y had alluded to
measures about to be brought forward for the regulation of the Bank of
England, and the administration of banking concerns in general. On the
6 th of May, in accordance with this announcement, the house having
resolved itself into a committee upon the Bank charter, Sir Robert Peel
explained these measures. The act of 1833, he said, had empowered the
government to notify to the Bank, before August, 1844, that parliament
meant to deal anew with the subject; and government now proposed
that parliament should exercise that power of notification. The right
honourable baronet went on to consider the principle of value. What, he
asked, was a pound, and what the engagement to pay a pound? He contended
that the word meant more than an abstraction--that it meant a certain
weight of precious metal; and the engagement of a maker of a promissory
note was to pay on demand a definite amount of that metal and fineness.
A real measure of value in this just sense had existed till the year
1797, when bank paper became issuable without being convertible into
metal. For some years the subject attracted little attention, until
the bullion committee of 1810 propounded a sounder theory. This theory,
however, was unsatisfactory to the people at large, and a notion became
general that a pound was merely an abstraction. Some writers had argued,
he continued, that gold was unfit to be a particular medium, because
it was an article of commerce. There were several theories upon this
subject. For instance, Mr. Ricardo conceived that paper should be
convertible only when the notes tendered for specie should reach to
upwards of a certain high amount; but he preferred, to adhere to
the present system of a single gold standard, and a five pound note
convertible into gold. The right honourable baronet next proceeded to
state his views respecting the principle for the regulation of a paper
currency, making a distinction between bills of exchange and those
promissory notes, which, being payable to bearer, served the direct
purposes of money. He next stated the outline of the practical measures
he was prepared to recommend. He remarked: "I propose, with respect to
the Bank of England, that there should be an actual separation of the
two departments of issue and banking--that there should be different
offices to each, and a different system of account. I likewise propose
that to the issue department should be transferred the whole amount
of bu