The Sun.
London, England, 1832-09-06 00:00:00

management !bat you mentioned on the former day,
such as not favouring commercial discount, and act-
ing, in contracting your issues when the exchange is
adverse, according to your definition of an adverse
exchange, have those principles been recognised and
di-cussed by the Directors at large, or are they only
princ:ples brought into action by the Select Corn•
tnittee as the occasions may have arisen ?—All

matters relative to the management have been recog-
nised by the Court at large.
Aber di,,cussion ?—Discussion has taken place,
and the principle has been recognised.
Were you rightly understood that, in the event of
an unfavourable exchange for a length of time, the
Court of Dire.cters took no measures, by contract-
ing their issues, to amend the course of exchange ?
—I mean to maintain that the Court of Directors
have taken no measures, within the last period o 4
18 months or two years, for the purpose of oontracr-
ing the circulation ; that the contraction bas been
almost effected entinly by the return of notes for
gold and silver.

How long have the Bank conducted their affair,
upon this principle ?—The Bank har•e not had the
Power of acting upon any fixed principle till a late
period, subsequent to the year 1825.
Why was that ?—From various circumstance,
that existed prior to that period; from the yea,
1819 to 1822, the preparation for return to cast.
payments under the order of the House of Com-
mons,—the conflicting character of the circulation
of the country and London, governed as the coun-
try was by a small note circulation. So long as the
Bank was liable to that internal demand, the Bank
could hardly be expected to adopt any system such
as I have alluded to.

Will you explain more at large in what way thr
state of the small note circulation operated so as to
interfere with the management of the Bank ?—lt
rendered the 'Bank liable to a very great sudden de-
mand; for instance in the year 1825, from October
to the let of December, the demand upon the Rink
vas nearly two millions and a half sterling for the
support of the country circulation) when the ex-
changes were nearly at par, if not entirely so, and
which placed the Bank in a very peculiar state of
difficulty. The whole difficulty of that period, with
regard to bullion, arose from the magnitude of that
demand.

You conceive the magnitude of that demand was
very much increased by the small note circulation
of the country ?—t consider the demand was almost
entirely to uphold the small note circulation.
Will you explain why you are of that opinion ?
Because the holders of small notes are the louet
orders of the people, whose fears are more exten•
sively acted upon in times of distrust, and there
having been no exchange for the li. note but the
sovereign, the demand upon the Bank became in-
evitable.

Were you not alio pressed for gold very much by
the London bankers, who were called upon to send
it to bankers in the country for that object ?—That'
was the channel through which the supply was sent
to the country.
At what date were the Bank compelled to with-
draw their own cne-pound notes ?—They were not
compelled to withdraw their one-pound notes when
that measure was adopted ; the Bank anticipated
that period ; I think that it was in 182! they paid
off the notes of that description.

The period was in 1822 when the Bank woult
have been bound to pay them, was it not ?—I be.
lieve it was.

Would not the country bank-notes have beep
abolished in 1823, if Parliament had not in 1822
extended the period for one-pound notes ten year,
longer ?—Yes.

Was not that at the stmgesticn of the Govern-
ment of that day ?—I do not know whether any
ether parties promoted it.
You have stated that there was a great drain upot,
the Bank for coin in a certain period of 1823, for
the country circulation ; have you the means of dis-
tinguishing pretty accurately what bul:ion i 4 drawn•
cut for the purposes of internal demand, and wha•
for foreign export ?—lt is difficult to ascertain tha•
correctly ; but we have the power of forming at•
opinion from the channels through which it passes.
Nave you the means at the Bank of showiq
those precise circumstances in 1793; what propor-
tion of the demand at that time was for the countr)
bards,?rs, and what was the demand for export at
that time ?—I cannot answer that question wirhout
reference, but I ttil! make inquiry whether the in-
formation can be given.
Has the demand for gold upon you for the pur-
pose of internal circulation been materially dimi-
nished since the circulation of 1/. notes has been
prevented ?—The occasional demand has been ob-
viated.

Has there not occasionally been a pressure for
such gold, nearly amounting to the pressure tha
took place during the time of the circulation of 1/
notes ?—During the last fortnight there has been
very considerable pressure for an internal demand)
but that I take to have arisen from a totally different
cane ; the demand has been one of political dis-
credit, and the Committee, perhaps, will understand
the character of au discredit, when I mention tha•
there is no return to the Bank, down to this day, of
any part of this issue.
Is it not true, that when, on a recent occasion,
the Bank of England gave notice that they would
lend money upon securities at four per cent., which
they have done lately at an caviler period than they •
were accustomed to do, that that very act upon the
part of the Bank had the effect of putting an end tc,
that run, like magic ?—Not for gold.
Can you state whether the gold went to Sealant],
or England, or to what particular part, in the las,
fortnight ?—ln the last fortnight, the Bank sent
down to the branch banks about 400,000/. ; the)
have issued to the London bankers about 400,0001
more, arid I believe the London bankers generally
paid bank notes, leaving the Bank to pay the gold
for the notes at the Bank itself. The issues to the
branch banks and the b Hikers were, together, above
800,0004 ; the issue to the public, at the counter
of the Bank, was about the same amount : making
in the whole about 1,600,000/.; arid in addition, the
sum that went cut for the dividends, in April, ha,
cot returned. The common course of circulatim,
is, that what goes out for the dividends at the com-
mencement of the quarter, comes back towards tlo-
termination. Therefore, I believe the whole ab-
sorption at the present time to be nearly two milli-
ons sterling.
Was there no demand for the Scotch Banks, that
you could ascertain to be for the scotch Bauas ?
Only by conversation.
What conclusion would that conversation. lead
to ?—lt would lead to the supposition that the
amount was about 1,000,0001.
Does not the demand for the internal circulation,
made upon the Batik of England, come through the
London bankers, and not direct fiom the country
hankers ?—lt comes through the London bankers
an 1 the branch banks..
Can you state the relative proportion of the de-
mands for gold within the last fortnight at these
three places—at Birmingham, Manchester, and
Liverpool, and in what degree they differ ?—By re-
ference I could. At Birmingham, 154,000/.; at
Manchester, 11S,000/.; at Liverpool, the receipt,
and issues were nearly equal.
What particular characteristic did that political
demand assume, according to the opinion of the
Bank ; was it from discredit, or was it from any
other assignable cause?—lt appeared to have the
character of political discredit (this is merely infor-
mation that I received from other persons), from
the sale of stock by small holders, who demanded
sovereigns for the notes they received for the stock
sold. My opinion is founded upon the fact of r.
number of persons applying for one, two, or three
huterred pounds, who stated the demand to be in
payment of the stock sold. They appeared to be
persons of respectability.
Did it appear to you that the demand for gold
was for the purpose of forwarding any political end?
—I think it was one of alarm entirely ; and I ap-
prehend it was alarm, because the gold does not
circulate; the gold is clearly to this moment in the
possession of the parties who received it; and the