The British Press; or, Morning Literary Advertiser.
London, England, 1826-02-11 00:00:00

respecting the difficulty of getting gold in payment of a one pound
net presented at the Bristol Bank. That difficulty produced a
certain degree of caution on the part of these who held country
nags and they Itegtoe few of Mantras-they oeuld.fiemetralives.alff=
acid by prudence. Subsequent to that !mind gold found its way
OM NI tomtit), &Ai, because it was material that bankers should
mote ciposed to so notch danger as might accrue did they not
keep &certain portion againot any unforeseen contingency. They
also found it necessary for their own safety to withdraw a large per.
lion of their hones from circulation—those banks which were esta-
blished upon a solid foondatiOn did so to premme their credit unim-
paired, while there r:hich were of a weaker charneter contracted
their issues also to atoll the prohability of ruin—sod the species of
paper, the circulation of which was Shill contracted, was that with
which a rim was likely to be commenced, I moan one and two
pound notes. There were also a great number of notes
scanned which eaull ant get into circulation except gra-
dually in inmplving the number of those which were wo-n
out ray destroyed. Allowing then ti. 000,060 to be the are.
mom, thhaugh 1 think the total number in circulation far .port of
that, the tt mosso effect of that which I mean to propose will be that
in the cortee of the next three years the vacuum to that amount in
the eiteutatioc mud be filled up with gold. It should also be re.
matted, the in the years lee 4 and 1825 there was a greater
abunifeece of paper in cimulation than was consistent with keeping
the exeheneme ta a proper state. I conceive that whatever ditficul.
ties may impede the premien of •he measure, the ecempt to supply
the vacuum in the circulation will not he deemed the result of mad-
/teem Many, it is true, may thereby be inconvenienced, and inju.
ties may be sousitied in particular parts of the country; but the
fact is, we are in a difficulty, sand we most get nut of it. (Bear,
helm. A rd white we seek the means of doing so, we must alien
provide "going getting into it again. (Hear, hear, hear.) It was
riot because the means were difficult of accomplishment thlt the
attempt was to be characterized as the reault of madnems ;Thut if
Parliament was to shut its eyes upon the danger which threatened
in perspective and blink the question altogether for the sake of a
little temporary ease, such • procedure might indeed be attributed,
and justly an, to matinees. (Hear, beer, hear.) If Parliament wilt
not act upon sound principle in time of peace, then do I say than
sound principle is net worth a farthing, and the country must fad
into a scene of chain and confusion. ((leer, hear.) Something ha
been said in the emirs, of the several discussions which had take
place upon the subject of the Zeta panic in support of the opinion
that other causes had contributed to the excess of paper circulation;
that in 11123 and 1824 all of that gold which had been previously
imported was again carried out of the country, and that this was
one cause which led to the recent pressure, and which would impede
the execution of the measures in contemplation. Now, Sir, why
shnukl the ditlienhies by which We measure is surrounded be dis-
guised ? I do not deny thee:tent of these difficulties, but 1 a•
deny that they ate of a permanent chrumeter. (Hear, hear.) It is
true that the paper of the Bank of England had increased in the
yew. 1824 and 1823, as appeared by the returns moved for vest mi-
slay. and that the average amount of notes issued by the Bank in
IV3 was 10.137,0001., but the country bank circulation during
that year remained nearly the some as during the year preceding.
In 11124. the totem of the Bank of England amounted to upwards
of 20,011'1,0094 increasing nearly one million and a halt beyond
the rime" of the preceding year. In 1823. they decreased again to
In )00,711/. It did not appear that the incre.se of Bank of Eng-
lard paper had been followed by the increase of country bank paper
so as to protium, that effin upon the excharges which had taken
plate during the last two years. If the circulation of the Bank of
England paper increased, while that of the country banks decreased,
or vice error, it of mune followed that there could he intimate con.
nezion between them. It has been said that the increase of bank
parer, to which the recent distress has been attributed, was entirely
owing to the measures of Government m paying off the holders of
the 4 per colts., yet it appeared evident that it the Bank had not
at that period proceeded to issue notes upon a new pr:nciple (that of
lending them upon bonds), the arrangements alluded to would not
have raised the Bank issue, more than '2OO 0(W)!. or 200,0001.
