HC Deb 20 April 1812 vol 22 cc495-500

Mr. Wharton having appeared at the bar with the report of this Bill, the question being put for its being brought up,

Mr. Pole Carew

expressed his total disapprobation of the principle of the Bill, inasmuch as it would create an inducement to give more for coin than its nominal or legal value, thereby creating a crime which could not be prevented by any legislative act.

Sir Thomas Turton

contended, that if this Bill passed into a law, it would completely do away the sacred contracts between landlords and tenants. He could see no necessity whatever for such a measure, and until some necessity was shewn, he could by no means give his vote in its favour. The House had heard from a noble lord (Castlereagh) that the Bill would be of considerable importance, and was in truth much wanted in the north of Ireland. He did not, however, feel disposed to lake the noble lord's ipse dixit, and should therefore wait for better evidence of the fact, before he could give it implicit credence. A committee ought to be appointed to enquire into the state of Ireland, and if they reported that such was the state of that country as to render such a Bill necessary, he should have no objection to give it his sanction. At present he could only regard it as the worst of evils, the only effect of which would be to destroy the compact between man and man, and create dissentions and disagreements which could not be too strongly-deprecated. He had heard it slated that Ireland was precisely in the same state, as far as regarded the powers of this Bill, as England This he begged leave to deny. In Ireland a special agreement was entered into by the tenant to pay his rent in specie. Would the House then dissolve these compacts? Would they, by passing this Bill, completely overthrow those customs which had so long existed, without question or inconvenience? He could not help thinking that the facility already given to paper currency had given rise to something like depreciation, and had little doubt that a one pound note and a shilling would not purchase so much as a guinea. An hon. gentleman had suggested as a nostrum for this evil, that the Bank should be suffered to regulate their own issues; that country banks should be obliged to pay their notes in specie; and that government should pay to the Bank the sum due to them by the country. He should be glad to know how these measures, if adopted, would have the desired effect? Or, how the payment of that sum would draw back to the country that coin which appeared to have totally evaporated? He was firmly persuaded that the connection between the government and the Bank was extremely ruinous; but when government attempted to legislate for them, and to give value to their notes, the consequences would be fatal. As long as the war in the peninsula continued, the country could expect to have no other coin than the pocket pieces which were at pre-sent in circulation. He did hear of a flag of truce having arrived, and of some over-tures having been made from France. These, he hoped, would meet with that sort of attention the state of the country required. In conclusion, he declared, that if the necessity of the measure was clearly established, he would give it his support, but otherwise he should certainly vote against it.

Mr. Taylor

took a short view of the mischievous effects which had ever been experienced in all ages, and in all countries, by the substitution of a paper currency for the legal coin of the realm. He particularly instanced the consequences of this substitution in the American war, in Austria, and in France; and, drawing deductions from these examples, he strongly contended that the present Bill was highly impolitic, and likely to prove highly detrimental to the interests and welfare of the country.

