'Though the official printer has not found it convenient to

supply the subscribers to the Parliamentary Papers, or even the Members of the House of Commons, with their copies of the Evidence given before the Committee on the Bank Charter. some extracts from that evidence appeared in the Metropolitan Magazine for the present month; and the Courier having afterwards been fortunate enough to obtain a copy of the whole, has in the course of the -week published a considerable portion of the examination, as well as of the documents that were laid before the Committee. On the fragments of evidence as they have successively appeared, the Daily Journals, in the extreme scarceness of other topics, have been busily engaged in commenting; and it will perhaps be expected that in this we should follow their example. But we have several reasons for deferring this task. One word, in the first place, on the value of such an inquiry as that with the results of which we are now engaged. That many curious and some important facts are contained in the evidence before the Bank Committee, we do not mean to deny. This has arisen, less from the aptitude of a Parliamentary Committee for the eliciting of truth, than from the peculiar nature of the subjict inquired into. The whole of the Bank affairs, up to the present publication, have been, for many years, a profound secret, to the knowledge of which none but .the initiated, and these very few in .number, were admitted. The profanum vulgus-*healer proprietors or non-proprietors, whether directly or indirectly interested—have been compelled to wait on the outside of thetemple, while-the mysteries of Regina Pecunia were being cele brated within; and unless by the imprudence or treachery of some of the officiating priests, they have had no opportunity of obtain_ ing even a distant glimpse of their nature or object. It would have been folly to expect that every finer veil of concealment was to be removed by the voluntary testimony of the Directors ; yet it was impossible for these gentlemen to give evidence without exposing the more prominent parts of the machinery. Farther than this, the advantages to be derived from the Committee's labours are questionable. The manner in which such labours are entered on and completed, is pretty nearly the same in every instance. The party by which the Committee is procured have a case to make out ; either they wish to defend and continue some institution or system, or to abolish or modify it. They go into Committee with the old scheme or the new, as the case may be. The questions are deliberated and arranged ; the witnesses are selected ; and the catechist and. catechumen are equally instructed before either comes into court. No evidence is sought, and no evidence is given, but such as makes for the common purpose of him that seeks and him that gives. If, in the Committee, there be an opposition party—which, for the saving of appearances, there generally is,—their questions and witnesses are regulated by the same principle. Of crossexamination there is little ; and that little being managed by men unaccustomed to the task, is seldom of much value. Besides, cross-examination is chiefly directed to the ascertaining of facts; and the evidence before House of Commons Committees contains, for the most part, little else than opinions. Add to this deficiency of the means of cross-examining, the fact that such evidence is not given on oath, and that variation or contradiction involves no penalty, and it may be easily seen that the result of a House of Commons Committee will generally be the establishment of such truths only as the witnesses have an interest in establishing, and no more.

If each of the persons examined before the Bank Committee had written a pamphlet on the various subjects to be discussed on the question of the renewal of the Bank Charter, a collection of these pamphlets would have furnished very nearly as solid grounds of conclusion as the report of the evidence does. Mr. PAGE, better known by his assumed signature of Daniel Hardcastle, has done so in the columns of the Times; and his replies there, to questions which were meant to be put, are quite as valuable as they would have been, in Old Palace Yard, to questions that had. been put. Such being the general conduct of Committees, and such the authenticity of statements ma.de before them, we might, even on these grounds, stand excused from deciding on so complicated and. important a question as that of the Bank Charter, by any data they can furnish. But, in the present case, we labour under a double difficulty: not only is the evidence defective from the same causes that render all such evidence defective; but, imperfect as it is, we have not the whole of it. For, though the Times now boasts of a complete copy, we cannot go so far; and if we could, we should ask somewhat longer than twenty-four hours for its accurate analysis. We intend therefore to defer all attempts at a discussion of the question, until, in the form of one of those Supplements to our paper which we have announced as in preparation, we can discuss it fully and satisfactorily. We shall not only, by that time, have the additional information which will be added from private sources, but, in the sifting to which the evidence will not fail to be subjected by those who are opposed to the renewal of the Charter, we shall be put in possession of the only real cross-examination to which House of Commons witnesses are ever subjected. The following extracts from the evidence now before us, we quote as matter of curiosity chiefly. From some evidence given by Mr. WARD, it would. not appear that the Court of Directors have as yet entirely. agreed on any general system; • and previous to 1827, the majority seem to have been very much inclined to proceed.at haphazard. The rule which seems now to regulate the Directors is very simple—it consists in little else than in moving when they are impelled. The end and object of such a Bank as the Bank of England, is described by Mr. HORSLEY PALMER, the Governor— In case of a deficiency of capital for carrying on the concerns of the country, and that it cannot be procured from private bankers or brokers, would not the aid of the Bank of England in discounting bills be very advantageous to the country ?—I do not blow what is meant by a deficiency of capital as respece the Bank. In a time of discredit, it is extremely desirable that the Bank should grant the requisite aid to the public by an increased issue of their notes; and there are times when the Bank may afford considerable facilities to the commercial interests through discounts, by changing a part of their Exchequer Bills into securities of the former character.

Then you think that the Bank of England should, be a bank of discounts ordY in cases of emergency?—! think so, with the exceptions above referred to.

