GENERAL HISTORY. 



[69 



the paper currency that we have 

 hitherto possessed. At present 

 our paper currency was not of 

 equal security in different parts 

 of the liingdom. Scotland, from 

 the nature of its currency, and 

 the extent of the capital of the 

 persons engaged in banking, had 

 had no considerable failures, and 

 enjoyed great advantages in the 

 security of her paper circulation. 

 In England however, and still 

 more in Ireland, that was not the 

 case ; but all the inconveniences 

 arising out of the insecurity of 

 the paper of private bankers, 

 might be prevented by the adop- 

 tion of the plan that he was 

 about to propose. In that plan 

 he wished to keep in view the 

 diiference between that part of 

 the paper currency which might 

 be considered as the immediate 

 representative of cash, and notes 

 of larger value, which in some 

 respect answered a different pur- 

 pose. It was when the metallic 

 currency was first suspended by 

 the act prohibiting cash payments 

 by the Bank of England, that 

 permission was given to circulate 

 notes under five pounds, awd of 

 not less than twenty shillings 

 value. This permission had been 

 renewed from time to time ; and 

 the period now fixed for the cir- 

 culation of these notes was one 

 year after the expiration of the 

 term at which the suspension of 

 cash payments should terminate. 

 The Suspension act would expire 

 on the 5th of July 1818 ; but as 

 he should also propose the conti- 

 nuance of the suspension for 

 another year, it was his intention 

 also to propose that the alteration 

 with respect to the circulation of 

 private bankers, should not take 



place before the fith of July 

 1820. After this date, he meant 

 to propose that no private banker 

 in England or Ireland should 

 issue notes for any sum under 

 five pounds, without having made 

 a sufficient deposit of govern- 

 ment securities, consisting either 

 of stock or of exchequer bills. 

 He therefore proposed that it 

 should be enacted, that every 

 private banker should transfer into 

 the names of the commissioners 

 for the reduction of the national 

 debt, an amount of stock double 

 to that of the nominal value of 

 the notes of that description issued 

 by them, or deposit in the hands 

 of the commissioners exchequer 

 bills of equal value to that issue. 

 The cause of the difference which 

 he recommended in tiiis respect 

 was, that from the frequent fluc- 

 tuation in the price of stock, the 

 nominal value of the notes in 

 stock might turn out to be a very 

 inadequate security. 



This was the general outline of 

 his plan, the details would of 

 course be a matter of much deli- 

 beration. He, however, took 

 the occasion to answer at some 

 length two objections w^iich 

 might be made to the plan ; one, 

 that the measure proposed would 

 tend to produce a great and unli- 

 mited paper circulation ; the 

 other, that the circulation of 

 paper under the value of five 

 pounds was not so profitable to the 

 banker as to induce him to con- 

 tinue it under the circumstances 

 of a deposit. The chancellor 

 of the exchequer concluded with 

 moving, " That leave be given to 

 bring in a bill for farther continu- 

 ing an act of the 'tith year of his 

 present majesty to continue the 

 restrictions 



