The Sun.
London, England, 1828-06-04 00:00:00

our treaanre, wasted by extravagant expellees and a nits-
'nallaged trade, which the land always is the first to feel."
,
11thould have stopped here, did I not remember the ad-
vice •
gd:en to my Noble Friend on the occasion of the Bul-
namittee. Had that adVice been followed, many of
the •
Ifi
have
4.lcultits into which we have since followed would
• been avoided. He said on that occasion—
s` lhe reduction of paper would produce all those effects
arise from the reduction in the amount of money in
A4T.EY ebtantry—an effect which, I think, is well described in
T.• ifotne's Eseay on Money.'
The consequences of the contraction or expansion of the
B•lnNat of money in a country seem more felt during the
Prnt•eesa of such contraction and expansion than from any
Positive
amountoof money at any one given period. It •
Let,
elan;
neoemy opifgri p, of great importance what. amount of
it Y may exixt in any country, but the question, whether
en
p.on the increase or decrease, is one of great importance
Zere branch of industry."
what is the cipluon' .of Mr. Huai, to which he
e refire? If I show the effects of a contraction of the
~ elope_
neer to be what I have stated, and further show that
th
c7e measure of the one pound noted will contract the
'gently, I prove my case. If Ido make out from past
.;, nerience that the measure which I oppose will be in-
:. 34rinus' although we cannot repair the mischief that has
foerl already done, let us prevent the recurrence of it for the
‘nlee. Mr. Hume says-
- 4
le The good policy of the Magistrates consists only in
..7tping money, it possible, still increasing; because,
.by
toot means, he keeps alive a spirit of industry in the
44444 and increases the stock of labour, in which con-
• '4'lall •
real power and rachese
"A nation whose money decreases is actually' weaker
more miserable than another nation which possesses no
;lin re money, but is on the increasing hand. The altera-
4)tla in the quantity of money are not immediatel • attend-
Wit} • • in •
t. 44' 1 proportionable alterations the price of conuno-
;• '• there is always an interval before matters be ad-
o...
ee"eit to their new situation; and this interval is as per-
'''''"oue'to industry when money is diminishing, as it is ad- .
ti!nteteous when it is increasing. The workman has not
175,:a thern e employment from the manufacturer, though he
same price for every thing in the market. The
%Mier cannot dispose of hie corn and•eattlee though he
levet
pay the same rent to his landlord. 'the poverty,
*ggery,' and sloth, which must ensue, are easily foreseen."
CONTRAST.
! •
In every kingdom into which money flows with
greater abundance than formerly, every thing takes a new
e .
the merchant becomes more enterprising, the ma-
' 4"facturer more diligent and skilful, and even the farmer
',flows
the plough with more alacrity and attention."
The facts
.I have brought forward prove, and the audio-
Nee I have adduced confirm me, when I assert that a de-
e. e„.
43e in the quantity of money, if not actual gain, is at
are,-7
rate the good to it for any country where the experi-
nt is tried. I fortify myself in my argument by the att-
iscrepe't
It'.titity of the Right Hon. Secretary for the Home Depart-
the co e•
4:4t,. who, in answer to:die:observation of the Hon. %-
With 1111
01 e gee, the Member for Kent, who was speaking the other
expre' vtning upon the effect of the suppression of the 1/. notes
tee(' (I,'(l)l,:ent the.scale of. protection, said that it would have the
they - of increasing the value of money, ;lad, therefore, of
errors stl';:
I,mq:easing the protection to the agriculturists. At any
before ,:‘?, then, it is the deliberate intention of the Government
reirtelrease the.value of money by this measure. If, there-
.arer 4 rest the case here, so far as the argumenium art ho-
f the
fr ern goes, it would be impossible for the Right Hon.
