The British Press; or, Morning Literary Advertiser.
London, England, 1826-02-21 00:00:00

PROMISSORY NOTES BILL.

fa the Order of the Day— that the !louse resolve itself into a Com-
mittee on the Promissory Notes' Bill being read,
Lord A. HAMILTON said, that, from whet he understood bad
fallen from Lord Liverpool, it appeared that three years, which
was to have been the period of limitation for the circulation of small
sates, was to be extended to six years from the present time. This
be thought an impolitic mode of proceeding; it was a different thing
to petition for the repeal of a measure and to prevent its being ear-
ner.' into teen He was anxious to know if Government contempla.
teal antMeuure to destroy the circulation of small note* in Scot.
Mid. The apprehension of such intention on the part of (loran-
116IM had produced a strong sensation in that country. At that very
moment there were several cities and boroughs prepared to petition
against the measure, and several had made applications to him to
blow the best time to send forward those petitions with effect. They
were situated at such a distance that it was necessary they should
obtain early information of the intentions of Government, or they
would be excluded from expressing an opinion on the measure.
The CHANCELIA)R of the EXCHEQUER said that the
:iable Lord had misunderstood what had been intimated on
the s.ibject. It was not said that any measure would be adopted
telat.we to the circulation of small notes in Scotland; he did
not with to mix up the consideration of the circulation in both 1
countries in one Bill ; he certainly would admit that he was averse '
le having one system in England and another in Scotland (hear,
hear, hear); but until the measure which referred to the circulation
of small notes in this country was disposed of, he had no intention
to interfere with the circulation of those notes in Scotland ; at
Present he was not determined to make any alteration. It was his
Intention in the course of the present Session to cull the attention of
the {loose to that subject.
Mr. P. GRENFELL said that he thought it advisable that a
weekly return should be made to his Majesty's Government of the
cures la circulation and also a quarterly return of the average I
amount of one pound notes in circulation, which should be pub.
hatted in the Gueette.
Mr. CA LCH.t PT said that if the Chancellor of the Exchequer
amended his Bill it might he deprived of sonic of its injurious
effects. He could not but admire the dexterity of the Hight lion.
Gentleman, Ile would not meet both questions toge.her. but
would with admirable dexterity separate them, in order to defeat
with greater ease the opponents of the measure; he no doubt hoped.
by the assistance of the Scotch Memhers, to carry the lenglesli
measure. He could assure the House that the introduction of the
proposed plan into Scotland would produce as much ruin there a,
it had done already in this, when the Bank was unable to isms,
500.1• OD sovereigns. He was at a loss to concive where Govern.
11441, e mid procnregald sufficient to supply the entire country With
a .eetallie circulation. The principal part of the circela•ton of
Ireland consisted of one pound notes, and he had no doubt but
that the Right Hon. Gentleman would extend the measure to that
e toner ; ter his port he would continue to support what he had
first advanced on the question.
Mr. ll' 11l TM( n( le said that the subject under consideration'
was one of much importance; but he thought the any measure ,
that did not strike at the root of the evil quite nuentory ; if they I
went to the one pound notes they thould go to the live. (Cheers.)
The circulation of paper had a most decided eft.ct on the aff:tirs of
tne flank; when there %%Win I trge ;unload of payer in circulation I
taut ur a smell quantity of geld, treasure iminedneely accumulated I
le e : hands of the hank. In *arch. 1793, the amount of treasure
in the hands of the Ileitk was 3.Steleetee Previously to the years
I 7eli, 1790. sell 1;91. the amount of treasure in the coffers of the
~teolv ws. 10,eitoeseie ; in 1791 the amount of notes hewed was
1 I e1e9,1 MU. The amount of treasure in the flank in December,
179.2. was reduced to 5,•260,1eNe. • and in March. 1793, to:CAI:0'0W.
l't e ametint of treasure in the [tank in March. 17e1. was tame tease.