Is not the accommodation of discount to the commerce of the country one of the main objects for which the Bank has ever been instituted, and for which all banks are instituted ?—As an exclusive bank of issue in the capital, it appears to me that it cannot beneficially conduct a discount account to any great extent with individuals, except in times of discredit. When the circulation is full, a competition with the bankers would, in all probability, lead to excess, in addition to other difficulties which would occur in the attempt on the part of the Bank of England to regulate their issues through that channel. Then you consider that it ceases to become the paramount duty of the Bank, because there are other bodies, in the shape of private bankers, and so on, that do it ?—Yes, who employ -the circulation. What do you consider as the principal function which it is the duty of the Bank to perform ?—To furnish the paper money with which the public act around them, and to-be a place of safe deposit for the public money, or for the money of individuals who prefer a public body, like the Bank, to private bankers. Are not those functions the functions of a Government rather than a private company ?— That is for the Government to determine.

Mr. PALMER'S account of the internal management is curious. The same subject is repeatedly touched upon in the Evidence. It was indeed that which was most likely to arrest the Committee's attention ; •for it was that which they knew least about— Can you recollect how long it is since there was any contested election of Directors for the Bank of England ?—No, I cannot. Has there been any within your memory ?--There was one vote given at the last election for an individual not included in the list of candidates. I do not recollect any regular canvass.

What is the amount of stock that a proprietor must hold to qualify him to vote ?—Five hundred pounds. What is the amount of stock that qualifies for a seat in the Court of Directors ? —Two thousand pounds. Does not the Whole list of candidates come to the Court of Proprietors recommended by the Court of Directors themselves?—Yes. Is there not an annual change ?—Eight go out and eight conic in, every year. And those eight that come in are generally recommended by the Court of Directors ?—They are. There is not, in geueral, any application made by individuals to be placed in the Court of Directors ?—Not What is your opinion of the effect of eight Directors retiring each year?—! am not aware of any lenticular effect being produced.

Are you aware of any prejudicial effect n_saio.

Is it not the fact thst the Directers of the Bank of England for many years past have thought it right not themselves to he very large holders of Bank Stock? —I do not believe that any Director of the Bank of England holds more than his qualification.

Is it not true that, in the month of May 1816, when the Bank made a most magnificent donation to the proprietors the Bank Directors remained just as they did before, small proprietors of stock ?—I believe so.

Has there been any change made in the duration of time for which any officers of the Bank of England have been elected, within the last year or two ?

The Governor and Deputy-Governor have each been elected for a year ?— Except upon the last occasion, when I have been allowed to continue, under the particular circumstances of this inquiry.

In the choice of new Directors, is it not the practice of the Court to look with attention at the private character of the new Director in all points of view ? —As far as 1 hove been concerned, that has been the invariable practice. If an individual was to be offered as a member of the Directors would not the Court of Directors consider it their duty to inquire into the whole character of that individual ; and would they not give 'him that influence which, as a body, the Court of Directors have, according to the opinion they form after their inquiries were made ?-s-I believe so. Do the Bank endeavour to equalize, as far as they can, the circulation of the country during the whole course of the year ?--They endeavour to equalize the circulation of London at the termination of every quarter, within about a month of the expiration of the quarter ; when they offer to the public at large the issue of any notes that may-be requirednat what may be the market rate of interest, upon the deposit of approved securities; and that is done for the purpose of relieving the scarcity that may be supposed to arise from the payments into the Exchequer.

How long. is it since that regulation has been adopted ?— About three years. Has it not been attended with the most beneficial consequences ?—It has been stated so.

And you believe so ?—Yes. By good securities, do you mean,all Government securities, including Stock? —The Bank have of late, upon one occasion, advanced about 300,0001. upon Stock ; but only upon one occasion, and that was under particular circumstances. When measures of importance are about to be taken with respect to the enlargement or contraction of the issues, are the Directors at large consulted, or are steps of that sort taken on the responsibility of a select portion of the Directors ?—The. Court of Directors are -apprized of every transaction of that sort as it occurs.

. Before it occurs, or afterwards?—! can hardly sa.y before it occurs, because there may, at times be a day or two intervening. The Governor is supposed -to have the responsibility, for a few days between the intervening Courts, of taking any measure of that nature that may be deemed desirable.

Practically, be and the Select Committee conduct the business of the Bank in the intervals between the sittings of the Court ?—Yes; but nothing of any consequence can be acted upon without the full knowledge and concurrence of the .Court of Directors. No action of any extent, that ever I was aware of, has taken place without the Court being apprized of the principle that :governed that action.

How is the Select Committee formed; is it by rotation, or by agreement .amongst the Directors to attend ?—It consists of the senior Directors of the Bank, who have passed the chair. Then no person is on the Select Committee who has not passed the chair?— No, with the exception of the Director immediately succeeding in rotation to the -deputy-chair.

Does the Governor himself extend or contract the currency without communicating; with the Directors?—I never knew a Governor take upon himself the responsibility of acting to any extent without the concurrence of the Court of Din:tams. It is usual' upon any extraordinary emergency to summon the Court specially? —Certainly not; if an emergency were to arise similar to the year 1825, the Court would be specially summoned, and they were so during that period.

With reference to some of the great principles of management that you mentioned on the former day, such as not favouring commercial discount, and acting, in contracting your issues when the exchange is adverse, accontling to your definition of an adverse exchange, have' those principles been recognized and discussed by the Directors at large, or are they only principles brought into action . by the Select Committee as the occasions may have arisen ?—All matters relative to the management have been recognized by the Court at-large. After discussion ?-e-Discussion has taken place, and the' principlehas been recognized.

Were you rightly understood that, in the event of an unfavourable exchange for n length of time, the Court of Directors took no measures, by contracting their issues, to amend the-course of exchange?—/ mean to maintain that the Court of Directors have taken no measures; within the last period of eighteen months or two years, for the purpose of contracting the circulation; that the contraction lies been-almost:effected entirelyhy the-return of .notes for gold and silver.

