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only at the Mint price; and that may not take place and have been eswhenever Parliament shall think tablished before the 1st of May 1821. proper to require the Bank to pay Under this certainty it would be its notes in coin, notice thereof shall difficult, if not impossible, to foresee be given to the Bank one year be- any moment previous to that date at forehand, such notice not to be given which it might be expedient to make before the 1st of May 1822. such an issue, or at which the public
Should Parliament think proper would be able to avail itself of the to adopt this plan for the regulation power of resorting to the Mint for of the Bank of England, it is evi. the conversion of bullion into coin. dent that provision must be made But it will be able to avail itself of for applying the same principle to that power under the operation of the Bank of Ireland.
this plan at as early a period as could The Committee are perfectly a- reasonably be expected under any ware of an objection which may be plan for the simple resumption of stated to this plan, viz. that during cash payments. In the interval the its operation the country will pro- currency must consist (as it has long bably have no currency except pa- consisted) of paper alone; but from per, for payments beyond 40s., and the moment this plan begins to opethat the advantage resulting from rate, this paper would have what it the convertibility of Bank notes in- has not had since the Bank restricto bullion appears to be given, at tion, and what it could not have in least in the first instance, only to the the interval preceding a simple reholders of large sums.
sumption of cash payments, a metalIn answer to this must be re- lic standard for its regulator. The membered, that so long as the price holder of large sums in notes would of gold shall continue high enough indeed have the power of converting to afford a profit upon the melting them into bullion at a fixed price by and exportation of coin, framed ac- presenting them at the Bank; but cording to the present Mint regula- the holder of a small sum in notes tions, there can be no circulation of has not now, and could not have, the gold coin in the country. Under power of converting it into coin, unsuch circumstances any further issue der circumstances when, as has been of gold coin would be useless ; it before stated, no coin could remain would indeed be worse than useless, and circulate in the country. as the purchase of the bullion to be latter, therefore, is exposed to no discoined would raise the price of gold, advantage whatever during the ope. and the expense of coining it would ration of the present plan, to which be a waste of public money. Such he would not be exposed during the an issue could only be useful when- interval which must precede a simple ever the price of gold is so far below resumption of cash payments; but the Mint price as to compensate for he derives from the first moment of the interest lost during the time of its commencement a participation in coinage. But although the Commit- the security against fluctuation aftee entertain great hopes that, dur. forded to the holder of large sums. ing the operation of the plan in ques
This detail of the plan now protion, the price of gold will fall to the posed by the Committee will, they Mint price at an earlier period than hope, be sufficient to explain both it's what is fixed for its completion, yet nature and its objects. Above all, the plan itself presumes that such fall they trust, it will be manifest that the
plan is now recommended by them the country a profit equal to the as a temporary measure, as the mode whole value of the gold employed which appears to them at once the as dead capital for the purpose of cir. most desirable, and the most effectual culation, an endeavour shall be made for the attainment of the object which to confine the whole of our currency Parliament has in view—the restora- (except for the small payments now tion of our currency to its ancient made in silver) to paper only, but to standard of metallic value. They paper regulated by convertibility in. think it probable, as they have al- to bullion ;—these, with the numeready stated, that this object may rous details connected with and dethus be attained at a period compa- pendent on them, are points upon ratively earlier than that for which which the House will find much usethey have ultimately provided. But ful information in various parts of the they entertain a confident expecta- evidence contained in the minutes, tion that in this mode it will be ef- and upon which the Committee are fected at that period, if not before, satisfied that a better judgment than and with the least practical inconve- can be formed at present will be denience to any of the interests which rived from the experience of the o. it may affect.
peration of the plan immediately in After the attainment of this first question. and great object, many important With respect to the decision to be questions will still remain to be de- taken as to the future circulation of termined by the Legislature, respect. the smaller notes, the Committee are ing the system on which our currency, fully sensible that all views of expewhen regulated by a metallic stan- diency or profit in this respect must dard, may in other respects, with be combined with another most im. most advantage, be ultimately and portant consideration--that of the permanently founded. But in these comparative facility with which such points the Committee think they paper, or the coins for which it is subshould have exceeded the limits of stituted, may respectively be countheir duty, if they had ventured at terfeited. This point is essential to the present period even to form, the success of any measure on this much more if they had submitted to subject ; and it is of great weight in Parliament, any final or decisive o- the opinion of the Committee, as con. pinion.
