Star.
London, England, 1828-06-04 00:00:00

Wet much of mischief had emanated, would but
expose the Government and Legiilature to be the objects
of con emo An i iislicule to the country. As to the small
notes ai p e•ent in
.England. he would remark, that
from the present amount of the general circulation of
the c,,untry, the proportion of small notes in circulation
to' the whole amount was so small, as to be quite unim-
portant. It was but an inconsiderable item in the gross
amount, as appeared from the returns laid before the
House. To show how unimportant the proportion
was, he would refer to those returns. From them it
'appeared that the amount of notes of the value of 51•
and upis ards, issued by the Bank of England, was
twenty ; the amount of similar notes issued by
'country bankers was thirteen millions; the amount of
notes under 51 issued by the Country Bankers was
1,400,0001. The amount of sovereigns in circulation
W 25 twenty-two millions, which, together with eight
tniilioris of silver, gave the total amount of circulation,
in strictest sense, at 65,500,0001. It appeared then,
that the amount of small notes bore only the proportion
42,400,0001. to a total of 65,500,0001. which be con-
sidered he was justified in regarding as a very incon
siderable one. Let the House only consider how small
:he proportion was—se per cent. on the whole amount.
How small, then, must be the effect of that small note
circulation upon the general circulation of the country?
And this, it was likely, would be rendered less by the
increase of 600,0001. in the issue of large notes, which
was intended partly as a substitute for the diminished
amount in the circulation of small notes. He admit-
ted the force of the argument of the inconvenience that
might arise from the withdrawal of small notes from
certain districts in which labourers wages were paid in
one and two pound notes. It was contended that in
such districts the greatest distress would prevail; bat it
would be a great consolation for those to know, who
complained of this inconvenience, that both in reference
to periods anterior to the present, and still more in re-
ference to the present, there were ample means of
circulation to remedy any apprehended evils of
this description. He would refer to four different
periods, to show what had been the state of the
circulation in those periods of , four years each.
He would commence from the year 1810 to 1814.
There were then 4,000.000 of guineas in circulation,
which, though considered to be in circulation, yet it was
well known that a considerable portion of that number
was hoarded up. These guineas were subsequently ex-
changed for sovereigns. Besides these four millions of gui.
nea,, there were then seven millions three hundred thou.
sand of one pound notes issued by the Bank of England;
there were also ten millions seven hundred thousand of

