Fall the topics which occupied the attention of Parliament during the present Session, there was certainly none which, in respect of the great interests which it involved, and the effects it was calculated to produce upon the commercial and monetary transactions of the kingdom, deserves a more prominent notice than the Bill introduced by Sir Robert Peel for the regulation of the Bank of England and for the administration of banking concerns in general. By an Act of Parliament passed in 1833, conferring upon the Bank of England certain privileges, it was provided, that the charter granted to that institution should expire in 1855, but the power was reserved to the Legislature, by giving six months' notice, to revise the charter ten years earlier. Availing themselves of this option, the Government now proposed a measure by which this most important branch of the business of the country was in future to be regulated upon an improved and newly modelled system of management and control. This Bill, now become the law of the land, may justly be considered the second great monetary measure of Sir Robert Peel's life, and will assuredly be regarded as

one of the most signal monuments of his skill as a commercial Minister and financier; and as the plan itself may well challenge competition with any other specimen of modern legislation on the same subject, the exposition with which it was introduced by the Prime Minister to the House of Commons deserves no less to be characterized as one of his happiest efforts. The masterly and lucid statement of the principles of currency with which his speech commenced, imparted an attraction even to that usually barren and repulsive subject; the skill with which controverted points were disposed of as they successively arose, and the dexterous arrangement and happy elucidation of the details of his scheme, riveted the attention and admiration of the House to a degree which, on a question of so dry and complicated a nature, afforded the highest testimony to the ability of the speaker. To abridge in any degree a statement so complete and well digested in all its parts, is to do an injustice to its merits, though unavoidably necessary in regard to the limits of this work. The extensive nature of the subject, however, and the abundance of details involved in the Ministerial

plan, will not bear to be comprised within very narrow bounds. On the 6th of May, the House of Commons having resolved itself into a committee upon the Bank Charter, Sir Robert Peel commenced his speech amidst profound attention, by observing upon the extensive effects which the decision of the House upon the matter of these resolutions must produce throughout all the transactions of society. The Act of 1833 had empowered the Government to notify to the Bank, before August 1844, that Parliament meant to deal anew with the subject. The Government now proposed that Parliament should exercise this power of notification. He was sure the House would address itself to the question without party bias: he would even ask, if it were permitted him to do so, that gentlemen would be content that night to hear attentively, without expressing any opinion, that they should reserve all observations until they should have taken time to consider the suggestions of Government. He adverted to the manifesto put forth by the country bankers he would not blame them, in a matter affecting their own interests, for having thus solicited the aid of members towards a combined resistance; but he must express his hope that members would deem it their duty to decline that indiscriminate invitation.

It would be necessary for him, he said, in the first place, to consider the principle of value; because he feared there was not an universal agreement as to what really constituted the measure of value. First, he would inquire, what was a pound? and what the engagement to pay a pound? Surely the word "pound" meant some

thing more than an abstraction; in his opinion, it meant a certain weight of precious metal of a certain fineness; and the engagement of a maker of a promissory note was to pay on demand a definite amount of that metal and fineness. A real measure of value, in this just sense, had existed till the year 1797, when bank paper became issuable without convertibility into metal. For some years the subject attracted little attention, until the Bullion Committee of 1810 propounded a sounder theory. That theory, however, was then unsatisfactory to a great part of the public; and a notion became very general that a pound was merely an abstraction. He quoted some of the current definitions of that time, whose vagueness excited a good deal of laughter. Similar inaccuracy of opinion seemed to prevail at this day, if he was to judge from the pamphlets now in circulation, particularly from one lately published at Birmingham. It was said, that the change of times required a new standard of value; but just as reasonably might it be urged, that because population had increased, and the railway system widely extended, the foot measure ought henceforth to contain sixteen inches. The reason

why an ounce of gold cost 31. 17s. 10d. in silver was, that this is the real proportion of the one metal to the other; and if you meant to give a certain advantage to all debtors you should do so by way of a direct discount, and not say that an ounce of gold, really worth 31. 17s. 101d. of silver, shall be worth 51. for the future; for here the dealers in those metals would assuredly defeat you. Some writers had argued that gold was

