HC Deb 02 August 1833 vol 20 cc293-308

Lord Althorp moved the Order of the Day for the second reading of the Renewal of the Bank Charter Bill.

Mr. Poulett Scrope

hoped the noble Lord would not press so important a subject in the absence of many hon. Members, who were absent on the understanding that it would not be brought forward that evening.

Lord Althorp

said, that the course he had proposed last night, was that which was now about to be followed. He had said that he would not bring it on till after the Slavery Abolition Bill; and as that had been disposed of for this evening, he thought that, as there was so much lime now, it would be wrong not to bring the question forward.

The Order of the Day read.

Lord Althorp moved, that the Bill be read a second time.

Mr. Poulett Scrope

rose to oppose the Motion, though he was not as well prepared as he should have been had he known that the question was to be brought forward that evening. He would state briefly the reasons why be would urge on his noble friend to postpone the question to the next session. The first was, that there existed no pressing necessity for urging this forward in the present year; and, next, there were many subjects of the highest importance which were fully sufficient to occupy their undivided attention for the remainder of the session. The subject of the Bank Charter was one which he believed was not fully understood, and certainly had not been fully discussed. He had every confidence in the integrity of the noble Lord, the Chancellor of the Exchequer; but he must own that he had not the like confidence in his ability as a financier. He did not believe that the noble Lord was as yet thoroughly master of the subject. In the first place he differed from the noble Lord as to the time to which he proposed to continue the charter; for he certainly considered it a most erroneous policy to doom the whole monetary system of the country to the influence of a narrow monopoly for the term of twenty years. The only thing like the shadow of an argument which could be urged for this course was, that if the measure were not passed now, it would leave our monetary system in a state of suspense. This objection would have some weight if the Bank Charter were to expire in the present year; but that was not the case; for if notice were not served on the Bank before the 1st of August, 1833, it must continue for a year from the 1st of August, 1834, for it would require the notice of a year from that time. [Lord Althorp: A notice of twelve months from 1833 would be sufficient.] Even in that case there was not any pressing necessity for urging the matter in the present Session. There could be no danger in delaying it over till the next; but there was great danger from precipitancy in taking a step which must bind the country for so long a period. They were about to enter upon a road in which there was no turning; and in which they must continue to go straightforward, be the consequences what they might, till the year of our Lord 1846, during which long period the monetary and, to a certain extent, the commercial system of the country, must be delivered up, bound hand and foot, to this monopoly. All the fluctuations in our system which had caused so much mischief had been chiefly owing to the acts of that monopolizing body, which had operated on the currency for its own purposes. This he did not state on his own authority, but upon the authority of the late Mr. Horner, who in 1816 had condemned in strong terms the system of the Bank, and the enormous profits they were al lowed to make on the management of the public business. Mr. Grenfell was of the same opinion; so had been Lord Archibald Hamilton, who stated, that the profits of the Bank monopoly kept pace with the distresses of the country; adding, that so sure as effect followed cause, the same consequences must continue as long as the monopoly was allowed to exist. He could quote in support of the same opinions the authority, not only of Mr. Ricardo, and others no longer in existence, but even that of many of those right hon. Gentlemen who were now the ornaments of the Ministerial Bench on which they sat. How was it that they had so greatly changed their opinions on this subject? He had yet to learn how it was that the right hon. Baronet (Sir. James Graham) who, in 1828, called on the Government of that day to cut the connexion between it and the monopoly of a single bank should, as a Minister of the Crown in 1833, call on Parliament to continue that connexion for so many years. He had yet to learn how the right hon. Secretary at War (Mr. Ellice) whom he did not then see in his place, should have changed his opinion so greatly as to advocate as a Minister that which he had deprecated as a private Member of that House. He had to learn how it happened, that an hon. Member, Mr. Henry Brougham, who, in 1826, had so strongly declared against the monopoly of twenty-four men—the Bank Directors—should in 1833, as Lord High Chancellor, wish that the monetary interests of the empire should be placed under the influence of that monopoly. It would not have surprised him had such a measure as this been proposed to an unreformed Parliament, to which a Minister of the Crown could dictate; but he was surprised that a Reformed Parliament and a Reforming Ministry should wish to continue the yoke of this powerful corporation over the monetary system of the country. He was surprised that they should wish to bind down the country for twenty years to the domination of those task-masters whose stripes were still fresh on their shoulders. The Bank had been the great cause of the prodigality of former Governments, which could never have raised the extravagant loans they had contracted if they had not been aided by the Bank. The Bank had been the great architect of the national debt, and, like some other architects, it had an interest in continuing the system from which it derived so much advantage. He looked with apprehension to the increase of power which this measure would give to the Bank. It would have, in consequence, an overwhelming influence in the metropolis, and through it, branch banks would, in a few years, obtain equal influence in the country. It would be enabled to command the whole money transactions of the country; landed, commercial, trading, and funded. Napoleon Buonaparte, by his system of prefects, and sub-prefects, did not establish a more complete system of tyranny than would be given to the Bank by this Bill. It might be supposed that such apprehensions were visionary, but the Bank of Genoa did actually obtain the sovereignty in Corsica, and the most extensive influence in this way; and it was well known, that in the United States the people were determined not to continue the privileges of the Bank from an apprehension of the effects it might have on their liberties. He objected, therefore, to the measure, because he thought it likely to trench upon the liberties of the subject—to lead to a profligate expenditure of the public money, and an undue control over private property. He called upon the noble Lord to postpone the Bill till next session, with a view to the appointment of a Select Committee, which should place the banking and monetary system of the country upon a sound and permanent footing. In conclusion he moved that the Bill be read a second time that day six months.

