Lords Sitting of 7 May 1819

SECOND REPORT FROM THE SECRET COMMITTEE OF THE HOUSE OF LORDS RESPECTING THE BANK OF ENGLAND RESUMING CASH PAYMENTS.
The Earl of Harrowbypresented the following Report:

SECOND REPORT.
BY THE LORDS COMMITTEES appointed a Secret Committee to inquire into the State of the Bank of England, with reference to the Expediency of the Resumption of Cash Payments at the period now fixed by Law, and into such other matters as are connected therewith; and to report such information relative thereto as may be disclosed without injury to the public interest, with their observations:
Ordered to Report,
That the Committee have, pursuant to the instructions given to them by the House, proceeded to inquire into the several matters referred to them, and have collected from the examination of witnesses, and from the accounts laid before them, the information, which will be found in the minutes of evidence, and in the appendix.
The Committee think it right to premise, that in this investigation they have taken as their guide the decided opinion of parliament, as declared by many repeated enactments, that the removal of the restriction upon cash payments by the Bank, or in other words, the restoration of the currency of the country to a state of regulation by its ancient metallic standard, is an object which ought to be accomplished at as early a period as shall be found safe and practicable.
The first act, confirming and continuing the restriction contained in the minute of council of the 26th of February 1797, was passed on the 3rd of May 1797, and was to be in force till the 24th of June 1797. The restriction was farther continued by an act passed on the 22nd June 1797, until one month after the commencement of the then next session of parliament. By another act, passed on the 30th of November in the same year, the restriction was farther continued until one month after the conclusion of the war by a definitive treaty of peace. On the 3rd of January 1799, the directors of the Bank, in pursuance of a power reserved to them by the acts of parliament referred to, gave notice that on the 14th instant they would pay in cash all fractional sums under five pounds; and on the 1st of February 1800 would pay cash for all notes of one and two pounds, dated prior to the 1st of July 1798, or exchange them for new notes of the same value at the option of the holders. By another act, passed on the 30th of April 1802, the restriction was continued until the 1st of March 1803. On the 28th of February 1803 it was farther continued until the expiration of six weeks after the commencement of the then next session of parliament. On the 13th of
200
December 1803, the country being then again at war, it was farther continued until six months after the ratification of a definitive treaty of peace. In the year 1812 an act was passed for preventing any note or bill of the Bank of England or Ireland from being received for a smaller sum than the sum therein specified, and for staying proceedings upon distress by tender of such notes; and in 1814 this act was farther continued during the continuance of any act imposing restriction upon the Bank with respect to payments in cash.
By an act passed on the of 18th of July 1814, the restriction upon the Bank was continued until the 25th of March 1815; and it was farther continued by an act passed on the 23rd of March 1815, to the 5th day of July 1816. On the 21st of March 1816 an act was passed, by which, after reciting in the preamble "that it was highly desirable that the Bank should, as soon as possible, return to the payment of its notes in cash; and that it was expedient that the provisions of the former acts should be farther continued, in order to afford time to the directors of the Bank to make such preparations as to their discretion and experience might appear most expedient for enabling them to resume payments in cash, without public inconvenience, and at the earliest period; and that a time should be fixed at which the said restriction should cease," it was enacted, that the said restriction should be continued until the 5th of July 1818. On the 28th of May 1818 another act was passed, by which, after reciting in the preamble, "that it was highly desirable that the Sank of England should return as soon as possible to the payment of its notes in cash, and that unforeseen circumstances, which had occurred since the passing of the last of the preceding acts, had rendered it expedient that the restriction should be farther continued, and that another period should be fixed for the termination thereof;" the restriction is farther continued until the 5th of July 1819. Of these unforeseen circumstances, the most important was the apprehension of the effect of farther foreign loans (particularly those of France) upon the exchanges and the price of gold.
Subsequent to the first restriction upon the Bank of England similar restrictions were imposed and continued by different acts upon the Bank of Ireland, and their termination was fixed at three months after the expiration of the restriction upon the Bank of England.
During these successive prolongations the Bank appears at different periods to have made great exertions to procure such a mass of treasure as might enable it to replace itself upon its ancient footing, whenever it should seem good to parliament to remove the restrictions. In 1798 the treasure was increased to an amount which bore, in the early part of 1799, a very large proportion to that of the outstanding notes. During the years immediately subsequent, this treasure expe-

201
rienced a considerable reduction; but from the middle of 1804 to the middle of 1808, the favourable state of the exchanges enabled the Bank to make large purchases of gold. In order to encourage the importation of gold, the Directors determined to give 4l. per oz., and the treasure was so much augmented as to have exceeded in 1808 the highest amount which it had reached in 1799. From that period it successively declined. The restriction was prolonged in 1814 only to the 25th of March 1815, and in 1815 only to the 5th of July 1816; but the extraordinary high price of gold, and the extreme depression of the exchanges, which, from whatever causes, prevailed during great part of these periods, combined, with the large advances to government which the exigencies of the public service required, to prevent any material progress being made towards a restoration of the treasure of the Bank to its former amount.
Notwithstanding these discouraging circumstances, the Bank more than doubled its treasure during the last eight months of 1815; and the fall in the price of gold, and the favourable turn of the exchanges, enabled the directors to raise it, by January 1817, to more than quadruple what it had been in the beginning of 1815. At this period the directors felt so confident of being able to comply with the injunctions of parliament, even before the period at which the restriction was to expire, that they issued a notice for the payment in cash of all the one pound and two pound notes bearing date prior to January 1816. Finding little or no demand for cash in consequence of this notice, and their treasure having continued during the course of the year to increase to an amount far exceeding what it had ever reached, and, with few exceptions, bearing a larger proportion to the extent of their issues than it had ever borne before, the directors issued a second notice in September 1817, for the payment in cash of all notes bearing date before the 1st of January in that year. This measure has been stated to the committee to have been undertaken, in the hope, that if it proved successful, that is, if the gold so tendered were not demanded, or it, when demanded, it remained in the country, the complete resumption of cash payments would take place gradually, and as it were insensibly, even prior to the period then fixed by parliament, viz. the 5th of July 1818.
In the month of April 1817, the effect of the great foreign loans made in that year began to be considerably felt. Between April and October 1816 the exchanges took an unfavourable turn, and the price of gold, which had from July 1815 to March 1817, fluctuated between 3l. 18 s. 6d. and 3l. 19 s. 6d., rose between April and December 1817, from 3l. 18 s. 6d. to 4l. 0s. 6d.; since which date it does not appear by the quoted prices to have been ever again reduced below 4l. The new gold coinage also began to be issued in July 1817. The treasure of the Bank was raised to
202
its highest amount in the month of October 1817. There appears to have been no considerable demand for gold previously to the month of October. The first issue of sovereigns in large quantities was in that month. There was a diminution in the demand for them in the three succeeding months; but in the month of February 1838 the issue of gold increased till August in the same year; and the demand during this period is stated to have arisen decidedly for the purpose of exportation. It appears from the evidence of Mr. Harman, that during the whole of the year 1817, the Bank did not think it necessary to make any reduction of its issues, either in consequence of the effect of the foreign loans upon the exchanges, or of its payments in gold, made in conformity to the notices above referred to. In fact, the average issue of Bank notes in 1817 exceeded by 1,700,000 l. that of 1816; the average issue of the last six months of 1817 exceeded the average issue of the first six months of that year by 1,870,000 l.; and this increase, combined with the revival of country banks from their previous depression, probably raised the circulating medium of the kingdom in the last six months of 1817, considerably beyond the amount at which it had stood in the preceding year.
A great reduction has been made in the issue of notes of the Bank of England since the commencement of the year 1818; they had been, on the average of six months from July to December 1817, at 29,210,000; on the average of six months from January to July 1818, at 27,954,000; from July to December 1818 they were reduced to 26,487,000, and have since been farther reduced to about 25,000,000; and during the last three months of 1818 the issues of country banks are stated by persons much conversant with the subject, to have certainly not increased, and probably to have declined; but the price of gold and the state of the exchanges have continued to be such, as to have drawn from the Bank, in addition to the gold demanded previously to March 1818, amounting to 2,022,000, a farther sum of 4,787,000, making in the whole an issue of 6,809,000, in consequence chiefly of the liability with which the directors had under different circumstances voluntarily charged themselves to pay the fractional parts of dividends, and a certain proportion of their notes in cash. Their treasure was by these drains very considerably reduced; and they were still liable, in consequence of the same measures, to an additional demand for cash to the amount of several millions.
This unfavourable state of the exchanges and of the price of gold is attributed to different causes by different persons examined before the committee. By some, to an excess in the circulating medium of the country; by others, to the effect of the late regulations of the mint respecting the new silver coinage, by which the proportions between the relative value of

