HC Deb 14 December 1812 vol 24 cc297-306

On the order of the day for the third reading of the Gold Coin Bill,

Mr. Whitbread

rose to move the following Resolutions which were brought forward by Mr. Brougham in 1811: viz.

1. "That, by the law and constitution of these realms it is the undoubted right of every man to sell or otherwise dispose of his property for whatever he deems to be its value, or whatever consideration he chuses to accept, and that every man possessed of a Bank-note, or other security for the payment of money, has an undoubted right to give it away for nothing, or in exchange for whatever sum of money he pleases, or, if he cannot obtain what he demands, to retain possession of it.

2. "That any statute having for its object to restrain this right would be contrary to the principles of the British constitution, and a flagrant violation of the most sacred rights of property, and the ancient and unalienable liberties of the people.

3. "That any statute having for its object to prevent the Bank or other paper currency of the country from being exchanged against the lawful money of the realm, below a certain rate, would, if it could be carried into effect, cause the awful money of the realm wholly to disappear, and would, in proportion to its efficacy, preclude the application of the most appropriate remedies for the present derangement in the circulation of the country.

4. "That the free exchange of the lawful money of the realm with the paper currency, on such terms as the holders of each may think proper to settle among themselves, is not only the undoubted right of the subject, but affords the best means of restoring the circulation of the country to its sound and natural state, by establishing two prices for all commodities when so ever the one currency is from any cause depreciated below the other

5. "That no law whatsoever can alter the real value of the paper currency in relation to the lawful money of the realm, nor alter the real value of either kind of currency in relation to all other commodities; and that any attempt to fix the rates at which paper and coin shall pass current, must, in proportion to its success, interfere with the just and legal execution of all contracts already existing, without the possibility of affecting the terms upon which contracts shall be made in time to come.

6. "That it is the bounden duty of the Commons House of Parliament, as the guardians of the rights of the people, to discountenance and resist a scheme which has for its immediate objects the establishment of a maximum in the money trade of the realm, and the dissolution of the obligations already contracted by numerous classes of the community, but which has for its ground work principles leading to an universal law of maximum, and the infraction of every existing contract for the payment of money, and that the said Bill has the said objects, and proceeds upon the said principles."

The Resolutions being put were all negatived. Upon the third Resolution, the House divided, when the numbers were, For the Resolution 29. For the previous Question 73. Majority against the Resolution 44.

List of the Minority.
Abercromby, J. Martin, H.
Bennet, H. G. Marsh, G.
Babington, T. Morpeth, lord
Burrell, P. R. D. North, D.
Combe, H. C. Phillips, G.
Courtenay, W. Robinson, G. A.
Cavendish, lord G. Rancliffe, lord
Calvert, C. Smith, R.
Duncannon, lord Thornton, H.
Fitzroy, lord J. Westerne, C. C.
Flood, sir F. Whitbread, S.
Gordon, R. Wharton, J.
Grant, J. P.
Hamilton, lord A. TELLERS.
Harcourt, J. Creevey, T.
Lewis, T. F. Brand, T.
Lloyd, J. M.

The motion was then put for the third reading of the Bill.

Mr. Abercromby

observed, that the amount of currency was now entirely under the regulation of a body, who had declared, that they governed their issues by no other rule than the supposed solidity of those upon the security of whose bills they made their advances. Provided the Bill was considered the representation of a real commercial transaction, and payable at a short date, it was admitted that no further test was deemed necessary of the propriety of any issue. How the di- rectors always ascertained this point lie did not know, but he believed there were cases in which they had been mistaken. The practical consequences of such a system was, that enterprising speculators were tempted by these new facilities into undertakings, many of which, in the course of time, naturally failed, and caused very extensive distress. Another effect equally important was, that the main ground on which the system was originally supported had been entirely taken away, and that instead of being enabled through its operation to prosecute the war in the peninsula, it now was the great obstacle to its progress.

Mr. Rose

repeated several statements, which he had a few days since laid before the House, in order to show that the foreign exchanges were entirely independent of the domestic currency. He endeavoured, likewise, to shew that the whole amount of our present circulation fell short of what it was when gold formed the larger part of the currency. He was aware that the issues of the country banks were considerable; but in many parts, and particularly in Lancashire, no country paper whatever was in circulation.

