giving its value in commodities. At the end of the war, our manufactures, still in their prime, while those of the continent were only beginning to recover from a long period of languor, commanded every market, and enabled us to obtain our gold. But at present the manufactures of the continent and America were springing up all around us; every year we were more and more excluded from foreign markets; and, in fact, the inability to dispose of our commodities, formed one of the most aggravated features of the existing distress. In such circumstances, it would be most unwise to adopt a measure, which, besides injuring an individual class, would necessarily tend to increase public calamity. As a measure of present relief, it was mischievous and inappropriate; and as a measure of prospective security, it would be nugatory. banker, who entertained a due regard for his own credit, would be compelled to take measures for withdrawing his notes as expeditiously as possible. These had been issued, in reliance on the stability of the system, and on the faith of acts of parliament which ought to be as inviolate as the charter of the Bank; and they had been advanced to promote the most laudable objects, to assist individuals in carrying on useful improvements, and in supporting industry. These sums must now be called in, and the course of industry, in numberless channels, must be stopped. A banker could not draw in four or five hundred pounds without throwing four or five persons out of employment: this was already going on all round the country, in consequence of the manifesto against the banks contained in the correspondence between government and the Bank of England, and still more in consequence of that arbitrary and illegal act, by which ministers, by their own mere will, had prohibited immediately the farther issuing of stamps. The extent, to which the evils arising from this compulsory contraction was spreading, and might spread, no man could pretend to calculate; nor ought the House to be surprised, if it should turn out, that they were leading rapidly to consequences of which the House would be very unwilling to hear. How was the gap thus made in the circulation of the country to be filled up? At the termination of the war, there existed a strong desire to return to a metallic currency; and, during the first years of peace, there was a great facility of obtaining specie. But the case was altered now. No country could obtain it, without The resolution was supported by Mr. Huskisson, Mr. Peel, and Mr. Canning. They denied that to ascribe much of the distress which had prevailed to the issues of the country banks, was to attack the character of the persons connected with these establishments, or that any thing had occurred to justify the extreme sensibility which had been manifested on their behalf. In the class of country bankers, unquestionably, were to be found individuals of as high character as in any other that could be named; but this could be no reason, why the system, on which men, who, in some respects, filled the office of public functionaries, were acting, should not be discussed with perfect freedom; nor could the country bankers complain of being illtreated, in being held unfit to exercise-as they virtually did the prerogative of the Crown in regard to the currency. With regard to the measure itself, it was not intended so much as a remedy for existing evils, as a preventive against their future recurrence, by bringing the currency, to a certain extent, to be a metallic one, and especially that portion of it which alone supplied the wants of the lower classes. All experience proved that this restoration of a metallic currency could not be effected, so long as small notes were allowed to be circulated: a permanent state of cash payments could never exist by their side. If, in any country there be a paper currency, of the same denomination with the metal currency, the paper and the coin will not circulate together, but the latter will be expelled by the former. If crown notes, and half crown notes, were issued, crowns and half-crowns would disappear; and if the one-pound notes continued to circulate, a sovereign would become a rarity. There never was a gold circulation in the country, except in Lancashire, where no country notes existed; and when, in 1822, and 1823, the Bank of England was most anxious to supply the country with gold, the sovereigns sent down by one mail coach returned with the next. Great sacrifices had already been made to effect the introduction of even the partial metallic currency now in existence; and these sacrifices had been made in vain. A large supply of gold was obtained at a great expense, and was obtained only that we might see it depart and be compelled to purchase it again at a double expense; nor could the currency of the country ever be placed on a solid basis, unless country banks were prohibited from issuing notes, except ing such as were of a considerably higher denomination than the current coin, so as to save it entirely from the competition of the paper currency. The principle of the measure, therefore, could be resisted only by those who held that the pecuniary relations of the country were best secured by proscribing a metallic currency. Its necessary effect, again, would be to give solidity to the banks themselves, by compelling them to maintain a portion of their circulation in gold, instead of worthless paper; and thus, even where a failure took place, that