• d Cie a•nount of notes issued was 11,14.7210/. In February,
I' 17. the amount of treneure in the hands of the think wo. reduced
t t 1.272.1100/. ; anti the amount of notes issued was leetteeeite In
the year 1112:1 there was a large treasure in the hand; of the Bank
of England t the consequent Issue of the Bank sees well known.
and the n-tilt it produced ; there was, indeed, a spirit alloot whim
was productive of ititieh mischief; but if that sprit had not been
assisted tr: the issues of the Bank, those evils ',mid not hare
r:stiNel which were so justly complained of. No ere' eolith gain...y
the fact.; he had stated ; the treasure which the Itoek had necu-
mutated as. romnlctily a dead weight. lie dem,•ltt that at the
present m-anent they should not pre.a one adili,tonal measure ; he
considered that which was now proposed quite as much es the
country could bear; he thought that if they rem:emit In their
present course. in ten years they would he in a worse state of
destrose than that from which (he wished he could say) they bed
been extricated ; he had been himself captivated, as well ns many
others. by the plan which was proposed hr tit. lamented and
intelligent friend (Mr. Ricardo). The plan peeetweil by th it
gentleman, whether good or bad, had not had a trial. The pet tent
meesure was not a paper toucany nor cash payntents; it a to a
half measure ; but it they did no; adopt the plan which had been
already protwiel by 31r. Ricardo, they should give a met illte
vecilletien to the country- Tney should not, certainly, treat •
a gloom through the country ; but it was butte evident that
tie viler of the currency which was prop t.. a rhould be in.
(-need over that which it superseded. Tlieugh ths increase or de-
croaee of the peon rimer ey would barren effect tin •tie gold currency.
yet the quantity of geld they would want e edil not increase the
value of the trend.. They might go into the market of the world
without produiring any increase in the value of gold. France and
Germany could suptilv their, with g .1d without enhancing the value
or
that lineal, and that inuet ineeitenl) be the case while England
was the only country where gold via matte the standard. I 'pen
this point he would make one single remark. The matter resolved
itself into a question of demand and supply. which couli not be
applied to the preseet cotes.. There was one co-sideration which he
avoid advert to. Ile thought that a species of currency might he
produced of great value. A Mint note might be issued open bul-
lion deposited in the Mint. There was unimeetlonably a great
convenience in the circulation of paper, and 'et that mode the ad.
vantages of the paper currency alight he preserved, without incon-
venience or insecurity.
Mr. 31ABEHIN Raid that he thought that any measures
might more fairly and properly be proposal in the Committee.
For his own pan he had heard nothing against the unsure
that had made env impression aeon his mind. By the trans-
ac•tons that had taken pl ice between Goverretent and the Bank
several persons had lost twenty per cent. The effect of these
transactions was to produee a greet fluctuation in the currency.
At one time a large Towny of exchequer parer was thrown upon
nie iii .rk is: at a disettunt of Vos. per cent.. for the ourpose of raising
a demi dated paper currency. Subsequentiv, the Bank of England,
I.
~.,n I..ve of notes, raised it again to par; but notwithstanding all
met the flank of England could do, unless Government weuirl
raise the interest upon exchequer bill., they most till again to a
discount of 21s. per cent. His object in setting this was to place
etre puhlic upon their guard---to induce every man to take care of
himself, for it was but too evident that Government would not
take care of them, and that the whole property of the kingdom MIS
onsle to depend upon the rates of exchange, which could be influ.
enced at pleasure, favourably or otherwise, by the issues of the .
Batik of England. It was his opinion that, on the 15th of each
morel), an account should be inserted in the Gazette of all of the
Bank of England notes in circulation during the previous month.
This was done invariably by the Bank of France, which gave pub-
licity to all its transactitms—even to the amount of its profits; and
it was • measure, he was prepared to contend, calculnted to give
rester stability and security to the Rank itself, more confidence
and greater safety to the public, and without which it could not
render that essential service to the country which it ought to do.
Another clause which be thought it would be well to adopt in the
measure, which was in the course of enactment, respected the fetes
of exchange. He hail conversed with many persons deeply versed
I a commercial transactions as to what was par, and al) seemed
quite uncertain in their opinions. It would therefore, he thought,
be advisable to settle those differences of opinion upon a point of
each art important nature, to ascertain what was the per of ex-
change, anti to have that published monthly in the Gazelle, as well
as the rates of exchange. so as to enable that portion of the public
who resided away from the metropolis to judge of the value of their
property. Another subject to which it would be well to pay similar
attention, was that of bills of exchange. He thought an account
should be published monthly in the Ga.etfr, of all exchequee hills
sold, paid off, and received during the preceding month. Unless
these measures were adopted, the public could never form an esti-
mate of the actual value of their property individually, and that
alone was a sufficient reason for carrying them into effect. There
was still soothee measure which he also thought It would be wise
to adopt, although he doubted the propriety of Introducing it into
A Rill of the nature of that to which he had alluded. He was of
repthion that • monthly account should be published in the Cavite
of the amount of the imports and exports of the kingdom. The
*nuns of the imports and exports. as hitherto made, were evi-
dently erroneous. During the last twelve years, according to those
trews, the exports of the country exceeded the import• by the
OPURIIIOII.I sum of two hundred millions. This was an erroneous
statement upon the very face of it ; and it was of the grentest im-
portance to adopt some means of ascertaining the real amount of
imports and exports, and publishing them in the manner he had
gus ested. These measures. he believed, would be found to he
i efficient In alleviating the diseases of the courn•y, and could
if
not ail to assist the operation of the Bill which the Right Ilooour.
able Gentleman (the Chancellor of the Exchequer) wad endeavour.