Mr. J. P. Grant,

in a maiden speech, began by remarking, that to his understanding, it appeared quite clear, that the depreciation of any currency could arise only from one of two causes—either from a want of confidence in those by whom it was issued, or from an excess in the amount of their issues. This proposition was so indisputable, that upon this part of the subject, he should make but few observations in speaking of the value of gold, or of any other circulating medium, he thought it would not be to require too much, if gentlemen were to state in what commodity it was they estimated that value. The price of any article could only be ascertained by a comparison with the value of some other. In the year 1718, when the nominal value of the guinea was considerably raised, the immediate effect was, to render gold exclusively the currency of the country. It was stated, he believed, in lord Liverpool's Letter to the King, that during a period of some extent, the value of gold remained stationary, whilst that of silver had undergone several variations. The rate of exchange to which the right hon. gentleman, who preceded him, had referred, could serve to throw no light whatever on the question to which it was applied. No alteration in the balance of exchanges between countries not possessing mines of their own could affect the system of their internal circulation. It was utterly impossible, that in a general interchange of commodities, the demand for the precious metals should ever be excessive. These principles were so incontrovertible and so well established, that he was at a loss to attribute the diversity of opinion which prevailed respecting them to any other cause, than a disagreement in the meaning of the term employed, by which, what was obvious to one understanding was rendered unintelligible to another. If this were not the case, he must be led to conclude, that different understandings were differently constructed. But with respect to the Bill immediately before the House he rose on this occasion to enter his humble protest against it. Bad as the system was to which it belonged, he regarded it as its worst part, because it cut off the last hope that remained of revising it. With regard to what had been said about a pound note and a shilling being equivalent to a guinea, he thought that it proved that the parliamentary meaning of the word equivalent was very different from the common acceptation of it; and that thus the word equivalent, like permanent (as a noble lord had stated a few evenings ago) had two different meanings. Unless this were the case, it was certainly impossible to prove that a pound note and a shilling were equal to a guinea. The remedy proposed by this Bill appeared to embrace, as a principal object, the prevention of two prices. Now, with respect to two prices, properly speaking there was an inaccuracy in the language; two prices in fact could never exist. It was not possible to maintain the existence of two contemporary currencies of unequal values. In the reign of William 3, as every body knew, one part of the currency became degraded below its nominal value, and the consequence was, that it banished from circulation that part which was justly estimated. The hardship complained of by the public creditor was not that the currency was merely depreciated, but that he was obliged to receive it at one value, and pay it away at another. It might be a harsh name to call this Bill, if it passed, an act for the promotion of fraud; but it certainly was not a law for the distribution of justice. Persons constantly engaged in the purchase and sale of stock were not exposed to the loss in- curred through depreciation; but on the contrary, those whose property had been long vested in the funds, and others engaged in Chancery suits, suffered an injury of prodigious extent. They found at the Bank that 10 per cent. was taken in the first place under the Income Tax, and in the second, that the value of the remainder was diminished above 30 per cent. The system was equally injurious to private annuitants, and unless so great and grieving an evil should be redressed by the application of salutary measures, and looked at steadily with the eye of a true statesman, the inconvenience would soon become not less obvious to the meanest capacity than it already was to those whose inquiries had rendered them more conversant with the subject. The present Bill appeared to him to resemble the folly of children, who imagined that they would remain concealed by placing their hands before their eyes: its object was to draw a veil between the country and its real situation. No doubt the genuine remedy must produce inconvenience, and, perhaps, in some degree distress; but these would be greatly augmented by suffering the distemper to continue until it should assume a yet more formidable aspect. He thanked the House for the indulgence he had experienced; the great importance of the subject and his own conviction of its nature and tendency had prompted him to state on what grounds he must protest against the Bill then under consideration.

Mr. Alderman C. Smith

admitted that the gold coin of the realm had disappeared; and he saw no reason why gold, as well as other articles, might not be made a source of traffic. In many instances it must necessarily be expected, such as when it was applied in the purchase of corn, or other commodities, on the continent. The high price of bullion was, in his opinion, wholly attributable to the balance of trade being against us; and until this could be remedied it was not to be expected that we should have an influx of that coin, of which the country now appeared to be almost totally drained. Rather than see two prices put upon the circulating medium, however, he would be satisfied to see the country without a single guinea.

