That this liability of the Bank to deliver gold in exchange for their notes shall continue for not less than two nor more than three years, from the 1st of May 1821, and that at the end of that period cash payments shall be resumed.

That on a day to be fixed by Parliament, not later than the 1st of February 1820, the Bank shall be required to deliver gold of standard fineness, assayed and stamped as before mentioned, in exchange for their notes, (an amount of not less than sixty ounces being demanded,) at L. 4, 1s. per ounce, that being nearly the market price of standard gold in bars, on an average of the last three months.

That on or before the 1st of October 1820, the Bank shall pay their notes in gold of standard fineness, at the rate of L.3: 19:6; and on or before the 1st of May 1821, as be fore mentioned, at the ancient standard rate of L. 3: 17: 10.

Your Committee proceed to state the reasons which induce them to recommend the adoption of these suggestions.

By requiring the Bank to pay, after the 1st of May 1821, a given quantity of notes in standard gold, at the Mint price, a security against fluctuation in the value of the paper currency will be provided, of the same nature with that which payments in specie afforded previously to the restriction act. If the issues of the Bank shall at any time exceed the amount to which they must be limited in order to maintain their value on a par with gold, the Bank will be subjected to an immediate demand for gold, and will naturally have recourse, as before the restriction, to the contraction of the issues of their paper.

The chief recommendation of this plan, in the opinion of the Commit

tee, is, that it will enable the Bank to pay their notes in gold at a much earlier period than they could pay them in the present gold currency. There cannot, while this plan is acted on, be any demand for gold for the purpose of internal circulation; and whatever quantity it would be necessary to provide with the view of replacing the small notes at present in circulation, may therefore be dispensed with. That portion of capital which must otherwise be applied to the purchase of an expensive and unproductive instrument of commerce will be less available for the employment of productive labour; or, at any rate, time will be afforded, during the operation of the plan, for the gradual abstraction of that capital, and for the accumulation of such a stock of the precious metals as may enable the Bank with perfect safety to supply a metallic currency. Although in the event of general panic, and a want of confidence in the stability of paper credit, the Bank would be exposed to the same demand to which they would be liable were cash payments resumed; yet it is probable that the drain caused by sudden and local aarms would be greatly diminished, if not altogether prevented.

In speaking of this plan, Mr Baring observes, "Under such a system, the whole amount of bullion that would be required must be that amount which the Bank would be under the necessity of keeping, for the purpose of balancing the variations that may from time to time occur in the amount of currency which at different periods the state of the country may require, and farther, any amount which the public may be disposed to hoard. I should not think that the amount so required by the Bank could much exceed 5 or L. 6,000,000, because I should

not think that the contraction and expansion of currency at different periods could go much beyond that amount. Hoarding would go cer. tainly to a less extent than under a system of coin, because there could be no small hoards, and persons would be less disposed to hoard larger sums when they had not the means of issuing them as currency, if they should be disposed to do so, otherwise than by selling or carrying them to the Bank. Under these circumstances, I should incline to think, that L. 10,000,000 of bullion would be abundant for every purpose; but it is difficult to speak with accuracy of an untried plan."

With respect to the preservation of the standard of value, Mr Baring states, "That he is quite confident that the standard of the country, and of course the par value of the paper, would be preserved in much greater purity than under any system of coin."

Mr Holland delivered a paper to the Committee in reference to the plan of bullion payments, in which he thus expresses his opinion: "I can venture to assert, as a practical man of business, that there will be little if any difficulty in carrying it into effect; that it will not unnecessarily cramp circulation; that it will not impede the ordinary measures, either of Government or the mercantile community; but that, on the contrary, it will restore order and harmony to the system, and give to the country what all parties who wish its welfare desire-a safe and efficient standard of value; variable, it is true, in a certain degree, but less variable than any standard which any country has ever yet established."

Your Committee will now give their reasons for recommending the arrangement, which they have suggest

ed, for regulating the mode in which

gold shall be issued in exchange for Bank-notes, between February 1st 1820 and May 1. 1821.