Sir Henry Willoughby

seconded the Amendment. His objection to the Bank was, that it was a great jobber in public securities, and he apprehended that under the increased power now conferred upon it, that corporation would regulate its issues of paper money, not in reference to the wants of the country, but with a view to the extent of its own engagements.

The Question having been put—

Mr. Alderman Thompson

said, that his interest in the success of the Bank was but small, compared to the interests of the trade and commerce of the country; he, therefore, trusted that hon. Gentlemen would not think that he would make the interests of the country subservient to his own, or those of the Bank. It was not very correct to accuse Ministers of precipitation, since a Committee had for several months last Session sat upon, and inquired into, the Bank question; so that the charge upon that point, made by the hon. member for Stroud, was not likely to have any great weight with the House. As to the danger mentioned by the hon. Member likely to arise out of the connexion between the Bank and the Government—how could the hon. Member dread it? For how could he be so ignorant as not to know that no Minister could borrow 100l. from the Bank without the consent of Parliament? On that head there was nothing in the hon. Member's argument. In contradiction of the opinions unfavourable to the present system of the Gentleman quoted by the hon. Member, he would cite the opinions of Lords Liverpool and Ripon. Those noble Lords, in a letter addressed to the Governors of the Bank of England, which was laid on the Table of that House the 15th January, 1826, said, "that much of the prosperity of the last century was owing to the general wisdom, justice, and fair dealing of the Bank of England." The authority of Lords Liverpool and Ripon was every bit as good as the opinions of those Gentlemen quoted by the hon. Member, The hon. member for New castle-under-Line feared that the Bank would extend its circulation according to their own engagements. This could not be, since the circulation must be regulated by the state of the exchanges; and, moreover, since the Bank would be compelled to publish its accounts quarterly, it could be guilty of but very little mismanagement. He hoped the House would reject the Amendment, and not postpone the proposed measure; for if it should be postponed to next Session, there would be an end to that revival of commerce which had been lately witnessed, and the whole commercial transactions of the country would be involved in confusion. He supported the second reading of the Bill, not that he was interested in the success of the Bank, but on account of his regard for the interests of the public.

