The Sun.
London, England, 1833-08-03 00:00:00

he felt that many of the provisions of the Bill could pro-
duce only the most disastrous results.
An HON. AIEMBEA (it was said Captain Bouverie)
quoted the reply of the Noble Lord (Alrhorp) to the
country bankers, and the speeches of the Noble Lord, to
show that he had declared the conduct of the country
bankers to be unimpeachable, and equal to the wants of
the community. He said, then, leave well alone. But
that, it appeared, would not satisfy the Noble Lord ; no,
he must have a new scheme. Then the Noble Lerd
talked of fluctuations, and to prevent fluctuations wished
to have a single bank of issue for the whole country. II
the Noble Lord had had the experience he had he would
have known that it was impossible for the country bankers
to produce any material fluctuation. For instance, he had
a bank, and it was situated in an agricultural district.
Well, last year there was a plentiful harvest ; the conse-
quence was that his circulation was increased, not because
he forced it, but because there was a greater plenty in ar-
ticles for change, and a greater demand for the medium of
change. But his circulation increased only one-twelfth,
and it was ridiculous to suppose that any country banker
could extend his circulation just as he pleased.
It was the
foreign exchanges that caused the fluctuation, and not the
country banks. He hoped most sincerely that the Noble
Lord would abandon his plan.
Mr. P. THOMSON would turn to the speech of the
Hon. Member for Whitehaven. The objections of the
Hon. Member appeared to be taken, not against the prin-
ciple of the Bill—the matter then to be discussed—hut
against the arguments by which the Bill was supported
for the Hon. Member said he would vote for the second
reading. Some of the arguments of the Hon. Member
were of a personal nature. How, asked the Hon. Mem-
ber, could the advocates of free trade support the Bank of
England monopoly ? He replied, very easily, and upon
the ground that both the one and the other were for the
public good. For the interests of commerce, commerce
ought to be free ; but for the safety of the monetary sys-
tem, the issues of paper ought to Ise restricted. With a
single exception he knew of no new privilege given to the
Bank. It was said that it got a great increase of power, but
he could not see how that was to be proved. Was it no di-
minution of the power of the Bank to have publicity given to
their accounts, and to he exposed to every observation
that any one might be disposed to mike upon their pro-
ceedings? Undoubtedly that was such a check upon the
Bank of England as never had existed before. He could
not consider the making Bank of England notes a legal
tender was any benefit to the Bank. It was never under-
stood to be so intended. It was intended for the conve-
nience of the public, and he believed it would add very
litt'e, if any thing, to the circulation of the Bank. He
did not think it of so much importance that the external
drain should be guarded against as the internal one. It
wood be found, on looking at the Bill, that the moment
the Bank ceased to pay in gold, its notes would cease to
be a legal tender. He differed widely from the views of
his Hon. Relative upon this question, and was of opinion
that the powers given by the Bill could not be intrusted
into better hands than those of the Bank o!' England.
Sir R. PEEL said, that as regarded those parts of the
Bill which related to the extending of certain privileges to
the Bank of England, it had his assent; and he should,
therefore, vote for the second reading. He thought, upon
the whole, that the contract made was a very improvident
one for the public, but that contract having been entered
into by the authorized officers of the Government, he could
not, without stronger grounds than any which lie saw, be
a party to its violation. The nature of the bargain as
between the Bank and the public was clearly indicated by
the fact that Bank Stock, since it became known, had risen
from 193 to 208. Assenting, however, as he did, to the
Bill generally, there was one clause to which lie very
strongly objected, and that was the one which made the
Bank of England notes a legal tender. And if anything
could increase his objection to the principle of that clause,
it was done by the mode and time and place in which such
a principle was proposed for the adoption of that House.
As to tithe time, he objeeted that a principle entirely
changing the monetary system of the country should be
proposed to the House at midnight on the 2d of August.
—(Hear.) Toe Right Hon. Gentleman had said that
the change would not materially increase the paper issues
of the Bank. That word " materially" admitted the
whole question. It was enough to show that the measure
would in effect destroy the convertibility of paper. Then
as to the mode. The clause was introduced in the middle
of this Bill without a woad to explain for what reason it
had been adopted. He could not help admiring the mo-
desty of the framers of the clause. They could not even
condescend to say that " whereas it was expedient" to
make the provisions it contained. There would be nothing
whatever upon the face of the Act, if it should be so
passed, by which yosterity would be enabled to know why
they had made this departure from the principle of their
monetary system. Besides this, he objected to it particu-
larly as affording a precedent which might afterwards be
used for the most dangerous purposes; when they hail
once entered upon this slippery path, it was impossible to
kno.v where they were to atop. Ile begged to ask the
Noble Lord a question. If a demand were made upon a
man for 3/. 25., was it intended that a 5/. note and 2e.
should be a legal tender ?
Lord ALTHORP replied in the affirmative.
Sir 11. PEEL—Then it was quite apparent that the
standard of value as hitherto established by law was at an
end, because part of the amount being paid by a note not
payable in gold anywhere but in London, and the other
part, the two shillings, clearly not being of the standard,
there was no standard at all in the payment. Why, then,
if this could he done, it would be met by the issue of
five-guinea notes on the part of the country banker. And
why should it not be done, since that would be a perfectly
legal issue, and there was nothing whatever to prevent it'?
He had the strongest apprehension that the consequence
of the measure would be to cause the gold circulation to
be displaced by paper.
Lord ALTHORP denied that there was anything in
this measure chargeable as a departure from the principles
which hail always been professed by the Government. He
denied also that the Bank of England was liable to the
charge of jobbing in public securities. The Right Hon.
Baronet who preceded him had objected that no reasons
were given for the introduction of the clause relating to
the legal tender. It might be an error that such a decla-
ration had been omitted, but he did not see that this was a
sufficient ground of objection to the Bill or to the prin-
ciple of the clause. He certainly thought that in bringing
in the measure all matters directly affecting the B ink of
England might properly be introduced in a Bill fur re.
newing its charter. He had also introduced other matters
indirectly affecting the Bank, but these he had withdrawn
in deference to the feeling of the House. The Hight Hon.
Baronet had asked if the legal tender was considered part
of the bargain with the Bank of England. Undoubtedly
he communicated the proposal in the first letter he wrote
to the Bank Directors, and they said in reply that it was
a matter more belonging to the Government than to them.
It appeared, therefore, that they did nut attach much
value to the arrangement, though unquestionably it must
be an advantage to the Bank in a time of run or panic,
by increasing their means of meeting the demand upon
them, He did not believe, however, that while the Bank
of England was conducted upon sound principles there
could ever be such a demand as they would not be pre-
pared to meet without assistance. But the Right Hon.
Baronet had said that there was a danger that the Bank
of England might become the only place where gold might
be bad for the whole country. With the permission of
the House it was his intention to add a clause which
would obviate ti is. Ile bad applied to the Bank Direc-
tors,
ah
ny
they
yt
mustt e i their
(I.,r,ovissuing
vaet
notes,tlt ei r
furt li ff et rheenpt byr, an ne?,,
Qbanks tors, and found that they kind no obj••ction to 14 restricted
have a reserve of gold.

Sir R. PEEL inquired (as we understood) how they
were to be compered to continue the branch banks at all ?
Lord ALTHORP certainly did not see how they could
be compelled by Act of Parliament to have branch banks,
and to maintain them at particular places. He did not
see how it could be more for the interest of the country
bankers to pay in notes than in gold, inasmuch as they
would Dave
astof
geFi v et
hteh
ee
tehaenri.e valueH et o
couldtb not concur with
e Bank of England
for thed
the Right Hon. Baronzt (Sir R. Peel) in thinking the
effects of the legal tender clause would be to make the table
wl
of the Bank of England the only place where gold would
be procurable. At the present moment, in times of panic,
when there was any great demand for bullion, it could
only be had in large quantities at the Bank of England;
but beyond that, the necessity of consulting the convenience
of their customers would be quite sufficient inducement to
the country bankers to keep their coffers supplied. It had
been likewise observed by the Right Hon. Baronet that the
effect of altering the yalue of the currency would be to oblige
f,reigners at the outports to taw.e notes instead of bullion
i - , for their goods. But if he in exeda,..i,e wee not much
mistaken a foreign machant seldom if ever sought to take
bullion for his goods. Irl, e eithex took in return the goods
of the British market, or bills of e;chan.e,_
6 (ljear, hear.)
But even putting aside that consideration, he did got think
there was any weight in the observation.
Mr. BERRIES said that, being entirely favourable to
the .princiPle of the renewal of the Bank Charter, he
would give his vote for the second reading of the Bill. It
contained, however, several clauses to which he bad strong
objection?, and which, when in Committee, he would en-
deavour either to have omitted altogethtr, or so modified
as to divest them of their most obnoxious points. In the
first place he would altogether object to the clause making