203
gold and silver are stated to have been so varied as to have occasioned the exportation of gold: by others it is attributed to the continued operation of foreign loans, to the temptation held out by a high rate of interest to the investment of British capital in foreign funds, and foreign speculations, and to the large purchases of corn from abroad; a great proportion of which is paid for in advance, and must therefore in their opinion have had a material effect upon the balance of payments, and of course upon the exchanges, during the year 1818.
It is under these circumstances that parliament is called upon to deliberate, whether it will be most for the public interest to adhere to the decision it had taken in May 1818, or to allow a farther delay for the preparations necessary to carry this important measure into execution, in order, as far as possible, to secure its ultimate accomplishment, and at the same time afford the means of taking such precautions, as may diminish the pressure of whatever public inconvenience may be felt or apprehended.
Much difference of opinion upon almost all the questions, whether of theory or of practice, to which the attention of the committee has been drawn, will be found in the evidence. Upon one point only there is nearly an unanimous opinion, grounded indeed by different persons upon different lines of argument, but concurring in the same result; viz. that it would not be safe and practicable for the Bank to resume cash payments on the 5th of July 1819; and, as the committee see Sufficient reason to agree thus far with the practical result of these opinions, viz. that in the state of things which now exists, there is a necessity for some farther postponement, they need only refer to the evidence, in which the different reasons which lead to this conclusion are fully stated.
It can hardly be necessary for the committee to remark, that this opinion does not rest upon any ground which can intimate the slightest doubt as to the credit or solidity of the Bank; that body possesses at the present moment, the means or discharging, out of the treasure actually in its coffers, every demand which could have been made upon it for payment in cash in consequence of the notices referred to; and the only object of the measure which, at the recommendation of the committees of both Houses, has been already adopted by parliament, during the course of the present session, was, to prevent the continuance of a drain of the existing treasure, and thereby to facilitate such operations as the committee might feel it to be their duty to recommend, in preparation to a final removal of the restriction.
Of the ultimate sufficiency of the Bank no doubt has been or can be entertained; but as parliament thought proper, at the period when it imposed the first restriction upon the Bank, to direct an inquiry into the actual
204
state of its affairs, and as a similar injunction is contained in the order by which this committee is appointed, they have thought it their duty to lay before the House the statement in the Appendix; by which it appears, that exclusive of the debt from government, at three per cent., of 11,686,800 l., and of the advance to government at three per cent, of 3,000,000 l. making together 14,686,800 l. the balance in favour of the Bank, on a comparison of its debts and credits (including in the former the government balances in the hands of the Bank) is 5,231,190.
The next subject to which the attention of the committee has been directed, was the consideration of what time might now safely be fixed for the ultimate restoration of the currency of the country to the ancient metallic standard of value, and what were the measures, if any, which it plight be expedient to adopt, in order both to facilitate and to ensure the complete attainment of this great object.
Unless the market price of gold shall be, at the time so fixed, and shall continue to be afterwards, so near the mint price as not to afford a profit upon the exportation of that metal, it has been abundantly proved, by past experience, that no law can prevent such exportation, and the consequent demand upon the Bank. The main question therefore is, by what means, and within what time, the reduction of the price of gold to the mint price, or, which is nearly equivalent, such a favourable state of the exchanges as will prevent a profit on exportation may best be attained.
It is strongly contended by some of the witnesses, and is admitted by most, that a considerable, and (as was expressed by one of them) forcible reduction of the issues of the Bank, accompanied by what some consider as a necessary, and others as a probable consequence, a diminution in the issues of country bank paper, would produce a favourable turn in the exchanges, and a reduction in the price of gold. But many of those who are most deeply impressed with the necessity of the earliest possible recurrence to the ancient standard of the country, state, in the strongest terms, the general distress which a large and sudden diminution of the paper currency, now the only circulating medium of the country, must occasion; while others are opinion, that a very small reduction of the circulating medium will be sufficient to produce these effects, and that little distress would be, occasioned. There are some also who hold that the present mint regulations respecting silver are the sole cause of the high price and. consequent exportation of gold, and of course are of opinion, that there need be neither reduction nor distress.
The general result of all the varying sentiments of the witnesses upon the subject of the foreign exchanges, and of the price of gold, may perhaps be thus stated.
Many of those who maintain, that it is at all times in the power of the Bank to exercise a complete control over the rise and fall of the exchanges, and of the price of gold, nevertheless think, that the great loans contracted for since the peace, by foreign states; the investments made by persons in this country in foreign securities, to the amount as has been conjectured, of ten or twelve millions; the pressure which took place in the money market at Paris and other commercial towns on the continent, and in America; and the great importation of corn during the last year, nave of late concurred in lowering the exchanges. They hold indeed, that when our circulation was in its former state of payments in specie, no payments abroad could bring the exchanges materially below their par; but with a paper, that has no such regulator of its value, they think that the necessity of payments abroad, from whatever cause, does undoubtedly produce a considerable effect upon the exchanges, which might however, as they state, be always counteracted by a sufficient diminution of paper.
On the other hand, many of those who attribute the high price of gold, and the unfavourable state of the exchanges, chiefly to the operation of these latter causes, and who deny or doubt the fact that the issue of the notes of the Bank of England has been excessive, nevertheless think that an excessive increase or diminution of their issue might affect the exchanges; but they doubt whether a small increase or diminution would produce any marked effect upon them.
Those again, who maintain that the proportion betwixt the Mint price of gold and silver, as settled by the recent change in our Mint regulations, is the sole cause or the nominal high price of gold, think that the real exchange has, for the last two years, been in favour of this country; that there has been during that period no over issue of bank paper: that had it not been for the Mint regulations, gold must have continued to flow into this country, as it did in 1816; that there could, therefore, have been no demand on the Bank for coin of that metal, for the purpose of exportation; and that the Bank could have found no difficulty in resuming payments in cash at the time now fixed by parliament.
It appears to the committee, upon the whole, that so long as the Bank continued liable to pay in cash, it might be concluded from reasoning, and has been proved by experience, that the variations in the market price of gold, and also in the exchanges, would be confined within much narrower limits, than they have been since the restriction upon cash payments.
Under the ancient system, if an unusual demand were made upon the Bank for cash, when the exchanges were above par, and the price of gold below the Mint price, as such a demand could only be occasioned by some
206
sudden panic, or by a failure in commercial credit, and could not, under such circumstances, arise from the profit to be derived from the exportation of gold, there might be occasions in which the Bank might think that with a view to its own interest, so closely connected with that of the commerce and manufactures of the country, the best mode of checking such a demand might be, to make a more liberal issue of its notes, and thereby to revive that credit, the want of which had produced the embarrassment; but if an unusual demand took place, at a time when, from the state of the exchanges and of the price of gold, it evidently arose from the profit to be made by the exportation of that metal, the Bank always found itself under the necessity of contracting its issues for its own security. In the latter case therefore, whether the directors did or did not adopt the principle, that the increase or diminution of the paper currency has a decisive influence upon the exchanges, they necessarily acted in the same manner as if they had fully adopted it.
There is a difference, however, not to be disregarded in the impression likely to be produced upon the public mind, by any pressure arising from the measures to be taken by parliament for insuring the restoration of a metallic standard, as distinguished from those pressures which might be occasionally experienced under the former system. These would be felt to be the necessary result of the precautions, which, under particular circumstances, might be taken by the Bank for its own security; and if any temporary inconvenience were produced by them, they would manifestly have for their object, to avert an evil universally acknowledged to be still greater, viz. the stoppage of payment by the Bank; whereas any pressure which might now be experienced by too rapid a progress towards the resumption of cash payments, might be thought to be an evil voluntarily and unnecessarily incurred, from an impatience to attain an object, respecting which there was more difference of opinion, and therefore less readiness to make any considerble sacrifice for its speedy attainment.
It has also been stated to the committee, that there exists at this present moment a considerable degree of embarrassment in commercial transactions, which is attributed by some of the witnesses to the over-trading which has taken place, encouraged, in the opinion of one witness, by the increase of the circulating medium in 1817, and is attributed by others to the subsequent diminution of that medium. Very different opinions have also been stated respecting the probable duration of this embarrassment; but as all agree respecting its actual existence, a more than ordinary degree of caution is required in the adoption of any legislative measures which may, even by a temporary operation, in any degree aggravate or prolong it.
These considerations have united to incline
†