Sir F. Flood

could not, by any means, agree to a Resolution which went to assert that a one pound note and a shilling were equal to a guinea. He had had very frequent and satisfactory assurances of the contrary from experience, the best of all teachers; yet though such was his opinion, he could not give that unqualified opposition to the Bill which might appear to be necessarily deducible from it. There was one provision of the Bill, which in the existing situation of affairs, was absolutely required to protect the poorer and feebler class of society from being visited by the oppression of the wealthy and more powerful—he meant that by which landlords were prevented from exacting from their tenants payment of their rents in gold. But here his approval must terminate. In the remaining provisions he could see nothing but a mass of mischievous absurdity. The very title of the Bill appeared to him a misnomer, it was called the Gold Coin Bill, when it would have been more appropriately entitled the No Coin Bill. He would state to the House a fact, which would serve as well as any that had hitherto been submitted to their attention, to prove the existence of two prices. Having had occasion to purchase a horse in his native country, he had visited a fair for the purpose, where having fixed on one in the possession of a country dealer, and asked his price, he was answered, thirty-eight guineas, upon which, pulling out a parcel of Bank-notes, amounting to that sum, from the one pocket, and a purse containing thirty-four guineas in gold, from the other, he asked the seller which he would have, when the man, without hesitation, made his election in favour of the specie, swearing by his soul, when he could get it, he would have nothing to do with a bit of a note. No doubt could exist but that a similar feeling pervaded all society; that there was no part of the country, where if a person were to send guineas to market, he would fail of getting such articles as he might wish to purchase cheaper than if he were to send paper to the same nominal amount. But besides the evil which must result from the existence of two prices, and which the Bill went to inflict on the community, it must also be considered as tending to effect the exclusion of specie from the country, and as holding forth an invitation to foreign agents to extract that portion which it might still haply be found to contain. Could any rational man for a moment doubt, that such must be its tendency, when the immense disparity of value between the metal and paper currency was considered? He had himself, on his way to the House, applied to a goldsmith in order to ascertain what that disparity was, and had been assured by him, that a guinea contained bullion which was worth twenty-eight shillings, if bought with the reduced currency. Would it not be absurd, under these circumstances, to suppose that guineas would not be sold, or if it were unsafe to sell them, hoarded till an opportunity could be found of doing so? For his part, if he were to consult his own feelings on the subject (and he was perhaps as disinterested as his neighbours), he could not indulge in such an hypothesis. On these grounds, though as he had before stated, he approved of one provision of the Bill, yet, considered as a whole, he must enter his vehement protest against it.

Mr. Preston

was of opinion, that the evils which it was asserted would be the result of the Bill, were either fictitious, or easily obviated; and that under all circumstances, the necessity of the measure must be apparent to all who sufficiently reflected on it.

