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mate success of that measure, by assigning to it the earliest period within which, according to such opinion, it might be safely practicable. The measure had better not be begun at all, unless there be a determined purpose to carry it to its completion, as an ineffectual attempt might create great mischief and distress, and would not leave any beneficial result to repay the country for what it may have suffered.

From thus extending the period, it seems to the Committee that considerable advantages would arise. Those who think that the object is to be accomplished only by the means of a considerable reduction of the notes of the Bank of England, and that the inconveniences, which they acknowledge to be the necessary result of such reduction, would be amply compensated by the restoration of the ancient metallic standard, feel considerable anxiety to diminish the extent of these inconveniences. Those who expect little or no inconvenience to arise from the measures necessary for the attainment of this object, are nevertheless sensible of the difficulties which are opposed to its early accomplishment by the present state of the Bank treasure, and by the existing (though as they hope temporary) commercial pressure. They are on this latter account particularly desirous to allay even those apprehensions which they deem unfounded or exaggerated, and are satisfied that, provided the ultimate object be secured, the intermediate pressure, whatever may be its degree, would be materially lightened by being spread over a greater length of time.

Those, on the other hand, who feel less confident in the effect of such a reduction-who think that, even were its effect certain, it could only be produced by the creation of a greater

VOL. XII. PART II.

degree of distress than the public could well bear-who look to the cessation of those temporary causes, to which they attribute the largest share in producing the unfavourable state of exchanges and the high price of gold, as the natural remedy for the evil-and who expect, that in no long space of time the favourable balance of payments (the usual result of the extent and nature of our commerce) will, without incurring any distress by taking measures for the forcible production of such a change, lead insensibly, but with sufficient certainty, to the attainment of the object in view-all persons who entertain these opinions must feel still more anxiety for the extension of the period.

There are, however, some measures of preparation which, whatever time may be fixed, appear desirable, if not indispensable.

It is well known that the Bank has always been in the habit of making large advances to the Government for the public service. These advances are partly made under special acts of Parliament, upon securities therein provided. There is another species of accommodation which has also been afforded by the Bank, viz. the purchase of Exchequer bills to a large amount. For the state of the law upon this subject the Committee beg to refer to a paper which has been laid before them, and which is inserted in their Appendix. The amount of the Exchequer bills and other Government securities, either held or purchased by the Bank at different periods, will also be found in the account which is there inserted. The different applications made by the Treasury to the Bank for accommodation are fully detailed in the annexed accounts and correspondence. The principles upon which the Treasury has acted in making

2 E

these applications during the last four years are explained in a memorandum delivered to the Committee by the first Commissioner of that Board; and important information respect ing these transactions will be found in the evidence of Mr Harman, who, during the greatest part of the period last referred to, was either Governor or Deputy Governor of the Bank.

The Committee think it proper to remark, that whatever effect the extent of the advances here referred to might have had upon the power of the Bank, at any given moment, entirely to resume cash payments, supposing other circumstances had not intervened to prevent such resump. tion, they do not appear to have had any influence in diminishing the extent of the accommodation received by the public for commercial purposes. In the opinion of most of the witnesses who have been examined, the abundance of circulation produced by the liberal issue of Bank-notes, upon whatever securities they were issued, has produced indirectly as great facilities to commerce as if they had been directly issued in commercial discounts. A transfer, to a considerable degree, of the discount trade from the Bank to private bankers and merchants is stated to have taken place; but the facilities afforded to commerce were at least as great in the latter case as in the former, as the discounts made by the Bank were more restricted in point of time, were limited by the necessity imposed upon the applicant of bringing two and sometimes more securities, and were granted only at five per cent. at a time when private merchants and bankers were discounting at a lower

rate.

The effect, however, of the extent of the advances to Government upon the situation of the Bank, when

preparing for a resumption of cash payments, is evidently to cramp its operations, by placing a large proportion of its issues beyond its control. The advances made directly to Government are only repaid at the period fixed by law. The Exchequer bills purchased by the Bank could not be sold in large quantities without reducing them to a considerable discount; and this discount would bring them into the Exchequer in payment of the taxes, to such an extent as might materially derange the provisions for the public service. An understanding, therefore, without express agreement, appears to have prevailed, that, when thus purchased, they should not be sold by the Bank. On the other hand, the issues of notes upon discount revert to the Bank at periods so short, that any reduction of the paper so issued, which circumstances may render necessary, is always within their reach: with this control over their issues, they are enabled to feel their way, and to restrict or enlarge them, either as the wants of the country may permit or demand, or as the state of the exchanges and the price of gold may appear to require.

It appears, therefore, to the Committee to be highly expedient, that means should be taken to repay to the Bank a large amount of these advances at an early period.

In considering the means of providing for the future a safe and sufficient circulating medium for the country, the Committee were naturally led to make inquiries as to what had been its amount, previously to the Bank restriction, when it consisted partly of gold coin, and partly of paper; what has been its amount during the interval, when there was little or no gold coin in circulation; and what is likely to be its amount,

and what ought to be its composition, when a metallic standard is restored.

Upon the first of these heads they neither found, nor indeed could they expect to find any ground, from which a satisfactory conclusion could be drawn. The only certain data at any period are the notes of the Bank of England. The amount of coin rests only upon estimates formed in a great degree upon conjecture; and the official accounts offer little information respecting the issues of Country Banks at that period, as the stamps upon these notes were not then sufficiently distinguished in those accounts from other stamps. It is known that in 1792, those issues had been considerably extended; that after the commercial difficulties of 1793, they were greatly reduced; and in 1797, had not reached their former amount.