one pound notes issued by country banks, which, toge-
ther with seven millions pounds of silver, including
bank tokens, gave a total means of small circulation of
twenty-nine millions. Taking the second period from
1814 to 1818, the total amount of circulation was
29,200,000/. The next period, from 1818 to 1821,
was twenty-five millions four hundred thousand
pounds. And taking, lastly, the present period,.it would
appear that there were twenty-two millions of sovereigns
io circulation, which, together with eight millions of sil-
ver, gave a total of thirty millions as the means of small
circulation for the exigencies of the country. It would
appear, then, that our means in this respect exceeded at
die present period what they had been at any former one.
If then our minor circulation now was greater than ithad
been at a time at which taxation had been at the highest
rate, and at which the commerce of the country and its
pos.tion were such as to require all possible facilities
of circulation, there were not, in his opinion, any rea-
sonable ground of apprehension that the amount now
at our command would be found insufficient for our
prevent exigencies. If, then, thirty millions of circa...
lotion of this description would meet every reason-
able demand, on a fair comparison of •the present
period with anterior ones, he did not think these was
much dread of our experiencing the evils which some
persons anticipated, from the withdrawal of the one
pound notes from circulation. He trusted, then, that
he had shown that the effect of the withdrawal of the
small notes, in reference to the whole circulation of the
country, would be inconsiderable at all, times. More-
over, he could further show, that even in, districts where
most business was done, and where the greatest com-
mercial activity and enterprise•prevailed, it appeared
that issues of 11. notes were not necessary. In many
places—in Lancashire, for instance—such issues did not
take place. And when the great extent of that district
was considered, and the great trade that was carried on
there, and yet that no issues of 11. notes occurred there,
the House, be anticipated, would concur in opinion with
him mat in other districts issues of this description might
without injury be dispensed with. If they were ad•
vaotagesius to trade, he was sure they would be touud
is Lancashire. These considerations, he busted, would
induce the House to grant him permission to bring in
the Bill, and to withhold its assent from the motion of
the Honourable Baronet (Sir .1. Graham) for a Com-
mittee on the expediency of assimilating the paper cur-
rency of Englind to that of Scotland. The Hon.
Baronet endeavoured to recommend his motion by ac-
companying it with the notice that it was a motion to
inquire. The Hon.- Baronet was too dexterous a teed-
tiao not to know that this.was a captivating device toi
recommend
,the motion to the favour of the House.—
Ibis, the Hon. Baronet was well aware, would be a
more acceptable motion than to submit one directly foe
the repeal of the Act of 1826 ; and yet he was satisfied
that the Hon. Baronet was too candid not to admit that
the repeal of that Act must flow from that Committee.
which it was his object to have appointed. If the Hon.
Baronet Were successful in his motion, the impress
tioa on. the country would be, that it was intended to
repeal the. Act of 1826; and it could not be denied that
much inconvenience and evil would arise from the pre.
valence of such an impression. The Right Hon. Gen.
Orman recalled the attention of the House to the men.
sure of 1819, which was introduced as a permanent one,
with a view of restoring and establishing cash payments.
tie principle of that measure should direct and govern
the House in all its acts of legislation on this sub)ecto
aid he trusted they would continue to abide by a as
they hitherto had done, with some variation, bat with
a perfect degree of consistency. The Right Honourable
Gentleman concluded by moving for leave to bring in
&Bill to restrain the negotiating in England of pro-
missory notes and bills of exchange under the value of
twenty shillings issued in Scotland or helapd—(Hear).
Cis the question being put,
Sir J. GRAHAM said, be bad expected much diffi-
culty in addressing the House on so important a sub-
lett ; but the difficulty he had naturally anticipated had
been greatly increased by the course adopted by the
Right Hon. Gentleman opposite (the Chancellor of the
Eschequer). The Right Hen. Gentleman had spokes
as if in reply to something that had been urged, or what''
Le supposed would be urged. The Right Hon. Gentle-
Ilan had said that those who in 1819 bad voted for the
resumption of cash payments, would be guilty of a
great inconsistency if they did not then support him in
his proposition. He (Sir J. Graham) was one who had
an voted in 1819. He was at that period extremely
4ed be had yielded to the persuasive powers of

one to whose name he could never allude without
feelings of attachment, affection. and respect. Through
the influence of the late Mr. Ricardo he had unfor.
tunately and unhappily supported by his vote one
of the greatest fallacies which . had ever met with
the concurrence of the House of Commons. Erne-

tience and consideration, however, had convinced him
of his error, and therefore he did not hesitate then

to come forward and to declare openlythe change which
had taken place in his •iews upon the subject. He would
not then go into all the detailed statements made by the
Right Hon. Gentleman; he was not prepared to do so,
and even if he were, he should contend that a Commit•
tee was the place where their validity ought to be tried,
and into tha► Committee he challenged the Right Hon.
Gentleman to go. And he would even say, candidly,
he was not so wedded to his opinions as not to be able
to pledge himself to give the Right Honourable Gen-
tleman his support, if upon investigation he should
be found able fully and fairly to substantiate all
those statements: Some of the statements, however,

were of so extraordinary a character, that he could not
avoid noticing them. That with respect to twenty-two
millions of sovereigns being in circulation, he confessed
surprised him. Such a number might have been issued
from the Mint. but it appealed to him impossible to say
what proportion of it was actually in circulation. The
Right Hon. Gentleman also had laid some stress upon
the state of the present law, which, as he said, provided
for the gradual withdrawal of the small notes. But he
thought that the Right Hon. Gentleman would hardly
venture to assert that it would be prudent in a country
banker not to be prepared on April 5. 1829. for the
payment of all his outstanding notes. The effect, there.
fore, of the present law, if enforced, would be En con-
tract the currency, whichwas the real evil to be appre-
hended, and if possible to be avoided. In another state-
ment the Right Honourable Gentleman had stated that
small notes were unknown until after the passing of
the Bank Restriction Act; but, by the 18th of the late
King, they appeared to have been known much earlier.
The Right Hon. Gentleman had elm said, that there
were no small notes in Lancashire, and from that cir-

cumstance appeared to think that they might be done
without elsewhere. But it there were no small notes in

