§ The order of the clay being read, the House resolved itself into a Committee of the whole House, to consider further of the Report of the Bullion Committee, Mr. Lushington in the chair.
§ Mr. Grenfellsupported in a few words the Resolutions of his hon. and learned friend (Mr. Hornet). He professed himself to be of the same opinion as he was last year, namely, that the currency of the country had been, and still continued to be, in a state of gradual depreciation. He believed he had heard and read almost every thing that could be said upon the subject, and had heard and read with a mind open to conviction: and the result of his candid attention was, that, looking at the question as a plain practical man of business, he felt satisfied that the Resolutions proposed by his hon. and learned friend, were those which in his mind most consulted the best interests of the country, and as such they should have his cordial support.
§ Mr. William Taylorthought the present, that sort of question which could be best treated by discussing it, partly upon the ground of authority, and partly upon the ground of examples: existing authorities, he admitted, could not be very conclusive, when it was considered how men the best qualified to decide the question clashed in their respective ultimate determinations upon it: an opposite rule would, however, apply with respect to the selection of examples, for while, perhaps, they could not go too far back for authority, those examples were the best and had the most practical application which were taken from the circumstances and events connected with the different banks upon the continent. Applying then this principle to the subject before them, the hon. gent. proceeded to shew by a variety of references to the practice and principles regulating the Swedish Bank, the Banks at Vienna, Paris, and Hamburgh, that a currency of paper of the same denomination 1152 with a metallic currency must invariably have the effect of driving that metallic currency out of circulation. This position, which he had thus attempted to establish by analogy and example, he should next proceed to support by reference to authority. The Memorial of the great sir Isaac Newton upon the subject of currency, was considered a work in no sense inferior to any other of the immortal productions of that greatest of all philosophers. Here the hon. gent. read to the Committee an extract from this Memorial, which went to establish as a principle in the doctrine of currencies, that where there were two currencies and both legal tenders, one of them must become depreciated. He referred also to the authority of Mr. Harris, who agreed not only in the justness of this principle, but went a step further: he laid it down, that if there were established two currencies as legal tenders, the one paper and the other metal, the paper currency would infallibly drive the metallic out of circulation. In the various-views taken of depreciation, gentlemen confined themselves too much to domestic effects: depreciation was not to be looked to by mere reference to home; it could only be rightly judged of by looking at home and abroad, and comparing the foreign rates with our own. Thus it was insisted, that paper did as well for all do mestic purposes as coin; but why? Be cause the tax-gatherer, and every public officer, was compelled to receive Bank notes in payment: it was not public confidence that gave Bank notes this sort of compulsory credit, it was the sanction of a law compelling by penalty. So true was this, that wherever an opportunity seemed to offer itself for evading that law, it was industriously sought after. He had heard, for instance, that foreigners in this country, to whom sums of money had been owing by persons in London, had gone so far as to take counsel's opinion, to know, whether the Bank Restriction act extended to them, and whether they might not en force payment in specie. The hon. gent. concluded by stating it as his opinion, that whenever there were two currencies of the same denomination, and of different intrinsic value, the one of greater value must invariably disappear. He thought there should be an explanatory act passed, to shew that Bank of England notes were a legal tender.
§ Mr. Dawes Giddybegan by stating, that he should assume this one principle 1153 of exchange, that the value of all articles depended on the quantity supplied and on the quantity demanded. If this principle should be conceded to him, he apprehended that all the conclusions which he should take the liberty of submitting to the House followed as matters of course; and, if denied to him, be did not know how to prove it but by leaving the fact to the common sense of the House. There was one principle, too, and only one, in which he differed from his hon. friend (Mr. Huskisson) namely, that the value of the precious metals depended on their intrinsic worth, and not on convention. To this he could not agree. He begged leave also to suggest that bullion might have been of less value than coin, if the penal laws could be enforced, as the superior value of the former only arose from its being exported; and if the circulation of paper was not more than the country demanded, it would equally answer as a circulating medium as even a metallic circulation. A given quantity of the precious metals, he begged it to be observed, would not purchase the same articles as formerly, but their value was daily decreasing. This was, in a great measure, occasioned by the great increase of these metals by the discovery of America. But what occasioned it in a still farther degree was a discovery even more estimable than the metals themselves, the invention of bills of exchange. The circumstance of the precious metals having been, by the invention of bills of exchange, discharged from those uses to which they were formerly employed, had contributed largely to this fall. From his own knowledge, the precious metals never were of less value than at present. Some gentlemen, in endeavouring to find out the standard, had defined it to be the interest of 33l. 6s. 8d. not seeming to recollect that this sum itself must be valued in the same standard. As well might any gentleman, instead of miles and furlongs, take clouds for describing the distance of one place from another, and say that such and such a place were distant from London Bridge so many clouds.—The issue of country bank-notes was to his mind the great cause of the depreciation of our paper currency, and he was surprized that no gentleman had yet referred to that circumstance. He was of opinion that bullion had not advanced in price compared with other artiticles, but that bank-notes were really depreciated. He certainly agreed, that part 1154 of the unfavourable rate of exchange was to be attributed to the state of trade, but the rate of exchange could not vary more than between the comparative ability to pay in one country and in another. Some gentlemen had argued that the guinea was not worth more than a one-pound note and a shilling in this country; but why was it so? Because of a penal law which prevented a greater value being given for it. A law might give the same value to any piece of coin, however small, as to a banknote; but still this would not make this piece of coin of the value of a guinea; and was it possible that any law chaining two things of so unequal value together, could continue for any long time? The great cause of the depreciation of paper, as he had already said, arose from the number of country bankers, who, without any capital, exchanged their paper with each other, probably at the distance of 70 or 80 miles, and thus put into circulation a greater sum than the demand rendered necessary. The given value of all the gold in the world must be diminished in the same proportion as the quantity was increased: and paper, of course, must be depreciated on the same principle. If bullion had been sent out of this country, however, it was because it was the commodity we could most easily spare; and he was not afraid but this country could support itself, though there was not an ounce of gold within it; and if the circulation of paper could be kept within bounds, we could go on with it as well as with the metallic medium. He was free to say, that the Bank of England notes were not of themselves sufficient for the circulation of the country, and should be happy if any gentlemen could shew him the mode in which country bankers' notes could be diminished. The diminution, however, he was afraid, could only be effected by curtailing the issues by the Bank of England. If this was done, their paper would rise in value, and a run would be made on the country bankers.—Having gone thus far with the honourable and learned gentleman who proposed the first set of Resolutions, he must leave him, at the last Resolution. The system must be departed from, but it must be done gradually and temperately. He was for passing the Resolutions of fact, and then al lowing the matter to lie over till next session, that they might see whether a body, in whose honour the House and the country ought to have the fullest reliance, 1155 [...]nd who best knew in what manner the [...]etrograde motion might most easily be accomplished; the Bank Directors, might not themselves take some preliminary measure towards a remedy for the evil. If they did so, then the House would be relieved from any farther interference; if they did not, then it would be the incumbent duty of the House to take such steps as should arrest the evil, while it was capable of being arrested.
§ Mr. Long,as he had been a member of the Bullion Committee, was desirous of briefly troubling the present Committee, lest he should be supposed to have concurred in the recommendation of measures, which, in his opinion, would, if adopted, prove highly injurious to the country. In the whole course of his experience, he had never known a report which differed so much from the evidence of those who were examined by the Committee from which it proceeded. He distinctly denied that, considered with respect to domestic purposes, paper had experienced any depreciation, although he admitted that, with respect to our foreign relations, it had done so. He denied also, that the unfavourable state of the exchanges was attributable to the over-issue of bank notes, and referred to a paper in the Report in order to shew, that at former periods the exchanges had net been operated upon by that cause. The fact was, that the balance of payments, which was considerably against Great Britain, was the real cause of the unfavourable state of the exchange. We could not, as in ordinary times, force our exports, and set the exchange right in that way. As to the remedy of the evil, he thought it would fee most unwise to declare that the restriction should cease at any given period; because, when that period came, it might be found impolitic or impracticable to terminate it. The despondency of those who thought differently from him on the subject, reminded him of an expression used by the late Mr. Fox in 1797, when the Restriction Bill passed. Mr. Fox then said, "that he must be a very sanguine mart indeed who did not believe that public credit would be ruined if the Bill continued in force six or eight months." A similar result would, he was persuaded, attend the predictions of the hon. gentlemen who anticipated such evil consequences from the present system.
Sir Francis Burdeltobserved, that after the length to which the discussion had 1156 gone, and the nugatory result to which it was likely to lead, he would not have risen, had it not been, that the subject appeared to him to require attention in one or two points of view, in which it had as yet not been considered. He really thought, that, after what had been said by the hon. gent. (Mr. D. Giddy) who had spoke last but one, they had at least got the length of being convinced that two and two made four; and that the exchange against a country could not for any long time fall beyond the charge of transporting the precious metals. In a proposition so simple, he thought that gentlemen on all sides should have been agreed. But from what had been said by the hon. member who spoke last, he found that this was by no means the case: for, according to that hon. gentleman's view of the question, they not only were at issue upon the general result, but as far as ever from being agreed upon the first principles of the doctrine of money and exchanges. The hon. gent., who spoke last, had earnestly deprecated the adoption of any tone or language upon a subject of such importance, and so essentially connected with the best interests of the State. But if any thing could excite despondence in his mind, it would be to be told, that the very existence of the country depended on the maintenance of the paper currency. He (Sir F. B.) would feel very despondent, indeed, if he could be brought to believe that the trade, manufactures, all the resources, and even the existence of the nation depended upon such a commodity.
But if the hon. member himself really believed that to be the case, he must say, that those who had been parties to the restriction and its consequences, had been the worst enemies of the country, and the best allies of France. He recollected well, and he was persuaded it must be in the memory of every hon. member who heard him, how very differently during the revolution these gentlemen had argued with regard to France. The paper of France, it was then contended, would be its destruction. It was impossible it could continue the war with such a depreciated paper currency. And yet the very same gentlemen were not now ashamed to argue that this country could not carry on the war without such a depreciated currency; He was far from thinking that there was a want of coin in the country; nay he was persuaded that if the paper could be suddenly removed, abundant coin would in- 1157 stantly make its appearance. Let but the excess of paper be withdrawn from circulation, and they would soon have enough of coin. The metals would return, as they did in America and other places. The principle and practical effect in this respect had always coincided. The want of coin in this instance arose solely from the attempt to prop a depreciated paper currency. He also was convinced that bullion and coin weight for weight must be nearly equal. The variations arising from certain advantages that might attach to each in some circumstances must be but slight, as the one, in spite of law, could be so easily converted into the other. As to the question of depreciation, he need only observe that in the Island of Jersey the notes of their own little bank were at par, or three per cent. better than the Bank of England note. This was decisive proof of a depreciation. But gentlemen seemed blind to these considerations, or, shutting their eyes against the light of demonstration to grope about in the darkness of error and prejudice, feeling their way by the helps of a vicious practice, and altogether regardless of the beacons of sound principle, or a wise and prudent policy. The result of all this must be that, after breaking their shins, knocking their heads against posts, and enduring many hard blows, they might find out the proper path at last. If these gentlemen could shew, that the principles slated with respect to currency were erroneous, that was another thing, but they admitted the principles, and then argued that they ought to adhere to no principle at all. For his own part he thought that injustice had been done to the country Banks, in saying that their paper bad been the cause of depreciation, since they were subject to a check, from which the Bank of England was free. But at any rate it had been admitted that their paper increased only owing to the increase of that of the Bank of England. It was therefore rather hard to blame the country Banks.
This attack upon the country bankers reminded him of a story in Gil Blas.—When the band of robbers in the forest were, by way of amusement, relating each his birth, education, and adventures, one of them observed that he was the son of the nurse of the prince of Asturias, and that he had had the honour when a child to be brought up with the prince, but, added he, "it unfortunately happened that whenever the prince committed a fault, I 1158 was whipped for it." Such was exactly the case of the country bankers. They suffered the reprobation which was exclusively the due of the Bank of England system. The country Banks grew out of the Bank of England system, and rose with it; but now that a depreciation had been produced by the excessive issue of the paper of the former, gentlemen were disposed to shew a courtly, tenderness for that institution, however ready to visit its faults upon the heads of the innocent country bankers.
Whatever differences of opinion might prevail upon other parts of the case, it was to him astonishing that any doubt could possibly be entertained of the fact of a considerable depreciation, when guineas were sold at twenty five shillings each—when, in the purchase of any article, a material distinction was made between a payment in gold and a payment in paper, and when it was perfectly known and notorious that two prices were common throughout the country. He could say from his own experience that such was the case. He could assure the Committee, that he had been offered wine at far different prices, according as he should pay for it, either in specie or in depreciated Bank paper. The question at issue, then, was reducible to this: on one side it was contended that Bank paper was depreciated, and this position was proved by the high price of bullion and the low rate of exchange; on the other hand it was denied that any depreciation had taken place, and in support of this assertion, it was urged that the price of bullion was enhanced by the scarcity of the article, and that the depression of the exchange arose from the state of our trade, and would be removed whenever commerce should be restored to its wonted activity and prosperous condition. If this were the case, he was very much disposed to question the probability of any speedy improvement of the state of the exchange, as he could not foresee any prospect of the restoration of commerce to its former state.
He agreed with the eloquent and able mover of the Resolutions in the principles detailed in his speech, but he was far from being satisfied on the subject of the remedy proposed. He feared that the system must be permitted to take its course.—The inscription on the gate of Dante's Hell might very appropriately be applied to it—"You who enter here, leave 1159 all hope of returning behind." He saw no reason, to believe that the Bank would ever be able to recover itself. Reverting however to the state of the exchange, he must mention an instance in point from Dr. Adam Smith, a wild theorist—not a practical man, and therefore his authority might be of great consequence with those who paid no regard to principles. This instance had been stated in the Bullion Report, and referred to the Land Bunk of Scotland, instituted upon Mr. Law's principle. Many millions of landed property were pledged for its security. When pressed with a hard run, its notes contained an optional clause, to pay immediately, or at the end of six months, with legal interest. Yet while the exchange between London and Carlisle was at par, that between London and Dumfries, the latter not more than 30 miles from Carlisle, was four per cent. against Dumfries, where the notes in question circulated. This was a complete proof of the effect of a depreciated currency on the exchange.
As to the nature of a standard or a measure of depreciation" about which so much had been said, it was difficult to ascertain what it should be fixed at, for different reasons; but he thought that instead of making gold or silver the standard, it would be better to fix on the assize of bread, and if this was taken, it would appear, that in the fourteen years before the Bank Restriction Bill, it had been at 7½d. the quartern loaf, and now it was at 1s. 2½d. which fully proved the case. He might be asked, however, what remedy he had to propose, for the evils which existed, as he was not disposed to acquiesce in those which had been offered. He confessed it was a difficult and delicate matter to offer an opinion upon such a complicated subject. It must be obvious to every person capable of forming any idea upon the subject, that the remedy should not only be applicable to the entire correction of the evil, but so guarded and qualified, as to prevent its operation from becoming more injurious than the disease it may be intended to cure. As things stood at present, he must contend, that if the sound state of the currency were to be restored without the collateral guards to which he had alluded, it would be impossible for the country to pay in sound coin of standard value, the enormous pensions and salaries at present enjoyed, besides the army and navy expenditure, together with the in- 1160 terest of the debt, created with a view to the progressive state of depreciation. Considering the rate at which we were proceeding, the interest of the debt would probably, at no very distant period, amount to 50 or 60 millions. How could the people pay this in sound currency? But then again, it might be said, "what remedy have you?" That was a hard question. He could not save a dying man. But he must blame those who produced the disease, and carried on the delusion, which began with the funding system, and would ultimately prove its destruction. He thought, however, something should be done for the security of funded-property, which would be ruined. The country had derived no benefit from this measure of restriction. The Bank had derived great profit from it. It had forfeited its commercial character by becoming a tool of the minister of the day; and, as in the South Sea scheme, he thought the estates of the directors ought to be made liable for the losses sustained by the public creditor in consequence of the restriction. That being his opinion, he would not shrink from declaring it.
§ Mr. Wilberforcesaid there was, in his opinion, but one way of getting quit of the increasing evil at present felt by the country. The consequence of proceeding in our present course must inevitably be ruinous to the country; and the first opportunity should be taken of reverting, if possible, to a better state of things. It appeared to him, that the members of the Committee in general, and the learned gentleman who opened the discussion, had been placed in a very hard situation. They were bound to declare their opinion as to the true line of policy which they conceived proper to be adopted by the House; yet all who had opposed them had considered them in the light of persons who had come voluntarily forward, and proposed measures of the utmost danger to the country if agreed to. They were bound to discharge their duty in the manner in which they had performed it: they were bound to point out what they conceived to be the causes of the high price of bullion and of the low rate of ex change. But whatever may be thought of the labours of the Committee, it was not to their opinions to which the Committee had to look; they had only to look to the present state of our circulation. All of them knew how likely that circulation was to be affected by the conduct of 1161 the Directors of the Bank; all of them knew the conduct of those Directors; the Committee stated what that conduct ought to have been; and it was now the duty of the House seriously to determine, whether the opinion of the Bank or of their own Committee should receive their sanction and approbation. When the Bank Directors had told, clearly and explicitly, what their principles were, and when these principles had been adopted by the right hon. gentleman (Mr. Vansittart), the Directors might say, and with great justice, that in rejecting the recommendation of the Committee, the House had bestowed on those opinions a tacit approbation. For the Directors he entertained the highest respect; and he sincerely believed that they had discharged their duty with every respect for the public interest; but their eyes were not opened to the magnitude of the duties they were called on to discharge, and to the effect of the measures they were pursuing. The Directors of the Bank had made no secret of the principles upon which they had acted. They had told the Committee, and had argued in the course of the present discussion, that there would be no excess of paper issues, so long as the discounts were confined to persons of established responsibility, upon bonâ fide mercantile transactions, and for periods not exceeding two months. They had gone further; they had declared to the Committee, to Parliament, and to the public, that, according to their views and principles, they could not conceive, that any difference in the rate of interest, whether it was five, four, or three per cent. on their discounts, could make any alteration as to the security against an over issue. It was time for Parliament to interfere, when the Directors of the Bank avowed that, if the interest were to be reduced to three per cent. there was no danger of excess whilst their issues were regulated upon the principles they had laid down for their conduct in their discounts. When those gentlemen had shewn themselves to be so little aware of the danger to be apprehended from their conduct, it was the duty of that House to take measures to check the indefinite extension of the circulating medium.
The hon. gentleman then proceeded to illustrate what his own opinions on this subject were, which he professed to have been derived from a publication of an hon. friend of his (Mr. Thornton). He said the Bank Directors, without the restric- 1162 tions, would infallibly take the best course without being aware of it, like the honest citizen in Moliere, who had been speaking prose all his life without knowing it. If they were freed from the principle of providing for their own security, they may issue any quantity of paper, and the gold would leave the country. The country banks, which had been so roughly treated by those who opposed the Committee, hinged entirely on the Bank of England. Perhaps the Committee had not allowed enough for the unprecedented difficulties in the present situation of the country; and these difficulties had much increased since their Report had been framed. Why did the right hon. gent. opposite (Mr. Rose) insist so much on the errors of the Committee, in stating the course of exchange of former times? When he stated that the course of exchange had been formerly against us, he should have stated the difference in the extreme degree; formerly not equal to the expence of transportation, and now above 20 per cent. The same arguments which were now brought forward, might afterwards be brought forward when the country was on the brink of ruin. According to the test of the gentlemen on the opposite side, we should then appear to be in the greatest prosperity, somewhat in the same manner as a person who drops down of an apoplexy, frequently appears, shortly before, in the most perfect luxurious health. Our finances and commerce never appeared so prosperous as during the South Sea bubble. He then adverted to the argument of the right hon. gent. (Mr. Rose) founded on the diminution of the circulating medium since the restriction from 46 millions to 24. He observed, that a new mode of transacting business in the metropolis, rendered less of that circulating medium necessary. Nobody, he said, would bring gold into this country; for to whom were they to bring it? Not to the Bank, for they would not buy it: they had then only to export it again. He lamented that so much had been said about perjury in exporting coin, and thought it would be much better to allow gold to follow the laws of all other commodities. The House of Commons, he said, were the mint, in which were coined the political opinions which pass current throughout the country, and it became them, therefore, to set this question at rest. Whenever the Bank Directors knew the opinion of Parliament to be against their system, they would 1163 carry the principles of Parliament silently, but efficiently into execution.
Mr. Roseexplained. He said the act of 1797 did away two millions of oaths, and he had formerly not charged the Committee with encouraging fraud and perjury, but said that their remedy involved fraud and perjury.
§ Mr. Samuel Thorntondisclaimed the idea that the Bank issued paper to an unlimited amount: every one of the 24 gentlemen at its head had a vote whether each sum was or was not too high. The discounting of bills was not the only means of issuing their paper, much being issued on government securities. The Bank of England at their beginning vested their capital in government securities. Why should not country bankers vest a part of their capital in the same way? After adverting to the Resolutions of Mr. Horner, he expressed his conviction that there would be no limit to the distress and embarrassment that must follow the restoration of cash payments, under circumstances like the present, the necessary effect of which must be to compel the Bank to draw in their issues. As to what had been said of those states in which there was no paper currency, it should be recollected that this was, because they had no credit to support.
§ Mr. Whitbreaddeclared, that after so many speeches of consummate ability had been delivered in proof and demonstration of the depreciated state of our currency, he should have felt that some apology was' due from him to the House for rising on this occasion, and at so late an hour; but the hon. director who had just spoken, had opened so new and so tremendous a scene, as to call in the most imperious manner for some animadversion. After hearing him declare that the Bank must be ruined, that it could not go on if compelled to return to cash payments, and after comparing this declaration with the opinion of another Bank director, who last night argued that our currency was the destructive effect of our destructive system of finance, and after seeing that both differed in their views with the right hon. the Chancellor of the Exchequer, it became the House of Commons, indeed to pause and deliberate well on a question so big with the fate of the country. It was his decided opinion that the House ought to stop nothing short of fixing a period for the resumption of cash payments. The Bank Company, who had been convicted of error, but not 1164 convinced of it, ought not to be suffered to persevere in a system which must end in national bankruptcy, and national ruin. Those who opposed the Resolutions charged their opponents with inconsistency, while most inconsistent themselves. He denied that the Report was contrary to the evidence given before the Committee. If a period were not now fixed for the resumption of cash-payments, the present system might be considered as made permanent, but the system itself would crumble into dust, and the rags of it would be worth no more than the rags from which they came.
And here he must say, that he coincided fully with the reasonings contained in the speech of a right hon. gent. opposite to him, (Mr. Canning) certainly the best speech which he had ever heard him make in that House. What a contrast did not the sentiments of ministers and the Bank Directors furnish to the avowed principles of Mr. Pitt in originating the Bank restriction! Mr. Pitt denied that any evil could arise from the measure, except after a certain period of duration. That period had been fulfilled, and the predicted evil had arrived. Now, however, it was defended as essential to the maintenance of our commerce and manufactures; and, above all, to the prosecution of the war. There could now remain no doubt that the Bank Directors, that ministers, and that the noble and provident statesman who had so indulged his fancy last night in rioting on the luxuriant blessings of paper currency, now contemplated the restriction as a permanent measure. If Buonaparté were the governor of the Bank, he could not, in that noble lord's opinion, adopt a more injurious measure to this country than the resumption of cash-payments. He had been a little surprised at not seeing a right hon. proselyte and privy counsellor join in this eulogy on depreciated paper. But if this currency was so propitious to industry and manufactures, from what cause was it that they had a petition lying on the table from thirty thousand persons in a condition of the most extreme distress, and urging their wants and their sorrows in the ears of the right hon. the Chancellor of the Exchequer? The doctrine that gold had risen in value, but that paper remained undepreciated, put him in mind of the anecdote of a man who limped, and was very much affronted when he was told that one leg was shorter than the other. No such thing, he exclaimed with indignation, one is longer than the other, 1165 that I'll allow you. The estimation in which notes were held was such, that a man might as well try to eat them as to buy a dinner with them, as was known to every one who had travelled. Even in the coffee-houses in the neighbourhood of Westminster, he would ask if a stranger could get any thing to eat or drink for Bank-notes? Though the Restriction Act was to cease to be in force six months after a peace, yet if a peace were concluded to-morrow, cash payments would not be resumed within that period. The horrible and tyrannical decrees of Buonaparté, as they were called, which were spoken of as being what could only be expected to be issued by a fiend, gave him no surprise. They were only such as our hostility was calculated to provoke, and to speak of them in such a manner, was like the surprise and indignation of an army sent out to destroy another army, which on finding that it was to attack armed men, might exclaim, "Why? these scoundrels have had the unparalleled villany to come into the field with muskets."
