The Sun.
London, England, 1836-10-21 00:00:00

given his support to Ministers. Who doubts it ?
After so many vague generalities it was necessary
that some appearance of point should be given to the
opinions of the Attorney-General. At the end, there-
fore, of this burlesque or representative responsibility,
certain preconcerted questions were put to the exhi-
bitor by Mr. Tait, the Radical bookseller, and other
persons of the same class. These questions had refe-
rence to the vote by ballot, the duration of Parliaments,
and the payment of church-rates. To the ballot Sir
John expressed himself decidedly hostile—at present.
Under a new combination of circumstances—an in-
crease of the " pressure from without," for instance—he
would not say that his opinion might not undergo a
change. The question as to the duration of Parliaments
he answered by a joke ; and what we cannot help think-
ing rather a bad one : but this maybe our want of judg-
ment. About church-rates Sir John said little ; and that

little was, in so many words, that his Majesty's Mi-
nisters thought they might think of something on the
subject before Parliament should again assemble. Such
is the Ministerial manifesto to the Reformers of Scot-
land, and, as far as we have yet seen, to those of
England. There is another quality that we have fre-
quently felt inclined to attribute to the leaders of these
gentry rather than folly. But if we should have been
wrong—if they should be satisfied with vulgar per-
sonality as a proof of judgment—with defeat in the
most important measures as evidence of strength—
with evasive answers to the plainest questions as marks
of sincerity—then we wish them joy of the Ministers
whom Sir John Campbell be-praises, and of the At-
torney-General whom these Ministers have appointed
to plead their cause. But, whatever the " Reformers"
may think, we have a strong suspicion that the people
of Scotland will find nothing in Sir John Campbell's
speech, that is likely to make any great change in the
state of public opinion, as exhibited in the result of
the late registrations throughout that part of the king-
dom.—Morning Post.

In another column is a very clumsy defence of Mr.
Spring Rice, whose management of the West Indian
Loan, anterior to the supposed indiscretion of the
Bank, was the first cause of the dangerous position into
which they have been brought. As to the Exchequer-
bills held by the Bank, it is well known that a great por-
tion are not optional with them, but arise out of their
transactions with the Government. As to those pur-
chased in the open market by the Bank, we suspect
that they are comparatively of very small amount, and
as regards them, the relative situation does not differ
from that of any private holders. It is the duty of
any Minister in the situation of Mr. Spring Rice
to see that only such an amount of unfunded debt,
and at such a rate of interest, shall be in circula-
tion as will insure its being at all times marketable
at par, or above it. If a fall below par occurs, it is an
indication of something wrong, either in the rate or in
the amount, which it his duty to remedy as speedily
as possible. We do not at all believe, therefore, that
the Bank have had an anything to do with the late rise
in the rate of interest on Exchequer Bills, but rather
that Mr. Spring Rice is wholly indebted to them for
having.been able to keep so large an unfunded debt at
so very low a rate of interest so long in circulation. The
consolatory part of the question to the public is the
deadly quarrel which has evidently arisen between the
parties, under the influence of which neither of them
will have any favour to expect from the other, and this
cannot but lead in some shape or other to a good issue.
—Times.

SPRING RICE v. THE BANK.
TO THE EDITOR OF THE TIMES.

