neil.) 
~ 
In consequence of the opinion which 
your committee entertain, that, in the 
present artificial condition of the circu- 
lating medium of this country, 1t 1s most 
important to watch the foreign exchanges 
and the market price of gold, your com- 
mittee were desirous to learn, whether 
the directors of the Bank of England 
held the same opinion, and derived from 
it a practical rule forthe controul of their 
circulation ; and particularly whether, ‘in 
the course of the last year, the great de- 
pression of the exchanges, and the great 
rise in the price of gold, had suggested to 
the directors any suspicion of the cur- 
rency of the country being excessive. 
Mr. Whitmore, the late governor of 
the bank, stated to the committee, that, 
in regulating the general amount of the 
loans and discounts, he did *‘* not advert 
to the circumstance of the exchanges; it 
appearing, upon a reference to the 
amount of our notes in circulation, and 
the course of exchange, that they fre- 
guently have no connexion.” He after= 
wards said, ‘* My opinion is, I do not 
know whether it is that of the Bank, that 
the amount of our paper circulation has 
no reference at all to the state of the 
exchange.” And on a subsequent day, 
Mr. Whitmore stated, that ** the present 
unfavourable state of exchange has na 
influence upon the amount of their issues, 
the bank having acted precisely in the 
same way as they did befere.” He was 
likewise asked, Whether, in regulating 
the amount of their circulation, the bank 
ever adverted to the difference between 
tle market and mint price of gold? and 
having desired to have time to consider 
that question, Mr. Whitmore, on a sub- 
sequent day, answered it in the following 
terms, which suggested these further 
questions: 
‘<n taking into consideration the 
amount of your notes out in circulation, 
and in limiting the extent of your dis- 
counts to merchants, do you advert to the 
difference, when such exists, be.ween 
the market and the mint price of gold?— 
We do advert to that, inasmuch as we do 
hot discount at any time for those per- 
sons who we know, or have good reason 
to suppose, export the gold. 
*« Do you not advert to it any farther 
than by ref nr® to such per- 
gons?—-We do advert to it, inasmuch as 
whenever any director thinks it bears 
upon the question of our discounts, and 
pressestto bring forward the discussion. _ 
“ The market price of gold haying, in 
on the High Price of Gold Bullion; 
495 
the course of the last year, risen as high 
as 4/. 10s, or 4/. 12s. has that circum. 
stance been taken into consideration by 
you, so as to have had any effect in dimi- 
nishing or enlarging the amount of the 
outstanding demands?—lIt has not been 
taken into consideration by me in that 
view.” 
Mr. Pearse, now governor of the bank, 
agreed with Mr. Whitmore in this 
account of the practice of the bank, and 
expressed his full concurrence in the 
same opinion. ~ 
Mr. Pearse.—“ In considering this 
subject, with reference to the manner in 
which bank-notes are issued, resulting 
from the applications made for discounts 
to supply the necessary want of bank- 
notes, by which their issue in amount is 
su controuled that it can never amount to 
an excess, I cannot see how the amount 
of hank-notes issued can operate upon 
the price of bullion, or the state of the 
exchanges, and therefere I am individu- 
ally of opinion that the price of bullion, 
or the state of the exchanges, can never 
be a reason for lessening the amount of 
bank-notes to be issued, always under= 
standing the controul which [ have al. 
ready described. 
“Ts the governor of the bank of the 
same opinion which has now been ex. 
pressed hy the deputy governor? 
Mr. Whitmore.—‘*I am so much of 
the same opinion, that I never think ig 
necessary to advert to the price of gold, 
or the state of the exchange, on the days 
on which we make eur advances. ; 
“¢ Do you advert to these two. circume 
stances with a view to regulate the ge= 
_neral amount of your advances?—I deo 
not advert to it with a view to our yenes 
ral advances, conceiving it not to bear 
upon the question.” 
And Mr. Harman, another bank di- 
rector, expressed his opinion in these 
terms: ‘] must very materially alter my 
Opinions, before I can suppose that the 
exchanges will be influenced by any moe 
difications of our paper currency.” 
The committee cannot refrain from 
expressing it to be their opinion, after a- 
very deliberate consideration of this part 
of the subject, that it is a great practical 
error to suppose that the exchanges with 
foreign countries, and the price of bule 
hon, are not liable to be aflected by the 
amount of a paper curreacy, which is 
issued without the condition of payment 
in specie at the will of the holder, That 
the exchanges will be lowered, and the 
tty yas makes price 
