The Sun.
London, England, 1832-09-21 00:00:00

1

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'4. awe beef' aft,riled to the commercial
iyiachhiS 'hie 'usury laws had not existed .?—I think
possibly there might.
Do you see any objection to their repeal 2—De-
cidedly not.
. .
Upon the occasion of the renewal of the charter of the
Bank of England, supposing Parliament shall renew it,
can you, from your experience, suggest ra:ay alteration or
modification of the system of banking under the Bank of
England, as it -at present exists?--t am not prepared to
offer any modification as far as regards the London busi-
ness, conceiving that the Bank of England as a bank of
issue, in connection with the private bankers as banks of
supply to the trade of London, forms a system which could
not easily he improved. With regard to the country bu-
sines., there are two points which I think might perhaps
be modified ; the first is the prevention which is now ex-
erci,ed by the Bank agrinst the joint-stock banks making
their notes or bills under 50/. payable in London; the se-
cond is the line of sixty-five miles which has been drawn
round London, preventing the establishment of any joint-
stock banks within that district; perhaps twenty or
twenty-five miles might be sufficient to give the Bank of
England the circulation of London completely, tvithotit
interfering unnecessarily with oilier establishments.
Do you conceive that by the conduct of the Bank of
England, as far as you are able to ascertain, any great
fluctuations have been produced in the value of money ?
In the last three or four years I do not think there have
been.

The question refers to the time since the Bank- re-
striction was taken away in 1819?—These fluctuations
have occurred occasionally.
Do you consider that those fluctuations.bave been oc-
casioned by any want of discretion in the Mariagetnent of
the affairs of the Bank ?—There has been occasionally an
anxiety to increase the issues of Bank-notes, which proba-
bly may have promoted those fluctuations, with a,corres-
yowling desire existing on the part of the country bankers
at the same time.
Do you believe that the issues of the country bebkets
are increased always when the issues of the Bank of Eng-
land are increased?—Not by any means necessarily; very
often it acts in the other way. .

Prom your observation should you say that, tibey the
Bank of England have been endeavouring to contract their
issues the country bankers have increased theirs am
afraid that my evidence upon that point' mt.& he imper-
fect, because it only arises from what I hive seen in Lon-
don ; but I should say that about the middle of 1825 there
certainly was a tendency to increase their issues upon the
pirt of the county banks when the Bank was trying to
decrease its circulation. _ _ _

Would the knowledge that the Bank of England were
trying to decrease their circulation have any effect upon
the conduct of the country bankers?—l do not thjok they
regulate their operations by any expectation of what the
Bank of England is about to do, or with any refe'rene'e to
the exchanges which operate upon the Bank ; they depend
necessarily very much upon the demand in the part'of the
country where the hanks are situated. -
At present the conduct of the Bank of England is en-
tirely under the control of the Directors ; do you think
that it would be advisable in any way to put a check upon
the entire discretion of the Directors ?1-I am not prepared
to answer that question ; it is one to which I(have never
turned my attention any further than to the consideration
that the publication of the accounts might .syrye as a
check ; but that has always appeared to me to be a matter
of great difficulty, connected as they are With the bullion
hell by the Bank of England.
What accounts do you think could be published with
safety by the Bank of Eneland?—All the accounts of, pro.
fits and loss, if. Alley can be disconnected from the bullion
accounts ; liutl am not prepared to say more upon that
division of them, because I am not aware how they are•kept.
Do you think that the publication of the•amount oitheir
bullion could be safely made ?—I confess it ,is sohj,ct
up oi which I should entertain considerable apprehension.
Do yen think that if the Bank published an account of
the bullion in their hands six months previous to the
period of publication any danger would arise froth that ?
That would be some diminution of the risk;esrtainly ; but
I am not at all sure whether, even with that precaution,
it would not have a tendency to create speculation upon a
koowledge of the fact. ,!• • t •
Do you apprehend that the general knntolNlgc.of the
bankers in London does not lead them to make a tolerable
estimate of whether the Bank is well supplied with bullion
or not at the time?—l think the hankers have •an.oppor-
tunity of making a tolerably correct estima,te‘oCthefacts;
but I think it is confined very much to the,biokers,
Do you think the knowledge of what amount of bullion
the Bank had six months previous wouldin-crease, to the
bankers and persons concerned in the dealln.F or Money,
very considerably their accurate knowledge of the amount
of bullion at any particular period ?—I tic not think this
is 'o much the question to which the bankers in London
tarn their attention as to the immediate opration of the
exchanges; fur, although the bankers are not directly
atfucted by the exchanges, there has been ofiateivars an
inclination upan the part of the private bankers to, regulate
their operations, as far as they can, by, t 1 exchanges,
knowing that they must eventually affect the amount of
Bank-notes in circulation.

