sacrifice to the Bank of Englandthe favoured Bank of England. He asked how it could be said, that the state of the circulation did not call for inquiry, when the Bank, having an nounced their determination to pay in cash all the small notes issued prior to 1st January 1817, those notes were now at a premium of 2 per cent, and the two millions and a half issued in paying them had vanished from circulation, and, doubtless, out of the country. What was the nature of the paper circulation, which it was intended that we should have? It was intended that we should have four descriptions of paper. A Bank of England paper, for which the Directors of the Bank had made themselves liable to pay cash on demand. A Bank of England paper, not liable to be paid on demand. A paper circulating on the security of deposits of stock and exchequer bills; and a paper circulating without any security. Such a circulation as this was reserved for the noble Lord and his colleagues to invent. His Lordship censured the having two metals as a standard, and the preference given to gold above silver. This had been attempted to be justified on the ground of the magnitude of the transactions of this country. But the reasoning of the noble Lord was not less absurd, than if he had said, that because we were the greatest manufacturing country in Europe, it was necessary that we should have a yard ex-, tended beyond that of other nations, in proportion to the quantity of our manufactures. It might be proper to consider what was the situation of our metallic currency. We had a gold coin entirely without a seignioragea silver coin, for the first time for centuries, with a seigniorage.-We had, till the 5th July, a silver currency at 65. 8d. the ounce; and we had in Ireland a silver currency at 7s. 3d. an ounce, Our paper circulation could

never be payable on demand, nor in a salutary state, while our coinage remained on this footing.

The Earl of Liverpool entirely agreed with the noble Earl in considering it desirable that this country should have a paper circulation, measured by the precious metals as its standard, and convertible into cash at the pleasure of the holder. There was not a man in the kingdom more anxious than he was to see a return to cashpayments as speedily as possible; and if he had come to the conclusion, that it would be detrimental to the interests of the country that the restrictions on the Bank should be immediately removed, he could assure the Lordships that he had adopted that conclusion after the most mature deliberation, from a review of the particular circumstances that characterized the present times, and with the deepest regret. With regard to making gold the standard of metallic currency, this did not originate with ministers. Gold had become, in fact, and in practice, the standard metal before it was declared so in law. It had risen into this state imperceptibly, before an act of the legislature had sanctioned the practice, and made it the only legal tender for all sums above 25l. In addition to the inference in favour of that metal drawn from general consent and practice, it might be stated that the expediency of making it the legal standard measure of value for other metals was supported by the circumstance, that it was less liable to fluctuation. With regard to the regulation of country banks, he considered some security indispensable; and even among those who objected most strongly to the present plan, he never met with any who did not think some check was necessary. At present, country banks might issue 17. or 2l. notes to any amount, or on any security; but when the restriction expired, they would be authorized to

issue none under 57., unless some special regulation were made. It seemed universally agreed that this limitation to 51. and upwards would be now inexpedient. Were we then to repeal the act, and allow issues of one and two pound notes on any security, or without security at all? Let the House consider the history of the currency of country banks for the last three years, and the calamities that had arisen from bank speculations. Out of 700 country banks that existed in 1814, 200 had now been swept away, and had disappeared, to the ruin of individuals and whole districts, and to the general injury of the agricultural and commercial interests. It was to be observed, that while the great crash to which he alluded was experienced in England, not one, he believed, or perhaps only one bankruptcy had taken place among the country banks in Scotland. This formed an important consideration. Perhaps it was to be partially attributed to that clause in the charter of the national Bank, which provided that no number beyond six should join in a country Bank. To Scotland, therefore, the act was not meant to extend. To the plan proposed he had heard only one important objection, and that appeared to him to admit of an easy answer. The objection was this, that if notes of one or two pounds only were issued on security, the credit of notes of a higher denomination would be injured, as they did not possess the same security. In opposition to this prediction, he would say, that so far from the deposit of securities for small notes being injurious to the credit of notes of a greater amount, the very deposit of such securities for the former would give the latter additional credit. This opinion would be confirmed, if it were considered that double the nominal amount in stocks must be deposited for the small notes, which, at the usual price of the public funds,

would afford to the holders of the five pound notes a balance for the payment of the latter. But, without laying much stress on this argument, he would say that the holders of large notes would not be in a worse situation than they were before small notes were allowed to be issued at all; and as they they then took on credit, for their own convenience, large notes in preference to gold, there was no reason why they should not afterwards, for the same convenience, take them in preference to small notes. Why did people take notes at all, when they might have guineas or sovereigns, but because the former, when great sums were concerned, were more easily carried, and had other conveniencies. He repeated, that the proposed continuance of the restriction arose from nothing either in the internal state of the country or its foreign relations, but from circumstances arising out of the pecuniary transactions of other countries.

