The Sun.
London, England, 1828-07-04 00:00:00

SCOTCH PROMISSORY NOTE BILL

The Duke of WELLINGTON moved the order
of the day for the second reading-of this Bill. The
object was to carry into complete execution the law
of 1826, its intention beingto prevent the circula-
tion of Scotch bank notes under the value. of 51.
within the .kingdom of England. 'lbis measure
came recommended to Parliament by the proceed-
ings of two Committees—one of this House, and one
of the other House of Parliament—and those Com-
mittees go so far as to say, that if the circulation of
those notes cannot be prevented, and if no provision
in law can be made sufficiently strong to prevent
their circulation, it would be better to put an end
to their circulation in Scotland altogether. It was
quite obvious, and it was so stated by the Com-
mittees, that if such circulation of 11.- notes were to
be permitted within this country, it ought to be the
circulation of 11. notes issued by bankers residing in
the north of England, and not in Scotland. It was
obvious that it was a hardship upon the people of
England, who received those notes, and who were
under the necessity of receiving them if circulated,
to be -obliged to go and seek for the metallic value
of those notes beyond thel frontier. That was, how-
ever, not all, for they must not only go and-seek for
this metallic value from the Scotch banker; who was
good security, bat if that systeni'was not prohibited,
it was quite obvious that bank establishments
would be - set up in all parts of the frontier,
for the purpose of circulating those notes within
England, and thus defeating, by what was almost • a
fraud, all or a great part of the object of the mea-
sure of. 1826. He was abroad at the time that
measure was adopted; but he must say that he con-
curred in that measure. It was a measure of Lord
Liverpool's Government, founded upon the neces-
sity of the time,--a necessity growing up to that
period, and which, in 1825, amounted to such a de-
gree, as to render that measure absolutely necessary.
And he did not found the necessity of this measure
upon any theories, which, as stated by a Noble Earl
the other day, we ought to avoid, in considering a
question of this description. He did not found the
measure of 1826 upon such theories, but he must
say, that the experience of the last few years 'had
proved the falsity of another, which was stated in a
former Conimittec,—he meant the theory that all
was slfe provided notes were convertible into gold.
He-did say that the experience of recent years had
proved that theory not true.—(Hear.)—But that
experience bad proved likewise the truth of another
theory—namely, that U. notes and gold sovereigns
-could not circulate in this country at the same period
of time. That had been proved by the transactions
which had taken place in recent years. If you have
gold- in circulation, the advantage of which no
man deny, you cannot have one pound - notes.
Under these circumstances there could be no
doubt that the measure of 1826 was a proper
• measure to be adopted. It was contended by
his Noble Friend opposite (the Earl of Carnar-
von) the other day, that the -measure of 1826 had
inflicted great evils on the country ; thar the people
had been thereby deprived of facilities of trade, and
been subjected to all those numerous other disad-
vantages so often pressed forward in argument upon
this subject; but he had left out of the question all
the evils which had flowed from'the breaking of the
banks. His Noble Friend had lost sight of the fact
that paper was but a fictitious capital, and that it was
the evils which it entailed that had obliged Parlia-
ment to put it down. - Why should they have re-
course to paper, when there was no want of capital,
no want of currency in England ? That there was
no want of capital; was proved by the state of -the
funds, and by the readiness to embark in any scheme,
however distant the scene of its proposed operations,
which promised to return any profit. It had been
asked, if the measure in .question was good for Eng-
land, why was it not to be extended to Scotland ?
But there was a great' difference between the cir-
cumstances of the two countries. In the first
place, the banks in Scotland were on a much
more secure footing than those in England. They
were established on a different foUndation, and did
business on a different system, altogether from the
English #banks. In Scotland all the banks were
a cheek on each individual esta,blishment. Upon
the whole, the system had worked for the prosperity
of that country, and he should therefore be sorry
to take it from it. But then, he asked, could that
establishmentebe so carried on in Scotland, if there.
were -not a well-established metallic currency in
England ? If they could not procure gold from
time to time from the Bank of England, they could
not carry it on. Then the only'question that re-
mained was, were there the means of executing the
measure of 1826, of which he was now ' Proposing
the completion ? Upon this part of the subject he
must trouble their Lordships with a reference to sonie
figures, to show the amount of currency at present
in circulation. It appeared, from the number of
stamps issued, that the quantity of 1/. notes put
into circulation in 1822, 1823, 1824, and 1825, was.
9,075,500/. Out of that stun 1,075,0001. circulated
in Scotland, leaving in circulation in England
8,000,000 of 1/. notes. Out of that sum it was cal-
culated that one-fifth was kept in reserve. It was
true, moreover, that one-fifth of the banks broke. in
1825, and their notes must therefore be taken to be
out of circulation. Adding, then, to that 2,500,0001.
the amount withdrawn at that period, the sum not
then in circulation amounted to '5,700,0004 ;
ducting which froin 8,000,0007., left 2,300,0001. at
present in circulation. Now a part of that must have
been in circulation since 1822. This was the nearest
approximation to the truth that could be arrived
at. Now, then, what WaS the amount of the
cltircailil the 11. notes ?
besides
en their Lord-
ships' table, that the Bank issued between the
yeari; 1821 and 1828,78,830,000 sovereigns ,of which
t hey had received back 50,417,000,1eaving28,365,000
still out. From August, 1824, to December, 1825,
there had been. exported 6,090,000, leaving in cir-
culation at that time about 20,000,000 of sovereigns;
and
.since then there had been issued .2,300,000,
making altogether 22,475,000 sovereigns now in
circulation. In addition to that, there were 8,000,000/.
of silver, 20,000,000/. of Bank of England notes of
.51. and upwards, and 13,000,000/. of country bank.
notes of Si. and upwards, So that, besides the 17.
notes, there were no less than 13,000,000/, of country
bank notes in circulation in this country. Now,
Just to show the abundance of metallic currency
aich existed; there had been coined, since the