How long have the Bank conducted their affairs upon this principle ?—The Bank have not had the power of acting upon any fixed principle till a late period, subsequent totheyear 1825.

Why was that ?-..-From various circumstances that existed prior to that period; from the-year 1-819 to 1822, the-preparation fer return to cash payments

• rinderthe order of the House of Courinonsntlie-conflicting character of the-circulation ofthe cotuetrynnd London, governed .213' iheeountry was by a-small-note circulation. So long is the 13ank was liable to that internal demand, the Bank could hardly be expected to adopt any system suds as I have alluded to.

Will you explain more at large, in what way the state of the small-note.eirculotion operated so as to interfere with the management of the Bank ?—It rendered the Bank liable to a very great sudden demand : for instance, in the year 1825, from October to the let of December, the demand upon the Bank was nearly two millions and a half sterling for the support of the country circulation, when the exchanges were nearly at par, if not entirely so, and which placed the Bank in a very peculiar state of difficulty. The whole difficulty of that period, with regard to bullion, arose from the magnitude of that demand.

You conceive the magnitude of that demand was very much increased by the small-note circulation of the country ?—I consider the demand was almost entirely to uphold the small-note circulation. . Will you explain why you are of that opinion ?—Because the holders of small notes are the lower orders of the people, whose fears are more extensively acted upon in times of distrust ; and there having been no exchange for the it. note but the sovereign, the demand upon the Bank became inevitable.

The following refers to the rule adopted by the Bank for the regulation of its issues— What is the principle by which, in ordinary times, the Bank is guided in the regulation of their issues ?—The principle, with reference to the period of a full currency, and consequently a par of exchange, by which the Bank is guided in the regulation of their issues (excepting under special circumstances), is to invest and retain in seemities, bearing interest, a given proportion of the deposits, and the value received for the notes in circulation, the remainder being held in coin and bullion. The proportions which seem to be desirable, under existing circumstances, may be stated at about two thirds in securities and one third in bullion; the circulation of the country, so far as the sauna may depend on the Bank, being subsequently regulated by the action of foreign exchanges.

By the circulation of the country, do you mean the whole circulation of the country, and not the country circulation ?— The whole circulation of the country.

When you say that as a general principle you think it desirable to have one third of bullion in yourneffers, against your circulation, you. mean to include in that circulation not only your paper out, but all deposits, whether of Govern anent or individuals ?—Yes.

In short, all liabilities to pay on demand ?—Yes.

And you hold the liability to pay on demand arising from a deposit to be equfvalent to a note nut ?—I hold it to he that sort of liabilitywhich the Bank are bound to provido for by a reserve of bullion. Do you think the liability arising from the deposit to be more dangerous to the Bank. as to sudden calls, or less dangerous to it, than the same amount out in paper ?.--Less dangerous. According to your description of the principle upon which the affairs of the Bank are conducted, do not the Directors of the Bank of England possess the power of regulating the whole circulation of the country ?—The Bank are very desirous not to exercise any power, but to leave the public to use-the power which they poetess of returning Bank paper for bullion.

Would the exchanges he correctedif the amount of currency was left wholly in the hands of the public ?—They have been principally corrected under that management. Is the Bank exposed to no inconvenience by waiting to have the correction take place in this method, in preference to itself interfering by that power to diminish the circulation in case of a fall of exchange ?_No; provided they are adequately, supplied with bullion when the exchanges are at par, and which proportion I'have stated to he about one third. Does not the Bank, if it thinks proper, possess the power of extending the currency or of diminishing it, without waiting for the interference of the public ?—It has the power.

Would the Bank forcibly contract their issues by a sale of securities during an unfavourable course of exchange with foreign countries and would-they-forcibly extend their issues by the purchase of securities when the exchange was favourable?-4 think not, except under special circumstances.. You mean to sae that the Bank would not forcibly do that, brit that it would leave it to the public to act upon the Bank, and produce-the effect at which it would arrive 2-1 do.

It appears by the accounts before the Committee, that-for the four last years the amount of securities in the hands of the Bank varied very little. Do you consider it important in the management of the Bank to keep the securities at nearly the same amount ?—As nearly as the same can be managed.

What is the reason why you think it necessary to keep the securities at the -same amount ?—Because the public are thereby enabled,• without any forced action on the part of the Bank, to act for themselves in returning notes for bullion for-exportation, when the exchanges are unfavouratile. If the exchanges continue favourable for any-great length of time, then the influx of treasure will command an increased issue of paper, and which may derange the proportions; but it does not follow that the Bank ought, upon that account, immediately to extend its issue upon Securities. When, however, it is clearly ascertained to be desirable-that part of the excess of bullion so received should be returned to the Continent, then it may be necessary for the Bank to re-assume its proportion, by transferring part of the bullion into securities, still preserving the proportions of one third and two thirds.

Thus far Mr. PALMER. The evidence of Mr. NORMAN, a Director, on the same subject, is also worth perusal . Are you aware of the principles upon which the Bank of England regulate -their issues ?—I am aware of the principles upon which they regulate their -issues at present.

Will you state what those principles are ?—I conceive that the principle for the regulation cif the Bank issues under ordinary circumstances is, at the time • wheri the currency is-full, to.invest, of the whole amount received for the circulation and deposits, in the proportion of about one third in bullion and coin, and about two thirds in securities bearing interest.

