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against four; in 1812, against tions might have carried some out
; seventeen ; in 1813, against eigh- of the country. But, making a ten; in 1814, against twenty- most extravagant allowance for nine ; in 1815, against twenty-six; these additions, the amount ex in 1817, against thirty-seven; and ported will not exceed 10,000,000, during the late crisis, against no leaving 15,000,000 still in the fewer than seventy-six. Even country, to which was to be added those numbers were undoubtedly a million imported since last Nobelow that of the failures, for in vember, in consequence of the exmany cases of insolvency commis changes having again turned in sions of bankrupt had not issued. our favour. Now, the average Any measure would be good which, issue of small notes by the Bank by compelling these establishments of England, during the suspento rest, in part, at least, on the sion of cash payments, had been necessity of circulating gold, would 7,000,000; the small paper of the give solidity to themselves and see country banks could not be estis curity to the public; and the effectmated at more than 6,000,000, of the present measure would be, although they had gone on increase that the small note circulation ing their issues, while those of the would immediately be superseded Bank of England had been cons by a metallic one. There were at tracted. Thus, the paper to be least 17,000,000 of sovereigns in removed amounted to 13,000,000, the country ;
the prohibition and there were 16,000,000 of against small notes would forth- sovereigns in the country to occupy with bring them into circulation, its place. Where, then, lay the whether, they had been hoarded difficulty of effecting the object up in the coffers of the cautious which the proposed measure had from prudential considerations, or in view ? Within the metropolis, retained in the chests of country and its immediate vicinity, there bankers, who would rather see was nothing but a metallic cura their own notes circulating. Thus, rency. In Lancashire, in Liverin point of fact, it was far from pool, containing not fewer than being certain that a new importa 150,000 inhabitants, and Manchesa ation of gold would be necessary ter, containing, perhaps, 200,000, even to fill the place of the four or no such thing as a small paper five millions which would be ab« circulation was ever known; so stracted from the paper circulation: that in a district, possessing not the gold was already in the coun- fewer than 2,000,000 of inhabitry, although seldom seen, because tants, nothing was to be found but thrust aside by the small notes;
a metallic currency:
Adding the for, of the twenty-five millions contents of this district to that of the which had been coined since 1819, metropolis, there were 4,000,000 not more than eight millions had of people occupying districts, been exported.
which contained two thirds of the By the official returns, the quan- entire wealth of the nation, in tity exported was 7,269,000. No the daily practice of conducting all doubt considerable sums might the ordinary transactions of life have been exported without find- without the assistance of a paper ing their way into the official ac- currency, and yet these are prea counts; and smuggling transac« çisely the places, in which the
greatest difficulties to the establish- to notes of the higher denominament of a metallic circulation tions: “these may be piled mounwould be expected to exist. tains high, provided the base be
While the expulsion of the small refreshed by copious streams of the notes would thus necessarily restore metallic currency.” the securities and the stability 'of
To those, who, without objectà metallic currency, it was chi- ing to the principle of the measure, merical to regard it as injurious to wished it to be postponed, it was the country banker himself. The answered, that, instead of coming small-note" circulation cannot be too soon, it had come, if any thing, taken at more than five millions; and too late. If it had been adopted it never can be reasonably con- at an earlier period, for instance, in tended, that gradually to diminish 1822, when government was foiled that circulation, at the rate of a in a similar attempt to make the third part in each of three succes- country bankers deposit security sive years, could be attended with for their issues, it would have been any thing like a shock to the cre- happier for the country. At no dit of firms, which, in the recent time likely to arrive could there be. concussion, had displayed such un- a more favourable opportunity for equivocal marks of stability. The effecting the object in view ; for number of country banks was one result of the late panic had about eight hundred; one hundred been, that a large proportion of of these had failed; there still the small notes of country bankers, remained seven hundred; and independently of those of the hunthe circulation of each of these dred banks which had failed, had would average about 8,0001. Could been withdrawn from circulation, it then be supposed, that a stability and the prohibitory measure, therewhich had stood the late tremen- fore, would be less strongly felt. The dous shock, would be shaken or de- advocates for delay were called on stroyed by a gradual curtailment of to recollect, that even the existing papertotheextentannuallyof 2,0001. law would, at the latest, put their or 3,0001.for three successive years? favourite notes to death in the When the difficulty was thus re- year 1833 : that was the remotest duced when the means were so period to which their flimsy existlimited and humble, by which a ence could be protracted. That mighty principle was to be esta- extinction would exactly coincide blished-when, by an operation so with the expiration of the charter
-minute, and a process almost in- of the Bank of England ; and no sensible, the prodigious advantage person, whose opinion was entitled could be attained of placing the pe- to the smallest respect, could maincuniary concerns of the country on tain, that it was desirable that these the broad and imperishable basis should be contemporaneous events; of a metallic currency, it would be and not one of those who pleaded as imprudent to let slip the oppor- for delay had pretended that the tunity, as it would be unreasonable circulation of the small paper of to deny the principle. The intended the country banks should extend change was not to affect the paper beyond that period, nor could any circulation at large; it was not to man do so, unless he were hardy trench upon the great mass of enough to maintain, that it should paper currency, which was confined be made perpetual and unlimited VOL. LXVIII.