If Government has acted wrong in this instance, why, let Gemin-
ating take the blame of their wrong doing. It' I do not enter into
a laboured vindication of that pleasure, it is because I flatter myself
that the House sill adopt the measures I am about to retrommend,
sod if they prove to be pernicious, it may deal with me hereafter,
as far as I nut petvonelly concerned, just as it pleases. (Her,
hear, hear.) 1 will, therefore, not trouble the House by
going into unnecessary details, as, should the measures I
am shoot t 3 propose prove inadeqate or pernicious, the House
mid at least retain the power of preventing a repetition of each
an error. I lope the House will trot shrink from the difficulties
which surround the measure. if pucks deserve blame let them
bate it—but let not the measure be abandoned because of these
Having gone at length into the principles of the
question, I will now proceed to state in detail the plan by which
flavernment propose to effect the intended alteration, sod make
gold the basis of the country circulation in future. There are
two vitiate' of effecting this alteration t one is,
period—the
declaring that
re small notes shall be boated after a given pert he other, by
allowing those in circulation to run their course, but to grant no
cew cam The first of these plans, that of assigning a period
after which no notes shall be issued, appears to be liable to ob-
j.ction. if the period of three years be fixed for suffering the
onntinuance of the currency of small notes, and if during that
period the stamping of these notes be allowed, it will leave tire
circulation of the country in the most unsatisfactory state; and at
the expiration of the time the House would find itself and the
country beset by every difficulty which they have now to encounter,
at 4 the molt will be that the measure cannot be carried into
cleat at all. It appears to me, therefore, better to adopt the latter
course, and to come to a resolution that no notes shall be stamped
from the commencement of the present Session of Parliament, and
that, in the course of three years from the same period, country
bank small notes should not circulate any more. These are the
only pellets in detail which 1 thick it necessary to state, and the
foandation of the Bill which I mean to introduce will be com-
posed in the following Resolution which I shall presently move:
•• That it is the opinion of this Committee tha: all promissory notes
payable on demand, issued by country bankers, fur any sum less
than 31., dated prior to the 6th of February, 1826, shall remain in
circulation until the Rh of April, 18211, and no longer." 'lids
Resolution, as I have already stated, will form the feundation of
the Bill, so that in point of detail I have nothing further to add.
It appears however to me to be of great importance that I should
state to the House the views taken by his Majesty's Government
relative to the existence of a considerable circulation of small paper,
which will not be affected by the Bill I am about to introduce. It
had been asked the other night what were the intentions of hit
Majesty's Ministers with regard to Scotland? I believe Ireland
was not mentioned; but as the currency of all parts of the empire
is of importance, I will state the nature of the views which are
entertained a hh regard to those countries. In Scotland there was
no prohibitory law as regarded the circulation of small notes until
the year 1763, when a Bill passed declaring that no notes should
be circulated under the value of 20s. Subsequently however this
Act was repealed, and no restriction now existed in that portion
of the empire. In Ireland also there existed no restrictive law
with regard to mall notes, but it was found totally impeach.
cable there to get them into circulation. In the north of Ire.
land, at all events, all their lesser payments were made in
gold. it being found impossible to gct one-pound notes into
circulation. In 'the year 1799 the Irish Parliament adopted
a course of procedure, the very reverse of that resorted to by the
English Parliament about the same period. They passed a law
priOnbiting the issue of small notes altogether, and that law had
the edict of keeping the gold in the country. lo the year 1804,
when the laws of both countries, as regarded paper currency, were
mairdlated. the immediate consequence was the almost total ex-
clusion of gold coin from Ireland. In Scotland the banks have no
exclusive privileges, though it is true that the chartered banks are
I:able only to the extent of their shares, and in 1812 the Bank of
Ireland waved its charter, except within fifty miles of the city of
Dublin. The first question then to be considered is—supposing
tita proposed measure to be beneficial—upon what grounds they
could maintain a difference .as regarded the currency between Eng.
land and the other parts of the empire. (Cheers) I do not mean
to say that, in carrying the present measure into execution, it
ovoid be advisable to apply it to those parts of the empire at the
same period at %latch I propose to effect a change in the currency of
Milt country. In Scotland the currency was not founded upon a
metallic basis, nor at such a time could the measure be adopted as re.
minded Ireland without beingguilty of great imprudence. It is, therm
lON, not toy intention to move any resolution respecting those coca.