207
the committee, in the proposal which they will submit in the conclusion of their report, rather to extend the time at which the ultimate resumption of cash payments should be required to take place, beyond the period at which, according to the best opinion they can form, there would be a probability of its easy accomplishment, under ordinary circumstances, than to hazard the ultimate success of that measure, by assigning to it the earliest period within which, according to such opinion, it might be safely practicable. The measure had better not be begun at all, unless there be a determined purpose to carry it to its completion, as an ineffectual attempt might create great mischief and distress, and would not leave any beneficial result to repay the country for what it may have suffered.
From thus extending the period, it seems to the Committee, that considerable advantages would arise. Those who think that the object is to be accomplished only by the means of a considerable reduction of the notes of the Bank of England, and that the inconveniences, which they acknowledge to be the necessary result of such reduction, would be amply compensated by the restoration of the ancient metallic standard, feel considerable anxiety to diminish the extent of these inconveniences. Those who expect little or no inconvenience to arise from the measures necessary for the attainment of this object, are nevertheless sensible of the difficulties which are opposed to its early accomplishment by the present state of the Bank treasure, and by the existing (though as they hope temporary) commercial pressure. They are on this latter account particularly desirous to allay even those apprehensions which they deem unfounded or exaggerated, and are satisfied that provided the ultimate object be secured, the intermediate pressure, whatever may be its degree, would be materially lightened by being spread over a greater length of time.
Those, on the other hand, who feel less confident in the effect of such a reduction, who think, that even were its effect certain, it could only be produced by the creation of a greater degree of distress than the public could well bear—who look to the cessation of those temporary causes, to which they attribute the largest share in producing the unfavourable state of exchanges and the high price of gold, as the natural remedy for the evil—and who expect that in no long space of time, the favourable balance of payments (the usual result of the extent and nature of our commerce) will, without incurring any distress by taking measures for the forcible production of such a change, lead insensibly, but with sufficient certainty, to the attainment of the object in view—all persons who entertain these opinions, must feel still more anxiety for the extension of the period.
There are, however, some measures of preparation which, whatever time may be fixed, appear desirable, if not indispensable,
It is well known that the Bank has always been in the habit of making large advances to the government for the public service. These, advances are partly made under special acts of parliament, upon securities therein provided. There is another species of accommodation which has also been afforded by the Bank, viz. the purchase of exchequer bills to a large amount. For the state of the law upon this subject the committee beg to refer to a paper which has been laid before them, and which is inserted in their appendix. The amount of the exchequer bills and other government securities, either held or purchased by the Bank at different periods, will also be found in the account which is there inserted. The different applications made by the treasury to the bank for accommodation are fully detailed in the annexed accounts and correspondence. The principles upon which the treasury has. acted in making these applications during the last four years, are explained in a memorandum delivered to the committee by the first commissioner of that board; and important information respecting these transactions will be found in the evidence of Mr. Harman, who, during the greatest part of the period last referred to, was either governor or deputy governor of the bank.
The committee think it proper to remark, that whatever effect the extent of the advances here referred to might have had upon the power of the Bank, at any given moment, entirely to resume cash payments, supposing other circumstances had not intervened to prevent such resumption, they do not appear to have had any influence in diminishing the extent of the accommodation received by the public for commercial purposes. In the opinion of most of the witnesses who have been examined, the abundance of circulation produced by the liberal issue of Bank notes, upon whatever securities they were issued, has produced indirectly as great facilities to commerce, as if they had been directly issued in commercial discounts. A transfer, to a considerable degree, of the discount trade from the Bank to private bankers and merchants is stated to have taken place; but the facilities afforded to commerce were at least as great in the latter case as in the former, as the discounts made by the Bank were more restricted in point of time, were limited by the necessity imposed upon the applicant of bringing two and sometimes more securities, and were granted only at five per cent, at a time when private merchants and bankers were discounting at a lower rate.
The effect, however, of the extent of the advances to government upon the situation of the Bank, when preparing for a resumption of cash payments, is evidently to cramp its operations, by placing a large proportion of its issues beyond its control. The advances made directly to government are only repaid at the period fixed by law. The exchequer

