The Sun.
London, England, 1857-03-14 00:00:00

FIFTY THOUSAND POUNDS PER ANNUM.

The only ground on which the advocates of
the Bank Charter Act now attempt to sustain it
is, that it insures the immediate convertibility of
the Bank note 1 That, under any circumstances,
the holders of Bank of England paper are certain
of obtaining the specified amount, without delay
or annoyance. In this respect it has been stated
to be the necessary complement to the Act of
1819, without which there would be no ade-
quate security for the effectual maintenance of
specie payments. Mercator has definitively aban-
doned all pretences respecting its preserving an
equable rate of interest, or even .not occasioning
great fluctuation therein. " The immediate re-
demption of the paper issues" is the motto he
has adopted—the sole ground that he puts for-
ward, and if that fails, cadit questio, the Act can-
not be sustained or justified.
Let us, then, examine how far that single
alleged advantage is well founded—whether it is,
indeed, justified by the real fact, or whether, as
we distinctly and unequivocally assert, that
precious convertibility, for the maintenance
whereof so many sacrifices are sustained, so much
misery and suffering, is not, and has not been,
greatly endangered by the very law whose sole
recommendation is, that it prevents the possibility
of such a calamity.

Before we enter into this part of the subject,
we shall refer to the speech of the Chancellor of
the Exchequer, in which he confirmed that which
we long since put forward, viz., that in the-event
of the insolvency of the Bank of England, " all
the creditors, the note holders, and depositors
would have equal rights and equal claims to the
general assets of the Bank," that in such a con-
tingency the funds of the Bank would be consi-
dered as one, notwithstanding the separation of
the arguments. Arguing on this assumption, we
shall proceed to show what not only might, but
unquestionably would, have been the result but
for the issue of the letter of the 25th October,
1847, which virtually condemned and annulled
the Act of 1844—and the opportune discovery of
the auriferous regions, wbich enabled the Bank
with difficulty to meet all demands, and to main-
tain the convertibility of the Bank note, despite
the restrictions imposed by the Act.

But for that letter the Bank must have closed
its doors within a few weeks if it could so long
have withstood the pressure. The reserve in the
banking department on the 23d, both of notes and
bullion amounted to only 1,994,516 L not only
for the parent establishment, but for all its
branches. The amounts were thus distributed :—.

Notes in London £981,615
Do., in the Provinces
Gold coin in London
Do., in the Provinces . 78,399
Silver Coin in London 104,045
Do. in the Provinces

The proportion—Notes . £1,547,276
Specie 447,240

This comparatively insignificant amount was
further reduced within the following week. On
the 30th October it stood as follows :

Notes in London
Do. iu the Provinces 608,270
Gold in London 151,053
Do. in the Provinces
Silver Coin in London 105,787
Do. in the Provinces 52,990

Total—Notes £1,176,740
Specie

£1,606,384

' These simple " facts and figures" will explain
the position of the qtcssi National Establishment
better than a score of far-fetched argu-
ments to prove—or rather to attempt to

prove—what might have been done had the

Government refused to incur the responsibility
of illegally setting aside the express provisions of
the Act; and, be it remembered, that the insertion
of a clause in the Bill of 1844, investing the Go-
vernment with such a relaxing power, had beep,
fully discussed and deliberately rejected—(a mat-
ter which induced the celebrated remonstrance of
the London bankers of the 11th June, 1844.)
The total means of payment were, in round num-
bers, 1,600,0001., and there were notes issued
beyond the amount of bullion deposited in the
vaults at Threadneedle-street, 14,000,0001., and