extensive misery, which such an occurrence produced among the lower classes, would no longer return; for the security of the poorer classes in such cases lay in the absence of small paper. Let the Bank of England retain in its hands as much gold as might be necessary for the ordinary operations of commerce, for such demands as the exigencies of government might require, or to adjust an unfavourable state of foreign exchanges. Let every country bank be governed by the same rules, and compelled to keep an amount of gold proportioned to its operations; and thus would be created a sensitiveness to occurrences likely to cause a pressure on the country banks, which would tend to the security of the whole kingdom. The issues would be kept within bounds, and gold would be kept in the kingdom. To judge of the unsoundness of the present system, it was only necessary to look at the fact, how easily many of the country banks had, at all times, been overturned. In 1793, there had been one hundred failures among them; in 1810, there were commissions of bankrupt issued against twenty-six ; in 1811, against four; 1812. against tions might have carried some ou seveneen; i 1815, against eigi- of the country. But, making a teer; in 1814, agams tweny- most extravagant allowance for nine in 1825, against twenty-six: these additions, the amor e in 1627, against thirty-sever; and ported will not exceed 10.000.000, auring the latt crisis, against neving 13.000.000 still in the fewer than every-81. Even country, to which was to be added those numbers were undoubtedly a million imported since last Nobelow that of the failures, for invember, in consequence of the ex many cases of insolvency commis changes haring again turned in sion of bankrupt had not issued our favour. Any measure would be good which, by compelling thest establishments to rest, in part, at least, on the necessity of circulating gold, wouĪČ give subdity to themselves and se curity to the pubas; and the effect of the present measure would be, that the s note circulation would immediately be superseded by a metallic one There were at least 17,000,000 of sovereigns in the profitition against small notes would forthwith bring them into circulation, whether they had been hoarded up in the coffers of the cautious from prudential considerations, or retained in the chests of country bankers, who would rather see their own notes circulating. Thus, in point of fact, it was far from being certain that a new import. ation of gold would be necessary even to fill the place of the four or five millions which would be abstracted from the paper circulation: the gold was already in the country, although seldom seen, because thrust aside by the small notes; for, of the twenty-five millions which had been coined since 1819, not more than eight millions had been exported. the country; By the official returns, the quantity exported was 7,259,000. No doubt considerable sums might have been exported without finding their way into the official accounts; and smuggling transac Now, the average issue of smal notes by the Back of England, during the suspension of cash payments, had been 7,000,000; the small paper of the country banks could not be estimated at more than 6,000,000, although they had gone on increas ing their issues, while those of the Bank of England had been con tracted. Thus, the paper to be removed amounted to 15,000,000, and there were 16,000,000 of sovereigns in the country to occupy its place. Where, then, lay the difficulty of effecting the obiect which the proposed measure had in view? Within the metropolis, and its immediate vicinity, there was nothing but a metallic currency. In Lancashire, in Liverpool, containing not fewer than 150,000 inhabitants, and Manches ter, containing, perhaps, 200.000, no such thing as a small paper circulation was ever known; so that in a district, possessing not fewer than 2,000,000 of inhabi tants, nothing was to be found but a metallic currency. Adding the contents of this district to that of the metropolis, there were 4.000.000 of people occupying districts, which contained two thirds of the entire wealth of the nation, in the daily practice of conducting all the ordinary transactions of life without the assistance of a paper currency, and yet these are precisely the places, in which the ment of a metallic circulation would be expected to exist. greatest difficulties to the establish- to notes of the higher denominations: "these may be piled mountains high, provided the base be refreshed by copious streams of the metallic currency." While the expulsion of the small notes would thus necessarily restore the securities and the stability of a metallic currency, it was chimerical to regard it as injurious to the country banker himself. The small-note circulation cannot be taken at more than five millions; and it never can be reasonably contended, that gradually to diminish that circulation, at the rate of a third part in each of three successive years, could be attended with any thing like a shock to the credit of firms, which, in the recent concussion, had displayed such unequivocal marks of stability. The number of country banks was about eight hundred; one hundred of these had failed; there still remained seven hundred; and the circulation of each of these would average about 8,000l. Could it then be supposed, that a stability which had stood the late tremendous shock, would be shaken or destroyed by a gradual curtailment of paper tothe extent