Note E — THE PAPER CURRENCY OF ENGLAND DISPASSIONATELY CONSIDERED, &c. (continued 2)

We have not alluded in the text to the effect of our proposed system, in reducing the enormous fluctuations in the rate of discount produced by the operation of the Act of 1844; but this is a feature of the question too important to be altogether passed over without reference. In his examination before the Committee of the House of Lords on Commercial Distress, Mr. J. H. Palmer, a very competent authority, declared, that in his whole experience he had never known such vicissitudes in the rates of interest and discount as since the passing of the Act; and the greater number of the witnesses were unanimous in deploring the excessive injury inflicted on the community by those vicissitudes. Now, one essential part of the operation of the governmental charges of 1, 2, and 4 per cent. would be the reduction of those violent oscillations within more salutary limits; as we have just now seen that 3½ to 4 per cent. would be the probable minimum, and 6 to 7 per cent. the probable maximum, at which the Bank of England would ever grant accommodation, and that moreover it would only be in extraordinary cases that the range of variation would exceed from 4 to 6 per cent.