§ The order of the day having been read for reading this Bill a third time,
§ Mr. Broughamexpressed a wish to be allowed to bring forward, in the first instance, his Resolutions on the subject.
The Chancellor of the Exchequerobserved, that he understood it had been settled, that the hon. and learned gentleman was to discuss those Resolutions in the debate on the third reading of the bill. After this bill was disposed of, the hon. and learned gentleman, if he thought proper, might take the sense of the House upon his Resolutions, and enter them on the Journals.
§ Mr. Brougham acquiesced.
Mr. Johnstonerose and said: I hope my hon. friends will do me the justice to believe, that I have felt very great pain when compelled to differ from them in every stage of this proceeding; but still entertaining the opinions which I had occasion to deliver when the Bank Restriction bill was passed, and on the discussion of the Bullion Report, it was impossible for me to have acted otherwise without a dereliction of character and consistency. When the Bank-Restriction bill was enacted I was a very young member of the House, and I did not venture to oppose a measure which seemed to meet with general concurrence; but I took the liberty of stating my very great apprehensions, lest it should be followed by all the calamities which in every country have resulted from giving to paper a compulsory circulation; and since the depreciation, which I then foresaw, has become manifest, I consider it an imperative duty to use my endeavours, however feeble, to persuade the House to retrace its steps.
This bill has been supported, first, as conformable to certain dicta of Mr. Pitt; secondly, as a necessary consequence of the restriction itself: and, thirdly, as indispensible to protect the tenant against the oppression of his landlord, and the stockholder against the manifest injustice of receiving his dividend in paper, while the private creditor compels a metallic payment from his debtor.
1039 As to the first point, I must be excused, if, after a lapse of fourteen years. I am disposed to place no great faith in such an authority, when opposed to Mr. Pitt's public measures and parliamentary declarations.
Secondly, if it be considered to have been the purpose of the Restriction Act to force a paper circulation upon the country, whatever might be its depreciation, this bill is the necessary consequence of the measure: but if the intention of that bill was to give a currency to Bank-notes so long, only, as they bore a value equal or nearly equal to specie; and, by giving to every individual a power to demand payment from his debtor in metallic value, to take a security against the depreciation of the Bank-note beyond a certain point; then is this bill by no means a necessary consequence of the Restriction Act.
On the third point I shall have occasion to dwell at greater length hereafter: I shall only here observe that the argument supposes an actual depreciation of the Bank-note; and as it is admitted by all sides to be an act of fraud, to pay a debt contracted in good and lawful money with a depreciated paper currency, so it becomes the duty of every man to resist it by all the legal means in his power.
But there is another consideration, which leads me to approach the decision of this question with considerable apprehension:—I mean our financial situation. Gentlemen who have turned their attention to this subject are well aware that our unfunded debt in navy and exchequer bills amounts to no less a sum than forty-five millions, the largest part of which is returnable into the exchequer, in payment of the existing taxes, four months after it has been issued. If, in consequence of the proceedings now adopted by lord King, there shall be any considerable demand on the private bankers, they must endeavour to realize their funds, which are chiefly placed in these securities; and if from this or from any other cause there shall ensue a considerable fall in the value of public securities, no part of the current revenue will be received at the exchequer, but the whole will be paid in the exchequer bills now outstanding. What may be the consequence of a failure in the ordinary receipt of revenue it is not easy to foresee, and therefore, if the Chancellor of the Exchequer had proposed this measure as of a temporary nature, avowing the disorder prevailing in our currency, professing an 1040 intention to take the subject under consideration in a future session of parliament, and precluding the further progress of depreciation by limiting the issues of the Bank to the amount at which they at present stand, I should not have refused my concurrence, in order to prevent the possibility of alarm. But his sentiments are of a very opposite nature: he maintains that the present system stands in no need of amendment; on the contrary, that it is connected with the national greatness: and he has distinctly stated, that if this bill shall be found ineffectual to support the credit of Bank-notes, it is his intention to make them a legal tender. I am compelled therefore to refuse my assent to the bill, because no disorder in our finances, no disappointment in our plans of external warfare, is equal in danger to the evils of a violation of the sacred law of property, uniformly consequent, in all ages and all countries, on measures like the present.
With a view to understand, how far this Bill is calculated to answer its professed purpose, it is material to consider, how the law actually stands', and what is the purpose of lord King in the appeal he has made to it. In this House, it is sufficiently known, though not fully understood in other places, that the effect of the; Restriction act in 1797, and the other measures connected with it, is to make payments in Bank-notes obligatory on the public creditor alone, by placing him in such a situation, that if he refuses Bank-notes when tendered to him at the Bank; in payment of his dividend, he can get nothing else. In the acquittal of all obligations between individuals, the wise and salutary maxims of the law are unimpaired, and it is yet the privilege of Englishmen, that in the payment of a debt of twenty shillings, they may refuse all the paper of the Bank of England. Not only is this the wording of the statute, but the case has been solemnly considered and ruled by the unanimous opinion of the four judges of the court of Common Pleas in the instance of Grigby v Oakes. Under these circumstances, lord King has formally announced to the world that he will no longer receive a currency, manifestly depreciated, in discharge of obligations contracted when the nominal and the real value were the same; and that he will assert his right and seek his remedy in a court of justice. Such is the portentous evil against which we are required to provide by legislative mea- 1041 sures, and now, for the first time, have we heard censure, nay criminality, attached to an appeal to the law, which has hitherto been regarded as our only safeguard and protection.
There are some gentlemen, who, disapproving of the Bill generally, do not object to that part of it, by which all process by distress is suspended, on tender being made in Bank-notes; they deem it expedient that all summary process shall be suspended, by which men may be induced to submit to the demands of lord King; and consider it essential, that parliament be actually sitting, when the final judgment of the law is pronounced. An hon. friend did put some very pointed questions to the Chancellor of the Exchequer, as to the actual state of the law, but had not the good fortune to receive explanations equally distinct; yet he must be well aware, that although the process of distress is prompt and efficacious, with a view to secure the landlord from ultimate loss, it does not accelerate the decision of any point of contention, more than the other remedies reserved to lord King,—an action on the case, or by ejectment. In every instance of distress, the tenant may replevy, and, on giving security to the sheriff the cause cannot be decided, and judgment obtained, in less than two terms: if, therefore, parliament, shall refrain from interference, and lord King remain at liberty to exercise all the powers of distress, the cause cannot be tried in Westminster hall until the next term, nor judgment obtained until Hilary term, in January 1812, or if the cause shall be tried before the judge of the assize, as is probable, a final decision will not be had before the month of May. This will equally be the result of an action on the case, and therefore no power of deferring, a decision is granted to the tenant by this Bill, which he did not actually enjoy by the law of the land. With a view to delay, with a view to the purposes for which this Bill has been chiefly approved, it is altogether unnecessary.
But I am reminded by the looks of my hon. friends, that this act has a far more important operation, and that, by the words in the Bill" or other person liable to such distress," it is intended to exempt bankers and other persons, who have issued one and two pound notes, under the 37th of the king, c. 32, from the compulsive obligation to pay in money, contained in that law. I cannot believe this act will be so construed.
1042 By the act of the 15th George 3, the legislature, with a view to prevent a paper currency from intermixing in all the re tail transactions of life, had inhibited the circulation of Bank-notes under five pounds. Its wisdom was praised by eminent political writers at the time, and be came manifest upon experience. Upon the stoppage of the Bank, it was, how ever, repealed, and private bankers obtain ed the advantage of circulating one and two pound notes. But the same law pro vided against excess and consequent depreciation, by giving to every holder of such notes the power to demand payment in money; and, in case of refusal for a period of seven days, any magistrate is empowered to levy the amount, by distress and sale of the goods of the party. We foresaw the possibility of excess and con sequent depreciation, and did take security against it, by putting it in the power of every holder of such notes to compel a payment in money, by this summary process, as often as he felt the mischievous consequences of a redundant circulation. Upon what principle is it that private bankers are, in this insidious mariner, now to be relieved from their own obligation? Were they ignorant of the nature of the responsibility they incurred, when they issued their notes? Was the fulfilment of their obligation in any degree dependant on the resumption of cash payments? Was it not incurred when cash payments at the Bank had ceased, and when they knew that cash for the fulfilment of their con tracts must be obtained from other quarters? Having accepted this benefit, with the burthen annexed, will the House absolve them from their engagements after a period of fourteen years; after the enjoyment of a privilege so beneficial as to have increased the number of bankers from 275 to 770? Even if a demand for gold compelled them to fulfil their engagements on the terms specified by lord King; if they were subjected to a loss of seventeen per cent. on each guinea; is it unfair or unjust, or is it more than the advantages they have already derived from the beneficial traffic in which they have been engaged?
It is most remarkable, that, throughout the discussion of the Bill in another place, this intention was never avowed, and that the Chancellor of the Exchequer, in the speech by which he first recommended it to the favour of the House, never touched on this point. They who introduced this 1043 clause in another place, could not be ignorant of its operation; and if they actually meant to effect so important a change, under cover of protection to the tenant, they were not only guilty of a want of fairness towards that assembly, but acted most insidiously. I cannot suppose them guilty of a conduct so unworthy; nor will it be believed by the judges of the land, when this question shall be argued in Westminster hall, that the guardians of property in another assembly,—that we, whose regard to its sacred principles is such, that we suffer not the minutest right of common, founded on the occupancy of the lowliest cottage, to be affected, but after due notice,—that the parliament of Great Britain, tacitly, and insidiously, repealed the contract by which currency was given to twelve millions, in the notes of private bankers;—a contract solemnly and deliberately prescribed by parliament, as affording the only remedy against a misuse of the privilege it granted.
As to the other clauses of the Bill by which it is attempted to make things unequal in value, reciprocally exchange able, I will not hesitate to say that it is a violation of natural right. Upon what principle, are we now to prohibit the possessors of paper and gold from inter changing their several properties, on any terms which are mutually beneficial? Is it just to pervert the law to such a purpose? or, even if it were just, is our authority competent to accomplish our object? What has been the experience derived from all legal interference with the interchange of property? What is the result of the existing law for prohibiting the exportation of specie, and other laws of the same description? Have they proved effectual in any one instance?
So many cases have been put by different gentlemen in the course of the debate; and the experience of all ages, on this subject, has been so uniform, that even the authors of the law cannot indulge a hope, that it will be effectual. If circumstances render it advantageous or necessary, that parties should exchange their several properties, exchanges must and will take place in spite of all our efforts; and the only consequence will be, to add to the cost of the exchange, resulting from the several values of the commodities exchanged, the additional expense, which is to compensate for the danger of being engaged in a violation of the law. I entreat my hon. friends to consider the case 1044 stated on the last discussion, in respect of silver. To supply the want of silver currency, issues of dollars have been made, first at 5s., and lately at 5s. 6d.; they have vanished from circulation, in proportion as bank-notes have depreciated. By the progress of the disease, the silver tokens lately coined, will become more valuable in their metallic state, than in the shape of coin, and, like the rest, will speedily", disappear. The same scarcity of silver, as has lately existed, will recur; and, as the business of a banker cannot be conducted without silver change, he must give a premium for it, correspondent to its advance in value compared with notes, and an increased compensation to those who incur the legal dangers of conducting the barter.
I cannot suppose, that my hon. friends seriously hope, that this Bill will support the value of the paper currency; but it is expected, that by giving a parliamentary discountenance to the measure now adopted by lord King, of demanding payment in specie, the general adoption of the practice will be prevented.—Vain and delusive hope! much as I condemn the abuse which has been heaped upon that nobleman, I should be disposed to add to it in an aggravated degree, if, after deliberately engaging in a question of such importance, he should meanly shrink from bringing it to a final issue. But even if he were to be so wanting in consistency, there are others who would undertake the duty. The depreciation of paper is become manifest to the whole world; the loss is no longer inconsiderable; it now amounts to twenty per cent. nearly; and as the law has not yet rendered it compulsory in the acquittal of obligations, men owe it to them-selves, men owe it to their country to appeal to those laws which are stilt in existence for the protection of individuals, and for a fair and just fulfilment of contracts. This therefore is no other than a prefatory measure, to render bank-notes' a legal tender. The Chancellor of the; Exchequer, with that fairness, and I will-add with that courage, which belongs to him, has distinctly stated his purpose. He has distinctly announced, that unless wear content to receive bank-notes in all payments, unless we are content to forego, the rights we derive from the law; he with propose to parliament, to render them a legal tender. I now therefore implore, the House gravely to consider what in every country has been the effect of such a mea- 1045 sure. Has it not universally been attended with the ruin of the public creditor, and with the subversion of private property? And by what delusion, by what infatuation is it supposed, that to us alone belongs an exemption from calamities, which have ensued among all other nations?
Great offence is taken by gentlemen, when, tracing the progress of this measure, among other nations, it is said: you will proceed from legal tender to a maximum, and by a maximum cause a total stoppage of all pursuits of trade and agriculture. I am willing to allow, that in the present state of men's minds, it seems impossible we should ever be brought to enact laws of this nature; but how gradually do the necessities resulting from our own improvidence, and the difficulty of tracing back our steps, alter our opinions, and induce our assent to measures formerly regarded with the utmost reprobation! In fact is not this very law a law of maximum in respect of gold and paper currency, which must aggravate the evil it is designed to remedy, by banishing from the market an article no longer permitted to find its own value? And is it not supported by a minister, who first recommended himself to public favour, by minutely tracing the progress of similar measures among our enemy? Before we give sanction to the roost oppressive laws ever adopted in any country, to support a depreciated currency, it is not necessary for us to depart further from our present opinions, than we have already departed from the maxims of our ancestors, when we listen with complacency to the Chancellor of the Exchequer, suggesting the future necessity of paper currency becoming legal tender, and a director of the Bank proposing the immediate adoption of such a resolution. How little are we now conscious of the pride and exultation with which we once repeated to ourselves the well-known words of Mr. Burke, "our paper has a value in commerce, because in law it has none—it is powerful on Change, because in Westminster Hall it is impotent!" Then it was the just boast of an Englishman, that a creditor might refuse all the paper of the Bank of England in payment of a debt of twenty shillings. Now we overwhelm with reproach the individual who has been found to exercise the right.
