The Bank Charter Act cannot be maintained... — page 8: what you’re looking at

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

10 Bank, it may be a matter of question whether there was any real occasion of alarm at the reduction of the gold to £2,000,000; for when it was at this low point in the latter end of the year, the circulation was reduced almost to an extreme minimum; being in December of that year as low as 15,000,000. In looking back to the period of 1793, I am quite willing to admit, that the acts of 1819 and 1844 were improvements mn the right way upon former acts, especially as to the establishing the soundness of a Bank of England note; but with this step in the science of the currency (if I may so call it), we have attached to it a most unnecessary ruinous condition of supply im pressure. I remember even in the panic of 1825, when Bank of England notes were offered on the Stock Exchange at a considerable discount ‘“‘as time bargains”; I have still sound- ing in my ears on a dark November morning of that ver- satile year, the energetic shout of ‘ Daniel Hardcastle ” (the then great authority of The Times for currency and finance), too glad to prove that the long pet theory of his own was at last coming too true. There are no such bargains to be had now, for undoubted convertibility is the order of the day; but this, Sir, is a poor reason that we are to sit down satisfied here and proceed no further, and leave the busy, enterprising, though somewhat too grasping, free-traders of the country to be caught every now and then, as if in some herring-net, and then to be hauled up high and dry upon shore to wait for “ government supplies.” I am quite willing to admit, at once that an inconvertible paper curreney is a worthless boon; for it can neither re- present or economise the gold of thecountry. Mr. Twells’s £20,000,000 to pay taxes with, &c., might suit Warwick- shire and its neighbourhood; but most certainly the large ™ —- 11 .commercial houses on ’Change, and even the tax-gatherer himself, would look ‘shyly’ at them, and ina panic, they would greatly aggravate the evil. I grant, Sir, without any mental reservation, that the only honest, steady, and sound repre- sentation of a £5. Bank of England note is as many sove- reigns; but while we admit this in argument, we must not carry the principle to a fallacious extreme (to a disease) in practice. It is not because three or four millions of sove- reigns, in time of Panic, have been taken from the Bank, (from causes which the Directors know full well are for mere temporary protection —in the Provinces—that the Bank of England itself is to turn round upon the public, and refuse them assistance when most required. No, certainly not ; for if it does, from whence is the extra accommodation re- quired by the Panic (the fall in credit) to come ? Clearly, Sir, all facts, common sense, prudence, and experience would prove, that it is the bounden duty, as well as the best policy of the Bank, in such times, to endeavour to their utmost to supply the extra circulation required with notes, and thus relieve the gold. It would be the height of impolicy and short-sightedness in this particular juncture, to be too tenacious of the abstract principle, that for each note in circulation, there ought to be a sovereign in the Bank to meet it. If this was to be practically carried out, the 144 millions of the issue would require just the same attention, for if this amount of paper circulation has been found to ‘remain out” since the beginning of the present century. Surely 3 or 4 millions more would be equally certain to be ab- sorbed in a panic for paper in 1857. We must never forget that the increased solidity of the Bank of England note under existing circumstances would always prevent its soundness being questioned in thetime of a temporary withdrawal of gold. This position of the Bank would be but the exception to the