Icommencement of tnepresent coinage, not less than
40,000,000/. in gold, and 10,000,0001. in silver; so
that there was. 50,000,0004 of metallic currency still
in the country, except the 6,000,(100/. which had
been exported. Feeling, then, that there must be a
currency in which - the country could have confidence,
—one which would nor be liable to sudden fluctua-
tion, and consequently calculated to produce such
scenes of confusion and misery as had been witnessed
in 1825,—feeling also that the country possessed
the means of obtaining a currency upon such,solid,
basis, he had no difficulty in corning to the conclu-
sion, that they might safely adept the measure now
proposed.
The Earl . of CARNAIWON—•The Noble
Duke said, that if this Bill 'were • not pass d it
would be better to put an end to Scotch Banks
altogether, in order to protect the north country.
men from the incursion- of the Picts and Scots.
But he (Lord Carnarvon) thought that they might
with great safety be left to take 'care of their
own interests; without putting on the statute-
book this monstrous anomaly in the shape of a penal
statute. If their Lordships recollected that the Bank
Charter had but four years to run, he could not con-
ce;ve that there would be, any difficulty in procuring
such an arrangement as would leave the currency.on
the footing of last year, without carrying the measure
of 1826 into execution. If that measure were car-
ried into effect, not only the I/. notes, but the large
notes also- must be withdrawn; for he (Lord car-
. narvon) hithself knew many bankers who were now
preparing to call in their a notes, to prevent tl:e
run which must take place when the 1/. notes ceased
to circulate: He also feared the. consequences of the
great diminution it would occasion vf the limited fa-
cilities which the farmer at present possessed. It
had been said that. the panic of 1825 was attribu-
table to the circulation of bank notes. NoW he (lid
not believe that any diminution of bank notes would
prevent the recurrence of such a crisis again. Many
crises had taken place before that, which could not
be attributed to W. notes. Scotland had her 1/. notes,
and yet she had not been visited with such a crisis.
It was not, therefore, the want of a Wholesome cur-
rency which occasioned panics or convulsions of this
description ; and it was, therefore, not necessary to
draw a cordon sanitaire round the frontiers of England.
But even admitting that the panic of 1825 had been
occasioned by excessive paper credit, the 11. bank
notes bore a Very small proportion to other descrip-
tions of paper. Even if there were an increase of
3,000,0004 or 4,000,0001. of small notes there was'
also an increase of many millions in bills Of exchange
and other paper securities. Then 'Why wage War
against the small notes, as tieing the cause of all the
mischief? But perhaps he should be told that, all
paper security should. be put down. Let their Lord-
ships do so—let them have no , security but gold.
But if so, he could assure them they would soon re-
dice the country to a state of absolute poverty.
What would then become of credit ? And, destroy-
ing credit, they would also pOt an end to all specula-
tion, mid to all trade; which could not be carried on
without credit. But of all descriptions of paper
credit, the 1/. and 2/.notes werethemost impotent to
produce any great national crisis. A slumber of causes.
-etmcurred to produce it, great in their united .effect ;
but amongst theM all, the same notes had the least,
if any thing, to do with it. He again 'contended, there-
fore, that the small notes ought not to be suppress-
ed. The Noble Duke said, that a metallic was the
safest, because it was the most certain medium of
circulation. But he (Lord Carnarvon) was pre-
pared to show that gold was liable to greater fluc-
tuation than the notes which they were now so
anxious to guard against. Gold was liable to be
affected by the state of the excliamses with foreign
countries; but if a few Scotch banks were the objects
of a run, there was a general concurrence on the part
of the others to take their notes, and so guard against
ally loss to the pUblic. It was the duty of the le-
gislature to guard the standard, but not to make it
• the sole currency. The prosperity of the country
was itlWsys diminished in proportion as its circula-
tion was contracted; and its prosperity increased as its
circulation was expanded. It
.might be desirable, (Tr-
' tainly, if some invariable standard could be
adopted; that the Noble Duke would be de-
ceived if he though that, so long as specula-
tion existed, all fluctuations would be avoidiel.
Before he sat down, there was one ouestion con-
nected with the present, on which he wished to say
a word ; he Meant thesquestion of a silver standard.
If they suffered one metal to circulate over the other,
the silver would be the most eligible. It was cer-
tainly not so likely to expose us to danger as gold.
He believed that it was pretty generally known that
the Bank of Prance had been able in 1825 to give
the Bank of England such assistance in gold as saved
it from breaking; and dquestion had •been put upon
that occasion to the French Government, inquiring
whether or not the Bank of France ought to lend
the Bank of England the assistance they required.
Now that ought to operate as a warniug,. for it
showed the danger to which wgold standard exposed
us. - Silver could have been procured. froM Holland
and various other countries on. the 'continent; but
France alone could supply a sufficient quantity of
gold to meet the emergency. The Noble Earl con-
cluded by apologizing for trespassing so lona upon
their attention, particularly as he had already ex- -
pressed his sentiments on the' subject the other
evening.
Lord GODERICH had heard with great satis-
faction the speech of the Noble Duke in opening
this proposition, not only on the grounds on which
he had rested the policy of the measure, but also on
account of his declaration of the unequivocal adher-
ence of his Majesty's Government to those principles
on which the measure of, 1826 had been founded,
and from which they could not have departed
without the greatest danger to the country. The
Noble Earl who had just sat down, had addressed
the House with great clearness, but the substance of
his argument after all was, that he gave a decided
preference to paper over a metallic currency ; he
would not even have paper convertible into gold :
he, consequently, advocated -the necessity of
enforcing the fatal measure of preventing the Bank
from paying their notes in gold. The Noble Earl
had stated that the measure of 1826 had been
adopted in a hurry, as. the result of the fears of the
moment, and had been passed without due caetion.
New he (Lord Goderich) had never said, nor did
he say now, that the U. notes were the cause- of the
great convulsions which had then taken place; but then
the mischief was, that when convulsions did arise,
the It. notes brought the great body of the public
into jeopardy. The Noble Earl said that they were
a great convenience. He (Lord Goderich) knew
they were, because they were' the medium of the
poor ; but that was the very reason they were the
more dangerous. When panic arose, and a run
upon a bank took' place, who'svere the crowd around
a banker's door? Why, was it not composed of
poor people, of agricultural labourers, and they it
was who broke the. bank ? This was said to. be a
sentimental argument; but he did not see any thing
very absurd in taking the woeful condition. of the
poor on those occasions into consideration. The
rich might survive the shock; but the poor man lost
his all. In 1812, there was a general opinion, that
a restoration Of the old currency was necessary, and
niusttafk9erthe
place the moment circumstances reudered
b it possible, and the Bank began- to make pro-
visioncessation
attemptofto rettr
therestriction
was said that
h
tallic standard was made too soon, but if they had.
i n tote
e act.
me-
It.
delayed that proccedims to the. present time, he
feardd that they would have committed a most gross
error, for they would have been maintaining a' de-
preciation of 25 per cent. during peace, when all the
products of our industry must come in competition
with the products of . foreign countries, at a dised-
smagsse to the extent of that difference. This Would
have 'thrown the whole commerce of England into
confusion. In war, when this country possessed
the commerce of the world, such a system would
not have borne so heavily on the mercantile system ; ,
but in peace such a state of things could not be suf- j
feted, to remain. But the Noble Lord (Carnarvon)
said the misfortune of the case was thiS—" that we ,