I am not disposed to exaggerate the gloom which such changes of opinion, and such measures, inspire; and since it is 1046 offensive to so many gentlemen to designate Bank-notes by the term of assignats, I will refrain from it, But when gentlemen state that a hundred and thirty millions of assignats were issued in one year, and, in a confident tone, ask, would you compare such a currency with Bank-notes, of which the whole issue is 23 millions, I must be permitted to remind them, that this issue was in the last stage of the disease; that we are now only commencing our career; that when Mr. Burke was writing some of the reflections I have quoted, the issue of assignats had not exceeded 16 millions, which were less depreciated than the present currency in Bank-notes. I have undoubtedly the utmost confidence in the wisdom and honesty of parliament. I believe, that even if we do not return to a metallic circulation, we shall proceed in the career of depreciation with less rapidity, and with more, regard to the principles of justice, than any other nation: but I cannot indulge the hope, that we shall escape mischiefs from which none have been exempted. There is no such radical difference in cur situation, as will warrant such a hope. Other nations, like ourselves, have used the agency of Banks; several times has France defrauded her creditors through the agency of the Caisse D'Escompte, and other banks. A very large part of the depreciated paper now current in so many of the states of Europe has also been is-; sued through banks and companies. But we are told, with that complacent smile, which too often marks an Englishman, when he speaks of the institutions of his own country, the Bank of England is founded upon principles different from all other banks; it advances its notes only for values actually deposited in its coffers. I know not, that the principles of the Bank of England are in this respect different from the principles of any other bank. No establishment of this kind ever professed to make advances of its notes, but for securities of adequate value, and I am not aware of any great bank, (the Ayr Bank excepted,) that failed by a departure from its principles, except through its accommodation to government. I can not perceive the difference, between, the Bank of England making advances on an exchequer bill, and the Caisse D'Escompte issuing its notes on the acceptance of a farmer-general of the revenue in former times; except in as far as the government of England, ii more, likely to 1047 maintain its faith than the goverment of France. Too close a connection, too liberal an advance to government, has uniformly first discredited, and ultimately ruined, every bank. Governments, in their dealings with banks, resemble a class of customers not unusual, who, in order to pay one bill, demand permission to discount another; so, in the next year, government will faithfully discharge its obligations; yet we shall probably find, that the claims of the Bank on the revenue of the approaching year are somewhat greater than at present. Therefore the true matter for our consideration is not concerning the principles on which the Bank is constituted; but is it now an independent body, in the same degree as in former years? and has it not increased its advances, and drawn closer its alliance with government? It has been said the progress of depreciation was rapid in France, because paper was issued for the capital of the debt created in supporting war; it is slow in England, because we issue paper for the interest only of the capital. It was properly answered, by the Chancellor of the Exchequer, that we provided for the interest of our debt by annual taxes; but are not the accommodations of the Bank progressively increasing, either in the shape of advances, or purchases of exchequer bills in the market?
I disagree with those who profess themselves unsatisfied, unless the Bank possesses a guinea in its hoards, for every note that is put into circulation. Such is not the principle on which paper currency in these islands has been established. But I may be allowed to ask, is the Bank of England actually solvent, except in as far as government shall discharge its obligations? I voted for a committee to enquire into the affairs of the Bank, in order to ascertain what proportion its other assets bore to its demands on government. The deputy governor of the Bank of England has since enumerated demands of this description to the extent of nineteen millions, to which is to be added 800,000l. advanced to the East India company, on the security of 1,200,000 three per cents. and the whole amount of Exchequer bills purchased by the Bank, in the market, making no less than 26,000,000. Under such circumstances, the Bank is little else than a machine of government, and cannot control its own progress. Who now denies that the stoppage of cash payments was the result of measures which the 1048 Bank was compelled to adopt by Mr. Pitt? At that time the Bank direction was composed of persons, (Mr. Winthrop and others,) brought up in the sober school of mercantile economy; they entertained no wild notions of extending trade, or carrying on war, by paper credit; and, foreseeing the dangerous consequences of the propositions to which they were urged, they forcibly and solemnly protested against them. Did their opposition pre vail? did not the importunity and influence of government compel them to yield assent to measures which ended in stop-page? If such was the influence of government at that period, who shall entertain a hope that the directors can now refuse to accede to the requests of government, now that government protects the Bank against its own creditors, with a degree of zeal proportioned to the pecuniary accommodations it has itself received? Let us only consider what occurred last year after the examination of the Bullion Committee, after it became the deliberate opinion of all candid and impartial men, that it was expedient to try the effect of a decreased issue with a view to remedy the exchanges. It is impossible to suppose that the Bank directors were not willing to have made the experiment, and the opportunity was afforded them. After having exercised the utmost liberality in supporting commercial credit, the demand for discount fell greatly short of its usual extent, and a diminution of the circulation might have taken place without affecting the commerce of the country, which had been urged as the great motive for sustaining it on so enlarged a scale. But did the directors of the Bank find themselves at liberty to make this salutary experiment, by diminishing their circulation in the same proportion as the demands for commercial discounts had diminished? was not the influence of government exercised to induce the Bank to make advances to Mr. Goldsmid and others, and to purchase Exchequer bills in the market, to such an extent, as involved an increase of Bank notes to the amount of twenty three millions, being three millions more, than in the former year, when the issue had been deemed excessive? In this, I blame neither the government, nor the Bank; great mischief might have followed, if they had not done so; public securities might have fallen very considerably; and if they had fallen, the revenuer 1049 would have been paid in Exchequer bills, and the resources of government have entirely failed. I state it, only to shew the impossibility of the Bank diminishing its issues in the present state of things; to prove, that we must go on in the same course in which we are proceeding: and thus to demonstrate, that the depreciation of Bank notes, which now amounts to twenty per cent. has no other limit, than the wants and necessities of government.
If the House will not take warning from what has happened in other nations, at least let us derive instruction from our own legislative proceedings. On a former night an hon. gentleman stated the course of the American legislatures, even when acting under the control and supervision of the British House of Commons. After a paper currency was substituted for the precious metals in each State of North America, its depreciation speedily followed, and gradually proceeded in its course, during a period of sixty years, in times of prosperous trade, and in periods of adversity; until parliament, disregarding the arguments, which now meet with so favourable a reception in this House, consulting the principles of justice, and impressed with a strong sense of the manifold evils resulting from such a system, proceeded to put an end to it by a legislative enactment. I refer to the act of the 4th of Geo. 3, cap. 34, the preamble of which never ought to be absent from our minds:" Whereas great quantities of paper bills of credit have been created and issued in his Majesty's colonies, or plantations in America, by virtue of acts, orders, resolutions, or votes of Assembly, making and declaring such Bills of credit to be legal tender in payment of money; and whereas such Bills have been greatly depreciated in their value, by means whereof debts have been discharged with a much less value than was contracted for, to the great discouragement and prejudice of the trade and commerce of his Majesty's subjects, by occasioning confusion in dealings, and lessening credit in the said colonies." I humbly beseech the House to direct its attention most carefully to this instructive case; because it affords an example applicable to our present situation in every part. First it shows, that whenever a paper circulation has been substituted for a metallic currency, no prudence in the issue of it; no attachment to the principles of justice; not even the supervision of parliament legislating as 1050 judges, and not as parties, can preserve it from depreciation. Can the representative of money be as valuable as the thing represented, unless convertible into money at pleasure? Can a promise to pay, at a period indefinite, be as valuable as an actual payment? In every state throughout the colonies, depreciation varied only in proportion to the moderation observed in the issues of paper. In some States it amounted to eleven hundred currency for 100 pounds sterling, while it was only one hundred and thirty per cent. in the wise, moral, and religious state of Pennsylvania.
Secondly, it proves, that in such a state of things, the evil has no tendency to correct itself, and is no way influenced by what is called a favourable or unfavourable balance of trade. During 60 years, our American Colonies carried on the most favourable commerce; yet they derived no accession of the precious metals sufficient to supersede the use of paper currency, though in the immediate vicinity of the mines which supplied the world.
Thirdly, the proceeding is said by Adam Smith to bear resemblance to a scheme of fraudulent debtors to cheat their creditors, and its injustice and impolicy are forcibly set forth in the emphatical words which I have quoted from the act. But the Americans themselves were totally unconscious either of the cause or the result of the system. Like ourselves they attributed the fall of exchange to the deranged state of commerce, and being for the most part debtors to the Mother country, loudly complained of the injustice of parliament, when it enacted that paper should no longer be deemed legal tender.
Lastly, we may hence learn how vain is the apprehension, generally entertained, that, by a recurrence to cash payments, we shall want a measure of exchange in all the ordinary transactions of human life; since we find, that a currency which had existed during half a century, and extended to the minutest fractional payments, was decried after a period of four-teen months; and that the precious metals immediately assumed the place of the former depreciated paper, without occasioning the least embarrassment to individuals, or to the State, and with incalculable benefit to the community.
Having said so much, with immediate reference to the Bill, I hope I may be allowed to trouble the House with a few words concerning the effect of a depreciation, of currency, as the subject appears 1051 to me much misunderstood. It has been conceived, that the present is a question which chiefly concerns the landed interest: but, in point of fact, it relates, almost exclusively, to the public creditor, and all others who have fixed incomes; and touches the landed proprietor no otherwise, than during the period for which his leases are granted. It must be sufficiently evident to every one who has reflected upon the subject, that, as the value of all articles depends upon their relative plenty or scarcity, whenever the currency of any community is increased, whether consisting of the precious metals, or of paper, it must represent a smaller quantity of all other articles. When this change takes place, each party naturally endeavours to shift the burthen from himself; the landlord demands a higher rent, and obtains it, because the value of land is measured by the quantity of labour which it can command, and by no other scale; the price of labour is in no degree affected, the value of labour being in all cases proportioned to the demand for it, and paid for, in a certain proportion of the necessaries and conveniencies of life, whatever may be the nominal values which represent that proportion. Neither are merchants and traders, who buy to sell again, in any way injured; they only pay a greater nominal value for each commodity they purchase, which they sell again for a proportionate increase:—nay, in every instance, where they trade upon a borrowed capital, they are benefited, as they are enabled to acquit the original debt contracted, with a less quantity of real value. The only persons who are substantially affected and injured, are the public creditors, and all other classes of men who have fixed incomes, or are under contracts, the measure, of which is regulated by a monied price; they have no means of casting the burthen from their own shoulders; the amount of their receipt is fixed and limited by the engagement itself, and in reality daily decreases by becoming exchangeable for a less quantity of every other article. At first view, it might be thought that the state stands in the same relation with this class of persons, its revenue being fixed, and its expenditure dependent on the value of the labour and other articles which it has occasion to purchase; but it will be found that so much of the revenue as consists of ad valorem duties, such as the stamps, Property 1052 Tax, and many others, rises with the depreciation of the currency; and, above all, the state has the power of compensating itself for a depreciation in the value of its revenue, by an increase of imposts. The state, therefore, remains a gainer, on all payments made to its creditors, of the difference between the value of money at the time when it pays, and the value of money at the time the loan was contracted; and ultimately nations have generally availed themselves of such a contingency to expunge their public debt. The wealth, the industry, the commerce, the agriculture of the nation, are neither advanced nor impeded. To suppose that the state acquires a power of maintaining foreign wars, and adds greatly to its pecuniary resources, by means of the depreciation of currency, is an absurdity reserved for present times:—foreign wars can be supported only by the surplus of our agriculture and commerce, beyond what is necessary for our own consumption; and the means of the state are always proportioned to the extent of that surplus, whether represented by a greater or smaller quantity of nominal value.
When, therefore the first symptoms of depreciation become apparent, the public creditor, and every class of persons enjoying fixed incomes, are peculiarly entitled to the care and protection of the legislature, because their condition depends wholly on the faith and honour of the state. By various natural, causes, their in comes are liable to gradual deterioration; but, if to this be added a deterioration arising from the depreciation of the currency itself, the state is then guilty of the utmost degree of injustice and oppression. When the stoppage of the Bank took place, in 1797, our necessities compelled, us to be guilty of this injustice, by paying the public creditor in paper, instead of; metallic currency, leaving other classes of creditors to exact a metallic payment from their debtors, whenever they thought, fit. But this, so far from being an undue preference of the private creditor, seemed; to the public creditor an important security against an indefinite extension of injustice. It kept alive a memory of the true measure of value, and of his contract with the state. It was calculated to retain more metallic currency in circulation, than would otherwise have remained. It seem"; ed a guarantee for moderation in the issue of notes, since, none were bound to accept them but while they were judged of 1053 equal value with cash, and the guarantee Would have been effectual, if we had been individually vigilant, when the early symptoms of depreciation became apparent, if from unsuspecting confidence depreciation should ensue, and men should insist on metallic payments, as lord King is now doing, confidence in the justice of the British parliament forbade the apprehension, that when every individual was enabled to obtain payment of his debt in the good and lawful money in which it was contracted, the state would persevere to pay its creditors in depreciated paper. Now the argument of the noble lord (lord Castlereagh) is a little curious. His sensibility is extremely acute on this subject. "Would you" says he," commit the monstrous injustice of paying the public creditor in paper, while the private creditor is paid in metallic money?" an argument in itself a confession that paper is less valuable than coin. The just remedy would be to pay the public creditor according to the terms of his contract." But," says the noble lord, "Take from the private creditor the right of demanding payment according to the terms of his contract, and deal out the same measure of injustice to both parties, by compelling them to accept payment in depreciated paper." On behalf of the public creditors, I do most earnestly protest against the remedy proposed by the noble lord. If the necessities of the state do net enable it to fulfil its engagements with us, our lot will not be alleviated by an infraction of justice extended to other descriptions of men: let them enjoy their rights in their fullest extent; the wrong we sustain must be so manifest to all mankind, that in process of time, relief may be granted to us; but if a common measure of injustice be extended to all other members of the community, then we shall be entirely forgotten, and finally afford to mankind another example of the fate that awaits those who enter into engagements, in which right is on one side, and power on the other.
But let me now examine the conduct of lord King, which has been as much condemned by the public in general, as within the walls of the House. After the most deliberate and sober reflection, I solemnly declare, that in my judgment, he merits the thanks of the public, rather than its censure. I do not hesitate to avow, that for the last three years, during which depreciation has been going on, I have very 1054 often deliberated on demanding payment of debts in metallic money; and if I have been deterred from doing so, it has not been from any doubt of the justice of the measure: but being totally unconnected with party, and fully sensible of my own insignificance, I did not find in myself courage to brave the clamour which I foresaw would be raised by the many persons interested in the continuance of the present system of things. By this declaration, I trust I shall not be deemed to brave public opinion. He who affects to place himself above the opinion of mankind, is more or less than man; but entertaining these sentiments, I will not, while I am conscious of their rectitude, shrink from the avowal of them, because they may be unpopular. What is the spirit of the contract between a landlord and his tenant?—That the landlord shall receive a monied rent equal to a certain proportion of the produce of the soil;—and if a monied rent paid in notes, actually depreciated, no longer represents that proportion of the produce, is it unjust or unfair to require payment in metallic currency, which more nearly represents that proportion? Suppose the noble lord to have let, in 1780, a field capable of producing four quarters of wheat, worth on an average of the last 15 years 180 shillings; and to have allowed 135 shillings for the labour and stock of the tenant, and reserved to himself a rent of 45 shillings of metallic money, or one quarter of the pro" duce. Suppose the same field still to produce four quarters, which, on an average of five years, sells for 85 shillings per quarter, or 340 shillings, in paper currency. The sum necessary to compensate the labour and replace the stock of the tenant will be 225 or ¾ of the produce, every article necesary to cultivation having advanced in cost in the same proportion; but if he can acquit himself of his rent by 45 shillings of the same currency, he will be a gainer of 40 shillings; the share of the landlord, which, in the contemplation of the parties when the contract was made, amounted to 17/68, will be reduced to 9/68; and the farmer, who looked to 51/68 will receive 59/68. Repayment is not demanded of the 8/68 or 40s. thus lost by the landlord, and gained unexpectedly by the tenant. Lord King was aware of the natural depreciation of money in a rich and flourishing country, and is content that his tenant shall enjoy a very large portion of the gain. He requires only that his contract shall be executed in, the terms in which it 1055 is conceived;—45 shillings formerly contained about 9 ounces of standard silver; and were represented by 18 pieces, called half crowns. The mystic word" Bank" has been imprinted on their face, and he is required to receive these same pieces as of the value of three shillings, though no individual in the community will give in exchange for them, a particle more of his property, than when they passed by their old name. Our tone and manner of thinking may have altered, since the case is no longer viewed in the abstract; such transactions, however in other countries, and among ourselves in other times, have been stigmatized as gross and barefaced frauds. But the currency of the bank, though it may have lost of its value on 'Change, is not yet omnipotent in Westminster-hall; and lord King has appealed to the law of his country, to enforce the rights which still remain to him.
