llion now in the possession of the Bank, and that the issue of
bank-notes should hereafter take place on two foundations: first, on a
definite amount of securities, and, after that, exclusively upon that of
bullion; so that the action of the public would, in this latter respect,
govern the amount of the circulation. There will be no power in the
Bank to issue notes on deposits and discount of bills; and the issue
department will have to place to the credit of the banking department
the amount of notes which the issue department by law will be entitled
to issue. With respect to the banking business of the Bank, I propose
that it should be governed on precisely the same principles as would
regulate any other body dealing with Bank of England notes. The fixed
amount of securities on which I propose that the Bank of England should
issue notes is L14,000,000; and the whole of the remainder of the
circulation is to be issued exclusively on the foundation of bullion.
I propose that there should be a complete and periodical publication
of the accounts of the Bank of England, both of the banking and issue
departments, as tending to increase the credit of the Bank, and to
prevent panic and needless alarm. I would, therefore, enact by law that
there should be returned to the government a weekly account of the
issue of notes by the Bank of England; of the amount of bullion; of
the fluctuations of the bullion; of the amount of the deposits; and, in
short, an account of every transaction, both in the issue department and
the banking department of the Bank of England; and that the government
should forthwith publish, unreservedly and weekly, a full account of the
circulation of the Bank." Sir Robert Peel next explained the regulations
proposed by him for private banks. The general rule, he said, would be
to draw a distinction between the privilege of issue, and the conduct of
banking business: the object being to limit competition, but to make the
great change with as little detriment as possible to private interests.
From this time no new bank of issue would be constituted; but all those
existing would be allowed to retain the privilege, upon condition that
they do not exceed the present amount, to be calculated upon the average
of a term of years. This would enable the Bank of England to know the
extent of issue with which it would have to compete. While the issues
would be restricted, banking business would be facilitated; the
privil