§ The House resumed the adjourned consideration of the fifteen last of the Resolutions which were yesterday reported from the Committee 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 cause of 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 Third Resolution was then read: viz.
§ "Resolved, That it is the Opinion of this Committee, That the promissory notes of the company have hitherto been, and are at this time, held in public estimation to be equivalent to the legal coin of the realm, and generally accepted as such in all pecuniary trans- 151 actions to which such coin is lawfully applicable. Upon which,
§ Mr. Tierneyrose and said, that if the subject was of less importance, he should have to apologize to the House for taking up any more, of their time upon a topic which had already been so ably discussed. He really, after the first night's debate, felt no inclination to speak upon the subject, as it appeared to him to be then disposed of. He had never heard an abler discussion in Parliament than had taken place upon this subject; and he thought the highest compliment was due to the hon. and learned gent. (Mr. Horner) who brought forward the business, for the reach and comprehension of mind which had enabled him to take in the whole of this most extensive and difficult subject—for the unwearied industry with which he had collected such a mass of information upon it—and for conveying that information to the House, in a speech of such forcible eloquence as had rarely occurred in our parliamentary history. Agreeing, as he did, most perfectly in all the general Resolutions of that hon. and learned gent, he could not agree with him in his last Resolution, which assigned the expiration of two years as the period when the Bank should be obliged to resume its cash payments. He should have abstained from troubling the House at present, if the proposal he had made last night had been agreed to. He could have wished that the Report of the Bullion Committee had been left alone to work its own way in the public opinion: but when it was not thought sufficient to reject the Resolution contained in that Report, but that it was also thought necessary that the House should pass Resolutions of a contrary tendency, he felt it necessary to propose an Amendment. He chose to move his Amendment upon the third Resolution, because those who brought it forward professed, that passing this Resolution would put the question of depreciation at rest. But in what manner was it now attempted to put this question to rest? His hon. and learned friend (Mr. Horner) had proposed in a Resolution, "That the actual value of the promissory notes of the Bank of England (measuring such value by weight of standard gold and silver as aforesaid) has been, for a considerable period of time, and still is, considerably less than what is establish by the laws of the realm to be the legal tender in payment of any money contract or stipula- 152 tion. The Amendment moved by a right hon. gent. (Mr. Vansittart) entirely evaded the main question in this Resolution about the value, and asserted only that Bank notes and money were of equal value in the estimation of the public. The question of depreciation was thus avoided: for the right hon. gent, did not state that the actual value of Bank notes was equal to what they purported to represent; but said merely that they were equal in public estimation. Now, what did he mean by public estimation? He certainly did not mean the general estimation of all countries; for no one had yet attempted to dispute or deny, that in the estimation of foreigners our paper was depreciated, and was not of the value which it purported to represent in gold or silver. They had only attempted to argue, that for the purposes of home circulation our paper was not depreciated. He could not, however, conceive how a currency, unsound as to foreign nations, could be sound at home: or how that could be equivalent to gold here, which was not equivalent to it abroad. As to the experience of individuals, which was mentioned in the course of the discussion, several instances had been stated where goods were offered at different prices, if paid for in money or in Bank notes. These instances proved, as far as they went, that the two things were not exactly the same in public estimation.—There was another circumstance, however, which would put this position in a stronger light. About a month ago, the Chancellor of the Exchequer received a paper from a deputation of many of the first merchants in this metropolis, attributing the unfavourable rate of exchange to other causes than those stated by the Chancellor of the Exchequer. This paper stated, "That it was the licensing system, and the great encouragement it afforded to the exports of the enemy, which turned the rate of exchange so much against this country, occasioned the great rise of bullion, and the apparent depreciation of Bank paper." This paper was signed by Mr. Mellish, Mr. Thornton, sir C. Price, and a long list of the most respectable merchants in London. Although be did not then see any of (hose gentlemen who had seats in that House present, yet he hoped that they would drop in in the course of the discussion, and explain their ideas upon this subject. Was it not a monstrous proposition that the House was called 153 open to vote, when after almost all the leading houses in the city had told the Chancellor of the Exchequer that there was an apparent depreciation of Bank notes, parliament should be called upon to say, that there was not, and that in public estimation Bank notes and money were of the same value—He should not go into the examination of those general principles, which had been already so ably discussed; but for his own satisfaction, as a member of the Committee, he must declare, that in the general principles he agreed with every syllable which had fallen from his hon. and learned friend; and it was his firm conviction, that there was a depreciation of our currency, and that it arose from an excessive issue. On the present occasion, it was they who denied the excess who were bound to prove that there was none, as all the symptoms and every presumption was, that there was an excess. It was to be noticed, that there were above 770 country banks, all forcing as much of their paper into circulation as they could.