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    K-V>ifl&^^ : V^ : :v.:-^ £ r

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    INDIA 4NDT^I)G)TJBiE GQVERN^ Thi; necess...

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    The Bank Charter Act Not Tin&Ti. Ta3eb U...

    the means of establishing bur gold currency on a sure basis , and of securing the convertibility of the banknote . By this Act he viricUcated a great principle---the restriction of the issue of paper ; but there is abundant evidence that he looked forward to a tfevelbplrient of thisprinciple , and to further great changes that would necessarily follow from JWadoption . -:: :: , ¦ % ¦ y . r ^ --V :. - r :- . . -:- v , " He would have clone more if he had ielt -that lie could then do sb ; flafeiy . ^ : ' ' ^ 6 Vsagar oiouslr contrived a scheme that at once

    ensuredthe object hehad in viewj aiid at the same time disarmedthe opposition of yarious interests that Were affected by the measure . Had he felt that hei couid : do soy he vbuld not only ; have limited the issues of couritry bankersj but ? would have provided for the -gradual extinction ^ of their paper , lie lo oked 'forward to the time when there should be but one description of paper currency ^ viz ., -that o » f a ^ CJentr a ] , Government Banlt ; but he felt that it had not then arrived . He looked

    forward to the time when ^^ tlie public would entertain notionsion moneymatters foo clear to permit an . anomalous ; issue of paper money fey ihjdividuals , while it rigidly restricted -to the imperial Goyernment the power of coining the precious metals- In his 6 wn mind he wpiild have preferred Gbverrinieiit notes rather thariBank of Erigiand notes , arid he pirbbably :: expected ^ at by ^ issue from the banking department lie was preparing the > pjublicmind for spine greater change hereafter . ;; --. ; . v ¦ - . / : ; ' : - - ¦" - /¦ ¦•"'• ¦ : - " ' . ' . "¦¦ : ;

    The friendsof the measurewould -dp well to defend" it in the spirit with which its author infeb j duced it .- He ; was careful not ; tp raise prejudices by jpuslii ^ dg forwar « 4 his prinr icijples in a ; marinerincoinpati ~ ble with the due consideration of private and persoaal interests . He acknowledged that he fell short of the application ofhis own prineiples ^ - ^ he looked to existing' circumstances----to the usages and habits of the community in the time y rtien he liyed-r- ^ he ¦ v ' was careful to avoid practical \\ evil by the preiiiature and undue © Xfcension of theoretically sound principles ,

    He knew where to stop and when to stop , and he rested wherei he did / beeause he in-- tended ultimately to g . o further ; in corise-^ Hjenee , hecarried , almost unanimously , a wise ineasure that would have provoked unlimited opposition had he pushed it further at the time . He conciliated the Bank of England , the joint-stock bariks ^ the private bankers , the banks of issue , -the ... powerful banking interest in Scotland— -interests as diverse as can well be conceived—at the same

    time that he secured for the nation at large a sound and . practical system of c urren cy . Fortunately the country bas , at this moment , several able financiers in the House of Commons ; men not only versed . in the theory of banking , but living daily in the practical application of it . Among other subjects , the ¦\ yjiGT rjBi . iNB , the GxYNS i the Hankeys , thel 4 ? : wiSEB , the Gladstones , and the Gkahams , will bo doubt give their earnest attention to the question on which we now particularly dwell , because it greatly occupies the public mind , and because on it there

    exists considerable diversity of opinion , viz ., whether it would be expedient to increase the amount of bank-notes issued upon securities . There is of course no chaTm in the present amount , Fourteen Millions ; in 1844 s it happened to be about the capital of the Bank of England—and it was observed to be within the lowest sum that the public had ever held in their own hands at any one time . But no one can seriously contend that it is the one and only sum that ought , under any conceivable circumstances , to be unrepresented by bullion ; that any other amount , a little more or a little less , would not