in point of time. Delay, for what- Mr. Baring moved as an amendever period, under whatever repre- ment, “That it is the opinion of this sentations it might be granted, by House, that, in the present diswhateverexplanations or assurances turbed state of public and private it might be accompanied, and how credit, it is not expedient to enter ever it might be regarded in that into a consideration of the banking House, would be viewed out of doors system of the country," and, Mr. as the defeat of the whole measure, Canning having expressed a hope and a rejection of its principle. that the decision on the present Moreover, who could answer that motion would be regarded as decidelay given for purposes of
prepa- sive of the principle, as the sooner ration would be so employed, and it was settled the better, the House that it would not be used in taking divided : for the original motion, serious and effectual steps to pre- 232; for the amendment 39; vent the probability of a recurrence majority 193. An amendment to cash payments, to render it im- moved by Mr. Gurney to exclude possible to resume the question, the Bank of England from the or, at least, to take it up on the operation of the resolution was same basis on which it now stands ? likewise negatived by a majority The season, therefore, was as fa- of 66 to 9; and a similar amendvourable, as the object itself was ment being again moved next day, desirable. The alteration, indeed, on the bringing up of the report, would not directly and immedi- on the mere allegation that, withately put an end to our commercial out small notes of the Bank of embarrassments, which had princi- England, it would be impossible pally arisen from the unwholesome to fill up the vacuum occasioned and preternatural extension of by the withdrawal of the country commercial speculation ; but it paper, it was negatived without a would have the effect of alleviate division. ing and preventing the recurrence The overwhelming majority, by of that distress, which, however it which the resolution was carried, might begin with the higher, was promised that little opposition sure, if not withstood in the outset, would be made to the progress of to find its way to the lower classes the bill for carrying it into effect, of society. It would be a step which was immediately brought in towards the fulfilment of the old by the chancellor of the Exchebenevolent wish, that every pea- quer ; especially as many of those sant should have a fowl in his pot; members who had voted against for the effect would be, that the it, and even Mr. Baring himself, labourer would find in his pocket had declared, that, the principle a piece of gold, instead of a shred having been once carried, it would of (perhaps worthless) paper.