—It appeared in evidence, that one country banker wished to get 50,000l. more of his notes into circulation; but with all the exertions he could use, he could only force 1,000l. more than was before circulating. Probably some other country banker of his neighbourhood, no less enterprising, had gone before him, and forced upon the market the utmost quantity of paper which it could bear. It was then perfectly established, that there was a number of persons always watching most anxiously for an opportunity to force upon the market as much paper as it would bear, which must have a natural tendency to excessive issues. There being, then, a natural excessive issue, and an apparent depreciation, the presumption was, that there was an excess which produced the depreciation. Those who denied this fair presumption, were bound to shew that there was no excess. When he used the word depreciation he wished that he could find any other word in the language to express his meaning. He did not mean, nor did any of his friends mean to argue, that Bank notes were discredited; but he meant to say, that they had lessened in value, as Was evident by gold bearing so a high a price in reference to the com that those notes purported to represent. He must deny, however, that Bank notes and money were of the same value, either actually or in public estimation. In the ordinary oc- 154 currences of life, and in small transactions, the one might serve as well as the other. With paper he could pay his taxes, and make what purchases he wanted; but in transactions on a larger scale, the value was not the same. The answer generally given to this position was "Oh, thin, you must suppose men to be acting unlawfully, and breaking the laws of the realm." As to the laws respecting the coin, he did suppose they had been violated every day since they were first passed. Those laws, as had been stated by the best writers, were very doubtful in their policy, but ineffectual in their operation. As long as coin could, by even violating the law, be turned into bullion, which was a thing of greater value, and paper was not convertible, coin and paper could not be of the same value. When it was well known that there were a race of men in this city, anxiously catching at the smallest advantages, even at one eighth per cent. upon Stocks or Exchequer bills, how could it be supposed that men would be wanting who would violate the law for a premium of 20 per cent. which they could gain immediately by melting the guineas? If the right hon. the Chancellor of the Exchequer were to go to the bullion market for the purpose of buying gold, did he really suppose that he could buy gold on as favourable terms for Bank notes as for coin? If he was sure that he could not, how could it be said, that gold and paper were of the same value He did not approve of the form of the amended Resolutions going so particulary upon dates. This semblance of extraordinary correctness was often assumed merely to put the adversary to trouble in detecting the inaccuracies.—He should next make some observations on those Resolutions, as they would affect our foreign trade. Those who had all along opposed the Orders in Council, could not be surprised at seeing the consequences turn out such as they apprehended, but he was really surprised, that those who always supported them should think it advisable to publish such Resolutions to the continent. Did they see no danger in circulating all over the world, that the rigour and violence of the enemy had done the greatest injury to our trade, had kept the rates of exchange always unfavourable, to us, and had produced an apparent depreciation, at least, of our Bank paper? All this he thought would be much better omitted, especially at the gentlemen on the other side of the ques- 155 tion proposed no remedy for the evils which were acknowledged to exist. He saw great danger in proclaiming to the world, that our enemy had brought us into a situation of unparalleled embarrassments, unless the means of getting out of them were also pointed out. It appeared to him most ridiculous for the House to cell the people what the public estimation was respecting Bank notes, for the public must be at least as good judges of that as the House. The first Resolution was, in substance, that as we could not contrive to make our currency conform to the standard, it was a part of the royal prerogative to make the standard conform to the currency. There was at least this difference between those who agreed with the Report and those who opposed it, that the one proposed some remedy, and the other proposed none. The right. hon. gent. (Mr. Vansittart), instead of proposing any remedy, contented himself with stating generally what every body knew before, namely, that it would be advisable that the Bank should resume cash payments as soon as it could conveniently. He, of course, could not wish for such a premature resumption of payments, or so great a limitation of issues as to produce very great inconvenience to the government or to the trade of the country. But although some inconvenience would probably result from any limitation of the issues, yet in the midst of a most expensive war, we must be prepared for some inconveniencies. The right hon. gent. (Mr. Vansittart) had spoken of a certain madman in Abyssinia; but it appeared to him that nothing more ridiculous could occur to the mind of any madman in Abyssinia, or out of it, than that great and expensive Wars were to be carried on without any pressure or inconvenience being felt; and yet this appeared to be the system of ministers. They seemed to think that by the dexterous device of substituting a paper currency for money, the country might be made to carry on the most expensive war without feeling any pressure at all. They, no longer now supported the Bank restriction on the grounds upon which the act was originally brought in, but they seemed now to stand up for it as a system good in itself, and productive of great benefit to the country. The measure was first proposed on absolute necessity, and for the public safety; it was now supported as a system of advantage to the public Against this new system, and those, doctrines, he must always give his 156 decided opposition. He then referred to a book which bad been