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circulation of the Bank of England the empire. He concluded with in 1820, was 23,875,0001. ; in moving the following resolution 1822, it was only 18,000,0001. a “That it is the opinion of this larger difference in the total amount committee, that all promissory of circulation than could possibly notes payable to the bearer on de be produced by the proposed mea- mand, issued by licence, and under sure: yet not only had that de- the value of five pounds, and stampficiency been supplied, but, during ed previous to the 5th of February, these three years, twenty-five 1826, be allowed to circulate until millions in gold had been coined. the 5th of February 1829, and no
The withdrawal of the small longer. notes, therefore, while it gave Mr. Baring took the lead in security equally to the bank which opposition to the measure. He issued, and to the party who held objected to it as being both utterly them, would not operate in- inadequate to meet the evils comjuriously on the currency, or on plained of, and ill-suited to the the trade and manufactures of the present situation of the country. country. There were two ways Neither could he
agree in ascribing of effecting this withdrawal. The the embarrassments, which had one was, by enacting that no small arisen, entirely to speculation or notes should be stamped after a over-trading; for much of it had certain future period: the other, by been owing to the conduet previallowing those already in circula- ously pursued by the Bank. At tion to run a certain course till a the end of 1822, and in 1823 and fixed period, and prohibiting 1824, the Bank had accumulated any new ones to be created. The in its coffers a large amount of first of these modes might lead, in specie; during that period, its the course of three years, the pro- dividends were raised from 8 to posed period, to very unsatisfactory 10 per cent after large bonuses results; for, if the power of stamp- had been granted to the proprietors; ing were to remain unlimited and, in the mean time, the notes during that period, so considerable of the country bankers were ina number might be stamped as to creasing, an issue of Bank of subject the country, in its ultimate England paper always tending to endeavours to get rid of them, to increase the issue of country bank all its present evils. It was in- paper.
of the tended, therefore, to propose, as a quantity of money thus in the more convenient, effectual, and ex- market, interest fell to four, and peditious plan, that no new notes three and a half per cent; and at all should be stamped, and that every person, who had money to those now in circulation should, at lay out, apprehensive that he might the end of three years, be allowed not be able to put it out profitably to circulate no longer. In conse at all, did invest it for so long a quence of certain differences which period, as to expose them to the distinguished the banking systems full action of the change which of Ireland and Scotland, particu- followed. But the Bank of Englarly the latter, from that of land soon discovered its error, by England, the enactment would its specie being drawn out. It not, at present, be extended to then suddenly contracted its issues ; either of the two former parts of and those, who, the week before,
could not tell what to do with intended change, had already augtheir money, could not now tell mented that distress." They were where to find money. The Bank, indeed preparing; but they were no doubt, acted in perfect good doing so by screwing almost to faith; it was their first duty to destruction every manufaca take care of their own interests, turer, and other customer in the but still the consequences were the country, from whom they could same. The London bankers now get their money. Many of the called upon their correspondents the country bankers had already secured country bankers, who again called the means of meeting this new upon their customers, and every order of things in part; but if
parhis debtor, although liament were to allow them longer a short time before every one had time, they would be able to afford been anxious to invest his money. relief to the many poor and deserve This state of things brought to the ing people, whom otherwise it ground all those of feeble credit ; would not be in their power to and, in the next place, many who assist. The important question had been supposed to stand firm was, not what was theoretically and upright. Then came panic; the best, but what was the safe and the country bankers being course, and what, under all the themselves called upon, were com- circumstances, it was possible to pelled to call on those who were attain; and the general distress indebted to them; and even the that pervaded the country districts man who did not actually want was the first thing to which, in money, called for it, to provide for discussing questions of this nature, that event, which, in the then state parliament was bound to attend. of things, might occur in a single The proposed measure would do day. The Bank was too much little or nothing, and the little it fettered by its advances to, and might do, would be an aggravation agreements with government, to of the evil. He would recommend meet the casual embarrassments them to establish banks, either by which might from time to time Joint-stock companies, or on the arise. It ought to have available common principles on which they possession of all its means; for, at