One of the most important measures of Peel's financial administration was the passing of the Bank Charter Act in 1844. The object of the Bank Charter Act was to separate the issue from the banking department of the Bank of England, to restrict the issue of notes, to a certain specified amount of securities, to place the whole further circulation on what is termed a gold basis, and to prevent the formation of any new banks having the power to issue notes. The object of this important legislation was to make it sure that no notes should be issued which did not represent an actual amount of gold in the possession or at the disposal of the Bank. This very salutary piece of legislation had, however, to be suspended on two subsequent occasions, because in each instance of a certain crisis in the financial world which could not have been dealt with under a strict application of the existing law. In the autumn of 1857 it was first suspended, and nearly nine years later, on the famous "Black Friday," May 11, 1866, a day of financial panic and peril only too well remembered still. We have anticipated a little the course of history in order to mention these two suspensions of the Bank Charter Act, and will now return to the story of Peel's administration.
The year 1846 will always be memorable in the story of modern England because of the introduction of Sir Robert Peel's Free Trade policy. Peel had taken office in 1841 as an opponent to Free Trade, and in 1846, still Prime Minister, he proposed and carried the measure for the abolition of the duties on the importation of foreign grain. It would be almost needless to say that he was bitterly denounced by his opponents for what they held to be his outrageous political inconsistency. No doubt he was inconsistent, if it be inconsistency to learn anything of experience and of the lessons which are taught by unexpected events. Peel was inconsistent with regard to Free Trade as he had been inconsistent with regard to Catholic Emancipation. At one time he did not see his way to concede Catholic Emancipation; later on, as we have already shown, he felt himself compelled, by the teaching of events, to become its advocate. So it was with regard to Free Trade. In the case of Catholic Emancipation he saw himself compelled to choose between the relief of the Catholics and a civil war. In the case of Free Trade he saw himself compelled to choose between the removal of the duty on foreign grain and the outbreak of famine after famine. An agitation had long been growing up in England, having its birthplace in Lancashire, for the removal of all duties which limited the necessary supply of food to the people of Great Britain and Ireland.
The grain grown in England, no matter how plenteous, was always made costly to the people by the heavy prices which the landlords exacted, and the duties on the importation of foreign grain were kept high with the avowed purpose of protecting the landlord against the competition of foreign growers. The Manchester Free Trade League was founded for the purpose of creating an agitation which should arouse the country generally to insist on the abolition of that duty, and let the people have bread that they might eat of it and live, no matter whether the bread was made from grain cultivated at home or cultivated abroad. The chief leaders of the Free Trade League were Mr. Cobden, Mr. Bright, and Mr. Charles Villiers. Mr. Cobden was one of the most persuasive and convincing speakers who ever addressed the House of Commons or any English meeting. He always appealed to the reason and never to the passions. John Bright was a man equally unselfish and exalted in character, but possessed of a higher order of eloquence; he was, indeed, in the House of Commons and out of it one of the greatest orators England has ever known. Charles Villiers was, unlike Cobden and Bright, a man of aristocratic birth and training, and was led to become a Free Trader by intellectual conviction and by his sympathy with the cause of the poor. Villiers was in Parliament many years before Cobden and Bright obtained seats there, and used to bring forward year after year a motion calling for the abolition of the duty on the importation of foreign grain. Cobden and Bright went about the country addressing meetings everywhere, and devoting themselves almost altogether to the one single subject. The Free Trade Hall, Manchester was built on the ground where, as we have told our readers already, took place what was called the massacre of Peterloo.
(From a photograph by Messrs. Elliott & Fry.) John Bright. 1811-1889.
The agitation which Bright and Cobden founded and carried on, soon became an immense power all over England. It was aided before long by a grim and terrible ally. "Famine itself," as Mr. Bright put it in his eloquent words, "against which we had warred came to our aid." The Irish famine broke out, and it was necessary to take some instant steps lest the people of Ireland should wholly perish. Lord John Russell had for some time been a growing convert to the economic principle of Free Trade, and would have become a convinced Free Trader in any case, but the Irish famine hastened his convictions. So it was, too, with Sir Robert Peel; and before the end of 1845 Peel had made up his mind that nothing short of a total abolition, within a very limited space of time, of the import duty on foreign grain would satisfy the demands of the emergency and of the country, and ward off the recurrence of periodical famine. In 1846 Peel announced his intention to bring in a measure which should, after a short and limited delay, abolish the Corn Laws for ever. Some of his colleagues, however, Lord Stanley in particular, broke away from Peel on this question. Peel found that he could not go on under such conditions, and he resigned his office; and the Queen sent for Lord John Russell and invited him to form an administration. Russell did his best to comply peel's triumph And fall with the Queen's wish, but he found that the Whig Party were not strong enough for the work, that they had not a majority in the House of Commons, and that there were irreconcilable differences on other questions amongst some of those whom he proposed to invite to his Cabinet.