often quoted in the course of this discussion, and of which he thought most highly, that of the earl of Liverpool on coins. His lordship in one passage seemed to have foreseen the system which was now supported. He says that some persons fancy they have discovered that the gold and silver might safely be sent out of the country, and a paper currency substituted. This practice, however, went directly to encourage over trading, and to the exercise of unworthy artifices to support the credit of ruined adventurers. In every commercial country, capital was absolutely necessary, and coins should be made and kept as perfectly as possible to the standard. Lord Liver pool seemed in this publication to have foreseen that a time would come when persons would contend that the way to carry on wars was to send the gold out of the country, and in the place of it to adopt a, paper circulation. The right hon. gent. then proceeded to state his Amendment, which was in substance, "That it was highly important that the Bank restriction should be removed at as early a period as possible, and that during the continuaiion of it, it was the duty of the Directors to regulate their issues, on the principles upon which they were governed, while they were obliged to make cash payments." He should certainly object to naming a day upon which the Bank should be obliged to resume its payments, but he wished to lay down some principles by which he Bank might understand the meaning of the House. He thought it if the House now laid down such a principle, they would do all that was at present necessary to be done. He believed that a gentle hint would be quite sufficient to the Bank Directors. Hitherto, they were warranted it conceiving that it was the wish of parliament that they should make abundant issues. Since the restriction, the public had borrowed from them two separate sums of three millions each, without interest. What could the Bank judge from this, but that it was expected that they should make abundant issues? Before the restriction, they conducted themselves on the sound, honest principles of banking; and refused an advance of money to Mr. Pitt, even in his plenitude of power, although he stated it to be absolutely necessary for some operations in the Austrian war. At that time, the necessary care of their own interests obliged them to refuse 157 him; and he hoped that they would again return to the sound principles of banking, and no longer suppose, that it was understood, that government and themselves were to participate in all the advantages which could be made of forcing a paper currency upon this country, in the place of the lawful money of the realm. Such a declaration as he had stated in the Amendment he had read, would in his opinion lay the foundation of retracing our steps, and recovering from the evils which were obvious, and which were confessed by all sides. This course he conceived better than fixing a day for the resumption of cash payments, and much better than the set of Resolutions submitted by a right hon. gent. (Mr. Vansittart), who proposed no remedy at all. The right hon. gent. concluded by moving the Amendment which he had stated in his speech.
§ Sir John Sinclairrose and said:
§ Mr. Speaker;I should not probably have troubled the House at so late a period of the discussion, after the doctrines contained in the Bullion Report, had been so ably refuted by several respectable members, had I not been personally alluded to in the course of these debates, by an hon. gent. (Mr. Whitbread), as having become a proselyte to new opinions. This is a point which I think it necessary to explain. In the year 1797, I happened to be a member of the House, when the restriction on the payments of cash at the Bank of England was first established. I was then inclined to believe, that the continuation of that restriction would be injurious to the commercial and general interests of the country, and that it was possible to form a plan by which the payment of cash at the Bank might soon be resumed. Those ideas I stated to the public in a short tract, which has often been invidiously quoted by those who concur in the doctrines of the Bullion Committee. It is absurd, however, to contend, that the opinions of men, like the laws of the Medes and Persians, should be perfectly unalterable, and that no change of circumstances, no further experience, no new and decisive facts, should make any impression on the mind of one, anxious to ascertain the truth, and open to conviction. My object then was, to maintain a system which I thought had materially tended to promote the prosperity of the country. My object now is, to maintain another system, which I am convinced has answered the public interest better; and if the hon. gent., (Mr. Whitbread), 158 will produce a third system, that will promote the public interest more effectually than either, it will find a friend and advocate in me.
In regard to the general subject, connected with the Bullion Report, it has been so ably discussed in the debates which have already taken place in this House, and has been so fully treated of, not only in an endless succession of pamphlets, but in daily, weekly, monthly, quarterly, and every other species of periodical publication, that it seems to be in a great measure exhausted. I should wish, however, with the permission of the House, very shortly to state to it, first, the nature of our paper currency at this time, according to my conception of it; and next, to point out how that currency differs from those of America and of France, which were at first depreciated, and afterwards totally failed. It is the more necessary to dwell upon that circumstance, as the members of the Bullion Committee, and their abettors out of doors, take advantage of those failures, to throw a slur on the solidity of our medium of circulation, though in point of fact there is no, earthly resemblance between them.
An hon. friend of mine (Mr. Davies Giddy), who has spoken with great ability on this question, but who has given way to an unfortunate bias in favour of the Bullion system, in the course of one of our late debates, divided currencies into two sorts, one possessing an intrinsic, and the other an ideal value. I am rather inclined, however, to prefer the terms, metallic, and representative.
