opinions on this subject; he distinctly called | to produce a considerable depreciation in the attention of the House to the fact; but the standard of value. The hon. Member more extended experience had had the knew as well as any one, that the effect of effect of showing him his mistake, and he such a circumstance would be to turn the left this confession of his error, which foreign exchanges against this country, and truth required him to make, to operate on that being so, the Bank must have such a his reputation as Gentlemen might think drain of gold as would have the effect of fit it should. restoring the exchanges. There was nothing but a Bank Restriction Act that could keep the exchanges permanently against this country. He believed, that the fears of the hon. Member were groundless, and that the change would be productive of the greatest advantage to this country. Instead of affording any ground for apprehension that it would produce bad effects on the circulating medium, he believed that all such evils were fully guarded against, and that it would be most desirable that the Resolution should be adopted.

Lord Althorp observed, that the change in the hon. Member's opinions had taken place since the evidence he gave before the Committee on the Bank Charter, and certainly the hon. Member had little right to find fault with his (Lord Althorp's) opinions, since those opinions had been much influenced by the suggestions of the hon. Member, as given in that evidence. The noble Lord then referred to some answers of the hon. Member, given to the Committee, to show that, in those answers, the payment of country bank-notes by Bank of England notes had been recommended. The hon. Gentleman, however, now said that, since giving that evidence, other circumstances coming to his knowledge had altered his opinions, and especially the fact of the commission paid for gold in Lancashire since the establishment of the branch banks. He must say, that he could not agree with the hon. Member in supposing that the poorer districts of the country would suffer from this measure-indeed, he believed that all the evils anticipated by the hon. Member as likely to occur in such districts would be prevented by the competition among the country bankers. The hon. Member had supposed that the poorer classes of tradesmen in the country would dislike to place coin in the hands of the country bankers, because they would not be able to draw it out again. Now, though they would not, under this Bill, have exactly a legal claim to draw it out again, yet, if there were two banks in one place, and one was ready to pay, when required, in gold, and the other was not ready to do so, that difference in their mode of dealing would make the people select one of these banks in preference to the other, and that selection would cure the evil. He believed, that the anticipated evils were never likely to be felt, except in times of great difficulty, and against such occasions the measure had endeavoured to provide. In times of difficulty it was of the greatest possible importance to increase the security of the Bank of England-and times of difficulty, like those of 1825, might again occur. But then, said the hon. member for Bridport, the effect of this measure must be to tend

Mr. Clay thought, that the manly and noble conduct of the hon. member for London, in thus frankly avowing what he now considered to be an error of opinion, was above all praise; and instead of detracting from his character for talent and judgment, would only increase his deservedly high reputation. With respect to the plan which the Government had proposed, he thought the noble Lord had altogether failed, both in showing that there was any difficulty or danger in the present system, and that the proposed plan would obviate it. The noble Lord had shown no necessity for such a change in our monetary system, and in his opinion, no such panic as that of 1825 was likely again to occur. He believed, that the plan of the Government was not calculated to obviate any real danger; but he feared that it was likely to create some. He thought that they incurred danger, in infringing on the principle of the convertibility of Bank paper; and he should oppose that part of the plan most decidedly. Country banks had already sufficient facilities for circulating their paper; the issue of it was favoured by several different circumstances. He knew that there were instances in some of the manufacturing districts in which manufacturers paid their men in a body, so that they might give among three or four men one 51. country bank-note, instead of giving to each the amount due to him in sovereigns; and these men were charged, at the public-house where they spent their money, 1s. for each note changed for them. This was a serious evil in these places. [Cries of "name," and "where."] In the manufacturing districts of Lancashire and Yorkshire he had known instances of it.

He could tell the noble Lord, that there | hon. Members seemed to entertain of the was already a feeling against this plan, injurious effects of the measure on the cureven in those parts of the country where rency, he thought they were altogether Bank of England notes now circulated groundless. Looking, then, at the measure instead of country notes; and that in these in every point of view, he thought it would places indignation was already expressed at benefit the country, and he would, therethe attempt of the Government to make fore, give it his cordial concurrence. Bank of England notes a legal tender, and there was already a disposition to combine and prevent their circulation. What were the intentions of the Government with respect to Scotland and Ireland on this part of the subject? Did the noble Lord mean to make Bank of England notes a legal tender in those parts of the Empire? for if he did, he might as well resort at once to a Bank Restriction Act, the evils of which he had just confessed. So persuaded were the Americans of the necessity of a perfect convertibility of paper into gold, that there were no Charters now given to incorporate banks there, except upon the condition that they were to be forfeited, the moment they were unable to pay a single sum in gold.

Mr. John Smith commenced by praising the liberality with which the Bank of England had acted in every crisis of public difficulty, and especially in the year 1825, when such a panic occurred as, he believed, would never occur again. At that time the Bank had committed a mistake in the extent to which it carried its liberality. Now, it was the interest of every man, manufacturer as well as agriculturist, to protect public credit; and a second mistake in the Bank of England might be injurious to the whole country. This mistake, however, could not occur if the notes of the Bank of England were made legal tender. He was of opinion, that making them a legal tender would not occasion any great scarcity of gold. Though it might be true that a publican had charged 1s. for changing a 51. country note into sovereigns, he would not say that he doubted-he would say at once that he disbelieved-that any country banker had ever done such a thing. He contended, that the right hon. member for Tamworth, on bringing in his Bill of 1819, had rendered great service to the country, We had now done, thank God! with 17. and 21. notes: if they should ever again be permitted to return into circulation, he would retire from banking and live as well as he could on his means, believing, as he did, that our ruin would infallibly follow the recurrence to such a practice. He thought that the first opinion of his hon. friend, the member for the city of London, was the best. As to the fears which some

