The Sun.
London, England, 1833-07-02 00:00:00

sly to thee, and how would he prevent it t—(dear.) The
Noble Lord. had proposed another very important regula-
tion--that the notes of the-. Bank of England should be
Payable znly..at •the places where they were issued. Ac-
cording-to this, the. whole issue by a branch bank would
be payable in London, and the towns. But he would look
et it further. What security had they that the Bank of
England would continue to employ branch banks at all ?
Why should they? If, indeed, Government issued this cur-
rency, it might say, we do it with no view to profit—we
seek only the general interests of the country, which
would b • benefited even were the system carried on at a
partial loss. But the Bank of England was in a very dif-
ferent situation. It was a company established for the pur
pose of profit, and owed duties to the proprietors of Bank
Stock. By the provision for the formation of joint.
stock companies, a direct inducement was held out to
Withdraw the branch banks, for the bank of England
would find it much more economical to employ joint-stock
banks, with a few partners as agents for the circulation
of their notes, than to keep up their branch banks. The
consequence was, that bank of England paper would be
payable in London only. Yet this paper was to circulate
in every part of England. Under such circumstances, no
°' Act of Parliament could give confidence to a currency
r which had no intrinsic value were it issued by an institu-
6°, lion which had ten times the stock, and which was ten
°l' times more solvent than the Bank of England. This
would inevitably lead to an agio On gold. Only suppose a
man in the country wanted to leave England, or for any
other occasion, to convert 5001. into gold—he would be
unable to get his notes exchanged except in London—that
el man would readily give an aeio for gold.—( Hear.) What
a door this would open to forgery—it would be most dil-
ls; ficult to detect forgeries of bank notes at a distance of 200
. miles from
"/ the persons who alone were competent to
distinguish them. The time at which the Noble Lord
be proposed Vais
bg measure was equally objectionable. About
tbi two months ago his Hon. Friend proposed an inquiry into
the currency, with a view to its relaxation. The Noble
re„‘ Lord negatived the proposition, and moved a resolution,
declaring his determination to adhere to the standard.
et, But at the mule time said lie would appoint two Com-
; In.ittees—one to investigate the state of agriculture, the
other that of comme:ce, which Committees had since asei-
It' duously proscuted their nqes, had particularly
°l° a.
ireeted their attention toi theuiri effects and
of 'he banking and
Bo currency system on trade and agriculture. What a
161•rnockery, however, were these Committees, when the
, Noble Lord would not condescend to wait for their reports
tit --now, doubtless, nearly ready—but came forward and
proposed this great alteration in the currency, without
t a paying the s'ightest attention to their suggeeitees.—
,01 (Hear.) He was never more surprised than when the
if Noble Lord and his colleagues proposed this alteration,
!,a0 so repugnant to thir former p•inciples.—( Hear.) He
had always understooed the doctrine of the Noble Lord to
jag be---" Issue what paper you please, only let it be payable
on demand, and in a metallic currency ;" but to take
P,
up one particular class of paper, and propose to destroy
allotlar class.es, in order that this might circulate on their
s a.
oi, lime was the most extraordinary proposal he had ever
ssued Hear.) One or two pound notes ought not to
Tan because they interfered with a gold cut-fancy,
but. beyond that he thought it right to have no check
beyond that of immediate convertibility. He agreed
31 ; With Adam Smith, who said—. It were better, perhaps.
that no back notes were issued in any part of the kingdom
ti; a smaller sum than Si. Paper money would then, pro•
uat'lY, confine itself in every part of the kingdom to the
eireulation between the different dealers, as much as it
riatt; floes at present in London, where no bank notes are issued
under ten pounds value ; five pounds being, in most parts
hi of the kingdom, a sum which, though it will purchase,
Ao perhaps, little more than half the quantity of goods,
fl as much considered, and is as seldom spent
•
.al At once, as ten pounds are amidst the profuse expense
'S London. Where paper money, it is to be observed, is
tit eretty much confined to the circulation between dealers
and dealers, as at London, there is always plenty of gold
ire and silver. Where it extends itself to a considerable-
part of the circulation between dealers and consumers, as ° in Scotland, and still more in North America, it banishes
kef gold and silver almost entirely from the country ;
111, almost all the ordinary transactions of its interior corn-
-011 mercy being thus carried on by paper." The same author
;1 also said, at the conclusion of his chapter on metallic and
e paper currency—" If bankers are restrained from circu-
-01"1 lating bank notes, or notes payable to the hearer, for less
it than a certain sum, and if they are subjected to the obli-
gation of an immediate and unconditional payment of such
oa bank notes as soon as presented, their trade may, with
ffr° safety to the public, be rendered in all other respects
4°li perfectly free. The late multiplication of banking corn-