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much higher a proportion to the whole of the circulating medium, that the uncertainty which rests upon the remainder has less proportional effect upon the general result. The details of these issues appear in the accounts in the Appendix.

The variations in the amount of these issues, in the week immediately preceding, and in that immediately following the payment of the dividend upon the national debt, are so considerable (being from 3 to L.5,000,000 in January and July, and from 2 to L.3,000,000 in April and October,) that in considering the general circulation of the country, it seems better to take an average of the issues for six months, than to form any calculation upon a shorter period. Stated upon this principle, it appears that they did not reach L.15,000,000 before the first six months of 1800; that they never reached L. 20,000,000 before the first six months in 1810, in the latter six months of which year they exceeded L.24,000,000. The variations for the next three years were not considerable; but the rise during the year 1814 was rapid, and carried their amount, upon the average of the last six months, to above L.28,000,000. The lowest point to which they fell was between 26 and L.27,000,000 in the first six months of 1816. The highest to which they rose was in the last six months of 1817, when they were at their greatest average amount, viz.L.29,000,000, and from that period they have gradually decreased nearly to L.25,000,000, previously to the issue of the last dividends.

The amount, however, of Bank of England paper actually in circulation is not always to be measured by the extent of its issues. When credit is flourishing, the reserve of Bank of England notes kept by country

F. 7.

bankers will be considerably less
than when any local or general diffi-
culties oblige them to make more
ample preparations against large and
sudden demands; and this reserve
must, in the present state of our cir.
culating medium, consist of a great
proportion of notes of the Bank of
England, into which their own notes
are legally convertible. It will con-
sist also, to some extent, of notes of
other Country Banks, in exchange
for which they can demand from
those Banks, notes of the Bank of
England. In a state of imperfect 21,374,000
credit, the Country Banks will also
reduce their own issues, and will ei-
ther never issue at all, or refrain
from re-issuing a larger proportion
of their own notes, which they keep
by them ready stamped; so that,
even if the amount of stamped notes
actually in existence in any given
year could be ascertained with cer-
tainty, (which is very far from being
the case), the proportion of such
notes at that time actually in circu-
lation could not from thence be infer-
red with accuracy. A similar degree
of uncertainty as to the amount of
the circulating medium must exist,
as far as it arises from the varying
reserves of all bankers, even when
that circulating medium consists in
part of gold, and will then equally
apply, which it does not now, to the
reserve of the Bank of England.

With respect, however, to that part of our currency which has consisted of Country Bank-notes, the Committee have endeavoured, from such accounts as have been furnished them from the Stamp-office, to form some estimate of their amount. The difficulties of various descriptions, which throw a great uncertainty upon any calculations founded upon these accounts, are explained in statements delivered in by Mr Sedgewick, which are to be found

in the Appendix. From these materials two calculations have been drawn. The grounds upon which each of them rest are to be found in the appendix. The Committee are inclined to that of these two approximating estimates, the second is the best adapted to their view of the subject; but they submit them both to the House with a full sense of the imperfection to which they are necessarily liable.

F. 8.

.....

1810 ........
1811

21,819,000
21,453,000

.......

20,977,000 ..........
20,047,000............
22,342,000 .......
21,672,000

1812 ....... 19,944,000
1813....... 22,597,000
1814 ....... 22,709,000
1815 ....... 19,011,000
1816. 15,096,000

...................

.......

20,378,000
15,525,000
15,862,000
15,8€2,000 ....... 1817 ....... 15,898,000
20,044,000
1818
20,507,000

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These estimates must indeed be not only far removed from accuracy respecting any particular year, but many causes of uncertainty attach to them even if they were considered merely as affording data for calculating the relative circulation of different years. In this respect, however, they derive confirmation, especially the latter, from their correspondence with the general tenor of the evidence of persons connected with the Country Banks. The esti mates which these persons have formed as to the amount of the country notes, grounded upon local knowledge, and extended by inference to the whole kingdom, will be found in the minutes.

Much important information respecting the nature of this circulation will be found in the evidence, and particularly as to the different practice which obtains in different parts of the kingdom, more especially in Norfolk and in Lancashire. The calculations founded upon

the

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To this must be added about L.271,000 for the average circulation of unstamped small notes issued by the three Chartered Banks in Scotland, which are not included in the Stamp-office accounts.

The result of this estimate would be, that the circulating medium of England, as far as it consists of notes of the Bank of England or of Coun try Bank-notes, between 1810 and 1818, both years inclusive, has varied from about forty-two millions to above forty-eight millions; and that it was highest in 1814, and lowest in

1816.

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27,220,000

20,044,000

-

-42,099,000

--44,360,000

24,023,000

22,597,000

-44,825,000

26,886,000

19,011,000

-47,264,000————45,897,000

26.574,000

15,096,000

-44,136,000

26,901,000

22,709,000

43,181,000

F. 8.

-46,620,000

-48,610,000

28,274,000 15,898,000

-41,670,000

-44,172,000

27,220,000

20,507,000

-47,964,000——— --47,727,000

With respect to the numerical amount of circulating medium necessary to carry on with facility the transactions of the country, whatever may be the composition of such circulating medium, it is evidently impossible to form any judgment.

The great increase of the transactions of this country in every part of its home trade and agriculture; the rise of the amount of its exports and imports (even according to the official value, which is much below the real value) from L.51,231,000, on the average of three years preceding 1797, to L 82,750,000, on

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