The Sun.
London, England, 1844-05-20 00:00:00

BANK CHARTER.

The House then went into Committee on the Bank
of England Charter Acts.
Mr. B. ESCOTT presented a petition from the in-
habitants of the Cities of London and Westminster,
praying the House to repeal the Currency Law
of 1819.
Mr. SCIIOLLFIELD presented a petition from
Birmingham to the same effect.
Sir It. PEEL said he should be very unwilling to
interpose any observations before the commencement
of the discussion upon the resolutions which he should
move that evening, if he did not think it would be
for the convenience of Members who were likely to
take part in that discussion, and for the advantage of
the discussion itself.; were he to make ex-
planations on some points with respect to which
it was probable questions would be put and points
relating rather to the details than to the general prin-
ciples of the measure. He was sure the House
would bear in mind that it was, necessary for her
Majesty's Government to frame their measure, and for
him, as she organ of that Government, to make the
statement which he did on the:th of May, without the
advantage of communicating with parties whose
opinions on such a. question were entitled
to great weight. In his opinion deep and
entire secresy in ' all matters relating to
money was absolutely necessary. Making every
concession to the honour and integrity of individuals,
in matters affecting the monetary interests of this
country, the Government must be contented with
availing itself of such information as the evidence
taken before Committees and their own experience
might supply. They must not enter into commu-
nication with private individuals on such a subject.
If in the subsequent communications which they had
had, with such parties they had seen reason to alter
their views, they would have had no hesitation in
proposing the necessary alterations, but having had
the opportunity of communication, he was bound to
say, that the Government saw no reason whatever to
modify the plan which he had proposed on Gth May.
All the principles he then laid down he was prepared
to stand by ; he had seen the proprietors of Bank
Stock, the Directors of the Bank, representatives of
joint-stock and private banks, and he was not enabled
to say that the Government felt any willingness to
depart from the plan proposed; and he must ask
the sense of the House upon that plan as ori-
ginally proposed. But there were a few observations
n the details of the plan which he must now make.
Ile had proposed that the issues of the Bank of Eng-
land should be made partly on securities and
partly on bullion ; the issue on securities to
be limited to 14,000,0001., and the remainder
might be circumstances
ionn bwuhl .
ch might be required to in-
thßeutpatlniekre
crease its issues ; supposing that the circulation of
private joint stock banks should, from failures or
voluntary,agreements, he reduced from eight millions
to four millions a month, the Bank might be re-
quired to ;increase its issues in order to sup-
ply the void thus created. That is, one he pro-
posed should be made upon securities, and that only
after a communication made to the Government,
and with the consent of the First Lord of the
Treasury, the Chancellor of the Exchequer, and
the President of the Board of Trade. He did
not reserve that power from any distrust of the
principles he had laid down, but to meet the
particular case of the concession on the part of
banks of issue, and the necessity of the Bank of
England, supplying the.deficiency with its own notes.
At the same time ho considered it advisable, if pos-
sible, to prevent all interference in this matter on
the part either of the Executive or the Representative
Government. Yet, at the same time he considered
it would not be, advisable to sive the Bank the power
by law of increasing its circulation except in certain
cases. -Her was not quite- 'Clear that in every case in
which there should be a void created by the with-
drawal of other circulation, sit ought to -be in the
power of the Bank to increase its circula-
tion on securities.—(Hear, hear.) Suppose the
case to be as it was at present, that there was a large
amount of bullion about sixteen millions in the coffers
of the Bank, the Bank would have a circulation of
about thirty millions—namely, sixteen millions in
bullion and fourteen millions on securities. Now, of
the circulation of the sixteen millions of bullion, the
greater part would be dormant in the coffers of
the Bank, for about twenty-two millions would be all
that • would be required for the circulation of the
country. Now, in such a case, if a void were created
—say in Cornwall, for instance—by the withdrawal
of 200,000/. of country bank notes from circulation,
he was not prepared to say that the Bank. ought at
once to increase its circulation upon -.securities;
but if hereafter it should be necessary for
the Bank to increase its circulation on secu-
ity, he thought that there should be -some check
upon that power. He therefore proposed in the
preamble of the clause* to recite what grounds in the
opinion of Parliament would justify the Bank in
increasing its issue on securities. These were—first,
the failure of a country bank; secondly: the with-
drawal by a country bank of its issues ; or
thirdly, an undertaking on- the part of a
country bank to withdraw its circulation
if the Bank of England would substitute its notes in
the room of those of the country bank. This recital
in the preamble would show what was the intention
of Parliament. He proposed that the Bank, in case
it should consider it desirable to make an increase in
its circulation, should not be permitted to do so ex-
cept upon application to the Executive Government,
and that such consent should, be given by her Ma-
jesty in Council, such consent to be pub-
lished immediately afterwards in the London Gazette.
He preferred that to giving power to.the Bank under
any circumstances to increase its issues, though he
was certain that while the present management of the
Bank continued, that power would not be taken ad-
vantage of, but it was desirable to have a' check, and
he therefore proposed that they should not increase
their securities, except with the sanction of the
Council, and not to permit an increase of se-
curities, except on the distinct condition tlitit
the amount of all securities should not ex-

ceed two-thirds of the amount of issues—that 11‘a.i

•-•th4 the issues on the increase of securities should