;eel ; i,entleman to contend that any thing else was in view.—
;11 kr..."0;; ~1.4 that the withdrawing of the small notes from circula-
rossible ji '4l, even if the amount be replaced by larger ones, con-
r• l''
„rty Ittle,eta the circulation, I think is almost self-evident.—
't r rpe „ smaller notes it is known circulate with much
now c' lA/ I '''Nter rapidity than the large ones—and. increased velo-
is e4Y in the-
roof
`gig
circulation is equal to increase of quantity. If,
woirr, ite therefore,te._ the country bankers should issue as much in
1,71. nt ix five-pound notes as they did in one-pound notes,
able to gl)
ore ious to their euppreesion,the currency would not,in point
rinnittel'
or effect, be the less contracted. The suppression
before , of the
bat. et, one-pound notes would, besides, operate most
t:r naively in another point of view. The 51. notes
utlie woe !et:l.l"n more quickly in the bankers' hands, and therefore
"'Ea d them less profit than the smaller notes, which re-
t.:Med longer in circulation. With the larger profits they
.the.e,13.4;b0;
tlt enabled to pay larger interest to those who deposit money
tra.el their hands, and also to accommodate their customers
ore liberally. And this accommodation, as it is called, is
the war'', tethin
g more than an increase of the circulating medium?
down
'0 stop this accommodation is then a contraction of the
itohnatidl! t . I will now, Sir, call the attention ofp the
amine house to the reasons which are assigned for the sup res.
~en of the 11. notes. There are two principal arguments
aced val°
t7eed by those who supoert that measure. They are, that
tune aJsmall notes lead to over issues, and tend to produce panics.
ly conwi
Alt the authorities worth quoting on this subject, tip to the
lepreciate'
l thus ounfe of 1826, of Mr. Hall—the evidence trken before the
ele'n Committee—the opinion of the first merchant ot• the
tin-thread'
araerd e I}t "Whose name could not be alluded to but with honour,
tof Dr. Adam Smith—all conclude that convertibility of
pitalitl
e degradel 4,..per into gold, under a good system of banking, was an
eat
emit 4..111y sufficient check upon over issue.' (Cheers.) That, Sir,
ne receaiei or may not be a well founded opinion, but this House
1.04 hoe 4111innt sanctioned any other doctrine, nor was it ever an-
te need upon any authority that the Government ever enter-
,,,ednefseLtrb"el t,'Oodany other doctrine except in the letter of Lord Liver-
s sew to the Bank of England.—(Hear, hear. Do I, then,
ma.6tgiatriss' ttat°o much, when .I call for inquiry into eo important
eresult sot eh nom a subject before we act upon different prin-
o_ceeee 1.'7 from what we have hitherto? With aspect to the
seen tee d argument, of the panics to which the small notee are
,eie
_loot ei.'Y to give rise, I beg the Right Hon. Gentleman to
the
cow me to turn his attention to Scotland. Such a thing
Zbeteeee 4, panic is unknown there. I appeal to any Scotch
l.'?aber in the House to say whether he has ever heard of
CDlllolodi'
mit, sugar,
.a thing as a run upon a Scotch Bank. The just
le eapula' te,'Plea upon which they have been conducted have
tbingi ttooed, them the confidence of the public, and notwithstand-
, ,!te, I‘„e9leir issue of small notes, they have never been em-
-7000,p• kal•l,lfisett:in the manner we have in England. Yet, in
re. e,glineCtliey are to be put down as the cause of the panic.
1" t ee• ~,e most formidable panic ever known in this neuntry, not
:..aneedoo, and tt.ll, excepting that of 1525, was in 1793, when, he,
ydu? t,4hered, we had a metallic currency.—(Hear, hear.).--
i the
,:nressor Playfair has given a very full areount of the cir-
eienttl; • lostances•of that panic, and of the causes which, in his
Iet:010p 14<nion, led 'to it. I will read it the House. He says—
'ekit'.One great evil to which the Bank has constantly been
ntr is
oireted, arises from the gold coin being of too much in-
during t:
; the °se gestic. value. It has frequently haPpened, owing to the
4'l Cons that take place' between the proportional prices
ePr'' four gad' d '1 i
a fifty' se,_ an serer,. gu nea Las been of more value
where it might pass
of "` sett tetelteJ dolmen.. carried abroad,
~.41tA bullion pr. ICe,ilatin here in England, where the value
era•, never alter.