-Do the Bankof England, in regulating the amount of their paper-in circulation, have reference to the state of foreign exchanges ?—The Bank, for several years, have always looked very narrowly at the state of the foreign exchanges. Since the principle which I have just mentioned has been adopted, the plan has been, under ordinary dreumstances, to let the public act upon the Bank, rather than the Bank upon the public. Having fixed the amount of securities and

treasure at about two thirds and one thud, the-drain is allowed to go on unchecked, -unless • some special occasion for interference should arise. The dimin, nution of treasure is then accompanied by an equivalent diminution of circula. Ttion and deposits.

In case of the foreign exchanges being against this • country, would the Bank take any-step to counteract that issue ?—I should: say, under ordinary circumstances, not; there might possibly be extraordinary circumstances, in which _a forcible and more rapid contraction of liabilities -would be requisite. When-the bullion is being drawn from the Bank, do the Bank •take any ineasnresto restrict the accommodation they give to -the mercantile world?—No; they usually hone contrived in that case to dispose of a _portion of their Exche • quer Bills or other securities, and -thus increased the fund disposable for die.. -counts: the-object istokeepthe• securities upon the whole at the same amount; or somewhat near the same amount ; it is impossible to obtain perfect accuracy. Do the Bank, then, look at the amount of securities bearing interest in their hands, more than they do to the positive amount of bullion ?—Yes ; the principle is, at the commencement of a drain—that is to say, when in all probability the circulation and the treasure are about at the highest--that we should have the proportion of two thirds and one third ; then if the securities are kept about the same level, the reduction of the treasure must show itself in the circulation and the deposits.

The fullest information on the subject of Exchanges was, of course, obtained from the great leader of the Loan-mart, Mr. ROTHSCHILD—he who has so long and so successfully played the part of Taurus among The many wild and strange beasts that crowd the via obliqua of Bartholomew Lane— Have you observed that the exchanges are materially altered by the operations of the Bank of England, such as increasing the issues of notes, or diminishing them ?—When the Bank diminishes its issues, there is always a fear on the Royal Exchange to do business, because if money is made scarce, every man of real property draws in till he sees how far this scarcity of money will go ; but for long it has no effect, it will always find its level, and the exchanges conic round again. Then, supposing the Bank of England were to diminish its issues so as to produce an effect upon the money-market, how long would it take before the effect was felt upon the exchanges ?—It is not possible to judge. The effect on one side is good, and on the other side it is bad. Persons of real property will do no bbsiness at all ; and the manufacturers and persons in working business are obliged to send their goods abroad, and to sell at any price. But in the mean time things come round, and the Bank can never guide the exchanges for long; it may do for a short time, for a couple of months, but it is not in any one's power to do so for long. This country in general is the bank for the whole

world; I mean, that i transactions, in India, n China, in Germany, in Russia, and in the whole world, are all guided here, and settled through this country; so that it is not possible for any power to guide the exchanges for so long as two or three months.

Then you hold, that the balance of payments with those countries with which you trade, really and truly is the only guide for the rate of exchange ?—Certainly. When there is an unfavourable exchange, that is to say, when gold is flowing out, would you consider that the Bank of England could regulate that exchange, and make the gold flow back again, by curtailing their issues of banknotes ?— For a little while the Bank can do a great deal, because they may deter any rich man from doing business, and they may stop the whole course of trade ; but it is not possible that it should last long, because the exchanges will come round soon, whatever the Bank may do. A great many people will be obliged, when money gets scarce, to sacrifice and to sell all their property; but, in the mean time, persons of real property will be quiet, and wait till every thing is clear and settled.

The following additional observation on this nice subject is from the same party— Your opinion is, that the Bank of England, in attempting to regulate the exchanges, have not the power of doing so?—The Bank of England has great power if they do not care to sacrifice money; if the Bank of England wish to make money very scarce for a time, they have it in their power to do so ; but the exchanges cannot be guided by anybody unless circumstances favour it. If there is a war, and the foreign Governments want specie, they must have it. I remember France made a loan at 50, and now they want to make a loan at 90. If any Government wants gold, it does not care about any price for it if they can only get it. So that upon that principle, the Bank' has great power to guide the exchanges in peace time aud in quiet times, by making money very scarce, but in the regular way it is not possible that anybody can.

The evils of a bad law are widely diffused. Whatever tends to hamper commerce in one point, injures it in all. There is no monopoly that effects wider mischief in this way than the mono poly of the Landlords— • Whensommodities are cheap its this country, has it not a tendency to turn the exchanges in our favour ?—There is no &mkt it has ; then you get a good many good customers from the whole world, who wish to purchase their articles here. •

• Does not the Bank contracting their issues tend to make commodities cheap?

Will not the Bank contracting their issues tend to turn the exchanges in our favour ?—Not always ; it may be for -a time ; but it is not possible that the exchanges can be kept down or kept up unless The real trade goes along with it.

Will not the exchanges be generally in our favour as long as commodities are cheap in this country ?—It does not depend altogether upon this country's commodities, it depends upon the general trade.

Do you think that lowness of price, which is caused by a contraction of issues, makes any great difference in the foreign demand for our manufactures ? —No I do not think so; but the reason is, that a great many people abroad are deterred from purchasing, because they do not know to what value the produce of the manufactured goods may rise.

Will not the export of goods be greater under low prices than it will be under high Prices ?—You will export a great deal of goods; you will sell two pieces for one.

Is not that increased demand from abroad in consequence of the cheapness of price here, the mode in which the exchanges turn and are rectified ?—The exportation may be more from the Customhouse, but I do not think the consumption will be increased; if goods are too cheap, they will not sell so well. You have stated that you consider that the exchange, but for foreign loans and for advances to foreign Governments, would be almost always, under mere commercial transactions, in favour of this country ?—Yes, unless you have a great importation of corn.

