LIGHT GOLD—THE CURRENCY.

HC Deb 25 July 1845 vol 82 cc1098-120

Mr. Spooner

presented petitions from farmers in Warwickshire, complaining of agricultural distress; and from Mr. Taunton, of Birmingham, complaining of the errors of our existing system of currency.

Mr. Newdegate

also presented petitions from farmers in Warwickshire, to the same effect as those presented by Mr. Spooner.

Mr. Spooner

subsequently rose, and said that he had a petition to present from a most respectable individual, Mr. Andrew Spottiswoode, who had signed a petition as Chairman of the Society for the Emancipation of Industry. The members of that Society traced the extreme depression, so much to be deplored among agriculturists in this country, and prominently among them the labourers, mainly to the present state of the national currency. The petitioner prayed that an inquiry might be instituted to ascertain the cause of the distress.

Ordered to lie on the Table.

On the Motion that the Order of the Day be read, for the House to go into Committee of Supply,

Mr. Hume

called the attention of the House to the loss to the public by light sovereigns, and that some offices should be appointed by the Government to receive light gold at the intrinsic value, according to the number of grains deficient in the average weight, and not allow the loss of 6d., more or less, to the holder of the coin, according to the will of the person who was to receive the coin. The proclamation issued some time ago, relative to light gold, subjected the public to a loss of from 4d. to 6d., or even more, on sovereigns which were deficient in weight; and this loss fell principally upon the poorer classes. Supposing the deduction on each light sovereign to be 6d., the loss sustained by the public would be 75,000l. a year. Unless some alteration was made in the present system, he was convinced that a general desire would be excited to return to the system of 1l. notes, which would enable persons to avoid the loss they now incurred upon bullion. It was entirely owing to the negligence and carelessness of the Chancellor of the Exchequer that the loss to which he referred had been sustained by the public. The Chancellor of the Exchequer was quite callous to his appeals, for he had brought forward this subject three or four times, and the right hon. Gentleman had never thought fit to notice it. He would now, however, move a Resolution in the nature of a vote of censure upon that right hon. Gentleman for his negligence, which he hoped would have the effect of leading him to bestow some attention on this important subject. He begged to move that— An humble Address be presented to Her Majesty, to represent that, on the last occasion, when the light gold coin of the Realm was called in, a considerable loss, attended with much inconvenience to Her Majesty's poorer subjects, occurred, having been in a great degree caused by the neglect of Her Majesty's Ministers, in not making timely preparations for receiving the light gold coin at its intrinsic value at convenient places in the several towns and districts of the United Kingdom, and humbly to request that Her Majesty will be pleased to give directions to guard against similar scenes of loss and trouble for the future.