at sve_crt On such occasions a demand fur guineas has been made
ri°oll vi plot ;;°O .•
the Bank, where atone they could be procured.in any
re
this calllr dainty ; such a demand for guineas has nothing to do
141.4 soil the credit of the Bank or of the country, it is a mere
hen 1 kteulation t
-(Cher the gain the difference between old coined g and
sohUifi•tive, ingot.
folloW . k
1,4 Buttkough those runs on the Bank had no connection
ill, t' ,
614 itsiredit in the first instance, and did not arise from
t'sii!vant of confidence, 'yet the effect was in appearance
tar tui p °
nee, ein reality the same.
Iseqo'months- of March, April, and May, a
ectly Orf 441amm in 171)3, in the
nd for guineas arose in this manner :—They bad been
old
is 111113°'
eoW 4441127 livres in silver, or 22e. 6d. at Paris. The Bank,
Imatktlrned at this demand, which would have drained all the
Ho with eneas away, diminished the circulation of its notes. This
eO. tt 11 speedy remedy for the company, but a terrible one
to bei# lee' It tee' commerce of the country. When the Bank of
boa ,
Oand diminished its.discounts, all the Bankineolionses
°leer I London, on which the Country Bankers draw, sent
M 'ai' for Olee orders
heat e not to go to the usual amount ; the panic he-
,
w eve, V- keet' general, and as a true or false alarm of fire are the
eot in effect for the first inetant, this country, in which
"4,7100,1.! e,''.4lth had a few months befere been more abundant than
I;ee, °'t he
without any real misfortune, without any real
7,hee tbei tlet't'o of its real property, waO involved in the deepeet
laborer 11,,,,r!"19. Above 70 private "tankers stopped, and the total
_toeso. ICoer of Bankruptcies in the year amounted to 1,300.
coow`oh: sere evil was going on with rapid strides, when Ministers
farturer.. Wisely stepped forward, by creating 5,000,000/.
' apt 0, lioOtoltequer Bills, the Bank was enabled to lend money to
ore ' " merchants and manufacturers as had sufficient secu-
°D eilly to give. The good effects of this measure were so soon
r). ee me,;
_that only 3,500,000/. of the money was ever de-
can -
oat in the
'pet Some that was demanded was not wanted, and
"leli4t of what was obtained was returned in a few weeks.
and ties ROellovel and soccessful experiment, which necesst suge
ett. o 510. 1;/ saved many thousand people in trade, restored
„noel! 'net and Government was repaid the whole with some
'thy,: (steel profit."
ee co' tine ere then is a panic occurring with a metallic circula-
-694 4/ ' Vehi Pitt remedied •
in en elr.
the bode leet „trease of the circulating medium. There is another
nierewi oich I do not mean to rely upon as an argument, but
enied r 101);
faiwg g; Poe, J mention as a singular coincidence. It is that one-
while tb, he 4"1. 10i.egii 4;T to be put down as the cause of panic,
ant thrive' media
have been twice, even in 1793 and 1825, used
cal. hi, 11o: 14 to,e_thesi for panics, and that when all others had failed. '
toe, ' their <to. the coffers of the Batik were nearly exhausted of
4n
entneeti septooe_tsure, when, after five days, recoerse was had to a
to LOP (.0 fo°l one-pound notes. The effect is.as magical; af-
the oboe t (cri, ZeScl,iately
.began to mend, for the panic was- checked.
,takeo,oo koe0 t, .•)-1 will go further, and say, that the suppres-
ito of to er„, fleae notes will produce.a panic. I will endeavour
e1g94,3 )tatedr:11:111 to the House luiw that would be.effeeied: I have
'n (miniver to an argument of the Chancellor of the

foratef,,
1114'
that,
tional 11';
we sl's'
1810,"'
)italt els
of that,
n moatt:
[on011111: