Star.
London, England, 1826-02-11 00:00:00

BANK ACT&

The CHANCELLOR of the EXCHEQUER moved the Order
of the Day for going into a Committee of the Whole House upou
'the Bank Charter and Promissory Notes Asc.
lord FOLK ESTONEwialted to suit whether spas that question
the Right Hon. Gentleman meant to propose his measure, or after
the House bad gone into Committee?
The CHANCELLOR of the EXCHEQUER.---inihe Com-
mittee.

-------
Lord FOLKESTONE then said, that the Right
Hoe. Gentleman had stolen an unfair march upon the
House. In the debate which wok place on the List
day of the Session, the Right Hon. Gentleman gave
notice of a motion for this day upon the subj-cc of the
Bank Acts. But on Monday the Right Hog- Gentleman came
facedown no the House and made It an Order of the Day for the
House going into a Committee upon it. Now this was, in his
opinion, a vary objectionable mode of proceeding; beteg*, it sup-
posed the House to be in possession of facts, whereas they were
quite in a state of Ignorance. He for one was not prepared to go
into the Coalmine!. It the Chmcellor of the Eacbequer would
state his measure upon the question for going into Committee, be
was ready to withdraw ; but if not, he hoped, the House would
weigh well the step they were taking, before they admitted there
were grimeds for a Committee.

The CHANCELLOR of the EXCHEQUER said,
the Noble Lord accused him of hbving stolen a march
upon the House—an accusation which he did not feel
that he had justly intu. red, AS he had done n►►thtng in-
consistent w►th the uniform practice. his notice, as it
first stood, was incorrect, owing to his wo►ds having
been u.ibunderstood; and be subsequently took-ruea-
sureb for putting himself right. It was perfectly tree
that he did nut alter the notice on a subbequent day,
bet he did not feel that in doing so tie was doing any
thing inconsistent w►th the unitorm practice of the.

Upon the quettlon ilsat the Seeker do now leave tke Chair,
Lord FOLKE.S'IONE explained, and said he would not persist
In his opposition, against the feelings of the House.

hIr.CA LCRA FT sal& that he,aor as he should think, assault

any Mensbei consider binned pledged to anything by the step
new takes by the House.
The Sagalea having left the Chair, he House went Into Com-
mittee, Mr. Mumma presiding.

The CHANCELLOR of the EXCHEQUER then

said he was well aware of the objections that would
be made, as well to the principle as to the details.of
the measure which his duty required that he should

lay before the House. He should, however, proceed
to ditcharge his duty fairly and fearlessly ; and in
doing so_he should have to ask the. House for their
Patience, and their indulgent attention. But before
be proceeded to explain the views of his Majesty's Go.
vetnmentoind the grounds upon which they-concvived
that the disttesses and alarms of the country required
eleae :miters to be treated of, he should offer some re-
alistic upon a course which had been taken—not there,
but cis ot: er quarters, in reference psi he conduct of Go-
vernment. He meant the objection which hadteeii.
raised against outerpectations of relief: It
was said that it would have been mote prudent If they'
•
had altogether ahstaiced from stating to Palliainein
what their intentidas were until the.), were ready to
bring theft measures forward. Now .he entreated the
House to consider the situation in Which they should have
been placed.;—and,. what *Attar test thousand times mote
importance—the situation in which the country would
have been placed by such a proceeding 0.. their part.
lithe? had taken that course, it was impossible that the

subject-could have been alluded to in the Roy el Speech.

But if they had been silent upon such a subject he
should be glad to know where would have been the
silenc e inother quarters? WAS it possible, wit-h such a

