HC Deb 14 May 1811 vol 20 cc134-46
Mr. Wharton

reported from the Com- mittee of the whole House, to whom it was referred to consider further of the Report which, in the last session of parliament, was made from the Select Committee appointed to enquire into the high price of Bullion, and to take into consideration the state of the circulating medium, and of the exchanges between Great Britain and foreign parts, the Resolutions which they bad directed to be reported to the House; and the same were read. [For the Resolutions see p. 69.] On the motion for the second reading of the said Resolutions,

Mr. Johnstone

rose, and declared that he felt very reluctant, after the long and able discussion which had already taken place upon this subject, to offer any thing further to the attention of the House. But having had the honour to be a member of the Bullion Committee, and having also concurred in all the opinions expressed in its Report, he trusted that he might be indulged for a short time with their intention. He apprehended that among all the gentlemen who had spoken on this question, none had sufficiently considered what might be the consequence of a perseverance in our present system. Much bad been very justly said on the virtual breach of faith towards the public creditor, and it was impossible that too much anxiety could be felt on that point. The debate had, however, in his judgment, done much good in drawing from those who opposed the conclusions of the Bullion Report, some concessions which had been obstinately withheld in many of the pamphlets by which that Report had been followed. With only one exception, every member who had joined, in the discussion had disclaimed all belief in or adherence to any imaginary standard, in the constitution of our monied system, and that exception was the noble lord under the gallery (lord Castlereagh), whose criterion was still more fanciful and wild than any he had ever heard of. The standard had been moreover acknowledged to be the precious metals, and the only point in dispute between his hon. friend near him and the right hon. gent. below him was, whether as bullion or, as coin they were the most effectual and undoubted standard. This was a point he thought of no great importance, since coin alone derived its value from the quantity of bullion which it contained. The Chancellor of the Exchequer had also distinctly admitted in his speech on the preceding evening, that a diminution of the issues of the Bank would operate favourably on the exchanges, but argued that that was a good overbalanced by the political mischief by which it would be attended. He would touch afterwards on the solidity of this last argument. Something had, too, been acquired to the doctrine of depreciation by the admission, that, as applied to external purchases, our currency had fallen in value. Now, that these external purchases necessarily affected the price of commodities in the home market, was a point very properly noticed immediately by his hon. friend, and he should therefore not dwell upon it. A great distinction had been said to exist between the present alledged excess of paper, and the excess in Ireland, whch was followed by the open establishment of two prices. But what was the cause of this difference? Two prices did not openly prevail in this country, from the terrors of the statute of Edward 6, a statute not applicable to Ireland. It had been stated by the right hon. gent., that our circulating medium amounted before the Bank restriction, to 47,000,000l. including 36,000,000l. of specie, and 11,000,000l. of Bank Paper; and that, at present, we had in circulation, but 3,000,000l. of specie, and 23,000,000l. of paper. He had to observe, in the first instance, that this statement entirely overlooked the issues of the country banks, on the amount of which he had some observations to make. He had moved some time ago for the production of several papers from the stamp office, which shewed that in the year 1805 the number of stamps, taken at the lowest sums to the issue of which they were legally applicable when converted into the form of country banknotes, would amount to 10,100,000l.; in the following year to 10,000,000l.; in 1807 to 6,000,000l.; in 180g to 8,000,000l. and in 1809 to 15,000,000l. In the last year their amount was 9,000,000l. These stamps could only be in use, according to the law, for the period of three years. Thus the years 1805–6–7, would prove the whole amount of country notes in circulation to be not less than 26,500,000l. and to have increased latterly to 29,400,000l. He was aware that this account might be liable to some deductions, but he believed them to be inconsiderable. The deposits of paper now kept by Bankers fell very far short of what they were when subject to be called on for payments in specie. There was probably at least 6,000,000l of specie originally always in their coffers, to meet any accidental demand for it. This was so