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every description, dated prior to Ja. by the officers. These circumstances, nuary 1st, 1817. Payment in cash was however, though well worthy of condemanded to a large amount ; not for sideration, were of less importance than the purpose of internal circulation (for the large loans negociated by France this he hardly apprehended was the in this country. In June, 1816, it obopinion of any person), but for the tained one of about five millions ster. purpose of being remitted to foreign ling. In 1817, successive loans took countries. To the causes which pro. place, to the amount of between 13 and duced that situation of things he should 14 millions ; and, another of 12 milpresently advert. It appeared, from a lions was contracted for during the return made to the other House of present. But there were negociations Parliament, that the Bank issued under now on foot, which might produce a their last notice a sum not less than demand for a much larger loan. Should 2,600,0001. Of that large sum hard. the allied armies evacuate France duly any part remained in circulation in ring the present year, the French gothis country. The circumstances which vernment must liquidate all the claims appeared to him to have occasioned of the allied powers against it, for this difference, were the deficiency of which purpose, it must require a loan the two last harvests, which had occa- of not less than twenty millions stersioned a great drain of money for the ling. Nothing, he believed, could be importation of corn, and the number farther from the wish of the indivi. of English emigrants residing on the duals who made these loans, than to do continent. The whole number of per- any injury to their country. The consons, who, from the year 1814 to the sequence, however, was the recurrence 24th of February last, had embarked on a greater scale of the same circumat Dover for the continent, amounted stances, which had rendered necessary to 90,230; exclusively of aliens, whose the first restriction. This took place number amounted to somewhat above chiefly in consequence of the extent 11,000. The number of English, who, of the Austrian loan in 1795. Noduring the same period, had returned thing could be stronger than the exto Dover, amounted to 77,530. The pressions used by the Bank on that ocdifference between the two numbers casion. When in 1796, another loan was which he had stated was 12,700 ; so contemplated, they resolved, “ That if that it might be safely affirmed that any farther loan or advance of money the number of English residing abroad to the Emperor, or to any other foreign did not exceed 13,000. If it were as- state, should in the present state of sumed that these 13,000 individuals affairs take place, it will, in all probaexpended on the average 2001. a.year bility, prove fatal to the Bank of Eng. each (which as a number of them were land ; and they, therefore, most earservants, might be deemed a sufficient- nestly deprecate the adoption of any ly high estimate) the account of their such measure, and solemnly protest annual expenditure would be somewhat against any responsibility for the caabove two millions and a half. But, in lamitous consequences that may follow addition to that, the committee must therefrom." Yet this contemplated take into their account the large sum loan amounted only to three millions, expended by our army abroad; for and it was stopped in consequence of although it was true that the French the remonstrances of the Bank, At government provided for the support present, besides the thirty millions of the troops, still it was notorious which had been required for France, that great private expense was incurred five millions had been raised for Prus
sia. Although, therefore, he certain- the national debt, an amount of stock ly did not wish our circulation to de- double that of the nominal value of the pend on the operations of foreign notes of that description issued by them, powers, the present appeared to him or should deposit in the hands of the a most inexpedient time to create a commissioners exchequer bills of equal drain on our resources.
value to that issue. The cause of the The next proposal of the minister difference which he recommended in consisted in a plan for the security of this respect was, that from the frequent country banks, the extensive failures fluctuation in the price of stock; the of which had been productive of much nominal value of the notes in stock distress throughout the country. It might turn out to be a very inadequate was his wish that the restriction should security. The interest arising on the cease on the 1st July, 1819, and that stock transferred, or on the exchequer this plan should begin to operate a year bills deposited, would of course be paid after. The object was, that no Bank to the owners after the deduction of should issue notes without some pro- charges for management. With reperty to answer for the payment. spect to the notes to be issued on this Land, from the difficulty of its con- credit, he meant to propose, that beveyance, and of raising money upon fore they could be so issued they should it, was ill suited for such a purpose. be carried to the stamp-office, and Funded property appeared to be free stamped in a way that should denote from those objections. Scotland, from they were so secured. Some farther the nature of its currency, and the es. collateral security against fraud or fortent of the capital of the persons en- gery, might perhaps be deemed expegaged in banking (which in that part dient; but that would be a matter for of the kingdom were not subject to future consideration. This plan did the same restrictions in point of num- not appear to him to impose any seriber, which existed in England under ous hardship on the private banker. the charter of the Bank), had had no He would be left without restraint in considerable failures, and enjoyed great all issues of notes beyond five pounds advantages in the security of her pa- in value. He would liave all that parper circulation. No inconveniencies liament thought it proper he should could be charged against it. In Eng- have