Mr. Spooner

seconded the Motion, and said the hon. Member for Montrose had brought a very important Motion before the House. He had fully made out his case, and had shown that the poor man had been greatly injured by what he had justly styled the neglect of Her Majesty's Government. But there was a large and important class to whom the hon. Member had not alluded, viz., shopkeepers and retail dealers in general. Competition compelled them to receive light coin at its nominal value; but they had no means of disposing of it but in payment of the debts they had incurred in the purchase of goods. Then the loss between intrinsic and nominal value was tested, and fell on them. This could not be avoided; for if the Government were to take in the light coin at its nominal value, it would open extensive doors to fraud; but in addition to this loss, the holders of the light coin were subjected to the risk and expense of transmission to London. That risk and expense the Government ought to bear. A place ought to be appointed in the centre of every important district, where light sovereigns might be exchanged. He hoped that the present Motion would be the means of calling the attention of the Government to the subject. But important as the Motion was, it was only part, and a comparatively small part, of that great and momentous subject—the monetary system of the country. He approached this question with much diffidence; he could not forget what passed last Session, when his right hon. Friend at the head of the Government, holding up a book, denounced its contents as nonsense—denounced also the borough which he (Mr. Spooner) had the honour to represent, as being the only town where two men could be found to write such nonsense. Agreeing with nearly every part of that book, he was willing to take a due share of the obloquy attempted to be thrown upon it. With regard to the authorship, he had nothing to do with it; nor did he even know, when the papers first appeared in a periodical, who was the author; and would, therefore, not assume a merit which did not belong to him. If, however, that book contained nonsense, he had the consolation to know that it was nonsense which had received the sanction of the right hon. Baronet the Secretary for the Home Department. That right hon. Gentleman had, in the year 1826, published a book containing the same principles, and enforcing the same views, which the right hon. Baronet at the head of the Government had so stigmatized. His (Mr. Spooner's) object in calling the attention of the House to this subject, was to point out what he believed to be the situation of the country at the present moment. They had succeeded in bringing back gold, manufactures and commerce were flourishing—agriculture alone was depressed. On former similar occasions, some time after these evidences of returning confidence and commercial prosperity, the prices of agricultural produce began to rise; and whenever they became high, all other things advanced beyond the continental level of prices; gold became the cheapest article of export, the export of manufactures ceased, and panic ensued. He believed they were now approaching a similar crisis. He formed that opinion from a review of the past, which was the best index for the future. To take this review effectually, they must begin with the year 1797. Previous to that year, a very great and long-continued depreciation had been going on; gold had been gradually leaving the country; paper was increasingly substituted in its stead, till, in 1797, the gold was all gone, when measure was adopted by Mr. Pitt, which the right hon. Baronet had also denounced, and called a "fatal" measure. What were the circumstances under which that measure was passed? What were the measures which the right hon. Baronet would have substituted? A mutiny at the Nore, all Continental alliances broken up—single-handed was this nation left to contend against the revolutionary spirit which overwhelmed the whole of Europe. The master-mind of Pitt called forth the credit of the country, aroused its latent energies, established that system which enabled the country to conclude a long and expensive war on the glorious field of Waterloo, and to dictate peace within the walls of Paris. A fatal measure! If there was anything fatal in the measure, it was that it fell to be carried out by statesmen who were incapable of understanding it, and committed the very blunders which the great master-mind who framed it feared they would fall into. In proof that Mr. Pitt did foresee the danger, he would read an extract from a book which was of very high value, which he esteemed himself fortunate in possessing, because it was now a very scarce book, and what was most remarkable was, that the scarcity of the book came all at once. It was formerly in all booksellers' shops; now, not a single copy was to be had. ["Name!"] The name of the book was—"Graham on Corn and Currency." [The hon. Member then read the extract, which was to the effect that Pitt deprecated equally an unlimited currency and a sudden contraction.] The successors of Pitt, the hon. Member said, fell into both errors. Ignorant of the mighty power which they had to wield, they first unconsciously depreciated to an extent they did not contemplate, and thus found the means of supporting the large expenditure of the war; at the conclusion of which, reckless of all consequences, they suddenly contracted the circulation, and enormously enhanced the value of money. In 1810 and 1811, Committees of the House sat on this subject. He knew not if hon. Members had read their Reports; but being convinced that the subject would soon force itself upon the consideration of the House again, he would exhort hon. Members to make themselves complete masters of those Reports. On these Committees sat some of the ablest men on the opposite side of the House, and they stated what he thought was a mere truism—but which was strenuously opposed by hon. Members on this side—that the currency was greatly depreciated, and that that depreciation ought to be marked and arrested. The Government met this proposition by the monstrous Resolution, that a pound note and a shilling were equal to a guinea, though it was well known that light ones were then selling for 25s. Ay, Lord Bexley denied the existence at any time of any fixed unvarying standard of value. So we went on to the end of the war, and in 1815 great preparations were made for returning to a metallic currency. This produced universal distress. This