The Sun.
London, England, 1826-02-20 00:00:00

buted them all to the currency. That they did
not flow exclusively from the currency, he had
already stated and 'hewn; but he did not think
that all these speculations and gambling transac-
tions could have been carried to the degree they
had, if they had not been encouraged by the pa-
per currency. Both causes had operated. The
speculations in the trade bad been the origin of
the evil ; the spirit of gambling carried into
every branch of trade had been the beginning, but
it could not have been so extensive, if they had
not been aided by the currency." His Lordship
maintained that the exchanges were an infallible
guide with regard to the Currency, and he ad-
verted to the doctrine lately advanced by Mr.
Tooke, that the cause of the unfavourable Ex-.
changes had been long in operation before the
effect is indicated by them. He then shelved
that the Bank had long neglected to attend to
the unfavourable turn of the Exchanges, thereby
accusing the Bank of having added greatly to the
evil. So far so good. But his Lordship having
thus contended for the exchanges as a criterion
of the sound or unsound state of the currency,
soon abandoned his own• doctrine, and in-
formed the House 44 there was no fact clearer

than this—the cause he would not now stop to
inquire into. But the fact was, that gold and
paper would not go together. If Parliament
should say there should be no circulation of
paper, there. would be none ; and if, on the other
hand, they said there should be sovereigns, their
direction would be as effectually obeyed as in-
deed it would be if they were to direct a circu-
lation of crown pieces, or any other kind of

money whatever. But the circulation of paper
could never be intermingled with a metallic cir.
culation ; by whatever reasoning the fact was
proved, it % as clearly so, and that fact must be the
bushier their determinations." If the exchanges are
in our favour, his Lordship will hardly contend that
the gold we already have will leave us—but his
Lordship contends that the Bank ought to have
had their eye on the Exchanges, and regulated

their issues in such a way that they should not
have been against us. Then, if the exchanges

were in favour, and the gold were kept in the
country, through a proper regulation of the Bank
issues, why should not the gold and paper cir-
culate together ? If the Bank, by the regulation
of their issues, can make it unprofitable to ex-
port, gold, then the Bank can keep paper in
circulation along with gold. The two positions
of his Lordship cannot, therefore, be both true.
If his Lordship meant to say that the circulating
medium, being a given sum, every addition to the
paper must displace a certain amount of gold ;
for, if no diminbtion of gold took place, the cir-

culating medium would be augmented, and a
depreciation of the currency would follow :
this is quite a different proposition from the
one that gold and paper cannot circulate together.
The Exchanges would fall were there an aug-
mentation of the mass of paper and gold taken'
together, beyond what was required for the wants
of the country ; but his Lordship contends that the
Exchanges may be kept in our favour with a paper
circulation, consequently, that the mass of paper
and 'gold, taken together, is not augmented, and
yet, that they cannot circulate together. If they
cannot circulate together, he ought not to have
blamed the Bank for.not keeping the Exchanges
in our favour, so pi to prevent the exportation of

gold.

[TUE 11EPRESENTATIVE.1
Considerable misconception seems to prevail,
even among those who ought to he well-informed
upon the subject, as to the extent and influence
of the connection which is alleged. to exist
between Government and the Bank of England.
Even in the debate on Friday night, it was
asserted by a Noble Marquis, in his place
in Parliament, that the operations of the
Bank were hampered by its transactions with
Government ; and that it was in conseqeence
less able than it might have been, to lend its
assistance in relieving the difficulties which now
press upon the mercantile classes. however dis-
posed we may feel to respect the authority ,p 0
which Ruch a statement is advanced, we must be
permitted to say, that we cannot perceive the
solidity of the foundation on which it is sup-
posed to rest. For the purpose of bringing the sub-
ject within the comprehension of the general reader
we must request him to view the dealings of the
Government with the Bank of England, in the
same light as his own transactions with his
private banker. Let us then suppose that
the Bunk advances Government a loan of ten
millions on Exchequer Bills. It will then be
asked, does not such a measure hamper the ope-
rations of the Bank ? and has not that establish.
ment ten millions less to employ in discounting
the bills of private merchants ? It does not% we
apprehend, to the extent which is sometimes ima-
gined. If the Bank retain the Exchequer Bills
upon which it has advanced money, it only
proves that it possesses a surplus capital which it
cannot advance upon private bills so as to return a
higher rate of interest. But the truth is, that the
Bank seldom keeps-Exchequer Bills to any con-
siderable amount. When the money has been
advanced upon them, they are usually brought
into the market to be sold to the public
for the best terms which they will corn-
mand, and the money originally advanced by
the Bank is thus replaced in its coffers. If
a good bargain has been made with Government
Exchequer Bills fetch a premium which gives a
profit to the Bank: even under the most adverse
circumstances the worst that can happen is, that
they should sell at a discount, and thus cause a
loss to that establishment. In both cases the
capital originally
advanced by the Band returns
to its coffers : in one case with a profit, in the
other with a loss. There appears therefore no
ground for supposing that the bank cripples its
resources by advancing money on Exchequer
Bills. Every wan at all acquainted with money
transactions,
knows that on whatever terms the
original issue of such bills may have been made,
still the Bank can extricate its capital at a very
short notice, even in the most unfavourable
state of the market, by sacrificing the. discount to
which such securities may lov? Wien. While
Exchequer bills are at par,' it is quite impossible
that an advance of money upon them can em-
barrass the operations of the Bank. They