Will you stale the grounds upon which you consider that to be the case ?—If you send manufactured goods abroad, you send them gradually, and you receive your remittances every month gradually for them ; but if you have an importation of corn, every corn-merchant writes abroad, and gets his corn shipped

Sm'mediately, and the bills are drawn, and a great quantity of bills come all at once from the Continent.

If the exchanges be in the long-run almost invariably in favour of this country, must, not that be because there is a considerable balance owing from other countries to this ?—Yes.

How_ do_you consider that there is a considerable balance owing from_ other countries to this?--Because England is the place of settlement for the whole world ; what is wanting in India, in the Brazils, &c., gets settled here ; and

• secondly,, suppose you import iron from Sweden if you receive 1,000/. worth of iron and manufacture it, you will then get 10,000/. for it; and then, when it is manufactured, it is sent to all the world. Suppose you get cotton from America; the cotton costs there 361. or 6d. a pound, but when it is manufactured, that pound of cotton is worth four times as much. In the regular course of things, the exchange with every country must be in favour of this. But upon the other side, wool and other commodities come in here from abroad. Besides

which, there are isgreat many English living abroad ; and when loans are made, or when corn or wool, &c. is imported, certainly the exchange will go against you, but not for any length of time. You consider, then, that it arises from this country being the great emporium for the commercial transactions of the world ?—Certainly ; if this country is left alone, I think it is the first country in the world.

Mr. ROTHSCHILD is not over favourable to joint stock company banks ; but then, he probably knows nothing about them. His love of secrecy in business transactions smacks of the shop—

You have described London as the centre to all the great commercial transactions of the world : do you think there would be any advantage in having joint stock banks in the metropolis, and each of those banks issuing its paper; or do you think it would be better to confine the circulation of paper to one bank like the Bank of England ?—I think you must leave it to one bank ; because if you divide it among several banks, every bank will be jealous of the other ; and if the Bank of England had 4,000,000/. of guld, another would say, We will have 4,200,000/. ; but if the strings are all in one hand, and if one bank holds the

specie, it can be useful to Government, useful to the country, and useful to every body. If there were several banks, one of them might act in an imprudent manner, and cause a run upon itself, which would materially prejudice the others, and shake confidence to a great extent.

Upon the whole, you think there is more steadiness in the circulation insured by having one bank of issue in the metropolis than by having several ?— Certainly. Do you think that by having one great bank, it has agreater hold upon the circulation, and can act more decidedly in a time of crisis ?—I do not like the phrase " hold of the circulation." I like the Bank of England to be the head bank, and to have all the specie under their care, and to have all the issues under their care, and to be as liberal of money as they can. Do you think there would be any disadvantage in the Bank of England being required to publish, from time to time, an exact account of the whole of its transactions, which should include a statement of the whole of its public an& private securities, deposits, the amount of bank-notes issued, and also the amount of bullion held by the Bank ?—I think it would be a dangerous plan for this country. Is your apprehension of danger limited to a disclosure of the amount of bidlion ?—I think it would be a party business. Suppose the Bank published at one time that they had 10,000,000/. or 12,000,000/. of gold, and suppose at the end of the next six months they had only 9,000,0001. of gold, and after another six months only 7,000,000/., people would be alarmed, and there would limediately be a run upon the Bank for gold. Suppose the effect of publicity was to make the Bank keep in its possession a regular amount of bullion ?—Then you must stop the issue, and say, As soon as you find you have only 5,000,000/. of gold, you must issue no more. I think it is much better that the Bank should not tell the public what gold and what silver they have. Supposing that in the operations of commerce, the bank-note maintained its full value in gold, what should induce individuals under ordinary circumstances to go to the Bank to get gold ?—We are not all alike; many persons would be frightened, and would go to the Bank and get a great quantity of sovereigns to lay them by.

Supposing persons saw, from the periodical publication of the Bank affairs, that by comparing the deposits and other liabilities of the Bank with the aniount of public securities and the amount of their bullion, the Bank were perfectly solvent, and their means greatly exceeded their liabilities, do not you think that the knowledge of that fact would tend to prevent any alarm ?—A great many people do not read at all ; if they hear there is a great deal of gold fetched from the Bank, they will all run, like a flock of sheep, and fetch their money out.

Do not you think that if persons like yourself, of intelligence and wealth in the metropolis, showed entire confidence in the ability of the Bank of England to meet all its demands, that would tend to discourage the alarms of ignorant people ?—No, it is not possible : we may do all we can, but when people get frightened, one fetches his 10/., and another his 201., and the middle class of people will all fetch out their money

. There is much truth and shrewdness in his remarks on the holders of Small Notes.

To what extent do you think it possible that a combination of four or five individuals acting together' could draw money from the Bank of England, for the

purpose of distressing or breaking the Bank ?—I do not think any body can do it. Suppose there are five people that have got a million sterling; they can take their own money, but they cannot take any more; and they will soon be tired of that, because they will not get any thing by it. Therefore in case of a publication being made by the Bank, you do not think the Bank would run any risk of being distressed by any combination of individuals?—No, I do not think any persons would be so mad. You do not think that there is any other ground of apprehension than that which would arise from individuals holding 10/. or 20/. or 50/. notes, who in a time of great alarm would press for gold for the purpose of hoarding?—Certainly. That is the only objection you think that applies to the publication ?—A publication that was only read by individuals sensible enough to understand it, would have no bad effect ; but the danger would be with the lower classes of people, that would read wrong statements in the newspapers.

