The Committee hope that the House will allow them to abstain for the present from entering into any particulars which might anticipate the detailed Report, which they trust shortly to be enabled to lay before the House, on the whole result of their enquiries as to the mode and period which may be most advantageously adopted by Parliament for ultimately bringing back the currency of the country to its ancient standard.

But the Committee are decidedly of opinion, that all practicable and advantageous operations for that purpose would be impeded instead of being promoted, by a continuance, under the present circumstances, of the partial payments to which the Bank is at present liable; and they presume therefore most strongly to recommend to the House, that such Payments should immediately be suspended by legislative authority; but for such a period only as shall be necessary to bring the whole subject distinctly under the consideration of Parliament.

SECOND REPORT,

&c. &c.

By the Lords Committees appointed a Secret Committee to enquire into the State of the BANK OF ENGLAND, with reference to the Expediency of the Resumption of Cash Payments at the period now fixed by Law, and into such other matters as are connected therewith; and to report such information relative thereto as may be disclosed without injury to the public interest, with their observations:

Ordered to report,

That the Committee have, pursuant to the instructions given to them by the House, proceeded to inquire into the several matters referred to them, and have collected from the examination of witnesses, and from the accounts laid before them, the information, which will be found in the Minutes of Evidence, and in the Appendix.

The Committee think it right to premise, that in this investigation they have taken as their guide the decided opinion of Parliament, as declared by many repeated enactments, that the removal of the restriction upon Cash Payments by the Bank, or in other words, the restoration of the currency of the country to a state of regulation by its ancient metallic standard, is an object which ought to be accomplished at as early a period as'shall be found safe and practicable.

The first act, confirming and continuing the restriction contained in the Minute of Council of the 26th of February 1797, was passed on the 3d of May 1797, and was to be in force till the 24th of June 1797. The restriction was further continued by an Act passed on the 22d June 1797, until one month after the commencement of the then next Session of Parliament. By another Act, passed on the 30th of November in the same year, the restriction was further continued until one month after the conclusion of the war by a definitive treaty of peace. On the 3d of January 1799, the Directors of the Bank, in pursuance of a power reserved to them by the Acts of Parliament referred to, gave notice that on the 14th instant they would pay in cash all fractional sums under five pounds; and on the 1st of February 1800 would pay cash for all notes of one and two pounds, dated prior to the 1st of July 1798, or exchange them for new notes of the same value, at the option of the holders. By another Act, passed on the 30th of April 1802, the restriction was continued until the 1st of March 1803. On the 28th of February 1803 it was further continued until the expiration of six weeks after the commencement of the then next Session of Parliament. On the 13th of December 1803, the country being then again at war, it was further continued until six months after the ratification of a definitive treaty of peace. In the year 1812 an Act was passed for preventing any note or bill of the Bank of England or Ireland from being received for a smaller sum than the sum therein specified, and for staying proceedings upon distress by tender of such notes; and in 1814 this Act was further continued during the continuance of any Act imposing restriction upon the Bank with respect to payments in cash.

By an Act passed on the 18th of July 1814, the restriction upon the Bank was continued until the 25th of March 1815; and it was further continued by an Act passed on the 23d of March 1815 to the 5th day of July 1816. On the 21st of March 1816 an Act was passed, by which, after reciting in the preamble" that it was highly desirable that the Bank should, as soon as possible, return to the payment of its notes in cash; and that it was expedient that the provisions of the former Acts should be further continued, in order to afford time to the Directors of the Bank to make such preparations as to their discretion and experience might appear most expedient for enabling them to resume payments in cash, without public inconvenience, and at the earliest period; and that a time should be fixed at which the said restriction should cease," it was enacted, that the said restriction should be continued until the 5th of July

1818. On the 28th of May 1818 another Act was passed, by which, after reciting in the preamble, "that it was highly desirable that the Bank of England should return as soon as possible to the payment of its notes in cash, and that unforeseen circumstances, which had occurred since the passing of the last of the preceding Acts, had rendered it expedient that the restriction should be further continued, and that another period should be fixed for the termination thereof;" the restriction is further continued until the 5th of July 1819. Of these unforeseen circumstances, the most important was the apprehension of the effect of further foreign loans (particularly those of France) upon the exchanges and the price of gold.