In regard to a metallic currency, it is singular that in China, which contains the greatest mass of population ever collected under one government, (it is stated by Mr. Barrow at above three hundred millions of souls), the precious metals should be considered merely as merchandize, and that when foreign coins are even imported into that country, they should be immediately converted into ingots of silver, and what are called shoes of gold. It appears from a work of authority lately published (Kelly's Cambist), that there is but one kind of money in China, which is used for small payments, called cash, consisting of six parts copper and four parts lead; it is not coined, but cast, with an square hole in the middle, by means of which it is carried about like beads, on a, string or wire. I do not mean to contend, that coin is not extremely convenient for 159 making the smaller payments: and I should have no objection to see it as current as is requisite, in all our pecuniary transactions. But the state of China is a sufficient proof, that coining the precious metals is not indispensably necessary for a populous, civilized, and commercial people, and hence that all the ingenious speculations regarding the necessity of having gold and silver in coin, or possessing a fixed standard of value in coined gold or silver, to which every thing can be referred, however necessary it may appear to the theorist, is not essential in practice. It would be an amusing spectacle to see the hon. gent., (Mr. Huskisson), endeavouring to convince a Chinese Mandarin, that his country must be in a state of ruin, because it possessed no standard, and because no coins of gold or silver were to be met with in its circulation.
As to the currency which prevails in this country at this time, to which the name representative may be properly applied, it may be defined, "a species of paper money, issued for value, representing actual property, convertible into every species of goods at will, receivable at the Exchequer, and returning, at no great distance of time, to the coffers whence it was issued."
The advantages of such a currency are very great. 1. It is procured with little trouble, and at no expense, and supersedes the necessity of exporting goods or property to the extent of many millions, merely to obtain a medium of circulation. 2. It need never be diminished in its amount; on the contrary, it may be increased, whenever the circumstances of the nation require it, a point of infinite moment, and the advantages of which Hume has ably described. 3. It enables a country, without inconvenience, to export its metallic wealth, for carrying on necessary wars, or purchasing grain in times of scarcity or famine. 4. It is the means, both directly and indirectly, of making important additions to the revenue, and creates a saving to the country of those expences which coinage continually occasions, and that to a considerable amount. In the reign of king William alone, it cost us above three millions, without our deriving any advantage from it whatever. 5. It makes a nation independent of all other countries for its medium of circulation, a point of infinite moment, more especially in time of war; and, in the last place, what makes me pecu- 160 liarly attached to the system, is this, that it possesses a species of magical influence on the internal prosperity of a nation. Even in the midst of a long and expensive war, we see its effects—industry abounds—agriculture flourishes—commerce and manufactures have increased—money is procurable at a moderate rate of interest—the public revenue becomes every year more and more productive—public loans are obtained to any amount, and on cheaper terms; and every species of domestic improvement, as roads, bridges, canals, harbours, public edifices of various descriptions, enclosures, plantations, cultivation of wastes, &c. all these proofs of national prosperity, are carried on with a degree of energy, and, more especially at the present moment, are multiplied to an extent, not to be equalled in any other period even of our own history, and far less in that of any other country in the universe.
Perhaps the world never witnessed such a scene as Great Britain has lately exhibited; with the one hand we have been spreading cultivation over our own soil, and carrying on the commerce of the universe; whilst with the other, we have fought successfully against the tyrant of the continent, and all his millions of subjects. Our empire of the sea we have confirmed—we drove the French out of Egypt—Portugal has been rescued—the emancipation of Spain, is, I trust, at no great distance—every possession belonging to the enemy in both the Indies has been subdued. And shall we throw away all these advantages, arising from abundant circulation, (for on that they depend), and obtained during the reign of a paper currency not convertible into coin? Shall we dismiss a fleet that rules the ocean? Shall we disband an army the terror of its opponents? Shall we destroy those resources which, if properly applied, may yet humble Napoleon to the dust? And shall we submit ourselves to a ferocious, and to a conquered enemy? because a band of speculative politicians, the Midases of modern times, who wish to convert every thing they touch into gold; who seem, to care but little what experiments they try with the prosperity of the country, provided they can gain a petty triumph, by effecting a reduction in the price of their favourite metals, or diminishing by a few groats or stivers, the rate of our exchange; who, contrary to the evidence that was brought before them, and in opposition to the knowledge, and to the 161 conviction of so large a proportion of their fellow subjects, ventured to report to this House, some months ago, that our currency was depreciated, and still persist in maintaining so groundless an assertion. But how does it appear that our currency is depreciated? Is it not received as value in all pecuniary transactions? Will it not procure every necessary, every comfort, and every luxury, of life? With a sufficient quantity of the notes of the Bank of England, cannot the holder of them purchase the most magnificent mansion house that can be erected, with all its furniture and decorations? Or will they not be received in exchange, for the finest, the largest and the best conditioned estate that the kingdom boasts of? And yet cur currency is depreciated. Whence can have originated this perversion in the ideas of these modern Midases? With what delight would the Phrygian sage have witnessed the deliberations of the Bullion Committee His spirit must have inspired some of the weightiest and profoundest paragraphs in their massy Report. I wish most sincerely, that a dip in the Thames, the Tweed, or the Shannon, would prove as effectual a remedy for their metallic phrenzies, as Midas found was the case, when he was fortunately immersed in the waters of the Pactolus. I hope, at any rate, that we shall soon see an end put to these Phrygian doctrines, and to the Midassian system of the Committee.
Having endeavoured to describe the state of this country, where a paper currency is fortunately established, on principles amply sufficient to guarantee its stability, let us next proceed to consider the situation of other countries, where a different system prevails, and where the precious metals are the only medium of circulation. I shall state the case as it is given us by Dupont, in his Report on the Bank of France, whose authority will not be objected to by gentlemen on the other side of the House, as he is an advocate for a paper currency convertible into coin. He says, "in the Indies the quantity of gold and silver is enormous, and yet is always insufficient. Europe and America are constantly sending the precious metals there, but they never can get enough of them. The interest of money is very high, because it is necessary to produce, and often to advance the metals in payment. They hardly ever admit of promises or engagements to pay, placing no reliance on them. The working people are very 162 poor, and the rich are at the same time wicked and powerful."
Let us proceed briefly to analyze this statement: "In the Indies, the quantity of the precious metals is enormous, and though Europe and America are constantly adding to the supply, yet they (the natives of India) can never get enough of them."—The circulation of the country, therefore, cannot be increased according to the increasing demand for it, an advantage which paper, when properly regulated, possesses in an eminent degree, and by means of which, a country, being independent of foreign nations for its medium of circulation, can increase or diminish it as its interests may require.
"The interest of money is high."—What a misfortune! What a bar to national prosperity! Interest in the Indies is said to be 1 per cent. per month, or 12 per cent. per annum. I should be glad to know what the middling classes of the community, the farmer, the tradesman, the shopkeeper, and oilier industrious descriptions of persons, would say, if they were to be changed 12 per cent. as interest. They could not carry on their business, without, demanding such enormous additional prices for their commodities, compared to the quantity of currency in circulation, as would in a great measure prevent the sale of them.
"The working people are very poor."—No wonder: for wages in the East Indies are only at the rate of 2½d. per day. Permit me to ask, bow the industrious classes of the community, in this country, could bear such a reduction in their wages, and whether such a fall in the price of labour is at all calculated for the meridian of England? We are told indeed, that when this mighty project is completed, 2½d. in coin, may go as far as 2s. 6d. in paper. Any great alteration in the value or amount of our currency, however, could not be effected without a convulsion. What is to become of the merchant, the manufacturer, the landlord, the fanner, the tradesmen of every description, whilst this great and momentous operation is going forward? What, in the interim, is to become of the revenue? What of the payment of the interest of the national debt? What of the Sinking Fund, that palladium of our national property? What of the charges of our fleet? What of the maintenance of our army? And what of all the other innumerable articles of expence incident to the situation 163 and circumstances of a great empire? I repeat it again, that any great reduction in the price of goods, or any important alteration in the value of our currency, could not be effected, without a complete convulsion. The enemy know this well, and do every thing in their power to drive us down that precipice, which it would never again be in our power to remount.
"The rich are wicked and powerful."—Dealing in usury, they are of course wicked, (for nothing is more apt to degrade the character of a man), and by engrossing all the wealth of the country, they are enabled to trample on the rest of the community, and to render the inferior classes truly miserable.
Such is the situation of extensive countries, where the precious metals are the sole medium of circulation; and such is the state to which the doctrines of the Bullion Committee, if they were to be adopted, would inevitably reduce this flourishing and happy nation.
Let us next proceed to compare our paper currency with that of other countries; for instance, those of America and of France, which were first depreciated, arid afterwards totally failed, such failures being held forth as grounds of terror and alarm, in regard to the solidity of our medium of circulation. The following contrast will sufficiently explain the difference.
§ American and French Currency compared with British Currency,
§ The paper currency of America, and the assignats of France, were issued by these revolutionary governments without any controul whatsoever, as the only means by which they could be enabled to carry on the contests in which they were respectively engaged.——The paper currency of England is not issued by the government of the country, but by corporate bodies, or partnerships of individuals, responsible for their conduct and their engagements, and the amount of their issues is subject to the controul of parliament.
§ The paper currencies of America and of France, were issued without bounds, and without adequate funds having been provided for their liquidation, or their returning again to the coffers whence they were originally issued.——The paper currency of England is never issued, but in exchange for national or individual securities previously deposited, and the 164 notes thus issued necessarily return, at no great distance of time, to the coffers whence they were issued, for the redemption of those securities.
§ The paper currencies of America and of France were issued to such excess, that it became necessary to compel the people to take them in payment of those articles which these governments required. Hence their depreciation originated, and their ultimate annihilation.——The paper currency of England has never been excessive, and has never been forced into circulation, nor can it exceed its due bounds, whilst it is issued on securities of a temporary nature, and is founded on real transactions.
§ Thus it appears, that
§ The one was forced.——The other is free.
§ The one was founded on security.——The other is only given for real value, or solid securities adequate to the repayment.
§ The one was perpetually increasing, until its value was extinguished.——The other increases only in proportion to the growing prosperity of the country, and the demand which thence originates.
§ Let us now proceed to consider the advantages of an abundant circulation, of which some individuals do not seem to be aware.