eUthough the public might feel alarmed at first, when they became habituated to this publication, do not you think that the good sense of the upper classes of society and the intelligent and wealthy persons would operate upon the lower classes, and prevent any evil ?—No, I do not think it could. Suppose there was a tendency to a run, and that the wealthy and intelligent merchants of London met together, and declared that they were ready, to take the notes of the Bank of England, that they were ready not to press for payment of their notes, and explain to the public' that if the Bank was insecure, the whole natidnal Exchequer was insecure also; do not you think that a declaration of that kind would tend to allay any alarm?—It might do for that time, but a man would say, "What occasion have I to believe Mr. Rothschild, or any body else?" The little shopkeepers, and people of that kind, do not stop to inquire, but they say, I svill get my money while I can; if I wait another week, I may not get it. Do not you think that the demands of the Country banks upon the Bank of England would be more likely to effect a serious dram than the demands of the little holders ?—The reason they are obliged to come to the Bank for gold, is to satisfy the demands of the little people, otherwise they would not do so, because they are obliged to pay for it.

Mr. RoTnicniLD, it will be seen, does not think very highly of the Bank rule of keeping gold in their coffers equal to one-third of their liabilities. • Supposing the'rule of the Bank is to keep one-third of the amount of their liabilities in bullion, do you think it possible that any alarm of that kind could endanger the drawing-out of the whole stock of bullion?—It will not endanger the Bank, but it will endanger the commercial business. Suppose the Bank has 30,000,0001. altogether, and they have 10,000,0001. of gold, and suppose that

from the 10,000,000/. of gold there are 6,000,000/. or '7,000,000/. taken out, if I was a Director myself, I should be frightened, and afraid of stopping payment, unless I had a paper in my pocket, signed by the Government, saying, you have no occasion to pay in gold.

There are of course various accounts in the Evidence of the Panic of 1825. Mr. ROTHSCHILD'S may be looked on as the external account.

You recollect the period of the panic in this country in 1825 ; can you state to the Committee the causes which you believe produced that crisis of affairs ? In 1824, there was a great speculation in wool and in spelter, and in different articles; an immense deal of bills had been drawn upon this country, from almost every quarter ; I myself received to an enormous amount of bills in the course of two months, from 1,000,000/. to 1,500,000/. sterling. At the end of the year, an immense deal of specie was obliged to be sent to the Continent to take up those bills, because if that had not been done, and those bills had fidlen one or two or three per cent., it would have given a great alarm. Then in 1825, when the Bank found there was a great deal of gold going away, the Bank drew in, and would not discount. In the mean time, there was an immense deal of speculation in corn, by which our warehouses were filled ; and the Bank then began to refuse to discount the corn bills, and some of the wool bills which came from Vienna, and likewise some bills drawn for spelter and other produce. From your observation, has the Bank made any discrimination with respect to the species of demand which arises occasionally upon them for gold ; that is to say, whether it be for the payment of loans or payment in consequence of demands to supply foreign Governments, or otherwise, or whether they treat it as a common demand arising out of our general commercial transactions?— The Bank never interferes; any person that pleases may send over his banknotes, and the Bank never inquires what it is for. Do you not think that it would be an advantageous attention on the part of the Bank to observe what the demand is for, and whether it be for a special purpose, or whether it arises out of circumstances that may be permanent in their nature ?—There is no doubt, that as the Bank Directors are clever men, they will know, if any person sends for gold largely, what operation is going forward ; but they do not ask him any questions whatever ; you bring in your bank-notes, they give you the gold. Might it not be judicious in the Bank to alter their system, according to whether the demand was special or likely to be permanent?—! do not know how the Bank could change their mode of paying bank-notes ; if I have a banknote and I want sovereigns for it, I have no occasion to tell the Bank for what I want it, but they must pay upon the demand. The question does not assume any doubt of that : but the question assumes that the Bank might be justified in diminishing their issues if the demand for gold were to be inconvenient, when they might not be justified if the demand was limited and for a special object, the extent of which was known to the Bank ?—The demand for gold is upon a different principle. There is no man in this kingdom who can send away so large a sum of gold at once as will make the Bank alarmed. The gold goes out gradually; it does not go all in one week or in one month; it will go in five or six months' time; and if it is an operation for supplying a Government, it is not all wanted at the same time— the Government abroad want it one month after another, and they give time enough for collecting it. If there is a bad harvest, and any large quantity of gold goes abroad, every merchant will know it ; if gold is wanted in Hamburg, every body will know it; if gold is wanted in Amsterdam, the exchanges will let you know it; if gold is wanted for an army, the Bank will know it immediately ; if gold is wanted for the importation of corn, for importation of wool, or for any other importation, the exchanges themselves will show it.

Perhaps one of the most curious circumstances connected with the history of the run, is the accidental discovery of the box of one-pound notes, mentioned by Mr. HARMAN. We may observe, that the panic did not extend to the Bank of England, whose notes were still as current as ever. Their small notes were therefore readily taken in exchange for large ones ; and Country bankers, who had such, found them quite as useful as gold.

Did any communication take place between the Bank and Government respecting an order in Council to restrain payment in gold at that period, December 1825 ?—Yes, it was suggested by the Bank. What answer did his Majesty's Government give to that ?—They resisted it from first to last.

Did the Government suggest any other course in refusing the suggestion of the Bank ?—No they left the Bank to act at its discretion, hoping that the panic would subside; and it is to be observed, that though our treasure was so much reduced, even much more reduced as we approached the crisis, we were at that period receiving gold, because we strained every nerve to get gold from the Continent. Bullion came in, and the Mint coined; they worked double tides—in short, they worked night and day; we were perpetually receiving gold from abroad, and coin from the Mint.

