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clined. The restriction was prolong. manded, or if when demanded it reed in 1814 only to the 25th of March mained in the country, the complete 2815; and in 1815 only to the 5th resumption of cash payments would of July 1816; but the extraordinary take place gradually, and as it were high price of gold, and the extreme insensibly, even prior to the period depression of the exchanges, which, then fixed by Parliament, viz. the from whatever causes, prevailed du. 5th of July 1818. ring great part of these periods, In the month of April 1817, the combined with the large advances to effect of the great foreign loans Government which the exigencies of made in that year began to be conthe public service required, to pre- siderably felt. Between April and vent any material progress being October 1817, the exchanges took made towards a restoration of the an unfavourable turn, and the price treasure of the Bank to its former of gold, which had, from July 1816 amount.

to March 1817, fluctuated between Notwithstanding these discourage- L.3:18:6 and L. S:19:6, rose, ing circumstances, the Bank more between April and December 1817, than doubled its treasure during the from L. 3:18:6 to L. 4:0:6; since last eight months of 1815; and the which date it does not appear by fall in the price of gold, and the fa. the quoted prices to have been ever vourable turn of the exchanges, en- again reduced below L. 4. The new abled the Directors to raise it, by gold coinage also began to be issued January 1817, to more than quad- in July 1817. The treasure of the ruple what it had been in the begin. Bank was raised to its highest aing of 1815. At this period the Di. mount in the month of October rectors felt so confident of being 1817. There appears to have been able to comply with the injunctions no considerable demand for gold of Parliament, even before the pe- previously to the month of October. riod at which the restriction was to The first issue of sovereigns in large expire, that they issued a notice for quantities was in that month. There the payment in cash of all the L. I was a diminution in the demand and L. 2 notes bearing date prior to for them in the three succeeding January 1816. Finding little or no months; but in the month of Feb. demand for cash in consequence of 1818, the issue of gold increased this notice, and their treasure hav- till August in the same year; and ing continued during the course of the demand during this period is the year to increase to an amount stated to have arisen decidedly for far exceeding what it had ever the purpose of exportation. It apreached, and, with few exceptions, pears from the evidence of Mr Har. bearing a larger proportion to the man, that during the whole of the extent of their issues than it had year 1817, the Bank did not think ever borne before, the Directors is. it necessary to make any reduction sued a second notice in September of its issues, either in consequence 1817, for the payment in cash of all of the effect of the foreign loans upnotes bearing date before the 1st of on the exchanges, or of its payments January in that year. This measure in gold, made in conformity to the has been stated to the Committee notices above referred to. In fact, to have been undertaken in the hope, the average issue of Bank-notes that if it proved successful, that is, in 1817 exceeded by L. 1,700,000 if the gold so tendered were not de- that of 1816; the average issue of

the last six months of 1817 exceed- attributed to different causes by difed the average issue of the first six ferent persons examined before the months of that year by L. 1,870,000; Committee, By some to an excess and this increase, combined with in the circulating medium of the the revival of Country Banks from country; by others to the effect of their previous depression, probably the late regulations of the Mint reraised the circulating medium of the specting the new silver coinage, by kingdom in the last six months of which the proportions between the 1817 considerably beyond the a- relative value of gold and silver are mount at which it had stood in the stated to have been so varied as to preceding year.

have occasioned the exportation of A great reduction has been made gold; by others it is attributed to in the issue of notes of the Bank of the continued operation of foreign England since the commencement of loans, to the temptation held out by the year 1818; they had been, on a high rate of interest to the investthe average of six months from July ment of British capital in foreign to December. 1817, at L.29,210,000; funds and foreign speculations, and on the average of six months from to the large purchases of corn from January to July 1818, at L.27,954,000; abroad; a great proportion of which from July to December 1818, they is paid for in advance, and must, were reduced to L.26,487,000, and therefore, in their opinion, have had have since been further reduced to a material effect

upon

the balance of about L.25,000,000, and during the payments, and of course upon the last three months of 1818, the issues exchanges, during the year 1818. of Country Banks are stated by per

It is under these circumstances sons much conversant with the sub- that Parliament is called upon to deject, to have certainly not increased, liberate, whether it will be most for and probably to have declined; but the public interest to adhere to the the price of gold and the state of the decision it had taken in May 1818 ; exchanges have continued to be such or to allow a further delay for the as to have drawn from the Bank, in preparations necessary to carry this addition to the gold demanded pre- important measure into execution, viously to March 1818, amounting in order, as far as possible, to secure at L. 2,022,000, a further sum of its ultimate accomplishment, and at L.4,787,000, making in the whole an the same time afford the means of issue of L.6,809,000, in consequence taking such precautions as may di. chiefly of the liability with which the minish the pressure of whatever pubdirectors had, under different circum- lic inconvenience may be felt or apstances, voluntarily charged theni- prehended. selves to pay the fractional parts of

