The Sun.
London, England, 1844-05-21 00:00:00

ducement to joint-stock banks to accept the circulation
of Bank of England notes than the payment of one per
cent., which he thought was too small to induce those
banks to suppress their own circulation and adopt that
of the Bank of England. He was glad that the Govern-
ment had taken this opportunity of proposing this plan
to Parliament, and he should be sorry if they allowed it
to pass by without making an attempt to place the cur-
rency on a sounder footing. The greatest credit was due
to the Right Hon. Baronet for the manner in which, in
conformity with his character as a statesman, he proposed
this measure, which would secure great advantage to the
country without disturbing those habitual arrangements
which subsisted in many parts of the country. He must
say he thought it was perfectly right, that in consenting
to allow private issuers who existed at present to con-
tinue their issues, a necessary limitation was imposed
upon them of confining their issues within a certain
amount.; but it was also right that those on whom these
privileges were conferred should be treated with ten-
lierness, and that there should be no risk of shaking the
public credit or public enterprise and industry, which
their suppression would give rise to. He was glad that
this opportunity of making a change was not passed by,
because the time was not far distant when its principle
would be tested. In msny parts of the country
those same causes which had produced the crisis
they had seen before were coming into operation, and
it would be matter of great interest to observe the effect
which an alteration of this kind would have on such
transactions as those he alluded to. If the plan suc-
ceeded and had the effect of mitigating those fluctuations
and changes which they before experienced, he would
have the comfort of performing a benefit towards the
country which would do him the utmost credit, and for
which he would receive, sooner or later, the thanks of
the country.
Mr. P. M. STEWART said that, while he was will-
ing to pay homage to the general plan proposed by the
Right Hon. Baronet, yet he felt it his duty at this early
stage to call attention to one or two points which, if
adopted, would, he thought, have the effect of making it
more complete. Ile thought the Right Hon. Baronet
had acted wisely in not interfering with the one-pound
note circulation of Scotland and Ireland, which would
only have brought a hornet's nest about his ears—he
thought he had acted better in limiting the measure to
England and Wales in the first instance. There was a ge-
neral rumour that it was the intention of the Government
to establish, sooner or later, one bank of issue through-
out the country. There was also a report
out of doors that the outline of this mea-
sure bad been drawn by the late Govern-
ment, and that it had been completed by the pre-
sent Government, and he confessed that he was con-
firmed in that impression from the manner in which it
had been received in the House. This measure was an
experiment and nothing better; it-was a new doctrine in
the country, and was not propounded by those great
names to which they were accustomed to adhere, so that
they should regulate the circulation by one branch of
issue. The Bullion Committee propounded no such
doctrine ; it was a doctrine of the modern school, which
like many others required to be well watched. His
proposition was based on the opinions of those who were
called the philosophers amongst the witnesses who were
examined,while all the practical men and bankers whogave
evidence before the Committee stated that one bank of
issue would be most inexpedient. At a meeting which
was held the other day, and was attended even by
bankers who issued Bank of England notes,
a resolution was come to, adopting the lan-
guage of the general meeting which was held
in 1840, that such a measure would be inexpedient.
There was one expression made use of by the Right
Hon. Baronet that night which put the matter beyond
doubt in his mind. It was, to reduce the circulation to
one system. But it was evident. that the same dangers
which threatened us before 1825 were impending upon
us now.—(Hear, hear.) He would not occupy the House
at that time of the night in going into a discussion of the
details of the question. It seemed to him that the plan
of the Right Honourable Gentleman was compounded
of the plan of 1819 and that most objectionable plan of
1837. All that he wished to impress upon - the
House and the Government was, that they should not
take such measures as would prevent them from return-
ing to the present system if they should find it necessary.
The proposition which was made to the Government by
the country and provincial bankerswas, that they should
raise the issues to a larger amount for the country banks
than was allowed by this project. The average of the
circulation of the last two years ought not to have been
taken as the maximum of the future circulation, but
as the average. It was absurd to look to
the foreign exchanges as the test for regulating the cir-
culation of the country. But the Right Hon. Baronet
had argued against the principles which he had himself
propounded.—(Hear, hear.) He (Mr. Stewart) inferred
that it was the intention of the Minister to extinguish
altogether the present country circulation ; but they
would greatly inconvenience the public by stopping that
circulation.

An Hort. MEMBER—The circulation of joint-stock

banks.

