The Sun.
London, England, 1844-06-14 00:00:00

to look on what they had done, although it mieht tippet!:
like the brazen serpent in the wilderness, they would
find that it had less than its healing virtues.
Mr. HUME could assure the Bon. Gentleman that
there was no necessity whatever for the'alarm which he
seemed to entertain. If he thought this measure would
lead to an extension of the franchise that would
be another reason why he should support it ;
but he found it would produce no such results. The
Hon. Gentleman seemed to labour under the delusion
that the precious metals were limited in their amount,
but the present state of the coffers of the Bank of Eng-
land was sufficient to dissipate such a delusion. The
Bank of England had at the present moment actually so
much gold that they did not know how to get rid of it,
and so long as England was capable of selling her pro-
duce cheaper
.than other countries, she would never want
for gold. This Bill maintained a gold standard with a
paper currency, convertible into gold, so as to make
paper of the same value as the gold. His Hon. Friend
who had introduced this motion had spoken to him on
the subject, and he had hoped that he might have been
able to support it. He thought it had been limited to a
statement which had been made by the Right Ho-
nourable Baronet, in which he attributed the fluc-
tuation to over-issue on the part of the country
banks. Now, at the present moment, it was impossible
that any Bank could issue a larger quantity of notes
than the country required, as long as those notes rested
on the basis of convertibility. The Hon. Baronet did
not carry out his own theory. One half of the currency
was convertible on demand, but the other half was not
of that character. Every bank note ought to be con-
vertible into gold on demand, but such was not the case
with country bank notes. They were convertible into
. Bank of England notes only. Now the holder of every
note ought always to be able to obtain its value in gold
on demand. The Right Hon. Gentleman, by continuing
the legal tender clause, destroyed his own theory ; for
a note was not currency if it was not immediately con-
vertible—it was commercial paper merely. He thought
there ought to be only one bank of issue, and that, as
the Government took upon itself to issue all the gold
and silver, it ought also to have charge of the
paper. He preferred metallic currency, but as a
mixed currency was more economical and convenient,
he did not object to it, provided the paper was made
convertible. lie knew not why the Bank of England should
have any privileges beyond the rest of the community ;
since the Government did not choose to take banking
into their own charge, they ought to have given all her
Majesty's subjects the same fair and equal chance. If
the Right lion. Baronet made all notes convertible he
might suffer the issue to be unlimited, for that would be
always checked by its convertibility. As long as notes re-
mained convertible, he would dely any set of men to put
forth more of them than the demands of the country re-
quired. A great deal had been said about the United
States, but those who had failed there, although they
might be called bankers, were not in reality such—they
were merchants and dealers. There was not an instance
of any hank which had acted on purely basking prin-
ciples having failed. Let them look at Scotland,
where there was no restriction as to issue. The number
of banks in that country was now twenty-five, and the
circulation had not been added to from what it hail
been when there were only six. They did not
issue more, but the issues were more divided.
Mr. Blair, in his evidence, had stated that he believed ,
that the whole of the notes issued by the Edinburgh
banks were returned every ten or twelve days ; and he
attributed it to the fact that no one had tiny inducement
to keep any bank notes in his pocket ; and they
brought them into the branch banks, whence they were
transmitted to Edinburgh. It was not possible to push
the amount of the circulation beyond what was sufficient
for the wants of the country. The amount of the cur-
reney in England was less now than it was ten years ago.
Instead of hoarding bank notes, as they did formerly,
people now deposited them either in savings' banks .or
joint-stock banks, for the sake of their interest ; and
in large transactions the currency was greatly
economised through the operations of the clear-
ing-house. This they were able to do with
a tench less amount of currency than formerly.
It wits not fair to attribute to the present system all the
benkrupteies which had taken place. The failure of
Wright's bank, in this city, one of the greatest failures
which had taken place, had no connection whatever with
the present system of currency. The Hon. 'Member
then quoted from Mr. Kennedy's evidence, to the effect
that he believed a single bank of issue would be destruc-
tive to ,t4eotland, and ilea, when there was a great deal of
bliii;en in e;;e Bank of England, the restriction of issue
would be limiter;. The effect of the extent of issue by
the country banks Lad been greatly exaggerated by
the Right lion. Baronet. ;shy, even in Ireland, where
the system of banking was impealect, there had not been
excessive issue. He (Mr. II.) denies net the issues of
private banks had anything to do with the exiepsive bank-
ruptcies which had occurred within a recent period, end
very little to do with the commercial stagnation which
had taken place. In 1819, according. to the statement
of the Committee of the House of Commons, the issue
of the country banks was fifty millions, and of the Bank
of England thirty millions. The Committee recbm-
mended an immediate contraction of the paper
issue. Accordingly, in 1820, the issue of the blank
of England was reduced to 23,000,000, and the quantity
of bullion in its coffers increased from three millionsiand
a half, - which it had been in the previous yea 4 to
8,000,000. On the 28th February, 1821, the issue of the
Bank of England was reduced to 16,000,000, and the bul-
lion in the coffers of the Bank had increased to
11,000,000, thus showing, that as the Bank of England
had contracted its issue, the bullion in its stores had in-
creased. The lion. Member quoted from nuinerouel
turns to show that extravagant issue on the part 01
Bank hail been productive of disastrous conseque]
and that as they restrained that injudicious circuit
the bullion in the Bank increased, and the currency
- came more steady. There was no good reason wild
Bank of England should be converted into a mono
by giving it such control over banks within sixty!
miles of the metropolis. He did not think therel
any need for obliging the Bank of England to kee
much gold in its coffers. He did not wish them to'
more than would enable them to change I
notes. As long as they kept up the corn-laws or
other system that caused such a drain upon the but
there would be derangements in the currency and ex
quent commercial embarassment ; and it must be
collected that this corn, in being paid for, had draw
le ,s than ten millions sterling out of the country. It was
nut necessary for him to go into any further details.. Ile
had shown where, in his opinion, the proposition of the
Government was sound and where it was unsour.d; and
though he should wish the measure modified in the in-
stances he had shown, he had still great pleasure in giving
his support to it.
