The Sun.
London, England, 1856-04-08 00:00:00

of 1852 there was a note circulation of 22,000,0001.
with 19,000,0001 of gold ; at the erd of 1853, a note
circulation of 24,000,0001. with 15,000,000/ of gold ;
in the early part of 1855 a circulation of 20,000,000/.
with 13,000,0001. of gold ; and in Odtober, 21,000,0001.
with only 11,000,0001. of gold. He trusted he bad now
made out a fair case for the propriety, if not the neceee
airy, of a searching investigation into this mat-
ter before a competent tribunal. He had brought
forward no theory ; he had only stated undeniable
fact. It could not be disputed that during the last 11
years greater fluctuations had taken place, and there
had been greater over-speculation and greater monetary
crises than had been ever known in modern times, and
the greatest supporters of the act admitted that some in-
quiry into its operations were necessary. It might be
said, what is the Ilse of making a change in the act of
1844 if you cannot substitute something better / But
there wire many points in the act which might be Me.
proved, and he thought it would be a better plan to im-
prove it than altoge her to get rid of it. If the act were
to be continued. he thought, in the first place, that the
circu'ation °tat to he released by enlarging the powers
of the Bank of England, so ns to enable them to issue
11.-notes. He was as much ire' reused as any man with
the necessity of providing for the convertibility of the
bank-notes ; but by preventine the Bank from issuing
small as well as large notes they fore d into circulation
a number of s ,vereigns which would otherwise remain in
the Bank, end enable is to issue a greater number of notes
on the security of it gold without increa lag its liability.
These 11.-not, s ught to be issued upon the same footing
as larger notes; th y r tight -to he a le ;al tender, but
convertible into go d. 1.. 1825 the Bank was relieved
from great difficulty by the issue of a number of these
small notes, and many of their lordships would remem-
ber the statement of the late Lord Ashburton, who n
commended the issue, that if 2,000,000 old 11.-notes bad
not accidentally been ready he did net know what
wou'd have been the result. It had been said ti at many
of these 11.-notes would be forged, but be could not un-
derstand why they could be forged more easily ti an notes
of a larger amount. In Scotland forgery had, he be-
lieved, been almost unknown for many years. The Scotch
not only preferred notes, but had a great distrust c f gold.
They knew that a 11.-note, however dirty, duly repre-
sented the amount of 205.; but that a sovereign might
be light. There was no feeling of distrust in 1826 and
1828 of U.-notes. So far from that he could refer to
the declaration of. Ministers of that day, who said that
the people preferred notes to gold, and an act was passed
in 1828, the 7th of George IV., by which Scotch
notes were prohibited under a penalty from being
ereutated across the border, these notes, although not
a legal tender, baying found their way into Lancashire
and Yorkshire. Another point in the present system
might be advantageously changed without infringing on
the main principles of the act—viz., the constitution of
the Bank direction. The management of the Bank was
int-usted to the governor, the deputy-governor, and
23 Bank directors, eight of whom were by turns ineligi-
ble for one year. He thought 1; oljectioaable ti at eight
di.• ;tors should be turned out of office just as ttiey be-
gan to know their business, at .d ehouid be "sent to
grass" for a year to forget it. He might also object to
the rule by which matters of importance were deci fed
by the mere majority of the &rectors. He thoureht there
ought to be some sort of Governmeu t inspection and cons
teed, and he was borne out in- .this opinion by the evi-
dence given by Mr. Glyn and Mr. Brown in 1843 before
the House of Commons. The Bank of France was con-
ducted on that principle of Government control, and
with excellent results. It had a governor and two subs
governors. These office: s were nominated by the
Crewn and receivel large salaries. He would not quarrel
wi h their raising the rate of interest when gold was
carce, because that was necessary ; but be objected to
the unduly low rate of interest to which the Bank re-
sorted when money was plentiful. The panic of 1847 was
very much brought on by the reduction in the rate of ie.
terest in the previous year to 2, and 3 per cent. The
Bank of England ought to be either a State Bank or
separated from the State. If it were a State Bank it
ought to be under Government supervision, and ought
to consult the interests of the country. He was inclined
to think, although he spoke with some doubt, that it
might be desirable to adopt some minimum rate of in-
terest. Previously to 1844 the variations in the rate of
interest were very few. Another improvement which
could be effected by a mere stroke of the pen was in
raising the amount of notes which the Bank of England
was authorised to issue over and above those that must
be represented by gold. In 1844 it was supposed
that 14,000,0001. were sufficient for the wants of the
country, but this amount would hardly be sufficient
now, considering how the country had in the interval in-
creased in population and wealth. It would be a great
relief if some step could be adopted, such as raising the
note circulation from 14 to 18 er 20 millions sterling, in
order to meet the increased demands of the country.
The main principles of the act of 1844 he disapproved—
viz., the restriet.ve elausee, and the separation of the two
departments of the Beek. Up, n'h a la'tor subject be
would quote the opinion expressed by Mr. Tooke at the
conclusion of his pamphlet on the Bank Charter. Mr.
Tooke said—