He knew, too, and he could assure the House, that the Bank had made most ample preparations to resume cash payments, and that they were ready to do so. The noble lord doubted this fact, and had given as a reason of their inability, the advances they had made to the government. He both denied the fact and the cause. The Bank might have returned to cash payments last year, when all the advances they had made to government remained unpaid. If, however, any thing had happened after this to disturb public credit, the Bank would have said, we must draw in our advances. The government was ready to pay up what it owed them, and, therefore, the advances made to government could no longer be an obstacle to the resumptions of cash payments.

The Marquis of Lansdowne spoke in support of Lord Lauderdale's motion, and was answered by the Earl

of Harrowby and Lord Sidmouth; Lord Lauderdale then, after a short reply, allowed his motion to be negatived without a division.

On the 1st May, Mr Tierney redeemed his pledge, by proposing in the House of Commons a committee of inquiry on the Bank Restriction. In the long and able speech which he made on this subject, he necessarily went over many of his former arguments. He insisted now that if the loan to France was really to be paid in gold, it was the Bank that ought to furnish it. Unless there was something in the air of this country repul sive of that metal, if gold went out gold would come back. This was therefore an additional ground for the resumption of cash payments by the Bank of England. Let the Bank of England send out large quantities of gold from their coffers; that would alter the rate of exchange. The Bank would have no difficulty in purchasing gold to replenish their coffers, though certainly at some loss. But the question for the House to determine was, which was best-that Great Britain should lose the character for good faith which she had hitherto maintained, or that the Bank should be compelled to disgorge a part of the enormous profits which it had made from the country at large? Was it more desirable that the public credit should be preserved, or that the Bank, having accumulated millions upon millions, without having contributed in the smallest degree to the national expenditure, should be enabled to persevere in that system? Supposing that the Bank had ten millions of gold in their coffers; if it were all to go, and if they were to repurchase it at a sacrifice probably of five per cent, that would be on the whole a loss of half a million. And what of that? The Bank had made twenty-one millions

by the country; and was the country now to be told that its whole commercial system was to remain in an injurious and unnatural state, because the Bank would not relinquish the smallest portion of their profits? With a view to persuade the House of the expediency of inquiry, he would urge the little probability, if they agreed without any inquiry to pass the right honourable gentleman's bill, that the Bank would ever resume cash payments. If the restriction were not at once rendered permanent, it would at least be continued from year to year.

One of the principal evils of the present system was, that there was nothing secure and solid in it. No man knew what was to come next. He was convinced that the fluctuation of the funds during the last eight or nine months arose chiefly from the uncertainty whether or not the Bank restriction would be continued. It would be much better to say at once that the restriction should be permanent, than to go on year after year extending it; because, whenever it was extended for a year, after the first six months of that year, a variety of rumours got abroad as to the probability or improbability of the resumption's being insisted on at the end of the year, and numerous opportunities were thus afforded for gambling and speculating. Among the chief speculators he must say, although he by no means wished to say it offensively, he could not help ranking the right honourable the Chancellor of the Exchequer. The speculation of the right honourable gentleman was, whether or not he could keep the existing circulating medium of the country up to that point to which it had attained by the continuance of the restriction on the payment of cash by the Bank of England. For that the right honourable gentleman lived; he dreamt

of nothing else; for on so keeping up the circulation depended the whole of his financial arrangements.

With regard to the bill respecting the country bank paper, it had excited a just alarm in the mind of every man in the kingdom. The effect of it, had it been adopted, would have been to drive a great many of the country bankers out of their business. For his part, he believed the country bank paper, generally speaking, to be a sound and useful currency. Nothing could be more objectionable than the purpose of the bill to which he alluded, namely, to prevent a man from using his own credit in his own way. A security was required which there existed no right to require. Parliament had a right to prohibit the bankers from issuing one and two pound notes, if it was thought that their circulation was detrimental to the general interest; but Parliament had no right to exact any security for the payment of such notes. The number of failures among country banks had been exaggerated, and last year there was rather a diminution. A number of licences had been given up, merely from the Jarge Banks withdrawing some of their subordinate branches. He suspected that bankers in London, during the same period, had failed for as large a sum as all the country bankers put together. Mr Tierney then charged the Chancellor of the Exchequer with a plan to issue government paper, from which, indeed, these notes, on government security, and with the government stamp, appeared to him little to differ. It was natural enough for government to say, "As we can circulate the paper of other people, why not circulate our own? why can we not do this as well as the Bank of England ?" The right honourable gentleman shook his head; but then the right honour. able gentleman had two ways of shaking his head-one was when he