Was there a period in December 1825, during which the Bank contemplated the great probability of being entirely exhausted of gold ?—At the latter end of 1825, decidedly.

Do you recollect the lowest 9uantity of gold which the Bank possessed during any period of December 1825 :—No, I do not remember immediately ; but it was miserably low.

Was it under the 1,300,0001. you have mentioned ?—Unquestionably.

It was stated by the late Mr. Huskisson to a member of the House of Commons' that he, as a member of the Administration at that time, suggested to the Bank, that if their gold was exhausted they should place a paper against their door, stating that they had not gold to pay with, but might expect to have gold to recommence payment in a short period; do you recollect such a suggestion? —There was such a suggestion.

What would, in your opinion, have been the consequence of that paper placed against the door of the Bank, without preparation to support commercial and financial credit?—! hardly know how to contemplate it. The Bank of England issued one-pound notes at that period ; was that done to protect its remaining treasure?—Decidedly, and it worked wonders; and it was by great good luck that we had the means of doing it, because one box, containing a quantity of one-pound notes, had been overlooked, and they were forthcoming at the lucky moment. Had there been no foresight in the preparation of those one-pound notes ?None whatever, I solemnly declare. Do you think that issuing of the one-pound notes saved the Bank ?—As far as my judgment goes, it saved the credit of the country.

The internal history of the Panic of 1825 is thus graphically given by Mr. RICHARDS

Do you recollect the period, at the close of the year 1825, when the Bank first felt a considerable alarm as to the circumstances of the country?—! do. Will you state what that period was?—! think it must have been in the autumn that the Bank began very seriously to contemplate what would be the result of the speculations, and of various circumstances that were going forward;

that increased in October and November, when there continued to be a very great demand, which I think had begun about April or February, for gold; and I believe it advanced down to the first Saturday in December. Not only the Bank, but I believe every man's mind connected with the City, was in an extreme state of excitement and alarm. I think I can recollect, on the first Saturday in December, having come home after a very weary and anxious day from the Bank, receiving a visit from two members of this Committee, and one of our bankers of that class, at my own house, stating the difficulty in which a banking-house near to the Bank was placed. I will not assert it, buts I believe they had gone so far as to take care of the clearing of that house that evening, so as that it might fulfil its engagements. The object of that visit was, to ascertain what would be my views upon the subject ; I was called upon, because the Governor was particularly connected with the house of Pole and Company by marriage and other circumstances of relationship. After speaking upon the sohject for some time, I was pretty sure that I could answer for the firmness of the Bank ; and I ventured to encourage those gentlemen to hope that apon any thing like a fair statement, the Bank would not let this concern fall through. It was agreed that on the following morning (Sunday) we should meet as many Directors as I could get together, with the three gentlemen who had called upon me, at the house of one of them ; and that in the mean time some eminent merchants, friends of the house, should also be called to the meeting to assist with their opinion. We so met ; and after hearing all the facts which were collected in the first instance, by the bankers and the merchants present, the Directors authorized their chair to say that assistance should not be wanting: it was agreed that :300,000/. should be placed at the disposal of Pole and Company the next morning, for which the Bank were to receive, and did receive, as securities, a number of bills of exchange and notes of hand, and over and above a mortgage on Sir Peter Pole's property, which was to ride over the whole. During that week, I believe the attention of every man was directed much more to the state of that house than to any thing else; they fought through it till Thursday or Friday pretty manfully; and about that time, from conversation I had with gentleman, a partner in the house, I was led to fear that it might fail: however, it was fought on till Saturday evening, and I believe their position was then such, that without the assistance of the same eminent individuals who had takeis part before, that clearing would not have gone right. Sunday passed, and on Monday mornine the storm began, and till Saturday night it raged with an intensity that it is impossible for me to describe; on the Saturday night it had somewhat abated. The Bank had taken a firm and a deliberate resolution to make common cause with the Country, as far as their humble efforts would go; and on Saturday night it was my happiness, when I went up to the Cabinet, reeling with fatigue, to be able just to call out to my Lord Liverpool, and to the members of his Majesty's Government then present, that all was well; that was, I believe, on the evening of Saturday the 17th of December. Then, in the following week things began to get a little more steady; and, by the 24th, what with the 1/. notes that had gone out, and other things, people began to be satisfied ; and then it was for the first time in a fortnight, that those who had beet busied in that terrible scene could recollect that they had families who had some claiflh upon their attention. It happened to sire not to see my children for that week. After that, the thing got quiet; and I think in January 1826, London and the country were getting still more quiet; but there was an excitement from the time Parliament met in February to its rising in June or July, which it required a vast deal of firmness and a vast deal of steadiness to control. Happily it did succeed ; and since that, I trust, under all circumstances, the thing has got into a state, which God forbid it should ever depart from.

Were you apprehensive, during the weeks you have mentioned, that the Bank would not be able to continue its payments?—It looked exceedingly suspicious : the Bank had determined, as it ought to have done, to pay to its last guinea, arid it would have done so; but by one of those heavy circumstances, when Saturday evening came, the tide receded, and I was able to assure his Majesty's Government that it was all well; and the tide turned from that moment. Another such week, and the country would not have stood it ; in my humble ji.dgment, the Bank could not have stood it, although we had gold coming.

Our readers will remember another panic, arising out of a very different combination of circumstances. It was talked of lightly at the time—so were other symptoms of that terrible week; but the laughers trod upon the edge of a volcano which was heaving to destroy them. Should any so unfortunate an event as a Tory Ministry be contemplated at any future period, the following testimony may be of service.

