ABSTRACT
The Committee feel, in common with every Witness examined, the Duty and Obligation of maintaining at all Times the practical convertibility of the Bank Note. This they consider to be the first and most essential Object, which, in all Discussions like the present, must be kept constantly in view, both by the Legislature and by those who direct the Banking Operations of this great Commercial Community. Upon the practical enforcement of this Principle not only does public and private Credit depend, but the whole Industry of the productive Classes, and the Wages of Labour. On this Point therefore the Committee have the Satisfaction to think that there can be no Difference of Opinion. The practical Questions to be settled at present are, Whether this great Benefit is attained with Certainty? Whether it is attained by
proper Means? and, Whether the Restrictions of the Act of 1844 are not attended with grievous and unnecessary Evils of a collateral Kind? Many of the Provisions of that Act are, in the Judgment of the Committee, as well as in the Judgment of the great Majority of the Witnesses, judiciously adapted to the Purpose for which they were framed. But an Attempt to enforce by Law, under all Circumstances, one fixed and inflexible Rule for the Management of a national Bank of Issue seems inconsistent with the best written Authorities, with the general Principles of Economic Science, as well as with the Testimony of many Witnesses of practical Knowledge and Experience. It can hardly fail to be productive of most serious Evils, more especially when a Contraction of Issues, indispensable in a State of adverse Foreign Exchange, is rendered imperative, as it is by the Act of 1844, under Circumstances which may be wholly opposite. It has been shown that an Enlargement of the Issues of the Bank under a favourable Foreign Exchange, would frequently be expedient at Times, when, under the Provisions of the Act, no such Enlargement would be possible, and even in Cases where by the Act a compulsory Contraction would be enforced.