tries (hear) at present, but at a future period I shall feel myself
called upon to state a time from whence their currency inay be also
altered. for 1 cannot see upon what principle a partial change only
stool/ be tarried into execution. I do not know that I have any
Snakier observation to offer respecting that part of the otiestisn, nor
imbed can I say more respecting the home of notes in this country,
except in reply to the isloterestsons as to the danger of the measure
to the landholders, which had been thrown out by the Hon. Meru-
bee for Cricklade (31r. Gordon). That Hon. Manlier argued that
the effect which the measures were calculated to produce upon the
fended interests was of the most pernicious character, and he ap-
pealed to the country gentlemen to combine with him in defeating
my Abets ta carry this measure through the House. Now, if they.
are any set of persons in the kingdom who can benefit by the mea-
sure I mean to propose more than ancther, those persons are the
country gentlemen, whom he has called upon to join him in op.
poste, that which is really calculated to rends,' them an essential
sconce. Is it likely, I will ask them, that they can have any
county as to the payment of their rents, while their tenants are
runuir.g with their mem to hank against ' which Mee is a
run, tootle this very nun was calculated to extend the alarm and in
tau etainrdit ern other banks, which might otherwise be as solid
nod as seettre as the Bank of IS'agiand ? Norersons an be mere
tateresten in haying a solid currency titan the hus.dholders, anti toe
the ask., ail the temporary ease which their tenantry may gain by
the,* psa a. I hopeabat they will not run blindfold em their oven
deteruction (Haim bear, hear), and oppeot e measure which 1 ant
sure is c iicti'aied for the well-being of etery person m the commits
tory. 1 will now tall the attention of the House to the second pan
of the mote man the privileges of tne Bank of England. 1
really shotibt not have anticipated any objection to the measure of
eurtaili ig the extent of its pets ilegea, for I well recollect when the
Bank of Ireland consented to a similar abridgment of their privi-
leges. no ore apprehended that any injury could allow to the pull-
-I.c. • on the contrary, the people of Irehmd profited, inasmuch re
toe measure ware a greater degree of stability to the country banks.
I remember that when the measure was before the House last year,
to eyerterel wish stoniest to be to go farther than was proposed. and 1
lied no little dirlisulty in preveming the curtailment 'tithe privileges
Inlet d beyond the point previously agreed upon between them
aid gore rnmeut, and winch had been warranted by that agreement.
I do not mean to say that it will prevent ever issues; but in regard
the o rarity to he afforded, I think that it would he promoted if
she barking sestem were placed on the same footing as that of
locullotad. It had been Raid on a former night dui, in point of fact,
same& six partners were allowed by law in English: banks,

they eeidoni orsever consisted armee than five, and very open did
not lintriber so ovanyi It might besot sir might be topically in ionic
in-latices acc‘rding to ti.c species of nuinagentent, bet 11w House
.cgmett- look for-dne-oiseseer so the observation to which he had
alluded as having bet') made on a former occasion, in the establish-
ments sad arum pursued in Scotland. In lreland, since passing
the, Act which regulated the banking system of that country, two
banks were formed, one of which bad between sixty anti seventy
partners, and that which is called I believe the Provincial Bank a
larger mouber, and the great ptudenee with which these concerns
have been carried on has been felt to lie most beneficial -and
satisfactory. It Is my intention to move a Resolution as to
the period when ti's issui..g of small notes shall cease, and
as to the establishment of country banks ; it is intended that
that mearttre should commence In the other House of Perlis-
mew ; bet, should this House not Weill to my proposition, and
die resolution should not receive the assent of the House, then it
would be another question as to what line of conduct was to be put-
sued. It li-d been asked en a former night Whether any time
would be Cffiwed before the new system should come into opera-
tion, and it was intimated that considerable difficulty would be felt
by the banks at present in existence if the new system were at once
brought into operation a ithcut giving them an opportunity of in-
creasing the number of their partners. Ido not think that any
danger is to be appreheeded on that head; for I feel convinced
that those establishments which are firmly established upon princi-
ples of credit and honour will have nothing to fear from the pro-
posed alteration. Some time would necessarily elapse, and I
should have no ohjection to insert in the Pill some pretise period
for their commencing their issues, not extending beyond the fish
of July it would necessarily take some time tu the formation of
the establishment, and therefore I apprehend that may be a pro-
per period at which they may come into operation. I am not aware
that I hare anything further to state to the House at present,
though 1 fear a thousand things may have mesped me in the very
imperfect statement I have laid before it. (ffear, hear.) If the
House should refuse to entertain the propositions I have to offer, or
after having entertained them, should refuse to adopt them, then 1
fear that it will deprive the country of a great good, anti lead to
comequenees of the greatest danger totredit and confidence, and
frequent returns of calamities such as the country had lately expe-
rienced might be expected to arrive, and which it was the impe-
rious duty of Parliament to prevent. The more frequent return
of injury will be the consequence of resisting the measure now pro-
posed, and the danger of fluctuation augmented and increased. 1,
therefore, call upon Parliament to step in and atop the den.
gee, and not allow that system to be followed which will lead
to a state of things destructive to the credit of the country.
