The Sun.
London, England, 1833-07-08 00:00:00

have not been of the same exchangeable value
in time past, and it is manifest they will not he
of the same exchangeable value in time to come.
It is beyond the reach of human sagacity to
foresee all the consequences that may result from
any legislative measure, and if bank notes shall
be made a legal tender in the way proposed,
there will be peculiarities in our monetary system
sufficient to confound all understanding—for
silver, which in British coin is now by law about
61. per cent. in exchangeable value less than
silver in bullion, will remain a legal tender for
sums not exceeding forty shillings. Gold,
which in British coin is equal in exchangeable
value with bullion, is to remain a legal tender
for any sum not exceeding 51., while bank note
which have been sometimes thirty per cent. be-
low the exchangeable value of gold in time past,
arc to become a legal tender for any amount above
51. in time to come. But these perplexities apart,
it accords with human experience that wherever
the Legislature usurps the province of omnipo-
tence by interfering with the natural course of
things, the consequences never fail to recoil
upon the authors.
The Bank of England desires that its notes
may be declared a legal tender, in the hope that
its issues may be enlarged in proportion to the
greater amount of its notes, which country
bankers may be induced to keep in store in pre-
ference to gold, and in the further hope that the
Bank may be called upon less largely or less
frequently for gold. But these expectations
cannot fail to be disappointed.
As bank notes upon being declared a legal
tender, will become lowered in exchangeable
value in proportion to the difficulty of obtaining
gold for them, so if country bankers were to
offer bank notes to customers when they re-
quired gold, their own notes would not only be
lowered in exchangeable value, but their cus-
tomers would probably withdraw their deposits,
which, in the case of any well regulated banking
company, arc not less than ten times the amount
of its issues.* In order, therefore, to preserve
their deposits, and to maintain the exchange-
able value of their own notes, country bankers
will cease to keep any notes of the Bank of
England in store, and keep a store of gold only,
and they will very soon learn how to make the
branches of the Bank of England subservient
to them in this respect, so that a further conse-
quence of this enactment may be, that the Bank
of England will find itself constrained to with-
draw most of its branches.

Enforcing this enactment upon the CHANCEL-
LOR of the EXCHEQUER, the Bank of England
has acted as it always acts. It looks to its own
interest only, and overlooks the interests of the
country at large. But the interest of the Bank
is not to be promoted at the expense of the
holders of its notes, whose interest in this, as
in every other instance of its management, the
Bank does not hesitate to sacrifice to its own.
Its conduct in this instance also proceeds
upon a further mistake which governs the whole
of its conduct, namely, that it does not proceed
according to the rules of every day transactions,
but confines its views to situations of emergency
which, if not produced, are most assuredly
always aggravated by the unnatural course which
is thus pursued by the Bank.
We do not altogether despair of this part
of the measure being yet abandoned ; but we
have now no expectation that the renewal of
the Bank monopoly can be prevented. We
trust, however, that its renewal will be subject to
the condition of its being abrogated upon three
years' notice, and upon repayment of the debt
due by the State to the Bank within two years
after such notice. _ _ _

The only part of the measure which we like is
the composition to be paid by bankers upon their
issues, because the amount of the country issues
which have hitherto remained unknown will thereby
be accurately ascertained. It will thence appear
that the country bankers never over-issue, but
that the Bank always does over-issue, excepting
for the short time that it finds itself constrained
to contract the currency, in order to stop a
drain of gold. No doubt, as currency prices
are raised in proportion to the over-issue of
the Bank, so the nominal amount of bills
of exchange brought to country bankers for
discount, and of the accommodations re-.
quired by their customers, and of the opera-
tions upon cash credits, are increased in pro-
portion to the rise of prices occasioned by the
over-issue of the Bank ; but in this respect
country bankers are acted upon by the over-issue
of the Bank of England, in the same way that
the country at large is acted upon, and can no
more help themselves than the country can help
itself against the power of over-issue possessed
by the Bank.

• The Bank of England affords a remarkable exception in
this respect. Its issues are generally twice the amount of its
deposits.

The Committee of the House of Commons
on the state of trade and manufactures is likely
to lead to some important disclosures. In the
early stage of the inquiry, it was stated by a
London banker, and others, that the country
was never in so flourishing a state, and that, as
regarded the East India trade particularly, no-
thing could be more stable than the houses do-
ing business with India. The recent failures,
however, have opened the eyes of many Members
of the Committee, who had placed confidence in
the flattering statements which had been made
to them ; and even Mr. POULETT THOMSON
has admitted the propriety of further inquiry.
As respects the home trade, it was stated by an
eminent wholesale haberdasher and linendraper,
that he had never known business more flou-
rishing. This statement excited the surprise
and anger of a great number of London
tradesmen, who immediately applied through
one of the Members of the Committee to be
allowed to give evidence. Their names were
given in on Friday, and they will probably be
called in the course of a few days. The accounts
which they are prepared to give of the state
of trade in the metropolis generally are afflicting.
They will, however, excite less surprise than
pain, as the public are pretty well aware of the
real state of things. Perhaps a stronger proof of
the depression in the metropolis could not be
given than the fact that there are at this mo-
ment, in one street of London (Blackfriars-
road), 78 houses to be let, whilst in the environs
of London the rents of the description of houses
usually occupied by retired tradesmen, or persons
in trade who have two places of residence, have
fallen 25, and in some instances 50 per cent.
Persons who are acquainted with the real
state of trade must be astonished at the gravity
with which a few individuals whose capital has
given them advantages over the generality of
tradesmen, speak of " national prosperity."
There can be little doubt, we believe, but that
the report of the Committee on trade and manu-
factures will, notwithstanding the known bias of
several of its members, be of such a character