Much difference of opinion upon dividends and a certain proportion almost all the questions, whether of of their notes in cash. Their trea- theory or of practice, to which the sure was by these drains very consi- attention of the Committee has been derably reduced ; and they were still drawn, will be found in the evidence. liable, in consequence of the same Upon one point only there is nearly measures, to an additional demand an unanimous opinion, grounded infor cash to the amount of several deed by different persons upon diffemillions.

rent lines of argument, but concurThis unfavourable state of the ex- ring in the same result, viz. that it changes and of the price of gold is would not be safe and practicable

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for the Bank to resume cash pay per cent., of L. 3,000,000, making ments on the 5th July 1819; and as together L. 14,686,800, the balaace the Committee see sufficient reason in favour of the Bank, on a comparito agree thus far with the practical son of its debts and credits (includresult of these opinions, viz. that, in ing in the former the Government the state of things which now exists, balances in the hands of the Bank) there is a necessity for some further is L.5,231,190. postponement, they need only refer The next subject to which the at. to the evidence, in which the diffe. tention of the Committee has been rent reasons which lead to this con- directed was the consideration of clusion are fully stated.

what time might now safely be fixed It can hardly be necessary for the for the ultimate restoration of the Committee to remark, that this opi- currency of the country to the annion does not rest upon any ground cient metallic standard of value, and which can intimate the slightest what were the measures, if any, which doubt as to the credit or solidity of the it might be expedient to adopt, is Bank; that body possesses at the pre-order both to facilitate and to ensure sent moment the means of discharge the complete attainment of this great - ing, out of the treasure actually in its object. coffers, every demand which could Unless the market price of gold have been made upon it for payment shall be, at the time so fixed, and in cash, in consequence of the no

shall continue to be afterwards, so tices referred to; and the only ob- near the Mint price as not to afford ject of the measure which, at the re- a profit upon the exportation of that commendation of the Committees of metal, it has been abundantly proved both Houses, has been already adopt- by past experience, that no law can ed by Parliament, during the course prevent such exportation, and the

ion, was to pre- consequent demand upon the Bank. vent the continuance of a drain of The main question therefore is, by the existing treasure, and thereby to what means, and within what time, facilitate such operations as the Com. the reduction of the price of gold to mittee might feel it to be their duty the Mint price, or, which is nearly to recommend, in preparation to a equivalent, such a favourable state of final removal of the restriction, the exchanges as will prevent a pro

Of the ultimate sufficiency of the fit on exportation, may best be atBank, no doubt has been or can be tained. entertained ; but Parliament It is strongly contended by some thought proper, at the period when of the witnesses, and is admitted by it imposed the first restriction upon most, that a considerable and (as was the Bank, to direct an inquiry into expressed by one of them) forcible the actual state of its affairs; and as reduction of the issues of the Bank, a similar injunction is contained in accompanied by what some consider the order by which this Committee as a necessary, and others as a prois appointed, they have thought it bable, consequence, a diminution in their duty to lay before the House the issues of Country Bank paper, the statement in the appendix; by would produce a favourable turn in which it appears that, exclusive of the exchanges and a reduction in the the debt from Government, at three price of gold. But many of those per cent., of L. 11,686,800, and of who are most deeply impressed with the advance to Government, at three the necessity of the earliest possible

of the present se

as

recurrence to the ancient standard duce a considerable effect upon the of the country, state, in the strongest exchanges, which might, however, terms, the general distress which a as they state, be always counteractlarge and sudden diminution of the ed by a sufficient diminution of papaper currency, now the only circu. per. lating medium of the country, must On the other hand, many of those occasion : while others are of opi. who attribute the high price of gold, nion that a very small reduction of and the unfavourable state of the exthe circulating medium will be suffi- changes, chiefly to the operation of cient to produce these effects, and these latter causes, and who deny or that little distress would be occasion- doubt the fact that the issue of the ed. There are some also who hold, notes of the Bank of England bas that the present Mint regulations been excessive, nevertheless think respecting silver are the sole cause that an excessive increase or diminu. of the high price and consequent ex- tion of their issue might affect the portation of gold, and of course are exchanges; but they doubt whether of opinion, that there need be neither a small increase or diminution would reduction nor distress.