    do equally well , or even better / There is a strong feeling that what was enongh in 1844 may be inconvenientl y that as our trade hasrriprethan doubled , our requirements of bank-notes may have ; somewhat ; increased ; ' There Is at least groimd-ior inquiry , whether an extension be desirable , since ife is well known . that the circulation of 51 . and 10 ? . Bank of England notes has increased one seventh during the last six years ; that 10 , 680 , 0 G 0 Z ; of these small notes are

    now m the hands of the public , in lieu of 9 ^ 300 , 000 ^ of small riotes in 185 1 ( bur readers wiU observe that this is fully ott 0-half of the ^ usual amount of iicvtes in the hands of the public ); that pur gold circulation lias also increased during the ; same time as much as 30 per cent . ; that there has also been anincrease in the quantity of silver and cqp proving iricontestably that -the amount of money actually required for thje daily settlement of ^ lie internal tirade of ^ tht ^ cjptiiitry is largely augmented . It is ouite true tliat the

    total of bank-notes in the hands of tlia pubr 1 ic has not sensibly increased , althoughyas ^ e have shown , the aimourit bf sinall notes is now so much larger ( 1 , 3 PQ , 000 ^) but this cirxjuinstance is accbiinted fior by the admission of ^ the joint-stock banks into the ^ clearing hpuse ^ by the increased rapidity of railway communicatipnV arid by the extension } of banking facilities ; ' generally— - all of which liaye tended to dimiriish the notes of larger denommations ^ s 6 as to epmperisate yfor the increasevpfthb smaller notes . In cbrrobbratidn of th is view

    it isiirgedthat th ^ . ptriiiciple upon which fourteen millions was selected in 184 ;* , would lead to the adbptibn of sixteen millions ridw— -as yen thi $ larger sunt is within the nii niihum airiount of bank-iibtes tliat the public have held since 1844 . It is also felt that an additipnal issue of notes on securities \ yt ) uld enable the Bank : tb keep permanently a larger reserve of unemplpyed notes , and that we should ¦ ¦ . never agaiu see the pitiable balance

    of a million to provide for all the cbritirigencies of ; tlie head office arid twelve branches . At a ^ y rate ^ it is believed to he sinipiy a riiatter of detail- —an open question even ahabrig those who in spirit are warm supporters of our present banking law . Lord OVEBSTOitfE , indeed — -no mean authority — - con siders that such an extension would be vicious ; that it would afford no relief to trade ; that an additional issue of two millions dri securities wbiild diminish the

    bullion reserve by two millions ; and he regards this as a truth equally fundamental with a definition of Euclid . But the public knows— -and Lombard-street knows— -that the extra issue of two millions did actually save the Bank of England from suspendingits operations- —did actually prevent a monetary convulsion unprecedented in history . Lord Oveestonb , like political economists in general , overlooks the fact that men are more frequently governed in times of difficulty by

    fclieir fears than by cool judginent ; his reasonings might be sound if all men were cast in the same mould with himself , but they fail when he lias to deal with the average of humanity . Bankers and merchants are men eminently practical ; in spite of all theories , they will provide large tills if they thiixlc they foresee a pressure— -they will retain more bank-notes than they immediately require , order to

    m make themselves doubly secure . The sixty London banks no doubt held at the very least an extra million of notes during the late pressure , in addition to their balances at the Bank of England ; and the thousand country banks held afc least another million between them . Here alone -we have the extra and illegal issue of two riiillions of notes absorbed , without there being the slightest possibility of an unfavourable action

    on the foreign exchanges . These notes were not ; strictly speaking ^ in the hands of the public , but ready to be circulated in case they were demanded ; and they yvill speedily find their way back to the Bank pf England now that the pressure is past . Let us not be mistaken . We ; are not asserting , that the ^ atribunt should be increased to sixteen riaillipns ; wie are simply stating some of the grounds why the piiblic desire that the question shoul d be earnestly recoiisideredv