But it is urged that landlords may exercise a grievous oppression over tenants. These names, whenever they are used, we consider to be descriptive of parties between whom respect and attachment, kindness and protection, mutually exist. And, happily for this country, so rare is the character of a harsh landlord, that I believe much of the odium attached to lord King has proceeded from an idea, that some severity to the tenant was in contemplation. The calculation with which I have troubled the House will show, that even if rents were paid in the manner demanded by lord King, the gain of the tenant, which is now 40s. upon a payment of 85s., will only be reduced to 31s., an advantage accruing to the tenant from the increased abundance of the precious metals, and other circumstances. But, even laying these circumstances out of our view, the tenant, whose currency consists for the most part of private banker's notes, will be no sufferer. Neither the public, nor lord King, seem to have been aware of the 37th Geo. 3, cap. 32. I was not till lately conscious of the powers it granted to enforce payment, in money, of one and two pound notes from the private bankers, who have issued them By means of that act the tenant who holds such paper will be entirely relieved. Whenever the landlord demands a metallic payment, it will only be necessary to carry the very notes, with which the tenant has usually paid his rent, to the private bank, and demand their value in specie. The law has provided efficacious means for enforcing the de- 1056 mand; and if any hardship or inconvenience or loss is sustained, it will fall, where it ought to fall, on those who during fourteen years, have reaped large gains from the circulation of notes; who, by the extent to which they have pushed their issues, have rendered manifest and intolerable the depreciation inseparable from paper currency. I hope no man will judge me to speak invidiously: I consider all private banks as institutions arising out of the wants of the community, and eminently useful. So far from concurring with those who would sacrifice them at the shrine of the Bank of England, I would rather forfeit all the benefits resulting from that establishment, than disturb one individual in his honest calling, whether founded on the accumulated capital of several generations, or upon a bare confidence in the probity and industry of the individual. But I will not, I dare not release him from the performance of one tittle of his engagement. If it be demanded, as in the case of the tenant," Did the parties look to the fulfilment of the contract in any other manner than in bank-notes?" I answer, they did so look. Not only is the private banker bound to pay one and two pound notes in money, by the general law of the land, from whose obligations no man is exempt by reason of ignorance; but, by the 37th Geo. 3, cap. 32, a distinct and special contract was created; private bankers were allowed to press their circulation into the retail transactions of life: but this great source of emolument was permitted to them only on the special condition of converting their notes into money at the option of the holder under pain of specified penalties. The boon was accepted, with all the obligations attendant on it; each village soon produced a banking shop; for fourteen years the country has been saturated with paper currency, and profits have been enjoyed beyond the wildest expecttation. After such a lapse of time, when at length it is perceived, that the easy confidence of the country has been abused; when our circulation is manifestly depreciated; when each individual has been injured in his fortune by a departure from the only true and just measure of value; shall we stigmatize the individual who refuses to receive a depreciated currency, and exercises the option granted to him by the law, for the very purpose of preventing that depreciation which the legislature foresaw?
1057 I ask the noble lord, if, when the assignats were first sent forth into circulation; if, when the American Congress, in the year 1775, first issued their currency; if, when our own colonies first emitted that compulsory paper which parliament has described as pregnant with so many evils; if, so those countries, there had been found a person, who, disdaining public clamour, and appealing to the laws of his country, (and those laws could have been enforced), had refused to submit to the aggravated injustice of receiving such paper in discharge of an obligation contracted in good and lawful money; I ask the noble lord, if such a person rousing the nation from its slumbers, had rendered it sensible of the evils of all compulsory paper, and restored the use of metallic currency; would such a man have been stigmatised as regardless of the obligations of conscience, and insensible to the prosperity of his country?
But it is said that the public mind has been disturbed, and its confidence in the notes of the Bank of England abated. I believe that a confidence in the notes of the Bank of England is very little influenced by our resolutions. If our opinions could attach estimation to them, we have already declared them equal in value to the precious metals: but on such subjects mankind are influenced by the evidence of their own senses, and estimate all articles by their value in exchange. The little importance attached to our opinions in the market cannot be better illustrated, than by the fact stated by an hon. director of the Bank, that, while this Bill has been under discussion, exchanges and the price of bullion have become more favourable.
The noble lord is likewise of opinion, that a sense of moral duty should have deterred lord King from the course which be has taken. I can very well admit, that if the depreciation was very inconsiderable, as in the first year after the restriction, when the precious metals and paper were readily exchangeable for each other, at a small premium, it would have bean improper to have disturbed an order of things with which the country was generally satisfied. But I wish to know to what extent this forbearance is to be carried: if a sense of moral duty may induce our submission to a depreciation of five percent, are we bound to submit to a depreciation of ten? or, if to ten, to fifteen or twenty? Under such Circumstances, if government, from temporary motives, refuses to remedy a disease so fatally progressive in its nature, 1058 and avows its determination to persevere,—is it unbecoming a man of high rank and irreproachable character, raised above the suspicion of mercenary motives, to proclaim the wrong he feels, and to appeal to the laws of his country to remedy an evil which can be resisted only in its incipient stages? For be it always remembered, that, if we shall persevere in this system, and depreciation shall increase, it will be impossible to retrace our steps: the hardship of compelling the fulfilment, in metallic value, of contracts which have been formed at periods of depreciation, being no less apparent, than to suffer a debtor to discharge, by depreciated paper, an obligation contracted when the real was correspondent with the nominal value of money. Let us not deceive ourselves: let us not fortify each other id error, by reviling the man who recalls us to a dispassionate consideration of this subject by ah appeal to the judges of the land, to that tribunal which is exempt front passion and prejudice. Does or does not depreciation exist? Is the true test by which the conduct of lord King must be judged. If depreciation does not exist, he has erred greatly: but if depreciation does exist, and to a considerable extent, then is he the defender of the rights of the public creditor, and all other persons enjoying fixed incomes, as payment to them in a depreciated currency has ever been acknowledged to be a most manifest in justice.
And now to the question of depreciation, to which I should have addressed myself in an earlier stage, had I conceived that it would still, have been denied. I despair however of convincing any man who is not already satisfied. Have not two years: now elapsed, since the exchanges with, all foreign countries have been depressed, below their usual level, to the amount of 20 per cent? Do not the precious metals, compared with Bank-notes, bear the same relative increase of value? Has it not been stated, that, in Jersey, the guinea exchanged for twenty-five livres, and the Louis d'or for twenty-four livres; that the Jersey Bank-note for a Louis payable in specie exchanged for twenty-four livers and that the English Bank-note exchanged only for twenty livres? Is it not acknowledged even by the Chancellor of the Exchequer, that the precious metals are more valuable than paper under certain circumstances? and if more valuable for any supposed purpose, must not that alone 1059 give them a value in the general estimation beyond paper, which is not so applicable? But will the evidence, resulting from the late issue of Bank-tokens, likewise be denied? The whole cannot be be greater or more valuable than the parts of which it is composed; three notes of one pound each cannot be more valuable than twenty three-shilling pieces of the new currency; and these twenty three-shilling pieces actually contain something less than the same quantity of standard silver, as was contained in twenty half-crowns. Suppose the Bank-notes for twenty-three millions, now in circulation, annihilated, and the same represented by a proportionate number of three shilling pieces, would gentlemen then assert that our currency was not depreciated? The same quantity of silver as was contained in fifty shillings would represent sixty shillings, and would any one deny that the denomination of our standard was raised, which is precisely the same thing? But really in discussing this question, gentlemen of the gravest character, and enjoying the highest authority in the House, for accuracy, and acquaintance with subjects of this nature, seem to feel themselves at liberty to indulge in the most extravagant perversions or omissions. 'Would it be believed, that the treasurer of the navy had twice entered into a discussion, of the amount of our currency, and had each time omitted an item of thirty millions in his calculations? Would it be believed that he had totally left out of consideration the circulation of the private Banknotes previous to the restriction, and in the present times? He has stated that the amount of our circulation in former times was thirty millions of specie and eleven millions of Bank-notes, and asked how it was possible to conceive a redundancy in our present circulation, when it consisted of twenty-three millions of Bank-notes, and when our gold was reduced to a sum not exceeding five millions; making in the whole twenty-eight millions, instead of forty-one of which it formerly consisted?
I believe this estimate of our specie to be considerably exaggerated; but, proceeding upon the right hon. gentleman's own data, his calculation is manifestly defective. Private Bank notes formed a material part of our circulation before the restriction, and now exceed our Bank currency and specie united. Conformably to the right hon. gentleman's own view, our currency was
| 30,000,000 | Specie |
| 11,000,000 | Bank notes |
| 7,000,000 | country notes; |
§ Its present amount is
| 5,000,000 | Specie |
| 23,000,000 | Bank notes |
| 32,000,000 | Country notes |
§ Making sixty millions in the whole; and constituting an addition to our currency of 12 millions instead of a diminution of 13; or an error in the right hon. gentleman's statement to the extent of 25 millions.
§ I hope I shall not be deemed presumptuous, when I most earnestly implore the House to attend to the facts that regard the circulation of private banks, because very little attention has been bestowed on the subject, and it has been thought impossible to ascertain the amount of their circulation.
§ It is sufficiently known, that, by various acts, a stamp duty is imposed on all promissory notes re-issuable, progressive according to the value expressed on the face of the notes. From October, 1804., to October, 1808, the duty by the 44 Geo. 3, was 3d. for every note, the value expressed on which did not exceed
| £. | 1 | 1 | |
| 6d. for every note not exceeding | … | 2 | 2 |
| 9d. for every note not exceeding | … | 5 | 5 |
| 1s. for every note not exceeding | … | 20 | 0 |
§ These duties, since October 1808., have been increased by the 48th Geo. 3, on a scale with which it is not necessary to trouble the House. It is greatly to be lamented, that accounts of the produce of the duties on promissory notes re-issuable, cannot be had from an earlier period than October, 1804, they having been con-, founded with the duties on bills of exchange. Had they been in existence, we might have traced the progressive increase of private bank circulation from its origin. But the accounts since October 1804, have been kept with the utmost regularity, and show the amount of stamps, of each class which have been issued. Notes for 5l. and upwards may be reissued as often as they return upon their issuers, during three years after their first emission, when the law requires the issuers to cancel them. Notes of one and two guineas may be reissued for a period unlimited, it having been assumed, that in, the course of three years circulation, they generally become so rubbed and worn as to be defaced, and incapable of further circulation. This, statement was furnished to the treasury by the private 1061 bankers, and therefore the average circulation of these notes may be presumed to last so long at the least. It is evident that no banker will incur the expense of issuing a note with a new stamp, as long as he has in his possession any notes which have been returned upon him, and are circulable; neither will he keep by him any large quantity of stamps ready to be filled up, when communication with the metropolis is so easy and expeditious. The number of stamps issued in three years antecedent to any given period will therefore shew the number in actual circulation. The only deduction to which the gross amount seems liable, is, for the banks which have failed, or declined business during the interval, which gentlemen may estimate in any manner they please, but which can scarcely be equal to the number of stamps which remain in circulation beyond the period fixed by the law.
§ Proceeding upon these data, we have therefore the means of ascertaining the issues of private bankers with considerable accuracy, by calculating the sums issued on the several classes of stamps. I assume that for every 3d stamp on which the private banker is competent by law to issue a promissory note for one guinea, there shall have been issued a promissory note for one pound only:
| For every 6d. or two guineas' stamp | £. 2 |
| For every 9d. or five guineas' | 5 |
§ And for every 1s. or 20l. and upwards 10l. only. The actual issues cannot have been less; they probably have been more. Applying this calculation to the stamps in the year ending October 1805, the result will as be follows:
| No. of Stamps. | £ | |||||
| 2,905,600 | 1l. | 1s. | stamps at | 1l | only | 2,905,600 |
| 32,000 | 2 | 2 | 2 | 64,00 | ||
| 823,466 | 5 | 5 | 5 | 4,117,330 | ||
| 302,600 | 20 | 0 | 10 | 3,026,000 | ||
| 4,063,666 | 10,112,930 |
§ Pursuing the same method in the following years we have for
| £ | |||
| 1806 | stamps | 4,032,155 | 10,337,905 |
| 1807 | 2,834,072 | 6,123,620 | |
| 1808 | 2,901,051 | 8,011,659 | |
| 1809 | 7,574,663 | 15,332,426 | |
| 1810 | 4,405,054 | 9,617,081 |
§ Hence it appears, that the number of stamps in circulation, at the end of three years, in October,-1807-, was 10,929,893, and the correspondent value of the notes issued by private bankers, was£26,574,455 1062
| 1808 | 9,767,278 | 24,473,184 | ||
| 1809 | 13,309,786 | 29,467,708 | ||
| 1810 | 14,880,768 | 32,961,169 |
§ The issues of the Bank of England have been progressive in like manner:
| In 1807 | 17,500,000 |
| 1808 | 17,500,000 |
| 1809 | 20,000,000 |
| 1810 | 23,000,000 |
§ Combining the issues of private bankers with the issues of the Bank of England, the whole paper circulation of the kingdom will have been:
| 1807 | 44,000,000 |
| 1808 | 42,000,000 |
| 1809 | 49,400,000 |
| 1010 | 56,000,000 |
§ I entreat the Treasurer of the Navy will do me the honour to bestow his attention on these facts. They are founded on documents which cannot be controverted. In each calculation I have assumed that the actual issue of the private banker is the smallest sum for which the stamp is available, and not the largest, as I might have been justified in doing. The result would have given an increased circulation of several millions. But, if I am not in error, all doubt as to depreciation must cease. Here is an end of the argument, that our circulation has been gradually extended with the increase of our commerce and our revenue, during a lapse of fourteen years. I am willing to allow, that until the year 1808, our paper currency may have extended itself with some relation to these circumstances, though with much more rapid progression. But what has been the state of our revenue, or our commerce, during the two last years? Our revenue has advanced a little; but our commerce has declined, as my honourable friends tell me, and its decline is the cause of the evils we suffer. To what then has this enormous increase of paper circulation been owing? To the facility of the Bank in granting accommodation to government, and to the activity of private bankers to push the circulation of their notes in proportion to the increased issues in the metropolis. The depreciation of paper in former years, was chiefly a subject of private discussion among speculative men. But, when seven millions were added to our currency in one year, can wee doubt the cause of the fall of bur exchanges? and when an addition' of a like sum ensued in the succeeding year, shall we be surprised if the depreciation of paper 1063 is now universally manifest? That prices advanced more than one half during the latter part of the 10th century is universally known; and the importation of the precious metals from America, which in no year exceeded six millions, diffused throughout the world, is acknowledged to have been the cause. Will then the sturdiest believer of the immutable value of Bank paper now maintain that fourteen millions can be added to the paper circulation of Great Britain in two years, without producing some effect of the same nature? Even the noble lord may hesitate in longer asserting that our disease is the scarcity of gold compared with paper, rather than the redundancy of paper compared with the precious metals. In my mind the difficulty is, how so great an increase of currency has produced so little advance of prices; and I might thence doubt the accuracy of my own statement, if I did not call to mind the many historical facts, which prove, that prices do not instantly follow an increase of the circulating medium, and do not find their true level until it has been fully diffused throughout the community, and intermixed in every transaction of life.
