The Sun.
London, England, 1844-03-22 00:00:00

THE BANK of ENGLAND and the
CURRENCY QUESTION.

The following remarks upon the late Mt. Harman
(one of the most active Directors of the Bank of
England during the late French war) are extracted
from the Banker's Circular, of the 16th February,
1844 :

" Having mentioned the name of Jeremiah Har•
man (who died last week, full of years and honour),
we cannot, for the sake of example, refrain from di-
recting reflection to the virtues of this eminent per-
son, which were as remarkable in his private as his
public station ; the latter only being within our
province to notice here. During that eventful and
critical period of our history which elapsed between
the years 1797 and 1818, Jeremiah Harman had
more concern with the regulation of that vital func-
tion of our system—its money power—than any other
man : he exercised this, without emolument or titular
distinction, with a degree of foresight, circumspection,
prudence,. and vigour, which, if there ever be an
historian capable of doing justice to human actions in
the most important positions of life, will place his
name among the most estimable and illustrious of the
age in which he lived. What are the duties of a Lord
Chancellor, with laws and precedents and a learned
bar to assist and guide him, compared with those of a
man who, in an, extraordinary, difficult, and unprece-
dented conjuncture of affairs, is appointed to hold the
balance which determines whether the people, what-
ever the sacrifices demanded from them, shall prosper
or wither in their industry ? What honour belongs
to that the highest subject of the realm, that is not
due to the balance-holder after he has performed his
duty discreetly, judiciously, and wisely ? Where
would have stood the names of Peel and Ark wright
if a man of opposite character to Mr. Harman had
governed the affairs of the Bank when they were
struggling to acquire wealth and pour wealth into
the country ? They would have figured in the
Royal Gazette as bankrupts, instead of being re-
corded there with honourable titles. Where would
have been Wellington's victories and glory, if such a
man as that had not given vigour to the " sinews of
war ?" And let not us of the lower grades of the
commonalty ever forget that Mr. Harman was the
man who boldly stretched out his arm to avert that
fatal blow on his industrious countrymen—the Act
of 'l9; for he it was principally, we believe, who
composed and tendered that celebrated remonstrance
against the impending mischief with which the Act
of 'l9 was charged, and which drew forth the
undignified sneers of Lords Grenville and Liverpool,
and Mr. Huskisson—presumptuous men, who dealt
with a case of which they were totally ignorant in
defiance and contempt of the remonstrance of those
who practically knew all. We here speak of Mr.
Harman as the last of the old school, with no desire
to detract from the merit of his colleagues and
coadjutors. We had no intercourse with him, and
have not had the pleasure of seeing his grove,
benevolent, and intelligent countenance, for ten years ;
but it would be wrong in a publication set up for the
purpose of giving warning of any danger which may
be seen approaching, in consequence of the disre-
gard of Mr. Harman's counsel, to omit this feeble
expression of our veneration for his character. He
was the brightest example of an independent high-
minded British merchant, as anxious for the success
of others as for his own, which ever appeared in our
path of life."
We subjoin a copy of the memorial of 1819, which
is alluded to in the above remarks as being princi-
pally composed by the late Mr. Harman. The man-
ner in which his fears and predictions have been
sincedrealised, constitutes an imperishable monument
to his memory. " The universal interests of the em-
pire, in all the relations of agriculture, manufacture,
commerce, and revenue, have been ruinously compro-
mised, notwithstanding the prolonged state of peace
with which this nation has been blessed since that
period."

" The Directors of the Bank of England, having
taken into their most serious consideration the reports
of the Secret Committees of the two Houses of Parlia-
ment, appointed to inquire into the state of the Bank of
England, with reference to the expediency of the re-
sumption of cash payments at the period now fixed—
have thought it their duty to lay before his Majesty's
Ministers, as early as possible, their sentiments, with
regard to the measures suggested by these Committees
for the approbation of Parliament.
" In the first place it appears, that, in the view of the
Committees, the measure of the Bank recommencing
cash payments on the sth of July next, the time pre-
scribed by the existing law, ' is utterly impracticable,
and would be entirely inefficient, if not ruinous.'
" Secondly, it appears that the two Committees have
come to their conclusion at a period, when the outstand-
ing notes of the Bank of England de not much exceed
25,000,0001. ; when the price of gold is about 4/. Is. per
ounce ; and when there is great distress, from the stag-
nation of commerce, and the fall of prices of imported
articles.