    Probably the immediate attention df Parliament will be limited to granting an iridemnity to Xiprd PAtkEBsroN for ^ saying us frbni a cpnyiilsidri , and thab the questibri of an iiicreased issue on securities Will be left for future discussibri— -that there will not for the present be any' perhiiajient increase of banknotes—that it yvill be quite unnecessary- — -and that no further ¦ relaxing power ; will he given . ! MeanwhiJe , the whole morietary qiiestion will be ventilated ^ arid the severe crisis through

    which we have passed will have left sbine good behind if it should induce the-public generally to niake ; themselves ^ ^ acquainted with the whole subject in all it ^ bearings ^ W earnestly entreat tlieta to recur again and again to the ; nrsfc principles ; of tl \ e science / --always to bear in ^^ mind its great priiniiry truthsj and , however subtle may l » e the for in pf error that mayvbe prpppuridedy itsi sophistries" will be a , fc once apparent to thfe tnirids df ; tlipae who keep always in view the few elementary truths on which the whole science is - 'bisedi . ¦ ¦¦ ¦ . ' '¦' ¦ ' ¦; : " - . . ¦ ¦¦' •• ' . ¦ ¦ ; '¦ ¦ . ' . . ¦ " : ' v-- <¦ .. * : " // - :, ¦' .-i-, ¦ ' - ¦ ¦¦ - . V- - ¦ ¦ :

    K-V>Ifl&^^ : V^ : :V.:-^ £ R

    K-V > ifl &^^ V ^ : v .:- ^ £ r

    India 4ndt^I)G)Tjbie Gqvern^ Thi; Necess...

    INDIA 4 NDT ^ I ) G ) TJBiE GQVERN ^ Thi ; necessity of a great ch ange in the administrative system pf British India has been avdweel by the Cabiaet . Pbr this anripiincemerit pur readers have long been prepared ; LdrdPAixMEBsroN " , spmbweeksi agb , wa 8 knpwri to be ^^ cbnsulting ^ With his cblleagues on the subject . ; Th 0 ^; arinounqements : \ put :. ; . forward ' last

    week , liovi'eyer , in a tpiie of authority , are riot only . ¦ premature but ¦ abapiutely ; irieb . r . re ' cti ' : ; -The abblitioii ; . "bf the iBast Iudia , Company has not yet been determined ivpori , altjioughv a measurei with thiat object will sliortly be laid before Parliament , with ; the knowledge , if not sanctidri , of the OaDinet / There must be , aud will be , a considerable interval of deiiberatidri . But there can be no doubt tlmt a

    new system of ^ government will establislied in India , gradually or otherwise . To frame and pass a bill clearing the whole ground during the " -riext session would be a policy of wild experiment . "We do not believe that such a policy will be adopted . In the first place , the public opinion on . the subject , although vigorous arid progressive , is not ripe . The debate has scarcely risen above a cross-fire of proposals , and we hold it to be essential that the grand Beform for India , to be declared

    law by Parliament , sliould in its origin be identified with public opinion . No question was ever involved in hiore diflficulfcy ; yet no question was ever capable of easier Bolutioa b y the superficial . There are minds so audacious that they will offer , after a week ' s study , a stupendous project for maintaining the perpetual balance between commerce and currrency . There are otliers , of equally rapid action , which , eince June last , have traced

    the diagrams of a perfect machinery for India . The suggestions are various :: — -abolish the East India Company ; appoint an Indian Secretary of State ; erect , in Xondon , a Legislative Council for India ; render the Government purely local ; place a Prince or Princess of the Boyal iTainily upon a Calcutta throne ; allow the natives to return representntives to a Legislative Chamber ; these , and numerous other ideas float through the press and the inferior channels of political discussion . Some of them are

• Citation
  • Leader (1850-1860), Dec. 5, 1857, page 12, in the Nineteenth-Century Serials Edition (2008; 2018) ncse-os.kdl.kcl.ac.uk/periodicals/l/issues/cld_05121857/page/12/