before the passing of the Bank land, however, and stillmore in Ireland, Restriction Act. Nothing would be that was not the case. It was his in- taken from him to which he could be tention to propose, that after the 5th considered as having a well-founded of July, 1820, no private banker should claim. There would still, therefore, issue notes in England or Ireland (for be left to him a very sufficient profit. he would except Scotland, as the ob. Many private bankers were already jection against the paper circulation of stockholders to a very large amount. the private bankers of England and In their case, where would be the inIreland did not apply to Scotland) for convenience of depositing in the hands any sum under five pounds without of the commissioners a certain portion having made a sufficient deposit of go. of that stock! The only difference vernment securities, consisting either was, that the amount deposited would of stock or of exchequer bills. He be available only to the holder of the proposed, therefore, that it should be notes secured upon it, instead of being enacted, that every private banker available to their creditors in general. should transfer into the names of the But the safety which those among commissioners for the reduction of whom the notes were circulated would
receive, would far outweigh any incon- not to be trusted. He had read all venience to the private banker. Strict. the plans which had been suggested ly speaking, a banker at present had for some years. This was one of them, hardly occasion for any capital. But and a very hopeful one it was. There one consequence of the proposed plan was an observation which he could not would be, that it would have a tenden. help making upon the subject. It was, cy to engage men of large property in that, according to this measure, the banking concerns, and to exclude those five-pound notes were to rest entirely, who did not possess an invariable se- as before, upon the personal security curity for their creditors. They were of the banker and his individual creplaced here in an option of difficulties. dit. In such a state of things would No man would say that they ought to any man be such a fool as to take prohibit the circulation of all paper five-pound notes at all from a private under five pounds in value. A metal- banker, while he could get one-pound lic currency was so cumbersome for notes with good security? No per. mercantile dealings, that we could ne. son in his senses would do it. ver conveniently return wholly, to it. would ask, why was the measure proThe question, therefore, was, whether, posed two years before it was to take as it might not be desirable to return effect? Here was a new principle, to a metallic currency, but as it was which, for some reason or other, the desirable to have a paper as near in Chancellor of the Exchequer wishvalue to a metallic currency as possi. ed them to admit two years before it ble, we would allow an issue of paper was acted upon. He would beg the without such a deposit as might secure House not to adopt such a principle the creditor against the danger of im- upon the mere visionary expectations provident speculation on the part of of what was to be the state of things the banker, and the banker himself two years hence. He did not fully against the temptation to it?
understand the bearing of the thing. Mr Tierney said, the statements of There was perhaps no man in the the right hon. gentleman were clear House who did. For this reason a enough, but to him far from convin- committee would be necessary, and if cing. As to the plan with regard to no other person in the House moved the country bankers, he could not yet for it, he would. As to the Bank Retrust his judgment so far as to offer an striction, the right honourable gentleopinion upon it. At all events, it man had pretended the greatest relucwould throw a great hardship upon tance to propose its continuance, and the private bankers. In the first place, had represented himself as only overtheir character would, after this pro- come by the strong necessity of the posal, starid tainted for the next two times. The right honourable gentleyears. What could be the use of pro- man, one or two sessions back, had posing the bill at present? The only said that he did not entertain the smallmotive he could see was, to put men est doubt that the Bank would be able upon their guard against the country to resume their cash payments in July bankers. He was no friend to an ex- next. If the right honourable gentended issue of their paper. They tleman expected really that they would had, however, been of great service to be resumed, he could assure him that the public; and however desirous he he was the only person who entertainmight be to confine their circulation ed any such hope. The right honourwithin proper bounds, he would not able gentleman told them that the diwish to bring odium upon them in this rectors were fully prepared and willing manner, or to hold them up as persons to pay in cash, and that the restriction
would only continue for one year more. the observations of Mr Tierney. He The right honourable gentleman must treated with contempt all the reasons forgive him if he did not believe one which had been assigned for the cona word of it. When July 1819. arrived, tinuance of the restriction, particularly it would be then said, that they might that derived from the foreign loans. as well continue the restriction for