§ The first advantage is, that a merchant or a manufacturer, instead of being obliged to keep a large proportion of his capital uselessly by him, to answer any unforeseen emergency, can employ his whole capital in carrying on his business, being certain, when the circulation is abundant, that he can always raise any sum he may require, by discounting the bills he receives in the course of his business. He is thus enabled to trade with less profit, dealing to a greater extent, and to undersell all other countries where a different system prevails.
§ Another great advantage of an abundant circulation is, that the interest of money is reduced. If the interest of money were at the rate of 12 per cent. per ann., as, it has been already observed, is the case in some parts of the East Indies, how could our agriculture, our commerce, or our manufactures go on, loaded with such a burden? Whereas by having the easy command of money, at a moderate rate, a country is enabled to prosper.
§ Another great advantage of an abundant 165 circulation is, that a considerable proportion of the capital of a country, beyond what temporary securities will absorb, may be obtained, to carry on lasting improvements, as canals, harbours, and the like, sinking the capital, the capitalist being satisfied with receiving a certain moderate interest. Indeed such is the abundance of capital at present in this country, ready to be applied to such purposes, that, in the course of this session, applications have been made to parliament, for laying out several millions, under the direction of only one engineer (Mr. Rennie), and if the spirit were properly encouraged, the whole country might be made a garden.
§ But the great advantage of an abundant circulation, consisting of a paper currency properly regulated, is this, that a great quantity of property, that would otherwise lie dead and inert, is vivified and put in motion. I sell 500 quarters of barley, or 500 tod of wool; instead of waiting three months for payment, I can immediately convert the value into cash, and carry on my improvements. When circulation is scarce, and interest high, nobody purchases any article, unless it is immediately required for his own consumption, or when he has the prospect of making great profit by the re-sale; whereas, if circulation abounds, and the interest of money is low, articles are bought, though not immediately in demand, with the prospect of ultimately receiving only a moderate profit.
§ We are next told, that our paper circulation has exceeded all proper bounds, and that its value is depreciated. Such ideas however have no just foundation.
§ In regard to excess, there are two tests by which the proper quantity of a circulating medium may be estimated. The first is, that it passes as value in all pecuniary transactions; and the second, that it is received at the exchequer in payment of taxes, for the treasury would be ruined, if it accepted depreciated paper.
§ There can be no excess in any currency that can stand the test of these two criterions.
§ As to depreciation,* our paper currency
§ *If the Committee mean, by contending that our currency is depreciated, that it is not appreciated, I deny it in, toto; if they mean, on the other hand, that the same quantity of circulating medium will not purchase, in several cases, the same quantity of goods, where the demand is great, and the supply deficient, as it
166§ has fortunately stood all the attacks which have hitherto been made upon it, and from the solidity of the principles on which it is founded, it must continue to do so. For fourteen years past it has been received both by public and private creditors in payment of the sums due to them, whether principal or interest; and though the price of some articles has risen since the year 1799, yet in other cases,† (as will be seen in the statement of the prices current in London, of various articles, authenticated by Mr. Irving, Inspector General of the exports and imports), they have been reduced. As to the idea that public and private creditors must take Bank Notes, because they can get nothing else, and consequently that is no proof of their being accredited, it is to be observed, that the case is otherwise in regard to a very intelligent and respectable description of persons, namely, the merchants of the city of London, who, when they have bills on the payment of which they can depend, will voluntarily go to the Bank of England, and will exchange these good bills, for the notes of the Bank, and will actually give a premium, under the name of discount, for the use of those notes. If our currency were in fact depreciated, could that possibly take place?
§ We are also alarmed with the idea, that we shall be overwhelmed by our increasing debts and expences. A few plain facts, however, will put an end to ail such groundless apprehensions. Let us first consider the small addition annually made to our debt, in consequence of the great effects which our sinking fund already produces, and the productiveness of our war taxes, which renders less borrowing necessary. It appears from a document laid on the table of the House, that the funded debt on the 1st of February, 1811. amounted to 545,662,698l. and on the 1st
§ would do some years ago, that must happen in such a period as fourteen years, if the nation be prosperous, whatever was the currency.
§ †It appears from Mr. Irvine's statement, that among forty-six different articles, eighteen have fallen in price since the year 1799: among these are, coffee, West Indian wool, cm rants, Spanish Indigo, British iron, Russian and Swedish iron, Nankeens, ordinary olive oil, pepper, saltpetre, sugar, tobacco, &c. This could not have happened with a depreciated currency.
167§ of February, 1807, came to 533,076,124l., so that in the space of four years we have added to our funded debt a sum of only 12,586,574l. If it is contended that our unfunded debt ought also to be taken into consideration, the increase may be thus stated. On the 1st February, 1807, the amount of the unfunded debt was 34,348,391l;. on the 1st February last, it came to 46,971,580l. making a difference of 12,623,188l. Adding the funded and unfunded debt together, the total increase, in four years, is only 25,209,762l. a sum often exceeded by the expences of one year's war, according to the former system. Taking the four years into calculation, the total is only at the rate of 6,302,440l. being an addition so trifling, that it can never be attended with any injurious consequences to the country.