present stood, but so as to induce being the heart of the circulating persons of capital to become banka medium, if it was unsound, the ers; next, to introduce silver as å most perilous evils were inevitable. standard of the currency no less If the Bank had been unincumbered than gold, which would at all by government, it could have come times enable them to purchase gold, to the assistance of the people with and would tend to retain more gold resources adequate to the emer in the country ; and lastly, to gency, and put a stop, at once, to relieve the Bank from those inthe rising distress. That distress, cumbrances which had hitherto, in which was more intensely felt than consequence of its pecuniary congovernment seemed willing to nections with government, weighbelieve, would be increased by the ed upon, and controlled it. proposed measure, for the country The resolution was likewise was not yet in a situation to bear strenuously opposed by_sir John it. The very ; exertions of the Wrottesly, alderman Thompson, country bankers to prepare for the ałderman Heygate, and Mr. Wils
son, one of the members for Lon- culations, such as had been recently don. But their opposition was witnessed, there were no country almost the only thing in which banks, and no country paper; and they, and other menibers who in 1797, when the Bank stopped spoke on the same side, agreed. payment, there were no country Some held that the measure in notes, and no small notes even of contemplation would be wholly in- the Bank of England. In the face operative to give any effectual of such facts it was impossible to relief, others, that it would be charge the present distress upon positively mischievous; and a third the conduct pursued by the country party, while admitting that the bankers. It was the failure of principles on which it proceeded seven London bankers that had were sound in themselves, thought occasioned one half of all the failthat the present state of the countryures in the country: the capital, required its postponement. They the cash, and the bills of more treated as visionary the scheme than an hundred country bankers of increasing the number of part- had been placed in the hands of ners in private banks, as a means London bankers; and the only of security ; because it was not on surprising thing was, that a greater the number of partners, but on number of the former had not their prudence, and their mode of failed in consequence. And, in so conducting business, that the credit far, again, as the distress might of a country bank depended. The have arisen from overtrading, how country bankers, sir J. Wrottesly were the country banks to be made maintained, instead of having ex- responsible for the failure of specucited a mad spirit of speculation, lations in cotton, or tallow, or were the only persons who had not spices ? speculated ; and, in reality, were It was farther urged, that the obliged, from a regard to their own very essence of the present pecu. safety, to discourage all dangerous niary embarrassments, consisted in speculation on the part of their the curtailed state of the currency ; customers. In point of fact, more and the direct tendency of the proover, where did
this spirit of posed measure was, to increase speculation commence? It first them, by curtailing it still more. shewed itself in Manchester and Taking the currency at twenty Liverpool, in a district where millions, and the deduction to be no local notes circulated. The made on account of the recent cotton speculations in these two failures at three millions and å places were the very first heard of; half, the effect of the scheme in and yet in neither of them did a contemplation would be to cause a single country, note circulate. The still farther deficiency, and reduce next point at which this spirit was it to about ten millions, with which manifested, and at which it had it would be impossible to carry on led to its unhappiest results, was, the trade of the country. Although not in the country where the notes a respite of three years was prein question circulated, but in the tended to be granted to the small heart of the city, on the stock ex notes, yet the adoption of the reso change of London. In 1720, the lution would be almost tantamount only year in which the country to driving them immediately out had been overrun with wild spem pf circulation ; because every
banker, who entertained a 'due giving its value in commodities. regard for his own credit, would At the end of the war, 'our manube compelled to take measures for factures, still in their prime, while withdrawing his notes as expediti- those of the continent were only ously as possible. These had been beginning to recover from a long issued, in reliance on the sta- period of languor, commanded bility of the system, and on the every market, and enabled us to faith of acts of parliament which obtain our gold. But at present ought to be as inviolate as the the manufactures of the continent charter of the Bank; and they had and America were springing up been advanced to promote the most all around us; every year we were laudable objects, to assist indivi- more and more excluded from duals in carrying on useful im- foreign markets; and, in fact, the provements, and in supporting inability to dispose of our comimoindustry. These sums must now dities, formed one of the most be called in, and the course of aggravated features of the existing industry, in numberless channels, distress. In such circumstances, it must