§ But there is another view; on which I am content to rest this, question. In a former debate, a right hon. gentleman of the most extensive information, and the utmost candour of mind, called upon a late Secretary of the Treasury, who bad greatly distinguished himself on such subjects, to state, whether he contended, that the currency was depreciated on a general view of prices? I then accepted the challenge, and declared that the argument for depreciation was at an end, unless it could be shewn that the currency was depreciated on a comparison with all those articles, which political writers, in considering this question, have adverted to as tests of depreciation.
§ As to the price of wheat, which is deemed by Adam smith a more accurate criterion of the value of money than any other commodity or set of commodities. I can only repeat what has been better expressed by lord King himself. It will be found that the price of wheat on an average of fifteen years, from 1771 to 1785, was 46s. a quarter; from 1788 to 1797 it was 52s. a quarter; and, from 1798 to 1810, (omitting 1800 and 1801 as years of dearth,) wheat has been 71s., a quarter. It will further appear, that in the year 1797, wheat being at 52s. a quarter, a pound 1064 Troy of gold, viz. 44½ guineas, or 46l. 14s. 6d. sterling, represented 18 quarters of wheat. From 1802 to 1806, when wheat was 70s. a quarter, one pound of gold at the Mint price of, 3l. 17s.10½d. per ounce, represented 13 5/14 quarters of wheat: but at the real price of gold in the market at 4l. 2s. per ounce, it represented 14 1/16 s quarters. From 1800 to 1810, the average price of wheat has been 85s. a quarter one pound of gold at the Mint price represented 11 quarters; and at the mean price of gold in the market, which may be stated at 4l. 7s. per ounce, one pound of gold represented 12¼ quarters.
§ But if the price of wheat be objected to as the test of value, shall this question be tried by reference, to the tables of sir George Shuck burgh Evelyn? They were constructed to ascertain the value of money from the Norman conquest, and have been highly celebrated for accuracy. They are founded on a comparison of the price of wheat, of twelve different articles of husbandry, of day labour, and of butcher's meat, and an average is taken of the whole as the true measure of depreciation. This calculation gives a depreciation greater by about a filth than if calculated by the price of wheat only Assuming 100 as the integer in the in the year 1550, the depreciation in the year 1700 was 238 In 1795 the depreciation was 426 by the price of wheat and 531 on a mean of the four articles the same calculation continued to the present time will give a depreciation of 696 by the price of wheat and 820 on a mean of the four articles.
§ A pamphlet has been published, not wanting in ingenuity, in which the depreciation of our currency is controverted, because the monied prices of cotton, sugar, coffee tea, tobacco, currants, and nutmegs, are not advanced beyond the prices in the year 1800. But did any writer ever deem these to be articles by which an estimate was to be formed of the comparative value of money? If coffee is to be used as the standard of value, the result will be, that instead of any depreciation in the course of the last century, the currency has advanced in value, coffee being now five limes cheaper than it was in the beginning of the last century. But, taking as a test the table adduced by the author of the pamphlet himself; it will be found, that every article of agricultural produce, and every, other commodity, not susceptible of 1065 indefinite increase by machinery or other improvements in manufacture, is really advanced in price nearly in the same proportions. A few exceptions have been quoted, such as iron and wool: but the first is to be accounted for by the improvement of our home manufactures, and the second by the large importation from Spain. If these facts be correct, they will effectually confute the doctrine, that "it is not paper which is depreciated from abundance, but gold which is become scarce." The House will recollect what reprobation this doctrine, when first started, incurred from Mr. Fox, and with how little favour it was viewed by Mr. Pitt, though now the doctrine of the day, applauded and followed by merchants, and bankers, and ministers. We have never been told by what scale gentlemen, when they so argue, measure the value of gold; but are they prepared to deny, that the prices of the precious metals must be measured, like other commodities which by an unrestrained sale have found their level, by the labour and capital necessarily employed to bring them to market? Are not the precious metals dear or cheap, in proportion as they exchange for more or less of other articles, on which certain portions of labour and capital have been expended?—If, as stated by lord King, one pound troy of gold now represents in its real value 13 quarters of wheat instead of 18 quarters which it represented formerly; and if all prices bear something of the same proportion to gold; it cannot be doubled that gold is cheaper, or in other words, that gold represents less value than formerly. We likewise know by the testimony of Humboldt and every other writer who has visited Spanish America, that the metals raised from the mines exceed in the proportion of 3 to 2 the quantity raised in former periods. The exportation of silver to India and China has also ceased of late years. Indeed we now hear of reimportations from these countries. But, what I deem of no less importance is, that very large quantities of the precious metals, hitherto used as coin in the several countries of Europe, are no longer employed for that purpose, and are returned into the bullion market to be applied to their metallic purposes alone. What is become of the twenty-five millions supposed to have circulated as coin in this island? Has not a large part returned to its other metallic uses? and could such an addition be made to 1066 the quantity of precious metals in the market of Europe without producing a sensible reduction of their price? Does not an increased quantity of gold and silver plate, and other ornaments, every where strike our senses? which is not accounted for by the increased wealth of the community alone, but must likewise be traced to an increase of the metals themselves. Facts of the same nature have been equally remarked in countries, which have not advanced in opulence like this nation. Throughout France a great increase in the nominal prices of labour and other things has been noticed by the statistical reports of all the prefects. This increase has extended itself to Poland, and other parts the least accessible to commerce. It has been estimated at 25 per cent. which will correspond with the depreciation of 45 per cent. observable among ourselves, being 25 per cent. for the decrease in the value of the metals, and 20 per cent. for a decrease in the value of bank-paper, when compared with the metals. Yet it had been imagined by many gentlemen, when these discussions commenced, that the price of gold had risen on the continent for no other reason than because gold passed out of this country. I entreat they will reconsider the facts, and I venture to assert, that there are only two articles in existence of which gold now represents a larger proportion than it used to do; silver, from the increased fecundity of the mines, and an improved mode of working; and bank-notes, from the redundancy of the manufacture.
§ A right hon. gentleman (Mr. Vansittart) who brought forward Resolutions, which, it was contended by their advocates, would set at rest this question, admitted Irish bank notes to have been depreciated in 1804, because two prices existed, and one exchanged for a larger portion of commodities than the other; which he denied then to have been the case in England. He was answered: "Wait the decision of De Yonge's case, now under the consideration of the judges, and you will here also see two prices generally established." The case has been decided conformably to truth and justice, by which alone the judges of the land have ever been actuated. Two prices do now exist publicly, as in fact they did exist privately, and will exist after our bill. Not a street in London where more value in exchange cannot be obtained for one hundred guineas in gold, than for one hundred 1067 and five pounds in notes. Will the right hon. gentleman still deny the fact? or will he argue that the precious metals have acquired an artificial value? Such cant is unworthy of the candour and knowledge and talents of that right hon. gentleman. He knows full well, that the law may give an artificial value to a paper currency, he cause it may cause it to be received in payment of revenue, and enable a debtor to acquit a debt of one pound with a shilling; but the value of guineas, like other articles, is regulated by the labour and capital necessary to bring them to market; and they never can possess any other value. After all these proofs, and the many more which may be adduced from our own daily expenditure, he who still continues to deny the deprecation of bank-paper, can only be classed with the ministers of Austria, who still complain of the machinations of merchants to keep down the exchange, when the price of government paper compared with specie is as 4 to 1.
§ But there is a considerable class of persons, who, admitting the dangerous consequences of a further perseverance in the use of paper currency, still ask, Flow shall we get back to a metallic circulation? Where shall we find the precious metals in sufficient quantity to supply the place of so much paper? And when a learned gentleman had argued," Leave them to find their way hither; they will come as claret does;" a great advantage in point of argument was supposed to have been obtained by the supporters of the bill. But I still do not hesitate to say on this, as in so many points of our case, look to your own legislative proceedings. Notwithstanding this and many other arguments of the same nature, you did decry the paper currency of North America, after a period of 14 months; and though no means were adopted by the state to procure an importation of the precions metals, they were found in sufficient quantity to supply all the purposes of a circulating medium. But if an example of a more striking nature be necessary, it is afforded by France. Without warning, without preparation), the paper circulation ceased, and the country returned to a metallic circulation. Nor has history recorded a single complaint of the inconvenience derived from the inadequacy of the circulating medium. Louis d'ors returned into the market the moment mankind were sure of obtaining for them their real value; and though the 1068 circumstances, which caused them to preserve their coined form, are not equally cogent in respect of guineas, yet many more guineas will speedily appear among ourselves than are suspected to exist, as soon as we shall follow the same course. Can a great and rich community, which draws to itself whatever is most rare and valuable in nature by the market it affords, alone want its due proportion of the precious metals? Did any nation ever take direct means to draw to itself the precious metals, or have they not diffused themselves throughout the world in search of a market? All nations, by a singular fatuity, have enacted laws to preserve more than a due proportion of the precious metals; but has any nation been successful? Whatever be the purposes to which they are destined, whether to be used as coin, or as plate and ornaments, or for any other imaginable purpose, each nation possesses its due proportion, and no more than its due proportion, on a comparison with the amount in existence throughout the world. When a nation substitutes a paper for a metallic currency, the coin disappears: and happy it is that such is the case; nor will that portion of the precious metals which formerly existed in the shape of coin ever comeback, whatever may be the state of trade, because it is not wanted for coin; and for all purposes of metallic use a due proportion already exists in the market. Or, if the precious metals did come back, they would again quit the country, from the same reason as first caused them to disappear. On the other hand, as long as a country persists in the use of metallic money, no circumstances in the conduct of its neighbours can draw away the portion it requires. The first fact is sufficiently proved by the history of our colonies already stated; and the last is strikingly illustrated by the situation of the four northern counties of Ireland, which still retain all the precious metals in the shape of coin formerly possessed by them, though they have vanished from Great Britain and all the neighbouring parts of Ireland. But if ever there was a moment when this apprehension, at all times groundless, must be absurd, it is now, when, by political events, this country, which formerly drew the precious metals from the markets of Europe has itself become the emporium, from whence all the other nations of Europe draw their supplies. Where, but to this country, must the produce of the 1069 American mines be brought? and yet it is supposed that we alone shall want an article of which we are the distributers to the whole world. If it were not the present fashion to disregard the authority of all great writers on political economy, whose opinions for half a century have been regarded as axioms, I would remind the House of the words of Mr. Hume: "a government has great reason to preserve with care its people and its manufactures; its money it may safely trust to the course of human affairs, without fear or jealous."
§ But on all these occasions a short answer is given: "Your doctrine is good in the ordinary state of human affairs, but does not apply to a crisis, when all commercial intercourse is at an end, and we have to contend with an enemy, who is pursuing a course of measures of which no example is afforded." This has been so often repeated, that many an Englishman, many gentlemen in this House, in general well informed, and devoting a sufficient portion of attention to the public documents, consider France and the Continent of Europe hermetically sealed against British commodities, and our commerce reduced very greatly below its extent at any antecedent period. To all such I take the liberty to stale, that at no period since the beginning of the present war, have our exports both of British produce and of colonial articles been so great as during the last two years, as the returns in official value will show:—
| British. | Colonial Produce. | ||
| Exports in | 1802 | 26,990,000 | 14,400,000 |
| 1805 | 25,004,000 | 9,950,000 | |
| 1806 | 27,403,000 | 9,124,000 | |
| 1807 | 25,190,000 | 9,395,000 | |
| 1808 | 26,691,000 | 7,862,000 | |
| 1809 | 35,104,000 | 15,182,000 | |
| 1810 | 34,940,000 | 10,945,000 |
§ But although gentlemen cannot deny the figures I have quoted, being the result of the Custom-house documents, and presented to our view with the accounts annually laid upon the table, they will answer, that this export has been to America, chiefly, from which returns have not been had, whilst our exchanges are chiefly affected by an intercourse with Europe itself. Here likewise I am happy to be able to satisfy them; for it will appear, that confining our view to the continent of Europe, our exports during the last six years have increased in a greater progression than to all other parts of the world.
1070§ Exports to and imports from the continent of Europe in official value;
| Exports. | Imports. | |
| 1805 | 15,465,430 | 10,008,649 |
| 1806 | 13,216,386 | 8,197,256 |
| 1807 | 12,689,590 | 7,973,510 |
| 80S | 11,280,490 | 4,210,671 |
| 1809 | 23,722,615 | 9,551,857 |
| 1810 | 19,606,706 | 12,476,140 |
§ Again will this fact be met with an assertion, that though our commodities have undoubtedly been exported from hence, yet, owing to various confiscations and checks and impediments, no adequate return has been obtained, and the greater part of our goods still remains in depot at Heligoland, at Gibraltar, and other places to which they were carried with a view to their ultimate introduction to the continent.
§ To what extent a deduction must be made for these circumstances, I am unable to estimate. I am willing to admit that it may have been considerable, though far less considerable than merchants in general would have us believe. During the year 1809, our enemy was engaged in the Austrian war; his attention was wholly occupied with that important object, and his armies being drawn to the Danube, an opportunity was afforded for the introduction of our manufacturers into Holland and other parts, with little or no restraint. Various severe decrees were promulgated towards the end of the year; but the measures for their enforcement could scarcely, be adopted before the commencement of 1810, when his armies were spread over the North of Germany. Accordingly we were expressly told in the speech from the throne, in the month of January 1810, with reference to our commerce and revenue during the year 1809, that," Whatever temporary and partial inconvenience may have resulted from the measures, which were directed by France against those great sources of our prosperity and strength, those measures have wholly failed of producing any permanent or general effect." Even for the first six months of 1810, as long as king Louis ruled in Holland, the decrees of the enemy do not seem to have been rigorously enforced; nor do our merchants seem to have taken much alarm until October. These are reasons, which induce me to believe, that the losses from all these causes have been much less than the public generally imagine. But what chiefly influences my 1071 mind, is the continuation of the increased export during two years Had it been for a single year, the enterprise of our manufacturers, aided by the unlimited extension of credit, resulting from the creation of paper circulation in the year 1809, and the impatience of our merchant to rid themselves of colonial produce, with which the market is glutted, might have tempted them to send abroad heir commodities, without due consideration of the difficulty of obtaining returns. But when our exports in the year 1810 have proved nearly as great, it is impossible for me to believe, that no adequate consideration has been received for our exports in 1809. I submit to the plain sense of mankind, whether it is possible that our exports to the continent, which in the year 1808 were no more than 11,300,000, having in 1809 increased to 23,700,000, should have continued in 1810 at 19,600,000, unless a tolerably fair return had been obtained. I am strengthened in this conviction, because I find that an export of coffee having taken place in 1809 far beyond what could be sold, the export, which had been in that year 5,845,000, sunk in 1810 to 1,454.,000. In other articles there is no such fluctuation. Our woollens and hardware, sugar paw and refined, indigo, and even piece goods, the produce of India, are nearly in their relative proportions during each year; and what is most remarkable is the export of our cottons, which has advanced progressively:
| Cotton manufactured Goods. | Twist. | |
| 1805. | 8,771,000 | 1,086,000 |
| 1806. | 9,896,000 | 854,000 |
| 1807. | 9,867,000 | 669,000 |
| 1808 | 12,835,000 | 575,000 |
| 1809 | 18,634,000 | 1,097,000 |
| 1810 | 18,634,000 | 1,075,000 |
§ But to put an end to the averments that no adequate value has been received for our exports to the continent, I refer to the account of exports and imports in real values, which shows that for an export of 27,190,337l. we actually received in 1809 an importation of 19,821,601l. The account for the year 1810 in real values has not yet been made up. But as there has been a diminution of exports of four millions, and an increase of imports of three millions in official values in the year 1810 compared with 1809, it is probable, that the exports and imports for 1810 in real values will nearly balance each other. Allowing therefore seven millions; to have 1072 been applied to defray our military and naval expenditure abroad in two years, we have received a full value for every article of export.