produce any marked effect upon The general result of all the vary. them. ing sentiments of the witnesses upon Those, again, who maintain that the subject of the foreign exchanges, the proportion betwixt the Mint and of the price of gold, may per- price of gold and silver, as settled haps be thus stated :

by the recent change in our Mint Many of those who maintain that regulations, is the sole cause of the it is at all times in the power of the nominal high price of gold, think that Bank to exercise a complete control the real exchange has for the last two over the rise and fall of the ex. years been in favour of this country; changes, and of the price of gold, that there has been during that penevertheless think, that the great riod no over issue of Bank paper ; loans contracted for, since the peace, that had it not been for the Mint reby foreign states; the investments gulations, gold must have continued made by persons in this country in to flow into this country, as it did in foreign securities, to the amount, as 1816; that there could, therefore, has been conjectured, of L. 10 or have been no demand on the Bank L. 12,000,000; the pressure which for coin of that metal, for the purtook place in the money market at pose of exportation ; and that the Paris and other commercial towns Bank could have found no difficulty on the Continent, and in America; in resuming payments in cash at the and the great importation of corn time now fixed by Parliament. during the last year, have of late con. It appears to the Committee upon curred in lowering the exchanges. the whole, that so long as the Bank They hold indeed, that when our cir- continued liable to pay in cash, it culation was in its former state of might be concluded from reasoning, payments in specie, no payments a. and has been proved by experience, broad could bring the exchanges ma. that the variations in the market terially below their par; but with a price of gold, and also in the expaper that has no such regulator of changes, would be confined within its value, they think that the neces- much narrower limits than they have sity of payments abroad, from what. been since the restriction upon cash ever cause, does undoubtedly pro- payments.

Under the ancient system, if an temporary inconvenience were pro unusual demand were made upon the duced by them, they would maniles/ Bank for cash, when the exchanges ly have for their object to avert a were above par, and the price of gold evil universally acknowledged to be below the Mint price, as such a de- still greater, viz. the stoppage of parmand could only be occasioned by ment by the Bank ; whereas any pre some sudden panic, or by a failure in sure which might now be expericommercial credit, and could not un- enced by too rapid a progress tader such circumstances arise from wards the resumption of cash pay. the profit to be derived from the ex- ments might be thought to be an evi portation of gold, there might be oc- voluntarily and unnecessarily incu. casions in which the Bank might red, from an impatience to attain a think, that with a view to its own in- object, respecting which there was terest, so closely connected with that no difference of opinion, and there of the commerce and manufactures fore less readiness to make any cesof the country, the best mode of siderable sacrifice for its speedy atchecking such a demand might be, tainment. to make a more liberal issue of its It has also been stated to the Com. notes, and thereby to revive that cre- mittee, that there exists at this pradit, the want of which had produced sent moment a considerable degree the embarrassment; but if an un- of embarrassment in commercial usual demand took place, at a time transactions, which is attributed by when, from the state of the exchanges some of the witnesses to the overand of the price of gold, it evidently trading which has taken place, esarose from the profit to be made by couraged, in the opinion of one witthe exportation of that metal, the ness, by the increase of the circula. Bank always found itself under the ting medium in 1817; and is attribanecessity of contracting its issues for ted by others to the subsequent & its own security. In the latter case, minution of that medium. Very distherefore, whether the Directors did ferent opinions have also been stated or did not adopt the principle, that respecting the probable duration of the increase or diminution of the pa. this embarrassment ; but as all agree per currency has a decisive influence respecting its actual existence, : upon the exchanges, they necessarily more than ordinary degree of caaacted in the same manner as if they tion is required in the adoption of had fully adopted it.

any legislative measures which may, There is a difference, however, not even by a temporary operation, in to be disregarded, in the impression any degree aggravate or prolong it likely to be produced upon the pub- These considerations have united lic mind, by any pressure arising from to incline the Committee in the prothe measures to be taken by Parlia- posal which they will submit in the ment for ensuring the restoration of conclusion of their Report, rather to a metallic standard, as distinguished extend the time at which the ultimate from those pressures which might be resumption of cash payments should occasionally experienced under the be required to take place beyond the former system. These would be felt period at which, according to the to be the necessary result of the pre- best opinion they can form, there cautions which, under particular cir- would be a probability of its easy ac cumstances, might be taken by the complishment under ordinary cir

. Bank for its own security; and if any cumstances, than co hazard the ulti.

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