209
bills purchased by the Bank could not be sold in large quantities without reducing them to a considerable discount; and this discount would bring them into the exchequer in payment of the taxes, to such an extent as might materially derange the provisions for the public service. An understanding therefore, without express agreement, appears to have prevailed, that, when thus purchased, they should not be sold by the Bank. On the other hand, the issues of notes upon discount revert to the Bank at periods so short, that any reduction of the paper so issued, which circumstances may render necessary, is always within their reach; with this control over their issues, they are enabled to feel their way, and to restrict or enlarge them, either as the wants of the country may permit or demand, or as the state of the exchanges and the price of gold may appear to require.
It appears therefore to the committee to be highly expedient, that means should be taken to repay to the Bank a large amount of these advances at an early period.
In considering the means of providing for the future a safe and sufficient circulating medium for the country, the committee were naturally led to make inquiries as to what had been its amount, previously to the Bank restriction, when it consisted partly of gold coin and partly of paper; what has been its amount during the interval, when there was little or no gold coin in circulation; and what is likely to be its amount, and what ought to be its composition, when a metallic standard is restored.
Upon the first of these heads they neither found, nor indeed could they expect to find, any ground, from which a satisfactory conclusion could be drawn. The only certain data at any period are the notes of the Bank of England. The amount of coin rests only upon estimates formed in a great degree upon conjecture; and the official accounts offer little information respecting the issues of country banks at that period, as the stamps upon these notes were not then sufficiently distinguished in those accounts from other stamps. It is known that in 1792 those issues had been considerably extended; that after the commercial difficulties of 1793 they were greatly reduced; and in 1797 had not reached their former amount.
Taking, however, the amount of the gold coin in circulation at five millions below the estimate made by the late lord Liverpool,

viz. at

£.25,000,000

The notes of the Bank of England at

10,500,000

The country notes, including Scotland, may be conjectured to have been

7,000,000

The amount of circulating medium before the Bank restriction will be

42,500,000

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exclusive of silver and other means of circulation.
Upon the second head, viz. the amount of the circulating medium since the restriction, there are undoubtedly, at least as to a portion of the period, somewhat better materials for calculation.! That part which is certain, viz. the amount of the notes of the Bank of England, has borne so much higher a proportion to the whole of the circulating medium, that the uncertainty which rests upon the remainder, has less proportional effect upon the general result. The details of these issues appear in the accounts in the Appendix.
The variations in the amount of these issues, in the week immediately preceding, and in that immediately following the payment of the dividend upon the national debt, are so considerable (being from three to five millions in January and July, and from two to three millions in April and October), that in considering the general circulation of the country, it seems better to take an average of the issues for six months, than to form any calculation upon a shorter period. Stated upon this principle, it appears that they did not reach fifteen millions before the first six months of 1800; that they never reached twenty millions before the first six months in 1810, in the latter six months of which year they exceeded 24 millions. The variations for the next three years were not considerable; but the rise during the year 1814 was rapid, and carried their amount, upon the average of the last six months, to above 28 millions. The lowest point to which they fell, was between 26 and 27 millions, in the first six months of 1816. The highest to which they rose was in the last six months of 1817, when they were at their greatest average amount, viz. 29 millions, and from that period they have gradually decreased nearly to 25 millions, previously to the issue of the last dividends.
The amount, however, of Bank of England paper actually in circulation, is not always to be measured by the extent of its issues. When credit is flourishing, the reserve of Bank of England notes kept by country bankers will be considerably less, than when any local or general difficulties oblige them to make more ample preparations against large and sudden demands; and this reserve must in the present state of our circulating medium, consist in a great proportion of notes of the Bank of England, into which their own notes are legally convertible. It will consist also, to some extent of notes of other country banks, in exchange for which they can demand from those banks, notes of the Bank of England. In a state of imperfect credit, the country banks will also reduce their own issues, and will either never issue at all, or refrain from re-issuing a larger proportion of their own notes, which they keep by them ready stamped; so that even if the amount of stamped notes actually in existence in any

211
given year could be ascertained with certainty (which is very far from being the case), the proportion of such notes at that time actually in circulation could not from thence be inferred with accuracy. A similar degree of uncertainty, as to the amount of the circulating medium, must exist, as far as it arises from the varying reserves of all bankers, even when that circulating medium consists in part of gold, and will then equally apply, which it does not now, to the reserve of the Bank of England.
With respect however to that part of our currency, which has consisted of country bank-notes, the Committee have endeavoured, from such accounts as have been furnished them from the stamp office, to form some estimate of their amount. The difficulties of various descriptions, which throw a great uncertainty upon any calculations founded upon these accounts, are explained in statements delivered in by Mr. Sedgewick, which are to be found in the Appendix. From these materials two calculations have been drawn. The grounds upon which each of them rest are to be found in the Appendix. The Committee are inclined to think, that of these two approximating estimates, the second is the best adapted to their view of the subject: but they submit them both to the House, with a full sense of the imperfection to which they are necessarily liable.

21,374,000

1810

21,819,000

20,977,000

1811

21,453,000

20,047,000

1812

19,944,000

22,342,000

1813

22,597,000

21,672,000

1814

22,709,000

1810.

Bank of England

22,541,000

22,541,000

Country Banks

21,374,000

21,819,000

44,915,000

44,360,000

1811.

Bank of England

23,282,000

23,282,000

Country Banks

20,977,000

21,543,000

44,259,000

44,825,000

1812.

Bank of England

23,237,000

23,237,000

Country Banks

20,047,000

19,944,000

43,284,000

43,181,000

1813.

Bank of England

24,023,000

24,023,000

Country Banks

22,342,000

22,597,000

46,365,000

46,620,000

1814.

Bank of England

26,901,000

26,901,000

Country Banks

21,672,000

22,709,000

48,573,000

48,610,000

1815.

Bank of England

26,886,000

26,886,000

Country Banks

20,378,000

19,011,000

47,264,000

45,897,000

1816.

Bank of England

26,574,000

26,574,000

Country Banks

15,525,000

15,096,000

42,099,000

41,670,000

1817.

Bank of England

28,274,000

28,274,000

Country Banks

15,862,000

15,898,000

44,136,000

44,172,000

1818.

