The Sun.
London, England, 1833-06-29 00:00:00

wards the conclusion of his speech, was extremely inaudi-
ble ; but we understood his final sentence to be a declara-
tion that the greatest evils would follow from such hasty
legislation, and a recommendation that the decision of this
question should he postponed.
Mr RICHARDS fully agreed with the Hon. Baronet
that sovereigns would, if this measure passed, be soon at a
premium. Then, as to the established joint stock com•
panies. Seven years ago they were, as it were, called
upon to farm themselves by Government. as being con-
sidered a more stable form of bank. Now, since this,
had there been any complaints made against these compa-
nies? No—quite the contrary. Was a country like this,
then, to have its monetary system disturbed in this 'man-
ner ?—(Hear, hear.) The joint stock company of
Knaresborough had been found eminently beneficial to all
parties concerned. According to tile Ministerial measure,
this bank would have to invest 100,0001. in real securi-
ties or Government securities. What would be the con-
sequence ? Why, if invested in real securities, being di.
rectiy contrary to all principles of banking, the utter
fai'ure of the bank would inevitally be the result.
Sir M. W. RIDLEY hoped that the House would
adopt a clear and decided opinion upon the main principle
contained in the first resolution.—(Cheers.)
Sir R. PEEL said, the immediate point before the
House was, whether it should affirm the first resolution
for the renewal of the Charter of the Bank of England
for a limited period, or whether the consideration of it
should be postponed until the next Session? He WaS
decidedly of opinion that the House would abandon its
duty if it did postpone it. He was in favour of one bank of
issue, because it ought to have control over the circulat-
ing medium, in order to give assistance when necessary
to commerce; and he thought that the Bank of England
was well constructed both fur that purpose and far the
purposes of Government. He did not wish the Charter
to be renewed for the sake of the Bank, but of commerce
generally. Other parts of the resolutions he was also
ready to affirm: it was desirable, for instance, to adopt
the fifth resolution, for he believed that the effect of the
usury laws in restricting accommodation in times of dis-
tress was very injurious ; by allowing banking establish
ments to make the true and legitimate interest of
their money, great facilities were often afforded to
trade. The terms in the fourth resolution were mat-
ter for future consideration, and he should also post-
pone the manner and degree in which some of the
other resolutions affected country bankers and joint stock
companies; they formed no essential part of the plan
of the Noble Laid for the renewal of the Bank Charter :
what their effect's might be upon the one and the other, he
(Sir Robert Peel) was prepared to discuss, hut at present
he should not be justified in detaining the House at suffi-
cient length to treat the point satisfactorily. One great
principle was involved in the resolutions of the Noble Lord,
not forming part of the question of, the renewal or the Bank
Charter, to which he (Sir R. Peel) could not give his
assent ; it was contained in the second resolution, and it
made the notes of the Bank of England legal tender in all
commercial transactions. He had riot heard from the
Noble Lord a single reason for this change, and he must
be presumptuous indeed who would venture to predict
what the consequences of it might be. The Noble Lord,
however, was bound to produce good grounds for the al-
teration of the law, and ought not to lay the onus
upon his opponents, of showing the evils that might arise
from it. He confessed that he had heard the proposition
with great surprise, for as far as authorities went, he had
thought it was a settled maxim in the science of currency,
that after the removal of the restriction on the Bank of
England, paper, under whatever authority it was is-
sued, should be convertible into gold. For this Mr.
Burke had contended, when he compared the notes of the
Bank of England with the assignats of France, and at a
more recent date the same doctrine had been maintained
by Mr. Huskisson. Although he would not predict
the consequences, be looked at the immense alteration
proposed with great anxiety ; and he apprehended
that the Noble Lord ought to show some great evil
which would be averted, or some great advantage to
be gained, before he recommended it. The Noble Lord
had talked of the effects of panic, but he (Sir R. Peel)
heaeed the House to distingui-h between commercial anti
voltical panic. A commercial panic had occurred in
1825, and a political panic in May, 1832. The one and
two pound notes were abolished in 1826, in consequence
of the commercial panic, and he begged to ask the Noble
Lord whether he apprehended any new commercial panic?