Subsequent to the first restriction upon the Bank of England similar restrictions were imposed and continued by different Acts upon the Bank of Ireland, and their termination was fixed at three months after the expiration of the restriction upon the Bank of England.

During these successive prolongations the Bank appears at different periods to have made great exertions to procure such a mass of treasure as might enable it to replace itself upon its ancient footing, whenever it should seem good to Parliament to remove the restrictions. In 1798 the treasure was increased to an amount which bore, in the early part of 1799, a very large proportion to that of the outstanding notes. During the years immediately subsequent, this treasure experienced a considerable reduction; but from the middle of 1804 to the middle of 1808, the favorable state of the exchanges enabled the Bank to make large purchases of gold. In order to encourage the importation of gold, the Directors determined to give 47. per oz., and the treasure was so much augmented as to have exceeded in 1808 the highest amount which it had reached in 1799. From that period it successively declined. The restriction was prolonged in 1814 only to the 25th of March 1815, and in 1815 only to the 5th of July 1816; but the extraordinary high price of gold, and the extreme depression of the exchanges, which, from whatever causes, prevailed during great part of these periods, combined, with the large advances to Government which the exigencies of the public service required, to prevent any material progress being made towards a restoration of the treasure of the Bank to its former amount.

Notwithstanding these discouraging circumstances, the Bank more than doubled its treasure during the last eight months of 1815; and the fall in the price of gold, and the favorable turn of the exchanges, enabled the Directors to raise it, by January 1817, to more than quadruple what it had been in the be

ginning of 1815. At this period the Directors felt so confident of being able to comply with the injunctions of Parliament, even before the period at which the restriction was to expire, that they issued a notice for the payment in cash of all the one pound and two pound notes bearing date prior to January 1816. Finding little or no demand for cash in consequence of this notice, and their treasure having continued during the course of the year to increase to an amount far exceeding what it had ever reached, and, with few exceptions, bearing a larger proportion to the extent of their issues than it had ever borne before, the Directors issued a second notice in September 1817, for the payment in cash of all notes bearing date before the 1st of January in that year. This measure has been stated to the Committee to have been undertaken in the hope, that if it proved successful, that is, if the gold so tendered were not demanded, or if, when demanded, it remained in the country, the complete resumption of cash payments would take place gradually, and as it were insensibly, even prior to the period then fixed by Parliament, viz. the 5th of July 1818.

In the month of April 1817 the effect of the great foreign loans made in that year began to be considerably felt. Between April and October 1817 the exchanges took an unfavorable turn, and the price of gold, which had from July 1816 to March 1817 fluctuated between 3/. 18s. 6d. and 37. 19s. 6d, rose between April and December 1817, from 31. 18s. 6d. to 41. Os. 6d.; since which date it does not appear by the quoted prices to have been ever again reduced below 44. The new gold coinage also began to be issued in July 1817. The treasure of the Bank was raised to its highest amount in the month of October 1817. There appears to have been no considerable demand for gold previously to the month of October. The first issue of Sovereigns in large quantities was in that month. There was a diminution in the demand for them in the three succeeding months; but in the month of February 1818 the issue of gold increased till August in the same year; and the demand during this period is stated to have arisen decidedly for the purpose of exportation. It appears from the evidence of Mr. Harman, that during the whole of the year 1817, that the Bank did not think it necessary to make any reduction of its issues, either in consequence of the effect of the foreign loans upon the exchanges, or of its payments in gold, made in conformity to the notices above referred to. In fact, the average issue of Bank Notes in 1817 exceeded by 1,700,000l. that of 1816; the average issue of the last six months of 1817, exceeded the average issue of the first six months of that year by 1,870,000; and