The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1857-12-22

ACQulrlnl
her 1851 securities the issue department Q, tue es ~
England beyond the amount authorized by law sha De
confirmed and made valid ana .ne ha ocrneS II
Company and all persons who nave peet oohoerneu "
such issues or doing advising any such acts a. aore
said hereby unidentified ana asehatgca ~ ienpee'
thereof and an indictments and norinations, actions,
suits prosecutions and proceedings whaisoeNeI, Oon'
menced be commenced against me said Governor
and Comrany or any person persons IN reaen TO the
acts and matters aforesaid any OF them, are hereby
discharged and made vold,
50 much of the said act OF the tn ana oth years oil
her Majesty limits the amount OF the securities to be
acquired and taken IN the issue department OF the
Rank OF England shall be and be deemed 10 have
been suspended from the 18th day of November,
1857 and shall continue suspended until the expiration
OF twenty days after the first meeting sitting of
Parliament the year 1855, subject the provso herein
after contained and during such suspension the prov
sons Of the said act in to the issue Of Bank
England shall be and take effect IL the
restriction the amount OF securities IN the said issue
department and the prohibition of the increase of such
and OF the issue OF additional Bank Of England
notes thereon had not been contained in said act pro
yided always that il before the expiration of the time
hereinbeore limited, the Governor and Company Of the
Bank OF England give public notice that they have
duced the minimum rate of interest required by them be-
low the rate Of 10 per censum per annum the SAID sus
pension shall cease.
8 Upon or before the expiration cesser of the
pension aforesaid the Of issues hereinbeore con
rmed shall be reduced to the amount which would have
been authorized by this had not been passed;
subject 70 the indemnity and discharge hereby given
all the provisions of the said rected act shall after such
expiration or oesser, he and remain in full force
This set and the royal speech having been previously
referred to the committee the chairman read the passage
in the royal speech relating TO the subject.
The CHANCELLOR Of the ExCiEQvER then said rise for
the purpose bringing under the attention OF the House
the question which, has been stated in the extract rom
the gracious speech from the throne, has led TO the
semblug OF lar lament before the usual time In order
that the committee may fully understand the of
the Of her MaiestyS government which has induced
the directors OF the Bank of England 10 infringe the pro
OF the aud thus rendered II obligatory
upon 10 ask the House to give It's consent To bill of
indemnity, VIII be my dut! 10 call their attention TO the
existing Of the law Sir Robert Peel in the of
his long political career Induced the Legislature agree
totwo important acts relating the currency which
trfnr he NJ
century The first Of these acts is well known 10 the
committee passed in 1919. II restored the currency
to rs proper metallic base put an end to the state OF
things existing during the state of suspension OF
specie plyments-and established the convertbiiy of
bank After that had been passed the power OF
the Bank Of England to issue notes was unlimited IN point
n extent. They only subject 10 the condition Of
being payable gold demand; and the power og -
ta5lshine country banks was also unlimited subject to
the privilege when then existed in favor of the sank
q England from the practise 20 reference TO six partners
These banks, whtn established, could create any
queutt, OF bank nocs. The same power existed
both u Ireland ana scotland Any person could, under
that aS, establish oauh ald issue notes payable
20 bearer demand, provided only that these notes
paid IN specie upon Presentation at the bank That
the state Of the law 1919 to 1874 the date Of
Sir peels second important act ou the currency.
That second act, stated te the House be
sderet complement q the nrst: he intended
cure, fact that conyertiolty Of the note which was
legal only by the act 81 1919; and the provisions
winch lie rtroiuced we're 10 The following elect: "a the
first place he enabled the Ban Of England
secg TO the extent Of Ga 0o0 900, together with
a. fgrtbcr sur which might accrue from the iapsed cir
lia y The English country banSs, TO which some
detailed PROVISIONS were introduced in the act.
