no unfavourable impression would arise from its being stated as only equal to a third of their liabilities. No bank which deserved good credit would be injured by publicity of accounts, though one that did not might suffer. Touching the management of the Bank of England, witness conceives that the state of the foreign exchanges forms the test by which they should administer their circulation. Under the system of publicity the Bank would have been better able to render assistance during the distressing period of 1825 than it was actually; for the Directors would have been restrained from making such extensive issues during the months anterior to the distress, when the world was in a state of artificial excitement, when the exchanges were adverse, and gold going out of the country. Their conduct afterwards, at the crisis, was liberal and daring, and was approved by the result; but they certainly ran the matter very close upon a suspension. Although the exchanges had then turned in our favour, the internal demand for gold, owing to the discredit of country notes, might, notwithstanding, have drained the Bank of its remaining bullion. Such increased issues might at the same time, by restoring confidence in the country, have prevented rather than augmented the demand for gold. As a banker, deeply interested in the commercial prosperity of the country, witness would not only feel no alarm, but an increased security, if it were decided that the accounts of the Bank of England were made public. He conceives that drains for bullion are less likely to occur under a system of continuous publication. We would feel no alarm for the effect of immediate publication. If such a principle should be acted on, he thinks the publication should take place weekly. Every bank of issue in the kingdom, including Scotland and Ireland, should, on the same principles, declare their accounts; but the difficulties of concentration make it a question whether they should also do it weekly. Publicity would not compel banks of issue to keep a greater stock of bullion than they ought to do under any circumstances; for, as to political discredit, that is one of the contingencies they must be prepared to meet. Designing alarmists may, as it is, spread abroad reports more exciting than the reality. If political discredit is such as to cause an unusual drain, it will do so whether the stock of bullion be published or not. Besides, with publicity no bank would ever suffer its affairs to be in such a condition as would convey to a reasonable man the least apprehension of its failing. Witness was here examined as to what might have been the effect of a publication of the stock of bullion in the Bank on a given day, during the crisis of 1825. In answer, he dwelt on the distinction that ought to be made between one special announcement made at a critical period, and a continuous course of publication. Had the latter previously obtained, the amount of gold would probably never have declined so dangerously low; and as it was, the thing became notorious enough. Banks of deposit, and all banks not of issue, might be exempted from the law of publication, as they only deal with specific individuals, and have no trust reposed in them by the general public. Yet there would

thence be little danger of existing banks of issue declining that part of their business on this account, if their affairs were solvent and flourishing. Assuming that any bank did so determine, the place of its notes would soon be filled up by those of wealthy banks, not finding the obligation of publicity either burdensome or discreditable. If, with publication, an increased reserve of gold did prove necessary, the loss of profit thereon would discourage some bankers; but that has been before denied likelihood. Witness does not imagine, that if the Bank had in 1825 suspended payments, the event would have at once annihilated all transaction. Much would have depended on whether the Bank Directors kept their circulation only at the amount they would have done under a necessity of paying in gold: if so, then merchants would have stood, in relation to debits and credits, just as if convertibility had continued. But, if the Directors had chosen to depreciate their paper, the effect on trade and property would have been commensurate. Meanwhile, there would have been a painful insecurity as to what might be the effect of resumed payments,-a general uneasiness as to how long the supension would continue-and an uncertainty as to what might be the value of the paper during the interval of suspension. It is very probable that in such case an inquiry would have been made into the affairs of the Bank, and that, if upon that inquiry it appeared a solvent Company, the merchants and bankers would have met, as in 1797, and declared their readiness to take Bank notes until a convenient time for resuming cash payments arrived. In May last, 1832, there was a considerable draft on the treasure of the Bank from political causes. Witness submits on this, that, if a certain number of the population enter into a conspiracy for the purpose, of course they might drain the Bank of its treasure, whatever might be the amount, and whether declared or not. An authorised account would only inform the public of what they could guess without, and would prevent blind and unthinking parties, not in the conspiracy, from increasing the run through the fears excited by artful misrepresentation. Besides, in the continuous series of accounts he proposes, there would be exhibited the liabilities of the Bank on one side, and its securities and bullion on the other; so that when any report showed the stock of bullion diminished, it would also exhibit a diminution of notes and deposits on the debit. People do not usually think of this relative consideration. In the accounts, the two facts would be brought at once before the eye of every man. 2. Recommends making Bank of England Notes, a legal tender by Country Bankers. (p. 4684.)

As a further change in the banking system of England, witness recommends the making country bank notes payable in Bank of England notes only; which he conceives would operate to save a great drain for gold upon the Bank in times of commercial discredit. There would then be no obligation to furnish specie when it was not wanted for circulation, but merely as a substitute for suspected