distress evinced itself in the low price of manufactures, which, from their low price, found their way into foreign markets, and brought back gold. Gold thus flowing back, confidence was restored, and the country began to return to a state of prosperity. In 1819 the Bill was introduced, which the right hon. Gentleman would forgive him for designating by the epithet which he had given to the measure of Mr. Pitt. That was a fatal measure; for we were called upon to return, not merely to the old standard of value, but to a standard at least 15 per cent. higher than it had ever been before in this country. The old standard was a joint standard of gold and silver, and gave the option to the debtor to pay in either. The coin was also protected by heavy penalties from being melted or exported. Coin may now be melted or exported at the will of the holder. I do not say that this change might not be a proper one; but, inasmuch as it gave an increased value to the coin, the coin itself ought to have been depreciated to have met that increased value. Under the plea of keeping faith with the creditor, there was a breach of faith with the debtor, for he was called upon to pay in a higher standard than had ever existed before. But there was a greater breach of faith than that. By the Resolution of 1811, all persons had been led to make their engagements under the conviction that the pound in which their contracts were made and their dealings took place, was the ancient pound sterling; that there had been no departure from the ancient standard; and, therefore, it was impossible for them to contemplate a return to that from which there had been no departure. At the close of the war, Government, composed of men of the same political party who had thus deluded them into the belief that the standard had never been departed from, now called upon them to pay their engagements in what was falsely called the ancient standard of value. [Here, Sir James Graham having returned, the hon. Member repeated what he before said about his book, and asked the right hon. Baronet where copies of his book could be had?] Afterwards came the distress of 1820–1–2, which, in 1822, had produced such discontent and alarm, that the late Lord Londonderry came down to the House, and truly assigned the distress of the country to the operation of the Bill of 1819; and introduced several measures extending the currency, and departing from the principle of the Bill. These measures were successful, and the distress of the country was relieved. But the Bill itself was not repealed; and, not being repealed, the prosperity so produced was only temporary, and in the end produced the panic of 1825, which few who witnessed it would forget till their dying day. But he (Mr. Spooner) remembered that in the June before, the present Lord Ripon, then Chancellor of the Exchequer, gave a most glowing description of the prosperity of the country at that time; and warned Mr. Brougham, who had a notice of Motion for reform in Parliament, to remember that that prosperity had been dealt out to the people through the ancient portals of the Constitution. That same noble Lord, in the month of February, 1826, came down to the House deploring the heavy calamity which had overtaken the country; and that calamity he attributed to great speculation produced by the excessive issues of country bankers. The father of the present hon. Member for Chichester, clearly and strongly exposed, at the time, the absurdity of this opinion, and its inconsistency with the noble Lord's statement a few months before. Prosperity in 1825, had been restored in the way it had ever been; the price of our manufactures having been forced down to a ruinous extent, again found a market on the Continent, and bullion flowed into the country. The effects of the panic of 1825 were long felt; and prosperity was not restored till our manufactures having again been reduced, the same results followed. In 1837, the American panic took place, which was but short in itself, and was followed by the short lived prosperity of 1838; for in 1839 the Bank of England was compelled to borrow gold from the Bank of France. In 1842, prosperity began to return; and the right hon. Baronet, who saw these things as clearly as any man in the House, fearing lest the return of prosperity should again be followed, as it had always been, by panic, brought forth his Bill of 1844, "a complement," as he called it, to the Act of 1819:—a measure, which at the time it passed, and frequently at subsequent periods, had been erroneously designated as a final measure—one that had for ever settled the question of the currency. Where, then, the finality of the measure of 1819, if it required such "a complement?" He (Mr. Spooner) admitted, that if the Bill of 1819 was right, that of 1844 was necessary. The object of that complement to the Bill, was to limit the currency with in such bounds as would prevent prices rising above the level of those of the Continent, and so to keep gold from leaving the country. He doubted if it would work; if it did, it could only be by permanently reducing prices to the level of the Continent. And he particularly called the attention of hon. Members connected with the landed interest to this point. The hon. Member then read the following extract from Sir James Graham's book:— With confidence I assert that the law which fixes the standard of value at 3l. 17s. 10½d., and compels payment of paper in specie on demand, establishes also 50s. the quarter as the average maximum for wheat in a series of years. It is shown by the Eton College tables, that, for 150 years prior to 1793, the average price of wheat, calculated in periods of ten years, was about 51s. the quarter. With the same standard we must have the same price; there is no escape from the dilemma; and if the landowners would preserve their estates, either the standard must be adjusted to their incumbrances, or their incumbrances to the standard. Now his (Mr. Spooner's) opinion was, that there was no remedy except through a complete investigation of this question, and an abandonment of the principle of the Bill of 1819. He had watched for an opportunity to bring this subject under the consideration of the House, and had hoped to have been able to have done so upon some one of the various occasions when the difficulties of agriculture were under discussion. But, owing to the great number of speakers, and the late hours to which the debates were protracted, he had not been able so to do. But being thoroughly convinced that a continuance of the present system must produce a return of panics so much to be deprecated, he thought it his duty to state his opinions to the House, not with the view of recommending at that time any remedy, but with the hope of inducing hon. Members to investigate the subject. He believed that the immense mass of gold which had been attracted to this country would not long lie dormant. Speculation had already begun in railway shares; in 1825, it was in foreign mines, and therefore was sooner felt; but it would be the same thing over again: confidence would be restored, the prices of manufactures would rise, and there would be an end to our export trade. The state of the iron trade within the last few weeks, proves the accuracy of this view; the price of iron had rapidly risen, and almost immediate countermand of orders for goods manufactured of iron, took place on the part of exporting merchants. It was a remarkable fact; but all who had watched the course of events as he had for the last thirty years, were aware that, under the existing system, manufactures, commerce, and agriculture never permanently simultaneously flourished; and here let him address a few words to the advocates of free trade. What would be the effect of a free import of corn? A corresponding export of bullion. The demand for our manufactures would not instantly be created in countries whence we should draw our supplies of free corn: it must be the result of long commercial intercourse. Habits of consumption must be created before demand arises: this could only be done by making them rich, and ourselves poor. The effect of this drain of bullion would be first felt severely by the manufacturing interest. Money would become scarce, and credit embarrassingly restricted. The commercial interest, as an interest, would recover; many would be ruined, but new firms would rise; and the pressure would ultimately and permanently lie on the agricultural interest, whose incumbrances could not be shaken off, while the value of their estates would be completely changed. Nobody would benefit but the capitalists; and if the system of the right hon. Baronet could be permanently established, and gold kept in the country at the standard present price, it must be by sacrificing the agricultural to the money interest; but should this system fail, there would be such a panic as had never before been experienced. In all former panics, there had been a safety valve for the Bank of England; that safety valve by the "complement" of 1844 had been destroyed. A demand for gold first arose from a turn in the exchanges; in self-de-fence the Bank was obliged to make money scarce to bring back the gold. This created distress in the monied world, confidence was destroyed, and then was created panic, and another and far more extensive demand for gold. As soon as the exchanges turned, and gold again began to come in, the Bank merely increased its issues, in order to restore confidence, and arrest the drain which had arisen from panic. It could not do so now; it could not issue notes upon the expectation of gold; it must wait till the gold had actually returned. Before he concluded, he would just advert to what he considered a prevalent and dangerous error. Many who agreed with him respecting the character of the measure of 1819, imagined that its effects were all over. Upon this point he begged to quote from a work that had just appeared, written by Mr. Alison, who, in his judgment, and in the judgment of many others, was a high authority on the subject; and upon this point he said:— It is often said, that the Bill of 1819 was a great error; but that it has been got over; that prices have become accommodated to the new scale; that the sufferers by it are bankrupt, dead, and buried; and that every thing would be thrown into confusion again if any change were now made. There never was a greater mistake. The 700,750,000l. of the National Debt has not become accommodated to the change. The 1,000,000,000l. of private debt in the community has not found its debtors inured to the change. The payers of taxes whose incomes have been lowered 50 per cent. by its effects, have not become reconciled to the change. The manufacturing and commercial classes, exposed every five or six years to a frightful monetary crisis, fatal to a large part of the persons engaged in business, in consequence of the present obligation of the Bank to pay in specie at the Mint price, are not enamoured of it. The farmers, who find the prices received for their produce lowered from 50 to 75 per cent., are not reconciled to it. The landlords, whose embarrassments are hourly increasing, and one half of whom are in a state of hopeless insolvency from the consequent and unavoidable reduction of their rents, are not accommodated to it. The nation, whose resources have been so seriously impaired by its effects, that any increase of revenue from indirect taxation has become impossible, and the ultima ratio of an income tax has become indispensable in the thirtieth year of peace, has not become accustomed to it. The evils of the system, as long as it is adhered to, are lasting, corroding, and irremovable. They are not over; they are only in their infancy. The hon. Member thanked the House for their kind indulgence; he had honestly, although he was afraid, most imperfectly, expressed his opinions. Those opinions had not been hastily formed; they were the result of a close investigation of the subject, commencing in the year 1810. One remark only upon those opinions would he make—that they were at least consistent—he had never denied the existence of depreciation, but had always admitted it to its full extent. He could not be charged with having been one of those who, by asserting that the depreciated one pound note and a shilling were of equal Value, for all legal purposes, to a guinea in gold, had induced the country to consent to taxation, individuals to enter into private contracts, and to charge their estates with family settlements and other incumbrances. Neither was he one of those who, having held and enforced these opinions, at the end of the war for the fist time, admitted the depreciation, and on the plea of public faith required the payment of the depreciated pound in the gold sovereign at full weight and value, thus increasing every man's debt at least 50 per cent., and diminishing the value of his property in proportion. The hon. Gentleman concluded by seconding the Motion of the hon. Member for Montrose.