Mr. Blamire expressed a hope, that as so much depended on the judicious settlement of this question, it would receive the most serious consideration. He trusted, therefore, that hon. Members from all parts of the country would state what were likely to be its effects in those places with which they were best acquainted. On these grounds he would say a few words as to what he thought would be its effects in the northern parts of the country, in which he considered that it would be productive of no advantage whatever to the country banker, and would be a serious inconvenience to the community. He could not but regret, that the noble Lord had not brought his plan to some perfect form before he submitted it to the House, which was thus inconveniently called upon to pronounce upon a part of the plan before it was made acquainted with the whole. That part of the measure which would tend to diminish the circulation of country notes, and to substitute those of the Bank of England, would be found greatly inconvenient to the people of some of the northern counties, where they had a strong objection to Bank of England paper, and preferred country paper, as they had much less difficulty in detecting forgeries of the latter than of the former. One effect of the plan would be, that the demand for gold in the northern counties would be increased, instead of being diminished, for those who now took country notes were satisfied with them, as being better able to detect any forgeries of them, but now, if the circulation of those notes was limited, they would seek for gold rather than take Bank of England notes, with which they were not acquainted.

Sir John Wrottesley said, that this was one of the most important subjects that had ever come under the consideration of that House. It was one which at different times had occupied the attention of some of the greatest statesmen of modern times, who, differing in most other points, concurred in that of the impolicy of making Bank of England notes a legal tender. Both Mr. Pitt and Mr. Fox had disclaimed the intention of making Bank of England notes permanently a legal tender. Even after the restriction of 1797 it was not

man. How could they pay 28,000,000l., the interest of the National Debt, in gold? They must, therefore, have some of those payments represented by a paper currency, which, on the present plan, he must again contend, would suffer no depreciation. What was the fact in 1825? Why, it was well known, that country bankers came up to London in that year, and took away with them large masses of gold, which were found afterwards not to be necessary, though great trouble had been gone to to procure it. The great object of this Bill was to guard against the recurrence of such a demand for gold.

Mr. Mark Philips opposed the Motion. When he remembered that the Bank of England was in itself merely a mercantile speculation, and that it extended its circulation further, in proportion to its capital, than the country bankers did, he could not but have doubts as to the propriety of making the issues of the Bank of England legal tender. And when he saw the readiness with which hon. Members seemed inclined to adopt this Resolution, it only tended to increase his doubts; and he thought it, therefore, his duty to oppose the Resolution. He denied, that the practice, stated by an hon. Member to exist in some parts of the country, of paying labourers in Bank of England notes of 51. was at all general. In Lancashire it did not exist. There wages were regularly paid at four o'clock every Saturday; and every man, woman, and child carried off their earnings in hard cash. In duty to himself, and to the large constituency which he represented, he felt himself bound to oppose the Resolution.

|

duce the circulation or re-establish the amount of gold in their coffers. When, however, they had too much gold in their coffers, they changed that gold into securitics. That this was the practice appeared from the evidence of Mr. Horsley Palmer. He (Colonel Torrens) thought those two rules incompatible, and he, therefore, said, that the theory of the Bank of England was worse than its practice. He was of opinion, that if they extended the monopoly of the Bank they would draw upon the country all the evils which had been felt from the fluctuations in the currency, and that when they established the Bank paper as a legal tender, they abandoned all the principles which science had brought to light upon this important subject.

Lord Sandon observed, that the object of Government appeared to be to relieve country-bankers from the necessity of procuring gold in the event of a panic, by making Bank of England paper a legal tender in the counties above a certain amount (51). How would the system satisfy the holders of 5. country-notes, and the depositors, who were the two classes of the country-bankers' customers? The holders of 51. notes could still demand gold, and the depositors might draw checks for small amounts, in order to get gold. Such being the case, the country bankers would naturally send to London, not for Bank of England notes, which might not be accepted, but for the article (gold) which he was quite sure would answer his purpose in the event of a panic. Thus it appeared, that the Government plan was, to say the least of it, inefficient: a sufficient ground to justify him in opposing the Resolution.

Colonel Torrens would have had no objection to make Bank of England paper Mr. Ewart said, that the great objection legal tender, provided that were done on which he had to the change proposed by the plan proposed by Mr. Ricardo, or pro- this Resolution was, that a case of necessity vided the Bank issues were on the same had not been made out; and he thought, principle as those stated by Joplin; but he such a change was not to be justified but had the strongest possible objection to by absolute necessity. The evidence on making the Bank of England notes a legal the subject went against, rather than in tender, constituted as the Bank of England favour of, its necessity. He had been on was. He believed, that the whole of the the Committee on the state of our comdistress which had afflicted this country merce, and had, therefore, had opportuniproceeded from the mismanagement of the ties of inquiring into the subject, and, he Bank of England. The Bank of England was convinced, that the currency of the was bad in practice, but in theory it was country as it at present stood was sufficient worse. Their rule was to keep to the for the necessities of the country. amount of one-third of their liabilities in objected to the Bank of England because gold, when the currency was full; but it was a monopoly. If there were other when a foreign demand came, then they large establishments, the rivals of each diminished the gold in their coffers below other, he would not object to making the that proportion, and in order to a readjust-paper of that Bank which had shown itself ment, they were then obliged either to re-deserving of the public confidence legal

He