be stopped. A banker could would be most unwise to adopt a not draw in four or five hundred measure, which, besides injuring pounds without throwing four or an individual class, would necesfive persons out of employment: sarily tend to increase public calathis was already going on all round mity. As a measure of present the country, in consequence of the relief, it was mischievous and inmanifesto against the banks con- appropriate ; and as a measure of tained in the correspondence be- prospective security, it would be tween government and the Bank nugatory. of England, and still more in The resolution was supported consequence of that arbitrary and by Mr. Huskisson, Mr. Peel, and illegal act, by which ministers, by Mr. Canning. They denied that to their own mere will, had prohibited ascribe much of the distress which immediately the farther issuing of had prevailed to the issues of the stamps. The extent, to which the country banks, was to attack the evils arising from this compulsory character of the persons connected contraction was spreading, and with these establishments, or that might spread, no man could pre- any thing had occurred to justify tend to calculate; nor ought the the extreme sensibility which had House to be surprised, if it should been manifested on their behalf. turn out, that they were leading In the class of country bankers, rapidly to consequences of which unquestionably, were to be found the House would be very unwil individuals of as high character as ling to hear. How was the gap in any other that could be named ; thus made in the circulation of the but this could be no reason, why country to be filled up? At the the system, on which men, who, in termination of the war, there ex some respects, filled the office of isted a strong desire to return to a public functionaries, were acting, metallic currency ; and, during the should not be discussed with perfirst years of peace, there was a fect freedom ; nor could the coungreat facility of obtaining specie. try bankers complain of being illBut the case was altered now. No treated, in being held unfit to ex« country could obtain it, without ercise--as they virtually did the
prerogative of the Crown in regarding such as were of a considerably to the currency. With regard to higher denomination than the cura the measure itself, it was not in- rent coin, so as to save it entirely tended so much as a remedy for from the competition of the paper existing evils, as a preventive currency.
The principle of the against their future recurrence, by measure, therefore, could be re bringing the currency, to a certain sisted only by those who held that extent, to be a metallic one, and the pecuniary relations of the counespecially that portion of it which try were best secured by proscribalone supplied the wants of the ing a metallic currency. Its neceslower classes. All experience provedsary effect, again, would be to give that this restoration of a metallic solidity to the banks themselves, currency could not be effected, so by compelling them to maintain a long as small notes were allowed portion of their circulation in gold, to be circulated: a permanent state instead of worthless paper, and of cash payments could never exist thus, even where a failure took by their side. If, in any country place, that extensive misery, which there be a paper currency, of the such an occurrence produced among same denomination with the metal the lower classes, would no longer currency, the paper and the coin return; for the security of the will not circulate together, but the poorer classes in such cases lay in latter will be expelled by the the absence of small paper.
Let former. If crown notes, and half- the Bank of England retain in its crown notes, were issued, crowns hands as much gold as might be and half-crowns would disappear; necessary for the ordinary operaand if the one-pound notes con tions of commerce, for such de tinued to circulate, a sovereign mands as the exigencies of governwould become a rarity. There ment might require, or to adjust never was a gold circulation in the an unfavourable state of foreign country, except in Lancashire, exchanges. Let every country where no country notes existed; bank be governed by the same and when, in 1822, and 1823, the rules, and compelled to keep an Bank of England was most anxious amount of gold proportioned to its to supply the country with gold, operations; and thus would be the sovereigns sent down by one created a sensitiveness to occurmail coach returned with the next. rences likely to cause a pressure Great sacrifices had already been on the country banks, which would made to effect the introduction of tend to the security of the whole even the partial metallic currency kingdom. The issues would be kept now in existence; and these sacri- within bounds, and gold would be fices had been made in vain. A kept in the kingdom. To judge large supply of gold was obtained of the unsoundness of the present at a great expense, and was ob- system, it was only necessary to tained only that we might see it look at the fact, how easily many depart and be compelled to pur- of the country banks had, at all chase it again at a double expense; times, been overturned. In 1793, nor could the currency of the coun there had been one hundred faia try ever be placed on a solid basis, lures among them; in 1810, there unless country banks were pro were commissions of bankrupt hibited from issuing notes, excepto issued against twenty-six ; in 1811,