The Peel Bank Act of 18^. 
391 
The Bullion Report, however, grew in favor, and its doctrines 
also prevailed largely in the business world. There always 
existed as in France a feeling of opposition to a favored bank. 
And in the case of the Bank of England this might have been 
increased by the stringent measures it had at times been com¬ 
pelled to take. Any distress therefore was most naturally 
coupled with some defect or abuse connected with the bank. 1 
In 1819, parliament appointed the “Bank Committee. ” It was 
in connection with the report brought in by this committee that 
arrangements for the re-establishment of gold redemption were 
finally made. 
A distinct school of theorists was now gradually growing up 
who, in reasoning upon the currency, started from the idea of 
a general level of prices brought about by the action of inter¬ 
national trade upon a purely metallic currency. Each country 
naturally attracts that portion of the money of the world which 
corresponds with the amount of business done within it. The 
fluctuations of such a currency, it was held, are the natural ones, 
and such as are necessary to effect a continual self-regulation of 
prices. If now a paper currency be introduced it is necessary 
that changes in its amount shall be made to exactly coincide 
with those in the bullion as effected by the balance of trade. 
To insure this harmonious variation the mere convertability of 
notes to coin was not considered as sufficient. The fact that 
the Bullion Committee had advocated in their report a return to 
specie redemptions as a sufficient measure to re-establish normal 
conditions in England, shows that there existed a difference be¬ 
tween the theory there contained and that of the“ currency” school. 
There is in both, however, the same tendency manifested, to an 
exclusive consideration of the quantity of money in a country, as 
the determinant of its value. The theory laid down in the 
Bullion Report, and the tendencies contained in it, could only 
logically develop into a pure quantity theory. The influence of 
the restriction period is seen in the application of a theory, 
loosely drawn from experience with an irredeemable paper 
1 Wagner, Peel’schen Bankacte, pp. 15-22, also 257-258, and Tooke, V, 
p. 527. 
