At] 
af cash payments the discount of good bills 
falling due at short periods cannot lead 
to any excess in the amount of bank pa- 
per in circulation, appears to your com- 
mittee to be a doctrine wholly erroneous 
i principle, and pregnant with danger- 
ous Consequences in practice, abi 
But betore your committee proceed to 
make such observations upon this theory 
as it appears to them to deserve,. they 
think it right to shew from the evidence, 
to what extent it is entertained by some 
of those individuals who have been at the 
head of the affairs of the bank. The 
ypinions held by those individuals. are 
likely to have an important practical in- 
fluence; and appeared to your commit- 
tee, moreover, the best evidence of what 
has constituted the actual poliey of that 
establishment in its corporate capacity. 
Mr. Whitmore, the late governor of 
the bank, expressly states, ‘¢ The bank 
never force a note in circulation, and 
there will not remain a note in circula- 
tion more than the immediate wants of 
the public require; for no banker, | pre- 
sume, will keep a larger stock of bank- 
notes by him than his immediate pay-_ 
ments require, as he can at alltimes pro- 
cue them.” ‘The reason here assigned 
is more particularly explained by Mr. 
Whitmore, when he says, ‘*'The bank- 
votes would revert to us if there was a 
redundancy in circulation, as no one 
would pay interest for a bank-note that. 
he did not want to make use of.” 
Whitmore further states, ‘‘ The criterion 
by which I judge of the exact proportion 
to be maintained between the occasions 
of the public, and the issues OF the bank, 
is by avoiding as much as possible to dis- 
count what does not appear to be legiti- 
tate mercantile paper.” 
when asked, What measure the court of 
directors has to judge by, whether the 
quantity of bank-notes out in circulation 
js atany time excessive? Mr. Whitmore 
states, that their measure of the security 
or abundance of bank-notes is certainly 
by the: greater or less application that is 
made to them for the discount of good 
- YW Lat? 
overnor, and 
k, stated very 
ip opinion with 
ticular point. 
er in which 
now governor 
distinctiy his com 
Mr, Whitmore wpa 
He referred ‘to t 
bank-notes are issue 
applications made lord 1 
the necessary want of not 
which their issue in amount, is, 
Lit IS 80 Con 
frouled that it can never amount to an 
1 
Mr. ct 
And further, ° 
on the High Price of Gold Bullion. A | 
excess.” He considers *‘ the amount of. 
the bank-notes in circulation as being 
controuled by the occasions of the public, 
for internal purposes;” and that ** from 
the manner in which the issue of banks 
notes is confrouled, the public will never 
call for more than is absolutely necessary 
for their wants.” 
Another director of the bank, JMJzr. 
Harmen, being asked, If he thought that 
the sum total of discounts applied for, 
even though the accommodation alforded. 
should be on the security of goed bills to 
safe persons, might be such as to produce 
some excess in the quantity of the bank 
issues, if fully complied with? he answer- 
ed, ‘* I think if we discount only for solid, 
persons, and such paper as.is for real. 
bona fide transactions, we cannot mates 
rially err.” And he afterwards states,, 
that what he should consider as the test 
of a superabundance would be, ‘* mone 
_ being more plentiful in the market.” 
Tt is matertal to observe, that both Agr. 
Whitmore and Mr. Pearse state that 
“the bank does not comply with the 
whole demand upon them for discounts, 
and that they are never induced, by a 
view to their own profit, to push their 
issues beyond what they deem consistent 
with the public interest.” , 
Another very unportant part of the 
evidence of these gentlemen upon this 
point, 1s contained in the following ex- 
tract: 
‘« Ts it your opinion that the same sg- 
curity would exist against any excess in 
the issues of the bank, if the rate of the. 
discount were reduced from 5/. to 4l. per 
cent.?” Answer.—‘* The security of an 
excess of issue would be, I conceive, pre- 
cisely the same.” Mr. Pearse.—‘* 1 
concur in that answer,” 
“ If it were reduced to 82. per cent.?” 
—IM>r. Whitmore, ‘<I conceive - there 
would be. no difference, if our practice 
remained the saine as now, of not forcing 
a note into circulation.” Mr. Pearse,— 
*“ T concur in that answer.” 
Your committee cannot help again cal= 
ling the attention of the House to the 
view Wh this evidence presents, of the 
consequences which have resulted from 
the peculiar situation in which the Bank 
of England was placed by the suspension 
of cash paymerités So long as the paper 
of the bank was vertible into specie 
i sat the will of the nolder, it was enouch, 
doth form 
the pub 
safety of the bank and for 
WiC Interest in what regarded its 
= 4s latins i 1j hie ees |= ce 
circulating 4 sedium, that the directors 
ajtended only to the character and qua- 
lity 