Mr. Marryatt

having on the first bringing forward of the present measure opposed it, could not now assent to it, as he meant to do, without explaining the grounds of his assent, and thus shielding himself from any imputation of a dereliction of principle. In many respects, the bodies politic and natural admitted of useful comparison, and if he might now be permitted to draw an illustration from it, he would say, that at the time he opposed the measures which he now approved, the state was in the situation of a patient, whom a singular operation would have restored to perfect and immediate health; it was now in the situation of one who had deferred such an operation till it could not be resorted to without incurring the risk of more serious evils, even of death itself. He would not take upon himself to say to what cause the evil was chiefly attributable, whether to the state of the currency; or to that of our foreign commercial relations; but be that as it might, he was rejoiced that the subject had been brought before parliament. If no other good was to result from that circumstance, the public would derive no slight satisfaction from the declaration which had been made some nights since by the governor of the Bank of England, namely, that in the course of the last year, the Bank issues had undergone a diminution of two millions. And here he could not forbear pressing on the attention of the House, the decided and very laudable inclination which had been exhibited by the governor and directors of the Bank, to do every thing in their power to remedy the evil to which the country was exposed. But the reason which now chiefly induced him to rise was, a desire to suggest some change of our commercial intercourse with the countries subject to the enemy, such as might have the effect of obviating the necessity of having recourse in future to measures of a similar nature to that which was now under discussion. It had been, as was well known, for a long time, the object of Buonaparté to effect the reduction of our political power, by excluding our manufactures from the countries which had fallen beneath his rule, and thus cutting off a main source of our national wealth. How sanguine he had been in the prosecution of this plan, not to mention less prominent instances, might be collected from his late attempt against Russia, which was made avowedly with a view to the furtherance of his purpose, and that with an eagerness and precipitation which had put his crown and life in jeopardy. There was undoubtedly much reason to hope that he was on the eve of being overtaken by a just retribution, which, while it avenged the cause of an oppressed world, would obviate the necessity of deliberating with respect to measures of future defence from injury; but we should not be too sanguine in our views of the present state of affairs, however indulgent it might be to our hopes. It was but too probable that our enemy might escape, and even with diminished power retain sufficient to accomplish his great purpose of excluding us from all commercial intercourse with the continent, at either extremity. This being the case, it might not be inexpedient to reflect a little on the progress of the measures intended to injure our commerce, as well as those by which they had been met on our part. The first to which the enemy had recourse were met by the Orders in Council, and the consequence of both was an almost total cessation of commercial intercourse; this state of things continued till the year 1809, when a quantity of goods were shipped in this country, and the efforts of the enemy to prevent the sale frustrated, and this was continued for some time, till by one grand stroke of policy, all hopes of future success were wrested from us, and for some time, our state was much the same as if our Orders in Council had been rigidly enforced. Buonaparté, then feeling that the people he governed suffered very much from the want of certain articles which it was in our power to withhold from them, agreed to take a certain quantity of goods upon condition that we should take in return commodities to the same amount. In this we acquiesced; but it would be easily perceived by those who would take the trouble of examining the nature of this traffic, that it was not conducted on any principle of reciprocity. While we received any thing wanted in this community, he made a strict selection of such articles of importation as he was in the greatest possible want of, such as dyed woods, indigo, and other materials, without which, certain manufactures must have been abandoned, of medicines, of leather, of bridles and saddles, and other equipments for his cavalry. How far such a trade as this could be beneficial to the country it was for ministers to decide.

Mr. Whitbread

observed, that the remarks of the hon. gentleman were most foreign to the question before the House. For his part he confessed himself wholly unable to discover their applicability: there might perhaps be a Ulysses or a Nestor present, who could. Possibly the Chancellor of the Exchequer, or the President of the Lard of Trade, or the. Vice-president of the Board of Trade might be able to show it. He owned that he was not at all surprised, to, hear the hon. gentleman attribute the embarrassed state of our currency to Buonaparté. It was the hon. gentleman's usual practice to lay all our evils at Buonaparté's door. On him all were thrown. Perhaps, even, the absence of a noble lord (Castlereagh) might be owing to Buonaparté's having turned up some what nearer home than was expected.

Mr. Bathurst

intimated that his noble friend was indisposed.

Mr. Whitbread

expressed his regret at the circumstance; he had supposed it possible that Buonaparté's having been found at Berlin, might have occasioned the noble lord's absence; knowing, however, the elasticity of the noble lord's mind and body, he had no doubt that he would soon recover his wonted health. With respect to the Bill before the House, the object of it was to prevent that which already existed—two prices. Every body knew that all the necessaries of life could be bought at a cheaper rate with gold than with paper. The conduct of the hon. gentleman who spoke last had been most extraordinary. Having, in the first instance, opposed the original resolution of the House on the ground that it would be as easy to controul the motion of the heavenly bodies by act of parliament, as to regulate the circulation of the country under the circumstances in which it was placed; having again resisted the Bill when introduced last year, he, now that ministers tried their hand at it again, declared, that he was their man, and gave his support to this notable proposition. The House were placed in this situation: they first voted a resolution which they could not maintain; and they then attempted to bolster it up by a law which was effective only in preventing the natives of this country from purchasing gold, and in opening the market to foreigners. Nothing could be more absurd than the Bill which it was then proposed to read a third time, and he should give his hearty vote against it.

A division ensued,

For the third reading 80
Aganist it 15
Majority — 65
List of the Minority.
Abercromby, J. Marsh, C.
Babington, T. Martin, H.
Brand, T. North, D.
Creevey, T. Robinson, G. A.
Calvert, C. Westerne, C. C.
Flood, sir F. Whitbread, S.
Gordon, R. TELLERS.
Grant, J. P. Hamilton, lord A.
Lloyd, J. M. Bennet, H. G.