and which enact that all bullion intended for exportation shall be sworn to consist of foreign gold or silver. The policy of these laws has long been held by the best writers on the subject to be at least dubious. From the nature of the article, so portable and so easily concealed, they could hardly be expected to be efficacious; and experience has abundantly proved their inefficacy. Notwithstanding the existence of these laws, the whole, or nearly the whole, of the gold coin of this kingdom, amounting probably to between 20 and 30 millions, has entirely disappeared, and scarcely a remnant now remains of the sovereigns which were issued in the year 1817. The prohibition, indeed, adds something to the difficulty, and consequently to the expense of exportation; and may, therefore, be supposed to operate, in some degree, as a seignorage upon our coin; but it is a seignorage perpetually varying, according to the greater or lesser facilities for smuggling which may at different moments exist, and affording therefore an uncertain, and, in point of fact, an inadequate protection.

The means also, by which this protection is afforded are highly objectionable, there being no possibility of distinguishing between bullion produced by the melting of foreign or of English coin. The only security is that of an oath; and the law, therefore, has no other operation than to offer a great, and, as experience proves, a successful temptation to perjury.

Even upon our ancient system of coinage, in which the value of the metal in coin is equal to that of the metal in bullion, and the whole expense of the coinage falls upon the public, it may be doubted whether the prohibition does not increase rather than diminish that expense; al

though the latter was probably one of the chief objects which the law had in view. As our coin is now either melted previously to exportation, or melted in the country to which it is exported, because it is not there known or current, when it returns, it returns in the shape of bullion, and if the Mint is open, and the price such as to make it worth coining, it is carried to the Mint and coined at the public expense. Whereas, if our coin were legally exportable, it would probably return into this country as coin, whenever the state of the exchanges rendered it a more profitable remittance than bills or merchandise. No country in Europe has maintained so large a metallic currency as France, without any prohibition upon the melting, the export, or the sale of the coin.

The Committee cannot conclude their Report, without adverting to the opinions which have been expressed and very fully explained by some of the witnesses, that the present regulations of the Mint for the coinage of silver must of themselves occasion a perpetual drain of gold from this country, and thereby oppose an insurmountable obstacle to the resumption of metallic payments by the Bank, at the ancient standard of value. These opinions have been directly and strongly controverted by other witnesses. The Committee more particularly refer to the evidence of Mr Page and Mr Fletcher on one side, and Mr Mushett on the other; and to a paper received from the master of his Majesty's Mint: but much important information on this part of the subject may likewise be collected from the testimony of others, whose sentiments and authority upon such matters must be of great weight. The Committee, being fully sensible, that if the opinions of the two first witnesses

be well founded, any attempt to remove the restriction upon the Bank must prove ineffectual, unless the Mint regulations for the coinage of silver were first altered, according to the principle upon which that opinion appears to be founded, have given this part of the subject full consideration; and they think it their duty to state, that they see no ground to apprehend that the present Mint regulations respecting the silver coinage, so long as such silver coin shall not be a legal tender beyond the amount of forty shillings, and the Mint shall not be open to the public for the coinage of that metal, will oppose any obstacle to the successful execution of the plan which they have ventured to recommend.

The House will find, in various

parts of the evidence, and in the Appendix, a great mass of valuable information, illustrating not only those points which the Committee have dwelt upon in their Report, but also many other points of considerable importance to which they did not think it necessary to advert. They have judged it best to confine themselves as much as possible to a practical view of the question referred to them by the House, and to rest the proposal which they have brought forward upon grounds which might recommend it sufficiently, if not equally, to persons widely differing in opinion upon many of the considerations involved in any discussion upon so extensive and complicated a subject.

The Committee of Secrecy appointed to consider of the state of the Bank of England, with reference to the expediency of the resumption of cash payments at the period fixed by law, and into such other matters as are connected therewith; and to report to the House such information relative thereto as may be disclosed without injury to the public interests, with their observations thereupon; have further considered the

matters to them referred, and have agreed upon the following Report:

Your Committee will preface the observations they have to make upon the matters immediately referred to them by the House, by a brief recapitulation of the laws which imposed and have continued the restriction upon payments in cash by the Bank of England.