I try to pay in a rectified currency debts contracted
Iwhen the currency was in a ,1-7r:ciated state. Now
the depreciation began ~. 0.:. yr;io 1808, and end-
ed in the year ISI.-J, n. 1),..: of about eight
years; then he would say, that so far as the charge
of debt was concerned, the whole . amount of de-
preciation referred- to . that portion of the debt in-
curred during those eight years : and if the depre-
ciation were about 25 per cent., it followed, as a
necessary consequence, that the charge fsn. it NV:-I,
also depreciated to the same amount. In 1816, the
charge for annuities, on account of .the funded and
unfunded debt, amounted to 32,500,000/., or there-
abouts, and the total charge now was 28,000,000/.
He was not positive as bathe figures, but he knew that
an actual reduction of 4,500,00 a had been made si my
the beginning of the year 1816. Now this 4,500,0001.
taken from the eharge of debt, was more than sufficient
to meet the depreciation of 25 per cent. He be,
lieved the total amount of additional charge for the '
eight years to which he had alludel was 12,000,000,
and if 4, 500f 000/. were reduced since 1816, which
met the depreciation, it could not . be said that they
were paying in a rectified currency for that which
had been contracted for.. in a depreciated currency.
He therefore did not. think that in taking this cow se
they were acting under a delusion;. neither did he
believe that. ,this country was in so crippled a condi-
tion, that if a foreign power threatened us, we
s)t'ould be obliged to bow our heads with shameful
InunilitY. His view was totally different from that
of the Noble Loid. As to the Bill itself, he thought
it absolutely 'necessary, beeause he conceived it
would be .unfair if the English banker were not al-
lowed to ,issue his notes, while, in his own imme-
diato.circle, he was met by Cie Scotch notes. - . He
therefore. thought it his ditty to give this measure
his support.