The Chancellor of the Exchequer

declared himself to be totally unprepared to enter upon the whole question of currency as entered upon by the hon. Member, who had gone back to the year 1798, and had brought his ideas to bear upon all the events that had happened in the financial world from that period down to the present day. He did not at all suppose that the hon. Member could think it necessary to call upon the House to visit the present Government with its censure for measures which they had taken two years ago—measures which then met with the general approbation of the House, who appeared to be perfectly satisfied with the explanation then given by the Government. He should now confine his observations merely to the Motion before the House, and endeavour to state the difficulties which would attend the carrying out of the proposition of the hon. Member for Montrose. The hon. Member said that the Government had made no preparation for their measure of 1842 and 1843; but the hon. Member must be aware that since the year 1816 the public had been made aware of the constant depreciation of the gold currency that was going on from year to year by wear and tear. He must be aware that at one time a memorial had been presented to the Government, which was signed by every banker in the metropolis, calling upon them to apply some remedy to this evil; for that if it were not remedied it would lead to still greater evils. The condition of this country was then favourable to a change; and when the hon. Member said that there was no silver coin at the time in the country to meet the difficulty, he begged to remind him that but a few weeks before that general measure of the Government there was a general complaint made of the great accumulation of silver in the hands of the bankers, which was calculated to lead to great difficulties. Indeed, a suggestion had been made some years ago by Lord Althorp in respect to this subject, to withdraw the silver from circulation, and have it sold as bullion. For a period of about twenty-six years no notice had been taken of the wear and tear of the gold, during which period the practice of weighing it was discontinued, thereby giving a value to this money which it could not legally possess as current coin. The hon. Member said that no legal means were taken to protect the poor from the consequences of this change. He denied the fact — he did not mean to say that any effectual measure could be adopted that could prevent some evils from arising. Indeed, he (the Chancellor of the Exchequer) knew of a case where a poor man had carried a new sovereign to a shop, and, notwithstanding, he had been compelled to make the shopkeeper an allowance for short weight. The hon. Member for Montrose had indulged in some severe remarks upon himself (the Chancellor of the Exchequer) personally; in doing this he was quite aware that the hon. Member occasionally suffered himself to be carried beyond the bounds of justice under the influence of the moment; and he should, therefore, be perfectly prepared, when the hon. Member should, at some future opportunity, when no relevant topic offered itself, and when, indeed, some totally different subject was before the House, to hear from the hon. Member, incidentally, and by way of parenthesis, an ample apology for the harsh expressions he had used towards him that evening. But to revert to the point under consideration. The hon. Member must be quite aware that the Government could not establish scales for weighing coin in the manner pointed out by the hon. Member; for, if scales and weights were by law to be established in every town, what was there to prevent the inhabitants of villages and hamlets from calling for a similar institution in every petty village or hamlet throughout the country? The law declared that no coin under weight should be received. But, suppose a trader chose to say a coin was underweighted, and either refused to give his goods or to give change for a sovereign unless an allowance were made to him, how could the Government interfere to prevent such a proceeding? The difficulties, therefore, in the way were too great. There were no less than 500,000 sovereigns short of weight offered in the course of the year, and the complexity of such an arrangement as that proposed by the hon. Member was a full answer to his own proposal. But, as he had already stated, the Government had taken precautions to protect the poor. Orders had been given to all the postmasters throughout the kingdom to take light coin at a diminution of 3d. for each sovereign, if the person tendering it chose to part with his gold on those terms; and besides, every post-office was ordered to keep a weighing machine in order to detect light coin. Having said this, he trusted the House would agree with him in not deeming the present to be an occasion when the whole monetary system and all its collateral branches ought to be made the subject of a debate, and be ventured to entertain a hope that he had said all that was necessary to vindicate the conduct of the Government with respect to the particular subject of the Motion before the House.

Mr. W. Williams

denied that the right hon. Gentleman had satisfactorily replied to the hon. Member for Montrose. No one who had not, like himself, been in the constant habit of receiving a most voluminous correspondence on the subject of light sovereigns could conceive the extent to which the labouring classes had suffered by that species of fraud or deterioration. There had been no public notices issued that the postmasters throughout the kingdom had orders to take all light coin at a loss of 3d. upon each sovereign.

Sir R. Peel

Sir, I am disappointed at being absent during the first part of the speech of my hon. Friend the Member for Birmingham; but that part of it which I heard, convinced me that my hon. Friend has established another claim on the constituency which he represents. Some portions, however, of his speech do anything but bear out his argument; for while the one seems to be in favour of a convertible issue of paper money, the other is in favour of an inconvertible issue. My hon. Friend, however, proposes one remedy; he studiously avoids informing the House in respect to the practical result of his observations. He did indeed refer to the pamphlet of one whom he terms the greatest philosopher of modern times—Mr. Alison. I have the pamphlet in my hands, and what does it say? I shall read an extract or two to show the House what are the pretensions of that gentleman to instruct us on the currency question. I never knew who was the author of the letters of Gemini. A classical man would refer them to Castor and Pollux, but a Warwickshire man always attributes them to Spooner and Attwood. I doubt, however, if Mr. Alison is not entitled to the honours of the confraternity. Mr. Alison [the right hon. Baronet read the extract] recommends an unlimited issue of notes of 1l. in value by the Bank of England, with an obligation to pay them in gold and silver at the market price of those metals when presented. But, if that was adopted, gold would soon rise to 6l. an ounce, and bank notes of 1l. would become the standard of the country. Mr. Alison, however, provides, as he thinks, for this predicament, by suspending those payments in specie when the market price of gold should rise above a certain fixed limit. But suppose the price of gold rose to 10l. per ounce, the banks would, in that case, do nothing to depreciate their own paper; that nominal value of the precious metals would consequently be kept up; and as a matter of course, the period would never arrive when the price would fall below the assigned limit. This is the philosopher who is to instruct us on the currency. Now, I ask my hon. Friend when he next brings the currency question under the consideration of the House—it is too late for the hon. Gentleman to do so in this Session, but early next Session—I do hope he will give notice of his intention in the first place, and next that he will propose what he conceives a proper substitute for that Bill of 1819 to which my hon. Friend is so much opposed; and, lastly, that he will acquaint the House and the country with the way in which he would adjust those transactions which have grown up between debtor and creditor upon the basis of the old currency system.