notes. The quantity of gold needed for the circulation in the absence of notes under 51. must remain. He does not think that inconvenience would result to persons wanting gold for the ordinary purposes of circulation; for though in times of alarm, bankers would resist payment in gold, none of them would decline accommodating customers with a reasonable quantity at other times, and for ordinary uses; neither that any would exact a premium, being under the control of competition. There would be motive sufficient for retaining the quantity of gold required for the circulation. In that persuasion, he does not imagine any outcry for a smaller currency, on the introduction of 17. Bank of England notes. The law being thus altered, an alteration in the form of the promissory note would of course be proper. It should run, "I promise to pay on demand, 5l. in Bank of England notes." With regard to outstanding notes, a day might be named, after which the holders, not having presented them, should be understood to acquiesce in the new arrangement. Witness has not considered how far it might be useful to enable others as well as country bankers to pay in bank notes; but sees no impossibility in making them a legal tender from such bankers exclusively. It is to be admitted that, under this system, money being only to be demanded at the Bank of England, and no where else, a man who could only procure notes from his banker might be placed in a position of difficulty by a creditor who demanded gold. Depositors should be placed in the same predicament with note holders. The bankers would, of course, still be compelled to pay checks below five pounds in gold, and thence attempts might be made to force them, by dividing checks for a larger sum; but this manœuvre they could counteract by sending the drawer his whole deposit at once in notes. There is very little likelihood that, in times of aların, Bank of England notes would fall to a discount in remote districts, because the note holder would generally be satisfied with the sort of substitute the law had provided him for his distrusted local note. If he had the legal option of choosing each, he might ask for it, under the impression that the law did not consider Bank of England paper as a fuli and adequate security, beyond all risk or suspicion; whereas, if he had no such option, the implied guarantee of the legislature would induce him to be satisfied with the bank note. Witness professes to be aware that the smaller holders would be most likely to carry alarm to a height, and yet, notwithstanding, to think that they would be satisfied by Bank of England notes. He had heard that, during the late political run, the distrust was against Bank of England notes, and not against country paper; but that, being the case again under the proposed regulation, would not affect its validity, for then there would not be any run at all. In Lancashire, where there is no circulation but in Bank of England paper, banking has always been conducted without distrust, and on a very solid footing. Witness, therefore, conceives it a fair inference that bank notes would satisfy equally elsewhere. Witness, not being aware

whether merchants in Dublin and Edinburgh remit to the continent through London, or direct, cannot say what effect the suggested alteration might have on their transactions, but admits that, if they remit direct, it might cause a diminished value of bank notes at those places equivalent to the expense of getting gold from London. The one pound and two pound notes in Scotland, he presumes, must continue payable in gold. As for the country bankers in Ireland, they ought also to be made to pay in Bank of England paper, unless it were found advisable to make Bank of Ireland notes the ultimate solvent, treating that country as a local whole in itself. If it were not so treated, then the Bank of Ireland should be included in the general law for paying in Bank of England notes. Even now, witness believes, that when the Bank of Ireland and the provincial banks in Ireland, settle their exchanges, the balance is discharged in London in Bank of England notes. He allows, that if he is mistaken in supposing that the public would be content with bank notes, and that they would not make application in London for gold, little or nothing would be gained by this alteration in the law; for his expectation is, that such a state of the law would give a confidence in the bank note which it would not obtain if the receipt were optional. It would make no difference to the country banker, as regards his profits, whether he paid in notes or in gold; he would have to keep the same quantity of the one or the other by him. In times of pressure, however, it would be a benefit, from enabling him to get accommodation in London more easily. The great advantage in the alteration witness proposes would be, that, instead of country bankers coming to London and carrying off large supplies of gold in seasons of pressure, they would take down chiefly paper; thus preserving the Bank from extraordinary drains, uncalled for by the general security of the country. Witness is opposed to the policy of a return to 17. and 21. Bank of England notes, considering them so liable, in periods of pressure, to create derangement and extend alarm.

3. The chief Profit of the Bank Circulation ought to be enjoyed by Government. (p. 4747.)

He would have the Bank of England compelled to pay over to the public all profit upon their circulation, saving so much as might be a fair remuneration for the trouble and risk of administering the details of it. This should be accounted for directly to government, and not be made a set-off in any bargain made as to the management of the national debt. In point of principle, country bankers might also be called on to give up their profits on the circulation; but seeing that a number of parties, every where out of the metropolis, have acquired a certain established interest in the circulation, it would be throwing them out of their business to deal similarly with them. Had they all charters expiring, like the Bank, they might be ruled afresh. It is in consideration of the circulation of London being capable of yielding a profit, and of

that circulation being at the disposal of Parliament, witness holds that terms may be exacted from the body to be endowed with its administration.

4. The Circulation better in the hands of the Bank than a Government Board. (p. 4750.)

He thinks that under the always assumed check of full and continuous publicity, the Bank, managed as it is by directors chosen within the body of commercial men, is likely to be conducted as a bank of issue purely, better than an issuing bank directed by government commissioners. Persons chosen by the government might equal the directors in commercial knowledge, and power of accommodating the trading world; but it might not be easy for such commissioners to equal the directors in reputation for incorruptible integrity, even though as deserving in reality. The commercial position of the latter puts out the idea of intentional dishonesty. Apart from this a bank circulation is preferable to a direct government circulation, as affording greater security against violent interference and intentional debasement. Moreover it represents a great mass of private or corporate funds, pledged to the holders of notes, in addition to the capital lent to government. Finally, the metropolis has been long habituated to a Bank circulation. There can be no doubt that a board of commissioners would have been quite as ready to run the salutary risk incurred by the Bank directors in 1825; probably more so, because they would less fear the evils of a suspension. Commissioners would not be so likely to resist the solicitation of an embarrassed government, at any juncture, as the present directors. The choice of directors is nominally in the Bank proprietors; but, in practice, the board itself fills up all vacancies; and, in the opinion of witness, that course is better on the whole for the public, than if the proprietors, in mass, interfered more directly. The responsibility of the directors is more keenly felt towards the public in general, than towards their own proprietors. Publicity would operate to keep the Bank directors acting on a fixed principle; because, supposing it understood they were bound to govern their issues by the foreign exchanges, it would then be always obvious to the public whether they conformed to the rule strictly or not.

5. More Banks of issue in London than one, mischievous. (p. 4763.) More than one joint stock bank of issue in the metropolis would be mischievous. If you have only one such bank, you get the circulation considered as a whole, which would be impossible were it distributed among six, or eight, or ten banks. No one among these competing banks would be either able or willing to measure its separate issues with reference to the total amount of circulating medium required, Each might unseasonably maintain, or extend its issues, taking the chance of being able to supplant the notes of other banks. In the provinces evils of the same nature would arise. Many stock banks in a district would present less security