state of public feeling, with so many interests involved
in distress and panic, that the Address would have been
moved half an hour before the Givernment was called
on, in such a manner as it could not resist, to state
its measures for removing or alleviating the evil ? . He
would say that they should have disgraced themselves
by such a silence, because it must have been im-
possible that they bad not fi amed something in their
own minds as to the measures best calculated to meet
the exigency of the case. The country would have been
justly incensed at such a delay, and the effect would
have been that all classes would have been kept in a
state of feverish agitation winds must h ive created
greater distress and suffering than even that which had
resulted from the present agitated state of the public
mind; it would have increased all the evils ill a degree
for which he should never desire to make himself re-
sponsible. Therefore, whatever might have been done
by Government, or whatever measures it would have
:been best for them to undertake—silence, in any case,
was inconsistent with the situation of the country,
and this' objection to their conduct was entirely with-
out 'grounds. And new, in order that the House
might be enabled to judge-..firstly, whether anything
ought to be done; and secondly, whether what the
Ministers proposed was the fittest thing. It was evsen-
tial that they should satisfy their minds in the first
in-
stance, that they could discover the true causes of the
evil. Because if they did not, they would only be legis
Laing in the dark, and doing infinitely greater mischief
than good. And here he 'would observe, that let
the measures they had to propose be ever so rigbt and
good in principle, they did not desire to lead the court,
'try to consider them as an infallible remedy for the
existing distresses. He wished not to do that, became
he knew be should baly be leading the country into a
'delusion. But he would also lay down this proposi-
tion as incontrovertible :—they could not flatter them.
selves, as Legislators, with' the hope of ever devising a
ineasuie of perfect and infallible relief against the com-
mon fluctuations of trade, prices, and commercial coat-.
dance. The supposition was contrary to the franie of all
human society—but particularly to a state of society like
that which had obtained in this country. All history
lOW us, that wherever society bad existed, such floetaii-
dons had been almost of periodical occurrence. 'ln all
countries, and above all, in those where refinement and
civilisation Were Most advanced, whatever might be
the nature of their-curtei4ey, whether theenetically and
pectic ,Ily metallic, er partly meta lic•and partly corn-

temptation io inc•ease the cultivation of the soil beyond
what could be eventuallyprofitabl • to the producer. This
for a time increased the means of the agricultural class,
sad they employed their increased means in an increased
Consumption, M hick likewie extended the means of
ether br undies of the'community, and an increased ge-
hrveral tendency to speculate was the comequence. Then
,came the natural tendencyto over-speculation and an al-
teration in the seasons brought down the prices to their
level. Alarm grew up. and confidence between man
and man was lessened or destroyed. Those who had
spent or tucked up their capital in the cultivation of the
soil were unable to meet the demands upoti them, and
their ruin was the consequence. The money' which had
been advanced upon the lands, was not available to the
ether classes who had so employed it, and that fluctua-
tion arose which created the sort of distress we had
now to suffer in a more extraordinary. degree than
was often known. But if this could happen in i coun-
try where the circulation was wholly Metallic,how much
more so in one where it was partly cornitosed of paper?
Because it-was well known that the effect of a paper cur-
rency would be to facilitate the rise of prices in the first
instance, and precipitate their downfal when it 9ceurred.
Bet if this evil—since in its result it was so on account
of the distress which it produced anyngst all on whom
it operated—was thus proitmed in such countries, he
thought it was greatly aggravated, though not caused
(he always wished to make that distinction) in this
country by the nature of its paper circulation. He
thought so, because where the paper circulation was
not confined to a large denomidation of notes, it ap-
peared to him that the existence of the smaller species
of circulation musts aggravate the situation. of the par-
ties from whom they issued.—They were told, indeed,
that Country Bankers did not wish' for the continuance
of this kind of circulation. One Hon. Member, engaged,
he believed, in that business, stated that the one pound
'notes were a postive nuisance, and that Bankers wished
Ito get rid of them. Those Gentlemen appeared. cer-
tainly,- impressed with• the daticolts of getting rid
of therm but they :said that every esrablishment was