nected with the comparative degree Whether the whole of our circula- of temptation or encouragement tion and currency shall thenceforth which any of these systems may be replaced either entirely on its an- ford to crime, and the consequent cient footing, or with what degree of necessity of frequent and severe pualteration, particularly in respect of nishment. the smaller notes, the issue of which Under these impressions the Comwas formerly prohibited ; whether mittee have endeavoured with much the payments of the Bank shall be anxiety to obtain information as to made at their option in bullion or in the progress and probable results of coin; or those payments continuing the inquiries which have lately been to be made in bullion only, the Mint made, under the authority of bis Ma. shall be open to the public for coin- jesty's commission, into the means of ing such bullion into gold coin, with preventing, or rendering much more or without a seignorage or brassage ; difficult than at present, the forgery or whether, with a view to realize to of Bank paper.' They have learnt
that these results are not yet suffi- first restriction upon the Bank. The ciently matured to be brought with amount of the advances appears to this view in a complete shape under have subsequently increased with the the consideration of Parliament; but succeeding embarrassments of the they find that the very able persons public service; and the extraordinary whose attention has been so bene.. exertions of the concluding years of ficially employed in the examination the last war naturally produced an of this subject, entertain sanguine unprecedented extension of them. A expectations that the principles which considerable reduction of these ad they have adopted for this purpose vances has since been effected, and a will, in their application, provide, if still further diminution of them is renot a complete, at least a much more commended in this Report. It will effective check than has been provide be for the wisdom of Parliament to ed by any means yet adopted for the determine whether, in order to guard security of the Bank and of the pub- against the unobserved recurrence of lic. In so far as the Committee has this practice, some permanent regufelt itself competent to judge of the lation ought not to be established, probable operation of those princi- extending the very narrow restraint ples, they fully partake in this hope; under which the Bank was originaland it is much strengthened by learn- ly placed in this respect, but impoing, from the testimony of the Go. sing some new principle of limitation, vernor of the Bank of Ireland, that so as on the one hand to allow the the application even of a part of those Bank such a free use of its capital as principles has been found there, in a might enable it (as it appears to have very great degree, effectual for that done previously to the Bank restricpurpose.
tion) to invest either the whole or There is another point to which some limited proportion thereof, if the Committee think it of great im- not demanded for commercial disportance that Parliament should ad. counts, in the purchase of Govern. vert. The large amount and nature ment securities; and, on the other, of the advances made by the Bank to prevent it from engaging in such for the public service have been sta- purchases for the accommodation of ted, on different occasions, as oppo. Government, when its own convesing considerable obstacles to the nience or interest did not require measures which would otherwise them, or from entering into any enhave been adopted by the Bank; and gagement, express or implied, which the plan now recommended essen- shall prevent its bringing those setially depends upon a previous re- curities freely into the market. It is duction of them. But the inconve- obvious, that in imposing any new nience of this mode of habitually pro- principle of limitation, exception viding for the public exigencies to so must be made for cases of great great an extent is not merely tem- emergency, to be stated to Parliaporary. It involves principles of con- ment and provided for by its express siderable moment, with reference to authority. the relation in which Government Whatever
be the decision of and the Bank are thereby placed to. Parliament upon all or any of the wards each other. This system is measures now in contemplation, the not, however, of recent date. It had Committee think it will be desirable been acted upon to a large extent, to repeal the laws which prohibit the for a long period of years before the melting and exportation of the coin, and which enact that all bullion in- though the latter was probably one tended for exportation shall be sworn of the chief objects which the law had to consist of foreign gold or silver. in view. As our coin is now either The policy of these laws has long melted previously to exportation, or been held by the best writers on the melted in the country to which it is subject to be at least dubious. From exported, because it is not there the nature of the article, so portable known or current, when it returns, it and so easily concealed, they could returns in the shape of bullion, and hardly be expected to be