" That the greater or less liability to variation in the
rate of interest 4onstitntes, is thO degree next only to the
preservation of the convertibility of the paper and the sol-
vency of banks, the most important consideration in the
regulation of our banking system. That a total separation
of the business of issue from that of banking is calculated
to produce greater and more abrupt transitions in the rate
of interest and in the state of credit than tbo (present)
system of union of departments,"
No man, however bigotted an advocate of a mo!allic cur-
rency, would say that the Bank ought to be deprived of
the power of issuing any notes whatever that were not
represented by gold. It England had been governed on
such principles for the last two centuries she would now
he a small third-rate State. There could be no doubt
about the expediency of issuing notes that were not
actually represented by gold in the coffers of the Bank,
and the only doubt was as to the limit. For himself, he
obj>_•cted to naminc, a particular amount of notes beyond
which no issue should take place, because when that
!bait was reached distrust and discredit began. Ile be-
lieved there would not have been half so severe a crisis
in 1847 if the Bank had had the power of increasing the
issue of notes upon the 9,000,0001. of gold which it then
possessed. At a later period of great difficulty there was
12,500,000/. of gold in the Bank of England, which would
have warranted a larger issue of notes, and would greatly
have relieved the pressure. If the provisions of the act of
1844 regulated the affairs of the Bank of France, instead
of r ow meeting all its engagements, and having a stock
of 8,500,000/. of cold in its coffers, the Bank of France
would be 2,000,000/. minus in its banking department.
WVithi❑ the last four years there had been only two
changes in the rate of interest charged by the Bank of
France, while within the same period there had been 18
changes in the rate of interest charged by the Batik of
England. The late Lord Ashburton, in his evidence
respecting the Bank of France, said—
" There has been at no time any suspension of its pay-
ments, or any material difficulties of any kind ; and it
seems to have answered perfectly well the object for which
that Bank, like our own, was instituted—namely, as a
bank to give proper facilities to the circulation and com-
merce of the country, and at the same time to be the bank-
ers of the Government, and to give every proper and legiti-
mate facility to the operation of the Government."

He would rather have inquiry by committee than no in-
quiry at all ; but, as it was almost impossible to sepa-
rate the subject from the influence of party feeling, he
thought the appointment of a Royal commission would
be the preferable course. (Hear.) He would not presume
to name the members of the commission, but would
humbly suggest that persons should be selected who
were not pldged to any particular views on the ques-
tion. In conclusion the noble earl moved, " That a hum-
ble address be presented to her Majesty, praying that
her Majesty will issue a Royal commis:lon to inquire
into the state of the currency of the United Kingdom."
The Earl of HARROW BY, who was very indistinctly
heard, was understood to say that it was the intention of
the Government, as had been stated by the Chancellor of
the Exchequer in the other house, to appoint a commit-
tee to inquire into the operation f the Bank Act of 1844
before any revision was attempted in the present ar-
rangements. He admitted that there were some subjects
in. re fitted to be inquired into by commissions than c
rnittees, but he considered this was an inquiry peculiarly
belonging to the Houses of Parliament to undertake.
He did not think it desirable to enter into any discussion
of the points suggested by the noble earl, but would
merely say inquiry should be made before notice was
given to the Bank to terminate the operation of the act
of 1844.
The LORD CHANCELLOR said it was usual to
give notice of motions of suoh importance as this, but
the notice given by the noble earl conveyed the impres-
sion that no motion would be made.
The Earl of EGLINTON said, he had hoped, and
still hoped, that his motion would extract a more satis-
factory answer from the Government than had been given
by the noble earl.
The Earl of lIARROWBY said the only new point
raised by the noble earl was his preference for a commie•
sion instead of a committee. He thought a commission
could only
add to the investigation, and not supersede
inquiry by committees of both houses.
The Earl of DERBY said a more important question
than the form of the inquiry was what were the inten-
tions of the Government ! All that the Government had
said was, that inquiry was very desirable at the proper
time and in the proper mode. He begged to ask, when
was the proper time f (Hear.) His noble friend (the
Earl of Eglinton) gave as a reason why the present was
the proper time that the Baak was open to notice from
the Government at any period, and the charter, there-
fore, continued only from year to year. It was very de-
sirable that the conditions of any new charter should be
well considered. The Government assigned the most ex-
traordinary of all reasons for not proceeding with inquiry
—that they did not intend to give the Bank notice in
the course of the present year. Surely inquiry, either
by a commission or a committee, ought to precede the giv.
log of notice to determine the present charter. Although
his noble friend did not intend to press his motion, he
(Lord Derby) thought that he had a right to expect from
the Government a more distinct declaration of their opi-
nion as to the merits of the act of 1844, and more definite
information as to the course which they intended to pur-
sue with regard to instituting an inquiry into its opera-
tion, in order that the country might deliberately and
fully consider and judge of the question before the Go-
vernment proceeded to Negotiate with the Bank.
The Duke of ARGYLL said that the noble lord had
somewhat misrepresented the answer given in the other
house by his right hon. friend the Chancellor of the Ex-
chequer, and repeated in that house by his noble friend
behind him (Lord Harrowby), In the House of Com-
ment} the Chancellor of the Exchequer distinctly an-
nounce change the Government bad no intention of mak-
ing any in the Bank Charter Act of 1844, but
any hon, member of that house was extremely
athnaxtio
uifs for an inquiry into the subject the Go-rem:ace
would throw no impediment in its way. The right bon
geutlemao did not intimate that hit thought an incoir,

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