Bank of England

27,220,000

27,220,000

Country Banks

20,044,000

20,507,000

47,264,000

47,727,000

20,378,000

1815

19,011,000

15,525,000

1816

15,096,000

15,862,000

1817

15,898,000

20,044,000

1818

20,507,000

These estimates must indeed be not only far removed from accuracy, respecting any particular year, but many causes of uncertainty attach to them even if they were considered merely as affording data for calculating the relative circulation of different years. In this respect, however, they derive confirmation, especially the latter, from their correspondence with the general tenor of the evidence of persons connected with the country banks. The estimates which these persons have formed, as to the amount of the country notes, grounded upon local knowledge, and extended by inference to the whole kingdom, will be found in the minutes.
Much important information respecting the nature of this circulation will be found in the evidence, and particularly as to the different practice which obtains indifferent parts of the kingdom, more especially in Norfolk and in Lancashire.
The calculations founded upon the accounts from the stamp office (which afford no distinct data prior to the year 1809) would leave the Committee to suppose that the amount has varied, between 1810 and 1818, from below 16 to above 22 millions; that it was at the highest in 1814; at the lowest in 1816 and 1817; and that it has again risen in 1818.
Combining the accurate statements of the issues of the Bank of England, upon the average of each year, with the result of the inquiry into the issues of country banks, the account would stand thus:
To this must be added about 271,000 l. for the average circulation of unstamped small notes issued by the three chartered banks in Scotland, which are not included in the stamp office accounts.
The result of this estimate would be, that the circulating medium of England, as far as it consists of notes of the Bank of England or of Country bank notes, between 1810 and 1818, both years inclusive, has varied from about 42 millions to above 48 millions; and that it was highest in 1814, and lowest in 1816.
With respect to the numerical amount of circulating medium necessary to carry on with facility the transactions of the country, whatever may be the composition of such circulating medium, it is evidently impossible to form any judgment.
The great increase of the transactions of this country in every part of its home trade and agriculture; the rise of the amount of its exports and imports (even according to the official value, which is much below the real value) from 51,231,000 l. on the average of three years preceding 1797, 82,750,000 l. on the average of the three last years of which the accounts have been given in; the increase of the charge of the national debt from 13,430,000 l. in 1797 to 43,819,000 l. in 1819; and the amount of the taxes, which since 1792 have risen from about 16 to 50 millions (an increase occasioned not merely by an increased rate of taxation upon the same articles, but by the imposition of new taxes upon a great variety of articles), might have been expected to require a much larger increase of circulating medium. It is, however, obvious that such amount would not have necessarily borne any specific proportion to the amount of transactions of every kind, or to that of revenue. The flourishing state of commerce and of credit producing a greater rapidity of circulation, will have enabled the same quantity of circulating medium to carry on a much greater amount of transactions; and the various modifications of credit to which such a state of things gives birth, together with the successive improvements in the arrangements of commercial and banking business, must have had the same effect to a great extent. There must also obviously be a great difference in the required amount of a currency consisting of paper only, and that of a currency consisting partly of paper, and also, in a large proportion, of gold. It is to these circumstances (co-operating possibly with others), that we may perhaps attribute the sufficiency of the circulating medium actually existing to perform functions to so much larger an amount than were performed in 1797 by the circulating medium then existing, which was probably not many millions less than at present.
What proportions the various component parts of the circulating medium may bear to each other, after the resumption of cash pay-
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ments, it is difficult to conjecture. They must evidently be influenced by the future regulations of parliament, with respect to the nature and description of the paper currency.
If the paper currency is to be confined, as it was within a short period before the Bank restriction, to the issue of notes of 10 l. and upwards by the Bank of England, and of 5l. and upwards by the country banks, the necessity for a very large amount of gold coin for smaller payments is evidently indispensable. Should parliament think proper to continue both to the Bank of England and to country banks the liberty of issuing notes of a lower denomination, and particularly of 1l. and 2l., this permission would probably have the effect of keeping up a paper circulation, bearing a much larger proportion to the whole, than in the former case, and would so far diminish the necessity of an extensive circulation of gold coin. But although it would diminish that necessity, the degree in which it would diminish the demand for gold coin can only be stated as matter of conjecture. The established habits of the public may operate so decidedly in favour of a paper circulation, that there might be only a very small demand for gold coin; and as far as any judgment can be formed from the short interval during which the Bank issued gold coin in exchange for their notes, before the rise in the market price of gold occasioned a demand for exportation, this might probably be the case; the period was however too short to afford sufficient grounds for any decisive inference as to the future; and it is on the other hand the opinion of some of the witnesses, that the new coin would be preferred to paper.
The Committee attaching great importance to the restoration of the paper currency to a metallic standard, are also deeply impressed with the great advantages of such a currency when so regulated; and they think it highly desirable that a large proportion at least of the transactions of the country should be carried on by that medium. But the question, what proportion ought to be so carried on (if it were a point capable of solution, or could be the subject of regulation), wherever a mixt circulating medium is permitted, is very different from the question, what proportion the different classes of such a mixt circulating medium will actually bear to each other, when left to be decided by the supposed interest, or even by the inclination of the public.
The latter question, however, is one, upon the result of which, one way or the other, the most serious practical consequences depend. Any judgment to be formed beforehand must unavoidably be conjectural, and yet upon such, judgement we must be forced in some degree to act. Upon the greater or less probability that, in the event of the opening of the Bank upon the ancient system, paper would still be preferred to coin, must depend the extent of the accumulation of such coin with which the Bank must be prepared to meet that demand.

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Unless this point be rightly estimated, the Bank, on its first re-opening, might experience a demand, against which it would be difficult, if not impossible, to guard.
If the Bank is to make preparation, in the interval between the present time and the expiration of the restriction, to fill with gold coin all those channels of circulation which might possibly require to be so filled, the very extent of the purchases of bullion, necessary to be made for such a purpose, must, in some degree, whatever may be the interval, and in a very great degree if that interval be short, tend to obstruct the attainment of the ultimate object—the equalization of the market price of gold to its mint price; and unless the effect of these purchases were counteracted by a rapid reduction of the issues of the Bank, for commercial discounts and other purposes, to an extent of which the mischief has been so frequently referred to, the price of gold might be such at the very moment of the resumption of cash payments (supposing that moment to be previously and unalterably fixed), as to render the continuance of such payments difficult and hazardous.
These considerations have led the Committee to examine, with particular attention, a plan which has been suggested to them, and which, as it will appear by the evidence, is viewed in a very favourable light by many persons well qualified to form a judgement upon such a subject.
The leading principle of this plan is, to restore to the country, by the speediest and safest means, a metallic standard, as the regulator of its paper currency, by permitting the Bank to pay its notes in gold bullion, at the mint price, instead of gold coin.
Various advantages appear to the Committee to attend this plan, in preference to a simple resumption, in the first instance, of cash payments by the Bank. It establishes equally with cash payments, the principle and the salutary control of a metallic standard while it affords the best prospect, of avoiding or diminishing many of the inconvenience which are by many persons apprehended from that measure. It exempts the Bank from the obligation of providing a quantity of gold necessary to replace, in case the public should prefer coin to paper, all the smaller notes to the amount probably of 15 or 16 millions, which are now circulated in London and in the country; and therefore, by relieving the bullion market from this demand, it prevents that augmentation of the price of gold, which might be the consequence of large purchases of that article made in a short space of time, under the pressure of a necessity publicly and previously known. And it continues to the Bank and therefore to the nation at large, all the advantages to be derived from the employment of a capital equal to the amount of all the small notes in circulation, whether of the Bank of England or country banks. In the one case, this capital would still be, as it now
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is, employed in the support and extension of agriculture and of commerce, whether foreign or domestic; in the other, it would be merely an addition to the dead stock of the country, producing neither profit nor advantage.
It seems probable also, that when the Bank is made liable to pay only in bullion, and that only in exchange for notes to a certain amount, it would be chiefly subject to such demands as might arise from the excess of the market price of gold above the mint price, and the consequent profit upon exportation. To a demand resulting from this source, every Bank issuing paper convertible into either of the precious metals, must at all times be liable, and unless the market price of gold can be kept within certain limits of deviation from the mint price, either by the reduction of the issues of paper or by the effect of a favourable balance of payments upon the exchanges, the whole system of banking must necessarily fall to the ground. It is no objection, therefore, to this plan, that it does not provide against a possible inconvenience, which is, under such circumstances, an inseparable attendant upon all paper currency so convertible; that is, upon all paper currency, which is secured from great and inconvenient variations. The plan however contains in itself, during the period which may elapse before the market price of gold falls to the mint price, a considerable guard even against this danger, a guard which did not exist in the mixed state of our currency. As it would be impossible for any person to draw bullion from the Bank, except in exchange for Banknotes, no demand could be made upon the Bank to any great extent for gold without occasioning a scarcity in the currency which would tend to raise the value of those notes, and to remove the temptation to present them in exchange for bullion. The same circumstance would operate to check any demand, which might arise from a sudden panic; and the rapidity of such demand, in which its chief danger consists, might be somewhat diminished by the necessity of collecting notes to that amount, in exchange for which payment in bullion would be demandable. And in whatever degree a disposition may have existed to hoard coin, there would probably be less disposition to demand bullion from the Bank for that purpose.
The Committee, in recommending the principle of this plan of resumption to the favourable consideration of the House, think it nevertheless their duty to suggest such provisions as have occurred to them, by which, in their opinion, without weakening its efficacy, or impairing any of its advantages, its operation would be facilitated and ensured.
In the first suggestion of the plan, it was proposed that the Bank, upon the removal of the present restriction, should immediately pay in bullion at the mint price, instead of paying in coin. The Committee have laid