an. If a wealthy German merchant hapother year that it would throw every pened to settle in this country, and thing into confusion to resume cash contract for a Prussian loan-and a payments until the other fine plan be. rich English merchant should go over gan to operate. In this manner, for to Paris, and treat for a French loan, one year, and for many other years, was it to be borne, that for such a reawould the Bank Restriction be conti- son incalculable mischiefs should be nued. It was said, that the Bank had endured by a whole people ? done every thing in their power to After a short reply from the Chanprepare themselves for the resumption cellor of the Exchequer, leave was of cash payments at the time provi- given to bring in the two bills. ded by Parliament. Quite the con- These proceedings in the House of trary. They had done every thing in Commons determined Lord Laudertheir power to avoid it by increasing dale, who had always paid particular their notes in circulation. They were attention to this branch of political allowed two years to make provision economy, to introduce the subject befor this event, but in place of doing fore the Lords. On the 20th of April, so, they had augmented their issues he moved the appointment of a comby two millions and a half. Here was mittee to inquire into the state of the the mutual accommodation ; the Bank currency. He never was more surpriby purchasing government securities, sed than when he heard foreign loans raised the price of them, and enabled stated as the reason for continuing the the Chancellor of the Exchequer to restriction. He should, however, show make flourishing speeches ; and while that this was a mere pretext, and that he was making flourishing speeches, the only reason was the internal situathey were making flourishing profits. tion of the country, created as it was The whole secret lay in the transac. by the measures of ministers. But tions between the Bank directors and here he could not help asking their the right honourable gentleman, who Lordships to consider in what situation knew very well that the former were this country was placed, when this his masters. “I,” said Mr Tierney, great question-one of the most im“ told him so two years ago ; and 'I portant which a legislature could be may use the words of the poet-I called upon to decide-was no longer thought so then, and now I know it.” to be left to the judgment of Parlia[A laugh]. Without the Bank ad- ment, but was made to depend upon vances and dealings with the right the caprice of foreign powers? Was it honourable gentleman, half his bub- to be henceforth a maxim, that when bles would have burst while he was the Emperor of Austria, the King of blowing them up.-He trusted that a Prussia, or the Legislative Assemblies committee would be appointed to in- of France, chose to undertake certain quire into the reasons for continuing financial operations, the Bank of Engthe restriction in a manner so suspi- land must suspend payments in cash? cious, that it seemed as if it had been It appeared, by the examination of the determined to continue it for ever. Bank Directors, that the gold transMr Grenfell entirely concurred in mitted to Austria, in consequence of
the loan of 1795, did not exceed in addition, was there any body who 500,0001. In the years when the loans did not think that the coin requisite to that power took place, the exports for resuming cash-payments must be to Germany amounted to 8,000,0001. more than double the amount of the though usually they did not exceed eleven millions that had been so confi1,900,0001. It appeared also, that dently stated as the sum ? And yet, these exports equalled all those that according to the noble Lord, the Bank were in the same time made to France, was perfectly ready to pay! the goFlanders, and Holland. Thus it was vernment was anxious that payments evident, that if their Lordships consi- should be resumed ! but, on his condered what had been the effect of the science, he believed that those payloans and subsidies of 1794 and 1795, ments were at a greater distance than they would find that the remittances ever ; that the whole business was a had been made almost entirely in goods, complete juggle between the Bank and and not in bullion. If their Lordships the government, and that the country wished to know what had been the real was completely their dupe His Lordcause of the restriction, they had only ship proceeded next to consider the to look at the evidence of Mr Giles plan for the regulation of country and Mr Bosanquet. These gentlemen Banks. He begged to be allowed to distinctly stated, that if all the advan. say, that this scheme was contrary to ces made by the Bank to government the whole spirit of the commercial had been repaid, there would have been laws of this country: those laws reno occasion whatever to have-resorted quired no other security than the proto that measure. There was a meeting mise to pay, and the power to demand at the Bank in October, in which the the fulfilment of that promise. This state of the advances to government country was the most opulent in Euwas taken into consideration. The ad- rope, and had gradually risen, through vances to government had amounted to the whole of the last century, to its 11,280,0001., but they were then found present state of prosperity, by means to be reduced to 4,278,0001. ; so that of banks of credit. Consult authors the Bank, in the expectation of being of any credit on the subject, and they obliged to pay their notes in cash, had would tell you why monetary banks compelled government, so early as the of deposit were not so good as banks month of October, 1797, to pay up of credit. Our system
was founded, , about seven millions. Thus, then, and had risen to eminence, entirely on there was the most full and convincing credit : when honour, probity, and reevidence, that the state of the advances gularity, were the foundation of credit, made by the Bank to government in it was altogether inexhaustible ; be1797, was the only obstacle to their cause, in proportion as extended comcontinuing payments in cash. His merce created an extended demand, (Lord Lauderdale's) object was to see the state of credit increased along with whether the Bank issues were conductit ; and if commerce slackened, credit ed in that salutary manner as to enable declined proportionably; but, under them at any time to be called in in six the system of banks of deposit, credit weeks. But he believed that the Bank always failed most when there was the had not sufficient left in their coffers greatest demand for it. Credit dependto effect such an operation. What with ed on confidence ; and if there was a the twenty-nine millions of paper that stigma, how could there be any confi. had been issued and was in circulation, dence ? The effect of the plan was and what with the loans to government only to make the country bapkers a