The Committee consider it necessary to fix a definite period at which the Bank shall be under the obliga tion of issuing gold at the Mint price; and a standard be thus established to which the value of the paper currency shall conform, and by which its issues shall be regulated. Parliament has on more than one occasion since the peace fixed a period for the return to payments in specie; and when it has consented to a further suspension of them, has expressed an opinion that their resumption was highly desirable; and has assigned as the reason for continuing the restriction, the expediency of enabling the Bank to make such preparations as to their discretion and experience might appear most expedient, for enabling them to resume payments in cash without public inconvenience.

Your Committee, therefore, are desirous, in recommending the further postponement of those pay. ments, to devise some additional security that preparations shall be made for their resumption; to prevent an impression on the public mind that further suspensions will take place; and to induce a gradual accommodation of commercial transactions to a system of currency which, having been long discontinued, could not be suddenly resumed without restraint and embarrassment. They conceive that such security will be best provided by requiring the Bank to revert at an early period to that principle on which, previously to the restriction act, their issues were regulated-a reference to the price of gold. They propose, therefore, that, time having been allowed for the repayment of a portion of the advances to Government,

the Bank shall undertake at a given period to deliver gold in exchange for their notes in the manner already described.

Between the present time and the commencement of the year 1820, the Committee cannot anticipate an operation of any of those causes which affect the value of the precious metals so extensive as to prevent the Bank from counteracting the effect of them, by such a reduction of their issues as may be made without producing public inconvenience.

If the price of gold shall remain the same as it is at present, the demand from the Bank, which will have to deliver it at that price, will necessarily be very limited. If in the interval any causes shall affect it, and produce a rise in its price, the Bank must in that case contract its paper, either positively, as compared with its present amount, or relatively, to any increased demand which there may be for it; and thus by increasing its value as currency, proportionately diminish the induce ment to demand gold.

It may be objected that the adoption of this suggestion appears to recognise a departure from the ancient standard of value; but it recognises it no otherwise than as it at present practically exists: it recognises it for a very limited period, and with no other view than to provide for the gradual return to that standard, the deviation from which it acknowledges.

The Committee trust that they have sufficiently explained the grounds on which they recommend that, with a view to the establishment of a metallic standard of value at the earliest period, the Bank should be required to deliver standard gold in exchange for their

notes.

They do not express any prefer

VOL. XII. PART II.

ence for the system of bullion payments over that of payments in specie abstractedly; nor are they prepared to recommend them as a permanent substitute: but they consider them the best means of facilitating and ensuring the resumption of payments in specie with the least: public inconvenience. They are of opinion, that when once the ancient standard of value in this country has been re-established, the great impediments to a return to our former system will be overcome; and it will be in the power of the Bank, or of individuals, by taking advantage of a favourable state of exchange, to increase the supply of the precious metals in this country to any extent to which they are likely to be required.

Your Committee are aware that it may be objected to the plan of bullion payments which they have recommended, first, that by necessarily continuing the notes below five pounds in circulation, it continues the present inducements to the crime of forgery; and, secondly, that by requiring the presentation of a large amount of notes in demand for gold, it gives to the possessor of notes to that amount an accommodation which the holder of a smaller quantity will not possess.

On the first of these objections, your Committee observe, that it is scarcely possible to calculate on a resumption of specie payments accompanied with the total exclusion of the small notes, at a period much if at all earlier than that at which it may take place, if the recommendation of the Committee be adopted. When the Legisla ture has, at former periods, contemplated the removal of the restrictions, the necessity of continuing the circulation of the small notes for some time subsequently has been foreseen, and is at present provided for by law.

2 G

It is true, that after the resumption of cash payments, the amount of small Bank-notes in circulation would probably be diminished, but there seems no reason for concluding that the temptation to forgery, which must depend on considerations of risks and profit, would be diminished in proportion to the decrease of those notes, provided they were not altogether excluded. The force of this objection will also be lessened proportionately to the degree of success which may attend the attempts that are at present making to devise means of rendering the imitation of Bank-notes more difficult. Your Committee have been informed, that the plan recommended by the commissioners appointed for inquiring into the mode of preventing the forgery of Bank-notes may be expected to be in full operation in about three months; and they have received from two scientific members of that commission (Sir Joseph Bankes and Dr Wollaston) the satisfactory assurance, that their confidence in the increased security which the new form of note will afford, as well by creating fresh obstacles to a successful imitation, as by giving a more obvious facility to the public in detecting any attempt to give currency to forged notes, has been confirmed by the progress of their inquiry and experiment since the date of their report communicated to Parliament. With respect to the second objection to bullion payments, your Committee remark, that the object of the plan which they recommend is, by securing a control over the quantity of the circulating medium, to regulate the value of the whole, and to maintain paper on a par with gold. While this object is effected, the holder of notes, to whatever amount, has a security for their value, which without this plan he would not pos