Would you then, upon the whole, prefer that the Bank
of England should act without any inure control than
there is now upon the Direction ; or would you endea-
vour to put some further control upon it am not
aware of the mode in which further control can be put
upon It.
May not there be demands upon the Bank •of ;England
without any consideration of the rates of exchange?—
Certainly ; political causes alone might create a, demand
for gold.

'—C:early, during: tlie.,neptiation

For foreign purposes?.
of foreign loans.
You weie asked, on a former day, if you could state
the comparative amount of notes which you paid durint
the first six months of last year, and the saint period of
this year ?-1 am prepared to say that during the six
months of this year, compared with the—six months of
1831, there has been a considerable diiniritltitin'in the
amount of country notes paid by us in London ; I should
say it is full one-eighth less.
To what do you attribute that?—There has been a-great
slackness in trade all over the country; there has been
less demand for money than there was in the former period,
and as there has been less currency in the country so there
has also been in London.

You have stated that now and then you think there has
hen an over-anxiety on the part of the ljank,toextend
their issues ; can you suggest to the Cummittie any altered
state of the banking system, as regards the Bank df Eng-
land, or any check -that could without incluivenience be
pet upon the direction of the Bank of England, which
worrle4 be likely practically to obviate those 000asionpl ex-
cesses ?—.lt seems to me almost impossible to vut any_check
upon the Direction ; it is a point which must be left to the
discretion of the Directors. Ido not conceive that there
could be any superintendence of the Directors tvithout
such a daily interference with their transactions as, would
render it almost impracticable to carry on .htisiness.
You do not think any number of charter-el 'bank., is-
suing paper in London, would be likely to make their
issues mere judiciously or more temperately ?---4*T4,• I am
not inclined to think that adding to the number would
lessen the evil ; probably the contrary.
Have you had occasion to observe tbat there has,t.teen an
over-anxiety occasionally on the part of the Bank to di-
minish their issues ?—No ; there has been wpropir'anxiety
very often manifested, and a necessary caution exercised,
to keep down their issues at certain times, according to
the fluctuations of the exchanges.
What has been the effect ?—lt has caused occasionally a
temporary pressure upon the money market; but within
late years I do not recollect any particular evil that has
been produced by the diminution of their Mats. • •
Has that pressure upon the money market been accotn.
partied by lowering the prices of commodities ?—I cannot
remember any particular instance in which this diminu-
tion has brought about at the time any lowering of prices;
the general Effect may have been subsequently- to lower
prices, but probably other causes have aeteil with it to
produce that ffect. •
Then the circumstance of a diminution of Issues on the
part of the Bank of England, not operating immediately
upon the price of commodities, wotild "have pro-
duced no immediate effect upon the exchanges?-=Except
that of rendering money more scarce in London, which of
itself has an effect upon the exchanges, without immedi-
ately acting upon commodities.
How does scarcity operate upon the exchanges ?—lt is
done by anticipation of its effect upon prices ; it is not the
actual tact that a certain large amount of banlc-notes is
taken out of the money market on any patliculair, day, but
it is the expectation on the minds nit the people thst from
the course of the exchanges a diminution of the currency
and a reduction of prices will eventually fol!otir; which
prevents orders from going abrcad ; the effect is not pro
duced by any immediate operation upon the prices of com-
modities, but rather by the anticipation-of the, probable

onsequenees.
With reference to that anxiety on the part of the Bank,
to which you have referred, to increase their issues, how
does it appear ?—I should more particularly allay to the
transactions in 1824 and 1825•

Through what channel did they make the issues to
which yon object ; do you mean that they discounted hills
too largely ?—I did not allude to that; the probability