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

another species of currency there, of a much more unsound
description—l mean small bills of exchange, drawn by and
on persons without any capital, andwhieh it is well known
circulate there to a most enormous extent. I shall now
apply myself to the consideration sof the intended Bill of
the Right Hon. Gentleman, to restrain the circulation of
Scotch small notes in this country, and which is, in 'the
first place, unnecessary, ae I think I shall prove by testi,
rnoay which the Right Hon. Gentleman will be the last
to reject. " The-Report of the Chairman of the Committee
of 1826 says—
" That while-Scotlimil had a paper currency for-the dis-
charge'of all elms above twenty shillings, Englend had, at
least 20 years preiiously to the Bank restriction, a cur.
rency consisting of the precious metals, to the exclusion,
by law, of notes below 5/. That those different 3y-steins
co-existed, and that no proof can be adduced that thepaper
circulation of Scotland displaced or interfered in any..
material degree with the metallic currency of England."
,This, I think is, at, all events, a proof that the measure
has been premature, for ehere could be no necessity to sup-
ply a remedy for an evil that had no existence. Then,
this measure is also compulsory ; for the persons on the
English border,. best aCquitinted with this subject, have, in
a petition signed by all the respectable inhabitants, land-
owners, merchants, yeomen, and manufacturers--men of
all parties, and who 'do not agree on scarcely any other
subject, all 'unite in stating that no greater evil can befal
them, than being deptived of the Scotch currency. They
say it has existed among them for .7(1 years, and that
during that peritid hut one hank "failed, which paid Iss. in',
the peund. I will also state a that I have always received
seven-eighths of the rents Of my estate in Scotch notes,
and I never sustained the slightest loss. The effect, too,
of the Scotch system Was, to Weaken all the local etta-
blishmente near this side of the border ; for an English
Bank with a few members could compete with a Scotch
Bank, which had 500 or 600 partners, and, as the peti-.
tion I have alluded to says, this meesure by way of meeting
a theoretical grievance will inflict a serious practical evil.
This measure too i an anomaly, for although the Right
Hon: Gentlemen to-night says that paper and gold cannot
co-exist, yet Ministers themselves say directly the contrary,
and yet it is wanted to introduce distinction on one side of
an imaginary line over which
,I can positively jump—and I
appeal to the House, whether there can he anything more
anomalous than the Bill now proposed by the Right Hon.
Gentlemari.—(Hear, bear.)—l shall further say, that the
Government itself has declared the paper currency of Scot-
land to he worthy of the highest approbation, and this too
his been agreed to by the Legislature, led on by the Right
Hon. Gentleman (Mr. Peel), as I shall prove, if the House
will allow me to read, another portion.of the report I have
mentioned. That said—
" That, coincident with the present system of currency,.
if not immediately owing to its effects, there has been a
great and progressive increase in the manufactures, agri-
culture, Commerce, population, and general wealth of the
country:l'
The Committee was thus not convinced that the sup-.
pression of one-pound notes would have a good effect on
cash credits, yet they were afraid to limit the iseues,,Of this
species of circulation, from. what muse may it be -suite
posed ? Not froM any fear of the injury their continuance
Would produce—but from that very system tending to eco-
nomise the 'use of capital and improve the moral habits of
the country. These are the terms in which they express
theniselves '
"Your Committee are certainly not convincedthat it (i.e.
the suppression of 1/. notes) would affect the cash credits
to the extent apprehended ; but they are unwilling, with-
:out stronger proof of the necessity, to run the risk of de-
ranging, from any cause whatever, a system admirably cal-
culated, in their opinion, to economize the use of capital,
to excite and cherish a spirit of useful enterprise, and even
to promote the moral habits of the people, by the direct
inducements which it holds Out to the maintenance of a
character for industry, integrity, and prudence,"
• The CHANCELLOR of the EXCHRQUER—That
merely refers to cash payments.
Sir J. GRAHAM—I do not ask whether it refers to
1/. notes or to cash credits, as the foundation upon ,which
the poor man may be paid, and it matters not whether
that may be done• by cash credit's or by a bill with two
names on it, as I look merely to the principle, and not the
instrument by which it is carried into effect. Lord Liver-
pool and lord Goderich 'say the same in the letter which
they wrote on the subject.—(Here the Hon. Baronet read
over an extract from their Lordships' letter on the establish-
ment Of Joint Stock Banks.)--;The effect of the law at
present in England is to prevent every description of bank-
ing except that which is solid and sound.—(Hear, hear.)—
I' contend, that I have the atithoriti of the 'Right Hon.