sompelkd to issue them in, order to keep up their cir-
ciulation, as long as they were aontitted into circulation
at all: Now the efsct of this competition was, a ten-
dency to increase the general. circulation beyond the
proper point, and then, by affecting -the exchanges, to
drive the gold out of the c • nn ry, aid prevent the par-
ties themselves from b iug able to pay 'in g• Id, that .
witch by the very terms ex, ressed upon tl,eir paper they
were bound so to pay. laiano.her point of view this Wai.
an evil, because it prevented the roil operation sir that
measure of 1819, which had ant with, he thought, the
tin 'monts support of tire House, and a general con-
..curt erice.of favourable opinion throughout the country,
And that measure provided for the entire refurival of .
*this species of circulation. This, then, was nil a new
prOposiiion. It only u cm to the restoration of things
as they were before. He declared to Goo it was not
now the political economists who were Oiling down,
but th:•se oppoied to them we e the iiinov,kors. Yet
what he h •d t i ropose was represented as a mie.ure
that would spread general confusion and distress, drive
all confidence out of the country, and preterit every
man from gaining accommodation in any of his com-
ma r.:ial dealings. He apprehended that a inetal.ic cur-
rency would lather increase than destroy such confi-
dence, and afford mo e security to all the transactions
of business? And when all these dangers and alarms
were held up against the change, let them look at the
effect of the present system. Who were those..mongst
whom the ,male notes generally circulated? They %coo
the poorer ctas,es;
.pe sir s h.ving nothing but their in-
dustry to subsist upon, and to. provide them with sup-
port in times of sickness or disease. One of these per-
sons may have acquired by careful and industrious
habits,three or four of these 1/.notes.Why to be deprived
of this was hear (-Ist eakirrg ; rt was his all, and no bing
could save hint firms ruin and misery.lt he had been pos-
sessed of sovereigns they would have been something
for him to cling to in the hour of need, and a vast
quarrity or human suffering would be prevented by
such a change.' The B irks, too, would be strengthened
in their security if relieved from the danger of supplying
the circul.tioa used by the poor man. But if they lett
lairn with these mars, err his hands—let disttust or al ism
be created by whatever cause they may—he, being the
first to suffer—he it was who spread the panic to the
holders of five and ten and twenty pound notes. When
they saw the poor man running to save his money, they
naturally began to say, there must be something rotten
in the Bank, and accordiugly went and drew out their
larger sums ; and thus the panic was spread to a class
not otherwise so liable to feel it, and in whom it became
a serious injury and loss to the parties. Therefore.
he thought that the taking away the power to issue
small notes altogether would be a benefit to the
Bankers themselves, as well as the poorer classes.
Am I, said the Right Hon. Gentleman, proposing in
this respect any principle either danrous or new ?
.Am I going to destroy that which Parliament has said
to be an es-ential part of OUT currency,•or that may
be necessary fur the' purpese of our own commerce ?
Quite the contrary ; I em only about to uphold the
principles solemnly pledged by Parliament, and to
place our currency on a more .steady basis. Sixty or
seventy years ago them eat no prohibitiiry law, but in
1773, after the reirirmation of the coin, a prohibitoVy law
WAS found to be absolutely necessary. . In .1777; 'a still
further prohibition was tound necessary—the Parlia-
ment not bell; swisi:d with the event to which it was
4; it t tied but tw6 years 'before. They considered the

issue of ridges updcr five pounds" to be a great evil ;
adding, at fhe same-time, that smaller notes were by
no means necessary for the purposes of our commerce,
In ITV, the Act of the 17th Gt o. 111. was made pei-
retual, and I cite those Acts for the purpose of shewingl
that those who preceded us, and who are som-tisieg
referred to as models of wisdom, and now and then as
the very reverse, considered the issue of-small notes to
be so bad that they absolutely prohibited them. In
1.1.97, when the suspension cf cash payments occurred,
i became necessary to give effect to that measure, by
allowing the issue of one and two pound notes ; but',
before that period their issue was illegal. In 1819,when
the Bank Restriction Act was over and over again dis-
cussed, wl en Parliament and the whole country resolved
to return to each payments, the House had a Committee
sitting, composed of men of all panics, of men of very
different opinions as to the principles on which our,
currency should be established ; but still there was no
dffeience uf opinion amongst them as to the necessity
of resuming cash payments, and I defy any man to find
out in the report made by that Committee, any one line
going to establish the necessity or utility of small notes,
fur the maintenance of our agriiulture or our com-
merce. .fhe Committee took the opposite course, and
decided that the issue of small notes should be discon-
tinued in two years after the resumption of cash pay.'
ments. The Parliament of that day, never intended that
small notes should continue to be issued for years after
the Bank had paid in cash. I repeat what I before,
repeated the other night, my unfeigned regret, that, in
Ib'22, that step was taken, by which the circulation
of small notes was extended. Now as to the de-
posit to be made by country banks. I have heard
that bankers say, they are indifferent as to the issue of
small notes. although they object to the deposit.—
Why, as to small notes, I am net going to introduce
any new principle; in 1833 they should cease as a
portion of our currency, and all I am doing is, to revert
to th: system which was so strongly recommended in
1819. My Hon. Friend, the Member for Cricklade,
says, the small notes are essential to the payment of
rents; and if so, why then the law now existing must
be changed, and my Hon. Friend must make the law
for small notes perpetual. My Hoa. Friend is a landed
proprietor, so am I; and, upon my honour, as such, I
do believe, .we should be sure to lose by the system of
whiclshe is so enamoured. Perhaps Gentlemen do not
wish to make small notes perpetual, and only object to
their being withdrawn, as being likely to cramp the
circulatioa of the country, and, by so doing, to lower
the pries of agriculture and commerce? I confess
that any such apprehensions appear to me quite vi-
sionary; besides, we are not without some experience
on this subject, for, in 1819, when it was necessary for
the Bank to provide means for paying their notes in
gold, the mode they adopted was, by contracting their
issues to such an extent as produced the settlement of
the exchanges, and brought in and enabled them to
keep a sufficient supply of golds since 1819, there has
been coined at the Mint no less a sum than 25.236,000
sovereigns. I shall now state to the House the periods
at which this took place, with a view .to chew how
great a proportion was coined in the three years imme-
diately after the year 1819. This appears from the
following Accouut of the Quantity. of Gold received
into his Majesty's Mint, and of Gold Monies coined in
the mulct mentioned years :

Gold imported into
the Mint.
s. 4.
• . 3,762 16 1
. . 1,493,162 10 7
. . 10,619,013 13 9
4,426,446 14 5
617,197 1 9
4,690,516 IS 2
4,152,159 10 9

1119
1020
1021
len
1023
1024
102 S . .