P., panics in both parts of the United Kingdom—an event by
re' which many people have been much alarmed—instead of
diminishing, increases the security of the public. It
obliges all of them to Ise more circumspect in their
conduct, and, by not extending their currency beyond its due
proportion to their cash, to guard themselves against those
malicious runs which the rivalahip cif so many competitors
is always reedy tp bring upon them. It restrains the
circulation of each particular company within a nar-
rower circle, and reduces their circulating notes to a
smaller number. By dividing the whole circulation into
a greater number of parts, the failure of any one Com-
pany—an accident which in the course of things must
sometimes happen—becomes of less consequence to the
Public. This free competition, too, obliges all bankers
to be more lib:ral in their dealings with their customers,
lest
their rivals should carry them away. In general, if
any branch of trade, or any division of labour, be advan-
tageous to the public, the freer and more general the com-
petition, it will always be the more so." This was the
reesoning of Adam Smith, a priori, fifty or sixty years
ago; and the Noble Lord now, on the Ist of July, comes
forward with this proposition, founded on the most slender
body of argument he had ever heard. The Noble Lord
might depend upon it the people would never place confi-
dence in bank paper, merely because an Act of Parlia-
ment called on them to place confidence in it.—(Cheers.)
After some few words from Mr. P. Thompson, Mr.
Baring, Mr. Attwood, and Lord Althorp, which did not
leach the gallery.
Mr. M. ATIWOOD said it was utterly impossible for
any man to predicate that this plan, which thus inter-
fered with the .egal standard, could stand for twelve
months: how absurd, then, to legislate on it for twelve or
twenty-one years?
"
n Mr. P. THOMSON expressed a wish that the Right
00. Baronet had acted upon the principle which he
strop
gly recommended on a former night—that of ke,ping
i_nauivacemw the distinction between political and commercial
A.most all the arguments of the Right Hon.
hid, on the contrary, been directed against peli-
tical p anics • an.,
possible f he would undertake to say that it was im-
- or any
predicate that it .man
nld ffr
to suggest a plan of which he could
'al'ardmprot„ifcu saytmnagainst the occa-
sional effects of political
that any bank of
issue, whether a branch of the. Bank of England, a join:-
stock bank, or a private bank, should be compelled to
keep gold enough in its coffers to meet all demands that
could be made upon it in times of political panic, would
be to put an end to banks of issue altogether, because, as
there could be no profit, there could be no inducement
for carrying on the business of banking at all. The true
question before them was, whether or not they were af-
fording the most convenient and efficient safeguard tp the
Piper of the Bank of England ? The Right Hon. Baronet
had argued that they were also bound to proßuvidte she rcurity
for the country banks. That he denied.
con-
tended that, alter passing this- measure of legal tender,
they would be leaving the country banks, with regard to
,ecurity, just in the same situation as they had stood in
btfote. lie saw nothing in the measure calculated to
tempt conntry hankers to keep less void than they kept
°OW, beeausiit would be required for the accommodate ai
of their customers. Neither could be understand how the
premium Right Hon. Baronet could make out that this plan was aren upon 'erre mites. Gold was as cheap to country
the
es notes, with a very little difference ; and that
•a, dependence of the country banks upon the Bank of
England should be either increastd or diminished by the
present measure was a proposition which he coul I not
Pole'lt•y undeistand. The Right Hon. Baronet bad over-
looked the real principle anti object of the plan, which was
to provide security for the circulation of the Bank of Eng-
land itself. He could see no
bepossible protection that could
afforded to the Bank in times of pressure, unless they
roads its notes a legal tender, as was now proposed. He
admitted to the lion. Member for Whitehaven, that the
ri l‘nniel. matte a depreciation to a certain extent, but
go°l,i,reatr that thiCli had formerly existed when the
of a.'" t° he Obtained from the Bank of England instead
13arolnwea. It teas a complete fallacy for the Right Hon.
that tlet 1°
niaintain—he lad advanced the proposition—
tohfecmil cauthlatio.n„
is effect of the measure would be to drive gold out
and that the
The couti ytankers must now come to
for it, et In London for gold, when they had a demand
Bank of P. would have to do still ; and making
'gland notes t I 'gal tender would induce them
ro take those notes to certain extent ; therefore, though
the Bank
t_hey would not
" °I England notes might drive out country notes,
daninish the amount of gold in circulation.
could not see the great evil to arise from the payment
of
1 nutes Leing limited to one place in London ; hut be.
,i'ved) with Sir. Ricardo, that the Bank of England would
Ye just as Secure if its notes were out), payable in Lon eon
as when they were le,yable it the branch establishments.
WWI regard to the questien of lorg,ry, it was certainly
Cfle 01 difficulty, but be could see nu:hing in this measure

• d
I.
)_.A!
acvi

prof
gold
at
dirif
rtes 1

el

bey
.ed,
ind
!me!

ti:„
L)l• ."ti