It is not necessary to advert to the circumstances under which that re

striction was originally imposed by order in Council in the year 1797, as they became the subject of Parliamentary inquiry previously to the passing of the act by which the restriction was confirmed and continued. Its duration was limited by the first act, which received the royal assent on the 3d May 1797, to the 24th June following. From that period it was continued until one month after the commencement of the succeeding session; and again, by the first act of that session, until one month after the conclusion of the war, by a definitive treaty of peace.

In 1802, the provisions of the acts above referred to were continued in operation until the 1st March of the following year; they were further continued until six weeks after the commencement of the then next session of Parliament, before which period war having again broken out, they were continued until six months after the ratification of a definitive treaty of peace.

An act which passed in the year 1814 continued the restriction until the 25th March of the following year, when, by an act which recited in the preamble," that it was highly desirable that the Bank of England should as soon as possible return to the payment of its notes in cash," the further suspension of cash payments was directed until the 5th of July 1816.

In 1816 it was again continued till the 5th July 1818, the preamble of the act reciting, " that it is highly desirable that the Bank of England should as soon as possible return to the payment of its notes in cash, but it is expedient that the provisions of the acts imposing the restriction shall be further continued, in order to afford time to the Directors of the Bank to make such preparations as to their discretion and experience

may appear most expedient for ena. bling hem to resume payments in cash without public inconvenience, and at the earliest period, and that a time should be fixed at which the said restriction should cease."

The act which passed in the last session, after reciting that it is highly desirable that the Bank of England should as soon as possible return to the payment of its notes in cash, and that " unforeseen circumstances, which have occurred since the passing of the last act continuing the restriction, have rendered it expedient that the restriction should be further continued, and that another period should be fixed for the termination thereof," directed that the suspension should remain in force another year.

The restriction therefore at present stands limited to the 5th July next; and, in fulfilment of the duty imposed upon them by the House, your Committee will proceed, in the first instance, to report the result of their inquiries into the state of the Bank of England, and their opinion with respect to the expediency of the resumption of payments in specie, at the period at which by law they are to be resumed.

1. Your Committee called for an account of the total amount of outstanding demands on the Bank of England, and of the funds in the possession of the bank for the discharge of those demands; and have ascertained that the sum which the Bank were liable to be called on to pay in fulfilment of their engagements, amounted on the 30th January last to L. 33,894,580, and that the Bank were then in possession of Government securities and other credits to the amount of L.39,096,900, leaving a surplus in favour of the Bank of England of L. 5,202,320; exclusive of the permanent debt due

from Government to the Bank of L.14,686,808, repayable on the expiration of the charter.

This document furnishes a clear and decisive proof of the flourishing condition of the affairs of the Bank of England, and justifies that ample confidence which the public have reposed in the stability of their re

sources.

The next point upon which the Committee required information respects the amount of cash and bullion in the coffers of the Bank, at the present and at various other periods since the year 1797.

After several fluctuations in the amount of their treasure, which was very much reduced at the close of the war, there appears to have been a gradual increase from the month of July 1815, to the month of October in the year 1817. During the interval between July 1816 and July 1817, the market price of gold did not exceed L.3, 19s. per oz. The exchanges with the Continent for a very considerable portion of that period were in favour of this country; and the Bank took advantage of those circumstances, and made a great addition to the amount of the precious metals in their possession. The purchases made by the Bank appear to have had no unfavourable effect on the price of gold; and there is reason to believe, that it would have fallen to the Mint price, had not the Bank fixed the rate, at which they were willing to purchase, at L. 3: 186 per oz. Mr Goldsmid informed the Committee, that "at that period there were no other buyers in the market at the price which was given by the Bank; had there been, they would have been supplied on the same terms, if they had wanted gold." Being asked whether, if the Bank had not been purchasers at L.3: 18:6, he believes

VOL. XII. PART II.

the price of gold would have fallen to the Mint price, he answers, “I think it might after some time; but that is matter of opinion only."