§ In regard to our expences, independent of debt, in 1801, they amounted to 36,124,783l., and last year to 49,947,631l. making an addition at the rate of 13,822,848l. in all, or 1,256,662l. per ann. but if the average of four years is preferred, it appears that in the year 1807–8, our expences were 39,936,855l., and 1810–11, 40,947,631l., the difference is 10,010,776l. or at the rate of 2,502,694l. Are these any grounds of alarm? If we add to our national debt only at the rate of 6,302,440l. and to our national expences only 2,502,694l., per annum, with the interest of annual loans to the amount of 6,302,440l. is it possible to fix a definite period at which our resources will be exhausted, unless indeed the doctrines of the Bullion Committee were to be carried into effect?
§ It was well observed, by Frederick the Great of Prussia, how fortunate a circumstance it was, that the abstract reasonings of metaphysicians, had no effect upon the price of the quartern loaf; and it is equally fortunate, that the sophistry of speculative politicians, has had but little influence on the credit of our currency, the real foundation of our national prosperity and strength.
§ I shall conclude with remarking, that there are some points so closely connected With the safety and existence of a great country, that they ought not to be rashly tampered with, nor brought under discussion, without the most urgent necessity. I particularly allude to its established religion and to its established government: and after these, in point of importance, I consider that species of currency which is found, to be the best suited to the circum- 168 stances of a nation. Religion, constitution and currency, are in fact the three think which bind together the members of a great community. Destroy any one of them, and you ruin the whole. In regard to our currency, a system has now existed, without interruption, for fourteen years, during which period, its effects must have decidedly proved themselves, in such times as these, either useful or injurious; the advantages, however, I trust, have been incontrovertibly established. The maintenance of that currency, therefore, I am fully convinced, is of such essential consequence, more especially during the continuance of the present eventful war, that on the decision of this night, and on our reprobating the doctrines of the Bullion Committee in the manner which they de serve, must depend, the future prosperity, or the entire ruin, of this great and powerful empire.
§ Mr. Whitbread, in allusion to former opinions of sir Sinclair's upon this subject, said, that although the right hon. bart. had changed his mind upon the question of currency, he bad no right to suppose that others had done the same upon other subjects. The right hon. bart. had changed his mind just in time to be made a Privy Counsellor. (No! from the opposite side.) Well, it was not just then, if the hon. bart. would have it so; but it was just then that the right hon. bart. bad signified his determination to publish a pamphlet on the question, and that pamphlet on the side of government. It was, however, not fair to impute to him (Mr. Whitbread,) any of the versatility which the right hon. bart. might feel. As to the opinion which he (Mr. Whitbread), had delivered with respect to the campaign in Portugal, he had spoken from all that he was allowed to know. Put when more ample information came, and lord Wellington's plan was developed, there was not any person in that House who was more willing to give that officer full and ready praise.
§ Mr. Manningdefended the conduct of the directors of the Bank of England, and denied that the Bank had any interest distinct from that of the public. In speaking from himself, which he had done in all that he had said upon this subject, and not as a person commissioned to state to that House the sentiments of the Bank, he was free to say that his situation as a director derived to him no advantage whatever, save what flowed to him, in the channel of the public interests. He was no farther a stock- 169 holder than as holding that portion of stock which was necessary for him to qualify himself for his situation as Bank director, and he had no connexion with the stocks but as a Bank director. In order to shew the fallacy of the arguments which had been resorted to, to prove the depreciation of the paper currency from the high price of guineas, he stated that there was a Dutch gold coin, called the Ruyder, which was worth fourteen guilders but which, by the laws of Holland, was not exportable. It was well known that a piece of bullion of equal weight and fineness, Would in Holland sell for 12 per cent. more than the Ruyder, because the Ruyder was not exportable. He repeated his vindication of the Bank, and contended that their paper issue was not regulated with a view to the raising of any excessive or unreasonable profits.