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before the House, in the former part of this report, the considerations which induce them to think that it must be desirable upon the whole to allow a considerable interval of time before the Bank should be required to resume cash payments upon the ancient system. These considerations would operate in a great, although not an equal degree, against the too early adoption of the plan for bullion payments at the mint price. The objection to the prolongation of the period in the former case was chiefly this; that the country would be left during that period, whatever it might be, without the certainty of any progress being made towards the re-adoption of a metallic standard of value. The interposition of bullion payments affords means of obtaining this security, which cannot be provided with equal advantage under the simple resumption of cash payments. The resumption of bullion payments may, if parliament should think proper, commence at an earlier time, and at the present market price of gold. Successive periods might, if thought necessary be fixed, at which the rate of bullion payments should be gradually lowered, until it should finally be brought down to the mint price. The same principle of gradation could not be applied to payments in coin, without the great and obvious inconvenience which must result from successive variations in its circulating value.
The effect of this graduated scale would be, to re-establish from the first commencement of its operation, the principle of a metallic standard. It would indeed not at once be a recurrence to the ancient standard; but an approximation would be gradually made towards it, and at no distant period it would be attained. The necessity, under which the Bank would be placed of regulating its proceedings with a view to the commencement of bullion payments upon this system, would give a security, perhaps unnecessary, but satisfactory to the public, that some progress was actually making towards the ultimate object. As the Bank would at the same time be relieved from an early recurrence to cash payments upon the ancient system, it would gain a longer interval for the gradual accumulation of its treasure, any reduction of its issues, which might be found necessary, might be gradually made; and all persons engaged in commerce would also be enabled to accommodate their transactions to the new state of our circulation.
It has been suggested, that the Bank might have the option of paying in bullion or in coin; but the committee are inclined to think, that even at the time when this scale shall have reached the mint price, the Bank should begin to pay in bullion only. If there is any weight in the argument that one of the great advantages of the proposed plan, with the modification suggested, is this, that it would render it safe for the Bank to open with a much smaller amount of treasure than might
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be thought necessary for the resumption of cash payments upon the ancient system, and therefore that it might begin its operation at an earlier period, it is evident that were the Bank from a preference to the ancient system, to determine to avail itself at that period of the option between bullion and cash payments by paying in coin only, it must, in consequence of such determination, make more rapid and more extensive purchases of gold in the interval, and thereby impede the gradual progress of its reduction to the mint price, which is the main object to be attained.
There is also another evil against which it would be expedient to provide a guard; viz. the possibility of an excessive reduction of the circulating medium, during the operation of this plan. This might be prevented by imposing upon the Bank the obligation to giving their notes in exchange for gold bullion (if tendered to them) at fixed prices, either taken somewhat below the mint price, or, in the first instance, somewhat below the price at which the bank should commence to pay in bullion; or farther, if it should be thought proper to introduce more than one point in a graduated scale, at prices somewhat below those which might successively be fixed. Either of the latter expedients would afford a greater security against any excessive reductions of the issues of the Bank, but they might introduce a degree of complication into the system, and might, cramp the operations of the Bank in an inconvenient manner; and the Committee think that, on the whole, a preferable security would be afforded by leaving the mint open to the public, by which any considerable deficiency in the paper currency would be supplied, and its effects counteracted by the coinage of gold.
In order to bring before the view of the House, with more distinctness, the whole of the plan which the Committee beg leave to recommend to their consideration, they will state shortly the different parts of which it consists:

1. That provision should be made by parliament for a repayment of the debt of government to the Bank to a considerable amount, and that a part of that repayment should take place some time antecedent to the first period, which may be fixed for the commencement of bullion payments by the Bank:

2. That from and after the 1st of December 1819, or at latest the 1st of February 1820, the Bank of England shall be required to pay its notes in gold bullion duly assayed and stamped in his majesty's mint, if demanded, in sums of not less than the value of 60 ounces, at the price of 4l. 1s. per ounce of standard bullion; that on the 1st of November 1820, or at such other period as may be fixed, the price shall be reduced to 3l. 19 s. 6d., unless the Bank shall have previously reduced it to that rate, it being always understood that

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the price, when once lowered, shall not again be raised by the Bank; and that on the 1st of May 1821, the Bank shall pay its notes, if demanded, in gold bullion, in sums of not less than the value of 30 ounces, at the price of 3l. 17 s. 10½d. per ounce of standard bullion:

3. That a weekly account of the average amount of notes in circulation during the preceding week, shall be transmitted to the privy council; and a quarterly account of the average amount of notes in circulation during the preceding quarter, shall be published in the London Gazette:

4. That for two years, from and after the first of May 1821, the Bank shall pay its notes in gold bullion only at the mint price; and that whenever parliament shall think proper to require the Bank to pay its notes in coin, notice thereof shall be given to the Bank one year before hand, such notice not to be given before the first of May 1822.

Should parliament think proper to adopt this plan for the regulation of the Bank of England, it is evident that provisions must be made for applying the same principle to the Bank of Ireland.
The Committee are perfectly aware of an objection which may be stated to this plan, viz. that during its operation the country will probably have no currency except paper, for payments beyond 40 shillings, and that the advantage resulting from the convertibility of Bank notes into bullion appears to be given, at least in the first instance, only to the holders of large sums.
In answer to this it must be remembered, that so long as the price of gold shall continue high enough to afford a profit upon the melting and exportation of coin, framed according to the present mint regulations, there can be no circulation of gold coin in the country. Under such circumstances any farther issue of gold coin would be useless. It would indeed be worse than useless, as the purchase of the bullion to be coined would raise the price of gold, and the expence of coining it would be a waste of public money. Such an issue could only be useful whenever the price of gold is so far below the mint price as to compensate for the interest lost during the time of coinage. But, although the Committee entertain great hopes that, during the operation of the plan in question, the price of gold will fall to the mint price at an earlier period than what is fixed for its completion, yet the plan itself presumes that such fall may not take place, and have been established before the 1st of May 1821.
Under this uncertainty it would be difficult, if not impossible, to foresee any moment previous to that date at which it might be expedient to make such an issue, or at which the public would be able to avail itself of the power of resorting to the mint for the conversion of bullion into coin. But it will be able to avail itself of that power under the
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operation of this plan at as early a period as could reasonably be expected under any plan for the simple resumption of cash payments. In the interval the currency must consist (as it has long consisted) of paper alone; but, from the moment this plan begins to operate, this paper would have what it has not had since the Bank restriction, and what it could not have in the interval preceding a simple resumption of cash payments, a metallic standard for its regulator. The holder of large sums in notes would indeed have the power of converting them into bullion at a fixed price by presenting them at the Bank; but the holder of a small sum in notes has not now, and could not have, the power of converting' it into coin, under circumstances when, as has been before stated, no coin could remain and, circulate in the country. The latter, therefore, is exposed to no disadvantage whatever during the operation of the present plan, to which he would not be exposed during the interval which must precede a simple resumption of cash payments. But he derives from the first moment of its commencement a participation in the security against fluctuation afforded to the holder of large sums.
This detail of the plan now proposed by the Committee will, they hope, be sufficient to explain both its nature and its objects. Above all, they trust it will be manifest that the plan is now recommended by them as a temporary measure, as the mode which appears to them at once the most desirable, and the most effectual for the attainment of the object which parliament has in view,—the restoration of our currency to its ancient standard of metallic value. They think it probable, as they have already stated, that this object may thus be attained at a period comparatively earlier than that for which they have ultimately provided. But they entertain a confident expectation, that in this mode it will be effected at that period, if not before, and with the least practical inconvenience to any of the interests which it may effect.
After the attainment of this first and great object, many important questions will still remain to be determined by the legislature, respecting the system on which our currency, when regulated by a metallic standard, may in other respects, with most advantage, be ultimately and permanently founded. But in these points the Committee think they should have exceeded the limits of their duty, if they had ventured at the present period even to form, much more if they had submitted to parliament, any final or decisive opinion.
Whether the whole of our circulation and currency shall thenceforth be replaced either entirely on its ancient footing, or with what degree of alteration, particularly in respect of the smaller notes, the issue of which was formerly prohibited; whether the payments of the Bank shall be made at their option in bullion or in coin; or those payments conti-

