464 ANNUAL REGISTER, 1810. 



the evidence of these gentlemen 

 upon the point, is contained in the 

 following extract : 



" Is it your opinion that the same 

 security would exist against any 

 excess in the issues of the bank, 

 if the rate of the discount were re- 

 duced from 51. to 4/. per cent. ?" 

 Answer. — " The security of an ex- 

 cess of issue would be, I conceive, 

 precisely the same." Mr. Pearse. 

 — " I concur in that answer." 



"If it were reduced to 3^. per 

 cent.?" — Mr. Whitmore, " I con- 

 ceive there would be no difference, 

 if our practice remained the same 

 as now, of not forcing a note into 

 circulation." Mr. Fcarse. — " I 

 concur in that answer.'' 



Your committee cannot help 

 again calling the attention of the 

 House to the view which this evi- 

 dence presents of the consequen- 

 ces which have resulted from the 

 peculiar situation in which the 

 Bank of England was placed by 

 the suspension of cash payments. 

 So long as the paper of the bank 

 was convertible into specie at the 

 will of the holder, it was enough, 

 both for the safety of the bank 

 and for the public interest in what 

 regarded its circulating medium, 

 that the directors attended only to 

 the character and quality of the 

 bills discounted, as real ones, and 

 payable at fixed and short periods. 

 They could not much exceed the 

 proper bounds in respect of the 

 quantity and amount of bills dis- 

 counted, so as thereby to produce 

 an excess of their paper in circu- 

 lation, without quickly finding 

 that the surplus returned upon 

 themselves in demand for specie. 

 The private intt rest of the bank to 

 guard themselves against a conti- 

 nued demand of that nature, was 

 a sufficient protection for the 



public against any such excess of 

 bank paper, as w^ould occasion a 

 material fall in the relative value 

 of the circulating medium. 



The restriction of cash-pay- 

 ments, as has already been shewn, 

 having rendered the same pre- 

 ventive policy no longer necessary 

 to the bank, has removed that 

 check upon its issues which was 

 the public security against an 

 excess. When the bank directors 

 were no longer exposed to the in- 

 convenience of a drain upon them 

 for gold, they naturally felt that 

 they had no such inconvenience to 

 "uard afrainst bv a more restrained 

 system of discounts and advances ; 

 and it was very natural for them to 

 pursue as before (but without that 

 sort of guard and limitation, which 

 was now become unnecessary to 

 their own security ) the same 

 liberal and prudent system of 

 commercial advances from which 

 the prosperity of their own esta- 

 blishment had resulted, as well as 

 in a great degree the commercial 

 prosperity of the wholecountry. It 

 was natural for the bank directors 

 to believe, that nothing but benefit 

 could accrue to the public at large, 

 while they saw the growth of bank 

 profits go hand in hand with the 

 accommodations granted to the 

 merchantsj It was hardly to be 

 expected of the directors of the 

 bank, that they should be fully 

 aware of the consequences that 

 might result from their pursuing, 

 after the suspension of cash pay- 

 ments, the same system which they 

 had found a safe one before. To 

 watch the operation of so new a 

 law, and to provide against the in- 

 jury which might result from it to 

 the public interests, was the pro- 

 vince, not so much of the bank as 

 of the legislature ; and, in the opi- 