Ostia carry through the House. He would any nothing with re.
sPect to that Bill at that time, but he wished to offer an obacryation
eithrefcrence to Scotland. ( Hear, heat.) With regard to Scot.
hied; he thought the Right Honourable Gentlemen had not been
quite so candid as usual ; he was of opinion that he ought at once
to state a time when that measure would be applied to that portion
of the empire. (Hear, hear.) The principle was precisely the same
as regarded both countries; and when the preeent agitated stab of
Scotland was taken Into consideration, Ministers were bound to '1
Sea out as to what were their intentions, and when it was pro. I
paid to carry them into operation. (Hear, hear.)
• Mr. RCM E said that he had listened with the deepest attention
to the arguments made use of on both sides of the Howse, and after
the most 'nature delibenatioo he was sorry to declare that he mold ;
net come to any sound conclusion upon the subject. It was the
opinion of the Right Honourable Gentleman opposite (the Chan-
edit* of the Exchequer), as expressed by biro upon a former even-
ing, that the distresses of the country was causal by au ono.issue
of one and two pound notes. He did not believe that that patinas
osteld be supported by proof, and he warned the House_ against
taking aftiamptiens for proofs. He meallectede when William
Cabbott published b• Met Wit pe and gold could not drew-
lake..ingetivey, the flight Hes. Geswas had replied' that that
010 don wad wet by possibility be eserset. beam the staplos of
do Illgehamostlß he evillest. and dos evil would correct Itself.
lel die it ens stated that so adequate provision
Gelid •bs sae Beget
deltaWdelloll a e Pala =mg, e2rePt
ihiltetneediate bop oil, Hs wished to know V there
ruts itnireiels lambda ilaskpa weld not be 'averted
Worm, V thin wits MIMI Maas this would be

, -
maintain that papa had net been at all depreciated, and that the
measure brought forward by the Right lion. Gent, was totally in-
adequate to prevent a recurrence of the et de u oder which the country
was at potent labouring. Much shots hail been hid upon the over.
inane% of bank paper ; but the fact was, that the amount of issues,
as calculated from the Stamp-office returns, gave no certain cri-
terion by which to ascertain the amount of papa in chailation.
Commercial transactions required a different amount of circulating
medium at different periods. If in January tweroy.one millions
had been the amount of circulating medium, in February twenty.
five millions could not be too much, taking into consideration the
state of commerce in each respective month. How then, be would
ask, mold the difference of three or four millions produce the
lamentable consequences which hat been assigned to that cause
(Hear, hear.) 1 pto that very moment, he wool," contend, t at
the paper currency had not been depreciated. In fact, no man
could aver that an increase of paper currency from twenty to t wen iy -
tive millions could he called an were, unless hr waa at the same
time fully acquainted with the commercial transactions of the coat.-
try. For his own part. unless lie had a statement of the extent of
our commercial transactions, as well aa an account of the paper
and gold circulation of the country' he could form no oninion what-
ever upon the %Aka. (Ilear, )lenr.) It behoved his 51aiesty's
Ministers, for at their door were all these difficulties to be placed,
to endeavour to alleviate the embarrassments which were pressing
upon the country. They had been fostering and encouraging the
mutations in the value of property., by sending forth exagge-
o rated statements of the prosperity of the country; the effect of
which was. that a person worth ten thousand pounds in the public
securities now might, owing to the fluctuation% of the money
market, in the course of one month be possessed of only seem
thousand pounds. Ile was most anxious to tee a termination
placed to the evils winch are on all hands anknowidged to es ist :
and if inweimment would adopt a system calculated to remedy th.,••
evils, he would ha most happy to render them any assistance in his
power These evils bail been assigned to the over-issue of paper.