§ Account of Exports and Imports in real values:
| 1805 | 20,435,940 | 21,744,762 |
| 1806 | 17,547,243 | 17,855,524 |
| 1S07 | 15,420,514 | 17,442,755 |
| 1808 | 13,983,123 | 8,905,099 |
| 1809 | 27,109,337 | 19,821,601 |
§ Even British shipping has increased in spite of the frequent intervention of neutrals to convey abroad our commodities; and the number of our merchant seamen has advanced, notwithstanding the increase of men in his Majesty's navy. I therefore undertake to say, that no material diminution will be found to exist in the exportation of any one considerable article of British manufacture, or even of colonial produce, whilst in several, and particularly in our cottons, there will be found the enormous increase I have stated. Nor need we be surprised at the fact. During the first years that followed the renewal of war, France had given great encouragement to the establishment of cotton manufactories, and had succeeded to a considerable extent. After the Milan Decrees, our orders in council prevented the importation of the raw material, and such a demand was thus created for cotton goods as, in its effect, far more than counterbalanced all the impediments' opposed by the enemy to their sale and use throughout the continent. I also think, that a careful examination of the exports and imports will tend to show, that up to the end of the year 1810, (of what has since happened I do not pretend to speak, no documents having been submitted to the House, the commercial embarrassments, so loudly complained of, have chiefly resulted from the excess of our colonial imposts, and the superabundant increase of our manufactures, and not from a diminution of our communication with the continent, on a comparison of the last eight years. Nor is it difficult to account for the misapprehension that prevails Merchants were unwilling to confess at; state of things in which much of the evil seemed chargeable to themselves. Opposition was willing to believe that the trade was totally stagnant, with a view to state it as the result of the orders in council. And government tacitly acquiesced in the statement, in order to place the fall of the exchanges to the account of a di- 1073 minished commerce, rather than to its true cause, a redundant paper circulation.
§ I have dwelt too long, and perhaps too minutely, on these statements: but I am most desirous to fix on them the attention of the House, because they may serve to show, how little availing are the efforts of power to interrupt the communications of countries which have a surplus produce to interchange. Since it appears, that after eight years of relentless warfare, the unremitting vigilance and uncontrolled authority of the enemy, sometimes seconded by our own efforts,* are wholly incom-
§ * What I here allude to is the fluctuation of our conduct in granting licences. In former wars the ports in Holland, and the mouths of the Elbe and Weser, were the places to which the belligerents resorted for the interchange of the produce of their respective countries. When these countries were involved in war, and the violence of the belligerents no longer permitted neutrals to navigate the seas; each nation was compelled to trade directly with the enemy by licence. But, instead of leaving the market to find its own level, a discrimination has been exercised, a sort of effort has been made to regulate the supply, in almost every article of traffic, as the board of trade judged the market to be over or under stocked. No one so unjust as to suspect the motive; but the effect has been to preclude all regularity of supply, to induce great fluctuation in prices, and encourage speculations of every description. It has also given a great and unfair advantage to the commerce of the metropolis over the out ports, whose merchants cannot so speedily become acquainted with the varying resolutions of the board. When they have applied for licences they have sometimes been informed that as many licences had already been granted as were deemed sufficient to supply the demand of the market; or when they have obtained licences, and conveyed instructions to their correspondents abroad, they have uniformly found themselves anticipated by the London merchants, whose orders had been received several days anterior. Merchants have likewise been induced to expect profit from the varying views of government rather than from a nice adjustment of supply to demand. No sooner has a large importation taken place from the Baltic or other parts, than all the power of the mercantile interest is em- 1074 petent to interrupt the commerce of nations, or even to disturb, in any material degree, the level that existed in a year of peace and unrestrained communication.
§ It only remains to state, in a few words; what in my judgment is the remedy adapted to our situation. For the reasons I have adduced, I do not dread the effects of a law directing a return to cash payments at the Bank, after any reasonable interval of time. But I do not wish to urge a remedy which many persons consider as extremely hazardous in its operation. Provided we abstain from all
§ ployed to obtain the withholding of further licences for similar goods, in order to raise the price on the consumer, and benefit the importer at the expence of the whole people of England.
§ But what appears to me an absolute cooperation with the views of the enemy, is the late refusal, to grant licences for the importation of goods from France, and some other parts. The enemy grants no licences for colonial or British produce; and therefore, with a blind spirit of retaliation we say, neither will we admit wines and other articles the growth of France. So to act is consistent with the views of the French government, which seeks to repress commerce, but cannot be consistent with our policy, who seek to cherish and extend commerce. For every article imported from the continent there must be taken from hence some article of correspondent value. No Englishman will become a purchaser, but by an article of less value in his estimation than the article to be sold; each individual buyer is therefore a gainer, and the gain of individuals is the gain of the nation. It is answered true; but goods are not admitted into France, and the importer of foreign goods will carry away guineas. How long are we to be haunted by this most absurd apprehension? If guineas are wanted in this country, they will not quit it to go to France, where they are in sufficient abundance; and if guineas are not wanted in this country, the sooner they quit it the better. If they cannot find their teal value in the market; from whatever cause; they will not appear in it; they will be hoarded, or they will pass to other countries to seek a higher value. If hoarded; they are absolutely unproductive; if they go abroad, it is either to return with a profit in some other shape or to pay for objects deemed of greater value. But 1075 interference with the prices of things; provided we suffer paper and metallic currencies to find their level in the market, I am content to leave the law as it actually stands. I am convinced that it will be found sufficient to remedy the existing evils, which have chiefly arisen from our own unsuspecting confidence. Depreciation is now sensibly felt. Lord King has afforded an example of resistance to payments made in depreciated currency, and the result of the cases to be judged in
§ what is the situation of the country which is paid for its commodities in guineas? The individual who carries them away is remunerated by the sale: but the nation to which he carries them is very little benefited. By an importation of sugar or cotton, the people would have been better fed or better clothed; but by a return in guiueas, unless again sent away to purchase consumable articles, no other effect is produced, than a depreciation in the value of money, and an advance in the prices of commodities similar to what is experienced among ourselves from an increase in the issue of paper. Our guineas, however, are now near an end, as is argued. We have only five millions left, and they cannot last long. In future foreign goods brought hither must therefore be given to us for nothing, or ours must be taken away in exchange. Hence it is evident that the best mode of disposing of our own goods is, to encourage all other nations to bring theirs to our market. The commerce of nations is barter; they who sell must buy. But, to pursue this system, it is above all things necessary to leave the market to find its own level, by granting licences either for exportation or for importation, without any limit or distinction. In times of peace the interference of government in the details of commerce is acknowledged to be prejudicial. In times of war, government has also abstained from interfering as long as the belligerents have carried on their exchanges circuitously through neutrals. And now when a direct intercourse is allowed under licences, there can be no good reason why government should assume to itself a more extended interference in the details. Its proper office now as in peace is to consider what are fit articles of import and export, and having made known its resolution to the public, it may safely leave to individuals to regulate their commerce by the wants of the community. 1076 Westminster Hall will fully proclaim the old and sacred maxim of cur law, that contracts can only be acquitted in the coins of the realm. Men, therefore, will gradually require payment in metallic money, which will bring it back to circulation. A knowledge of the salutary law of the 37th of Geo. 3, c. 32, will be disseminated throughout the country. It will be known universally that every private banker is bound to pay his notes of one and two pounds in money; and demands will be gradually made upon the issuers of private Bank notes for the fulfilment of their contracts. Though the amount now in circulation be not less than twelve millions, it would be absurd to suppose that an immediate demand will be made to the same extent. Many notes will be withdrawn from circulation as they return on their issuers. Arrangements and compromises will take place between the issuer and holders of notes in various ways which cannot be enumerated. Bank of England one and two pound notes will be substituted for a large amount of them. Some may be paid in standard silver, at 5s. 2d; per ounce, conformably to law. A few only will need to be paid in guineas, and a large quantity will actually remain in circulation, whenever it is universally known that a guinea, or its real value, may be had for each note on demand. The whole may thus be brought within due limits, with a less loss to the issuers than the profit derived from these very notes during the last two years. This once effected, our course is smooth and easy. The exchanges will experience a very considerable advance; for depreciation is not only influenced by the amount, but also by the velocity of the circulation; A note for one pound passing rapidly from, one individual to another, and becoming the instrument of many payments, influences prices much more than a note for ten pounds, which less frequently changes its possessor. And so far from neglecting the consideration of the one and two pound notes, as some have done, when the subject has been examined, I believe them to have conduced more to depreciation than the issue of all other notes. As the exchanges shall be found to mend, the Bank may gradually withdraw from circulation its own one and two pound notes, and subsequently its five pound notes; when after a due interval, and the exchanges being brought to par, and the Mint price and the market price of bullion 1077 being equal, the Bank may again resume its cash payments. Nor will it be difficult to take effectual security against the recurrence of similar difficulties, by adopting measures to limit the circulation pf paper currency to the payment of great and wholesale transactions, in which alone it is useful. By restraining the issue of Bank notes for sums under fifteen pounds, and private bankers' notes under ten pounds, metallic money will be the instrument of exchange in all the ordinary retail transactions of life. It will therefore bear a due proportion to the paper currency, and preclude much of the danger that was experienced in 1793 and 1797 from alarm. Not only will the bankers find much less difficulty in procuring money to discharge their obligations, but the demand will be much narrowed by the paper circulation being chiefly in the possession of the higher orders, on whom the influence of panic will operate with much less force than when paper is spread among the lower classes of society. Unless precautions such as these be adopted, my anxiety to return to cash payments will be much abated; being convinced that if the Bank of England is to be the sole source of cash supply to 700 private banks issuing notes without limitation, it will scarcely be found adequate to furnish their ordinary wants, and the first season of adversity and distrust will draw from it all the metal contained in its coffers.
§ I confess I see no difficulty in this course of measures but what arises from the exchequer bills now in the market. It must be the first duty of parliament, on its meeting, to fund a very large part of them, and at the same time pay off the last loan of three millions obtained from the Bank, in order to enable the latter to contract its issues, without diminution of commercial discounts. The public will be indemnified for this payment by the proper use of its own balances. I never could comprehend the policy of maintaining so large a floating debt, liable to return into the exchequer in payment of revenue at the end of four months, whenever by any untoward event, the interest of money in the market should be higher than that yielded by exchequer bills. The object appears to have been to avoid providing for the interest by taxation, as would have become necessary, had we funded the debt in the 5 per cents. which once might have been done nearly at par. Perhaps it would have been more worthy of the wisdom of 1078 parliament to have repealed the letter, than to have evaded the spirit of the law. But our situation no longer admits of alternative, and we must free ourselves, whatever be the cost, from this imminent danger. In other respects, I think it will be acknowledged, that the course I have suggested involves neither hazard nor injustice. We shall return to a wholesome state of things by the same steps as we have advanced to our present diseased condition; and nothing will be demanded of any man, except in conformity with his original contract, the benefit of which has long been enjoyed. Concerning the equity of the holder of a note demanding payment of the issuer in metallic money, there can be no question. But, confining our view to the situation of the Bank and private bankers, some persons may be of opinion, that the Bank should first resume its cash payments, before private bankers can be expected to fulfil their engagements. I agree with this opinion as far as regards all notes of 5l. and upwards. They were issued when the Bank paid in cash, and private bankers had a right to demand cash for a Bank of England note as often as cash was demanded from them for one of their own. But it is not so with one and two pound notes; the private bankers acquired the profitable right to issue them after the stoppage of the Bank, and undertook to pay them in money without reference to any aid derivable from the Bank of England. Besides, therefore, the difficulty, nay, the impossibility of the Bank, immediately on its opening, furnishing cash to all private bankers sufficient to pay the enormous amount of the notes emitted, it would not be just to impose on the Bank the burthen of discharging obligations contracted when cash payments had ceased. It would be leaving all the benefit with one party, and imposing all the loss on the other. Nor can there exist a doubt, that to leave the act of the 37th of Geo. 3, c. 32, to its undisturbed operation, which will reduce within due limits the circulation of the one pound and two pound notes of private bankers, is equally conformable to justice and policy.
§ To conclude, I protest against this Bill, because it has a tendency to encourage the circulation "of paper-bills of credit, by means whereof debts will be discharged with a much less value than was contracted for, to the great discouragement and prejudice of the trade and commerce of his 1079 Majesty's subject?, by occasioning confusion in dealings, and lessening credit in the realm; and because the existing laws, duly understood and enforced, are sufficient in themselves to restrain the further progress of the existing evil, and to bring us back to the only just measure of value—a metallic circulation.
Mr. Patersonobserved that it was not surprising the unfavourable stale of our foreign exchanges should make an impression so injurious to our currency; and that as to what his hon. friend had said of the trade of the country with the continent having flourished so much during the last two years, it should be recollected that the mere export or goods could not operate on the exchanges until they were turned into money, and the payments came round. He denied that the increased price of wheat was any proof of the depreciation of paper. That increase had been originally occasioned by a season of scarcity, and it was well known how difficult it was, when a commodity had risen in price from any cause, however temporary, to bring it down again. He considered the measure taken by lord King as an unfortunate one, and as tending to the reestablishment of the old principle of barter, which would be a most inefficient mode of carrying on the present extensive commercial dealings of the country. He admitted that our situation was one of difficulty; we were exposed to a severe trial, but it was not of our own seeking, and we were bound to endure it manfully. The national debt was unquestionably great, but the operation upon it of that powerful engine, the Sinking Fund, was very considerable, and in the event of the restoration of peace, we should soon be lightened from the burdens which now pressed so heavily on the country.