unfit to be a circulating medium, because it was an article of commerce, and there were several theories upon this subject. There was for instance the proposition of Mr. Ricardo, whose principle was that paper should be convertible only when the notes tendered for specie should reach to upwards of a certain high amount; but he preferred to adhere to the present system of a single gold standard and a fivepound note convertible into gold. He would now state his views respecting the principle for the regulation of a paper currency, making a clear distinction between bills of exchange and those promissory notes which, being payable to bearer, served the direct purposes of money. The first Lord Liverpool, a high authority, had enforced this important dis tinction between paper credit and a paper currency. In his time, as in ours, the attempt was made to deter the state from improving the paper currency, by the fear of injuring paper credit. Adhere to the standard of value and to the principle of convertibility, for your promissory notes, and there will be nothing to fear from any quantity of bills of exchange. But he did not agree that mere convertibility was of itself a sufficient guarantee against an over-issue of promissory notes. He admitted, as to most articles, the safety of leaving them free to competition; but the article of currency was one peculiarly circumstanced; it was not an object to produce the greatest quantity of this article at the lowest price. He quoted

evidence to show that where unlimited powers of issue should be in private hands, there could be no complete sympathy between VOL. LXXXVI.

the amount of currency put forth and the state of the moneymarkets; in such circumstances a danger would always exist, that just as there was beginning to be a rise of prices and a drain of gold, the issue of the paper would be increased. Observe the fate of the American issues;-the paralysis which had followed that case was a strong illustration that convertibility alone was not a sufficient guarantee. Now, these were his principles, and he thought it fit to lay them down in all their breadth, though he thereby exposed himself to be afterwards told that he did not practically carry them to their full extent. At all events, he would propose no measures which should be inconsistent with his principles; at all events, he would try to do as little individual harm as possible, and avoid injuring those principles by inducing an opinion that they were incompatible with the safety of private for tunes. It was contended by some that the power of issuing money, whether in metal or paper, should belong to the state; but this, he agreed with Lord Althorp in thinking, was not an expedient principle for a Government to adopt. He would now state the outline of the practical measures which he was prepared to recommend. "I propose, therefore, with respect to the Bank of England, that there should be an actual separation of the two departments of issue and banking-that there should be different officers to each, and a different system of account. I likewise propose, that to the issue-department should be transferred the whole amount of bullion now in the possession of the Bank, and that the issue of bank-rotes should hereafter take place on two foundations, [0]

and two foundations only-first on a definite amount of securities, and after that exclusively upon bullion; so that the action of the public would, in this latter respect, govern the amount of the circulation. There will be no power in the Bank to issue notes on deposits and discount of bills, and the issue-department will have to place to the credit of the bankingdepartment the amount of notes which the issue-department by law will be entitled to issue. With respect to the banking business of the Bank, I propose that it should be governed on precisely the same principles as would regulate any other body dealing with Bank of England notes. The fixed amount of securities on which I propose that the Bank of England should issue notes is 14,000,000l., and the whole of the remainder of the circulation is to be issued exclusively on the foundation of bullion. I propose that there should be a complete and periodical publication of the accounts of the Bank of England, both of the banking and issue department, as tending to increase the credit of the Bank, and to prevent panic and needless alarm. I would therefore enact by law, that there should be returned to the Government a weekly account of the issue of notes by the Bank of England-of the amount of bullion-of the fluctuations of the bullion-of the amount of deposits-in short, an account of every transaction both in the issuedepartment and the banking-department of the Bank of England; and that the Government should forthwith publish unreservedly and weekly a full account of the circulation of the Bank."

Sir Robert Peel next proceeded to explain the regulations pro

posed by him for Private Banks. The general rule would be, to draw a distinction between the privilege of issue and the conduct of banking business; the object being to limit competition, but to make the great change with as little detriment as possible to private interests. From this time no new bank of issue would be constituted; but all the existing banks of issue would be allowed to retain the privilege, upon condition that they do not exceed the present amount, to be calculated upon the average of a term of years. This was necessary to enable the Bank of England to know the extent of issue with which it would have to compete. While the issues would be restricted banking business would be facilitated; the privilege of suing and being sued, at present withheld from Joint-Stock Banks, would be accorded; the law of partnership would be so altered, that while the acts of an individual director or other authorized partner would bind the whole, the acts of an unauthorized partner would not do so; Joint-Stock Banks in London, at present forbidden to accept bills for a date of less than six months, would be placed on an equality with other banks, and allowed to accept bills of any amount and any date. If the last privilege were abused by the circulation of small bills, he should at once appeal to Parliament to correct the evil. Joint-Stock Banks would be required to publish a full and complete periodical list of all partners and directors, and banks of issue to publish an account of their issues,-a much better security for the public than many delusive checks to which his attention had been invited.