Gold Moo*
coaled.
.t. ad.
3,574 9 3
949,511 0 0
9,590,759 13 10
5,356,787 12 8
759,748 10 0
4,065,071 0 0
4,580,919 0 0

26,002,259 2 4 25,254,379 S
So the House will perceive, that, in 1820, 21, and 2Z,
the exchanges were set right ; the gold got into the
country, and fifteen millions of sovereigns were coined;
I do not mean to say that there was not partial distress
in 1819. and 1820. In some respects, I may say the same
of 1822. but still any one looking to the various prices,
of commodities in 1822, after the great effort made by
the Bank to return to cash payments, must see that
things we, e generally mended, although the citculation
of the aunt: y had been necessarily reduced, to enable
th Bank to meet the payment of their notes in gold.,
The average circuluion in 1590 was . . 423,875,000

1621
and in 1821,
notwithstanding the pressure which
existed. it amounted to

. . 18,000,000

the paper currency having In that year increased.—
When the substitution of gold for one pound notes
took place, did any man say to himself, di i am
likely to be ruined?" Did all credit cease ?
Did every one run to grasp at any remnant of
his property which might have been entrusted to the
hands of another ? Certainly not. They had been
prressively advancing to prosperity; prices had
attained a permanent level; confidence had increased;
cchnliverce had been flourishing, and the slightest con.
siderariin would convince those who directed their
attention to the state of things before and atter the
period he alluded to, that there was no foundation now
for the danger apprehended by some in the substitution
of gold for paper at the present moment'. But it may
be said that this is an operation of such magnitude as
ought not to be undertaken without great consideration,
nor are we doing so; for the subject has had the
sanction of Parliament for several years past, and now,
in order to estimate the apprehensions which thiy be,
entertained from withdrawing the circulation of small
notes, I shall call the attention of the House to the
gold circulation as it exists at this moment. In
18.19 we had no gold. In 1823 we have gold ; and
every one must see how much easier it is to superinduce
a smaller quantity on the stock we have than it was to
lay the basis of a large gold circulation, such as took
place in 1822. The gold coined since the year 1819,
amounts to 2.5,25,0001. there was expo' ted since that
period 7.269,000/. This appears by the following Ac-
cuunt of British Gold Coin extsortt d
Or. Value. Average price of gold.
1819 tan atilt,9l7l/ ,tre 19 9
18'20 . 111711 17,344 3 17 101
1541 . NO.
11-2 . 147,553 57§,c05
1823 • 98.000 319,730
4824 • 764;109 11,11014.121
1123 . 134,951 5,020,176

3 17 I
3 17 6
3 17 I
3 17 6

.0469,174
Of irlip 7469,1761. the cut Qf Looo,pooi. has compel
back in the sold coin of the realm, and thence.the iota:
hiss by eiportis about 6,000,()001. Thee deduct .fiorn.
the 26,000,000% coined the 6,000,0001. exported, and it
still leaves us a. balance of 19,000,0001. Some murs

'money may have gone out in the packets of individuals:l
some may have_ also roe oat in' a. species of. trade,
which ',have to
, otwiabed to be dpwn, mean.rhe;
trite kpowa by the name of stSgeWnp That triad.
purinapalty, if not wholly, managed by. gold, and no
bt some..deduetions are to be nada of the continnak
isiyments ander` that head. The exchanges are now
more favourable to the country, and consequently to
the importation of gold from all the other parts of the
world. It appears, therefore, that we have most fully and
completely laid the basis on which to begin, arid that
wWch we have to look to is, to see if, at the end of three
years time, we shall be able to withdraw the small paper
currency entirely flora circulation? The neat thing
which we have to look to is, to ascertain the quantity of
gold necessary to supply the place of one and two pound
notes which shall be so withdrawn. The House is
aware that there is much difficulty in ascertaining,
with any possible degree of accuracy, the amount of
country bank paper in circulation ; but still some pro.
table guess—some near approach, may be made to
it. It appears that during the year ending the sth
January, 1821, the number or one pound notes
stamped was 1,683,001 In the year ending sth
Jan. 1822 (the period at which the Wink of England
determined upon withdrawing their one and two
pound notes), the amount was 2,214,0004. In 1825,
1,888,C001. In 1824 there was a small increase, for
they amounted to 1,969,0004. In the last year, 1825,
they amounted to 2,501,0004 Now, I believe. tliikt if
we are to estimate the amount of country pacer