Mr. Philip Howard

said, that he should reserve to himself the right to propose an amendment in the Committee, particularly on the clause which went to make Bank notes above 5l. a legal tender. For the present, however, he would give his humble support to the second reading of the Bill.

Mr. Matthias Attwood

said, that his great subject of complaint was, that after a condemnation of all monopolies by the present Ministers, they now proposed to extend the monopoly of the Bank of England. He regretted much that the Bank was not confined to the same terms on which they held the present Charter, in place of enlarging their monopoly so far as to make their notes a legal tender. There would, in that case, be an almost universal concurrence in the measure, and the question might be disposed of in one month. It showed a want of sound judgment and discontent on the part of the Bank to grasp at such exclusive privileges. The hon. Alderman (Thompson) had read an extract from a letter from Lord Liverpool, but he omitted such parts of it as made against his case. At the lime that letter was written, the unanimous opinion was, that no exclusive privileges ought to be conferred on the Bank. Those very men who now proposed to extend their privileges, were the persons who at that time were disposed to deprive the Bank of all privileges. The letter of Lord Liverpool asserted a principle very different from that which the hon. Alderman seemed inclined to draw from it. It was, in point of fact, a manifesto to the Bank of those opinions which then generally prevailed in Parliament; and it held out no hope that the Bank would ever again be put in possession of any privileges which could give them an advantage over any other of his Majesty's subjects. Lord Liverpool referred to such privileges as having their origin in barbarous times, and being now out of fashion. He (Mr. Attwood) looked upon the conduct of the present Ministers as regarded the Bank to be a complete abandonment of all those commercial principles which had been held by them during the last fifteen years; and he concluded that in maintaining such principles they had at last seen they were in error. He trusted, therefore, the trade and commerce of the country would again be placed upon the same foundation, and regulated by the same principles, under which it had flourished for so long a period. It was now proposed to give a compulsory value to Bank paper. Such a course was directly opposed to all the received doctrines of a paper currency. The fact was, that Bank paper was already, by the tacit consent of the people, a legal tender for all useful purposes. There was no excuse for proceeding with the present measure. Other measures might have been defective; but there was this excuse, that they were adopted in emergency. Now no emergency pressed, and therefore this measure, if adopted, was adopted as a permanent measure, as an improvement in the monetary system. Was it such a measure? Could it be said, that it was prudent to trust entirely the currency of this country, with the power of depreciating it, to the Bank? Supposing the Bank under ordinary circumstances acted with the greatest prudence, what security was there for such a course being pursued by the Bank under pressure in times of war. He admitted, that this measure did not at once depreciate the currency, but it laid a sure foundation for future depreciation. Such a system was most dangerous, unless, indeed, steps were taken to enable the Bank to meet the responsibility which would thus be thrown upon it. The contrary course, however, was pursued in this plan, for in fact the basis of the Bank credit was curtailed. Much had been said respecting the panics; and it had been contended that that ought to be and would be guarded against by the proposed regulations. Now, be asserted, that those panics had nothing of danger in them, compared with what would be inherent in the new system. What provision was made to pay in gold the 13,000,000l which might at once be demanded? Let the House look back to those panics. He would notice the most prominent two which had occurred, that of 1832, and that of 1825. In the political panic of 1832, the gold drawn from the Bank amounted only to about 1,400,000l. To talk of such a sum endangering the Bank was ridiculous. Then what was the case in 1825? There was no more gold required from the Bank of England than about 1,300,000l. That was proved by the evidence of Mr. Harman, for that Gentleman stated, that shortly previous to the panic there were but 1,300,000l. in gold in the Bank. Surely, then, care should be taken to guard the public from being compelled to take notes to any amount unless some better security for their realization in specie should be provided. It was not the internal panics that, under the present system were to be feared, or that had ever endangered the Bank of England, but it was the drain in consequence of the foreign exchanges. Shortly before the panic, in 1825, no less than 9,000,000l. was drawn out of the Bank; and previous to the panic in 1832, 6,000,000l. in gold were drawn out of the coffers of the Bank. The Bill, therefore, as it stood, would guard against the lesser danger, which was insignificant, and leave the greater danger, which was immense, untouched. The most wise and easy way to prevent danger would be to compel the Bank to increase its store of gold by 2,000,000l. or 3,000,000l. He felt a strong repugnance to many of the details of the measure; but, at the same time, he was bound by sound policy to support the maintenance of the Bank of England. That Corporation, however, ought to be confined to its proper field; it ought to be a Bank of issue for the metropolis, and the only one. Not that there was any peculiar interest or charm in the number one, but because practice had grown up about the system and given it a firm root. But while he maintained the Bank of England in its legitimate functions, he would also maintain the coun- try banks of England, and the joint-stock banks of Scotland in their privileges. They were the growth of the circumstances of the country, and adapted to its interests and its wants. Another system might be better than the present, but to attempt to alter in parts would only produce dislocation. There was an old and wise maxim with respect to criminal law; and it was, that a known and fixed law, although imperfect, was preferable to an uncertain and changing law, although in all other respects the changing law might be much the superior. That maxim was even more applicable to mercantile affairs than to others. Anxious as he was to see the Bank of England supported in its just and useful privileges, he should vote for the second reading of the Bill, although he should do so with reluctance, for he felt that many of the provisions of the Bill would produce only the roost disastrous results.

