The Sun.
London, England, 1826-02-28 00:00:00

~,~ -L ~-~'G_

TUESDAY EVENING, FEBRUARY 28, 1826

moment when the Bank, if it had discharged its-duty towards
the public, must havecarried the public currency to the highest
amount which it considered necessary and prudent. If this
were the case, would not such a sudden addition produce an in.
jurious effect on the Exchanges. And should the Bank make
a mistake, and cause rununneeeesary increase of currency, how
difficult would it be to tread back its steps, and to bring back
that metallic standard which could only be attained under
favourable exchanges ? Agreeing as he did with the principles
put forward, the other day, by the Noble Earl, and with their
application on ether measures which had been proposed, he
could not approve of the present intuneuvre to engage the Bank
into a vortex of difficulties,. :tulle discretien of a Commission
partly appointed by the Government--(" No, no," front the
Earl of Liverpool).-.stall events influenced by the Goeern en t ;
whilst it was the interest of Govienmetit, t fire Bank, and of
the Country, that the Bank should be entirely independent in
all its operations.
The Earl of LIVERPOOL, though not prepared to enter
into an,explanation of themeasure proposed, assured the Noble
Ithetquis that-he had been misinformed on the whole state of the
question, and that all his-observations has been founded on the
error occasioned by misinformation. He agreed entirely with
that? ohleMarquis as to the Principles toneluch he hied appeal-
ed, and which he himself had Icicle heel iTreivn to that House.
He agreed that if the proposition Made tended to involve the
Bank in difficulties, or to deprive it of the free command of its
issueli, it would be wrong in principle, and highly.mischlevous
in practice. He also objected to any special interference at all,
if not absolutely necessary. But then he proceeded further, and
lie found that the Bank had a legal right to advance money on
goods. He owned that till lately he was not aware of this, nor
any one with whom be was accustomed to act. However the
right of the Bank was not extorted by the interpretation of
a word: it was one bestowed by Act of Parliament, and the
exercise of which had been regulated by a bye-law. In the very
same clause which authorised the Hanle to buy and sell goods,
and to advance money on discounts, were those words " or upon
goods," and a bye-law directed new those goods were after-
wards to be disposed of. It was clear that the legal right
of the Bank to advance money upon goods hail been con.
templated by those who had giveb, those who had re-
ceived the charter, and the Parliament which had enacted
the bye-law. He admitted at the same time, that because
the right was legal, it did not follow that its exercise was ex-
pedient. But it circumstances made it necessary that relief
should be granted, it was through the Bank that it should be
granted, and not by converting the. Government into a Bank ;
and inducing merchants not to look to themselves, to thoCoun.
try Banks, or to the Bank of England, but to the Government
alone, from whom no interference ought to proceed, except in
cases where the bend of Clod hid sent the infliction, or political
events of a peculiar and extraordinary nature had occurred.—
Not only the circumstances of 1793 were very different froM the
present, but it was at the commencement of a war, when in the
preceding session the highly gifted iodividital at the heed of the
Government had declared that there wise greater prospect of a
long peace than had ever existed at any ft-inner-period in the'
history of the country: Now it was not even pretended .that
the present evils had
sprung front political causes, hut all
agreed that they arose from overtrading and the state of
the currency. Re had, therefore, no hesitation in saying,
that the Bank having the legal power of advancing money
upon goods, if relief weir to he granted, it was through the
Bank that it ought to come. Whether the Bank would grant
it, he could not say ; it would be for the Bank itself to decide.
-He admitted all the inconveniences which it was alleged would
arise front the Bank adopting such a course, but all those in-
conveniences would be far greater with an issue of Exchequer
Bills. It would-be visionary to think of making such an issue
unless the Bank were to cash them, and it' it did, all the ob-
jections urged against the present measure, would apply with
ten timers more force to -such an expedient. It would be int:
proper for the Bank to issue money on goods for alonger period
than if it discounted Bills. Whatever limitations it, nut to its
discounts, it ought to put to its adVances. And then what dif-
ference would there not be between an issue on goods, re-
payable in two or three months, anti Exchequer Bills which
might be kept out one year at least, if not many years. For
the issue of 1793 took more than one year to wind up; and
one made at a later period nes not entirely wound np till
twenty-two years after it had taken place. He admitted that