" It must be obvious to his Majesty's Ministers, that,
as long as such a state of things shall last, or one in any
degree similar, without either considerable improvement
on one side, or :rowing worse on the other, the Bank,
acting as it does at present, and keeping its issues nearly
at the present level, could not venture to return to cash
payments, with any probability of benefit to the public,
or safety to the establishment.
" The two Committees of Parliament, apparently ac-
tuated by this consideration, have advised that the Bank
shall not open payments in coin for a period of four
years, but shall be obliged, from the Ist of May, 1821, to
discharge their notes in standard gold bullion, at Mint
price, when demanded in sums not amounting to less
than thirty ounces. And, as it appears to the Commit-
tees expedient, that this return to payments at Mintprice
should be made gradually, they propose that on the Ist
day of February next, the Bank should pay their notes
in bullion, if demanded in sums not less than sixty
ounces, at the rate of 41. ls. an ounce, and from the Ist
of October, 1820, to the Ist of May following, at 31L 19s.
6d. an ounce.

" If the Directors of the Bank have a true compre-
hension of the views of the Committees in submitting
this scheme to Parliament, they are obliged to infer, that
the object of the Committees is to secure, at every ha-
zard, and under every possible variation of eircum •
stances, the return of payments in gold at Mint price for
Bank notes, at the expiration of two years ; and that
this measure is so to be managed, that the Mint price
denominations shall ever afterwards be preserved, leaving
the market or exchange price of gold to be controlled
by the Bank, solely by the amount of their issues of
notes.

" It further appears to the Directors, with regard to
the final execution of this plan, and the payment of Bank
notes in gold at Mint price, that discretionary power is
to be taken away from the Bank ; and that it is merely
to regulate its issues, and make purchases of gold, so as
to be enabled to answer all possible demands, whenever
its treasury shall be again open for the payment of its
notes.

" Under thew impressions, the Directors of the Bank
think it right to observe to his Majesty's Ministers,
that being engaged to pay on demand their notes in sta-
tutable coin, at the Mint price of 3a. 17s. 10id. an ounce,
they ought to be the last persons who should object to
any measure calculated to effect that end ; but as it is
incumbent on them to consider the effect or any mea-
sure to be adopted, as operating upon the general issue
of their notes, by which all the private banks are regu-
lated, and of which the whole currency, exclusive of the
notes of private bankers, is composed, they feel them-
selves obliged, by the new situation in which they have
been placed by the Restriction Act of 1797, to bear in
mind not less their duties to the community at large,
whose interest in a pecuniary and commercial relation,
have in a great degree been confined to their discretion.
" The Directors being thus obliged to extend their
views, and embrace the interest of the whole commu-
nity, in their consideration of this measure, cannot but
feel a repugnance, however involuntary, to pledge them-
selves in approbation of a system, which in their opi-
nion, in all its great tendencies and operations, concerns
the country in general more than the immediate inte-
rests of the Bank alone.
" It is not certainly a part of the regular duty of the
Bank, under its original institution, to enter into the
general views of policy by which this great empire is
to be governed in all its commercial and pecuniary
transactions, which exclusively belong to the Adminis-
tration, to Parliament, mid to the community at large ;
nor is it the province of the Bank to expound the prin-
ciples by which these views ought to be regulated. Its
peculiar and appropriate duty is the management of the
concerns of the banking establishment, as connected
with the payment of the interest of the national debt,
the lodgments consigned to its care, and the ordinary
advances it has been accustomed to make to Govein-

went.
" But when the Directors are now to be called upon,
in the new situation in which they are placed by the
Restriction Act, to procure a fund for supporting the
whole national currency, either in bullion or in coin,
and when it is proposed that they should effect this
measure within a given period, by regulating the mar-
ket price of gold by a limitation of the amount of the
issue of Bank notes, with whatever distress such limita-
tion may be attended to individuals, or the community
at large, they feel it their bounden and imperious duty
to state their sentiments thus explicity, in the first in-
stance, to his Majesty's Ministers on this subject, that a
tacit consent and concurrence at this juncture may not,
at some future period, be construed into a previous ira-
plied sanction on their part, of a system, which they
cannot but consider fraught with very great uncertainty
and risk.
" It it impossible for them to decide beforehand what
shall be the course of events for the next two, much
less for the next four years ; they have no right to
hazard a flattering conjecture, for which they have not
real grounds, in which they may be disappointed,
and for which they may be considered respon-
sible. They cannot venture to advise an unrelenting
continuance of pecuniary pressures upon the commer-
cial world, of which it is impossible for them either io
foresee or estimate the consequences.
" The Directors have already submitted to the House
of Lords the expediency of the Bank paying its notes
in bullion at the market price of the day, with a view of
seeing how far favourable commercial balances may
operate in restoring the former order of things, of which
they might take an advantage ; and with a similar
view they have proposed, that Government should repay
the Bank a considerable part of the sums that hare been
advanced upon Exchequer-bills.
" These two measures would allow time for a correct
judgment to be formed upon the state of the bullion
market, snd upon the real result of those cbwges, which