The Sun.
London, England, 1833-06-01 00:00:00

paper should he a legal tender. It need not be hound by 1
law, for the moment it ceased to fulfil its engagements its
notes would necessarily cease to he a legal tender, He bad
his doubts about that part of the plan which spoke of the
limitation of specie. For himself, he should be inclined to
limit specie to the Bank of London only, as he considered
one place would he sufficient to give security to the country,
and he believed that in that opinion he was borne out by the
sentiments of Mr. Ricardo. He had another question to
ask, and that referred to the liability of the branch banks—
whether they would be equally as liable for the paper of
the Bank of England as for that issued by themselves ?
He cued not suppose that such was the case, and it was
his opinion that if there was any liability on those banks
it should be for the paper issued by themselves. He had
One question more to ask, and that related to the notice to
he given at the expiration of ten years by the Government.
He wished to know whether on this point there was to be
perfect reciprocity between the public and the Bank, or
could the Bank put an end to the arrangement at once ?
He regretted that a measure of such vast importance should
be brought forward at so late a period of the session, unless
the Nable Lord wished the session to last Cu Christmas.
The measure, and the alterations that might be proposed in
it, must be passed over in a hurry, if gentlemen did not
wish to sit to hours that would be incompatible with their
health and employments. He concluded by saying that
for the present he would not pledge himself to pursue any
particular course. He would reserve himself for the time
when the measure should be under discussion.
Mr. GROTE said, that as far as he understood the
proposed plan, I e was inclined, on the score of principle,
to quarrel with none of its provisions. There was but
one point he felt inclined to object to: the point be al•
luded to was the publicity relative to the issues of the
Bank of England. The more attentively he looked upon
that point, the more clearly did he see that there would
be no security except in a continuous publicity of the
accounts. The Noble Lord had laid that down as a prin-
ciple; but when lie came to examine to what extent that
principle was to he carried, he confessed that he felt dis-
appointed at its not being carried further. The proposi
tion of giving public ty to the Bank's accounts every
quarter of a year was not sufficient to give the public that
insight into its affairs that would be satisfactory, and
would not be enough to operate as a salutary cheek upon
the Bank. In his opini n, it would be a great improve-
ment if the series of weekly averages of accounts were
given at the end of the quarter, and renewed from one
quarter's end to the other. He suggested this improve-
ment in order that the public might know whether the
Bank Directors were judicious or not in their management.
This would be seen from these weekly reports, and if
there were any considerable variations, it would instantly
be seen what was the cause of them. It would even be
an improvement if the time were extended to six months,
provided that at the end of that period the whole series of
weekly averages were given. For the present he would
not enter into any arguments on the measure; he would
simply state, that he had no objection to any part of the
proposed plan, but he could not sit down without saying
that making bank notes a legal tender was a very material
mprovemenC.
Mr J. SMITE? (after a remark or two, inaudible in
the gal cry) said that the Governor of the Bank, in his
evidence before the Committee, had proved that t-e Bunk
was not afraid of a run caused by unfavourable exchanges,
because in that point it would soon rectify itself. After
al uding to the calamity of 1825, he said that the Bank of
England at that time had conducted itself with extreme
liberality.particularly towards the country banks, for, with
one hand it had assisted them by extraordinary issues, and
immediately afterwards, when the country bankers de•
manded specie the Bank paid them in specie. If the Bank
had had only its own engagements to answer for, it could
have easily paid them. By the proposition of Lord Al-
thorp, country hankers would not run for specie at all, as
they could pay in Bank notes, since they would be a legal
tender. He considered that part of the plan good, and
that it would tend much to increase the prosperity of the
c.iuntry, since it would for the future prevent runs upon
the Bank. He thought the Batik of Ene,land had so well
managed the national debt, that it ought to be paid for its
good management, and at present it was net paid .00 highly.
That part of the plan which related to country batiks, be
considered of considerable complexity. and upon it he
had no fixed opinion at present. He could not agree
with the assertion of the Honourable Member for Essex,
that the Noble Lord wished to destiny small hanks of
issue. They were of considerable use to the commerce of
the country, and he saw nothing in the Noble Lord's plan
that tended to do away with them. He thought the plan
of the Noble Lord showed great good sena-. The plan
was quite clear ant/ well defined, and in his (Mr. Smith's)
oitinion would have no injurious effect on the Bank of
England. For his own part, he was much relieved by
the statetntnt of the Ntib'e Lev!, and he believed that
when the papers were printed anti distributed, it would
give g neral satisfaction

' Mr. O'CONNELL would not say one word on the
general print•ip'es of the Bill, but he would beg to ask,
first, if the Noble Lord meant that Bank of Ireland notes
should he a legal tender in Ireland ? From the statement
of the Not) e Lord, he understood that they should not.
Secondly, di i he mean to introduce a similar measure into
Ireland ? And, thirdly, whether or not he intended to take
the subject of the Bank of Ireland Charter into considera-
tion during the present year.
Lord ALTHOHP said that the present measure was
meant to apply to England and Wales only, and he did
not mean to extend it to Ireland. With regard to the
Hon. and Learned Gentleman's question 3.4 to the renewal
of the Bank of Ireland Charter, he would only say that
the Bank of Ireland Charter did not expire till the ye ,r
1837, and it was not nee, ssary to interf 're with it at
pr sent; at the same time it was undoubtedly in the
power of the Gore, nment, by pay-ng up their debt to the
Bank, and giving the proper notice, to terminate the
Charter at any time.
Mr. O'CONNELL reminded the Noble Lord that he
had asked ii it was the intention to make the notes of the
Bank of Ireland a legal tender.

Lori ALTHORP did not mean to touch upon the
Irish Batik at al, at present.
Mr. HUME wan sorry to differ from many gentlemen
of great knowledge upon such subjects, who had pre-
vipusly spoken. It was his opinion that the negligence
of the Bank of England had created the panic of 1826;
or, at all events, he was certain that it wool,: not have
been so great, nor the loss so lamentable, but for that cir-
cumstance. And so far from thinking that they should
have had no relief at that pet iod but for the Bauk, he was
of opinion that, but for it, the panic would never have oc-
curred He was therefore sorry that they were to have
an establishment for ten or eleven years longer, which
had proved injurious; and by which, at all events, the
public would not profit. In his opinion, none could
manage the affairs of the public so well, or so economi-
cally, as aSt ite Bank. They could have a Government
Bank with as able men to m triage it, and with as little
trouble to the Alin ster for the time. being, as the present
Bank. He omplainad that he public was at present de-
prived of 600,0001 or '700,0001., which was now paid
to the Bank of England for the management of the
public business; and he saw no reason why a hank
shoulil not be established within sixty miles round
London, as well as any other establishment. He
considered the continuance of such a system a de-
parture from the principles on which the Noble Lord
mid pieviously acted. With regard to the forcing of the
circulation of the Bank of England notes all over the
country, that arrangement was merely for the benefit of
the B.nk, without any additional advantage to the public.
It was true that, by the Noble Lord's plan, the Bank, in-
stead of receiving 248,000/. for the management of the
public deb!, would now receive only 120,0001., and that
he considered the only good part of the plan. He consi-
dered that making Bank of England notes legal tender
would only increase its danger to the Bank, in case of an
internal panic. At present every bank was obliged to
have a certain quantity or gold in its coffers; but if the
present plan were agreed to, the run, in case of a panic,
would be entirely on the Bank of England. He therefore
thought the plan of the Noble Lord altogether bad, for he
had yet to learn why banking should not be a+ open and
pulilic as any other business or profe.sion. The Hon. 111 rn-
ber tor Essex hail said that if two rival banks were esta-
blished, evil would follow; but he (Mr. Hume) thought
the Hon. Member wrong in his opinion. In such a case
both banks would act upin their own responsibility—
would act as a check upon each other, and eacb would
prevent the other from playing tricks. He therefore
thought that the Government would do well to reconsider
their proposition. In his opinion they had judged ill wi.h
regard to the interests of the public in that plan. The
evil of panka would be increased by it, and the risk would
he diminished by adding to the number of broke. He.saw
no reason why no other banks but the Bank ear ,r,4oeglpil
should be established within sixty five miles of London, ur
why banking should be put on a differena footing from any
other business. He protested again,etbe whole principle
of the measure, and was convincecrthat the time would
come when they would regret that they had placed the
important privilege conferred by this measure in the bands
developed
to h, by
of any set of men, however respectable they might be.
Colonel
TORRENSpIan ti
hneNoblemsaaiyd rt
ei ..aLi:eoctr
thd.o, uat gnh
improvement
percoi
Chancellornesn (el considered rtoe dfu
up
the Exchequer,
the present monetary system, yet he could nut discover
how the dangers inherent in that were to be removed.
Publicity of accounts, making Bank of England paper a