Upon the subject of the exchange the right hon. gent. opposite (the Chancellor of the Exchequer) had, in reply to an hon. friend of his, exclaimed in a triumphant tone, "O happy Hamburgh, O happy Holland, to have been able to have preserved your exchanges!"—This was language not more unjust to his hon. friend than insulting to those fallen states—fallen and prostrate from those fatal wars, to the prolongation of which, he believed, our paper system might have been but too conducive. The only cause of any apparent equivalence being preserved between paper and coin was, unquestionably, the penalties of the law; and he did think, that it would well become men who were true believers, and who prayed to the Divine Being not to lead them into temptation, to abstain from tempting others to perjury and fraud. The opinions which the House was now called on to adopt, were sanctioned by the joint authority of Mr. Pitt and Mr. Fox, and now that their voices were no longer heard among men, the disciples of those great political opponents were seen to unite upon this question. The hon. gent. then proceeded in the most animated strain of eloquence, to draw a picture of the present state of this country, and of its future prospects. He begged the House to consider in what situation they would stand, in case the Resolutions of his hon. friend were refused. He denied 1166 that Bank-notes were the same as gold, or that the public thought so. Upon the whole, it appeared to him that any thing short of the Resolutions would afford no remedy. The remedy for all, he would repeat again, was peace; and not with standing all that had been said of the states of the Continent, they were prostrate; and if the paper system were followed, this country would in the end be prostrate too.
§ Mr. Hornerthen rose to reply, and began by remarking the various attacks which had been made on the Report of the Bullion Committee, both for having reported contrary to evidence, and for not having paid a sufficient deference to the opinions of practical men. He should have considered the Committee, however, as having abandoned its duty, had it acted on any other evidence than such as it deemed conclusive, or had it neglected to form opinions for itself. He did not think the Committee had been very courteously treated by the right hon. gent. (Mr. Rose), and he felt it necessary to reply to some of his observations on several parts of the Report. Mr. Horner then proceeded to vindicate the Committee for having quoted the opinions of Mr. Godfrey and Mr. Drake, the characters and principles of both of whom had been, he contended, wholly mistaken by that right hon. gent. (Mr. Rose).
The hon. gent. then proceeded to comment upon that part of the speech of the right hon. the Chancellor of the Exchequer which referred to the fact of an extraordinary issue of exchequer bills, for the purpose of preventing depreciation. He wished to know if the right hon. gent. meant that exchequer bills should be understood as a part of the circulating medium; if not, that case could not apply, and if he did, it was the first time that he (Mr. H.) was to learn that exchequer bills were any thing else than a mode of raising capital. Upon the subjects of standard and depreciation he should say nothing, for nothing had been left to him to say; they were both as well and as clearly established as any topics could be in an adverse discussion in a popular assembly; but this he would say, that the arguments of the noble lord (Castlereagh) and the right hon. the Chancellor of the Exchequer, admitted indirectly, the fact of depreciation. Their argument, that so sudden a return as that of two years to 1167 payments in specie, would be productive of incalculable mischief, this argument, he contended, did involve in itself a distinct admission of depreciation; for if the currency had not depreciated, where would be the danger in returning?
