§ MR. DELAHUNTY, who had on the Paper a Notice—
To move for a Select Committee to inquire and report as to the best system of Currency Laws calculated to secure a safe and uniform money circulation throughout Great Britain and Ireland,which he was prevented by the Rules of the House from bringing forward, said, it was undoubtedly a scandal and a shame that a different system of money laws should exist in different parts of the United Kingdom, and he was induced to call attention to the matter from a conviction that the laws which it referred to required revision. There were two kinds of money, one "hard money," as the Americans called it, the other credit or paper money. In England there was a mixed currency, and hard money circulated along with paper, because in England, as in France and Ger- 1537 many, no small notes were allowed to exist. In France they had no notes of less than 100f.; but the Bank was allowed to issue notes to a much larger extent than was allowed in England. He did not at all approve the restriction placed upon the issue of notes in England, because if, you had a metallic basis, it was quite sufficient security for convertibility. There were no small notes in Ireland up to 1797, when the Bank Restriction Act was extended to Ireland, and no country ever advanced more in prosperity up to that period. If anyone were to take up the description of Ireland given by Arthur Young, and compare it with his description of France, he would find that Ireland had progressed far more than France in the same time. That circumstance he (Mr. Delahunty) attributed to the fact, that in Ireland exchanges were free, specie being allowed to flow into the country with the addition of large notes. When cash payments were resumed in 1822, under the Act of 1819, small notes were not abolished, and the consequence was that both England and Ireland suffered to an immense extent. The agricultural and manufacturing interests were struck down in both countries; but Ireland being the weaker, her banks failed soonest; and in 1822, owing to such failures and the deficient currency circulation, famine broke out and numbers perished It was then that the necessity for an ample currency was seen. In 1825, when the English banks failed, Mr. Huskisson declared that England could not have commerce, trade, and manufactures without money, and she could not have money as long as £1 notes were in circulation. It was held that gold could only circulate with the repression of the £1 notes. Canning, moreover, said it was impossible to have credit money without a metallic basis. When the currency laws of England and Ireland were the same, the circulation of Ireland was equal to one-fourth of that of England and Wales. In 1825 the Bank of Ireland had double the circulation it had now, over £6,000,000 in notes, the entire circulation being over £9,000,000, or fully a fourth of the circulation at that time of England and Wales; whilst at present the circulation of Ireland was not more than one-twentieth of that of England. In illustration of his argument, he would refer to the case of France, which 1538 had been able to pay so enormous a war indemnity to Germany, and would ask whether any country with a small-note currency could have done that? Since the late war, Germany had taken a lesson from the French, and was getting rid to a great extent of its small notes, introducing coin in their stead. The Germans, he believed, would see the policy of "going the whole hog," and would adopt the system which existed in France and in England. He only asked for Ireland that which England now enjoyed, and would be satisfied with any currency that could be devised for the two countries. If it was deemed best that Ireland should have £1 notes, let England have them also. But he did not believe that John Bull would accept anything of the kind. They had only to look at the extreme depreciation of property, and especially of railway property in America, and the widespread ruin that had resulted from it, as the consequences of "soft" money, a result which was further borne out by the experience of Ireland in 1822, when the people starved in the midst of plenty, simply because there was no money in the country, and therefore no means of giving them employment. If all the gold money in the world was doubled tomorrow, the circulation in Ireland would not be 6d. better of it. He hoped the Government would do the right thing for Ireland in this matter. The late Government had behaved abominably. The Chancellor of the Exchequer was, he believed, a man who had given some attention to financial questions. He told the right hon. Gentleman that from this time forward he should often hear him (Mr. Delahunty) in advocacy of the prosperity of Ireland and of England also, as long as the two countries were united. He only asked for Ireland the same law as England enjoyed. If the right hon. Gentleman did not wish to grant that equality in respect to the currency, let him give Ireland Home Rule, and leave the question to the decision of the Irish people. Mr. O'Connell would certainly have taken up the currency question, when it was debated in 1826, had he not been prevented from doing so by the excitement arising from the Catholic Emancipation agitation; the opinion of that great man, at all events, was known to be strongly in favour of gold. The views which he (Mr. Delahunty) expressed 1539 had been held by all great authorities that he was aware of, including Adam Smith, J. R. M'Cullagh, and John Stuart Mill. Dr. Thomas Cooper, President of the South Carolina College, for instance, held that "no notes ought to be circulated that were not for a greater sum than the highest denomination of coin," the reason being that when there were notes and coin of the same value side by side, the bankers found it to their interest to force the former into circulation. He contended that Ireland had been prejudiced and sacrificed by the financial policy imposed upon her by Dublin Castle legislation since 1825, when the exports of Irish manufactures to England exceeded the exports of England to Ireland. Since then the population and the manufactures of Ireland had declined, and there was no hope of improvement except in the change he had indicated. It was the circumstance of having plenty of specie and plenty of paper money secured upon the gold that had made England, France, and Germany what they were in regard to financial position. That was what other countries were trying to achieve; but they could not achieve it so long as they did not follow the example of England, France, and Germany, and abolish £1 notes. What he asked of the Government was a verdict which should either establish a uniform currency for the Three Kingdoms, or do away with all notes under £2.