Mr. Brodie

said, that though he was a country banker, he would, divesting himself of all private and interested feelings, discuss this subject upon public grounds. The noble Lord, he believed, had already stated, that he would postpone that part of the measure which related to country banks to next Session. He would just refer for a moment to what had fallen on a former night from the noble Lord in reference to country banks. The noble Lord then said, that he certainly gave a decided preference to one bank of issue over the establishment of numerous rival banks—that he did not bring forward his measure in consequence of any complaints that had been made with regard to the unfitness of the existing country circulation; but he proposed it in consequence of his impression of the utility of one bank of issue in supporting a paper currency and preventing fluctuations. Now, here was the admission of the noble Lord, that no complaints had been made against the country banks; and they had also the confession of the noble Lord's party, that there existed no grounds for such complaints. Then the question arose, why did the noble Lord wish to place the country in the situation the noble Lord now proposed? He, for one, hoped that the House would never allow the noble Lord to make such a tremendous experiment upon the credit of the country. The noble Lord talked indeed of fluctuations, and he had said that the object of estab- lishing one bank of issue was, to prevent fluctuations. Now, if the noble Lord had had the same experience with respect to country banks which he (Mr. Brodie) had had, he would see, that it was quite impossible that the operations of any country banker would create fluctuations. All the fluctuations that took place in this country were created entirely by the operations of the Bank of England. Whatever fluctuations took place in the circulation of country banks were legitimate and natural. He would slate an instance with regard to his own bank. In consequence of the good harvest last year, the circulation of that bank rose by one-twelfth above what it had been in the preceding year. But the idea that a country banker could raise his circulation to what amount he pleased was preposterous and absurd, and contrary to all experience. No more of his notes would remain in circulation than were absolutely necessary for the daily intercourse from band to hand of the trade in the district where his bank was situated. To attempt to push his circulation further would be as ridiculous as to endeavour to put more water into a vessel than it would contain. But the Bank of England, besides supplying notes to its customers, had various other operations to perform connected with the funding of Exchequer-bills, the advances of money on mortgages, &c., all of which reacted upon its circulation, and subjected it to constant fluctuations. The hon. Member here read an extract from an Essay on Banking, published in 1830, to show that the existing country banks had answered all the purposes for which they were required by the country. He could not conceive, he said, any measure more impolitic than the establishment of a number of such banks as the noble Lord proposed to establish—banks that would be the mere menial servants of the Bank of England, and which would be obliged to contract or enlarge their circulation as the Bank of England was pleased to direct. He was of opinion that, so far from increasing the power possessed already by the Bank of England, it would be wise and judicious to diminish it. In conclusion, he solemnly called on the House not to enable the noble Lord to inflict such a deadly injury on the country.