be useless and unwise to offer any Mr. Brougham likewise sup- farther opposition. However much ported the resolution, and strongly resistance sprung up in discussing urged the inexpediency and the the details; and, on more occasions uselessness of any delay, when the than one, many of those, who had work was already half done, in supported the general principle, consequence of the general want of found themselves ranged against confidence having of itself greatlyli- ministers in regard to particular mited the issues of thecountry bansk. clauses which government pro,
posed, or which, when proposed to the 5th of February, should be by others, they deemed it necessary issuable, and continue to circulate, to resist. In particular, the pro- but that the small notes of the phecies of the opponents of the Bank of England should be issumeasure, that its instant effect able, though dated subsequently would be, to contract the circula« to the 5th February, and up to tion, already too much curtailed, the 10th of October. The effect seemed to be finding some degree of this would be, and the intention of accomplishment. In many places of it was, to enable the Bank to the country bankers, whether from supply, for a limited time, and to considerations of mere prudence, a
limited extent, or from unnecessary precipitation, vacuum which might be produced or, as was sometimes insinuated, by the withdrawal of the country to excite prejudice against the bill paper from circulation. There by creating an artificial deficiency, was in this neither danger to the had proceeded to withdraw their currency, nor any contradiction of small notes from circulation with the principle of the general meaa haste which did not give time sure. Although there were no sefor something else to occupy their rious difficulties in the way of that room; and the consequence was, measure, nor any thing which renthat, in different districts, much dered its success even problematidifficulty was encountered in car- it would be wrong to be blind rying on the ordinary transactions to the consequences which might of life. To remedy this inconve- follow, the country paper were nience, the chancellor of the Ex- to disappear at once, without a chequer, on the 20th of February, temporary substitute having been when the House was in a commit- provided. By the principle of the tee on the bill, moved, that the resolution itself, it was distinctly Bank of England, instead of being admitted, that some delay was nelimited like the private banks, to cessary before it could be carried small notes stamped before the into full effect; it assumed, that
: 5th of February, should be em- the circulation of small notes could powered to issue one and two not be altogether dispensed with pound notes stamped at any time for three years; and, therefore, to prior to the 10th of October, thus allow the Bank of England to prolonging the period, in the case stamp them for eight months longer, of the Bank, for eight months. they still being to be withdrawn He stated that it was not intended at the end of the three years, was by this, that the Bank of England only a consequence of that prinshould continue to issue small ciple, and necessary to make its notes, after that power had been operation complete. withdrawn from other banks ; it The clause, as it met, in some was not his object to give that measure, the objection to the bill incorporation the power of retain- founded on its alleged tendency to ing their small notes in circulation produce an injurious contraction a moment after the lapse of three of the currency, was supported by years. The proposal amounted many who had resisted the general only to this, that, during the next principle; while its opponents conthree years, the small notes of sisted of none but those who had country banks stamped previously voted for the original measure.
Their opposition rested on two Moreover, if the plan for establishgrounds. The clause, they said, ing branch banks were carried was inconsistent with the very into execution, nothing would be principle of the bill ; and the easier than for the Bank of Engpower, which it gave the Bank, land to inundate every part of the would be so abused, or, at least, country with one-pound notes. | b9 used, as to deprive the measure of These objections were met by all real effect. It was inconsistent Mr. Canning and Mr. Huskisson, with the principle, because it went who denied that there was any ins to encourage an extension of the consistency between the clause now very evil against which that prin- proposed and the principle of the ciple had been set
and asserted. original measure. It so happened, When, on the moving of the ori- that the country bankers had acted ginal resolution, different members doggedly in regard to the withhad pleaded earnestly for different drawing of their small notes, and periods of delay, ministers, had had, all at once, put a stop to very properly refused to procrasti, their circulation, instead of spread nate, on the ground that, at the ing it over as long a period as was expiration of any given time, we consistent with the proposed change. should be in no fitter a situation In such a case, it surely was the for making the experiment than duty of the House to guard against now, and that the interval would the consequences which might ennot be employed in preparing for sue from a complete and simulta. the change, but in rearing up new neous contraction of the currency obstacles. But the very same rea- to the amount of all the small sons applied against the proposed notes in circulation : unless there clause; they were as good against were gold in readiness to rush in eight months, as against twelve at once, by every channel, to fill months, or two years. Again, this up the vacuum, a most extensive was to enable the Bank to coun- stagnation of commerce must enteract the whole measure, by giving sue. Should this take place, or them an unlimited power of stamp- rather, should it have already oce ing small notes to any amount, curred, it would be neither more during eight months, and circulata nor less than a recurrence of the ing them by all the means within crisis of December, which a prompt its command. It would be the inter- issue of Bank-notes under 51. had est of the Bank to take advantage emedied. The amendment was of this power, and there was no conceived in the spirit of the origicheck by which their issues could nal measure, and no charge of inbe controlled. It would not do to consistency could lie against those say, that it was merely intended to who proposed or supported it: enable the Bank to fill up any neither was there any better reavacuum which might be made by son for supposing that the Bank the withdrawing of the country would make an improper use of paper ; for who could engage, that the power which was thus to be the Bank would confine itself conferred. It was not the interest within this limit, and not supply, of the Bank to make an issue of likewise, that other portion, the this kind; and accordingly it had existence of which was the sole never been a favourite of the Bank, object of the whole measure? for it never failed to come back to