Some gentlemen agreed with him in all his Resolutions but the last. He would ask those gentlemen who thus admitted the evil, what other remedy could be recommended for adoption? Was the choice of this remedy to be left to the Bank of England, or would a declaration of the veal state of our currency on the part of that House, without assigning or suggesting any remedy, be of itself sufficient to correct the evil? Would not such a declaration on the contrary, have the nattural effect of accelerating the depreciation? There was, in his mind, no practical remedy but the resumption of cash payments. He did not mean the immediate resumption of cash payments, as had been most unfairly presumed, and then most fallaciously argued upon. But the right hon. gent. had deplored the scarcity of gold, and upon this point his expression was rather odd; gold he said, was impossible to be got—impossible to be got! This from the minister of the first commercial country in the world was somewhat strange! He was almost tempted to ask if the right hon. gentleman could seriously admit the evil of which he (Mr. H.) complained, to be of an extent so serious? He was almost tempted to ask if the mines of America were yet exhausted? The gold leaves this country. Why, because the currency had lost its value here; restore that value by the diminution of its paper issues, and the evil is remedied at once.
In the various instances cited by the other side, from the earlier periods of our history, it was extraordinary that at most of those periods to which those instances refer, the plenty, and not the scarcity of gold was the subject of complaint. In 1697, the Chancellor of the Exchequer of that day had declared the kingdom to be undone by plenty of gold. An hon. friend of his (Mr. Manning) had cited sir Edward Coke, where he assigns even different causes for the then depreciation. Sir E. Coke was rather a delicate authority to cite upon such a subject, as that great lawyer had declared in his second Institute, that gold coin in its unimpaired purity of weight and fineness was "inter regalia et magna corona jura;" but in that very report (too long now to refer to) was to be 1168 found abundant matter in support of his views of the question. And here he must refer to an opinion of a right hon. gent. (Mr. Rose), as to the authority of lord Bacon on the subject of depreciation. That right hon. gent. had said, that lord-Bacon had not touched upon that part of the question. He (Mr. Horner) here read a passage to the House, stating lord Bacon's opinion thereon. But not to detain the Committee, he stated that he could see no one objection to the experiment, at least, because, if the Bank, after they had endeavoured, and did, in fact, restrict their issues, if they could then come down to the House and say we have restricted our issues and yet the market price of gold has not fallen to the mint price, then, indeed, he admitted that the Bank would have a better reason to question the good effects of their contracting their issues than any of their advocates had yet assigned.
As to certain arguments of the noble lord (Castlereagh) upon the fruitful topic of a paper currency, he could only say that, were he (Mr. Horner) possessed of that noble lord's singular power of reasoning—could he adorn that reasoning with all the florid beauties of the noble lord's as singular eloquence, still he should despair of convincing the Committee that a depreciated forced paper currency could be converted into the strongest sinews of war, and was, in itself, the best and happiest means of prosecuting a prolonged system of Warfare to a prosperous issue. (Hear! Hear!) After a variety of other observations equally forcible, Mr. Horner concluded nearly as follows, "If," said he, "there has been a departure from the old and constitutional mode of circulating the legal and substantial currency of the country, the charge of novelty is not imputable to that proposition that would go to restore it. A general rule in the great system of circulating medium has been avowedly violated. I admit that that minister is wise and happy who knows when and how to deviate from a general rule, but I contend, that there is still more wisdom and more felicity in knowing when and under what circumstances that general rule ought to be adhered to; (Hear!) but that above all, the cool trial of wisdom—the true test of fortune is to know, when to return after the success of an apparently justifiable deviation (Hear! hear!); it is indeed, difficult to resist the temptation of temporary expediencies. I shall now conclude, Sir by reading to the 1169 Committee a passage I met with this morning, preserved by the celebrated Sir Robert Cotton, and cited by him as an extract from a memorial of one of the greatest statesmen this country has produced, a remonstrance to Queen Elizabeth from her ablest minister, lord Burleigh, when at a time that Spain was aiming at universal monarchy (how strange the vicissitudes of empires!) that monarch entertained the notion of making some experiment upon the national currency; the language is simple, but, in my mind, pregnant with wisdom—"It is not by the ends of wit, or by the shifts of devices, that you can defray the expences of a monarchy—but by sound and solid courses."
The Committee then divided on the first of Mr. Horner's Resolutions. Ayes 75—Noes 151—Majority 76. The 14 next Resolutions were then put and negatived without a division; and, on the 16th, or last Resolution, the Committee again divided—Ayes 45, Noes 180. Majority 135.