Mr. Westernsaid, he was seldom anxious to join in the debates of that House on important subjects, being content to leave the discussion to members of superior talents and ability to himself. The Bill then under consideration was, however, of such peculiar importance, and, he thought, pregnant with such fatal consequences, that he could not refrain from availing himself of some opportunity to express his sentiments upon it, and enter his protest against its passing into a law. He had given the fullest consideration to the subject in his power; he had listened with attention to every thing that had been sad upon it in all its previous stages; and 1080 he had a clear conviction on his mind, that it was a measure directly at variance with those fundamental principles on, which the House had hitherto acted, and which principles, whilst they formed the character of the British legislature, at the same time constituted the foundation of our national prosperity and happiness.—Mr. Western said, he most earnestly wished the House would pause, and consider what were those principles that had governed their conduct in all legislative enactments? In the first place, a most scrupulous and sacred regard for the rights of property, an invariable abstinence from all interference in private concerns, or contracts of every sort formed between individuals, inviolable preservation of good faith, and constant attention to avoid giving to laws any retrospective operation. The measure before the House proceeded in defiance of all those principles, indeed actually subverted them all. It infringed the just and legitimate rights of property. It violated the obligation of all contracts entered into between debtors and creditors, and its operation was altogether retrospective. The Bill provided, in the first clause, that persons being in possession of the legal coin of the realm should not be permitted to part with it at its real value; that such property should not be suffered to find its true level; in the next place, that persons being possessed of the notes or bills of the Bank should not part with them in such manner as they thought most conducive to their own interests; in other words, that Bank-notes should not be paid or received for less than their nominal value, and that guineas should not be paid or received for more than their nominal value, when exchanged with such notes. Independent of the gross injustice of thus invading the right of the people to dispose of their property as they think fit, was there any thing so preposterous as to attempt, by an act of parliament, to determine the value of a promissory note, or any other paper security? That value could alone depend upon the opinion of mankind, and the confidence reposed in the promise expressed upon the face of such note. The paper had no intrinsic value in itself; its value was in the belief entertained by the people that the Bank, which issued such securities, were willing and able to make good its promises. Not less absurd was it to pretend to enact, that gold should not find its true value. No human power could prevent it paper 1081 notes and gold would find their level, in spite of all the acts of parliament that could be passed. This Bill was said to be introduced in consequence of an opinion declared, that Bank-notes did not now possess a real value equal to their nominal, and a demand therefore made by a creditor to be paid, pursuant to his contract, in the legal coin of the realm, or in Bank-notes equal in real value to the sum due in such good and lawful money. In considering the provisions of this Bill, he would weve for a moment the dispute about the value of Bank-notes, and would ask the gentlemen opposite whether they would not admit that it was at least possible that Bank-notes might be depreciated; that their real value might sink below their nominal? He was sure they could not do otherwise than admit the possibility of such a case, and he would therefore suppose such an event to have actually happened. He would suppose an excessive depreciation to have taken place, such as rendered the fact indisputable, manifest to all the world, allowed equally by debtors and creditors; in such a situation of things, he would suppose, what was not very improbable, an amicable agreement to be entered into between debtors and creditors, and the debtors willing to pay their creditors (in the absence of gold coin) depreciated Bank-notes according to their real value, so as to make an equivalent for the sum they owed in the legal coin of the country. He would then put it to the right hon. gentlemen opposite, and he would put it to the House, to consider whether it could be really their intention to pass an act of parliament that should make such debtor and creditor guilty of a misdemeanor, and subject to the penalties attachable thereto. He could not have believed that the House would have entertained such a proposition for a moment; and yet, if that Bill passed into a law, such would be its effects.—Mr. Western then proceeded to examine the alleged fact of Bank-notes being already depreciated, and declared, that he was fully convinced that such was actually the case. It was notorious that a traffic had long been carried on in the interchange of Bank notes and guineas, and that guineas were worth, at the time he was speaking, six or seven and twenty shillings each in Bank paper. This was, indeed, admitted; but gentlemen said, this traffic was carried on only by jews and pedlars. That might be so; but be did not see how that altered the 1082 case: the difference of value was just as strongly proved as if the traffic had been entered into by other persons 5 but he was confident it had become pretty general, and that the superior value of guinea?, in respect to paper, was so well understood in the country, that no person, having possession of guineas, to any material amount, would exchange them for paper, without requiring a premium for such exchange. A respectable country tradesman had told him the other day, that he had a little time ago come into possession of a sum of money in guineas, as executor and trustee to a friend; that finding this property in gold, and knowing, as all the country knew, that a guinea would exchange for more than a one pound note and a shilling, he felt it to be his duty not to part with these guineas at less than their real value, and they accordingly produced at the rate of five or six and twenty shillings in Bank notes for each guinea. This circumstance he mentioned to shew not only that the difference of value existed, but was generally known and admitted throughout the country; still it was contended, that this was no proof that Bank-notes were depreciated, that they would purchase commodities just as well as usual. It was said this was only an artificial depreciation of paper, or that, in other words, gold was artificially dear. He could not any way understand what was meant by artificially dear or cheap; but if the fallen value of paper in exchange for gold was not allowed to be a depreciation of paper, let it be examined whether gold had risen in value, and in order to determine that point, try it in the exchange for other articles, and particularly with those which would afford the truest test, namely, articles of primary importance and necessity. This comparison had been most ably and fully gone into by an hon. gent. who had preceded him in the debate, (Mr. G. Johnstone,) and he had most unanswerably shewn, that gold had not advanced in price as compared to these articles; so far from it, its value had been excessively diminished. It would not command by any means the same quantity of goods, it would many years ago. All persons having fixed incomes, felt most sensibly the truth of this assertion; and if they felt the diminished power of their incomes some time ago, how much more must they feel it now that the paper currency in which they are paid has suffered so material a diminution of its value below that of gold, 1083 which itself had lost a considerable portion of its former power. To illustrate this fact, he had likewise referred to the prices of corn for a number of years back. It was not the price of corn however only; other articles had preserved an equal ratio of advance; but the price of corn was more easily referred to and ascertained. Taking the average price of wheat from 17S0 to 1797, which would be found to be fifty-two shillings per quarter, a pound of gold, or forty-four guineas and a half, would command at that time eighteen quarters of wheat. In 1806, upon the average of five years, wheat, at seventy-shillings, and gold bullion at four pounds two shillings, a pound of gold, or forty-four guineas and a half, would command only fourteen quarters; and on an average of the last five years, wheat being eighty-five shillings, and gold bullion four pounds seven shillings per ounce, a pound of gold would command only twelve quarters and two bushels of wheat. Thus it appeared that gold was greatly diminished' in value, when compared with wheat, though advanced, when compared with Bank paper. Its powers, reduced in the command of wheat, increased in the command of notes, and yet, with these facts before our eyes, it was to be contended that this Bank paper was not depreciated. A right hon. gent. (Mr. Rose) had said, that this dear ness of wheat and other articles arose from other causes, and that an equal advance in price had taken place in France and other countries. That was very true, and it added confirmation to his, (Mr. W.'s) argument, that gold was not dear; on the contrary, that as well in other countries as here, it was diminished in value, when compared with other commodities.—Mr. W. further argued, that this increased price of all articles of necessity, had gone on with much greater rapidity since the year 1797, when the Bank stopped payment of their notes in specie. In twelve years prior to that time the price of wheat had advanced per quarter eight shillings and sixpence; in twelve years, since 1797, the price of wheat had advanced thirty-two shillings per quarter. This rapid advance of the price of wheat comparatively with the first period, was in fact neither more nor less than a rapid depreciation of our paper currency; at least it afforded of itself, he thought, indisputable proof that Bank notes were materially fallen in value; and upon the whole, the question 1084 appeared to him so clear, that he was astonished it could admit of argument at all.—Mr. Western then, in taking a further view of the Bill, said he was surprised to find that by many gentlemen it should be represented as applicable peculiarly to the case of landlord and tenant; that was by no means the case, it was applicable to all debtors and creditors of every description, and alike, in all cases, sacrificed the creditor to the debtor. It certainly, in that relation, was applicable to landlord and tenant, inasmuch as the landlord, having granted a lease, was the creditor of the tenant; but such landlord was, of all creditors, the one who would the least suffer, as in process of time the lease would fall in, and he would again acquire possession. But a great proportion of land-owners never granted a lease at all, which he was sorry for; and thought, after that Bill passed, they never could safely do so again. He doubted not that nearly one-half of the landed proprietors of the kingdom never granted leases; others there must be, whose leases were about to expire. All those persons would be rather benefited by the operation of this Bill. They might let their estates according to the real value of the currency they were to be paid in, and pay their creditors according to the nominal. Many there were, no doubt, who had debts and mortgages upon their estates; and in such case the mortgagee, or other person having a charge upon the estate, would be the eventual sufferers, and, of course, in exact proportion would the land-owners be the gainers. It was not then the case of landlord and tenant, it was the case of debtor and creditor. It was the creditor of every description who was to be deprived of his rights by this Bill; but most of all those who had fixed incomes; all annuitants, mortgagees, or persons having rent charges of every sort; all officers of the state, and officers of the army and navy, were likewise in the same situation. These persons were suffering by the reduced value of this paper currency, he firmly believed, to the extent of nearly one-fifth of their income. Other persons having land out of lease, or commodities of any kind to sell, did not suffer at all, for, they might and did ask for their land and their commodities in proportion. It would be well, then, if they would a little more consider those who have fixed incomes. How long it was desirable this state of things should be 1085 allowed to continue, he, could not pretend to say. Lord King had thought it would be better for the community to make a stand at the present moment. There were many persons said he was extremely wrong in bringing the question to issue now; there were others who thought he acted wisely in so doing. Whether he was right in the determination he had come to, or was mistaken, sure he (Mr. Western) was, that his motives were most upright and honourable.—Mr. Western again adverted to the provisions of the Bill, and argued that they were in no degree calculated to meet the case which was said to have given rise to it. The demand made by lord King upon his tenants was pretended to have induced the adoption of this Bill; but this was a mere pretence; the real object was to prevent, if possible, the further interchange of Bank-notes and guineas, which, whilst it continued, manifested too plainly the fallen value of the paper. As to the tenant, he was in no degree whatever relieved by this Bill; he was in a worse situation than before. His landlord, it was true, could not distrain upon him, but no landlord would proceed in that way; he would take his remedy by action or ejectment, which was still open to him precisely the same as before. Suppose this Bill had not been brought forward, or should not pass, a tenant might, if he chose, make an arrangement with his landlord, and pay him in notes at their real instead of their nominal value; and if the depreciation of notes should increase, and the fact become obvious and acknowledged by them, many would be very glad to do so; and if they had money out at interest, would make a similar agreement with their debtors; now if they did so, they would incur the penalties of this Bill. Gold they could not get, and they would then be placed in the curious predicament of having only to chuse the alternative of ejectment, or becoming liable to punishment for a misdemeanour, perhaps standing in the pillory, for doing that which a sense of what they considered their own interest, and justice to their creditors, equally prompted them to do. Such were the extraordinary provisions of this unprecedented measure. He would not further detain the House, though there were other topics connected with it to which he wished to advert; but must repeat his opinion, that, in the adoption of such a Bill, the House would depart from all those 1086 principles which it had hitherto made the paramount rule and guide of its conduct that they were about to infringe the just and legitimate rights of property, to violate all contracts between individuals, the protection of which had hitherto been deemed the sacred duty of parliament, and to attempt to do that which no human power could accomplish, namely, to govern the opinions of mankind, and force them to affix a value upon articles different from what in their judgments and estimation they did possess. He thought himself, therefore, warranted in saying, that such an act would degrade the character of the British Legislature, and shake to their very base the foundations of our national credit, happiness, and prosperity.
Mr. Rosecontended, that it had been, the policy of the country for centuries, to prevent the coin of the realm being sold. The Bill, therefore, far from infringing the rights of the subject, did but enact what had long been understood to be the law, and what, if not the law, had been intended to be the law. With respect to what had been said of its protecting the debtor against the creditor, he observed it was only intended to protect the tenant against charges which might be made, but could not be equitably made. The tenant, it should be remembered, if he charged a higher price for the produce of his lands, was obliged to pay a higher price for every article he consumed, and therefore it was doing no more than was right, when they protected him against such charges. It was too much to say, that the example of lord King would be followed by no one else whose motives were less honourable than were those of his lordship. The advance in the price of wheat was, in a great measure, to be ascribed to our corn laws, which had laid on it three or four and thirty per cent. within the last 15 years. It was the duty of parliament to protect the tenant, not against lord King, but against the merciless landlord who might distress him to gratify a mercenary disposition. The price of gold was four pound per ounce at the beginning of the last century. It had been at the same price within the last two years. It would be found by a table in the Philosophical Transactions, left by the late sir G. Shuckburgh, that the prices of most articles were more than doubled since the first mentioned period. Thus it would be seen, while other commodities doubled their prices, gold remained stationary. Our imports had been greater than they 1087 ever were before in the last two years, with this circumstance attached to them, they had been made in foreign ships. This, combined with our foreign expenditure, was a most serious consideration. Our exports, when the expences of freight, &c. were taken into consideration, would be found to have been made under circumstances which had never existed before. They might appear from the custom-house books to be what his hon. friend had stated them to be, but there were certain considerations which ought not to be overlooked. In the first place, a large portion of our exports were confiscated, and of course not one shilling had been derived from them, Others had been burnt, and on some of those which were neither confiscated nor burnt, heavy duties of 40 or 50 percent, had been imposed. Those which had been sold, having escaped the confiscation, the conflagration, and the enormous duties he had mentioned, had not always been paid for. There were instances of merchants having drawn bills on their correspondents, who were known to be solvent, which were ultimately returned on the drawer from there being no way of escaping the tyranny which prevailed on the continent of Europe. These deductions were to be made from the profits of our exports, and these might account for the country being drained of its gold; as while this system was acted upon by the enemy our merchants were religiously scrupulous in making their payments good. Could any man, after this statement, be surprized at the state of the exchanges, or wonder at the absence of gold. It had been proposed to establish a new Bank, but the party who suggested this idea had also proposed that it should not be obliged to make its payments in gold. He saw no advantages likely to result from such an establishment. After the investigation which had taken place into the affairs of the Bank in 1797, when it had been found there was in the possession of the company a surplus of fifteen millions above what they held in trust for the public, he thought the Bank a safer deposit for the money and paper of individuals than any other that could be named. The paper circulation was better left in the hands of the Bank company, than placed at the disposal of any other body. The unfunded debt had been spoken of as becoming most injurious to the country. He had to state, that the interest of it was now three- 1088 pence farthing a day. Some time ago, it was three-pence halfpenny. From this it would be seen that that was not becoming a very heavy burden. It was obvious that the ruler of France now directed his greatest efforts against our finances. Thus situated, no one thing could be so injurious to the country as neglecting to keep up the credit of our paper. How far this would be done by the present Bill he did not know; but that it would have that effect in a considerable degree he had no doubt, and with this feeling he heartily concurred in the measure.
§ Mr. Wilberforcesaid, that while he agreed in certain points with those who supported the present bill, and concurred in others with those who opposed it, there were at the same time, other views of the question in which he had the misfortune to differ from both sides; and first, he was ready to admit that while such apprehensions were afloat in the public mind in consequence of the conduct that led to this discussion, the government must have felt the adoption of some expedient to prevent great general distress and confusion indispensibly necessary. Of the conduct that compelled the government to resort to such an expedient he was willing to say little, but this much he could not well avoid saying, that of alt others he should have least expected, that a noble lord of the high rank, finished education, and just pretensions of lord King, would have thought it wise and fit-to resort to such an experiment. He was ready to make every allowance for the good intentions of the noble lord, but the noble lord was bound to have reflected that a variety of persons in an humbler sphere of life, and whose sole motive was the sordid one of gain, might be glad hereafter to shelter themselves under the high authority of the noble lord, and push his example to the extent of a mischievous and criminal abuse of it. Such men might talk very profusely about political economy, while they had nothing else but private emolument in view. Under such circumstances, therefore, it became the bounden duty of the government to do something, and so far he agreed with the supporters of the bill; but when these gentlemen would go farther, and instead of looking upon it as a temporary expedient to gain time, Spatium requi emque doloris'—when they Would represent it as more the this, as something that could permanently counteract depre- 1089 ciation, then indeed he thought it but fair to say, that his support or the measure was grounded in no such expectation; that he looked upon it merely as a temporary expedient, which extreme urgency had rendered indispensible, and that as such he gave it his support.—In adverting to the Bank Directors, he did not see that it had been clearly made out, though so often and unfairly asserted, that those gentlemen actually derived any material profits from the increasing profits of the Bank.—With respect to the immediate effects of this bill, in defending the tenantry of the country from the mischievous consequences it was provided to guard, against he thought that so far the bill would be completely effectual. The evils which might otherwise ensue, came so home to men's business and bosoms, that it was impossible to hesitate to provide against their occurrence. In looking dispassionately at the nature of those evils, it was impossible not to see the necessity of consulting in every department of the state, as far as it was possible, the principle of a wise and general spirit of economy. At the same time he admitted, that the administration, be they who they might, who were charged with the defence of the country, might feel it impracticable conscientiously to retrench those expences which were resorted to in the prosecution of that great object. In concluding, he adverted to the menacing aspect of affairs in America, and deplored the gloom that was spreading, over the Western horizon. He trusted that the misfortunes of a new war were not to be aggravated by a contest between two nations who might be said to be the common children of the same family, and participating as brothers in the inheritance of the same common liberty. He concluded by stating that the bill, as far as it went, should have his full support.