'!'lris he denied ; hut if he were to admit it for the sake of argu.
ment, he would tin ti ask if this over-issue was to be corrected by
lie withdrawal of one or two miCions ? or. how mold such a
tr;tling sum operate In limiting the amount of paper isuies ? The
1 ammin, of increaae of H. and 2/. notes was from two to four wit-
lions, but die amount of 5/. notes had been trebled, and these latter
I were to he unaffected by the proposed measure. (Hear, hear.) If,
therefore. the cause of the evil was a stirphia of paper cip:ulation,
why not apple it to all paper ? Ile was firmly persuaded that a me-
! taffir currency alone would not do for England. Its mercantile
transactfona were ton extensive to be carried on by means of a
inerill:c currency. Ile had had an opportunity of witnessing the
evils of a inetalli.: currency in India, where, in order to transmit
half a million of morns from one district to another, one or two carts
were obliged to be placed In requisition. in consequence of the
many inconveniences attending such a mode of conveyance, some
halividutda established a bank, with a paper currency, to obviate
the difficulties attendant upnn transmitting specie. This bank was
established upon the same principle as that of the United States of
America. and with the precaution of not allowing Government to
borrow from it. In the United States of America the National
!lAA mold not lend to the Government five hundred thousand dol.
Kura without the express sanction of the Legislature previously ob.
twined. With regard to the Report of the Bullion Committee,
which recommended, in order to prevent the depreciation of paper,
the retainnient of the power of converting it into gold, he 'would
*lost oh‘erve, that he thought the recommendation good, and he was
of opinion that Government were guilty of gross neglect in not
placing the country banks upon such a footing as would insure
that object to the public. No individuals ought to have any inte-
rest in the alteration of the currency. If two individuals were to
establish a hotpot of business, for the purpose of accepting bills, and
having no con me7zial transactions corresponding with those bills,
such an establiahm:nt would, in the eye of the law, be considered
as a fraud. (Heir, hear.) And he wished to know why a simile r
horal precautlo a should not be adopted in banking transactions.
(lieu, hear.) Ile knew that there were no such precautions, but
Ihe contended that there ought to he. He knew a manufacturer,
now in very solvent circumstances, who some years ago was tote Hy
wiffitutt capital, he could not even pay for the premises upon which
his hocine‘s was to be carried on. In this emergency lie opened a
hankine-housz. and was soon after enabled to pay for every thing.
His Moiesty's Alinisters were bound to adopt measures to give
proper security to banking establishments. It' it was important to
regulate the weights and measures throughout the kingdom, how
much more important to attend to that which regulates ovary man's
property, and to secure it against occurrences of chance. The
proper measure to pursue would be to compel every bank to give
security before they were permitted to issue a single note (hear);
and not to delude the public by a measure of relict and prevention
totally inadequate to the object at which it aimed. There had been
generally a disposition on the part of bankers to issue largely,
whether their issue. consisted of one or of five-pound notes. His
Hon. Friend near him (Mr. H. Gurney) had stated a case in which
the stun of 13.0948. had been issued and repaid three several times
in the course of a few days by a bank in Yorkshire; and, in the
history V the transactions of the Scotch banks it was well known
that at first they used every exertion to force a circulation.
They soon found, however, that it was necessary to bring
down from London, every now and then, three or four hundred
thousand pounds worth of gold to meet those issue's, and that
citeutuatance suggested to them the propriety of cenfiaing their
issues. They did so. and steer that period whenever paper comes
In faster than it ought to do, according to the usual routine, they
immediately limit their issues. Other banks found also by exoc-
rienee the rootlet,' of adopting the same cootie. The great demi-
deratom a. present was a remedy quick is its operation against a
hanker in ease of rum-payment. t (fear, hear.) The whole system
stiosild be placed upon a proper tooting; a commission should be
appointed. and offices appropriated for the purpose of taking eau-
ri•its from those persons intending to carry on banking establish.
mente. Money or else Government securities to a certain amount
upon their issues should be therein deposited; and the moment •
hanker refused to pay his notes, they should he immediately paid
from those deposits. e"uch a measure could not tail to restore con-
fidence. Poor persons holding small notes could be at no loss nor
irainrvenience, because their more wealthy neighbours would in-
smith give them call for their notes, knowing that they could re-
ceive it again by return of post. As to the amount of the de-
posits to be taken. he thought they should take deposits to the
full amount upon all small DOW boned, and to two thirds of the
ainnoint upon all large notes. That was the law In the year 1797,
and by that law, If any issuer of a note refused to make good his
pnyment, the holder of the note might have summary relief by ap-
plying to a Magistrate, who was compelled thereon to levy a die.