Mr. Poulett Thomson

said, that without any disrespect to the hon. Member who had just sat down, he did not feel it neces- sary on this occasion to offer any answer to the observations that had fallen from him, as those observations had nothing to do with the measure at present before the House, but applied to that part of the plan which had been postponed to the next Session of Parliament. The hon. Member's observations might have been perfectly appropriate three months ago, and they would be perfectly appropriate some nine months hence, if the measure which had been withdrawn should then be reintroduced by his noble friend, (the Chancellor of the Exchequer.) He would now proceed to reply to some of the points that had been urged by the hon. member for Whitehaven. To the great majority of them, the hon. Member had himself furnished an answer. The hon. Member, in stating, that he would vote for the second reading of the Bill, admitted that he approved of the principle of it. The hon. Member had asked how they, who were the advocates of free trade and the opponents of all restrictions, could advocate the monopoly of the Bank, of England. Now, he (Mr. Poulett Thomson) thought that the two things were perfectly reconcilable, and capable of being advocated upon exactly the same principle—the principle of the public good. He denied that it would be inconsistent for the advocates of free commerce to object to the issue of paper. Those who advocated free trade did so on the grounds that an individual could only injure or abuse himself by the misappropriation of his capital; but in the case of a private banker issuing his notes, he might not only injure those with whom he dealt, but also disarrange the whole monetary system of this country. It had been said, that a. perfect unanimity prevailed as to the propriety of a renewal of the Bank Charter in the way the proposition now stands; but he believed the right hon. member for Dundee (Sir Henry Parnell) differed in this respect. He, however, must maintain, that though many of the privileges of the Bank of England were continued, yet none certainly were increased, while, on the other hand, many privileges were diminished. The sole privilege retained for the Bank of England was that of issuing notes payable to the fearer within sixty-five miles of London. With this sole exception, the Bank Directors got by this measure no extension of privileges; and he would inquire under what restric- tions were those privileges continued? Was it nothing, he would ask, that the Bank of England would be required, under this Bill, to become a responsible instead of an irresponsible body to the public? And, again, was it no diminution of the privileges which the Bank now enjoyed, to be compelled to come before the public with a weekly statement of their accounts, and, indeed, to lay them thus open to the inspection of their customers? By these provisions a check was afforded such as never before existed. He was at a loss to conceive upon what grounds the increase of privileges to the Bank could be insisted upon as having been extended to the Bank by the Government; and he must deny, that making notes a legal tender would prove more a benefit to the banker than to the country generally. He must also deny, that the proposed measure would either be a violation of the contract, or that it would lead to any depreciation. Arguing from past times, he should say, that some check was necessary to guard against internal drains to which the commercial system of the country, and especially the Corn-laws, must administer; and he knew none so effectual as that which had been proposed, and to which he had already alluded. He must further observe, that no such difficulty could arise as that which had been suggested, for the moment that the Bank ceased to pay in bullion, that moment would the notes cease to be a legal tender. Again, he must express his conviction, that against external drains the State could always provide; and though he objected to any monopoly in private hands, yet, until he saw that the country could with safety take the management into its own hands, he would leave with even a private company such management, under such restrictions as might be considered necessary, with a view to prevent abuses. Though he disapproved of the mismanagement which had manifested itself of late years on the part of the Bank of England, yet he must say, that the management of the paper issue, and of the monetary system, could not be intrusted in better hands, and he should therefore give his support to the proposition of his noble friend.