SIR,—So much censure having been passed on the Chan-
cellor of the Exchequer by the Bank Directors and their
friends, for the unprecedentedly dangerous position in
which the Bank is now placed, and your columns having
been open to such censure, you will, I trust, from a love of
fair play, give me an opportunity of saying a few words in
behalf of the party so assailed.
The question, in fact, so far as 'I mean to moot it, may
be disposed of in a nut shell, therefore cannot occupy much
of your paper, or of the time of your readers to become
masters of it. It is simply this—who is to blame for the
present state of affairs ?—which may be described standing
thus :—Government have in circulation a large amount of
unfunded debt, in the shape of Exchequer Bills, on which
they pay a lesser rate of interest than they do on the
funded debt. Of these Exchequer-bills, the Bank, in its
excessive love of gain, has become the largest holder, issu-
ing in exchange its own notes, to an extent that has made
the currency of the country, what is termed, redundant.
The consequence of a redundant currency is an exportation
of gold and silver, for, with more of the circulating media
than the wants of the country require, it is quite clear that
the excess which must find its way elsewhere will be of a
description to circulate all over the world,—namely, gold
and silver, while Bank-notes will remain with us at home.
This being the case, and the Bank finding its bullion gra-
dually diminishing, it began to feel alarmed at its position,
and in perfect good time to change it for one of security,
had it set to work in the common straightforward, com-
mon sense way in which it should have done. But, no ;
whether from a greediness of profit, or sheer ignorance, it
persisted in its fatal career ; for instead of at once com-
mencing a quiet and steady sale of Exchequer Bills (of
which it held vastly too many), at a period when, from the
low rate of interest in the market, and the consequent
high premium they bore, sales might have been effected to
the extent necessary, without creating the slightest alarm,
and whereby they might have silently withdrawn their own
notes to the extent that the currency had become redund-
ant, they preferred having their notes out, and trying the
futile experiment of raising the interest of money, as if the
difference between 4 and 41- per cent. in the price of money
would remedy the evil—that evil being a vast superabund-
ance of money in the market, and which could in no way
be diminished thereby. Although the medicine so admi-
nistered failed, the Bank directors were not discouraged,
but proceed :0 to increase the dose, by raising the rate of
interest fro,4i to 5 per cent., thereby frightening almost
to death thnublic, which they had assumed as their pa-
tient, instead' of themselves, who were the only diseased
party.
By these Operations, which of course alarmed the public,
they made money dear, it is true ; but what they ought to
have done was to have made money scarce, and that could
only have 'been accomplished by selling securities, and
withdrawing Bank-notes from circulation. Then money
would have 'become dear from its actual scarcity, and the
Bank would have been placed in a situation so safe, as to
justify its assisting the legitimate mercantile operations of
the country, by liberal discounts, if required. In all this
clumsily attempted jonglerie the Directors lost sight of
another important feature in the case—namely, the large
amount of deposits held by them, and that, by proclaiming
money to be dear, they were but inducing the public to
withdraw their deposits for profitable employment, instead
of lying idle in the Bank, and that to pay such off required
an additional issue of Bank-notes. In fact, they ought to
have known, and always acted on, the principle, that de-
posits are but their own notes returned to them in trust,
and repayable whenever demanded, whether to the increase
of their issues, or the diminution of their stock of bullion.
These proceedings of the Bank are absolutely necessary to
be known to enable the public to judge between its directors
and the Chancellor of the Exchequer, into the conduct of
which last gentleman I shall now proceed to inquire.
The directors, finding themselves to be in a scrape, from
their diminished stock of bullion, the immensity of their
liabilities as compared therewith, and the impossibility of
better squaring the two, by sales of the latter, from the in-
terest thereon being so much less than they had made it in
the market, they apply to the Chancellor of the Exchequer
for assistance, modestly requesting him to raise the interest
on Exchequer-bills to such a rate as might enable them to
sell to the public the amount they hold, without incurring
the loss resulting from the heavy discount, to which, if sold
at the low rate they now bear, the Bank would be subjected.
To this proposal, it is said, Mr. Rice gave a flat refusal, and
on that refusal alone is founded the hue and cry raised by
the directors and their friends against him. Now, in the
name of common sense, I ask, would that gentleman, as
Chancellor of the Exchequer, have been justified in saddling
the country with from 200,0001. to 300,000/. a year, or any
lesser sum, by raising the interest on Exchequer-bills, merely
to save the Bank of England from an infinitely smaller
loss, by the sale at a discount of the quantity they had so
avariciously assumed ? The answer must be, No. He may
have been to blame, and I admit he was, in having so large
an unfunded debt afloat as 29,000,0001., but he is not to
blame for the Bank of England having purchased more of
it in exchange for their own notes than it was prudent for
them to hold. The Bank bought with a view to profit, there-
fore it ought in fairness to bear the loss incurred by a resale,
and well can she bear it out of the enormous gains made
from the public. Sell at a price she can, and if that price
should be a low one, the loss it may entail can, to say the
worst, but go to a diminution of the great profit made by
the West India loan, which to clutch, at the expense of the
public, led her to get into the scrape. From this view of the
case (and I trust it will be held to be a correct one), the Di-
rectors have no just cause of complaint against the Chancel-
lor of the Exchequer, any more than they had against the late
Lord Liverpool and Mr. Huskisson, who refused their appli-
cation for a Bank restriction bill during the panic of Decem-
ber, 1825, and Instead thereof, very properly recommenied