' circulation, by trebling the amount stamped in any
year (a scale by some supposed to be correct),
we shall considerably overrate the actual amount.
I believe the average of de three last years is
about 2,300,0001. and three times the average of the
three years, would give 6,000,000, or rather more; but
although that sum may have been the amount of that
-species of currency during a considerable portion of the
year 1825, there is no doubt that there is not the same
amount in circulation at the present moment. Because,
when in the month of July last, a question arose in
this House, respecting the right of any private banker
to refuse paying his small notes in gold, which question
arose out of the difficulty opposed by a banker in Bristol
to that mode of paying his one pound notes ; that cir-
cumstance operated to a great extent on those who were
in the habit of taking such notes, and also upon those
who issued them. Subsequent to that occurrence, and
in consequence of it, a great proportion of the gold
which had lain in the coffers of the Bank of England
found its way into the country to enable those bankers
who issued small noses, to provide against the menaced
exigency, and to lessen the quantity of their small notes.
Hence am I justified in believing that the amount of
small notes now in circulation is less than at any period
of the last year. From a calculation made by persons
most competent to that task, it was found that the notes
stamped for private bankers were not of necessity imme-
diately issued, but were held over to replace those which
had become worn out; so that, in point of fact, although
in 1825, it might have seemed that six millions, in small
notes, were in circulation, yet, from the operation of
the circumstances to which I have referred, the amount
is not now, probably, more than four millions. The
utmost effect, therefore, of the measure which I propose
to submit to the House, would be to render it necessary
to fill up, in the course of the next three years, the void
created by the withdrawal of that amount of paper cur-1
tency. The assertion of some Hon. Gentlemen, that it is
impossible to fill up the vacaueywhich theproposed mein
sure would cause, cannot be sustained, and the appal..
hensions founded on it, I will designate as most vi-
sionary and groundless. That some difficulties still exist,
and that some danger still threatens, I will not deny—
but surely, in an undertaking intended, and calculated
to remove those difficnlties—to avert those dangers,
and to prevent their recurrence, we are not to be
deterred by imaginary contingent evils—(Cheers).—r
It would be most pusillanimous, it would be must im-
politic, for Parliament to shut its eyes, and not to look
those difficulties and dangers in the face, and to provide
for them a remedy. In a time of war it may happen,
from a variety of causes, that the principles of sound
policy cannot in every instance be followed; but if, in
a time of profound peace, we are not to make sound
principles the basis of our conduct and of our measuress,
our affairs must for ever remain a chaos; it will be ins
possible for us ever to retrieve them from disorder, and
to place them in a proper situation with reference to
the dependence which all States have upon each other.
Reference has been made to the increase of circulation
of Bank of England paper, which, however, has arisen
out of measures adopted by the Bank, and which were
their own acts. It is undoubtedly true, that the issues.
of the Bank in the years 1824 and 1825 were greater
than in the preceding years. Here the Right Hon. Geo.
tleman referred to, and read the following decunsent
Amount of Bank Notes in circulation, including Bank Peet Mk
at the undermentioned periods' •
1820—February 15 . . X24,051,500'
May 15 • • • 23,815,7/0
August 15 24,451,470
November 15 . . 23,182,720
1821—February 15 . . 13.350,200'
May 10 . . . 3,812,850,
August 15 . . 21,241,170 i
November 15 . . 18,641,870
I 922 Fe bruar y 15 . . 15,826,270'
Atuy 15 . . • 17,230,410,
August II 18,513,2501
November 15 . . • 17,601,820
1553—February 15 . . 17,509,620'
May 15 . . . 18401,5801
August IS 19,895,8301
November 15 . . 00,365,140
1524—February 15 . . 20,357,100'
May 15 . . . 19,961,910
August 15 . . 20.960,540,
November 15 . . 21, t 114,430
1815—February ZS . . 91,301,931'
May 15_ . . . 201046000