Lord Folkestone

expressed his surprise, that so many gentlemen who had expressed their opinions upon this Bill, should set out by declaring their disapprobation of its principle, and yet afterwards find some qualifying circumstance which might induce them not to withhold their assent. Such had been the tenour of the speech of the hon. gentleman who had spoken last. He perfectly agreed with the hon. gentleman who spoke first in the evening, that the Bill went to create crimes which did not offend against any moral duty, it would be utterly impossible to prevent the exchange of gold for notes at a discount. In a political point of view, so far from being considered an offence, he thought such a traffic was very desirable in the present stale of scarcity, as by there being a gold price and a paper price for things, the specie, if any remained, would be the more likely to continue in the country. The present Bill, however, only went to increase the temptation to the crime wished to be guarded against, and after it passed, guineas would be still less in circulation than ever. It was well known, that the traders in guineas in Dublin, after the passing of lord Stanhope's Bill, became more anxious in their traffic than ever, and he had no doubt the system would now be carried to a still greater extent. From the report on the table of the House, relative to the number of Bank notes discovered to be forgeries by the Bank, it appeared that for fourteen years previous to the suspension of cash payments, there had been but four cases of prosecution for forgery; whereas in the fourteen years subsequent thereto, the prosecutions had amounted to 471. This statement, however, he did not esteem a just criterion of the real state of facts; for, although the amount of Bank notes said to have been discovered to be forgeries amounted only to 101,000l. he could by no means suppose, from the number of prosecutions, that that sum was in anywise proportionate to the number really in circulation. He conceived the present Bill to be perfectly nugatory. Amongst other anomalous principles which he had observed in it, was one which he thought particularly striking. It was an old mathematical axiom, that if two things were equal to one, they were equal to one another. Now, by this Bill, a Bank of England note and a shilling were mad" equal to a guinea, and the same regulation was made with respect to an Irish Bank note and a shilling, although it was well known that there was a return of discount—he knew the discount to have been equal to 10 per cent. Here, therefore, vas an inconsistency for which he could not account; it was, in fact, making the Bank of England and Bank of Ireland note of equal value; the fact, in truth, being directly otherwise.—He would not go into a detail of all the arguments which history and recent occurrences would amply furnish, upon the impolicy and ruinous tendency of a paper circulation. Examples had been afforded sufficient to induce the House to pause before they gave their sanction to a measure fraught with evils, and pregnant with the most calamitous events. Nor would he state the reasons why, from time immemorial, gold and silver had been preferred as the circulating medium of every nation. Their imperishable nature, their scarcity, every thing in fact had pointed them out as the best representatives of wealth. In addition to the political inexpediency of a paper currency, there were a variety of other reasons, equally strong, against it. Its inconvenience, its liability to accident and to forgery, rendered it peculiarly objectionable. Supposing a poor man, who had received one or two pounds for his week's wages, on his way home should get drenched in the rain—what would be the consequence? his notes, which would no doubt be consigned to his pocket, would come out a perfect pap, the numbers would be destroyed, and the fruits of his labour would be completely lost. (A laugh.) Gentlemen might laugh, but such might really be the case, and such were the accidents constantly occurring. He knew an instance of a poor man, who had saved up a sum of money, from the fruits of his labour, which was in the shape of Bank notes, and which he had deposited in a cupboard in his room. On going to seek for it afterwards, however, he found that his notes, as well as his bread and cheese, had been eaten by the rats. The noble lord concluded by declaring his dissent from every principle of the Bill. He would propose as an amendment, "That the Report be brought up that day six months."

Mr. Simeon

opposed the amendment.

Sir John Newport

deprecated the interference of the legislature in cases of this kind; as it only afforded to the ministers of the day a temporary relief from their embarrassments, and went to subvert all principles of political economy.

Mr. M'Naghten

thought it but fair that the Irish tenantry should have as much protection as the English.

Mr. Johnstone

spoke against the Report being brought up. He said the Bill would be destructive of public credit; and the only difference between us and foreign nations was, that they bounded into bankruptcy in three or four years, while we should be longer in doing so; but say what ministers would, it must come to the same end at last.

Mr. Vansittart was favourable to the Report being brought up. He said, we were no doubt in a state of difficulty and embarrassment, but denied that Bank notes were at all depreciated. He believed a great majority of the House approved of the Bill, and a much greater majority of the nation; and therefore it had his hearty support.

Mr. Homer

, at considerable length, opposed the general principle of the Bill. The invariable effect of legislative interference was to increase, rather than diminish the evil. The root of the evil, the excessive issue of Bank notes, ought to be struck at. The rate of exchange was now, in consequence of the measures taken by government, lower than at the time the Bullion Committee sat. He remarked upon the extraordinary coincidence, that the rise in the price of bullion exactly kept pace with the augmented issue of notes from Threadneedle-street.

A division then took place on the question that the Report be brought up, when the numbers were—Ayes 138; Noes 29. The Report was accordingly received, when

Lord A. Hamilton

proposed a clause to confine the dividend of profits to the proprietors of the Bank of England to 10l. per cent, during the operation of the Bill. His object was that the Bank might have an interest in the recommencement of payments in specie.

This clause was opposed by Mr. Manning and Mr. Vansittart, and supported by Mr. Brougham; but it was negatived without a division.

Mr. Taylor

proposed a clause to compel the Bank to employ the surplus, above 10l. per cent, to the purchase of bullion, which was also negatived, after some important discussion.

Mr. Johnstone

proposed a clause to limit the issue of Bank notes, which was likewise negatived.—The Bill was then recommitted.

The Chancellor of the Exchequer

proposed what he termed a valuable amendment, taking away from the landlord the right of ejectment after a tender of Bank notes in payment of his rent by the tenant. It was warmly opposed by Messrs. Horner, Brougham, and others, on the ground that it was a most important alteration, depriving the landlord of his only remaining remedy, and making Bank notes to all intents and purposes legal tender. The Chancellor of the Exchequer and Mr. Simeon maintained a contrary position, insisting that nothing new in principle was suggested, and indeed that the alteration had been in contemplation from the commencement. The amendment was passed without a division; the Report was brought up, received, agreed to, and the Bill ordered to be read a third time to-morrow.