HC Deb 09 March 1815 vol 30 cc85-90

After the third reading of this Bill,

Mr. Horner moved as an amendment, to leave out certain words, and to insert in their place a clause somewhat to this effect: "That whereas it was highly desirable that the Bank should, as soon as possible, resume its payments in cash, immediately after the passing of the present Act, measures should be taken by the Bank to enable them to resume such payments." His object in proposing this amendment was, that the Bank should, in the fifteen months longer allowed them, lose no lime in preparing to resume cash-payments, and not consider this as a new lease of exemption from paying in specie.

The Chancellor of the Exchequer

had no objection to the introduction of the first part of the amendment, which expressed the desire of a resumption of cash-payments, as he himself felt a sincere wish for that event; but he would certainly object to the latter part, which required the adoption of immediate measures for that purpose.

Mr. Rose

objected to the amendment, as it would tend to mislead the country: it implied, that the Bank, if urged, might take preparatory steps for resuming its payments in cash. That, however, could not be effected till the price of gold were reduced to the Mint price. When that period arrived, the Bank would adopt measures for returning to payments in specie; but while the price of gold was above the Mint price, there were persons who would always contrive to melt the coin. To the words in the early part of the amendment, he had no objection; since he had always expressed his individual anxiety to return to payments in cash, and he was persuaded that it would be the anxious wish of the Bank to pay their notes as soon as possible.

Mr. Manning

said, he had always stated his individual anxiety to resume cash-payments, and he knew that the gentlemen with whom he acted, wished to return to that state of things as soon as it could possibly be done without producing results highly inconvenient to the country. He wished to recall to the recollection of the hon. mover of the amendment, the concluding words of the Report of the Bullion Committee, that in the event of peace, two years would be the shortest period before the restriction could be taken off. It was well known that we were not yet in any thing like a state of peace: we had yet a large foreign expenditure; while this foreign expenditure was going on, and till the state of exchanges was fixed, it would be highly dangerous to return to cash-payments. One of the first effects of such directions to the Bank would be to induce them to restrict their issues; and the effect of this would be felt throughout the whole country.

Lord Archibald Hamilton

wished to know from the Chancel or of the Exchequer, upon what he rested his hope that we should ever be able to return to cash-payments? It seemed to him that he had no other ground for this, than the vague wish that the evil might cure itself. The governor of the Bank (Mr. Mellish) had been present at several discussions, but he seemed to take no interest in, nor to pay any attention to what was going on. The Bank must first reduce their paper before they could resume their cash-payments; and this was contrary to their immediate interest, for in proportion as they issued paper, in such proportion were their profits.

Mr. Horner

consented to take only the first part of his amendment. His purpose in proposing the amendment was to record the difference in principle on this ques- tion. He agreed that the Bank could not open cash-payments till the market and Mint price of gold were the same; but then the Bank must take steps themselves to bring this about. He contended that the present amendment was perfectly consistent with the Report of the Bullion Committee. We had been already ten months at peace, and by the present Bill fifteen months were added to the period of the restriction, which amounted to more than two years. The House might rest assured that unless Parliament interposed, payments in cash would never be resumed by the Bank of England, whatever might be the good wishes expressed by the directors in that House. He then altered his amendment to the following words: "That it is highly desirable that the Bank of England should, as soon as possible, return to the payment of its notes in cash."

Mr. Rose

said, that his expectations of payments in specie being resumed, arose from this: the price of gold in January 1814, was 5l. 10s. an ounce, but, on account of peace, it fell in August last to 4l. 4s. The large importation of corn which followed, raised it to its present price; but when that importation ceased, and foreign ports were shut, gold would fall-again, and the Bank would then be able to return to payments in specie.

Mr. J. P. Grant

was satisfied that no person was anxious to force the Bank directors improperly to resume their cash-payments. He thought that the late fall in gold in this country might be attributed to the immense quantity of depreciated Russian and Austrian paper which inundated the continent. The gold was thereby forced into England, as it had formerly been driven from it by a similar cause. This was at least a plausible explanation of the variation that had occurred in the price of bullion. All that he desired was, that the Bank should commence measures with a view to what every person: considered necessary; and he hoped and trusted, that if the right hon. gentleman and his friends should find it impossible next year for the Bank to return to payments in cash, they would themselves move the House to inquire into the subject,

Mr. Grenfell

was persuaded, that if the House did not urge the Bank, payments in specie would never be resumed. Notwithstanding the high characters of the directors of the Bank of England, he begged leave to ask, whether it were not possible that they might err as to sound po- licy, and whether the House should resign its own judgment to the Bank? He alluded to the vast profits of the Bank of England in its connexion with the public, and thought that a sufficient ground for parliamentary inquiry. There were three sources of emolument to the Bank, exclusive of the usual profits of trade. The first was by the management of the public debt, the transfer of stock, and payment of dividends; by this they had received, up to February last, 265,000l. per annum, which had been increased by the new debts to 270,000l. The second source of gain was from the deposit of the public money. That deposit was no less than ten millions annually, while their advance towards the public expenditure was three millions without interest, leaving in their hands seven millions. The last, though not the least source was by means of this Bill now pending, by which they had increased their issues from the year 1797, to the present period, from 10 to 30 millions; and any person might conceive what immense profits must result from so extensive an issue. He thought that the public had a right to a participation of those gains, much greater than what they received at present.

Mr. Thompson

had such confidence in the discretion of the directors of the Bank of England, that he was perfectly satisfied to rely upon their taking the proper measures to resume payments in specie, when circumstances would warrant such a step. He was quite at a loss to know upon what ground gentlemen were anxious to force a cash circulation at this moment. It did not appear to him, that the means by which gold was obtained was known to the generality of members, or he was sure they would not press the adoption of such a measure at this juncture. If it was once known that the Bank of England was purchasing bullion, the consequence would be an immediate rise in that article, and the exchanges, instead of being favourable, would be in a material degree unfavourable to this country; commerce would be thereby impeded, and the interests of the manufacturers would be sacrificed. The restraint on the issues of specie, he was satisfied, had been of great advantage to the commerce of this country, and particularly to those transactions which had taken place in London; and, for his own part, so little did he value a coin currency, that if he possessed a thousand guineas tomorrow, he would carry them to the Bank, and receive notes in their room, as being much more convenient.

Mr. Baring

said, he was by no means prepared to agree with the hon. gentleman who spoke last, as lo the superiority of paper over gold and silver. He wished to see the currency once more restored to a sound state, and to see a mixed issue of paper and coin, which would be alike valuable at home and abroad. Although he admitted that the commerce of the country had been considerably benefited by paper issues; now that we were at peace, he hoped, although he did not expect, that ere long we should see the depreciated notes of the Bank of England superseded by the standard coin of the country; and he further wished, that in future no minister should be tempted to depart from this principle under any circumstance. While he was up, he begged to make a few observations upon the state of the silver coinage. Whenever we should return to a sound circulation of gold and silver, he thought it was of the utmost importance that Government should pay some attention to the introduction of such a silver coinage as would supply the place of the French coin, by which this country was at present inundated, and for which we were paying a premium of at least 60 or 80 per cent. It was impossible that we could look to the Bank of England to supply our deficiencies in this respect. He thought a coinage might take place at 10 or 15 per cent, under the standard value of silver, whereby a security would be afforded for keeping such coin in the country, and it would not be liable, at every little fluctuation in price, to be melted down for purposes of trade. This plan would not at all affect contracts, because silver was a legal tender only to a small extent, and gold might be, as it always had been, the real standard of the country, by which contracts with, individuals might be regulated. Such silver coinage might even be 20 per cent, below the standard value, and this would amply compensate for the expense of coinage, and the loss upon the base coinage in circulation. He suggested also that gold pieces of the value of 20s. should be issued, which might be more easily divided into aliquot parts.

The Chancellor of the Exchequer

said he rose merely to correct a misrepresentation which bad gone abroad as to what he had said on this subject upon a former night. He had expressed his hopes that the Bank would be able to resume their cash-payments on the 6th of July, 1816, but he had not said he was confident they would do so.

Mr. Horner's

amendment was then agreed to.

Mr. Grenfell

rose to introduce an amendment, the effect of which would be to limit the period of the restriction in the same manner as the property tax was limited by the Act of 1806, viz. to insert after the words '5th of July, 1816,' the words 'and no longer.' This, he observed, would not tie down Parliament if it should be found advisable to continue, the restriction, while it would fix the period of it, if nothing meanwhile occurred to prevent it.

Mr. Rose

thought it quite sufficient that Parliament had described the limits of the restriction, and was of opinion that the amendment was utterly useless, and would only tend to mislead.

Lord Archibald Hamilton

supported the amendment, because, though it could not bind Parliament, it would express strongly its present sense as to the time at which the Bank should resume its payments in cash. Since the year 1797 the restriction had been continued as a matter of course, and now it appeared to Parliament that the restriction should not be again renewed, it was proper that their opinion of the inexpediency of further renewal, should be stated.

Mr. Pole Carew

thought the amendment perfectly unnecessary.

The House divided:

For the Amendment 17
Against it 75
Majority —58

List of the Minority.
Abercrombie, J. Monck, sir C.
Broadhurst, J. Mackintosh, sir J.
Bewicke, C. Morland, S. B.
Barnard, lord North, Dudley
Douglas, F. S. N. Ponsonby, G.
Fremantle, W. H. Philips, G.
Heron, sir R. Powlett, W. J. F.
Lambton, J. G. Tierney, G.
Moore, P.