Will you state what was the description of the demand upon the Bank for gold about two or three months since; did it arise from the demands of Country bankers, in order to meet demands upon them, or did it arise from the holders of notes in the Metropolis ?—As far as I have any knowledge of the fact, I was surprised that there was so little application from the Country bankers. I certainly never saw the ball of the Bank, for many years that I have gone through it, except in 1825, so crowded with applicants tendering their notes ; they hadt not, in general, the appearance of being people from the Country. I cannot at this moment state what the bankers took, for I went out of town almost immediately afterwards, for my health ; but I should say the Country bankers, either directly or through their agents in London, took but an inconsiderable quantity, compared with the circumstances of alarm at the moment. Supposing the total amount demanded was about 1,600,0004 do you think that at least a million of that was from the holders of notes in the Metropolis and the neighbourhood ?—I think so, but I have not the facts before me, from the circumstances I have stated.

Do you recollect the largest amount that was demanded in exchant; for bank notes by any one individual?—! do not; I recollect the circumstance of some man taking away a thousand pounds, and bringing it back, but there may have 1,2en larger sums. I have heard of one or two persons taking 5,000/. for friends in the country, but I have no accurate recollection of the facts. Did you by chance hear of an individual who had money at Jones and Lloyd's to the amount of about 20,0004 who drew it out, and went to the Bank and demended sovereigns for it ?-_Yes; I believe that was the case. For how many days did that last?—! believe it ran through nearly a week. Did you not hear from the bankers with whom you were in the habit of communicating, that they had a great demand at their counters for gold during that period understood so.

Did not several of the London bankers object to give parties gold, but gave them bank-notes, and said, "You may go and get gold for them at the Bank if you please ? "—I believe so. And others paid the full amount in gold ?—Yes, I believe so.

May you not consider that amount of 1,600,0001. as nearly the maximum of demand that can arise from political excitement?—! could not venture to give an answer to that question. I think it might go to a much larger extent ; it would depend upon the continuance of a demand of that sort. Had it gone on as it did, certainly 1,600,000/. or 2,000,000/. would not have satisfied the cravings of the public.

Is there not a necessary limit imposed in this way, that the persons making this demand for gold must present notes for payment, and by so presenting notes reduce the currency ; and if they seek to turn their convertible securities into Bank of England notes, the currency being at the same time reduced, they

must do so at a considerable loss ?—That is very true ;. but when men are frightened, they will submit to great disadvantage in order to realize their pro

PerAr.

Will not the distress occasioned by the presentation of notes in times of po litical excitement, afford a considerable check to any such conduct on the part of the public ?—Probability is one thing, but possibility is another ; and between these two it is not in ray power to give an opinion that is worth any thing. Did you hear at that time that several people took alarm and sold their stock out, and demanded sovereigns for the produce of that stock ?—I understood so. IDid it rot come to your knowledge afterwards, that the same parties within a few days bought back the stock with the same sovereigns at a loss ?—I think it very likely. Do you remember how much the Three per Cents fell during that week ?-4 do not remember : they did fall. What was the ground of public apprehension at that time : did they doubt the solvency of the Bank ?-1 should think not at all, there was no appearance of it ; but wlicu,people choose to take alarm, it is often, very difficult to account for it.

Do you think that in devising a plan under which the Bank should govern its issues, it would be proper to bear in mind an extreme case of this kind ?—I imagine that in every discussion that takes place in a man's own mind, and in deliberating upon subjects of that sort, he tries to look at every possible contingency that may arise ; and it is not merely the smooth, but he takes the rough side of the question also. What would be the wont that could happen under those circumstances ?— They might, I suppose, under circumstances of alarm, do that which they have done before, almost run the Bank dry.

Then the worst that would happen is that they might run the Bank dry ?— Can any Minty be worse?

We shall conclude with the Balance-sheet for 1831. There are doubtless many other portions of evidence that might have repaid a perusal ; but we believe that most of our readers will think we have given enough of. it for one week.

DEBTOR AND CREDITOR ACCOUNT,—February 29, 1832.

Dr. Bank-notes outstanding £18,051,710

To Public Deposits, viz.—

Drawing Accounts £2,034,790 Balance of Audit Roll 550,550 Life Annuities unpaid 85,030 Annuities for terms of years unpaid 39,360 Exchequer Bills deposited 490,000

3.193,730

To Private Deposits, vie.— Drawing Accounts 5,633,870 Various other Debts 51,560 5.73q,430 To the Bank of England for the Capital 14,553,000 To Balance of Surplus in favour of the Bank of England 2,037.70 £44,179,630

Cr. By Advances on Government Securities, viz:

Exchequer Bills on the growing Produce if the Conso lidated Fund, in the Quarter ending April 5, 1832.. X3,423,340 Ditto, July 5, 1832 697,000 Exchequer Bills on Supplies. 1825 7.609 Ditto, for 10,500,000/. tbr 1825 .2,000 4,134,940 By the Advances to tha Trustees appointed by the Act 3 Geo. IV., c. 51, towards the purchase of an Annuity of

585,7401. t).-.r forty-four years, from April 5,1603 10,697,880 By other Credits. viz.—

Exchequer Bills purchased £2,700,000 Stock purchased 761,600 Citv Bonds 509,000 13 ills and Notes discounted £2,951.070 Loans and Mortgages 1,452,100 London Dock Company 227,500 Advances on Security and vziotms Articles 570,690 9,166.860 By Cash and Bullion 5.293,i 50 By the Permanent Debt due horn Co-:eminent 14,626,../ 44,170,630

Rest or Surplus brought down 0437,760

Bank Capital due to Proprietors 14,553,000 17,190,763