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nuing to be made in bullion only, the mint shall be open to the public for coining such bullion into gold coin, with or without a seignorage or brassage; or whether, with a view to realize to the country a profit equal to the whole value of the gold employed as dead capital for the purpose of circulation, an endeavour shall be made to confine the whole of our currency (except for the small payments now made in silver) to paper only, but to paper regulated by convertibility into bullion; these, with the numerous details connected with and dependent on them, are points, upon which the House will find much useful information in various parts of the evidence contained in the minutes, and upon which the Committee are satisfied that a better judgment than can be formed at present, will be derived from the experience of the operation of the plan immediately in question.
With respect to the decision to be taken as to the future circulation of the smaller notes, the Committee are fully sensible that all views of expediency or profit in this respect must be combined with another most important consideration, that of the comparative facility with which such paper, or the coins for which it is substituted, may respectively be counterfeited. This point is essential to the success of any measure on this subject, and it is of great weight in the opinion of the Committee, as connected with the comparative degree of temptation or encouragement, which any of these systems may afford to crime, and the consequent necessity of frequent and severe punishment.
Under these impressions, the committee have endeavoured with much anxiety to obtain information as to the progress and probable results of the inquiries which have lately been made, under the authority of his majesty's commission into the means of preventing or rendering much more difficult than at present, the forgery of Bank paper. They have learnt that these results are not yet sufficiently matured to be brought with this view in a complete shape under the consideration of parliament; but they find that the very able persons whose attention has been so beneficially employed in the examination of this subject, entertain sanguine expectations that the principles which they have adopted for this purpose will, in their application, provide, if not a complete, at least a much more effective check than has been provided by any means yet adopted for the security of the Bank and of the public. In so far as the Committee has felt itself competent to judge of the probable operation of those principles, they fully partake in this hope; and it is much strengthened by learning, from the testimony of the governor of the Bank of Ireland, that the application even of a part of those principles has been found there, in a very great degree, effectual for that purpose.
There is another point to which the com-
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mittee think it of great importance that parliament should advert. The large amount and nature of the advances made by the Bank for the public service, have been stated, on different occasions, as opposing considerable obstacles to the measures which would otherwise have been adopted by the Bank; and the plan now recommended essentially depends upon a previous reduction of them. But the inconvenience of this mode of habitually providing for the public exigencies, to so great an extent, is not merely temporary. It involves principles of considerable moment, with reference to the relation in which government and the Bank are thereby placed towards each other. This system is not however of recent date. It had been acted upon to a large extent, for a long period of years before the first restriction upon the Bank. The amount of the advances appears to have subsequently increased with the succeeding embarrassments of the public service, and the extraordinary exertions of the concluding years of the last war naturally produced an unprecedented extension of them. A considerable reduction of these advances has since been effected, and a still farther diminution of them is recommended in this report. It will be for the wisdom of parliament to determine, whether, in order to guard against the unobserved recurrence of this practice, some permanent regulation ought not to be established, extending the very narrow restraint, under which the Bank was originally placed in this respect; but imposing some new principle of limitation, so as on the one hand to allow the Bank such a free use of its capital, as might enable it (as it appears to have done previously to the Bank restriction) to invest either the whole or some limited proportion thereof, if not demanded for commercial discounts, in the purchase of government securities, and on the other hand to prevent it from engaging in such purchases for the accommodation of government, when its own convenience or interest did not require them, or from entering into any engagement, express or implied, which shall prevent its bringing those securities freely into the market. It is obvious, that in imposing any new principle of limitation, exception must be made for cases of great emergency, to be stated to parliament, and provided for by its express authority.
Whatever may be the decision of parliament upon all or any of the measures now in contemplation, the committee think it will be desirable to repeal the laws which prohibit the melting and exportation of the coin, and which enact that all bullion intended for exportation shall be sworn to consist of foreign fold or silver. The policy of these laws has long been held by the best writers on the subject to be at least dubious. From the nature of the article, so portable and so easily concealed, they could hardly be expected to be efficacious, and experience has abundantly proved their

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inefficacy, notwithstanding the existence of these laws, the whole, or nearly the whole of the gold coin of this kingdom, amounting, probably, to between 20 and 30 millions, has entirely disappeared, and scarcely a remnant now remains of the sovereigns which were issued in the year 1817. The prohibition, indeed adds something to the difficulty, and consequently to the expense of exportation, and may therefore be supposed to operate, in some degree, as a seignorage upon our coin—but it is a seignorage perpetually varying, according to the greater or lesser facilities for smuggling which may at different moments exist, and affording therefore an uncertain, and in point of fact, an inadequate protection.
The means also, by which this protection is afforded are highly objectionable, there being no possibility of distinguishing between bullion produced by the melting of foreign or of English coin. The only security is that of an oath; and the law, therefore, has no other operation than to offer a great, and, as experience proves, a successful temptation to' perjury.
Even upon our ancient system of coinage, in which the value of the metal in coin is equal to that of the metal in bullion, and the whole expense of the coinage falls upon the public, it may be doubted whether the prohibition does not increase rather than diminish that expense; although the latter was probably one of the chief objects which the law had in view. As our coin is now either melted previously to exportation, or melted in the country to which it is exported, because it is not there known or current, when it returns, it returns in the shape of bullion, and if the mint is open, and the price such as to make it worth coining, it is carried to the mint and coined at the public expense. Whereas, if our coin were legally exportable, it would probably return into this country as coin, whenever the state of the exchanges rendered it a more profitable remittance than bills or merchandize. No country in Europe has maintained so large a metallic currency as France, without any prohibition upon the melting, the export, or the sale of the coin.
The Committee cannot conclude their report without adverting to the opinions which nave been expressed and very fully explained by some of the witnesses, that the present regulations of the mint for the coinage of silver must of themselves occasion a perpetual drain of gold from this country, and thereby oppose an insurmountable obstacle to the resumption of metallic payments by the Bank at the ancient standard of value. These opinions have been directly and strongly controverted by other witnesses. The committee more particularly refer to the evidence of. Mr. Page and Mr. Fletcher on one side, and Mr. Mushett on the other; and to a paper received from the master of his majesty's mint: but much important information on this part of the subject may likewise be collected from
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the testimony of others, whose sentiments and authority upon such matters must be of great weight. The Committee being fully sensible, that if the opinions of the two first witnesses be well-founded, any attempt to remove the restriction upon the Bank must prove ineffectual, unless the mint regulations for the coinage of silver were first altered, according to the principle upon which that opinion appears to be founded, have given this part of the subject full consideration; and they think it their duty to state, that they see no ground to apprehend that the present mint regulations respecting the silver coinage, so long as such silver coin shall not be a legal tender beyond the amount of forty shillings, and the mint shall not be open to the public for the coinage of that metal, will oppose any obstacle to the successful execution of the plan, which they have ventured to recommend.
The House will find, in various parts of the evidence, and in the Appendix, a great mass of valuable information, illustrating not only those points which the Committee have dwelt upon in their report, but also many other points of considerable importance, to which they did not think it necessary to advert. They have judged it; best to confine themselves as much as possible to a practical view of the question referred to them by the House, and to rest the proposal which they have brought forward upon grounds which might recommend it sufficiently, if not equally, to persons widely differing in opinion upon many of the considerations involved in any discussion upon so extensive and complicated a subject.
The Report was ordered to be printed. After which, the earl of Harrowby stated that it was his intention to propose some resolutions founded upon it, on Thursday se'nnight.
Earl Greyurged the propriety of giving more time for the consideration of the report, before bringing forward any propositions on the subject, if it were merely to preserve the appearance of decency; it being impossible that a report, with the appendices, which had taken, the committee three months to deliberate upon and arrange, could be fully considered by their lordships within the short period allowed by the noble earl, previous to moving his proposition: add to this, the vast importance of the question, extending as it did, into so many ramifications of detail, and affecting so materially the public interest. The House, besides, might pledge itself with respect to general principles, whilst the House of Commons, in which any legislative measure upon the subject would originate, might come to a different conclusion, and thus the two