and

thought he could silence an opponent by shaking it, the other when he des paired of being able to carry a favour ite measure. Mr Tierney finally told the House, if they voted as the Chan cellor of the Exchequer wished them to vote, there would be an end, there ought to be an end, to the cha racter of the country. It was that which was at stake. All principle would be set at nought by such an ac quiescence, which would merely shew the disposition of the House to bow to ministers, and to accede to any proposition without inquiry, howeve pregnant with unfair and dishonour able consequences.

The Chancellor of the Excheque did not see the necessity of an inquiry to enable the House to decide a ques tion, which turned chiefly on simpl and obvious facts, of which the Hous was as completely in possession a the committee could be. The righ honourable gentleman had stated, tha the committee would have to consider not the internal situation of the Bank but whether any internal inconvenienc would be produced by the resumption of cash payments. But he (the Chan cellor of the Exchequer) thought committee ought to take the counter part of this proposition, and ask wha internal inconvenience could result from the continuation of the restrictions for another year. As to determining the proper time for resuming cash payments, the House, after the report of the committee, might not be a bit the wiser on the subject. The right honour able gentleman had bestowed a good deal of attention in his speech on a subject not strictly before the House, and into the consideration of which he did not mean to enter he meant the bil for regulating the issues of country Banks, which was not to be proceeded with this session. But the right ho nourable gentleman had laid down some propositions so different from

what he (the Chancellor of the Exchequer) considered true, legal, and constitutional principles, that he could not help noticing them. The right honourable gentleman had said, that it was not legal or constitutional to exact security from bankers for the notes they might issue. [Here Mr Tierney intimated across the table, that he had said it was bad policy.] If the right honourable gentleman retracted his words, he ought to do so explicitly; but he had unquestionably called in question the right of demanding security from bankers for the notes which they might have in circulation. It appeared to him, that the legislature had not only a general right to regulate all the transactions of the country, but that it had a peculiar right to call for security from those who issued a currency to represent the metallic currency of the country-a power, in effect, no less than that of coining, which had always been held to belong particularly to the sovereign. As to the plan of issuing government paper in the shape of stock debentures, he would repeat what he had formerly said, that he had never entertained such an idea for a moment. The proposition had been made to him, but he declared it wholly inexpedient. Whether, under any circumstances, stock debentures might or not be advisable, was a question into which it was not then necessary to enter. He had thought such a measure wholly inexpedient at present, because the amount of floating government paper was already as much as it was desirable to have at the present moment. As to the advances of the Bank to government ample provision was made for reducing them to any amount that might be deemed necessary. The funding of sixteen millions of Exchequer bills had already much diminished them, to a greater extent indeed than the Bank had thought fit to require.

How far the character of the country had suffered from its paper currency, he would leave those gentlemen who were acquainted with the continent to determine. Had any of them found that the character of this country had decreased there? The constant increase of paper circulation in England had been known for many years. Was it not by the aid of this paper currency that we had been able to subsidize all Europe, that we had marched triumphant armies over the continent, that we had stood so high at the congress of Vienna, and that we had been enabled to conclude a peace the most honourable to this country of any that we had ever obtained? And now, after three years of peace, there was no country in Europe of which the finances had improved so much-there was no other country in which any thing had yet been done towards redeeming any part of its debt. The grounds on which he proposed to continue the Bank Restriction for another year were simply these the extraordinary situation of foreign countries, and the extraordinary relations of, this country towards them, which were such, that no man of experience on the subject could deem it prudent or safe to resume payments in specie at the present moment.

A debate of considerable length ensued, in which Lord Althorpe, Mr J. P. Grant, Lord Folkestone, Mr Frankland Lewis, and Mr Grenfell, supported the motion of Mr Tierney, which was opposed by Mr C. Grant, Mr Huskisson, Mr J. Thornton, and Lord Castlereagh. On a division, it was negatived by 164 to 99.

On the 18th May, the report of the committee on the Bank Restriction Bill was brought before the House. The opponents of the measure no longer attempted to demand the resumption of cash payments, which must then have taken place in little more