A. or3ai il Council under those provisions was
g. MIA q that portion OF ~ issue which rests upon
seclrit the gum Il e475.oo0. tn, retore al pre-
s-ai DE ssues which the Bank Of England can make
spHn esCgriiesand Il IS not allowed 10 make any issues
Cxcef UPON government securities-s EA475,o00. In
add ,U The law allows the Bank Of England 10 make
amount 6. Issue equivalent 70 the bu1hoh winch
may hr 10 - golfers. The act Of 1874 rher intro
d1ccd 4 provision which TO me. athoUg Oh some
manner connected with them yet 70 b. a-seniialy differ
character from the other proysous-I mean that
for d-vdug - Rank OF England INTO Two departments
the and the banking department Gentlemen who
;irA a. with the MODE IN Which the weekly returns
o. the ba-A published that The assets, and
la4les always are cassed Under those two divisions.
sha presently hayeo call the attention Of the Committee
the practical working OF that system with reference the
measure % which am about 10 ask their assent shond
add tia, with regard English country banks the of
lS4s contained this important provsonit prohibited any
barS vhch might after the passing estab-
hsned IL England from ISSUING bank notes. I, limited,
also TIC note issues Of the existing banks 10 the amount
which was then in circulation Ii contained no provision
requiring them issue notes securities, did it al
low them to exceed the fixed limit by issuing notes
against bullion Therefore, under the Act OF lsi4,
the condition Of the English country banks this No
new country banks can issue bank notes al ALL and the
country baks existing al the time Of the passing Of that
art ae limited their issue t. the circulation which they
then posse sed In the follow passed act wh
respec; Scotland and Ireland, which intended
siirg banks Of Scotland and Ireland to their then
n N the case o. the country banks OF England II did
require that those issues should bc guarded by secur
q ans kind, but authorized them 20 make issues in
" Their certified circulation against deposit OF
"A
tan amount Of paper which "a limited under tie act In
addition o. which the banks certain portion against
severe gus The committee ought 10 bear W mind the
praci cal result Of ths compound system upon the crcu
Iaon exists al the present moment. ON the 18th Of
Apr the Of the Bank Of England the hands
* TIE public amounted % Ele,752oi5 Al the same date
t4e nCte circulation oil
Tbe fas.sh country banks wa .......... Gs,e2oOoo
ine Seoteh osnks $1,000
an other banks III Ireland. 3,5'o.oOO
-. g-o15 600
adding that amount % tie circulation OF the Bank Of Eng
tarf nav take tle paper circulation Of the United
hi -don- 70 rs " round numbers about GJs,ooOOoo. OF
that s. 600 600 the only portion which j. strictly covered
by bullion thai which y issued by the Rank 90 Englani
aadt9g 90 the Elll15 coo Which they issue upon
tWHcs rhc whole OF tc circulation Of tie English couu
trv hHn n1d thc chief part Of the circulation ~ the Bank
ufitcani and The Scotch and irish country banks IT, 20
az q the law + concerned not represented by bullion
Tho security which the aN takes or that portion Of the
s.tcIat1L Z he legal couycribty 81 The nOte-the La
h y II tbe banker 20 pay nj specie when the note pre-
ssnted That 4 the existing state 81 the circulation
the different which regulate currency and
Il essential 10 bear IA mind with reference To the sol.
ytnty o. TIE Bank o. England aud the importance Of
Ieep.ga large bullion reserve IN that central establish
mcs thc cous 5erabc amount OF the provincial issue
when 81 introduced the measured lS44 he stated
that q the main objects which he had 10 70
provide security agnnst the excessive sue Of PAPER, and
thereby TO guard against the recurrence from time 70 time
a. those commercial pancs under which the country bad
different Intervals suffered previously to 1874 At the
time be stated that he did PROFOUND his measure
= pslacea or a. an inabe guard against such panics
because be that The q bank paper only
o. their causes and De- recognized The Tact that CONNER
Ga psncs might arise from which did not lie
within the scope q bis leyis But IN lsi7 after the
commercial crisis q that year, when became requisite
Tor tho government 70 auhnrza the bank " the necessity
should % exceed the limits fixed by the Of 1874
Sr r. Peel, il the discussion which arose, delivered his
opinions fully tho subject than be had previously
done, and be definition. corrected by experience,
o. H. views as 20 The objects Of the act Of lsai
which, as contains authentic exposition Of his opn
ions, trust The committee will permit 10 read. SIR
r. Peel, upon The 50 q December, lsiT, sad
then thai the t % 1874 had triple object Iis
obset was ha 10 which sdni Il has failed VIZ 70 prevent
W early end ersdsa and sudden nr.con and The
panic and confusion nscparabe from ~ but the bill hal
tvo other objects 81 At least equal mportancethe one 10
and guarantee the congeutiy Of the paper
rency gold, the other the difficulties which
all Times from undue speculation being aggravated
ty the abuse ~ credit in the form prUmssOy
IL hese objects telief u III The oil has completely
succeeded Ny belief hat have hsd guarantee for the
IL ua min rI