all measure of relief was objectionable, but the peoposltion
which had- fi been made was liable to ten nite% fewer objections
than any other.
The Marlins of LANSDOWN contended, that if the Bank
limited the time of its advances to the same period es that of its
discounts, the goods might be as unmaleable then test teiey were
now. The Bank must dim renew the sante advances, or else
the present distress would return. Whatever change might
take place in the circumstances of the world, the hands of the
Bank would be equally tied Up, and it. would beprevented from
making that reduction in its issue) tier which the interests of
the country might call.
The Earl of LIVERPOOL said, that there was a strange
misunderstanding as to the discounts of the Bank.. They were
made on the credit of individuals, but it was nu goods that. that
credit rested, and the reason why the Bank chose to discount
on bills and credit was the greater convenience oflhe practice.
But since the adoption of the Bonding and Warehousing Sys.
tem, anti since goods were under the King's lock, all inconve-
niences in adeencing money upon them were lightened, if not
entirely done away. Supposing the Money advanced not to be
to the Bill amount of the goods, but to onn.ludf or one-fourth,
they would bear much better security thine the credit of indivi-
duals. It was said that to advance money for so short a period
would be of no use; but if the Noble Margot* had seen the
number of persons with whom he (the Earl of Liverpool) had
conversed on that subject, from every part of the country, lie
would know that it was generally believed that an advance for
that limited period would be of the greatest use. The money
was In the country, and nothing but the restoration of eon&
dente was wanted. If there were a want of-means, tire case
would be very different; but if, as he believed, money was
merely loeked up, the course proposed would be the most
effectual.
'rite Earl of LAUDERDALE considered that measure as
merely tending to remove the responsibility from his Majesty's.
Government, and to throw it on the Bank. The Noble Earl
said that in 1793 the difficulties arose out of the polities of the
day ; but was not that the case now ? They were ascribed, he
well knew, to panic and to overtrading; but if the balance of
gains and losses through the whole country: were struck, he slid
not think that the latter would be found to exceed ii.2"'-"n b°','
The Noble Earl said that the eireulativm of one and two pound
notes, and the state of the law with lespect to banking,. were
other cuuaes of that digress, and then he introduced a new sys-
tem of banking ! %v as that a mode of restoring confidence
Many country banker* had weathered the late storm with great
loss to theaiseives, but still in a ruanner which hail confirmed
their credit. Was not that more likely to restore confidence
than a new system? But the truth was, that Mr. Pitt, in dee
Glaring war in 1793, had trot been a more active agent in bring.
ing distress- upon the country dam the Noble Earl in producing
such measures as were now before. Parliament. Had he at.
tended to his Majesty's Speech, he would have seen it stated,
that the growing
pr of the country would Rion repair
the evils which- it had *uttered ; but he had taken another way,"
and wanted to effect a total change of system, the most fatal
of beeam
emeasure which could- be- conceived, and the consequences of
which
The beet and only
way orethanptpn-aairleorit. ted in 1793, r a out gaie
giving everylief' 'day snore
in 1814. Even if it were wrong in itself, the very circumstance
of its having already restored confidence, would make him any
would
(the Earl of Lauderdale), tread the path which hail alretuly
succeeded. But in these times, right or wrong, somenew ex-
periment
must be tried! The. Noble Earl had' Wrought the
country to such a state that an
Issue of-Exchequer Bills would
he very useful, and much more effectual than all his new-
fangled plans.
BANK CHARTER.
The Earl of Id VERPOOI, moved., that the Report of the
Committee on the Bank Charter Alteration Bill be agreed to.
The Marquis of LANSDOW N rose to propose u proviso
to the clause added by the Noble Earl to the dill fur allowing
the Bank to establish Blanch flange in various putts of the
country. The object of this proviso was--to compel the Bank
of England, in the event of its establishing such banks, to
make payments in coin at those Team where they issued
Paper. It would always be found necessary foe the tn.gielee
ture to provide that paper be not 014 convertible into coin.
but that it be convertible in the earliest meaner and at those
Iplaces wkcre paper was inost used. ilo was the more in.
uced to press. this from what had. happened iii Ireland; where
one of the branch banks refuetel to pay its own notes in coin.
Proceedings were cormeenced against the Bank of Irelend,
who were wisely Advised by their•Coutbel, that their erintract,
being aria of a general nature, they were compelled to make
payment, In consequence of this, however, by inserting the
words " in Dublin" on their notes they bad made their con-