consequently the value of every man's property in it--a most extraordinary power to be vested in any body of men and before proceeding further, it may be useful to examine the nature of the responsibility under which this power is exercised.

The Bank of England is a Joint Stock Company, originally instituted for the private gain of its stockholders, for which purpose it is continued by its Proprietors up to the present day. It early obtained the monopoly of Banking in England as against Joint Stock Companies by Act of Parliament, which declared that no other Bank for the issuing of notes and bills of exchange should have more than six partners. This indirectly secured it the ordinary banking business of the state, as it prevented any other banking establishment being formed of sufficient credit to be entrusted with the large transactions of the Government. In the same manner it likewise secured it the circulation of London. London Bankers, if they please, may issue notes the same as Country Bankers, and at one time we believe they did so. But from a remote period, the circulation of the metropolis, owing to the superior credit of the Bank, has by the private Bankers been entirely left to it, with the understanding that it should not attempt to interfere with their private trade, for which, until lately, the Bank never offered any facilities. It has thus obtained a kind of prescriptive

right to the monopoly of the London circulation, which right has been now for so long a time considered beneficial to the public as well as to the Bank, that it is not probable the legislature would have permitted it to have been interfered with at any time during the last half century without their express sanction.

The Bank of England may, therefore, be said to be secured by law, at once a monopoly of the business of Government, and of the circulation of London: from which two sources the chief part of its profits is derived. The Bank is consequently so dependent upon the Government, that the wishes of the Ministers must necessarily be a law with them. And it appears by the evidence of the Directors that they are at all times ready to submit their affairs to them for their advice and direction. The Directors, however, are only responsible to their stockholders, of whom they are are the sworn servants. But it is so much the interest of the Bank to satisfy the Government, that they attend to the true interest of their establishment in the most effectual manner when they do so, even though at some present sacrifice. The stockholders are consequently willing to leave the management of the Bank entirely to the Directors, who, more especially in reference to the circulation, never take any step without the approbation of the Ministers. The consequence

of which is, that Ministers exercise a considerable influence over the administration of the currency. But as they derive this from the Bank as a matter of grace and favour, they are not at all responsible to Parliament for any advice they may give, neither are they compelled to render any account of such advice: while the Bank itself is not responsible to Parliament in any degree. As nobody can thus be called to an account, so no account is given, except perhaps once in fifteen or twenty years, when such an investigation as the present occurs, and then, if blame be found to attach to the management, no one is chargeable with it. The Ministers and the Bank divide the responsibility between them, and are both changeable bodies. But even if this latter were not the case, no person would have any objection to be wrong in such good company. In point of fact, therefore, there is no responsibility either actual or moral-no one can be called to any account, and no individual ever feels himself personally implicated in any charge of mismanagement. That the circulation has always been managed with great integrity, no doubt can be entertained. And if, as Mr. Richardson, one of the Directors, appears to think, integrity were the only thing necessary, we apprehend that no valid objection to the present system could be made. But where - one blunder might be more fatal, (if it should

Ꭰ

occasion a panic for instance,) than a thousand frauds, integrity is by no means the only requisite qualification.

Generally speaking, great trusts ought never to be placed in the hands of persons who are not responsible for their execution. On the contrary, those persons ought to be compelled to render an exact account of their management; and there should be a power vested somewhere of replacing them by others more competent, should it appear that their proceedings are not governed with sufficient judgment. It is altogether monstrous in principle, that so great a trust as that reposed in the Bank of England should exist, not only without any actual responsibility, but even without any knowledge on the part of the nation as to the manner in which it is administered. And the only excuse for the existence of such an anomaly in a constitutional Government which could be offered, would be that of finding the administration of it so good, that no change could materially improve it, and that however dangerous such a trust may seem in principle, it is, in practice at least, unobjectionable.

This latter, indeed, we might reasonably expect to find the case. The Bank Directors being sensible men, and acquainted with the practical detail of business on the one hand, and the Ministers being men, it might reasonably be presumed, acquainted with general principles

on the other, we might infer that between them the management of the circulation would be as perfect as the system would admit that if the Directors should be deficient in the knowledge of general principles, and disposed to act upon narrow views arising out of their own limited experience, they would be corrected in this by the Ministers; while, on the other hand, the practical knowledge of the Directors would enable them to test the soundness of any advice which the Ministers might offer, so that between the two we might look for a combination of all that was correct in theory with all that was sensible in practice; and the question we have now to ascertain, so far as the evidence before the Committee throws light upon it, is, whether this happy result has been obtained?

The first objects consequently to which our attention is naturally directed, are the principles and rules by which the Bank profess to be governed. These are described by Mr. Palmer as follows:

QUES. (72)—“ What is the principle by which "in ordinary times the Bank is guided in the regulation of their issues?"

ANS." The principle, with reference to the period of a full currency, and consequently a par "of exchange, by which the Bank is guided in the regulation of their issues, (excepting under spe