Lord REDESDALE defended the Bank Re-
striction-Act of 1797, which was roundest on the
principle of retaining, as far as possible, a supply of
metallic currency within this country. What was
the cause of the measure of 1797 ? It arose out of
the mast extraordinary event that ever occurred in
the world. lie meant the. French revolution.
What, he asked, was the effect of that revolution ?
It was, that the French nation confiscated to the
use of Government three-fourths of the property of
the country, real and personal—they put an end to
trade, and they also confiscated the whole of the
population, who were compelled to take up arms.
They at that time contemplated the conquest of-
Europe. And what wete the pecuniary means they
employed ? Why, they issued large quantities of
assignats ; but that species of paper did not answer,
and their object then was to withdraw from every
Country all the bullion that could be procured.—
They - set about the • attainment of that end
in a very efficient manner. They purchased
hills on this country at any, price; for there
they got batik-notes, which they ultimately
changed for bullion. By this means they
very soon abstracted from the Bank almost
• every piece of gold it had, and they pursued
the same course with other countries ; so that bul-
lion could not flow into England as it otherwise
would have done. To keep, therefore, a supply of
bullion in the country, the Restriction Act was
passed; and if that measure had not been adopted it
would have been impossible to have carried on the
war. So•far, therefore, from its being a measure of
which he was ashamed, he should always defend it
as a great political measure. He was aware that
sOme individuals were of opinion that, in returning
to cash payments, a silver currency might be ad-
vantageously used in aid of the gold standard.—
There were many difficulties connected with this
subject, and he feared that it would be found to lead
to great inconvenience if an indefinite tender of
silver or gold indifferently were allowed. Not only
would it lead to great inconvenience, but probably
to great frauds. Still it was well' worthy of ,consi
dering, whether it would not be possible to meet.
those disadvantages by. a silver coinage, nearly of
the same value as the gold which it represented.—
The material thing to be looked to with respect- to
bank paper of every species was, that there should
be, as far as possible, gold or silver to answer on de-
mand the amount of the paper issued. In the last
Session, he had _introduced a Bill for the regulation
of banks, and he was perfectly convinced that if all
bankers were compelled once a. year to strike a ba-
lance sheet,--as, indeed, all careful bankers did,—
there would be but very few failures amongst .that
class of people. In. cooclusion, the Noble and
Learned Lord expressed his entire concurrence in
the Bill.