sess, during the interval which must precede the resumption of cash payments.

Should the House determine to act upon the recommendation of the Committee, it will be expedient to continue the act which passed in the present session, restricting the farther issue of gold coin from the Bank. They propose no interference with the laws which regulate the Mint, conceiving it desirable to retain, as a check upon any undue contraction of the issues of the Bank, the power which individuals at present possess of receiving coin from the Mint in exchange for bullion, without loss or deduction, at the rate of L. 3: 17: 10 per ounce.

They recommend, not as an appendage to the plan which they have suggested, but as a politic measure under any system of currency, the total repeal of the laws which prohibit the melting or exportation of the coin of the realm. Your Committee conceive it to have been clearly demonstrated by long experience, that they are wholly ineffectual for the object for which they were designed; that they offer temptations to perjury and fraud, and give those who violate the law an unfair advantage over those who respect it.

Your Committee have received an intimation from the Directors of the Bank of Ireland, that they shall be prepared to resume cash payments six months after their resumption by the Bank of England. In making this communication, the Directors contemplated a return to payments in specie; but the Committee have the satisfaction of stating to the House, on the authority of the Governor of the Bank of Ireland, whom they have had an opportunity of personally examining, that there is reason to believe, that no difficulty

would exist, on the part of the Bank of Ireland, in carrying into effect any regulations of the same nature with those which may be adopted with respect to the Bank of England.

Your Committee would here close their Report, if they did not think it necessary shortly to advert to the circulation of Country Banks. The notes of all those establishments are exchangeable for the notes of the Bank of England. As a part of the currency, therefore, they must be affected by any fluctuation in value to which Bank of England notes are now liable; and consequently, they will be alike secured from such fluctuation, by any arrangement which will effectually place and maintain the latter upon a par with a metallic standard of value. Although, from this view of the subject, your Committee are led to the conclusion, that there can be nothing in the nature of the circulation of Country Banks which can form an obstacle to the gradual resumption of cash payments upon the plan which your Committee have suggested, they have made it their endeavour to ascertain the probable amount of that circulation at different periods; though they have to regret that they have not been able to obtain as precise and full information as might be desired. There are not sufficient data from which to ascertain the exact amount of Country Bank notes at any one time in circulation. Your Committee called for accounts from the Stamp office, of the number of promissorynotes stamped in each successive quarter, from the year 1810; and as these accounts show the number of notes stamped in each of the classes into which they are divided, according to their several denominations, if the nominal value of each is assumed, for the sake of calculation, to be the highest which such

If these notes on an average circulate for three years, the highest aggregate amount to which they can have reached is L. 29,232,870.

Your Committee are led to conclude, from the information of Mr Lloyd, that the whole amount of notes stamped, which still remain in such a state as to be circulated, can never have been at once in circulation. He says, "A banker may have L. 50,000 notes lying by him; his having paid the duty, and having the notes ready, by no means prove that they are in circulation. Sometimes there may be a very large amount locked up by him; at other times they may be almost all in circulation. In time of alarm he takes care to have them as much at home as possible; in time of prosperity and general confidence he has no hesitation in issuing them on satisfactory security."

Mr Lloyd expressed an opinion, that the issue of paper by the country Banks might be from forty to fifty millions; but your Committee are rather led to infer, from the general tenor of the information before them, that the amount of this branch of the paper circulation throughout Great Britain has never exceeded from twenty to twenty-five millions.

Whatever may have been the amount, it appears undoubtedly to have been liable to great fluctuations, as may indeed be inferred from the account of the stamps before alluded to, but with more certainty from ac. counts furnished by the three char