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Houses might be placed in the very embarrassing situation of holding conflicting opinions upon a question of such great and general importance. He trusted, therefore, that the noble earl would not object to afford more time for the consideration of the report. He suggested also, that it would be a great convenience if the noble earl would communicate to the House the nature of the propositions he intended to move.
The Earl of Liverpoolcould not see any just ground for postponing the consideration of the report beyond the day mentioned by his noble friend; on the contrary, he thought it of the greatest importance that the earliest possible period should be chosen for bringing on this question, involving as it did so many considerations of the highest public interest. With respect to what had been said by the noble earl, of there not being time to understand the report, the fact was, that the question would be best understood after it had been discussed in that House. As to the mode of bringing on the discussion, he contended, that upon all questions of great public importance, it was by far the best course to discuss the principles which were to form the groundwork of any legislative measure respecting them, previous to bringing forward any legislative enactments. This had been the course adopted with regard to the Irish propositions, and the renewal of the charter of the East India company, and the advantages of it were, that all the bearings of the question could be ascertained with much more accuracy by both Houses, than by coming at once to the consideration of legislative enactments. As to the propositions, he had no doubt his noble friend would communicate the nature of them to the House, previous to bringing on the discussion.
The Earl of Harrowbyexpressed his readiness to communicate the nature of his propositions to the House previous to the discussion, but saw no reason for postponing that discussion beyond the day mentioned.
The Marquis of Lansdowneagreed that it was right to fix the earliest day possible for going into the discussion. The public were so deeply interested in the question, that he thought it was due to them that no time should be lost in giving to it all the consideration it could receive in that House, and at the same time imparting to the public all that information respect-
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ing the subject which must of course be derived from its being discussed by their lordships. It did not however follow, that the day mentioned was to be irrevocably fixed, as if it should be found in the interval advisable to postpone it; the noble lords on the other side would doubtless not object to that postponement
The Earl of Lauderdalereminded their lordships, that the committee, whose report was now before them, had sat nearly three months before they had come to the opinion submitted to the House. Their lordships saw the size of the report which lay on the table; from its bulk they might conjecture what a mass of evidence they had to wade through; and yet the noble earl proposed to allow only ten days for the consideration of that evidence. He spoke in the hearing of the members of the committee, and he was certain that no noble lord who had sat on it, and recollected what had been the state of his mind during that inquiry, would say that by Thursday se'nnight his just opinion could be formed on the evidence. He must indeed declare, that to allow only the short period of ten days from the printing to the consideration of the report would be an absurdity. There was a great variety of other business before the House, and if any noble lord thought, notwithstanding the various subjects in which his attention might in the mean time be called, that he could digest all the evidence attached to this report in the course of ten days, that noble lord must have a very different idea of the nature of the inquiry from that which he had by experience found it to be. The noble earl said, that the public mind would be best settled by the discussion of the subject in that House. This was true; but that noble earl ought to recollect, that if the public looked up to the decision of that House on the present or any other subject, it was because they believed that their lordships took sufficient time to form an accurate opinion. He would take upon himself to assert that, no individual, though accustomed to the consideration of subjects of this nature, no merchant in the city of London, would say, that it was possible so to digest the evidence of this report in ten days, as to give an opinion upon it. How, then, could it be expected that their lordships, many of whom were altogether unacquainted with the subject, should make up their minds so quickly—should come

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so rapidly to a decision on questions of the most important nature ever submitted to the consideration of parliament? The noble earl had drawn a distinction between the consideration of the evidence and a decisive result; but, for his part, he was at a loss to understand how any resolutions could be framed, that were to have no result, and to pledge their lordships to nothing. What he was afraid of was, that it was the intention of the noble lords opposite to pledge the House, in some way or another, to certain results of the committee, one of which was of a nature more novel than any, thing that had ever entered into the brain of the wildest theorist. Ten days did not appear to him a sufficient time for examining the report, and if a course of precipitation was to be adopted on this occasion, their lordships would deprive their deliberations of that high character which they had hitherto held in the estimation of the public.
Earl Greyhad no expectation of being able to form a proper opinion on the report by Thursday se'nnight, and must once more appeal to the candour of the noble earl opposite for farther time. He was willing to allow the full truth of all that the noble earl had said as to the advantage of discussion with respect to its effect on the public mind; but then, for that discussion to be useful, it must be the discussion of informed persons, not of men who were denied time for deliberation and reflexion. The members of the committee, who had been three months pursuing the investigation, might be expected to come prepared to give an opinion; but was it reasonable to ask this of those who were as yet unacquainted with the subject? Where was the necessity for so much haste?
Lord Redesdaleunderstood that it was not meant that the general discussion of the subject should take place on the day chosen by his noble friend, but merely that an opportunity should then be afforded for comparing what was proposed to be done with the evidence, and of considering how far the evidence supported what was stated in the report. In that case, it would probably be found most convenient merely to move the intended resolutions, and appoint a future day for their consideration.
Earl Greyintimated, that he should be perfectly satisfied if it was only meant to open the discussion on this day fortnight,
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and afterwards, to fix a day for the discussion of the resolutions.
The Earl of Liverpoolconcurred in the opinion that it might be advisable for his noble friend to open the subject to their lordships some days previous to this day fortnight, but that day was the latest he could contemplate for the general discussion of the resolutions.
Earl Greyregarded the previous opening of the subject by the noble earl as of little value, if their lordships were to be limited to ten days for the consideration, of the report. The noble earl was master of his own day for his motion; but he now gave notice, that if a farther time was not allowed, he should as soon as the resolutions were proposed move to adjourn the debate to a future day.
The consideration of the report was then fixed for this day se'nnight.