The Marquis of BUTE did not think that the ar-
guments adduced by the Noble Duke and by the
Noble Lord who had delivered his sentiments from
the cross bench (Lord Goderich), had gone far
enough to show the necessity of this measure.

• Lord CALTHORPE—WhiIe he admitted the
necessity of the present measure, could not admit
the expediency of keeping up the distinction between
Scotland and this country. There was so,much in-
formation required to arrive. at an understanding of
the currency question, that he was not disposed to
hazard a decided opinion on the subject. He would
recommend, however, that this queoon should be
submitted to father inquiry. and investigation.
- Earl FERRARS wished to know by what mode
or way the Government of this country proposed to,
pay a paper debt in a metallic curreney'?-
The Duke of WELLINGTON said, in reply to
the Noble Earl (Ferrars) he had only to say, that he
was confident that this country would find no diffi-
culty, under any circumstances, in meeting its en-
gagements, whether contracted in paper or in pence.
The Bill was then read a second time, and ordered
to be committed.

Adjourned at a Quarter past Eight o'clock.

HOUSE OF COMMONS, JULY 3.

Mr. Watmore brought up an account of the re-
ceipts and appropriation of 'the pew-rents of the pa-
rish of Lambeth, from the years 1824 to 1827.
Sir H. PARNELL postponed the Order of the
Day for the committal of the Liverpool Roads Bill
until Monday next.

Sir F. BLAKE presented a petition from the
inhabitants of Berwick-upon-Tweed, in favour of
Scotch Small Notes in that town.

Mr. WEBB presented a petition from the Inha-
bitants of Nailsworth, against the Slave Track.
Mr. MARSHALL presented a petition from the
Inhabitants of Sheffield, signed by opsrards of
10,000 persons, against the additional Churches

Mr. BURRELL presented petitions from the
Landowners of the Western aid from the Land-
owners of the Eastern Division of Essex, praying
for a protecting, duty on the importation of Foreign
Wool.

Mr. MABERLY presented a petition from the
inhabitants of the city of Westminster, -against the
Additional Churches Bill.

Mr. ' V. STUART presented a petition against
he Slave Trade from the inhabitants of Cardiff.

Mr. BARING presented a petition from the
Planters of Christophers, Tortola, and 'other
Islands, against the Four anda.-.ltalf per Cent. duty.
Also a petition from the Planters of St. Vincent's,
Nev,is and Dominica, complaining of the wanner in
which they had been traduced on the ground of the
Slave Trade.
• „
Mr. DICKENSON presented a petition from
Yeovil, praying for a duty on the importation of
French Cloves.
Sir F.. BURDETT moved that the petition-re-
lative to the Supply of Water to the Metropolis be
referred to the Committee thereon.—Agreed to.
Mr. J. WOOD
presented a petition from the in-
habitantsoiould of Chorley against the Additional Churches'
Bill.
Mr. SLANElthoped that this measure would
be deferred until the ensuing Session of Parliament.
Mr. JONES said that the Bill gave such extra-
ordinary powers to churchwardens as he was sure
the House never would consent to.
iTheta tsof Devizes,
ie sazsi prayinghen
ordered
thatthe
tot bee Hu
printed.se
v
Mr. IIENETT presented a petition from the in-
k ab

enforce the revilations relating to Slaves sent out
to the Colonies in the year 1823.
Mr. R. GORDON said that some kind of amelio-
ration had taken place in almost every Colony.
Mr. ASTELL brought in a Bill to extend the
provisions of the East India Mutiny Act to the
Bombay Marine.
The Bill was read a first time, and ordered to be
read a second time on Tuesday next.