The Sun.
London, England, 1832-09-05 00:00:00

`for its own carculat:on P—l mean, that provided the
Batik were not liable to be called upon in the
inerney market of London for a large supply of coin
to uphold the country circulation, a less deposit of
bullion would be required.
Must not the demand for the country circulation
of gold from the Bank depend materially upon the
amount of the circulation of the Bank of England,
for which the country circulation have the power
to demand gold ?—I believe the country bankers
are possessed of so much property, and such securi-
ties, that I can hardly contemplate that contraction
of the Bank paper in London which would deprive
them of the power of obtaining the amount they
might require for providing themselves with coin
from the Bank.
Are there not circumstances which may occasion
a drain upon the Bank, other than what arise from
an unfavourable state of exchange P—Certainly.
Would not any state of commercial panic in the
country, from which a run upon the country bankers
may arise, send them to you for a supply of bullion,
though the foreign exchanges were not in a position
to induce the export of it ?—Certainly.
Was not that to a considerable extent the case in
the run upon the Bank in the year 1825 ?--I be-
lieve so.
Did not that run, which reduced your resources
so low, arise from circumstances independent of the
foreign export of bullion ?—Yes.
Therefore, after every precaution vou had taken
to keep your circulation in correspondence with the
state of foreign exchanges, you are still liable to
the other danger, of having to find bullion, not only
for the wants of the country bankers, but to allay
the fears and apprehensions of timid men who may
wish to have in their possession more than in any
emergency they may want ?—Certainly ; it is that
circumstance that impresses me with the necessity
for a larger deposit of bullion than otherwise would
be requisite.
Would not the larger to which you :mode be
remedied, supposing there were otherwise no objec-
tion to it, by providing by law that the country
banker might make his payment in Batik of Eng-
land notes ?-4 think that some substantial relief
would be afforded by that arrangement, but it would
not entirely remove the difficulty.
Would it not so far remove the difficulty, that the
outlet of the coin would be at the Bank of England
alone ?—Certainly.
Was not the difficulty of which you have been
speaking in the year 1825, when there was such a
run upon the Bank, unconnected with any foreign
demand, in fact met by the re-issuing of 1/. notes
—At Norwich it was, and I believe at one or two
other places.
Did any communication take place with the Go-
vernment relative to the amount of the circulation
of the Bank in May, 1825, or previous to May,
1825?-1 cannot answer that question.
Do you recollect the speech that Mr. Huskisson
made in the House of Commons in May, 1825, re-
lative to the conduct of the Bank IP—No.
At what time did the Bank become apprehensive
of an altered state of affairs in 1825 ?—I was not in
the Court in the year 1825, and am therefore unable
to answer that question.
In the amount of two-thirds, which you think the
Bank should keen invested in securities, what pro-
portion do yoti calculate as necessary to he available
within the period of three months ?—lt has always
appeared to me to be immaterial, provided they be
marketable.
What proportion do you consider it is necessary
should be marketable P—l think all the securities of
the Bank held against their liabilities, should be
marketable,
And the dead-weight you consider as one of the
marketable securities ?—Certainly.
Do you include the Deficiency-bills in your secu-
rities ?—Yes; the Deficiency-bills are always paid
off in the course of the quarter.
Do you consider them as marketable ?—They
never are sold, but they would be marketable, pro-
vi' ed the Government consented to their being sold.
Referring to the circumstances of commercial
alarm, which occasionally causes a demand upon the
Bank, does the Bank take into consideration that
subjects of political alarm might render the Bank
liable to a drain of gold from the holders of stock as
well as from the holders of notes P—l have always
thought it impossible for the Bank to be able, under
any circumstances, to guard against political discredit.
Do they keep, in fact, the means of meeting any
demand for gold, arising from what might be called
a political discredit ?—No.
You state that in 1825, the supply of 1/. notes
from the Bank was serviceable in'checking the alarm
of that period ; was not the Bank in the habit of is-
suing I/. notes prior to December, 1825 ?—Na, not
subsequent to their having been called in.
But they happened to have a supply of 11. notes ?
—Yes ; they were printed before the notes had
been withdrawn.
Have the Bank now any provision of I/. notes ?
They have the remainder of the stock of 1825. 1
believe there was an additional amount of 1/. notes
printed at that time.
Have they a considerable amount now in readi-
ness for circulation P—l shall be very glad to furnish
any return the committee may please to order on
that subject.
Has the Bank considered that it might, under
circumstances of commercial or political alarm, be
an useful provision to have 11. notes ready for issu-
ing ?—I believe I can safely state, that of late year.,
they have made no provision whatever with regard
to such contingencies.
Were riot the Bank restricted from signing 1/.
notes after October in 1826 ?--I believe they were.
Did the Bank issue any 1/. notes between 1821
and 1825 ?—They did not issue any small notes
from the time of their being called in, which I believe
was in 1821 or 1822, until the year 1825.
Can there be any doubt that that issue of If.
notes made in 1825 had a most beneficial effect upon
the transactions of this metropolis P—l believe that
it proved beneficial in stopping the run upon the
country bankers.
You stated, that you calculated upon requiring a
larger deposit of bullion, in consequence of the de-
mands of the cautery banks; are you not aware
that the demands of the country banks arise prin-
cipally from the demands of the public upon them,
and that they are merely the medium through which
the demands of the public come ?—Certainly. I
presume they are the demands of the public.
Is not the general system of the country bankers
this—to issue as much paper as they can, without
reference to what is to become of it ; or rather, is
there in the whole system of banking any one body,
but the Bank of England, that puts any check or
restraint upon its issues from pi udential considera-
tions P—l imagine that security is the first object
of a country banker, provided the securities be good
which are tendered to him, and such as he considers
to he strictly marketable. I imagine that he has no
objection to issue his paper upon them.
Are not the Committee to understand it to be
your opinion, that although the country banker may
issue with every consideration of prudence as to the
security upon which he issues, yet that the care of
proportioning the issue of paper to the state of ex-
changes or the state of bullion of the country, is
solely under the management of the Bank of Eng-
land ?—I imagine the Bank of England to be the
only body which has knowledge of the actual state of
the foreign exchanges.
And the only body that regulates its issues by
that principle ? Certainly.
Dow do you regulate your issues according to
the foreign exchanges ?—By the notes being re-
tunied for gold or silver fur export.
Do you regulate them from the return you have
of what the foreign exchanges are, or from the action
which takes place upon the Batik ?—The action
w filch takes place upon the Bank.
Do you find that the alteration in the action upon
the B It iS simultaneous with an alteration in the
rate tlereign exchanges, and that it is the case in-
ft
varie 11 ?—pertaiUty. P::::- i—d)
Do you notitotneti;nes atitcipate the actual action
upon the Btitik 64 the demand for gold, when you
there is a tendency in the foreign exchanges to

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