Sir Robert Peel

said, that as regarded those parts of the Bill which related to the extending of certain privileges to the Bank of England, it bad his assent; and he should, therefore, vote for the second reading. He thought, upon the whole, however, that the contract made was a very improvident one for the public; but that contract having been entered into by the authorised officers of the Government, he could not, without stronger grounds than any which he saw, be a party to its violation. The nature of the bargain as between the Bank and the public was clearly indicated by the fact that Bank Stock since it became known had risen from 193 to 208. Assenting however, as he did, to the Bill generally, there was one clause to which he very strongly objected, and that was the one which made the Bank of England notes a legal tender. And if anything could increase his objection to the principle of that clause, it was done by the mode and time and place in which such a principle was proposed for the adoption of that House. As to the time, he objected that a principle entirely changing the monetary system of the country should be proposed to the House at midnight on the 2nd of August. His objection to the place was, that a question so independent and so important in itself should be embodied at all in such a measure as the present Bill. It was no part of the contract with the Bank as far as he could understand; and he would ask, then, was there any prospect of such an immediate danger of commercial or political panic as to make it necessary to introduce in this measure a clause giving up the principle of the convertibility of paper into gold? The right hon. Gentleman had said, that the change would not materially increase the paper issues of the Bank. That word "materially" admitted the whole question, and was enough to show that the measure would in effect destroy the convertibility of paper. Then as to the mode. The clause was introduced in the middle of this Bill without a word to explain for what reason it had been adopted. He could not help admiring the modesty of the framers of the clause. They could not even condescend to say, that "whereas it was expedient" to make the provisions it contained. There would be nothing whatever upon the face of the Act if it should be passed, to show posterity why such an important alteration was made in the monetary system. He objected entirely now to enter upon this slippery path, from which he was satisfied it would be impossible to retrace the steps which it was proposed in this respect to take. The measure, with such a provision, would enable any man to issue his paper purporting to be payable to bearer on demand, and, instead of fulfilling that contract in bullion, he would be enabled to meet it by a note convertible only in London. This would be intrusting to parties over whom the nation would have no control, not only a complete power over the currency, but also an interest, and a direct one, to abolish a gold currency. He begged to ask the noble Lord (the Chancellor of the Exchequer) whether, if an individual had a demand upon another for 5s. 2s., the first could discharge the demand under the Bill with a 5l. note and 2s.? [Lord Althorp, Yes:] Then, in such a case, what provision was there in the Bill to prevent a country banker from sending forth notes for 5l. 5s., which would be a complete departure from the present system; and as the country banker could pay his note with a 5l. Bank of England note and 5s., it would never be necessary for him to be possessed of any bullion or gold, in order to be enabled to satisfy the demands of his customers. He could also conceive another inconvenience which would arise from the proposed measure—namely, that at the ports foreigners would, instead of getting gold, be obliged to take notes. He feared this clause would tend to increase the evils so much to be dreaded, and to it he could not give his consent. The proper time, however, would come for entering into a full discussion of its provisions, and he would not now further enter into it.