Lancashire, there was a much worse system of giving
credit. It was well known to be a common practice in
Lancashire for persons without capital to draw bills at
a short date upon others who were equally without ca-

pital, and surely such a system was much less satisfac-
tory than that of small notes—(Hear).—He would then
apply himself to the proposition which he intended
to submit to •the House. By the Report of the
Committee which sat in 1826. he was supported
in setting a high value upon the Scotch system
of banking. Among other passages in that Report he
found one which stated that the paper circulation of,
Scotland did not in any way interfere with the metallic
circulation of England. To say the least, therefore, of
the proposition of the Right Honourable Gentleman, it
was premature. But he contended that it was also
impolitic. He was connected with that part of England
which bordered upon Scotland, and he had presented a
Petition, signed by persons of all descriptions, who were
interested in the question. That Petition stated, that
far seventy years the Petitioners had enjoyed the be.
befits arising from the Scotch system. of -Ban,king, and
that during that time there had been but. peg failure,
in which case there was a payment of 15s. in the
20s. The Petition spoke in the highest terms possible
of the ..benefits. the Petitioners derived from the sys-
tem, and prayed that no alteration might be made;
and he. himself ,could speak as to the security of the
system, and its• beneficial effects. Seven-eighths of
the rent upon the estate which he possessed had for
the last seventy years been paid in Scotch currency, and
net the slightest loss bad been sustained in consequence.
There the effect of the system would so completely
weaken the neighbouring Banks as td'VerldW them
incapable of supplying the wants of that part of the•
country, should it be deprived of those advantages
which it bad so long enjoyed; and that district had
told the House, that if the alteration was made, it
would be for the purpose of introducing a theoreti-
cal remedy for a grievance that did not exist, and
throw it into, confusion and alarm. And when the
Right Honourable Gentleman thought that there
was a striking anomaly in permitting the circulating
of Scotch small notes in England, he would reply
that the true anomaly was for a Government which
professed to act upon general principles, to have one
system for two parts of the empire, and another system
for the remainder. The anomaly consisted in an imagi-
nary line, over which he could actually jump, causing a
difference in the currency—(Hear). The Hon. Baronet
then alluded to the Report of the Comm i ttee,which after
noticing the effect of the Scotch system of banking as
most admirable, went on to say, that they (the Com-
mittee) should not be inclined to change •the system,
whether of banking or of circulation, at all, as it was
calculated to econonsise,the use of capital. and to ad-
vance the happiness and prosperity of the country.
Mr. Secretary PEEL- said the Coeunittee alluded also to the
system it cash credits.
Sir JAMES GRAHAM was content to adopt the
view of the Right Honourable Secretary, and doing so,l
he would ask whether it was .not desirable to inquire
whether the country banks of England could not with
advantage be put on a similar footing'—(Hear).—The
instruments in use were the same.. In Scotland their
effect was good, and theiefore it was but consistent with
common sense and sound principles to conclude that
the system of bankitig in England was bad, and not the
small notes, and in that view he was confirmed by the
Report of 1826; and he, therefore, contended that.
the • view was not in the nature of the currency, Lint
in the system of banking. What he asked for, there-
fore, was, that the House would inquire into the system,
and see if a paper currency could not be so ameliorated
as to become, as it was in Scotland, a benefit instead
of an injury. The propositions, made by the Govern.
ment to Parliament were two—the establishment of
Joint Stock Companies, and the withdrawal of the
smaller notes from circulation. The first and principal
measure, and which was intended to remedy the defect in
lour banking, had been rendered entirely nugatory, by
a clause which was understood to have been inserted
at the desire of the Bank of England. The second
and subsidiary measure it appeared only was to be
carried into effect. The small notes were to be with-
drawn. He would then briefly trace the practical
effect of every attempt to tamper with the currency.-7
At the close of the war, in 1815, the bankers prepared
for the change with which they were threatened. They
contracted their circulation, and what was the conse-
quence? Why, in 1816. the wheat fell alarmingly. In
1815 the bankruptcies were 1,000, and in 1816 they
were 2,090, and 'distress prevailed throughout the.
country. But the apprehension of immediate change
was removed, the evil day was deferred, and prosperity
was gradually restored. Then came the Committee of
the Right Hon. Secretary for the Home Department,
in 1819,- and by that Committee it was entirely decided,
that, leicome what might, cub payments shouldpo.,
sitively be resumed in 1825. Well, what was again