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must be determined by some general principles which are in the truest sense constitutional. A line of demarcation has to be drawn between the presumptive claims of individual liberty, of immediate public utility, as scientifically ascertained or believed to be ascertained, and of broader and more general principles of government which cannot be long outraged with impunity. The history of the English Parliament is replete with measures of interference with the economic activity of individual citizens now either tacitly grown obsolete or scientifically condemned. There are found, too, influential schools of political thought of recent growth which would banish the interposition of the State from every field of industrial activity, except in cases such as that of railways, where the essence of the enterprise involves something of the nature of a confiscation, which can only be effected by law. Whatever theories are really in the ascendant in the world of thought, and may ultimately prevail in practice, the only point of constitutional relevancy is that during the last halfcentury, and mainly through the instrumentality of Sir Robert Peel and his political successors, the interference of the State with trade, commerce, money, and social economy generally has been professedly directed in accordance, not with the routine established by longfamiliar custom, nor with the dictates of an immediate expediency, however urgent, nor with the promptings of self-interest discoverable in important classes of the community, but with abstract principles of economy and of government, first laid down by thinkers outside Parliament, and then argumentatively reasoned out and successfully supported within its walls. The proof of these propositions is to be seen in the recent action The Bank Charter Act. 123

of Parliament in reference to (1) the Bank of England and other banks, (2) public Companies, (3) railways, (4) factory legislation, (5) the National Debt; and taxation.

(1) The modern legislation relating to the Bank of England commences with Lord Althorpe's Act of 1833,' by which the Bank of England was confirmed in the enjoyment of all its existing privileges until 1855, with the proviso that before the expiration of the term so fixed, and after ten years from the date of the Act, the privileges should cease, on a year's notice being given; 'and any vote or resolution of the House of Commons 'signified by the Speaker of the said House in writing 'and delivered at the public office of the said Governor 'and Company [of the Bank of England] or their suc'cessors should be deemed and adjudged to be a 'sufficient notice.' It was in reliance on this clause that, on May 6, 1844, Sir Robert Peel proposed the revision of the Bank Charter, and introduced the measure afterwards known as the Bank Charter Act, which has, for better or worse, revolutionised the relations of Parliament and the Government of the day with the trading community at large. The magnitude and novelty of the enterprise may be gathered from the language of Sir Robert Peel in first broaching the subject in the House. He said: 'I shall proceed at once to 'call the attention of the House to a matter which 'enters into every transaction of which money forms 'a part. There is no contract, public or private,—no 'engagement, national or individual,—which is un'affected by it. The enterprises of commerce, the 'profits of trade, the arrangements made in all the

1 3 and 4 William IV. cap. 98.

'domestic relations of society, the wages of labour, 'pecuniary transactions of the highest amount and of 'the lowest, the payment of the national debt, the pro'vision for the national expenditure, the command which 'the coin of the smallest denomination has over all the 'necessaries of life, are all affected by the decision to

* which we may come on that great question which I 'am about to submit to the consideration of the House.' The political principles which governed this reform, and which may be taken as the key-note of all the monetary reforms since effected, are brought into view in the following passage of the same speech. 'I have now 'to state the extent to which I propose to carry out

* these principles. [That is, the principles respecting 1 the measure of value, coinage and currency, and pro'missory notes payable on demand.] If I do not carry 'them out immediately to their full and entire extent, 'I may be told, as I have been told before, that very 'good principles have been laid down in the abstract, 'but that practically I shrink from their application. 'Nevertheless, the opinion which I formerly expressed 'I still entertain—that it is of great importance that 'public men should acknowledge the great principles 'by which important measures should be regulated; 'and in discussing a question of such magnitude as the 'present, I had rather it were said, " You fall short in '" the application of sound and admitted principles," 'than that, "You have concealed or perverted those '"principles for the purpose of justifying your limited '"application of them." .... All I can promise is, 'that I will propose no practical measure which is in'consistent with the principles that I have laid down,

* and which does not tend to their ultimate establishRelation oj the Bank to the State. 125

'ment. It is, however, most important that those who 'are responsible for the management of the affairs of 'a great country like this—seeing how easy it is, by 'unwise legislation, to create panic or introduce con'fusion into the monetary transactions of the country '—it is most important that they should deal con'siderately with private interests; first, because justice 'requires it; and secondly, because there is danger 'that the cause of progressive amendment will be in'jured if you cannot reconcile reform with a due regard 'to the happiness and welfare of individuals.'

It is not the purpose here to explain or criticise the provisions of this celebrated Act from a financial point of view. It is sufficient to notice that the effect of the Act was to render the Bank of England far more a department of the State than it had ever been before. The State, in fact, by this Act assumed the responsibility of securing the convertibility into coin of notes issued by the Bank, and the machinery introduced by the Act was a device, more or less wisely and aptly constructed, for the achievement of this end. Instead of being, as it had been hitherto, a mere private corporation, which in return for loans to the State, and for its services as agent in the management of the National Debt, had certain definite and peculiar privileges conceded to it, the Bank was transformed into a public institution, having supreme control over the issue of notes and the coining of money—the limits, the modes, and the occasions of such issue and coinage being strictly defined by Act of Parliament, and conceived in the interests, not of the shareholders of the Bank, but of the public at large, or rather of the State as an organised whole.

The privileges and responsibilities conferred by the Bank Charter Act on the Bank of England necessarily involved a reconsideration and readjustment of the rights and duties of all the other banks in the country; and the Bank Charter Act itself, and later Acts, contain numerous provisions for reconciling the vested interests of banks existing at the time of the passing of the Bank Charter Act with the new position of the Bank of England, for facilitating the multiplication of banks which should not interfere with the operations of the Bank of England, and for protecting the public against an unlimited diffusion of responsibility without sufficient guarantees, while on the other hand permitting an unlimited increase in the number of partners, under legally prescribed conditions of liability towards the customers of the bank. There is no doubt that much of this, legislation has proceeded in too hap-hazard a way, and has been much perplexed by the incongruous state of things already existing in 1844. The whole subject has been repeatedly brought before Select Committees of the House of Commons, and more systematic legislation than heretofore is likely to characterise the future. What is of chief importance to notice is, that from 1844 the public policy towards banking has been one of well-studied economic principle, and not of pedantic sciolism or of mere deference to existing interests or to the call of a transient emergency.

(2) The principles involved in the recent policy of Parliament in reference to Public Companies are not identical with those involved in the Bank legislation just referred to, though in some points they cover the same field. The older policy of the country in reference to trade associations of all sorts was that of jealousy

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