Mr. A. Smith

assured the House that his own experience amply verified the statements that had been made by the hon. Member for Montrose. The inconveniences that had been felt in consequence of the existing arrangements for changing the light coin were of no trifling character. He sincerely hoped that Government would make arrangements to obviate the evil. He wished also to say a few words on what had fallen from the hon. Member for Birmingham (Mr. Spooner) with regard to the scarcity of silver. In the last twenty-five years, he (Mr. Abel Smith) had been in the habit of hearing continued complaints of this scarcity. He knew, for instance, that the large dock companies had very frequently found it next to impossible to get silver to pay their labourers. This, he believed, was mainly to be ascribed to a dispute that had long been going on between the Government and the Bank of England, as to whether the loss which ensued in the maintenance of the silver currency should be borne by the Government or by the Bank. He considered it most desirable, for the interests of the country, that this question should be set at rest.

Dr. Bowring

thought nothing could be more unjust than that Government, after having altered the currency, should require individuals to bear the loss that ensued. He found, by some correspondence which had passed between Sir P. Stuart, the Governor of Malta, and the British Government, that when a depreciation in the currency had occurred in that Colony through the acts of Government, a loss of from 8,000l. to 9,000l. had been defrayed by Government. He conceived the present case was in all respects analogous to that he bad just referred to. The Chancellor of the Exchequer had stated that gold of light weight had been received at the Post Office without deduction; but why had not the same arrangement prevailed at other public offices? The inconvenience which resulted to the poor man, in consequence of this depreciation, was much more sensibly felt than was that which fell upon the rich, in consequence of the necessities of the former impelling him to make his purchases, subject to whatever reduction might be demanded. He hoped for the future the arrangements of Government would prevent this wide-spreading evil.