much withdrawn from the whole amount of the currency at the former period. Admitting, then, the correctness of the statement that, before the Restriction there was in the country 30,000,000l. of specie, beside 11,000,000l. of Bank paper, and 8,000,000l. of country notes, this deduction would leave the whole amount of the currency at that lime, about 43,000,000l. The present amount of Bank paper in circulation is stated to be 23,000,000l. and the specie at 3,000,000l. which he believed, however, to be less than it actually was. After making an allowance of two millions for paper cancelled or destroyed, we should have twenty-five millions remaining, which after a further allowance for the sum employed as deposits or rests by the country bankers, would constitute a sum total of 48,000,000l. and an increase of 5,000,000l. above the whole amount in circulation, antecedent to the restriction. The increase in London alone in paper applicable to the purposes of the whole-sale trade, had been calculated to be from 9 to 13,000,000l. It ought to be remembered at the same time, that this great increase was contemplated by various recent regulations; the use of paper had been much circumscribed, and the quantity of circulation greatly economised. The clearing house at which the transfers among bankers were made, afforded evidence of this, and the late practice of the Bank of discrediting bills had the same effect in lessening the sum required in circulation. A challenge had been given to his hon. and learned friend to adduce proof of any rise in prices corresponding to the alledged excess of paper, and certainly he fully agreed that if no such rise could be exemplified, that excess could not have taken place. But, as far as his infortion and judgment went, there could not exist a doubt that there was correspondence between them, and that the rise of prices had really gone farther than could be ascribed exclusively to the depreciation of the currency. His learned friend had, in his able speech, particularly referred to the rise of corn, unquestionably the criterion most favourable to his opponents, and had shewn the rise to be in the proportion of 7 to 11. Assuming the scale furnished by the tables of sir G. Shuckburgh, he calculated the proportion to be about 531 to 238.—The right hon. gent. had referred to the expences of Greenwich Hospital, and in his opinion that was a document well worth producing. He had seen, in one ingenious pamphlet, a scale of prices, in which it was attempted to shew that there had been no sensible rise. On looking into it, however, he perceived that the writer had, with the exception of tin and indigo, confined himself to articles of colonial produce. The hon. gent. then alluded to the neighbouring countries of Austria, Russia and Sweden, which ought to be a lesson to us. It had been said, that the exchange was affected by the present interruption to commerce; but the truth was. that our commerce, in spite of Buonaparte's decrees, had extended beyond what it had ever been at any antecedent period. In 1809 the exports increased from 11 to 23 millions, and this year the exports could not be less than 19 or 20 millions. The deranged state of the exchange could not therefore be owing to the state of the foreign markets. On one article alone, cotton, the rise was from 9 to 18 millions. A derangement had been talked of as likely to result by leaving the restriction system. It was said we could not carry on war. How had war been carried on for the last 14 or 15 years? Not, surely, from a paper system, but from a surplus produce, and our manufactures; so much the greater our produce than what was consumed by ourselves, we had the greater fund left for war. With respect to the interest of the sum due by the public to the Bank, 150,000l.; of that interest 100,000l. might be considered as compensated by the profits made by the Bank in managing government money in their hands. The Bank restriction might have produced good to this country in some such way as the mines of the new world were said, by Mr. Hume, to have benefited Spain at first; but the period was now past, and we were called on to slop. This might be carried too far, as in the human body, when a man rouzed himself to extraordinary exertions, those exertions would be succeeded by lassitude. The depreciation really began in 1797, and if the course of exchange had been sometimes since that period favourable, it was entirely owing to our balance of commerce. We had never mistaken the nature of the depreciation of the currency of our colonies: why, then, should we deal a gentler measure to ourselves than we had dealt out to them? All the banks that had followed the system of the Bank of England, had ended in depreciation; and if the Bank of England had stood out longer, it was entirely owing to the greater credit of this country. The hon. gent. concluded with imploring them, therefore, to return to the old and salutary system.