Mr. WODEHOUSE said it was his good fortune. to be
placed in a part of the country where the banks were admirably
conducted, where the people were satisfied-with their ma-
nagement, and where they had the greatest confidence in
them. They deserved now the opinion which had been ex-
presesd by Mr. Iluskisson in 1810 when writing on the subject
et banking generally. That eminent authority said, " 'Many
p'e charge them as being at the root of the evil, but let the pa-
rent stock be restored to a sound state of health, and time va-
rious ramifications in the country would soon be found to de-
serve no blame." He ( Mr. Wodehouse) did not wish to ex-
tenuate the evils that had followed from a too great ex-
pansion of the currency, but he was afraid the govern-
ment would soon find that they had run into thei con-
trary evil, and had subjected the country to the chances of
. a too great contraction ; and, unfortunately, they weredeter-
seined not to give way at all—to permit of no relaxationi what-
ever of their plan. They said—" We will hold you fist and
tight," arid would listen to no suggestions—hear of no cempro-
sniSe. To him (Mr. Wodehouse) it would be much pleasanter
to go with the Government if he could possibly do so. But
• they left him no alternative; he wished to God they would do
so. Under these circumstances, he could only satisfy his own
• mind in the fulfilment of his duty by voting against the'propo-
Wien of the Government.
Mr. C. BULLER said, as he had a little to do with the
wording of the resolution of his Hon. Friend, he felt some dis-
appointment at the objections that had been taken to the form
of it. The Hon. Member for Montreal, objected to it. It
. seemed as if no one could be pleased with it. The Chancellor
of the Exchequer came forward, and with what was rather a
favourite taunt of the Government, said it would have been
more manly to have moved that the Bill be read a second time
that day six months; but his Hon. Friend did not object to
the renewal of the Rank charter, therefore be did not oppose
the great object of the Bill. Had he moved the second reading
for that day six months, it would have implied that he did not
wish the Bank charter to be renewed at all. It was not his
intention to go at any length into this question, but be must
state this, that it had never been clearly laid down with what
• object this interference with the paper of country banks was
made. SOme said that a large issue of paper by country banks
would endanger the convertibility of the paper by the Bank of
England. The Right Hon. Baronet said that it would check
over-speculation. Why had he read to them that long list of
private banks which had failed, except to intimate that he
was going to provide a remedy for this undue speculation ? He be-
lieved that the law as it stood did all that a legislature Could do
te put the circulation of the country on a sound footing.; He ap-
proved of the principle of the Bill of 1819. He thought it
was founded on honesty and common sense—it put an end to
what was a kind of lie by Act of Parliament. Notes being but
promises to pay, it enforced the payment of those promises as
it would enforce the performance of any others. He equally
approved of the Bill of 1823, which put an end to the'circula-
' Lion of one-pound notes. The Legislature might always inter-
, fere, net to regulate credit, but to regulate what were frauds
of credit. It had not been shown that the disasters of the
American banks were• caused by speculation in banking only.
They were caused by an over-Speculation in all kinds of trades.
There the system of small notes was carried to ex-
cess. The "-shinplasters," which . were in general
circulation, were notes of 2s. each, or half a dollar. Where
such notes as these were current, it was impossible for any one
to know the stability of the banks issuing them. He' thought
the Government was also right in taking those measures which
led to the establishment of joint-stock banks. He thought
'nothing was more unwise than limiting the number of persons
engaged in banking. The precautions that had been taken had
fatly answered, and wherever the failure of joint-stock banks
had taken place he believed there was no instance in which
the holders of those notes had not been paid. • The object of
•
the present measure was still farther to change the banking
system of this country. There could be no doubt that the ob-
ject of the Right Hon. Baronet in limiting the paper currency
of the country banks was to prepare the way for the ultimate
establishment of one bank of issue. Now this limitation
Ste (Mr. Buller) objected to. All their measures on this sub-
ject had hitherto been sound, but, in adopting this principle,
the Right Hon. Baronet was embarking on the unsound course
'of' limiting one particular form of credit. The only result
would be, that the people would resort to other forms of credit
which would be less safe. Much confusion had arisen on this
question by time u e of the term " paper- money ;" the term was
An inconsistent enc. . What was the proper meaning of the
. word money ? It was some peculiar commodity of value
• which all nations had agreed to take as the instrument of ex-
• change. What was a bank note ? It was nothing but a par-
• titular form of credit—it had no intrinsic value. It might be
a tangible instrument, but it was intrinsically worthless, and was
only a form of credit. He objected to the plan of the Govern-
' 4 ment, because it was delusive, and was calculated to produce I
2,lve 7st effects. He could not see upon what grounds the
Xi7,„..67irere meat were justified in pursuing the course they had !
could be no doubt that it was the intention of
• ee' tbe Hon. Baronet ultimately to put an end to private '
' t
-_lt was true
ie that he dtd,not attempt to do it in the' first instance; butas put such restrictions upon them '
as would cause them to give uPp"
titusciinieesusiaajtogoetfhteir.
The-present measure would cut down the
country banks from eighteen to ten millions. He cOnnsiderel

is•of