Mr. Newdegate

said, that he was anxious to make a few remarks upon the highly important question now brought before the House; but must first of all clear himself and his hon. Friend the Member for Birmingham from being held bound by the suggestion for an alteration of the currency, made by Mr. Alison at the conclusion of his pamphlet, as had been inferred by the right hon. Baronet the First Lord of the Treasury. To that proposal neither he nor his hon. Friend subscribed. They begged distinctly to disavow it. Mr. Alison himself, as shown by the quotation from his pamphlet read by the right hon. Baronet, laid very little stress upon that suggestion. That which was of real and very great value in Mr. Alison's pamphlet, was the historical review of the monetary policy pursued in this country during the last fifty years, and the synopsis of its effects, unto the present time; and he (Mr. Newdegate) thought that no hon. Member who had any knowledge of these circumstances would hastily cast aside the monitions of experience. He (Mr. Newdegate) felt convinced that this subject could not be much longer neglected, and from its great practical bearing upon the interests of commerce and of the country generally, he thought that any Legislature was defective whose commercial policy was uninfluenced by consideration of this important element. Day by day this subject, in one form or another, obtruded itself on their attention. Was not the difficulty in obtaining silver (which had been adduced by the hon. Member for Chichester that evening) evidence of the restricted state of our currency? Was not the loss to the community by wear and tear of our coins (which was the ground of the Motion now before the House), evidence of the expensive character of our monetary system. So long as the domestic trade of the Empire was kept in subjection to those stringent provisions which modern legislation had enforced upon the medium of exchange, so long ought our domestic trade to be a matter of the deepest concern to the House, for it was upon our internal commerce and upon the remuneration of labour that our present monetary system bore with peculiar severity. He (Mr. Newdegate) rejoiced that this discussion had taken place, although he regretted that the House had not had earlier notice of the lucid and most able exposition of this subject given by his hon. Friend the Member for Birmingham. He could have wished that it had fallen earlier in the Session, but still he was sincerely glad that at last the attention of the House had been attracted to this subject. The question of the currency had long been so distasteful to hon. Members, that it was little understood; but to him its action seemed simple enough. Our present monetary system effected a compulsory exchange between labour and gold, or its representative, and in this exchange the labourer was injured. To supply the medium of exchange the Bank was obliged to keep a very large amount of gold in its cellars. Now, only a certain quantity of gold for the currency of the country fell to her share by the course of exchange, as abstracted from that amount of bullion, which formed the circulating medium of the world: and if we would have more than our share, we must purchase it by reduction of the price of our produce, that is, of our labour, in order to render our commodities more desirable to foreigners than bullion. And this was a heavy burden upon our labouring classes; for the effect of the Bills of 1816 and 1819 was to impose upon them the heavy charge of maintaining a currency the most expensive in the world, besides the burden, 30 or 40 per cent., added to the value of the national debt and of taxation generally by these measures. The injurious effects of this system upon agricultural interests were as clearly traceable. The Bank, as he had said, was obliged to keep a large amount of bullion; and if the price of bullion rose, the Bank contracted her issues. The consequence was an immediate fall in the price of commodities. The master manufacturers were not slow to shift the loss off their own shoulders—they reduced their men's wages—dissatisfaction, perhaps turbulence, ensued among the workmen—and then the right hon. Baronet came forward and told the agriculturists that it was necessary they should have their prices reduced, to meet the exigencies of the manufacturing classes, as he did in 1842. Thus did the loss and burden ultimately devolve upon the land and its cultivators. He (Mr. Newdegate) was most unwilling to detain the House; but before he concluded, he trusted that hon. Members, particularly those of his own standing, would forgive his expressing a hope, that hon. Gentlemen who came down to the House to legislate upon great commercial questions, involving elaborately the interests of the country generally, and who were in the habit of expressing opinions on these important matters, should not have to avow their ignorance of the state and characteristics of our currency, which formed so important an element in all commercial transactions. Those who proceeded to legislate upon questions so extensive, involving our commercial relations with foreign countries, should surely have some knowledge of that system which depended upon foreign exchanges, and so powerfully affected prices at home. What would be thought of a physician who prescribed for his patient without feeling his pulse, without any knowledge of the state of his circulation, or the action of the heart? Would he not be considered a quack? And were not those Members who were in the habit of legislating for the country in total ignorance of our system of currency, and the state of its circulation, liable to the same imputation? For years, any one who presumed to differ from the right hon. Baronet at the head of the Government on this subject, had been considered a lunatic; for years, the right hon. Baronet, by his eloquence, and by his sarcasm, had completely stifled all consideration of this subject. But public attention was gradually turning to this subject, and he (Mr. Newdegate) did hope that hon. Members would no longer submit to be laughed out of the use of their senses. Was it patriotic—was it fair towards the constituencies—was it just towards the labouring and productive classes of this country—that a subject so deeply involving their interests, should virtually be left out of account by the great majority of that House? The action and effects of the currency were so powerful, so universal, that, as had been eloquently observed in the able pamphlet of the right hon. Baronet the Home Secretary, "its operation extended from the Queen upon the Throne, to the most abject pauper who exchanges the smallest fraction of our coin for the barest means of subsistence." He had endeavoured to describe the depressing action of our currency, as it affected the productive classes; and if the House, blind to these considerations, determined to expose them to the still further pressure of free trade—determined that our labourers, obliged to maintain the most expensive currency in the world, and compelled to pay taxes in that currency, should also be exposed to the unrestricted competition of comparatively unburthened foreigners, he (Mr. Newdegate) believed that the Legislature would bring about in this country a state of things unparalleled in the history of civilized nations. Now, could it be just to adopt free trade in all things else, and at the same time render the monopoly of money still more exclusive; for the Legislature had created a strict monopoly in favour of money, when by law it fixed the value of our coin. Were not those whose property was in money, measured by a fixed standard—if they gained security from the maintenance of that standard, and the restricted system of our circulation, bound in justice to protect those at whose expense they enjoyed that security? His hon. Friend (Mr. Spooner) had been taunted by the right hon. Baronet with having made no definite proposal. Neither did he (Mr. Newdegate) make any specific proposal for the alteration of the currency. The commencement of a Session would be the proper time for such an undertaking as that; but he was prepared to tell the right hon. Baronet what he would not have done. He would not have introduced the banking measure of 1844, to restrain still further our currency and circulation, already too narrow for the exigencies of the country. He would not, when the population, the realized wealth, the commerce, the exports, the imports, of this country had vastly increased, have still further contracted our circulating medium. He would not, as had been eloquently observed by this very Mr. Alison whose judgment the right hon. Baronet appeared to hold in such contempt, have diminished the quantity of oil supplied for the commercial machinery of this country, when that machinery had been so enormously extended, as it had been, in the last thirty years. He would not, when the supply of meat for an army had been diminished, have provided that the rations of bread also should be so rapidly and extensively curtailed—that is, he would not, when the gold was abstracted by the course of exchange, have provided that the paper circulation of the Bank should be so unsparingly contracted. He (Mr. Newdegate) would conclude by expressing his sincere anxiety that this question should no longer be denied that attention to which, by its importance, it was so justly entitled.