Lord Althorp

denied, that any principle on this subject which had been adopted by him before coming into office had been abandoned in any provision contained in the present Bill: and he further denied that the Bank of England could be charged with jobbing with the public securities as had been stated. He was ignorant of any one fact which could expose the Bank to such a charge or imputation. The objection raised by the right hon. Baronet, the member for Tamworth, to the clause for making Bank of England notes a legal tender, was not really a valid objection to the Bill itself, and that objection rested on the non-insertion of a preamble to the clause. It had been thought right, by the Government to bring into this Bill all matters directly affecting the Bank of England, and this clause, he contended, had been properly introduced. The right hon. Baronet had inquired if this part of the bargain had been communicated. It had been so; and in the letter addressed to him, in answer, it had been said the matter was more deserving the consideration of the Government than of the Bank itself He admitted, that the clause would be advantageous to the Bank, but at the same time it could not be denied, that it afforded a means of meeting a run upon it. He (Lord Althorp) intended, in Committee, to introduce a clause restricting the branch banks from issuing anything but branch-bank notes, and that they must have always a resource of bullion. [Sir Robert Peel: Is it provided that the Bank of England shall have branch banks?] He could not see how it was possible to enforce this by any act of Parliament, but he thought the Bank of England would feel it to be for its own interest to have branch banks; but, at any rate, such establishments must be left to their own discretion. The right hon. Baronet had supposed that the country bankers would issue five-guinea notes to avoid paying in gold; but he did not see in what manner they would gain any advantage by so doing, or that it was the interest of country bankers to pay Bank of England paper instead of gold. The right hon. Baronet considered that it would be the interest of the country bankers to issue Bank notes not payable in gold; and that, as branch banks would probably cease, the payment of gold in exchange for notes, would consequently be confined to the Bank of England. But supposing that to be the case, it would not differ much from the present state of things; for in any great demand for gold, the place where it was applied for was the Bank of England. The right hon. Baronet had contended, that the altering of the currency so far would affect foreigners. But he did not apprehend that foreigners frequenting our ports took gold back—they took Bills of Exchange. He did not see how this could affect our internal transactions. The right hon. Baronet thought that the standard of value of the currency would be altered, if country bankers were allowed to pay 5l. 2s. in a 5l. note and 2s. He did not see how this would affect the standard of value, unless the 5l. note was depreciated; the right hon. Baronet must assume that paper would be depreciated in the country, of which he (Lord Althorp) thought there was no danger. It was then said, that other establishments would be found with equal security with the Bank of England. But the whole principle of the Bill was founded on this-that the currency of the country ought to depend upon one bank of issue, which should regulate the amount.

Mr. Herries

agreed in the principle of renewing the Bank Charter, and should therefore vote for the second reading; but he wished to make the legal tender—as it was, and ought to be—a distinct and separate question. He had, on a former occasion, put a question to the noble Lord (the Chancellor of the Exchequer) on the subject; and, if he recollected right, the noble Lord's answer was, that the legal tender was no necessary portion of the question as to the renewal of the Bank Charter. The right hon. Gentleman, the Vice-President of the Board of Trade, had said, that if the Bank were not able to pay in gold, the Bank-note would cease to be a legal tender. Now, let the House imagine the condition of a man who received a Bank-note as a legal tender on Saturday-night, and found it not a legal tender on Monday morning—did that case not show that a legal tender ought to have intrinsic value, or be State paper, for the value of which the State was responsible? Did not that show, that the case supposed would be full of danger? He had heard no arguments in favour of the great change proposed, and many against it. The Bank of England would be exposed, at a time of real panic, to a greater danger than ever. He believed, that the quantity of gold in circulation would be diminished by the change, and that the Bank would put more of its paper into circulation than at present. The Bank would advance its paper at a cheaper rate also than it advanced gold. Its issues would be advanced on different securities too from those it now accepted. It would advance its paper, he believed, on mortgage deeds. He was reminded of a remarkable passage in a letter signed by the noble Lord (Lord Althorp) himself, which stated, that the tendency of these measures would be to extend the circulation of the Bank of England. He believed—it was, indeed, quite certain—that it would extend the issues of the paper of the Bank of England, and diminish the quantity of gold in circulation. No more gold would be kept than was necessary. He believed an agio in gold would speedily follow the making Bank notes a legal tender. He did not suppose that, on the whole, the change would increase the currency; it would probably diminish it; and prices would rather fall than rise in consequence. He should, in the Committee, endeavour to diminish the extent of the Bank monopoly. Sixty-five miles was, he thought, too large a circumference. There were now many reasons, which did not exist when the Bank Charter was formerly renewed, for lessening that distance. He should also suggest in the Committee an alteration as to Banks having more than six partners, so as to do away with many of the restrictions now imposed on them. He concurred in the propriety of renewing the Charter of the Bank of England; but he hoped that the details of the Bill would be amended.

Mr. Poulett Scrope

declined to divide the House, because many of the Members who would support his Motion had gone away.

Bill read a second time.