Mr. Fuller

rose and said: Mr. Speaker, if the hon. member who has just spoken, alluded to my financial knowledge, I am only greatly surprised, and very much obliged to him. But he might as well have talked upon any thing else. For; Mr. Speaker, I don't like this business at all. I think that it is a humbug. I think that it is the greatest humbug that ever was put upon the country since that affair of the duke of York. There is no depreciation; or I know nothing at all about the matter. I can't understand how they would make out that there is any depreciation of the currency of the country. No, Sir, this is all the attempt—this is all the system of the base faction, the cowardly faction, who are undermining the credit of the country. (Cries of Order, order!) Yes, Sir, the faction that originates every thing malevolent to——, but, Sir, I go to other things. Some gentlemen, Sir, say the guinea was once worth 20s. It is now worth 21s., and some say it is worth 24s. Why, then, if this be the case, why not say so? why not speak out? why not raise the guinea at once, to 24s.? I don't pretend to puzzle myself with these things: but I say, let the country be firm; let the country keep up the credit of its currency, and all will go well. There are various reports as to what goes with the gold; some say it has disappeared; and some say it has been hoarded on the seacoast, in order to send off by the first boats that come, to take it to. the continent. No matter for that. What should hinder our having a circulation of our own, that nobody could take from us? The people would make no objection, they would take any thing for money; they Would take tallow candles for change, if they would not melt in their pockets. If we once adopt this plan, we may defy the enemy as long as we like. We can make coin of leather or oyster-shells; and if we can only keep up its credit for a year, we shall have Buonaparté on his knees at the end of it. He, that tyrant, the emperor of France him-self, will be in despair of ruining us. He will see that nothing can shake the stability, the firmness, the strength of the Bri- tish empire. I wish I could see a gentleman here (laughing), I mean, Mr. Speaker, I wish I could see a gentleman in his place (Mr. Sheridan), that was here the other night, when we were talking about play-houses. A great man, a noble person, Sir, I would have given him a hundred play-houses. Sir, he always came forward, he always spoke when there was a mutiny, when there was a riot; whenever, in short, the country was in danger, he forsook his party, and spoke his mind. He would certainly have, spoken now, and I only wish he was. here to speak. He would have put down this mean, conspiring set. (Order, order!); Sir, I wish to set my face against the whole scheme. It grieves me to see the time of the House taken up so many nights one after another, with this tiresome question. It grieves me to see so much labour and sweating about this Bullion Report. Why, Sir, it won't make a bit better figure in the papers, than that nonsensical dispute between you and me.* (Hear! and laughing).

Mr. C. Adams

commenced with a history of the nature of coin; and then proceeded to discuss Mr. Huskisson's pamphlet: he said, that gold had been considered the most precious metal from its rarity, as well as from its ornament and use. It was the most ductile, the most malleable, the most beautiful of all the metals; and it was besides the most hard to be got. The hon. gent. said, he was clearly of opinion, that gold bullion was not the standard of our currency; that mint coin, and mint coin only was; and that paper, as referable to such coin, was not in the smallest degree depreciated.

Mr. Thompson

contended, that the present difficulties of the country arose out of the state of its foreign trade. If we had no exports for our imports, it was not surprising that the price of bullion should be high and the rate of exchange low. The system of exchanges admitted of almost as much gambling as dealing in the funds. What had taken place upon this question had done much mischief; but he was persuaded that the result of their discussions would remedy the evil. As to the depreciation of paper, he should say, that neither the Bank could pay its notes in specie, nor could any gentleman in England pay one hundredth part of his debts in coin. When he took a promissory note, it was not in the * See vol. 15, p. 641 expectation of being paid in cash, but because he knew the individual to be possessed of capital and property. He denied that the directors of the bank could, by limiting their issues, have any effect on the exchange; and if they could, it would hot be desirable that the little gold in the country should be suffered to go to the enemy. He wished the Committee had shewn how the diminution of paper would bring back gold. The country would not have reached its present elevated situation if it had not had an abundant circulating medium. As to the country banks, it was usual with them to keep a large stock of Bank of England notes and government securities, in order to answer any run upon them; it was not to circulate an excess of their paper. He knew a banker, not in want of capital, who wished to increase his issue, and after having tried the experiment for one year, found he had not 1,000l. more of notes out in consequence, and made not a shilling by the operation. He should agree to any measure for rendering the country banks respectable, but must deny that they had, as they had been charged with doing, issued their paper to excess. The fact of the excess of paper was barely assumed; he could wish to hear it separately discussed. The liberality of the Bank had saved many persons from sinking under the pressure of the times. It was his opinion, that it would be better to go on with the existing system, than by resorting to any untried schemes, to risk the ruin of the trade and commerce of the country.