The general effect of the evidence before the Committee on
the affairs of the Bank certainly watt, not only that trade
and manufactures were flourishing, but that they were
established on sound principles, and that the immediate
convertibility of bank notes into gold was a sufficient check
to undue circulation. If so, why alter the currency, or
at hoist why alter it before the House was in possession of
the result of the inquiry before the Committee? Then
did the Noble Lord expect a political panic? What was
a political panic? An apprehension, growing out of po-
litical causes, that the Government was unstable, anti that
there was danger lest the Bank of England, connected wih
the Government, might not be able to effect its engage.
meats. During the political panic of 1832, in some cases
the notes of country bankers were preferred to those of
the Bank of England. Even against a commercial I mica
but still more against a political panic, it was impossible
to devise an effectual precaution. Did the plan oZ the
Noble Lord offer a precaution against a political panic ?
Certainly not. In Edinburgh, in 1832, the notea of a
private bank were sought in preference to chose
of the Bank of England ; true it was, the appre-
hension was merely idle, but in every panic the pre-
judices of the ignorant were to be dealt with and com-
batted. lie feared that one of the effects of the change
would be to diminish the quantity of gold in circuletion,
and he entirely dissented from those who thought Clot
there was anything insecure in the present state of the
currency. He doubted if it were possible to place it on a
better footing than at present ; for though it did not give
effectual security against political panic, it did give as
good security as could be devised against commercial panic.
Suppose a man did not like Bank of England paper, to
make it legal tender was to compel him to take it in the
country, for he could only obtain gold by taking it to the
branch bank, or by sending it to London. The Noble
ford hoped, by throwing this impediment in the way—
be rendering it necessary for a man to travel 30 or 4-0
Miles before he could obtain gold, to afford an effectual
check to political panic. With a view to this part of the
subject, it was very material to ascertain the amount
of country bank paper in circulation as compared with
that at the Bank of England. No wise or prudent States.
man would make this great change without first obtain-
ing that knowledge, and in fact, it was absolutely necessary
to warrant the arrival at any conclusion. A near rela-
tive of th• Vice-President of the Board of Trade had
estimated that Boils of England paper formed five-sixths
of the whole circulation. Ile (Sir 11. Peel) believed that
estimate to be ex otgerated, and he would take it that
country paper formed one•fourth or one-fifth of the paper
currency of the kingdom ; and was that sufficient to
affect the exchanges? The Noble Lord had avowed
his object to be to give the Bank of England a mu.
nopoly ; but how would that establishment deal
with joint stock companies? It would guarantee to
each a settled amount of bank issues, upon which
the joint stock company was to deal. Suppose coun-
try bank paper to be abolished, and a joint stock
company to issue Bank of England paper, etch joint stock
company must have a guarantee that the Bank of England
would insure to it a certain amount of its notes. That
was inevitable—and the time might at rive when the
joint stock companies wished to avail themselves of the
whole extent of their credit, and yet the Bank of England
might he anxious at the same time to diminish its circu•
lation, with a view to the exchanges; but by the guaran-
tee, whatever were i's amount, the Bank of England must
abide. Fit st, be (Sir R. Peel) was not prepared to admit
the policy of the monopoly ; next, lie doubted, if the plan
of the Noble Lord were entirely successful, whether he was
giving to the Bank of England an effectual contrail over
the exchanges in cases of commercial or political panic.
lie could not help entertaining great apprehensions that
one of the consequences of the pl in might be to diminish
the amount of the circulating inediutn for small payments,
en which he believed the whole superstructure depended.
A gold circulation, which was neatly equably spread over
England and Wales, was always necessary for small pay--
meets ; and he would a-k whether it wee safer to have
gold equaely diffused among the country bankers, or accu-
mulated in the cuff rs of the Bank of Eng:and and of the
branch banks? Nothing could be more fallacious than to
say, " You see how well things go on in Scotland and
Ireland, where they have one and two pound notes."
Why did they go on well ? Merely because they
were supported by the gold circulation of England ;
but once introduce the same system into England, and
the security of the paper circulation, even fur a month,
was at an end.—(lierti, hear.) For the stcurit), there-
fore, of all circulation, and especially for the security of
that of Seto land and Ireland, it was not necessary merely
to have gold in the coffers of the Bank of England and its
ht ancbes, but in the hands of country bankers. By the
proposed plan, an interest was given to every party to get
rid or gold ; and supposing there were 500 country batiks
in the kingdom, the Noble Lord would at once close 500
founts of the most precious metal. But it should be fur-
ther considered that small payments must be made, and
though tne Noble Lord was unwilling to think of the issue
of small notes, that might conic to pass. There was no law
against issuing notes for 51. 101. or for 5/. 55., and by