The Bank Charter Act cannot be maintained... — page 10: what you’re looking at

Machine-transcribed from the original scan — historical spelling and the odd misread are preserved.

14 being brought back to the Bank as soon as possible, no one ought to complain of a temporary heavy rate. If this plan were adopted, I believe all hoarding of gold and notes would be prevented, simply from the knowledge that there was a provision for the emergency. The limits of this extra accommodation in the currency, would be so sound, ample, and well-defined, it would not fail to be popular, and would be easily understood by all, and no doubt would give increased soundness to the whole cireula- tion of the country. The new issue would never be ques- tioned, as it would be based on something sounder than a sovereign (namely, on security worth £6, held by the Bank). These notes would immediately replace as much gold, and when a general improvement took place, the currency would collapse into its former state spontancously, without any suspension of the law. The borrowers from the Bank taking abcut one-sixth of the amount of the advances made to them in the notes of the Bank, would always be a most safe and legitimate extension of the circulation to meet a temporary urgent demand, whilst the very issue itself would always enable the public the sooner to pay off their engagements, by imparting that general ease and confidence which alone are required. It must always be remembered, that when a panic com- mences, there is such a demand for circulation (which the parties themselves can negotiate), that this account always increases to a great extent; but it cannot be ex- pected that the Bank can go beyond a certain amount without a further means of circulation in its power. It is inconsistent with every sound principle of banking to lock up resources to such extent in securities; but if the necessities of the panic demand it, they equally demand (for ~ 15 the exception to the general rule) the further supply of cir- culation which I suggest. This, Sir, is the general outline of my plan, which, I believe, is perfectly sound, and would meet the difficulties of the case. There are several different ways in which the sane idea might be carried out; but the one I have suggested would be the most easily understood; and I feel satisfied, if we wish to prevent a panic, it is essentially necessary that all the particulars of the relief should be known and under- stood, even by the most ignorant. When the Chancellor of the Exchequer, Sir Charles Wocd, was giving his reasons why the Government had interfered and suspended the law of 1847, he stated, “Parties of every description made application to us for assistance; they said anything you will do will give us con- fidence. Say you will stand by us, and we shall have all we want; do anything, in short, that will give us confi- dence. If we think we can but get bank notes we shall not want them. Let us only have notes issuable by the Bank, charge us with any rate of interest you please, 10 or 12 per cent. We do not want them; but only let us know that we can have them, and then we shall have sufficient resources of our own to go on with.” If this, Sir, was the language of 1847, what must have been the earnest appeal of the public for Bank of England notes in 1857? Surely, if such parties as these are not to have a circulation to meet their requirements, the sooner free-trade is abandoned the better. When we were going at the old stage-coach system of commerce in August, 1810, we had a circulation of Bank of England notes to the amount of £24,793,990; in a panic, and now going at rail- way speed, with free-trade, we had a circulation, on the 12th of November last, somewhere about £20,000,000, with