Avenges.
25,1175,942‘

21,7'74771

18,042,93/

19,157,49 S

12,7‘1,015

A o=ust 15 • • 19;616,010
November 1; . . 17,980,630_
From these data, it would appear, that the average
issues of the excheoges of the Bank had increased con-
siderably in the year 1824., and that of course that in-
crease must be attributed to the consequences which
follow every greatincrease in the issue of paper by
country bankers. The asserted proportion of issues of
the Bank of England, and the country Banks, does not
by any means exist ; for it appears that, instead of keep-
ing
pace with each other, the reverse, is the case; and
that, in fact, there is no intimate or direct connexion
between the two species of circulatiag medium which
has been ascribed to them. It does not. appear that the
increased issue by the Bank was caused, as is believed
,by souse Honourable Members, by. advances made to
'Government, or by the payment .of t le half-pay, pen-
Stens, and supesannuated alowances, or by pay.
• g off the holders of the four per cents. The in.
mused issue may rather be ace 'anted for by the
d teiminatiun sf the Bank to advance money upon

(landed security, for. in that waythe Bank had lent about
2,200,0094 the amount advanced by the Bask to Go-
vernment ceinot have increased the circulation beyond
200,0001:. or Soo,oo47consespently the increased circu-
lation of the Bank hid ;not been caused by advances to
Governaient. In stating this it is .by no means my-in-
tention to shift from Government to the -Bank. the re-
sponsiblity of the increase that took place in the circu-
lation. I have not the most remote intention to shrink
from the consequences of those measures of Govern.
ment in which I have concurred, nor to screen his
Majesty's Ministers from any blame they may
appear to have merited; that would be the weakest
point that could possibly be assumed. If it shall
be found that the conduct of Government did
contribute to produce the panic, it is the duty of
the House to take,care that such a misfortune shall
never occur again, and it is in the power of Govei nment
and of the House, to insure that result. I call upon
the House, n•rw to legislate on one subject, and I trust,
therefore, that I. shall not be 'without support, because,
on another question, some parties were to blame; if
they were to blame, in Gores nanke let them have it,
but do not suffer that circumstance to prevent the
adoption of a measure, calculated to prevent the pos.
sibli recurrence of a similar offence, or the unhappy
consequences attendant upon it. (Cheers.) I have now
gone at great length into the general subject, and shall
therefore proceed to a particular portion of it, and
state .in detail the mode by which Government
hope to destroy, at once, the small note circulation,
and the sources of those evils with which the country
has recently been visited. To effect this object, two
modes presen!ed themselves; one was, by declining
that no small notes should continue in circulation after
a given period : the other, that those notes should be
allowed to run their course, and that no new ones
should issue. It appeared to me that the best mode,
as WAS thrown out the other night by my Right Hon.
Friend near me (Mr. Huskisson) would be, to prevent
the issue of any new notes, and that at the end of three
years none of those which might then remain oat should
be allowed to circulate any more. These are, therefore,
in truth, the only points of detail which I feel neces-
sary to state; because, in fact, the Resclution which I
shall now have the honour to read requires no farther
explanation :

" Risio.vio—That it is the opinion of this Committee, that all
promissory notes, payable to bearer on demand, issued by licensed
Bankers in England, or by the Governor and Company of the
Bank of England, for a less sum than Five Pounds sterling, and
dated ON or previously to, the sth February, 11126, shall continue
to circulate until the sth February, 1829, and no longer."

—This is my first Resolution, and contains all that can
be said on the subject, for, in point of detail, 1 have not
much more to state. It is, however, important that the
House should know the views taken by his Majesty's
Government of the remaining portions of the question.
With respect to the application of this measure to other
portions of the United Kingdom than England,
the whole of the attention of Government would be
directed to the extension of the measure to all parts of
The Empire. The general law with respect to banking
in Scotland, differs from that which existed there since

