said that all was over, and a little while after Rose announced that he had ceased to breathe. He died tranquilly, and did not suffer at all. I never saw such a distress. His father, mother, sisters, William, and his wife went immediately to Boyle Farm. Henry would have followed them, but I persuaded him to go home. He went first to Mrs. ——, to whom Arthur had been attached for ten years, and after a painful interview with her he came to his own house; he has since been too ill to move. I have never seen grief so strong and concentrated as his; it has exhausted his body and overwhelmed his mind, and though I knew him to have been much attached to his brother, I did not believe him capable of feelings so acute as those which he has evinced. William is much more calm and resigned, a strange, unaccountable thing considering the characters of the two men—the one so indifferent, and with feelings so apparently deadened to the affections of this world, and the other with a sensibility so morbid, and such acute susceptibility and strong feelings, that the least thing affects him more deeply than very serious concerns do other men.
[4] [Colonel the Hon. Arthur John Hill de Ros, born 1793, died February 1826. He was aide-de-camp to his Royal Highness the Duke of York.]
Arthur was an excellent creature, and will be regretted by the Duke and deeply lamented by all who knew him intimately. His talents were not brilliant, but he had good sound sense, and was besides modest, diligent, honest, and trustworthy in a high degree. There breathed not a more honourable man, and as his ambition did not extend beyond the sphere in which fortune had placed him and he was contented with his destiny, but for this illness his career might have been long and prosperous. I went last night to sleep at the house, that it might not appear to have been entirely abandoned to the care of servants. The only wish he expressed was that Francis Russell should succeed him, which I have no doubt he will do.
February 25th, 1826
Received a letter from the Duke of York (to whom I had written to announce poor Arthur’s death) expressive of the greatest regret for his loss.
March 2nd, 1826
I am just come from poor Arthur’s funeral. There were present William de Ros, the two Hills, Craufurd, Torrens, Taylor, Francis Russell, Campbell, and B. Paget. The Duke appointed Francis his aide-de-camp directly.
July 2nd, 1826
ILLNESS OF THE DUKE OF YORK. Four months since I have written anything. The Duke of York has been dangerously ill, and it is still doubtful whether he will recover. I was with him at Frogmore before Ascot; we went with the King to see Windsor Castle. His Majesty has since been very much annoyed about the Duke, cried a great deal when he heard how bad he was, and has been twice to see him.
The elections have been particularly violent and the contests very numerous. A batch of Peers has been made; everybody cries out against Charles Ellis’s peerage[5] (Lord Seaford); he has no property, and is of no family, and his son is already a Peer. The King, when these other Peers were created, asked Canning to name somebody. He said he had nobody about whom he was interested but Charles Ellis, and the King consenting to his elevation, it was all arranged without his knowledge. However, it is thought very ridiculous, and that he would have done much better to have declined it. Clanricarde, too, being made a Marquis and an English Peer is thought an indirect exertion of Canning’s influence.
[5] [Charles Rose Ellis, created Baron Seaford in 1826. Lord Seaford was the father of Charles Augustus Ellis, who succeeded to the title of Lord Howard de Walden through his mother, Elizabeth Catherine Caroline Hervey, granddaughter of the fourth Earl of Bristol, who was the last Baron Howard de Walden, as heir general of Thomas, first Baron. The son of Lord Seaford had married a daughter of the fifth Duke of Portland, and was consequently a connection of Mr. Canning.]
London, December 14th, 1826
The Duke of York very ill; has been at the point of death several times from his legs mortifying. Canning’s speech the night before last was most brilliant; much more cheered by the Opposition than by his own friends. He is thought to have been imprudent, and he gave offence to his colleagues by the concluding sentence of his reply, when he said, ‘I called into existence the new world to redress the balance of the old.’ The I was not relished. Brougham’s compliment to Canning was magnificent, and he was loudly cheered by Peel; altogether it was a fine display.
Yesterday the Duke [of York] told me that the late King [George III.] was walking with him one day at Kew, and his Majesty said, ‘The world tells many lies, and here is one instance. I am said to have held frequent communication with Lord Bute, and the last time I ever saw or spoke to him was in that pavilion in the year 1764.’ The King went over to breakfast with his mother, the Princess Dowager, and she took him aside and said, ‘There is somebody here who wishes very much to speak to you.’ ‘Who is it?’ ‘Lord Bute.’ ‘Good God, mamma! how could you bring him here? It is impossible for me to hold any communication with Lord Bute in this manner.’ However, he did see him, when Lord Bute made a violent attack upon him for having abandoned and neglected him. The King replied that he could not, in justice to his Ministers, hold any communication with him unknown to them, when Lord Bute said that he would never see the King again. The King became angry in his turn, and said, ‘Then, my Lord, be it so, and remember from henceforth we never meet again.’ And from that day he never beheld Lord Bute or had any communication with him.