Gentleman opposite, and of his colleagues, that it is the
vice in the system of banking and not the system itself,
which might to be. complained. of. Let us then inquire
whether this system be not capable of amelioration, whether
it is not possible to do away with its vices, but preserve
the benefits it confers upon us. That letter, Sir, suggested
two very decisive measures as necessary to the attainment
of this object. One was the suppression, of one pound
notes, but that, She does not strike at the root of the evil,
and the other was added, for that purpose. :That other,
Sir, was the formation of Joint Stock Banking Companies.
A Bill, Sir, was introduced to carry those suggestions into
effect, hut a clause was
.inserted in that Bill, at the sug-
gestion, I believe, of the Bank of England, which quite
negatived the Joint Stock Banking part of it. This,
Sir, the primary and essential measure of the Bill was
defeated, while the second and subsidiary measure,
the suppression of the one pound notes,, was carried,
and that is the part of the Bill, Sir, which will come
into operation in 1829. Will it not, Sir, be better and
wiser to continue the paper circulation under a better sye-
tem of banking than put down the paper currency altogether,
'because the banking system wants improvement. It would
be alinost as absurd for the Right Hon. Gentleman, be-
cause the Report of the C,ominittee .on the Supply, of
Water to the Metropolis, has decided that that which we
obtain from the Riyer Thames at 'present' is impure, to
bring in a Bill to prohibit water being drawn from the
Thames at all, as to stop a paper currency entirely,
.be-
cause the manner in which it is supplied might be
amended. I will now, Sir,"briefly trace ac the practical effects
that, have followed from every attempt to tamper with the
one pound note currency. It was first resolved, Sir, that
the one pound notes should be suppressed at the close of
the war. , The Bank of England and the Country Banks
accordingly prepared for the great expeCied Chan; e, and
in 1915 contracted their issues. What, Sir, was the con-
sequence? In 1916 the price of wheat rose to.'loss. per
quarter from 645., which, it had been a year or.',iwo pre-
tvoi o unsoly,
moreand the
than
l,
b anko7oo, n
tciies' wlh6ich in
ou Btel
.
emDistress, Sir, 'was general throughout the country: Then
the Government, in compassion to the sufferings of the
totonteod
.
people, postponed the, stippressien.of the one pound notes
181nct ain
2oi,s
to a more remote period, and prosperity returned. In
1819, the Right Hon. Gentleman opposite will remember
it well, it was determined, come what might, that in 1825
the one pound notes in England and Ireland should be
abolished. Again, Sir, the Bank of England, and the
Country Banks, prepared to pass through the ordeal ;
again they contracted their issues. What, Sir, this Hine
was the consequence?—Wheat fell to. 435. the quarter;
lower than it had ever been at any period since the revo-
lution. What was then the course taken by Ministers to
check the evils which this occasioned? Lord London-
derry, with Statesmanlike decision and admirable dis-
cretion, did not treat this 119 a question of redun-
dancy of production, or of superabundant harvest—(A
laugh)—but as a question of curremey. This, said
he, is occasioned by a contracted currency ; to remedy the
distresii so occasioned I must enlarge the currency. With
that view he forced an issue of Exchequer Bills, by an
advance of money to the Government from the Bank. Ile
said at the, same time that the small note Bill "which was
to come into circulation in 1825, should be postponed till
1833. And why was it that he Kxed upon that term?
The reason was, that that was the period at which he knew
the Bank Chartek expired. And he then expressed his
opinion that it was expedient to delay the subject till then,
when the weoeequestion of the tanking pepit System
1 h
Could be discussed together. Then, he qaid, w 0414 lie
'the time to alter the system as might be wged. It beilig
priderstopcl,, them that else paper cureepey was to remain
undielerbed till 1833, the price of wheat rose to 68e. and
prosperity again:visited us. I will now, Sir, direct the
attention of the House to a point' in which I shell mainly
rest pppn the authority of my f: fon. yriepd, the MembeA*
for Callington, whom I now Zee on the floor, who in,181!)...
forewarned the House upon- it. 1 allude to the chap,
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