.1779. In Sootland, no check upon the issue of Bank
Notes under 51. in value was known until that date; but
•in that year the law was altered, and it was enacted
that no note under 20shillings in value should be issued.
In 1785, that law also was repealed, and by the general
law of Scotland, there is no restriction whatever on the
issue of small notes; indeed, some have been circulated
there for so small a sum as five shillings. In Ireland
there is no restriction, yet in that country an objection
had existed to paper currency. In the north of Ireland,
in particular, the people felt an objection to a small
note currency, and required that all rents should be
paid in gold. In the year 1799, the Irish Parliament
took a course directly the reverse of that which, in 1797,
the Parliament of England had taken (after passing the
Act for restraining payment in gold by the Bank), for
while we repealed the law which prohibited the issue
of small notes, the Parliament of Ireland passed'a law
(in 1799) declaring that no notes under 51. should be
allowed to circulate, and which had the effect of keeping
in that country a greater quantity of gold currency
than was in circulation in England at the same period.
In the year 1806, that Act was repealed, since which
date small notes have almost excluded gold from circu-
lation in Ireland. The difference betueen those two
countries is this: In Scotland there is no exclusive pri-
vilege enjoyed by any body or individual. There are
there three chartered companies, but without any ezclu
sive privileges whatever secured to them. In the Act
of 1822, the exclusive privilege previously enjoyed by
the Bank of Ireland was waived in favour of all other
Pinks not situated within fifty miles of the City of
iblitz. The first question that arises, therefore, is.—
" if you prohibit the circulation of small notes in Eng-
land alter a certain time, on what principle can it be
said that a permanent difference from the usage in Ire-
land or Scotland, in the banking system, ought here to
exist?" In reply, I shall say that I cannot, for my own
part, see why England should be kept on an exclusive
principle. i byno means say, however, that although the
principle should be impartial in its operation, that
the period fur its application to all parts of the United
ILingdona should be the same. In Scotland and iulreland,
a greater quantity of small note currency is in circula-
tion than in this country, and not, of course, so large a
portion of gold, and therefore, the same principle ought
not to be applied at the same period in all places. It
is-not, however, my, intention to move on this occasion
any exclusive measure, applicable either to Ireland or
Scctland. I shall take the first possible opportunity to
move for such an enactment, for, I repeat, I cannot
clonceive on what principle it can be asserted that there.
Ought to be a permanent difference. Now, Sir, to
call the attention of the House to the second branch
or point of this subject. By the second point, I
mean the exclusive privilege of the Bank of Eng-
land, and to limit which I confess I do not anticipate
any serious objection. When, in the year 1822, the Go-
vernor and Company of the Bank of Ireland consented
to waive the exclusive privilege secured to them, it never
entered the head of any Hon. Member of this House, that
that measure was fraught with danger to the existence
or interests of that Bank. Oa the contrary, it was
felt and universally recognised as an Act calculated to
give to it additional security; and when last year the
measure was discussed in this /louse, the only difficulty
I felt respecting it w is to prevent Hon. Members from
caitying the principle too far—so far, indeed, as to
curtail the remaining exclusive privilege of the Bank of
Leland, which had, been secured to it by its Charter.
1 am at a loss. therefore, to conceive on what possible
ground the application of the same irinciple to the Bank
of England can be resisted. Tire system in Scotland
has been long tired, and his proveu to be of a nature

the most beneficial: I do not . mean to soy that the
introduction of the system now proposed wilt absolutely
prevent imprudent speculation, or an imprudent issue
of notes; but I am decidedly df opinion, that it wilt
give a stability and security which have been hitherto
hnknown, and the want of which has been felt to be the
great failing in the present system. It has been said
that the measures new proposed will be useless,
because in the great majerity of country banks
now established, there • are no more than three
or four partners, although by law they are entitled
to have six. Bat there is no magic; in this num-
ber, for six may be too many, although in many instances
they are too few, and this is the light in which we must
consider the cautious system of Banking pursued in Scot!
lond. It is unreasonable to infer, therefore, that this' sysz.
tem will be practically useless. I need only serer to Iry
land, where, since the passing of the Act, the greater parf
of Banking concerns are carried on upon this principle,
(except, of course, the Bank of Ireland, which is a chat:
tered body), sad where the partners are seventy, eighty,
or more in number. Their affairs are ears ed on in an
excellent manner, and, as I am informed, the Commercial
Bank and othets have given pet feet satisfaction in the ars
rangements they have made, and in any notes they
have thought fit to issue. Upon this has been grounded
the resolutions now proposed to the House. They are
resolutions for laying the foundation of a ptinciple that
Banks should be established, without going into details
upon the subject. A Bill for this purpose it has been
thought better to originate in the other House of Par-
liament, where it will be brought in. If this resolution.
should not be agreed to here, and if the House will not
persevere in it when agreed to, I shall feel very deep.
regret. I have been asked, some few days since,.
whether I had proposed to fit any time before which it
would not be competent to parties wishing to establisli
Banks of the nature designed, to loin) themselves
into partnerships ? I certainly did not wish to tit'
any period which might be productive of inconve-
nience to any existing establishments, but I much,
doubt that any advantage can arise from postponement.
I would, therefore, propose the ash of July, as the tittle before
which none of the new establishments can begin to operate. This
is as much as any persons now interested can in reason demand,
and will be equally beneficial to those about to engage, for all pur-
poses of their future practical management. I ant of opinion that
if the House shall refuse to entertain these propositions, or if bevies
entertained them, they will not persevere steadily to the end, they
will inflict the most serious injury on the country, and expose it to
the certainty of having repeated those shocks which have already
caused suck mischief. I conceive it to he the positive duty of Par-
liament not to blink this question, but to apply themselves to it
boldly and heartily, and afford a real, decisive, and substantial
remedy. Whatever fluctuation of opinion, whatever difference of
sentiment, may have existed at different times and on different
subjects in Parliament, 1 have every confidence that they still
have sufficient steadiness to meet and correct, boldly and steadily,
the evils of the present system ; evils width, if not put an end to,
may lead to miseries much greater than any which have been
yet experienced. It is also my opinion that the difficulties which
lie in the way of the measures now proposed, are greatly overrated.
I do sot mean to cast the slightest imputation, or at ail condemn
any person engaged in banking under the present system—quite the
reverse; but the system is bad; and giving the persons engaged in
it the highest credit, I do not condemn them, but the law (hear,
hear), and that I wish to have altered. That the country banks in
general are conducted with credit and honour I willingly admit.
and all those that are so carried on, and have a basis of solidity.
cannot be injured by these measures, and the confidence reposed in
them neither eau nor will be shaken. The Hon. Gentleman
eluded by moving the Resolution.
Mr. A. BARING begged to ask the Right Hon. Gentleman,
the Chancellor of the Exchequer, if that was the only resolution he
intended to submit