annually of 2,000l. or 3,000l. for three successive years? When the difficulty was thus reduced when the means were so limited and humble, by which a mighty principle was to be established when, by an operation so minute, and a process almost insensible, the prodigious advantage could be attained of placing the pecuniary concerns of the country on the broad and imperishable basis of a metallic currency, it would be as imprudent to let slip the opportunity, as it would be unreasonable to deny the principle. The intended change was not to affect the paper circulation at large; it was not to trench upon the great mass of paper currency, which was confined VOL. LXVIII. To those, who, without objecting to the principle of the measure, wished it to be postponed, it was answered, that, instead of coming too soon, it had come, if any thing, too late. If it had been adopted at an earlier period, for instance, in 1822, when government was foiled in a similar attempt to make the country bankers deposit security for their issues, it would have been happier for the country. At no time likely to arrive could there be a more favourable opportunity for effecting the object in view; for one result of the late panic had been, that a large proportion of the small notes of country bankers, independently of those of the hundred banks which had failed, had been withdrawn from circulation, and the prohibitory measure, therefore, would be less strongly felt. The advocates for delay were called on to recollect, that even the existing law would, at the latest, put their favourite notes to death in the year 1833 that was the remotest period to which their flimsy existence could be protracted. That extinction would exactly coincide with the expiration of the charter of the Bank of England; and no person, whose opinion was entitled to the smallest respect, could maintain, that it was desirable that these should be contemporaneous events; and not one of those who pleaded for delay had pretended that the circulation of the small paper of the country banks should extend beyond that period, nor could any man do so, unless he were hardy enough to maintain, that it should be made perpetual and unlimited [C] in point of time. Delay, for whatever period, under whatever representations it might be granted, by whatever explanations or assurances it might be accompanied, and however it might be regarded in that House, would be viewed out of doors as the defeat of the whole measure, and a rejection of its principle. Moreover, who could answer that delay given for purposes of preparation would be so employed, and that it would not be used in taking serious and effectual steps to prevent the probability of a recurrence to cash payments, to render it impossible to resume the question, or, at least, to take it up on the same basis on which it now stands? The season, therefore, was as favourable, as the object itself was desirable. The alteration, indeed, would not directly and immediately put an end to our commercial embarrassments, which had principally arisen from the unwholesome and preternatural extension of commercial speculation; but it would have the effect of alleviating and preventing the recurrence of that distress, which, however it might begin with the higher, was sure, if not withstood in the outset, to find its way to the lower classes of society. It would be a step towards the fulfilment of the old benevolent wish, that every peasant should have a fowl in his pot; for the effect would be, that the Isbourer would find in his pocket a piece of gold, instead of a shred et perhaps worthless) paper. Mr. Brougham likewise supperted the resolution, and strongly urged the mexpediency and the ssess et any delay, when the work was already half done, in ensement of the general want of conthenechaving of used greatlyli ed theisses of the country bansk. Mr. Baring moved as an amendment, "That it is the opinion of this House, that, in the present disturbed state of public and private credit, it is not expedient to enter into a consideration of the banking system of the country ;" and, Mr. Canning having expressed a hope that the decision on the present motion would be regarded as decisive of the principle, as the sooner it was settled the better, the House divided: for the original motion, 232; for the amendment 39; majority 193. An amendment moved by Mr. Gurney to exclude the Bank of England from the operation of the resolution was likewise negatived by a majority of 66 to 9; and a similar amendment being again moved next day, on the bringing up of the report, on the mere allegation that, without small notes of the Bank of England, it would be impossible to fill up the vacuum occasioned by the withdrawal of the country paper, it was negatived without a division. The overwhelming majority, by which the resolution was carried, promised that little opposition would be made to the progress of the bill for carrying it into effect, which was immediately brought in by the chancellor of the Exchequer; especially as many of those members who had voted against it, and even Mr. Baring himself, had declared, that, the principle having been once carried, it would be useless and unwise to offer any farther opposition. However much resistance sprung up in discussing the details; and, on more occasions than one, many of those, who had supported the general principle, found themselves ranged against ministers in regard to particular clauses which government pro |