§ On the order of the day for recommitting this bill.
Mr. Calcraftaddressed the House on the subject of his intended motion, that the country banks should have the same privilege of issuing small notes until the 10th of October, as that granted to the Bank of England. He felt convinced that the arbitrary power given to the Bank of England would produce much mischief. In distant parts of the country there would exist a disinclination to take Bank of England notes; and unless government permitted the country banks to continue their issues of small notes, a stagnation in public trade and confidence must be the consequence. Under these circumstances, he trusted the right hon. gentleman would be convinced of the impropriety of running down the country banks. There could be no doubt that many of the stoppages which had lately occurred were to be attributed to the measures proposed by government. The country bankers wished as much as any other class, to get rid of the small-note circulation, and a metallic currency. He could assure the right hon. gentleman that his measure had contributed to revive the panic. He had seen a communication from an eminent banker in the north, which asserted this fact. The consequence, was, that he, in common with others, had written up for a large remittance of specie.
§ Sir J. Wrottesleysaid, he would support any measure which would be of service to the country bankers. He was confident that the removal of their notes would be of great inconvenience to the country, and would agree to the amendment of his hon. friend. As the bill stood, what was to prevent the Bank of England from stamping a hundred million of these notes before the 10th of October, and put them in circulation?
The Chancellor of the Exchequersaid, that the permission given to the Bank being to meet a specific contingency, there was no probability that they would issue more notes than were necessary to meet that contingency. The clause for the Bank to furnish accounts of their issues, and the notoriety to be given to the whole proceeding was, he thought, a security against an improper use of the power.
§ The House having gone into the committee,
§ Mr. Humesaid, he felt completely at a loss to comprehend the state of the law as it existed with regard to the currency. He had read with much attention all the acts repealing the Bank restriction, and he freely confessed that he could not understand them. It appeared to him that it would be advisable to repeal all those acts, and to bring in a single bill, which should embody the whole law for the regulation of the currency. It would remove all doubts, save much time and trouble, and bring matters to a speedy and safe conclusion. Let the principle of the Jury bill be adopted in the present instance, and all previous acts be repealed which tended only to perplex and embarrass the law. If this suggestion of his were adopted, the House would stop short in its present proceedings, and introduce such alterations in their measures as he was convinced would be found simple and useful.
§ On the clause being read, which directed that the Bank should make monthly returns to the treasury of the amount of its small notes in circulation,
Mr. Maberlysaid, it was important that the country should know not only the amount of the small notes but also the whole amount of all issues of the Bank, large and small, since the preceding month. It appeared, by the paper before the House, that in seven days the paper issues of the Bank had increased by 6,000,000l. He did not say that increase was unnecessary; but he thought it was 861 important that the public should be informed of the amount of the issues. The Bank might issue a million per day if it pleased; but though circumstances might require such an issue, still it could not be denied that property would be affected by it. No doubt if the Bank issued too much, the over-issue would come back on itself; but that would not hinder the over-issue from causing a fluctuation in property, which would be injurious to the public. If their issues were regulated by proper motives, the Bank could not object to have the amount known; but if by improper motives, that would be a strong reason why the return should be made. He would therefore move, that to the words of the clause there be added these: "and also an account of the amount of all notes in circulation since the last day of the preceding month." At present, they would be obliged by this bill to send on or before the 15th of each month an account of all the one and two pound notes in circulation in the previous month, which were to be published in the Gazette within three days after; but he thought that the public should be informed of the whole of their issues.
The Chancellor of the Exchequercould not see any necessity why the Bank, as a matter of course, should be obliged to publish monthly accounts of all their issues. Of the amount of their small notes in circulation, it might be desirable that there should be a monthly return, in order that a check might be provided against over-issue. If circumstances required that the whole amount of the Bank paper in circulation should at any time be made public, there would be no objection to such a return.
§ Lord Althorpsaid, that the object was, to obviate the danger of a suddenly increased or diminished issue of notes of all kinds, and he could not imagine in what way the publication could be injurious to the Bank.
§ Mr. Huskissonobserved, that the House might as well call for the publication of all the other proceedings of the Bank, as for the account now moved for. He, and all those who took the same view of this question had always contended, that the amount of the Bank notes in circulation was not a fair criterion of their being in excess, and the very fact alluded to was a proof of this; because if they saw the Bank circulation increased by 6,000,000l. in the course of a few days, and found by the 862 arrival of every foreign post, that it made no difference in the exchanges, was it not a proof that there existed no necessary connexion between the circulation and the rate of those exchanges? He objected, therefore, to the amendment, because its adoption by the House would be giving countenance to a fallacy. The Bank were the best judges of the amount of their issues. If those issues were very great, and they found that the notes came on them, and that their treasure were sent abroad in large quantities, they would contract their issues; and thus the over-issue, if there had been one would be corrected.
