BANK RESTRICTION BILL. (Hansard, 7 March 1815)

§ Mr. Brogden
brought up the Report of the committee on the Bank Restriction Bill. On the question that it be received,

§ Mr. Grenfell
, without detaining the House at length, having been a member of the bullion committee, wished to make a few remarks upon the measure. In his opinion no circumstances, had, since the report of that committee, occurred, sufficient to induce him to change his sentiments, or to think that the principles and doctrines laid down in the report of the bullion committee were ill-founded. Certain facts of a curious nature had indeed appeared, but they did not bear upon the true point in issue; and looking at the present state of the country, with reference to the currency, the price of bullion, and the state of the foreign exchanges, he was persuaded that the arguments in the report were more and more confirmed. Those who four or five years ago argued against that report, imagined that they had now obtained a signal triumph, but they and the House would recollect that Bank-of-England paper was only one component part of the paper currency of Great Britain; that the country banks made very large issues of paper money, the amount of which it was not easy to ascertain, but which also had their influence on the price of bullion. It would be found, he believed, on inquiry, to be a fact, that as the paper circulation of the Bank of England had been diminished, that of the country banks had been augmented, and consequently that the whole amount of the paper currency was generally at alt times about the same. This assertion was in some degree confirmed by the fact, that during the last summer, when a number of country banks and their paper were withdrawn, the issues of the Bank of England were augmented in proportion. The truth was, however, that the bullion committee had never contended that paper was to be considered as the criterion by which a judgment was to be formed of the price of gold and silver. He requested the House to reflect upon the present state of the country. We had now been for about twelve months at peace; the balance of trade had been during the whole period in our favour, and from these and other circumstances we had a right to expect that the foreign exchanges should be in our favour. What, then, was the reason that bullion was 15 per cent, below the mint price, 43 and that the exchanges were 15 per cent, against us? After the best consideration he was able to give the subject, he was convinced that the currency of the country was now, and had long been in a state of depreciation. He also felt some alarm lest this forced and fictitious state of things should in time be made a part of the permanent system of the country. He earnestly recommended that we should return to the ancient, sound, and wholesome state of a mixed currency of paper and gold. With this view, on the third reading of the Bill, he should propose an amendment similar to that which he had offered in the committee.

Mr. Rose
would be judged by any man, if the measure recommended by the bullion committee would not have proved most ruinous had it been resorted to at the period which they had named. The new guineas which the Bank would, in that case, have been compelled to coin, would have been melted down as soon as they were issued. The Bank would have sustained an enormous loss, and the public would have derived from it no benefit. He objected to the amendment proposed to be moved by the hon. gentleman, as he understood the introduction of the words, "and no longer," were intended to tie down parliament from continuing the restrictions, even if it should appear necessary. Gold had been 5l. 7s. the ounce; it was now down to 4l. 9s. If its price should again be advanced, great inconveniencies might result from pursuing the course which the hon. gentleman recommended. He denied, that we had been a year at peace: we had still to send a million of dollars per month to Portugal, on account of arrears; we were not yet in a state of peace with America, and immense sums had been carried out of the country by travellers and persons visiting and going to reside in France. But for these circumstances, he thought it probable, that even now gold might have been down to the mint price.

Mr. Homer
was decidedly of opinion that the Bank ought to resume cash-payments as early as possible. He denied that any of the doctrines of the bullion committee had been refuted, and could not allow this opportunity to pass without entering his protest against the Bill altogether. The Chancellor of the Exchequer, who had said he expected the measure would not continue to be necesssary beyond July, 1816, he regarded as being 44 pledged, not that the Bank should resume its payments in cash at that time, but that he would not lose sight of the subject. It was a mere delusion to suppose that the Bank would resume cash-payments if left to themselves. Government must interpose its authority, for it was not natural that the Bank should spontaneously give up the great profits which they derived from the system of restriction. Was it not a strange circumstance, that during the period of our greatest foreign expenditure, and our largest importation of grain, the price of gold was falling, and that it was rising this year, when our foreign expenditure was rapidly diminishing every week, and the importation of wheat had ceased? On the third reading of the Bill he should propose that a declaration of the principle that the Bank must resume its payments, should be introduced. No one wished cash-payments should take place immediately, but that ministers should adopt the doctrine of the necessity of their taking place.

The Chancellor of the Exchequer
reserved his observations upon the hon. member's views until he should propose the amendment of which he had given notice. He thought it however necessary on this occasion to deny the assertion, that the country had been twelve months at peace. For, in point of fact, considering the state of our*relations with America, that a definitive treaty was not yet concluded, and that our foreign expenditure still continued, the country could not even now be said to be in a state of peace. Our foreign expenditure had no doubt diminished, and was still diminishing. Yet its extent must naturally be conceived to operate against the reduction of the exchange; and until the expiration of the winter months, which impeded our commerce, the balance of trade could not be expected to outweigh the influence of our foreign expenditure. The prospect, however, was favourable, the rate of exchange having been reduced no less than 25 per cent, within less than twelve months; but still he was not so sanguine in his hopes as to speak confidently, that the restriction upon the Bank could be conveniently removed at the time specified in the Bill.

§ Mr. J. P. Grant
thought that the diminished hopes of the right hon. gentleman as to the resumption of cash-payments, since he last addressed the House upon the subject, furnished additional reason for inquiry. The House should not leave 45 such an important matter as the restoration of a sound currency to settle itself as it might happen. It was due to the country, especially after the declaration of the right hon. gentleman, that the House should enter into the full consideration of the subject. For his own part, he declared that he thought the resumption of cash-payments by the Bank so extremely difficult, that to devise the means of producing that resumption, must require the collective wisdom of parliament, duly and deliberately exercised. The prospect held out by the Chancellor of the Exchequer as to the removal of the restriction, was by no means encouraging; but still he must say, that his hopes were even less sanguine than those of the right hon. gentleman; nay, farther, he would say that he had no hope whatever on the subject; and in his calculation the right hon. gentleman, should he continue finance minister, would, before the period fixed for the expiration of the present Bill in 1816, have to apply to parliament for its continuance. Indeed, he expected that the restriction would continue to go on from time to time, as heretofore, if the subject were not taken up by parliament, and thoroughly investigated with a view to provide some remedy for the existence of such an evil.