efficacious; if the Mint is open, and the price and experience has abundantly prov. such as to make it worth coining, it ed their inefficacy. Notwithstanding is carried to the Mint and coined at the existence of these laws, the whole, the public expense. Whereas, if our or pearly the whole, of the gold coin coin were legally exportable, it would of this kingdom, amounting proba. probably return into this country as blyto between 20 and 30 millions, has coin, whenever the state of the ex. entirely disappeared, and scarcely a changes rendered it a more profitable remnant now remains of the sove- remittance than bills or merchandise. reigns which were issued in the year No country in Europe has maintain1817. The prohibition, indeed, adds ed so large a metallic currency as something to the difficulty, and con- France, without any prohibition upsequently to the expense of expor- on the melting, the export, or the tation; and may, therefore, be sup- sale of the coin. posed to operate, in some degree, as The Committee cannot conclude a seignorage upon our coin; but it their Report, without adverting to is a seignorage perpetually varying, the opinions which have been exaccording to the greater or lesser fa- pressed and very fully explained cilities for smuggling which may at by some of the witnesses, that the different moments exist, and afford- present regulations of the Mint for ing therefore an uncertain, and, in the coinage of silver must of thempoint of fact, an inadequate protec- selves occasion a perpetual drain of tion.
gold from this country, and thereby The means also, by which this pro- oppose an insurmountable obstacle tection is afforded are highly objec. to the resumption of metallic paytionable, there being no possibility of ments by the Bank, at the ancient distinguishing between bullion pro- standard of value. These opinions duced by the melting of foreign or have been directly and strongly conof English coin. The only security is troverted by other witnesses. The that of an oath ; and the law, there. Committee more particularly refer to fore, has no other operation than to the evidence of Mr Page and Mr offer a great, and, as experience Fletcher on one side, and Mr Mushproves, a successful temptation to ett on the other; and to a paper reperjury.
ceived from the master of his Ma. Even upon our ancient system of jesty's Mint: but much important coinage, in which the value of the information on this part of the submetal in coin is equal to that of the ject may likewise be collected from metal in bullion, and the whole ex- the testimony of others, whose sen. pense of the coinage falls upon the timents and authority upon such matpublic, it may be doubted whether ters must be of great weight. The the prohibition does not increase ra. Committee, being fully sensible, that if ther than diminish that expense ; al. the opinions of the two first witnesses
be well founded, any attempt to re- parts of the evidence, and in the Apmove the restriction upon the Bank pendix, a great mass of valuable inmust prove ineffectual, unless the formation, illustrating not only those Mint regulations for the coinage of points which the Committee have silver were first altered, according to dwelt upon in their Report, but also the principle upon which that opinion many other points of considerable appears to be founded, have given importance to which they did not this part of the subject full conside. think it necessary to advert. They ration; and they think it their duty have judged it best to confine themto state, that they see no ground to selves as much as possible to a pracapprehend that the present Mint re- tical view of the question referred to gulations respecting the silver coin- them by the House, and to rest the age, so long as such silver coin shall proposal which they have brought not be a legal tender beyond the a. forward upon grounds which might mount of forty shillings, and the Mint recommend it sufficiently, if not shall not be open to the public for the equally, to persons widely differing coinage of that metal, will oppose any in opinion upon many of the consiobstacle to the successful execution derations involved in any discussion of the plan which they have ventured upon so extensive and complicated a to recommend.
subject. The House will find, in various
From the Secret Committee, on the Expediency of the Bank resuming Cash
The Committee of Secrecy ap- matters to them referred, and have pointed to consider of the state of the agreed upon the following Report:Bank of England, with reference to Your Committee will preface the the expediency of the resumption of observations they have to make upon cash payments at the period fixed by the matters immediately referred to law, and into such other matters as them by the House, by a brief recaare connected therewith ; and to re- pitulation of the laws which imposed port to the House such information and have continued the restrictio: relative thereto as may be disclosed upon payments in cash by the Bank without injury to the public inte- of England. rests, with their observations there. It is not necessary to advert to the upon; have further considered the circumstances under which that re