deposits to the amount of 14,500,0001., of which
the deposits of the London bankers alone exceeded
2,000,000/. ; so that by combined action, which,
in self-defence, they should have been com-
pelled to adopt, the metropolitan firms
might have brought the career of the Old
Lady to an ignominious conclusion in a
single day. The Governor and Deputy-Governor
admitted that if any one, had called for anything
beyond that 1,600,000/. " they must have
stopped payment." Where, then, would have
been the boasted convertibility of the Bank-note ?
Where the security for immediate redemption of
the paper issues, which " Mercator" now tells us
was the sole object of the Act ? It is true that
there was at that moment bullion to the amount
of nearly 7,000,0001. lying idle in the issue de-
partment of no greater utility than an equal
weight of paving stones, that, but for the separa-
tion between the two departments, and if the
Bank had been conducted on the old principle,
instead of being within 1,600,0001. of stopping,there
would have been very nearly 8,500,0001. of trea-
sure in its vaults. But after the 1,600,0001. had
been paid over the counter, the balance-sheet
would have been thus :—Creditor, bullion,
7,000,000/. ; deficiency, 27,000,0001. ; total,
34,000,0001. Debtor, notes, 21,000,0001.; de-
posits, 13,000,000/. (deducting the 1,600,0001.
paid). Total, 34,000,000/: There would thus,
as we have already shown, been less than 21 per
cent., or 4s. 2id. in the pouad for noteholders
and depositors—" a beggarly dividend, less than
paid to the creditors of the Royal British Bank."

The other assets, excltisive of bills, were the
dead weight or annuities for terms of years, which,
it was admitted, could "not always be disposed
of," and certainly not under tlfe then 'tate of

affairs. There were also some 2,000,0001. of
consols, which the Governor thought might have
been disposed of—at a great sacrifice, and
the sale whereof "might have strength-
ened the reserve by about one million."
His experienced colleague, Mr. HORSLEY PALMER,
however, differed completely from this view of
the case. He said—" It would have been quite
impossible in the state of public feeling that then
existed to have gone into the market with a mil-
lion or a million and a half of securities, and
have found Bank notes for them." While Mr.
GLYN, an unexceptionable authority on such a
point—declared, "I should say from what r saw
at the time—that a sale of a million or two mil-
lions, which were the figures talked of, would
have been almost impossible, without knocking
down the funds to such a price as would have
caused a further panic." While Mr. BROWN,
M.P. for South Lancashire, doubted "whether
they could have been sold at all I" and thought
that, were it even possible, " the remedy would
have been worse than the disease." The Ho-
nourable Gentleman gave the following graphic
account of the emergency—" There was a com-
plete want of confidence between man and man.
Hardly a contract could be entered into. Such,
indeed, was the general feeling of instability and
alarm, that by the last packet advices had been
sent by many firms to America countermanding
the orders which they had given for the importa-
tion into this country of articles of such prime
importance as food. The same distress prevailed in
other branches of trade at Manchester, and pro:
ducers of goods for foreign exportation there
were most unwilling to go on increasing their
stock, and were actively attempting to convert
their bills into bullion. In fact, both as to
imports and exports, we were at a dead lock. The
last accounts, too, from the United States were,
he feared, not so flattering as he could have
wished, either as to the supply of produce, or as
to any prospect of the exchange being such as
would prevent further demands on us for gold ;
and the alternative of either allowing the drain
to continue, until we parted with our remaining
gold, or, of permitting the people to starve.
The position of the country was simply this—that
mills and manufactories were closed and closing
—that operatives were being thrown out of work,
and that artisans and workmen of all sorts were
becoming in an equally distressed condition" ! 1 !
The measure aid representative of value had,
in fact, almost altogether disappeared—with an
impending famine, neither flour nor cereal pro-
ducts of any description could find purchasers.
But better, far better, according to the heartless
theory of the bullionists, to permit the people to
starve—to see our famishing brethren perish in
the streets from actual hunger, than to relax a
single restriction, or endanger " the converti-
bility of the Bank note." The lives of the
people were as nothing when compared with "the
integrity of the standard !"

And yet, with these unquestionable facts, of
all of which he was perfectly cognisant, and which
we defy him to deny in the slightest particular,
MERCATOR has the reckless audacity—the un-
blushing hardihood—to declare, that " the Act
accomplished all its legitimate functions on the
occasion, and all went well (!) with the issue de•
partment !" and to announce his conviction that
" the steady force of sound principles (1), the clear
deductions of scientific reasoning (! !), the emphatic
verdict of experience (I I I), will not be hastily
overruled 1" If what we have detailed above be
the " legitimate results of the Act, then ought its
framers to be held up to execration"—for never did
' malefactors mere eminently deserve condign pu-
nishment at the hands of a betrayed and exaspe-
rated people, driven beyond self-control by the
extremity of misery and destitution.