§ Mr. Huskissonrose merely to make one or two observations upon what had fallen from the right hon. bart. and the hon. gent, who had just sat down. He apprehended that the right hon. bart. had in his zeal for the paper cause let out considerably more than the advocates of paper could wish to have disclosed. He seemed not only to deny the evils of an excessive paper issue, but to hail it as another and most promising system of finance; and that, as for the vulgar prejudices in favour of gold and silver, they ought to be at once exploded or left merely to those modern Midasses who would ruin the country in the fury of their speculations; this glorious paper system was to rescue us from all the horrors of gold and silver Which the right hon. bart had proved by a quotation from a French pamphlet must inevitably make "the poor miserable and the rich wicked and powerful." With respect to the Dutch coin mentioned by the hon. gent, the Ruyder, he believed it was the oldest coin in Holland. It was certainly prohibited from exportation by one of those absurd laws which were allowed to continue in many countries without one reason to warrant the continuance of their operation. But the instance put by the hon. gent, could not apply unless he was prepared to state that the Ruyder had not become deteriorated. It was rectainly a very old coin; and the coin to which the Dutch directed their attention Chiefly was the ducat which was exportable, so that the probability was, that the Ruyder had become deteriorated. With regard to the third Resolution, he wished to know from 170 the right hon. gent, the meaning of the word "equivalent" in that Resolution; was it that the denominations were the same, of this there could be no question; was it that their intrinsic value was the same, or was it that they had the same exchangeable value? Were the two commodities interchangeable? No; then, what was the meaning of "equivalent?" Standard was the measure of equivalency. If the assay-master, the favourite witness, Mr. Merle, was called and asked as to this point, he (Mr. Huskisson) should wish to put him two questions only;—first, "Are the dollars and the crown-pieces equivalent?" and this he would certainly answer, no. The second question would be—by what process can you make them equivalent? the only reply he could give to this, would be, perhaps, a laugh—because the thing was impossible—they could not be made equivalent.—It was absurd to talk of a standard when it could be traced only to a penal law. An equivalent in such a case could only be compared to the story of the scholars, who, complaining of the diminution of their commons, were desired to get a pair of magnifying glasses, through which to view their allowance. Such was the case with the dollars: gentlemen had only to view them through a different medium, and they would perceive them to be larger one day than they had been on the preceding day.
Mr. Manning explained,that the proclamation as to the rise in the value of dollars would put the Bank to a loss of 6d. upon every dollar then in circulation, amounting to several millions in number—a sacrifice of no trifling amount, for the convenience of the public. The Bank was not desirous of continuing those issues; but, on the contrary, would be anxious to withdraw from them whenever the executive government found itself enabled to dispense with the Bank's services. He regretted that the Resolution as to the rise in the dollars had not originated in that House. To the Bank it would prove a loss of 50,000l. or 60,000l.
§ Mr. S. Thorntonstated that within these two days a banker had put into his hands 500 guineas in gold, requesting to have in exchange for them, from the Bank, tokens to the amount, at the rate of 5s. 6d each; and a similar application had been made a few days before for an exchange as between guineas and tokens, to the amount of 300l. This was better than any reasoning as to what their value could be supposed to be.
§ Mr. Wilberforcewas satisfied the effect of the present discussion would be gradually to lead to true and just principles on the subject; and he was also satisfied that those would be found to be the best friends to the country who advised, that even in a state of prosperity, the present system should not be pushed too far.
§ Mr. A. Baringwas of opinion, that it would be most desirable, whenever it could be safely done, to revert to the old practice; but did not think that this country was in any immediate danger from a depreciated silver currency, after having so long gone on with debased shillings and sixpences manufactured by France at one half what they were current for here. As to the Amendment, no doubt could be entertained as to what was meant by it; but it was objectionable, as proceeding upon a principle at present impracticable. The operations of the nation could not be carried on if the circulation were to be much diminished. When in 1797, the Bank drew in its issues, the loan of four millions was raised at a benefit of 8 per cent. to the contractors, whereas the loan of last year was obtained at nearly the price of the funds in which it was borrowed. The ill consequences of such a diminution of the currency would be felt by the public, who were borrowing constantly by anticipation; but it behoved that House to guard the public interests from the injury they would thereby sustain. If any individual in his private concerns should feel apprehensive of a storm, he would take care, by contracting his out-goings, to be prepared to meet it. That House was bound to take the same course with respect to the affairs of the public, and to prepare the vessel to ride out the tempest by taking in the light sails, and putting her in a proper trim to encounter the storm. He was not a little surprised to hear the sentiments of the hon. member who had quoted the authority of Locke and Newton upon this subject; though he could not wonder at such authorities being referred to, when an hon. member last night even quoted the authority of Moses. He had never said that the system originated with Mr. Pitt. Whatever might be thought of it, no man could speak disrespectfully of a system which had enabled the country to maintain an expensive war for so long a period. No gentleman, who looked at the situation of the country, could think it expedient now to return to cash-payments; and it must be clear to anyone, who bore 172 in mind what had taken place since the Bank Restriction act, that at no period since that time was it more impracticable to return to cash payments than at present.
§ The House then divided:
| For the Resolution | 76 |
| For the Amendment | 24 |
| Majority in favour of the—Resolution | 52 |
§ Mr. Hornerthen proposed his several Amendments to the Resolutions of Mr. Vansittart, not with the view to any discussion, but that they might be entered on the Journals.
§ Mr. Hornerwas content that the matter should now rest on their counter assertions, which would thus appear opposed to each other on the Journals.
§ Mr. Horner's Amendments to the several Resolutions were then put and negatived. The following is a Copy of them:
§ Amendments proposed by F. Horner, Esq. on the Resolutions respecting Money, Bullion, and Exchanges, and negatived, on the 15th of May 1811.