If the House should refuse to entertain the proposition, or to carry
into erect the Bill intended to be founded upon it, it would take a
most fatal step; and I shall not envy that man who may then
bold the situation which I have now the honour to fill, if Parlia-
ment refuse to deal with the exigency-1 say I shall not envy that
man the heavy responsibility which will attach to him, in the
meat and set-loos difficulty in which he will be placed. I trust the
House will not be terrified by the difficulty of the case, but apply
itself boldly and heartily in preventing a return of such calamities
as the country had lately endured t and show to the world that,
whatever the difficulty of the situation might be, Parliament
would given remedy; but if it should not on act. it would produce
a more serious state of things than that from which the country
had lately escaped. 1 cannot but think that the difficulty of the
proposed plan is overrated, and that the fear of the country banks
is carried to too great t. length. The error is the error of the law,
and the law ought to be altered. Integrity and honour is the
solidity of banks, and with those qualifications the confidence of the
country would not be shaken as to those on whom they were dis-
posed to place their contidenee. l Hear, hear.) The Right Hon.
Gentleman then read the resolution as above.

Mr. A. BARING begged t,) a.k the Right Hon. tlentleman
the Chantal°, of the Exchequer if that was the only resolution he
intended to submit ?

The CHANCELLOR of the EXCHEQUER—" The only one
on that subject."
Mr. A. BARING said the resolution then went only to say that
the holders of one and two pound notes should not circulate them
beyond three years. There was no resolution respecting the Issue
of new notes, as to whether they might not be issued immediately,
or from the commencement of the new system. On that point
the resolution said nothing. The Right Hon. Gentleman bad
complained of hostility existing against him on that side of the
House.

The CHANCELLOR of the EXCHEQUER—"OnIy hos.
tility to the principle of the measure as to the expediency of with.
drawing one and two pound notes.
Mr. A. BARING said that the present was a question oft
which no party feeling could possibly exist : he could refer back
to instances in which party feeling had certainly showed them-
selves ; but that was not the ease now ; indeed there never was a
period when less existed ; but the R:ght Hon. Gentleman must
expect to find difference of opinion, without reference to politics.
In the matter of the question of currency it was out of the question,
and the country would not endure the supposition that such was
the case. It must be quite clear that the sensation created in the
City by the paper of his Majesty's Ministers addressed to the
Bank, was cakulated to excite hostility, when that paper stated the
distress of the country was past. He (Mr. Bating) must say that
he had Fathered from the speech of the Right lion. Gentleman that
his Majesty's Ministers had done nothing at all; or if they had
dons anything, that little went to aggravate the present state of the
country. They should go to the Royal Exchange to hear the real
state of things. He ( Mr. Baring) had every respect for the Right
Hon. Gent., but he must say that his speech had shown that he was
ignorant of the distress of the country: the view he had taken of it,
had only been skin deep. It had been an unfortunate circumstance
that theoretical men had thought they could perfect a system by the
study of books alone, and not look to the fact of exper!ence ; but it
was Impossible not to see that such a subject could not be attained
by a straight mad—not as the crow flies. Many years ago, when.the
bullion question was brought before the P.ou.e, it would be recol-
lected that he (Mr. Baring) opposed the bullion retort, and he re-
collected that the Right Hon. Secretary, (Mr. Canning) and the
President of the Board of Trade concurred in it, and the House
camel to the resolution that on the lit of the following January the
issue of specie should take place.
Mr. CANNING—I do not concur.