Mr. Marryatt,

in commenting on the speech of an hon. gent. (Mr. Fuller), said, he was willing to leave to that gentleman his oyster shells provided he would give him in return more gold and silver. A noble lord (Castlereagh) in speaking of our northern fellow subjects, the Scots, had called them what no man could deny them to be, a most moral and ingenious people. His proof of that assertion was, however, rather whimsical. He had said that not a peasant could be found in Scotland who would prefer guineas to bank notes; if so, he could assure the noble lord that their countrymen in London were distinguished by a very different sort of magnanimity; for here the difficulty would be to get them to take paper where they could get guineas. The noble lord, however, might have drawn more striking facts from amongst his own countrymen. In Ireland there was no taking up a newspaper, with- out seeing advertisements, vying with each other in offering guineas, doubloons, and dollars to sale. He read two of these advertisements from a paper he held in his hand, one signed O'Keefe, 113, Exchange, Cork; the other signed Hely, in the same city, where both professed to offer each of them a higher price for guineas than any other man in Ireland.

Mr. Simeon

spoke shortly in denial of the depreciation.

Mr. W. Smith

proceeded to state a fact or two, as proofs of the depreciation; first; That a pipe of wine, for which 110l. was demanded in the ordinary currency, had had been sold for 90 guineas—second, That a man having 600l, in gold, came to London to purchase certain articles in the way of his business and was allowed 12½ per cent. as the difference. But then it was answered that the guinea had risen. The Bank promised to pay in standard coin, and if the notes had been convertible into this coin, or had been considered as equivalent, then the man possessing the 600l. in gold would have had no advantage over one having as much in paper. But the difference fully proved the depreciation. After stating that actions would soon be brought for coin, unless the expence, and the sense that each prosecutor might be served in the same way, prevented it; he said that it was in vain for gentlemen to shut their eyes against the fact of depreciation, as the ostrich hid its head and then thought itself secure and unseen. Vigorous measures ought immediately to be taken to check it; the longer the remedy was delayed the more severe would be its operation. He then commented on the conduct of the Bank directors, which had been too much censured by others. They had certainly been placed in a difficult situation: but the cause stated for the restriction was, that they might have specie to answer the public emergencies. There were some grounds to believe that they had not strictly performed this condition, and therefore, their conduct was not deserving of the applause so liberally bestowed upon it. They had made immense profits, as appeared by the great rise in their stock, being from 180 to 280 since the restriction, while the government funds had, during the same period, only risen from 56 to 65, Adverting then to the remedy, he said that the Bank ought, at some loss to the proprietors, to put itself in a situation to resume cash payments, when parliament thought it expedient. He could not fix any definite period, neither did he imagine that the restriction ought peremptorily to be continued during the war. It was impossible to say how long that might last. They had not at present even a glimpse through the gloom.

The Resolutions were read a second time, and on the motion that the first be agreed to,

Mr. Horner,

for the purpose of having his own Resolutions recorded on the Journals, moved as an Amendment, to leave out all the words after the word, "That," for the purpose of inserting those Resolutions.

This Amendment was negatived without a division.

Mr. Canning

asked the right hon. gent. opposite, whether in the mention which he made in his first Resolution of "the right of establishing and regulating the legal money of the kingdom, having been at all times a royal prerogative," he intended to imply that the prerogative was entire and unlimited?

Mr. Vansittart

replied, that his Resolution had been drawn in compliance with the precedent stated in lord Liverpool's work and founded on the authority of sir Matthew Hale and others.

Mr. Canning

adverted to the 14 of the King, chapters 70 and 92, regulating the weight and fineness of the coin of the realm.

Mr. Vansittart

observed, that his Resolution did not trench on that act; and repeated that observation in answer to some similar remarks from Mr. Huskisson.

Mr. Rose

maintained, that his right hon. friend's Resolution was not at all contrary to the spirit of the act alluded to.

Mr. Ponsonby

called the attention of the House to the danger of passing this Resolution. It affirmed, that it had always been the right of the crown to mix the proportions of pure metal and alloy in the coin at its pleasure, and to make it represent what value it pleased. This he denied. There had always been a standard, and in proof of this he referred to the statute of Edward 3. That the crown possessed, and had exercised a right which was nearly equivalent in effect, namely, the right of altering the denomination of the coin, was true. Some of our kings had adopted this method of cheating their subjects, but as lord Liverpool had said, that was an expedient which in the end had never been profitable or honourable to the crown. But the prerogatives of the crown were a trust for the benefit of the people, and he beseeched their representatives to consider what it would be to say, that the crown had the power of establishing whatever base money it pleased as the coin of this country. This part of the Resolution was besides unnecessary, because it had no necessary bearing on the question under discussion. The Resolution further stated, that the crown had often exercised this prerogative in concurrence with the States of the Realm. This was a contradiction in terms, for the meaning of a prerogative was, that it might be exercised by the crown without the intervention of parliament. This alleged prerogative was at least sufficiently doubtful to require the House to pause before they passed such a Resolution. If they did pass it, whatever might be their own judgment as to their conduct, no lawyer nor man of sense in the kingdom would approve of it in this instance.