The CH A NCELLOR ef the EXCHEQUER—" The only one
on that subject."
Mr. A. BARING said the Resolution then went only to say
that the holders of one and two pound notes should not circulate
them beyond three years. There was no resolution respecting the
issue of new notes, as to whether they might not be issued imme-
diately, or from the commencement of the new system. On that
point the resolution said'oothing. The Right Hon. Gentleman had
complained of hostility 'lasting against bins on that side the House.
The CHANCELLOR of the EXCHEQUER—`• Only hosti-
lity to the principle of the measure as to the expediency of with-
drawing one and two pound notes."

Mr. A. BARING sail that the present was a question
on which no party feeling could possibly exist : indeed.
there never was a period when less existed ; but the
Right Hon. Gentleman must expect to find difference
of opinion, without reference to politics. It must be
quite clear that the sensation created in the City by the
paper of his Majesty's Ministers addressed to the Bank,
was calculated to excite hostility, when that paper sated
the distress of the country was past. They should go
to the Royal Exchange to hear the real state of things.
He (Mr. Baring) had every respect for the Right Hoe.
Gentleman, but he must say chat his speech had strewn
that he was ignorant of the distress of the country: the
view he had taken of it, had only been skin deep. It
had been an unfortunate circumstance that theoretical
men had thought they could perfect a system by the
study of books alone, and not look to the fact of expe-
rience; but it was impossible not to see that such a sub.-
ject could not be attained by a straight road—not as
the crow flies. Many years ago, when the bullion ques-
tion was brought before the House, it would be recol-
lected that he (Mr. Baring) onsosed the Bullion Report,
and he recollected that the Right Hun. Secret ary.(Mr.
Canning) and the Piesident of the Board of Trade con-
curred in it, and the House came to tiie resolution that
on the first of the following January the issue of specie
should take place. CMr. Secretary CANNINU:
.1 do
not concur] —lt was necessary to bear in mind the
nature and cause of the present difficulties. He agreed
in the main with the Right Hon, urable Gentleman in
regard to these, although he, perhaps, had kept rather
too much out of sight the conduct of Government its
some of the transactions with the Bank. In speakintof "
Country Banks and of the Bark of England, he wished
,to be understood as talking of systems, and not of men..
In speaking of the Directors of the B ink of England
in particular, he should do violence to hints. It if he
were to express anything but respect. He had spent
most of his time in ication with them, arid felt
the highest esteem for them as a body: but the ques-
tion was far too important to be blinked; cut of consi-
deration to any men. At the termination of the war,
great facility existed for the acquisition of specie. - Eng-
land had the command of the consuroption cf alt
Europe for her commodities. If it is Inferred, because.
it was easy to get gold then, that it is easy to get it now,
there could not be a greater !mistake. It was easy to.
talk about contracting issues, but it must be remem-
bered that gold is not gut without giving value for it.
The facility of obtaining gold is gene. The manu-
factures of the Continent, as well as those of America,
have gradually improved; and, year after year, vte
find ourselves a little and a little mare excluded.—
To return to the immediate causes of the present dis-
tress, the Bank of England during the years INS and
1824 had become possessed of a large amouut ut specie.
lhey had been during the war in the habit of giving to
the proprietors of Bank Stock a dividend of ten per cent.
as well as large bonuses in rapid ince ess.i on. In this
.there had been nothing to blame. But if, as he sus-