tress upon the premises. if not paid within three days. That term
was subsequently altered to seven days. and in that mate the law
continuer' up to the year 1816, when it got out of the statute book
tan ore knew how. (hat law he thought ought to be restored as
one step towards the increase of public confidence. A statement
had been made in that House that two or three banks had broken
in one week in the United States. He hod, in consequence of that
statement, made accurate inquiry as to the .anierican banks, and lie
discovered, that in New York there are no lass than thirry.five
honk, established by the legislative bodies of the State. When in.
dividuals there propose embarking in a banking establishment, they
apply to the Government, stating the amount of capital which they
mean to start with. An Act is subsequently passed, authorising
them to sin so, conditionally that they actually pay up the capital,
and not advance it nominally, as in this couotry. Their accounts
were published one a year, as ought to be the accounts of every
bank which was properly conducted ; and the Bank of hnglard
mild never be built upon a sure foundation until they similarly
:tried towards the public. [The Hon. Gentleman here read a Katt.
tacit of the accounts of the national Bank of the United States, from
which it appeared, that although their capital amounted only •ei
et irt y.five millions of dollars. yet their discounts amounted to thirti .
three millions, and proceeded to contrast it with the situation of the
Hank of England, which with a capital of twelve millions steal' g
seldom discounts more than two millions and a half.] 'this auto.
trent, thellon.Gentleman continued, clearly proved that the United
States Bank wan much more efficient in aiding the necessities of the
Iliadic, and in giving facilities to commerce. than was the Rank of
England. In that country, since the year 11113 there had not been
a failure of a single chartered bank, nor had any los, of any kind
been sustained by the public in
i consequence of the banking este-
ILishments. That which took place n Scotland two mouths ago,
took place in New York, in the years 1815 and 11116. A system a
overtrading had been carried on, which led to extensive commercial
embarrassments: but the banks exerted themeelves by granting
their assistance to the merchants until matters came round again.
The panic publicity was given to the transactions of the Bank of
France, and there also the public profited by it, and in neither
counter dial that publicity operate prejudicially to the bank. He
was decidedly of opinion that the peopeoed measures were wholly
inadequate to effect the object which the Right Hon. Gentleman
hot In view. The House ought to go into a Committee to consider '
I of w'tat had been suggested, and he had no hesitation in saying
that for every bank that failed Ministers were answerable for the
lo.s in the public. Ile believed that the Right Hon. Gentleman
(the I Itaneellor of the Exchequer) was most to blan.e, for he had
encouraged the public In gambling speculations by holding forth
delusive statements of the prosperity of the country ; and, there-
fore. he was more particularly bound to remedy the evil. Until the
banking system was placed upon a staple footing, there was no
caller to say that an over issue of paper had led to the distresses of
the country. nor pi argue that piper has depreciated in value. He
was plailaln to phis upon the House his view as to the cause of
the recant distresses. He believed they faulted from the measures
teker by Government in conjunction with the Bank of England to
reduce the interest upon money, which was not done as it ought to
have been openly and fairly. Also, by the' ennyernion and reduc-
tion of the interest upon the.public debt,. in which measure he had
certainly concurred, but erhh ought not to have beet done by at&
ing on the Bank for advances helood their means. He thought 100
much weight had been laid upon the argument that the spirit M
speculation had led to the evils complained of; and he was also of
opinion that he maid prove to dental/profit* what was the real
cause of she evil. From what he had already elated. he bentlyed
that thellourelmust feel quite satisfied that those gamblingapeintla.
dons Mold not Private be attributed to an meioses of paper. la
1820 there was no small paper circuladont_ond clause I=
inelliehen afloat 110 as Veit an extent. The M
for Northampton (31r. Moberly) had read an account of ahem
wild immolations. but AC these were to be littribelell Se.* gig
nankin, increase of paper, how was it that thq emisiod Is 11140 and
1797, when there ens no small papa einudatiaa. It maseertel by
co.nparing these dilfereet periods
row ti
alas theorise abet bad
been muluced with* metellie. me a paper I:WWI- plat.
He held in his hand a giepa eiggehstog op aratimi of the
gambling speculations whirls gad boon mtemel into sthoe.Decemw
her. HIM Befue reading if,.. he rim& mask if it was
not true that the Hank or ad between am and i
two minions on stock to me. . , which sant bad been IMP,
Tied in gold of the kingdom P suer leery siia (set, it proved
1;1
the necessity of qpoialinga to aneadaa into the trans.

Contract.

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