In the year 1817, the Bank had a much larger amount of cash and bullion in their coffers, than they had been in possession of at any former period since their establishment. From the commencement of the year 1818 the stock has been progressively diminished. This diminution has taken place in consequence of engagements into which the Bank entered (in conformity with the power reserved to them by the original restriction act) in the months of November 1816, and April and September of the following year, to pay in the first and second instance cash for all notes issued prior to the 1st of January 1812 and 1st of January 1816; and in the lat ter to pay cash for their notes of every denomination dated prior to the 1st of January 1817.

The total quantity of gold coin issued from the Bank, in consequence of the engagements thus entered into, and the continuance of the fractional payments under five pounds, appears, by accounts before the House, to have amounted, between the 1st of January 1817 and the 1st of January 1819, to the sum of L. 1,596,256 in guineas and half guineas, and in sovereigns and half sovereigns to L. 4,459,725. Your Committee have ascertained, that subsequently to the 1st of January there has been a further demand on the Bank for gold to the extent of about L. 700,000. The total sum, therefore, which has been issued by the Bank since the commencement of the year 1817 has been about L. 6,756,000; and no doubt can be entertained that the coin thus drawn from the Bank was demanded, not for the purposes of

2 F

internal circulation, but in order to realize a profit, either on its sale as bullion in this country, or on its exportation.

Your Committee are confirmed in this conclusion by the documents before the House, from which it appears, that the sum issued from the 9th of December 1816, (when the notes of the Bank became payable under the notice issued in the preceding month), to July 1817, amounted only to L. 38,020, 10s., though the Bank had become liable on the 2d of May of the latter year to pay cash for all their notes of L.1 and L.2 value, dated prior to the 1st of January 1816.

In July 1817, the former exchanges became unfavourable, and have continued so since that period; a profit has been realized on the exportation of gold coin, and the Bank has been subject to a constant demand for cash in payment of their

notes.

The following extract from the evidence given by Mr Alexander Baring shows the purposes to which a considerable portion of the gold thus withdrawn from the coffers of the Bank has been applied:-In France it appears, by the Report of the Minister of Finance, that there has been carried to the Mint of France, in the 16 months preceding the 31st December last, gold to the amount of L.125,000,000 of francs (being equal to about L. 5,000,000 Sterling); and silver to the amount of a little more than L.3,000,000 of francs. Of that gold upwards of three-fourths were in coin from this country; and this operation has continued during the present year, though the amount of the importations of this year has not been reported.

Your Committee are satisfied that the Bank, in undertaking to pay

their notes in cash, under the cir cumstances above mentioned, acted from the best motives, and from a belief that the measure would tend to facilitate the complete resumption of payments in specie. Unfortunately it has had a contrary effect; the last of the three notices having been given at a period when the exchanges were unfavourable, when the price of gold had risen from L.3:18:6 to L.4 per ounce; and at a time when the Bank had not (according to the evidence given by Mr Harman) that control over their issues which might have enabled them to counteract the effect of the unfavourable exchange, by a reduction of their paper currency.

There was, in fact, in the halfyear between July and December 1817, a considerable increase in the amount of notes issued by the Bank. The average amount outstanding in the four half years preceding had not exceeded L.26,771,914; in this half year it was increased to L.29,210,035, having been in the previous half year L. 27,339,768. It appears by the returns, that on the 5th July 1817, immediately preceding the payments of the dividends, the amount outstanding was L.25,800,000; and on the 4th of October, being a few days before the payment of the dividends of that quarter, the amount was L.28,900,000.

The issue of sovereigns between July and December 1817, amounted to L.1,240,422; so that, had the sovereigns remained in circulation, there would have been an increase to the circulating medium issued by the Bank of England, in the course of that half year, compared with the average amount outstanding in the four half years preceding, to the extent of L. 3,678,543.

Your Committee cannot avoid expressing an opinion, that whatever