Mr. P. M.
_STEWART--But, in interfering with

them, you would interfere with the general circulation
—(Hear, hear)—of the banks beyond sixty-five miles
out of London.—(A conversation then took place
across the table respecting the effect of the re-
striction, which was not clearly heard in the gallery.)—
If restrictions had not existed, there would not have been

those evils which had been Complained of. He offered
his sincere acknowledgments to the Right Hon. Baronet
for the straightforward manner in which he had met the
claims of the joint-stock banks. He offered his ac-
knowledgments, not for what the Right Hon. Baronet
had done, but for for the manner in which he did it. The
whole body of joint-stock bankers whom he (Mr. P.
Stewart) so unworthily represented, felt it very much.
In the points which he had stated he knew he was open
to correction, and he foresaw he would meet with that
correction, but then he had thrown out his ob-
servations for the purpose of rendering the application
of the Right Hon. Baronet's plan more readily practical,
and in making the propositions which he had sub-
mitted, he considered he was only doing his duty. The
Right Hon. Baronet's was a bold patriotic plan, but
like all human propositions, it had its- faults, and it was
their duty who thought they could amend it, to propose
whatever they thought would be effective for that pur-
pose. It was from such a sense of duty that he had
made his suggestions.
Mr. M. GORE referred to the years from 1825 to
1827 inclusive, to' show the evil effects of an excessive
paper issue. With respect to the measure of the Right
Hon. Baronet, it bacillus most cordial support, because
he thought it proceeded upon the just principle that
money was a commodity which, like all other commodi-
ties, was influenced in its value by supply and demand.
It had been said that this measure would depreciate
prices, but he doubted whether the depreciation of prices
was an evil. Much discussion had taken place with
respect to bullion, but upon that point he thought
no great danger -was to be apprehended. He
believed that the Right Hon. Baronet at the head of the
Government had acted most wisely in not attempting to
lower the standard of value. Many of the charges now
brought forward against tho Right Hon. Baronet were
brought against the Ministry of 1796,`when it was at-
tempted to place the currency of the country upon a
proper footing. lie should support the proposition of
the Right Hon. Baronet at the head of the Government.
Mr. GISBORNE knew that any person who came
forward as the advocate of free trade in money was the
subject of great animadversion. He adhered to the pound
as prescribed by the Right Hon. Gentleman. That the
amount of currency operated upon the price of commo-
dities bad never been satisfactorily established in his
mind. He believed that what was currency had never
been properly defined except in the Latin—quod smiler
—quod übique —quad inter °nines. He would reserve to
himself the right of objecting to this measure in the
other stages. He would say at once that his objection
to this meesure arose from his belief that it would have
a tendency to lower the range of prices in this country,
and that it would have a tendency to supersede bullion
for paper to a greater extent than now existed in circu-
lalion. He did not believe that the Bill of the Right Hon.
Gentleman of 1819 had fixed a right standard, but he did
not impute to that measure the destitution and misery
which had since resulted to the country, so much as to
other measures which accompanied it. The Bank of
England bad at the present time a most convenient
amount of gold lying in its coffers. Why did it not
employ that gold ? Because it could not force upon the
country a currency which it did not want. This was a
time of great speculation, yet the Bank of England
could not expand the currency, and he believed it would
never be able to do so without increasing its security.
A great part of what they called circulation was nothing
more than capital. The Bank would now be relieved of
all responsibility with regard to the issues—that was a
responsibility which he thought they ought never to
have had. He did not give implicit confidence to the
names that had been quoted. They were to be judged of
with some reserve. When the time came he should be
prepared to oppose the plan.
Mr. NEWDEGATE said, he rose to call the atten-
tion of the Right Hon. Baronet to one point on which
he should wish him to give an opinion. He believed
that there was something in the plan that might
prove injurious to the productive capital of the
country. He believed that the amount of the cir-
culation of the country' materially affected prices.
The point he wished to submit to the atten-
tion Of the Right Honourable Baronet was this
—how far the extension of the principle of the
Bill of 1819, as carried out by the alteration of the sys-
tem of issue and the alteration of the banking establish-
ment, as proposed by the Government, will, by limiting
the amount of the circulating medium to the average of
the last two years, without reference to the production
of this country, affect prices ? For, if the quantity
of produce increased, and the amount of money remained
the same, would not prices fall in proportion to the in-
crease of that production ? This point he could assure
the Right Hon. Baronet was well worthy his con-
sideration.
Mr. F. BARING expressed his satisfaction that the
Government had followed up the principles on which
this subject. Those
thelate Government was prepared to have legislated on
plan all seemed inclingentlemenouwth oofhtande
considerationoppo sedt he
of the position in which to slip
countryt wasf at presnt
hat principles they thoughttheo
placed. He should be happy
issuesearn of
fonth them on
countryl
ought to be carried on in the present state of' things.
the last arrangement of the Bank Charter by asgeN. Noble
Friend, Earl Spencer, two principles were laid down.
There was in the arrangement a regulation by which it
was supposed that the Governor' and Directors of the
Bank would in future conduct their issues, and at the
that
te
thetim time
a(vaenragdefosr tohfe first time)
issues time
and of the) it was provided
amount of the bullion in the Bank should be
published, in order that the private banks, might
according to those returns, regulate their issues. But
as far as legislation was concerned, they had no
power of enforcing that publicatton by the Bank.
Then it was said that the purpose of the publication of
accounts was to gttide the private bankers in their issue.