Mr. Calcraftsaid, that as there was a clause in the bill requiring the Bank to furnish an account of the amount of the small notes issued by them, it could not be contended that it was foreign to the object of the bill to propose the amendment of that clause, by requiring an account of the amount of all the notes issued by the Bank. He was sure it would be found most beneficial, not merely to the Bank, but to the public, that such an account should be furnished, and it was a more delicate mode of proceeding towards the Bank, that it should be effected by a clause in the present bill, than by a separate enactment.
§ Mr. Pearsethought it might be convenient that the extent of accommodation which the public required as to small notes should be, from time to time, made known, though it might be of pernicious consequence that the whole amount of Bank issues should be published. Peculiar circumstances might occasionally make it prudent for the Bank to increase or contract their issues to a very great extent, and if the public were made acquainted with the mere fact of such increase or contraction without at the same time being told the particular reasons for it, a considerable degree of alarm would be created thereby.
§ Mr. Hudson Gurneycould not see how the amendment of the hon. gentleman could, with any propriety, form part of the bill before the committee, to the objects of which it appeared to bear no relation. At the same time, he entirely agreed with him, that it would be of great public advantage, that the Bank should, from period to period, make the amount of their issues known to the public. As to the increased amount of Bank notes issued within the last two months, he 863 considered that it gave no clue whatever to the amount m circulation, it being notorious, that they lay, for the most pan, in the bankers' chests, who, being unable to foratt1 any sort of estimate of the demand likely to come on them, found themselves obliged to be prepared for any possible emergency.
§ Mr. Humethought it would answer little purpose to have an account of the small notes issued, unless we had an account of the large notes also. Neither in France, America, nor in any other country, was there any secresy or mystery of this kind.
Mr. Maberlysaid, the very opposition of the Bank and government to this amendment would induce him to press it. As the Bank made large profits by the monopoly, they were bound to give every information to the public by which those profits might be ascertained. What had been observed by an hon. member as to a quantity of Bank notes being looked up in the coffers of the bankers, afforded no argument against the motion; because those notes might, at any moment, be brought out, and gold demanded for them. The Bank had, on several occasions, acted with great impolicy; for when the exchanges were against them, they had not contracted their issues. Now, if their issues were published, the country would be aware of such imprudence on the part of the Bank. It was not necessary that the exchanges should be greatly against us to cause the Bank to be drained of its gold. One half per cent would be sufficient to effect this; and the House would be convinced of this when they reflected, that the insurance on gold to Paris was only a quarter, per cent.
Alderman Thompsonsaid, that although he had opposed this bill, he conceived that if it was to pass, it was better that it should pass without delay. As this bill gave the Bank the privilege of issuing small notes, it might be proper that they should-furnish an account of the issues of such notes; but as the Bank derived no privilege from it as to its other issues, there, was no reason why it should be required to furnish any account respecting them. The Bank might as well be called upon for an account of their discounts.
Mr. Hobhousesaid, that it was his intention to propose that country bankers should also furnish an account of their issues. Such account would afford greater security against their failure than any other 864 measure. If they were not required to do this, failures would occur as frequently from their issue of 5l. notes, as from their issue of 1l. and 2l. notes.
§ Mr. Moncksaid, that the amount of paper in circulation could riot be accurately ascertained, unless the country bankers, as well as the Bank of England, were required to give an account of the amount of their issues. He hoped therefore that the hon. member would persevere in his intention.
The Chancellor of the Exchequerhoped the bill would be permitted to go through its present stage that evening; as there would be two more opportunities afforded for hon. gentlemen to propose amendments to it.
§ Mr. Humesaid, it would be very improper that this bill should be hurried through the committee at that late hour. He would therefore move, that the chairman report progress, and ask leave to sit again.
§ The committee divided: for the motion 11; against it 66; majority 55.
§ Mr. Humeexpressed his determination to continue dividing the committee as often as it was attempted to proceed. The chancellor of the Exchequer consented to the adjournment; and the chairman reported progress, and asked leave to sit again on Monday.