§ Lord Cochranesaid, that had not every argument been used by the gentlemen, who had spoken, during the different stages of the present bill, that was likely to be urged either for or against the measure, and likewise in a similar debate on the Bullion report, he should not have presumed to trespass on the notice of the House, upon a question so foreign to his pursuits as one of finance, or political economy. But as the defects of the depreciation of our currency appeared to him to hare been alone dwelt on, or the originating causes traced no farther than to an excess in the issue of paper by the 1090 Bank, which was occasioned by the manner in which the war was conducted, to this subject he should confine the few observations he intended to offer, under a firm conviction, that no expedient like the present could produce a permanently salutary effect. Topical application could no more cure an aneurism of the heart, than propping up the branches could arrest a decay, in the root, which was the more dangerous, like in the present instance, if its progress remained unnoticed.
The heads, which he proposed to touch on were first, Our commercial relations with powers in amity, and the drain of silver and gold by the licensed trade with our enemies. Secondly the extraordinary supplies sent abroad for the pay and maintenance of our armies; and thirdly, injudicious subsidies.
Respecting our commercial relations with Portugal, Spain and Sicily, which are the only countries where British manufactures are admitted on any terms, he contended that the gain of British merchants in these glutted markets is derived, not from an advantageous barter, but from the unfavourable state of exchange, which enables our merchants to dispose of their goods at or even under prime cost, and yet derive an advantage of from 25 to 33 per cent. out of the pockets of their countrymen, simply by carrying the bullion which they thus collect, to the English commissaries who furnish them with bills, on government, at that ruinous discount.
The unfavourable state of the exchange against England could be altered only by reducing our military establishments in foreign countries, which might be effected, with advantage to our allies and ourselves, simply by suffering the people in whose behalf we pretend to be contending, to feel an interest in the cause we call their own, instead of wasting our means, and lavishing our treasure in support of their despicable and tottering governments, which will inevitably fall the moment we withdraw our military forces. He said that the profligate waste of our means was in no instance mare glaring than in the maintenance of an army under the pretence of defending Sicily against the French, but in reality to keep the people in subjection to the most weak, wicked and oppressive tyranny which existed under Heaven, whose absurd imposts rendered a whole people wretched and poor, in the midst of the most fertile country, 1091 once the granary of Rome, but now, owing to the corn laws, scarcely producing food for its thinly scattered inhabitants.
The expence of our troops he said was not the only drain which carried our treasure to Sicily, to which nearly half a million went annually under the title of a subsidy, and under the pretence of paying for services not one of which were performed, as his Majesty's minister had thought proper to deliver our money into the hands of the Neapolitan counsellors, who govern the queen and betray our interests to the enemy. He could not help remarking upon the extraordinary nature of the assistance we afforded, by defending I Sicily against the will of its government, and the government against the will of the people, by both of which parties we had made ourselves so detested, that each was ready to receive the French as their deliverers.
What reason, he asked, could be given for pursuing such a line of conduct? Did ministers imagine that their administration of affairs would benefit by a comparison with the corrupt government which they were struggling to uphold. The tyranny and vices of the Sicilian government, however, were so abominable that it would—
§ The Speaker.—Does the noble lord conceive, that an inquiry into the errors of the Sicilian government can be justly said to bear on the present question, according to the known usages of the debate? I was unwilling to interfere as long as the noble lord was pleased to keep within the widest limits prescribed by the ordinary rules of debate.
§ Lord Cochranesaid, that he should wave the farther explanation he was about to give of the internal state of Sicily, which certainly was no farther connected with the question, than by occasioning enormous expence to us, instead of making it worth the people's while to defend their own island and government; in doing so, be presumed, however, that it was not intended that he should abstain from mentioning, that in addition to the treasure sent to. Sicily, for the purposes he had already mentioned, one item alone of the extraordinary expence of our army amounted last year to 180,000l., he meant the repair, equipment, and pay of gun-boats at Messina, which the Sicilian government was bound to furnish out of the subsidy; a fact which he thought would scarcely be credited, when the. House should learn that we actually paid rent for the royal arse- 1092 nal, to refit them in at our own cost! Having been there lately be could vouch for this fact, which was consistent with the rest of our conduct.
His lordship asserted that our affairs in Portugal were not in a more favourable state, and the minds of the people were equally averse to the cause which we support, he meant that of their corrupt government. In Portugal it could not be pretended that we had any scruple, as to interfering in the internal affairs of the country, we had actually several voices in the regency, and yet we used our influence to no good purpose. He stated that he had made a calculation when at Lisbon, and found that each individual in our army, which was occupied in upholding this state of things, actually cost this nation the sum of ten shillings and three pence per day including the attendant naval establishment. This was one of the real causes of the depreciation of our paper and the disappearance of money. It was his Majesty's ministers, and not such men as De Yonge, who sent the coin out of the kingdom in the vain hope of contending in pitched battles, with the resources to be drawn from 49 millions of people.
He was convinced that with half of our naval means, and one tenth part of our army judiciously directed, we might reduce the efforts of Buonaparté to measures of precaution and defence, and compel him to occupy the force, with which he was now subjugating Portugal and Spain, in protecting his own shores, which we might threaten from the Baltic to the Adriatic sea, and thus oblige him to provide a force every where equal to that which we could direct to a single point, and which if he should neglect, his commerce and maritime towns would be at our mercy. Another advantage is obvious, the whole of this force must be paid by France, and not, as now is the case, maintained at the expence of our allies.
No individual existing could claim merit for this obviously judicious mode of conducting war by a maritime state. He would advise his Majesty's ministers to read the first oration of Demosthenes, which if they ever had done with the attention of statesmen, they could not unintentionally have brought our affairs, to their present condition. Our naval superiority was at present totally thrown away, we had no force employed to occupy the enemy by desultory movements; one army remains fixed in the centre of Portugal, the 1093 other ingloriously waits on the shores of Messina, until the French shall find it convenient to attack them, having completed the subjugation of the Continent. Might we not take a lesson by the effect which a threat of invasion produces on our military measures? Do we not all remember the mighty preparations made and the expense incurred in guarding against invasion, though only a limited portion of our shores could possibly have been assailed by the enemy's contemptible flotilla? Troops and artillery were brought from all parts to that spot. What then would have been our situation, if the whole extent of our shores had been menaced in like manner? If Buonaparté had a naval superiority and only 5,000 troops at his disposal, on what part of our shores could we sleep in safety? Ten thousand men, kept in constant readiness, under an able general, would excite more uneasiness in France, although they never put a foot on the shores of the enemy, than all the military means of England, disposed of as it is at present by his Majesty's ministers. He repeated that 10,000 troops, aye half that number embarked in a squadron under a naval officer of judgment, unfettered by orders, guided only by circumstances, by the state of the wind, or by any thing but by his Majesty's ministers, it would be possible [Here his lordship was interrupted by calls to order, and he was informed by the Speaker that if he persisted in his present course of argument he would incur the displeasure of the House.] Lord Cochrane said he merely wished to shew that our present expense was useless, which would clearly appear to the House if they would take the trouble to inquire into the subject. He considered the waste of the public money in the way he was proceeding to point out, to be the real cause of the depreciation which they were discussing to had no motive in view, but the interest of his country. His standing in the navy rendered it impossible that he could have a view to be employed in the manner he had pointed out. He declared before God and upon his honour that if the gentlemen opposite who had called him to order believed that he had any private object to serve, they were mistaken.
As he was not allowed to proceed on a subject which, if not strictly connected with the present question, yet was of importance to the interests of the country, he gave notice that he would take an early opportunity to call the attention of the 1094 House to the way in which the war had been conducted. He should then be prepared, he thought, to shew that the depreciation of the paper and the deficiency of coin had their origin in those causes which he had been prevented from noticing more fully—to wit, the profligate way in which ministers waste the resources of this country.
§ Mr. W. Taylorwas of opinion that the present measure, if not a cure, would be found the best palliative that could be applied to the existing evil. This was not denied even by those who were loudest in asserting the depreciation of the Bank note, and he should therefore vole for the Bill.
Mr. Herbertconsidered the Bill as likely to be much more dangerous in its effects, than that practice which had caused it to be introduced, and which had been spoken of as tending to destroy all the bonds of civilized society. After some observations on its probable effects on the country banks, he concluded with observing, if they were obliged to pay in cash, instead of its being a disadvantage to this country, it would be the means of keeping within it the money which was now sent to France for her produce, and he was convinced that France would be obliged to send her produce here, and take our manufactures in exchange.
§ Mr. P. Mooresaid he should detain the House but for a short while upon some points which did not appear to him to have been touched upon before, and if, when he came to those points, the House disapproved of his proceeding, he would sit down. In his opinion this question should have been left untouched by the House, whether the paper was depreciated or not, while the public did not murmur. He regretted much that his right hon. friend next him (Mr. Sheridan) did not take up the subject, as he would much rather have attended to him than undertaken the task himself. The Restriction Bill in 1797, like the present Bill, was declared to be temporary; but how many temporary measures had, in the most insidious manner, been converted into perpetual measures? It had been renewed from time to time, till we had got the present length, and till we did not know how to turn ourselves. He hoped the House would indulge him till he traced the steps by which the country had got into the present difficulties. He then went into a history of the several renewals of the Restric- 1095 tion Bill. The Bank, however, had come forward, and stated their willingness to have the Restriction Act repealed. This was stated in a report to the House, which was presented by an hon. gentleman of the name of Bragge; and he remembered it had been said then by a right hon. friend behind him (Mr. Sheridan) on the proposal of the Bank not being agreed to, that Brag was a good dog, but Holdfast was a better. He said there had been a system of fraud practised on the public mind ever since 1793, not by any particular administration, but by all administrations. He had no hesitation in saying, that 36 millions of specie were to be found at present in this country; it was nonsense to talk of the ship-loads of gold sent off to the continent.
§ Mr. Sheridan,adverting to the mention made by his hon. friend of a foolish joke which he had used when the Restriction passed, observed, that the joke had been remembered better than the application. The Committee for investigating the affairs of the Bank, with Mr. Bragge at its head, reported the willingness of the Bank to pay in cash, if political circumstances would allow it. Upon which, Mr. Pitt applauded the Committee and the Bank, but said that political circumstances would riot permit the resumption; and it was on that occasion he had said, that Brag was a good dog, but Holdfast was a better: not, however, approving the conduct of Holdfast, but quite the contrary. His honourable friend, who had made such an able speech, had expressed his wish that the House should hear him (Mr. Sheridan); this was somewhat surprising, because his honourable friend knew that he differed from him totally in opinion. Before he could be convinced that parliament ought not to interfere on the present occasion, he must also be persuaded that a change of system would not put an end to the means of supporting the great contest in which we were engaged, nor disturb the whole commercial arrangements of the country. Could any thing be more unjust than to compel the public creditor to take Bank notes, and yet leave it in the power of others to refuse them in payment from him? He, himself, had for four years encountered Mr. Pitt, and proposed resolutions as to the state of our finances, in which he had been followed by others. Upon these, Mr. Pitt had been in the habit of proposing amendments. The great difference between them was, as to the 1096 expenditure which would be necessary in time of peace, he contending that it must be 17 millions, while Mr. Pitt affirmed that 15½ millions would be sufficient. Every one would have thought it extravagant to suppose that the country could support, an income much beyond the highest of these sums, yet now the country supported an expenditure of 70 millions, without the slightest symptom of severe injury. No one in walking the streets of this metropolis could suppose that its wealth and luxury had decreased; though he lamented the distresses of the manufacturers and others, arising from a different cause. This had taught him not to be so confident with regard to financial predictions; and he was amazed at the warmth with which both sides, without much personal interest in the question, supported their several opinions, and with what confidence each side asserted that it was in the right. But party-feeling had run high on this subject (Hear! hear! from both sides). If he had wanted a proof that he was correct in what he had stated, he had it now (A laugh). Every one was full of his own theory. If the noble lord whose conduct was said to have given rise to this Bill, had not written a book on the subject, he never would have thought of distraining. The present Act, he believed, did no more than what was just and proper under the present circumstances. He hoped yet to see the day when the difficulty would be done away, and the Bank enabled to resume payments in cash but that must be under different circumstances. He could not risk the measure of fixing a time for the resumption and altering the system in our actual situation. But even the disappearance of gold was a proof of the great credit of the country. In other countries they must have gold because the public credit was small. Upon the whole, he thought it too perilous to alter the system at present, when the fate, not only of this country, but of Europe and mankind was at stake.
Sir Francis Burdettwas convinced the bill proceeded on the erroneous notion held out by a noble lord in another place, that any thing would answer for a measure of value as well as gold. But what rendered gold peculiarly fit to be a measure of value, was its intrinsic value in exchange among all nations, and to pretend by any act of parliament to make a thing of no intrinsic value, equally acceptable 1097 with gold, or paper convertible into gold, was one of the vainest notions that ever entered into the head of man. The mischief did not arise from lord King, but from the excessive issue of paper. Bank notes had been issued, not according to the wants of commerce, but the wants of government. This bill would be no relief. There could be no remedy while the present lavish expenditure was continued, because the bank could not diminish its issues. Gold could not be kept in the country in such a state of things—and if it could, it would be of no use, for it would only operate like so much additional paper. It was a good enough argument, certainly, that the landlord should be deprived of the power of seizure in the first instance; but the bill went to interfere with private property, and to violate all contracts, while it must be perfectly nugatory as an expedient to arrest the depreciation. But his chief object in rising, was to say a few words with regard to the case of lord King. That noble lord had, from the beginning, ability and integrity enough to endeavour to point out the mischief which would result from this system, and to attempt to stop its progress. Seeing no end, however, to the destructive course pursued by the government, he thought himself justified in saving his own property, which he had derived from no large salaries nor public plunder of any kind. The government now, however, was resolved to take the management of his estate out of his hands, and therefore supported this bill. With regard to the assertions of the bank directors, that they had but a small interest in the bank, he was sorry for it; he had rather their, whole property had been in the bank. Their command of money from their situation, would give them a very undue influence over whatever other concerns they might be engaged in. His suspicions of them, therefore, were rather increased than diminished. The government and the bank had now become partners—the ministers accommodated the merchants with exchequer bills, and the merchants accommodated the government with loans, so that among them the whole had been converted into accommodation paper. The hon. baronet then ridiculed the notion of the treasurer of the navy, that the loss of our gold proceeded from the state of our commerce, of the exchanges, and of the continent. It was impossible to believe this, when we saw other countries in our 1098 situation, with plenty of gold. The whole of this difficulty had been distinctly foretold long ago, by writers on this subject, who were called speculatists, because they happened to see further than their antagonists, and had eyes with speculation in them. It had been foretold that our system would go on more slowly than that of other nations, because they issued to the amount of all their capital. But we were in the same road, and had gone too far, perhaps, to recede Instead of temporary expedients, the ministers ought to look the evil in the face, and adopt some fixed plan of proceeding. Their maxim, however., was "sufficient for the day is the evil thereof," and indeed, it was of no great consequence, for the system must go on till it extinguished itself.