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, no one could deny the importance of the subject and the care bestowed upon it by the hon. Member opposite (Mr. Delahunty), whose views deserved careful consideration, although they might not be able to accept them. Our present system of circulation, though variable, might be fairly described as a safe one. It might admit of some improvements, and unquestionably it was not uniform. He entirely agreed with the hon. Member in saying that it would be a convenience if we could see our way to introduce a uniform money circulation; but when we had got so far, we should find ourselves in a difficulty which the hon. Member hardly seemed to have given sufficient attention to. He had proposed, as the first step of a uniform circulation, to abolish small notes. In doing that, however, the hon. 1540 Member would have to vie with Scotland, and there would be found very considerable difficulty in getting the Scotch to agree to the remedy thus proposed. And although, doubtless, the hon. Member was well qualified to speak on the subject, he (the Chancellor of the Exchequer) was not quite sure it would be found that the hon. Member represented the opinion of the whole of Ireland in suggesting that the small notes which now circulated there should be done away with. A good deal of curious evidence on the subject was taken by the Committee on Scotch Banks two years ago. He agreed, of course, with the hon. Member in the general principle that a circulation ought to be secure in having a metallic basis, and a proper law as to the convertibility of notes; but the hon. Member said it was an inconvenience to have so much small paper money in circulation, because we had less gold currency in consequence, and there might be occasions when the possession of a large stock of gold would be convenient. No doubt, but to keep up a purely or a mainly metallic circulation was an expensive arrangement; and a certain amount of paper circulation was a convenience and an economy, if you did not push it further than was required, and if it represented and corresponded with the internal wants of the country. In the case of Ireland there was evidence that such paper circulation did not unfairly represent and correspond with such wants. Going back 30 years and more, in spite of the change in the population of Ireland since 1841, there was some curious evidence of the fluctuation in the total amount of notes issued yearly by the Irish banks. The circulation had continued to be subject to nearly the same fluctuation as between one month of the year and another during the last 30 years; it was lowest in August and September; it expanded in December; it diminished again in June and July; the fluctuations, indeed, corresponded much with the theory of Scotch and English provincial circulation; and from these facts was drawn the conclusion that the issue of provincial notes in Ireland depended much upon the internal trade of the country, and that it was fairly proportional to such trade. If paper money was fairly proportioned to these internal demands, there was no 1541 doubt it was almost if not quite as convenient as gold; it had some advantages and some disadvantages; but, upon the whole we should gain very little by doing away with it. But when they came to the external demands of a country, as had been referred to by the hon. Member with respect to France, no doubt it was convenient, in case of a sudden demand from any cause, to have a large amount of gold available, and it was the great strength of this country; but if we were to provide the stock of gold that would be required to meet small notes, that would be a financial luxury that would have to be paid for. The hon. Member had referred to the distress and inconvenience caused by the return to cash payments both in England and Ireland in 1822. But although he (the Chancellor of the Exchequer) did not doubt that much of the distress which there was in 1822 arose from the return to cash payments, he must remind the hon. Member that that was a step in the direction of the substitution of a metallic for a paper currency. The hon. Member had asked why, in 1822, the Government did not come to the aid of Ireland, as Huskisson came to the aid of England in 1825. The way in which Huskisson came to the aid of the Bank of England was not in suspending the issue of £1 notes, but in promoting that issue for a time. What he would impress upon the hon. Member was that the circulation of a country regulated itself, and that it was impossible to say they could bring prosperity into a country by dealing one way or another with its circulation, and especially by withdrawing compulsory from it a convenient and economical mode of exchange. The hon. Member had referred to France, and had said that there was a greater amount of money circulating in France than in England. It did not, however, follow that a country was the richer, because of using a larger amount of coin as a circulating medium. It might be that by improved means of credit, such as the Clearing House system and others, a country might be enabled to dispense with the use of a large amount of capital as a circulating medium and to apply it in some other way, and this would be so much gain. While, however, admitting the importance of the question, and the undoubted right of the hon. Gentleman to speak upon it, he could 1542 not think that he should be consulting the feelings of the House if he were to enter further into the interesting argument which the hon. Member had presented on the occasion. The discussion for the present could have no practical issue, for, although it was well for the hon. Member to have called attention to the subject, it was not possible to have a Select Committee upon it in consequence of the manner in which hon. Members were occupied at this period of the Session. Moreover, it was the less necessary to have one in consequence of the large amount of evidence on the subject which was taken by a Committee which sat only two years ago.