Mr. Bathurst,

on the other hand, maintained that the Resolution was perfectly correct, and easily to be comprehended.

Mr. P. Carew

followed on the same side.

Mr. H. Thornton

thought the Resolution erroneously expressed.

The Chancellor of the Exchequer

was decidedly of opinion, that the declarations respecting the royal prerogative on this subject in his right hon. friend's Resolution, and the Resolution of the hon. and learned gent. were equivalent to each other. In both was expressed what in common law was the prerogative, and the way in which that prerogative was limited by statute. The indulgence with which the gentlemen opposite overlooked this in the hon. and learned gentleman's Resolution, and the acuteness with which they detected it in his right hon. friend's, was a proof of ingenuity rather than of candour.

Mr. Horner

hoped the House would come gravely to a decision on this most important point, without reference to the merits of either set of Resolutions. If his Resolutions contained precisely the same import as his right hon. friend's, why had the right hon. gent. voted against it? As to the authority of lord Hale, he admitted it to be great, but it was opposed by that of Blackstone, who held that the king's prerogative did not extend to the debasement of the current coin. In what part of Hale, too, was his opinion found? It was in a commentary on the reports of cases in Ireland, by sir John Davis. The House was, therefore, called on to declare that lo be a royal prerogative, which even prerogative lawyers had considered doubtful. He was happy to see the crown lawyers in their places on this occasion.

The Attorney General

contended that all those who had read the Resolution of the hon. and learned gent. must perceive that he had himself subscribed to the opinion of lord Hale. This was the natural arid obvious meaning of his expressions. (Hear, hear! from Mr. Wynn.) He would not be prevented by any vociferation, however offensive, from declaring his opinion. He extolled the value and authority of sir J. Davis's Reports, and observed that the Resolution before the House did not imply that the prerogative was to be exercised without consent of parliament.

Mr. Wynn

vindicated, the right of every member to interrupt another when advancing unsupported assertion?:, and observed that the case in Ireland, mentioned in the Reports alluded to, took place at a period when Judges travelled in Ireland in the midst of an army.

Mr. Tierney

said that as a former Amendment for omitting certain words in the Resolution had been rejected, he should move that there be added to it these words "and that it is expedient to declare it."

Mr. Canning

said, he was indebted to the right hon. mover for thus giving him an opportunity to remark, that the prerogative of altering the denomination of the coin having been limited and defined by a positive statute, he could not conceive what motive could induce any member to call upon the House to contradict by its Resolutions the written law of the land. If in conformity to such a resolution, a proclamation should appear to-morrow for altering or lowering the standard, even by a single grain, of our currency, any man acting in obedience to it would subject himself to all the penalties of the law. With this conviction, he intended, therefore, if the right hon. gent.'s Amendment should be rejected, to propose in lieu of it the following addition—" and that the weight and fineness of the gold and silver required to be contained in the coins of the realm are fixed and ascertained by H Geo. 3 cap. 96."

Mr. Ponsonby

, though fully sensible of the value of lord Hale's opinion, knew that both he and lord Coke sometimes committed mistakes in point of law: and that; he thought that sir Wm. Blackstone, who had all their light, was a great authority too. Sir John Davis laid down such doctrines in favour of prerogative occasionally, that if any lawyer in Westminster-hill should think proper to maintain them at present, it would not much conduce to his reputation.

Mr. Tierney's Amendment was then put and negatived.

Mr. Canning

then brought forward his amendment, stating in addition, that the weight of gold and silver was fixed by the 14th Geo. 3, cap. 96, which alter a short conversation was negatived.

The second Resolution was then put and agreed to.

Mr. Tierney

slated it to be his intention to move an amendment to the third Resolution, and he was anxious that the whole question should be adjourned.

The Chancellor of the Exchequer

opposed the adjournment.

Mr. Tierney

said this was unfair, as he had never been able to get an opportunity of delivering his sentiments.

After some further discussion the question was adjourned till to-morrow.