§ Mr. A. Baring,in reply to the observation of the hon. baronet, said that the bank directors certainly made no corrupt use of their influence, nor could they, without injuring their character in society. If the hon. baronet had any charge to make against them, it would be more manly and candid to do it directly, than to deal in suspicions and insinuations. He agreed with the member for Yorkshire, that this bill was a palliative, and not a cure for the disease. The only cure was to reduce the expenditure, which would enable the bank to reduce their issues. Another remedy, though an unpalatable one, was further taxation, to bring the receipts and expenditure nearer a level, instead of going on continually with a system of loans. Adverting to the plan suggested by the hon. and learned gent. (Mr. Brougham) of cutting off a third of the debt, and putting an and to a part of the dividends, he observed that this might answer very well, if the landholders and others were to contribute in equal proportion. But this was 100 violent an expedient, and could not safely be resorted to. He saw no ground for the despondency with which some gentlemen appeared to regard our financial situation. If the supplies and expenditure were equalized, the operation of the sinking fund would free us, from our embarrassments: and he suggested that some taxes would bear augmentations, since by the depreciation they were not now paid at so high a rate as they were three years ago. When it was considered that the funding system was one of which the efficacy depended upon intervals of peace, and that we had been at war for the last 1099 18 years, it was surprising that the country supported its exertions so well. No one who travelled through the country could believe that it had been reduced by its efforts. On the contrary, he would rather be apt to say, that in the last 20 years it had flourished more than at any other period. For the present he thought that bank notes ought at once to be made a legal tender; and he would himself have proposed this, had he not been sensible that some previous steps ought to be taken to secure public confidence in these notes. This, he thought, might easily be done, though perhaps it was too late to attempt it in the present session.
Sir S. Romillyhoped the House would indulge him for a few moments while he stated the reasons that induced him to vote against this bill; and he rose thus late because he had been anxious before he spoke, to hear the opinions of some other members of his profession, especially those connected with the government, upon a subject so important—a bill deserving their attention more than any that had passed that session. It was an ex post facto law, altering the state of all contracts that had been previously entered info. The necessities of the state might possibly require this, but such was its effect; and that it particularly deserved the attention of lawyers no one could deny. The hon. gentleman on the floor (Mr. Bankes) had expressed a hope—a hope which had been sadly disappointed—that it would be distinctly stated how the law stood at present before an alteration was made in it. Nothing could be worse than leaving men in doubt of what the law was, and leaving the matter entirely to the discretion of the judges. He had heard such language on this head as filled him with astonishment. One of the bank directors had said that the law would be too strong for those who attempted to demand payments in gold, and a noble lord (Castlereagh) had expressed his confidence that the energy of the judges would prevent the success of any such attempts [Lord Castlereagh signified that the honourable and learned gentleman was mistaken.] If he had mistaken the noble lord, he should be better pleased to apologize for it than to have to answer such an argument. It was their duty to make prominent the defect" of the measure, that it might be explained and corrected by the legislature, instead of leaving it to subordinate public officers to alter the law by some new practice. No- 1100 thing was more to be deplored than such a mode of proceeding. It was extremely desirable that they should ascertain what the law actually was, before it should be altered, and shew the way in which it would operate, as there might be many cases subject to it which the supporters of this measure never had in their contemplation. Leaving the financial part of the question to others, he should confine himself to the legal part of it. He understood the law at present, to be, that if any one was arrested and tendered the amount in bank notes, he was immediately entitled' to his discharge. This was wise, for he thought, or at least it was an opinion that might very well be entertained, that no one ought to be arrested at all on mesne process. It was a thing peculiar to our law, and no doubt was often converted into an engine of oppression. Persons swore to their debts, arrested their alledged debtors, who in many instances might find it difficult speedily to procure bail, when it often turned out on the trial of the action, that there was no debt at all, or at least that the debt was trifling. But at any rate it was wise to free the person from arrest, upon the tender of bank notes, when gold perhaps could not suddenly be procured. But if the creditor had a judgment, he could compel the debtor to pay in gold. There could, be apprehended, be no doubt on that subject. If he were to levy from the goods of his debtor, he must sell them himself, and the sheriff probably could get nothing except banknotes. But he would not take that course; he would proceed against the person; and what judge could prevent him from taking his legal remedy? He might shut up his debtor in gold, perhaps for the remainder of his life, unless the legislature were to adopt one of those violent measures which they had lately been in the habit of resorting to; he meant an Insolvency Bill. The only resource of a prisoner in this situation was to send a larger amount of Bank-notes into the market to purchase gold. This was hard, but it was a great deal harder to force the debtor to remain in confinement by forbidding him to purchase that which was necessary for his liberation. Yet such would be the effect of this bill. The debtor had but one resource, and of this they were about to deprive him; and that too by a law purporting to be passed in favour of debtors. He was far from saying that the law was good as it stood; but 1101 in order to be consistent, his right hon. friend the Chancellor of the Exchequer ought to make Bank notes at once a legal tender.—By this law, in all cases where the creditor had the power of distraining, that power was taken from him, if a tender was made in Bank-notes. Now, this remedy of distress was the last which any person desirous of payment in gold would resort to. He would have recourse to his action of covenant, or to an ejectment. If he distrained, he would have to sell the distress, and probably could only get Bank notes, which would not answer his purpose. The effect of this bill, therefore, would be to relieve the debtor from that hardship only, to which, of all others, he was the least liable to be subjected! Many had old rent charges, and how would they be affected by this alteration in the law? A man with an estate of 1,000l. a year, has three sons; he devises the estate to the elder, with a rent charge of 200l. a year to each of the other two sons. The estate of the elder increases three-fold in value; and it would surely be worth more consideration than appeared to have been given to this Bill, whether the other sons should be compelled to take payment in Bank notes. A case had been brought under his own observation, where a man, twenty years ago, made a lease of twenty one years, with an option to the lessee to purchase the estate before the end of the term for 2,000l The lessee had taken advantage of this option to purchase; and was it so clear that the payment ought to be in Bank notes? He would ask whether the ministers themselves, when the bill was proposed by the noble lord who introduced it, had not doubts whether they should support it; whether they had not held consultations on the subject in the House, while the debate was going on? When he attempted to procure an alteration in the law, he had been reproached for not having consulted the Judges; when he had introduced a Bill for rendering freehold estates liable, in the hands of the heir, to simple contract debts, all sorts of cases were put to him, with the utmost ingenuity, to shew the inconvenience of such an innovation; and yet, here was an innovation in the law, to make the existing contract different from the contract entered into! This was of all others a case where the judges ought to have been consulted. In point of equity, old and new contracts surely stood on a 1102 very different footing; yet this Bill brought them all to a level, and disposed of them in the same way! And why was this made a temporary measure? Was it to leave people in doubt what the law was; to produce uncertainty and confusion, and hold up a threat to the creditor, that if he dared have recourse to his legal remedy" parliament would alter the law for him? He really wished to be informed what the real object was. Without more information on the subject he was not prepared to alter the law and change the state of all existing contracts. Even the supporters of the Bill appeared to do it with very different views. One supported it because it must be followed by making Banknotes a legal tender; another because it avoided the legal tender. He really thought that ministers had acted very precipitately in this instance, and that there was a great deal of party feeling in the measure. (Mr. Perceval smiled.) The right hon. gentleman laughed at that. Now he had condemned the conduct of lord King, and said that it was because the noble lord had been supported by a great many others, that he brought forward this measure. If, then, his principal motive was not to have an opportunity of inveighing against lord King—and those who had supported him, he wished the right hon. gentleman to explain how far this Bill would operate to prevent the evil; to prevent the hardship on the debtor, when the only effect would be to take out of the hands of the creditor that remedy only, which, of all others, he was least likely to employ.
Lord Castlereagh,having been alluded to by the hon. and learned gentleman, begged to state what was the purport of his opinion, namely, that the House was called on to see that effectual protection was provided both for the person and the property of tenants. He had declared it to be his opinion, that it was better in such a case to rely on a moral than a legal sense of duty; that had been found an effectual protection for 14 years, and lord King, for reasons best known to himself, and into the propriety or grounds of which he had no right to inquire, had been the first to make an infraction on this moral law. This had imposed on the House the painful duty it was now in the course of discharging; and he only hoped that the remedy adopted would be effectual.
§ Mr. Tierneyrose amidst a strong cry of 1103 Question, question. Considering the rank and station in his profession of his hon. and learned friend who had just spoke on that side of the House, he expected to have heard his arguments at least attempted to be met by the legal gentleman on the other side, who was also at the head of his profession. There must be some mistake, he WAS convinced, and that hon. and learned gent, could not be aware of the call of the House on him, to rise and answer his hon. and learned friend (Question, question!). Since the Attorney General would not speak, that was no reason why he (Mr. Tierney) should not be allowed to speak. If any hon. gent. who was unwilling to hear him had an engagement out of doors, he had better attend it, because, if he did remain, he should hear him. He had intended to take an enlarged view of the present measure, but at the advanced hour of the night, and in the present humour of the House, he did not think it necessary to persevere in that resolution. He did not know, that being the case, whether he should have spoken at all, had it not been for the extraordinary speech of his right hon. friend near him, (Mr. Sheridan) who had taken a different view of this subject from what he had formerly-been accustomed to hold. His right hon. friend surely had not looked at the bill at all. The only part of the measure of which he seemed to talk with approbation was the clause to prevent distress against tenants, and that was not a provision which was originally in the Bill. Lord King's letter to his tenants, and the opposition to the bill by noble persons in another House, with whom his right hon. friend was accustomed to think on most public topics, were the principal inducements to the present bill; but, he was sure his right hon. friend was not aware of this. But his right hon. friend thought it his duty to support this bill, because he supposed that it was meant to make the Bank resume their payments in cash. No such a word had fallen from a single member on that side of the House; but he was surprized to find this adduced as a ground for his opinion to night, by his right hon. friend, who had lately been one of the most zealous in that House for declaring that the Bank should resume their payments in cash. He observed, however, that his right hon. friend did best when be came at rather a late hour. Then, though he might not have heard much of the argument, he commonly voted right, that was 1104 to say, with his friends; but when he came at an early hour, though he might speak, he was apt, at times, to take the wrong side. His right hon. friend had cautioned them against trusting to prophecies, as he had failed in a great number. [Mr. Sheridan said, no, he had not failed.] Then he had succeeded. He then proceeded to notice certain predictions as to the consequences likely to result to the country from different measures, as they arose, and inferred that the greater part of them were accomplished, in the present distressed state of the credit of the country. No person had a higher opinion of the individuals connected with the bank, than he had; but as a body, he did not think they did their duty. They were to take care of the public credit, and to hinder it from being unhinged; but to this he thought they had not attended. Nothing, too, in his opinion, could justify them in continuing the restriction beyond what the public exigency required; yet here the House had been debating a Bill of the nature of the present, with the greatest avidity, for weeks, and the Bank of England, as a body, had not given it a moment's consideration, nor did it appear at that time what their opinion was. Of the individual directors who were members of that House, one supported the bill because it led to the enacting of a legal tender; and the other supported it because it had exactly a contrary effect. He was sorry to see an hon. member (Mr. Baring) whose opinion on every subject of the kind was entitled to the highest respect, go out of" his way to defend the principle of legal tender. It was something abhorrent to the ear. The very idea of compulsory paper was dreadful; particularly, too, when it was not our own paper, but paper of which we did not know the value. He did agree with that hon. gent, that there was no room for despair. He might see things in a gloomy point of view. He agreed that the resources of the country might still be so laid out as to protect and secure her best interests; but to ensure success the country must submit to great privations. When the whole heart's core of England was safe there could be no ground for despair; and for that very reason he was against the present bill; for, if it were passed, our soundness from that moment was to be questioned. Never had such a silly unmeaning piece of paper, produced so much discussion. As to the clause relative to distress, he had no objec- 1105 tion to it, if it had been introduced into any other bill in itself deserving of being passed. The clause as to guineas was of no use. There was nothing to hinder any man who had bags full of gold to send them to Dublin, and sell them there for as many notes as they would bring, and that only at the expence of sending them to Dublin. As to the clause regarding the Value of notes, he could not see the morality of compelling a man who might have let a lease for 21 years, and have covenanted to sell his estate at the end of that period, at a stipulated price, to complete the bargain and take the price in bank notes, though they might in the mean lime have been depreciated to no thing. One might as well pass a law declaring that a man must make a free gift of his property. The longer he argued the case the more he was induced to say, that it must bring matters to a legal tender at last. He implored the House, therefore, to hesitate before it passed a bill which was of no use, and must do injury. If a legal tender was necessary, why not pass such a bill at once? But if we give six months notice of our intention to do so, was there a man who would not spend the time in seeing how he was to guard himself against the evil consequences of such a measure, by the species of property in which he should layout his funds? There was a prejudice in favour of guineas over Bank notes, and the present measure, under pretence of supporting Bank notes, was brought in, the direct tendency of which must be to injure public confidence, and to endanger, if not destroy, the public credit of the country. This was worse, too, as being a temporary measure. The defence of Spain and Portugal, and the necessity of supporting the war in those countries, was talked of. He could not consent to fight the battles of Spain or Portugal, however, at the expence of the ruin of this country. He knew he should be told, the success of the armies in Spain and Portugal were the best assurances of prosperity to this country. He knew that, but his first duty was to England. There must be some limit to every thing; and unless he was assured that the governments of those countries did as much for their own protection as we did in their defence; and also, unless he was assured that the same day which witnessed the defeat of the French armies in Spain and Portugal, was not also to seethe substantial Credit of England endangered he could 1106 not, however well affected he might be to their cause, consent that the contest should be persevered in. Buonaparté had told you that he would give credit to the prosperity of our finances when he saw a Bank note as valuable and as freely received in payment as a guinea. The right hon. Secretary (Mr. Ryder) answered" Then we will declare it so." We did so months ago, but Bank-notes had not risen in estimation in consequence of this declaration." Ah," the right hon. Secretary would reply," but that was only a Resolution, whereas this is an act of Parliament! "Ministers, therefore, were now mounted on a rock of confidence; but with Buonaparté's knowledge on this subject, was there any thing more likely to elate his hopes than our having recourse to this step? He begged of the House to stop, and not to pass a Bill which must have the effect of endangering the credit of the country, without mature deliberation.
§ Mr. Sheridandenied that he had ever despaired of the resources of the country. With respect to his vote on the Bullion Committee, that he had given conscientiously, but if he had had the good fortune even to have heard his right hon. friend's speeches, he did not think they would have altered that vote. His right hon. friend seemed to think that the finances of the country were gone, and Buonaparte, therefore, was more generous, for he allowed that they would stand ten years. He lamented that the House was not in a Committee, for then he could have confuted all his right hon. friend's arguments" which the rules of the House would not permit him to do.
§ The House then divided, for the third reading,
| Ayes | 95 |
| Noes | 20 |
| Majority | —75 |
| List of the Minority. | |
| Abercromby, Hon. J. | Ossulston, Lord |
| Burdett, Sir F. | Romilly, Sir S. |
| Creevey, T. | Sharpe, R. |
| Cochrane, Lord | Smith, W. |
| Eden, Hon. G. | Tierney, Rt. hon. G. |
| Folkestone, Lord | Vernon, G. O. |
| Howarth, H. | Taylor, W. |
| Herbert, Hon. W. | Wrottesley, H. |
| Hamilton, Lord A. | TELLERS |
| Johnstone, G. | Brougham, H. |
| Mackdonald, J. | Western C. C. |
| Moore, P. |