Mr. Muntz

said, that as he had not been in the House during the speech of his hon. Colleague, he could only form an opinion of it from the comments he had heard made upon it by the right hon. Baronet at the head of the Government; but if it advocated the payment of bank notes at the market prices of bullion, and after such prices should have been materially advanced, then that the notes in circulation should not be payable in bullion at all, he must dissent from such principle and practice. Although he very fully agreed with the speech he had just heard delivered by his hon. Friend the Member for North Warwickshire, (Mr. Newdegate), and could subscribe to nearly the whole of his statements, he doubted the discretion of both his hon. Friends, in introducing a currency debate upon the Motion of the hon. Member for Montrose (Mr. Hume). In the first place, the two subjects appeared to him to have very little connexion; and in the next place, to debate the money question at a time like the present, when everything appeared bright and smiling, was only giving the right hon. Baronet opposite an opportunity of amusing himself, by ridiculing the views and opinions of all those opposed to him upon the subject, although they possibly might eventually be found more sound than his own. The right hon. Baronet had only done him (Mr. Muntz) justice, when he said, that he had formerly recommended an alteration in the standard of value, upon the ground that a very large proportion of the liabilities incurred under the former depreciated circulation remained unadjusted; but the right hon. Baronet ought to have gone further, and informed the House that he (Mr. Muntz) had recommended that the standard in which the notes shall be redeemed should be a silver standard, like the other countries of Europe, and as this country formerly had; and also that such silver standard should be fixed, so that the relative value of the ounce of silver to the average value of the bushel of wheat, which had long existed, should be maintained; and the price of silver in this country, therefore, should be determined by the average value of the bushel of wheat obtained by the Corn Laws, which were supported by the right hon. Baronet. He could assure the right hon. Baronet that he (Mr. Muntz) was as much at issue with him upon the money question as ever he was; that the question appeared to him as unsettled as ever; that it would again have to be discussed and debated in that House; and that the time would come when the right hon. Baronet would find that he had been mistaken; that the House also would find they had been mistaken; that the country would find it had been mistaken and misled; and that all the three would have most dearly to pay for having been so long ignorant upon this important subject. He would not now say more upon the general question, but would now notice the Motion of his hon. Friend below him (Mr. Hume); and to him it appeared a matter of the first importance that some steps should be taken which should prevent the loss upon light sovereigns from falling upon the poor in the manner it had latterly done, and would do again, if nothing were done to prevent it in future. The right hon. Gentleman the Chancellor of the Exchequer had just said that he hoped the circumstance would never occur again; but he had not given the House any reason why it should not do so, and if the different Members of the Government knew as much as he (Mr. Muntz) did of the sufferings of the poor three years ago, he was sure they would see the necessity of taking some steps to prevent a recurrence of the evil. At that time he (Mr. Muntz) was in South Wales, and he could assure the House that for want of preparation on the part of the banks, sovereigns of full weight could not be changed; that he had seen women at Swansea, with children in their arms, unable to obtain the necessaries of life, and crying because they could not change sovereigns of full weight, which they had in their bands. Under these circumstances the unprincipled took advantage of their necessities; and he had known sixpence, a shilling, and even two shillings paid for changing a sovereign to silver. At that time he addressed a letter upon the subject to the right hon. Baronet, and even at this late period he would thank him for the prompt attention which he paid to the subject, and his interference, through the Bank of England. But how did such a state of things agree with the statement of the Chancellor of the Exchequer, that every preparation had then been made? Surely there must have been some neglect. Now he (Mr. Muntz), feeling assured that there would be a return of the evil, so long as the country amused itself by the present practice of rubbing gold together, so as to waste it to the tune of many thousands per annum, and periodically to suffer a loss in gross amount of some three to four hundred thousand pounds, as in the last instance, would submit a plan for the consideration of the right hon. Baronet and the Chancellor of the Exchequer, which should at least get rid of nineteen-twentieths of the evil. He must, however, guard himself against the supposition that he was one of those who advocated a circulation of 1l. notes with the view of elevating prices, and producing permanent prosperity; no one knew better than he did that such a measure must be subject to a speedy re-action, with still lower prices. As, however, the prejudices against 1l. notes were on the wane, and the right hon. Baronet had allowed them to be continued in Scotland and Ireland, it might be well to consider how absurd was the present practice in England, of wasting the gold by thousands per annum in abrasion, whilst we might lock it up safely, and as effectually use its representative in paper. Years had now elapsed, nearly twenty years, since 1l. notes were first abolished, under the impression that gold could only thereby be retained in the country; but that doctrine had completely exploded, by our having during the period before-named been fully as subject to the exportation of gold as we had been previous to the abolition of the notes. The next objection to 1l. notes was, that they encouraged forgery and crime; but this objection must be allowed to have little force, now that they were continued by law in both Scotland and Ireland. He had long been convinced that it was of no importance to the stability of the circulation and the steadiness of prices, whether the notes were 10l., 5l., 1l., or 10s., provided that they were payable in bullion on demand; and also that the amount of bullion held by the Bank bore the same proportion, at all times, to the aggregate amount of all the paper in circulation, which would be effectually produced by the management of the Bank of England under the Bill of the right hon. Baronet in 1844. With these views he (Mr. Muntz) seriously recommended to the consideration of Ministers during the recess, the allowing the circulation by the Bank of England of 1l. notes against the gold now in circulation, with a view of preventing its useless and unnecessary waste to the nation, and particularly the loss sustained by the poorer classes. He should certainly give his warmest support to the present Motion of his hon. Friend the Member for Montrose, fully believing that the subject was one of great importance, not only in a national point of view, but as bearing unequally and unjustly upon his poorer fellow subjects; and he trusted that even before the end of the present debate, the right hon. Gentleman the Chancellor of the Exchequer would propose some means of avoiding the evil in future.

The House divided on the Question, that the words proposed to be left out stand part of the Question:—Ayes 64; Noes 34: Majority 30.

Order of the Day read.