Dlr. BARING said that his Majesty's Ministers had kept out
of sight the fact of the Government having participated in the COOSs
of the late distress; in making this statement, he could assure the
House he should do it candidly and fairly. As to the country banks,
he wished to speak without the slightest imputation. In speaking
of the Bank of Englend,from having lived among them on terms of
of intimacy, from his connexion with the establishment, he would
wish to speak with the greatest respect ; at the same time the truth
must be spoken plainly an to that institution. The sae as re-
garded them was this. Upon the cessation of the war great facili.
tie+ existed of getting back metallic currency ; the whole thing was
new, and gen demon said, because it war got so easy then it could
be so now, but that was not the case. They should, when they had
got this gold, have,placed the currency on a proper footing ; resist-
ance might have been made by the country bankg, but from the
magnanimity expressed that night, that was the time to have set It
in order. There was great difference at times among all trades as
to the pressure of distress or of prosperity. At the end of
1823, or beginning of 1824, though it was difficult to know
the !IRO facts, from the secrecy which was punned in
the affairs of the Book—from circumstances connected as it was
to be supposed with the quantity of ettecie they postessed, they de.
dared a dividend of ten per cent. profit, and a bonus ; thus increas.
ing their profits and advantages when they ought to have set about
reducing the circulation of its paper. The thing weuton, and large
issues of Bank paper took plate ; that circumstance always encou-
raging and promoting a mailer extent of issue on the part of the
country banks. The great question then was, what was to be done
with money, and mortgage transactions varied finm five to two and
a half per cent., and the consequence was, that both the country
and London bankers pet out their money In that way. and conse.
Euently it became out of their reach and dieposol. The Bank of
ngland feud out their error, and began to draw in ; they jerked
up the horse, having bettor given him his head with a loose rein.
1 he find step they took was to draw in, and to call upon the coun-
try banks to draw in also ; every body tailed upon his debtor. and
gentlemen must be aware that every addition to the pante brought
weak parties to the ground—the firsi.claes houses went, and then the
second ; when they were gone the panic was ir.ereased ; men went
and drew their money out oldie', bankers' bends, and locked it up:
first came those who had to make a real demand, and then those
who were afraid to leave their balances ; and if the banker had not
Bank of England notes or hellion. he wee reduced to that state of
difficulty which led to such fatal consequences. There never was
a period when in so short a space of time so much of public credit
was destroyed, and many of the first respectability had been caught
in the storm. Men who six months before were worth entl,oool.
could not hare been more astonished if the sky had fallen upon
their heads, than to find the situation In which they Merl plan 1.
To think of removing all the difficulties which at present ember.
rutted commercial es.gagements, by taking objections to the fur.
they arculatian of one-pound notes by the Bank of Englaptl. was
in hie opinion quite absurd, but since they were so very anxious to
dispense with the circulation of those notes he thought it • great
pity they did not get rid of them when they could have drote it
without danger; but row when much diettesewrevailed, and wt.=
great commercial difficulty was eepericreed in every quarter, it
would be fitly to inert"- thou difficultiee to atop the circulation of
those notes. They had allowed the time it could be done with
safety to pass by. Now the Mouse waxen fire, and they threw all
the lighter anieles nut of the garret windows when they could not
preserve the furniture. The reitohition which the Right Hon.
Genii:Trim proposed was one he could not aove, and he
hoped it would be got rid of. The Bank. in his opinion,pr
bed bolt
eight of the true system on which their affairs ought to be coaduct-
ed ; by the rester:. they had in the proof hive, cc pursued they
were rot prepared foe the difficulties that came on, and by they
eirgegemerts with florernmeet they wars completely elelted up.
(Hear, hear.) Ile could not conceive what means could be found
to justify the measure which wits propelled, anti which he thought
mole ie./ail:doe' and absurd. (flux, hear. hear.) liVhen they
entered into secculltions ?elating to the Long Antitiithet they
Imagined they bad is sum of five millions to fort a sinking fund.
(flew. herr ) The Bank had eight millions in hard. and six
lions of Exchequer Bills were Issued. Whenever difficulty arose
those Exchemier Bills were turned to for the purpose of meeting
din exigencies of the time, and a quantity of them had been sold
nut at the period of dieters'. The Bank had a dead weight of
eight millions. The consequence of the engagements between the
Batik and the Government was to create a considerable deficiency
on the pan of Government. to meet which the Bank made a.) ad.
vitnee of Revert millions, by which it was ',addled with a deficiency
of five millions and a half. A fnrilter advance 1114611 liters ar,lR '
made to enable Government to pry the dividend., en that theme ad-
vent( I of the flunk to assist the finances of rite OoTernme3t °vie
dourly saddled that estebliehenent with the burden it removed fitter