HC Deb 14 June 1819 vol 40 cc1150-4

On the order of the day for the third reading of this bill,

Mr. Manning

observed, that he wished to propose a clause which he conceived essential to this bill. The Bank committee had reported, that in order to prepare for the resumption of cash payments, it was necessary to pay to the Bank 10 millions of the debt due to them by government. He had looked over the bill very minutely but could not find a single word which provided for the repayment of this sum. It was necessary, however, that some steps should be taken to this effect. If parliament made it imperative on the Bank to resume payments in bullion at a certain period, and ultimately to pay in specie, they ought to adopt such measures as would enable the Bank to meet the wishes of the House. His object was, to secure the opinion of the House, that the sum of five millions ought to be secured to the Bank, to be paid up at an early period next year. If this clause were adopted the payments would not commence until July, and would not be made up until the 15th of April next year which was more than two months later than the chancellor of the exchequer contemplated. In moving this clause, he was not actuated by any hostile feeling, neither he nor the other directors wished to throw any impediment in the way of ministers, or to prevent the recommendation of the committee from being carried into effect. All he wished for was, that parliament would secure to the Rank the payment, within a certain period, of five millions due to them by government. The clause he meant to propose was, "That in order to enable the Bank to have a perfect control over its issues of notes, and to enable them to provide for the proposed payments in gold, it was necessary that government should secure the payment of the proposed sum of 5,000,000l. to be paid in monthly instalments of 500,000l. commencing on the 15th July next, and to be continued monthly until the 15th of April which would make good the above sum."

Lord Castlereagh

requested of the hon. member to postpone this clause until the chancellor of the exchequer was in his place.

Mr. Ellice

said, he intended to propose a clause or two which he conceived important to the bill. His object was, to do away the alarm which was excited from the Bank narrowing its issues. If the Bank reduced their issues, merchants could call for gold bars in the course of next year, and would have the option of sending them to the Mint, to be coined into guineas at the rate of 3l. 17s. 10½d. per ounce. If this was done in order to increase the circulating medium, the money so coined must ultimately find its way into the Bank, the great depot of all large payments. But according to the proposed regulations the Bank could not re issue this money until 1823. The object of the clause he meant to propose was, to leave it at the option of the Bank to pay or exchange their 1l. and 2l. notes in gold, at any intermediate period between those mentioned by the report. If this was adopted, he intended to propose some amendments in the body of the bill. The hon. member then moved the following clause: "Provided also, and be it hereby enacted, that the governor and company of the Bank of England, if they shall see fit, may at any time on or after the 1st of May 1821, pay or exchange the lawful coin of the realm, for the notes of the Bank, payable on demand, any provisions in this act, or in the before recited acts to the contrary not withstand-standing."

Mr. Peel

said, he could not agree to the clause proposed by the hon. member, as it would have the effect of placing the || country in the same situation as it stood in 1816. It would further have the effect of impressing the public that parliament was not quite in earnest in its efforts to resume cash payments. He had no objection to the clause now proposed, as it did not make against the principle of the bill.

Mr. Dennison

observed, that the great issues of the Bank were occasioned by the wants of an expensive administration, and he thought that measures ought to be taken to place the Bank in a situation to fulfil the conditions imposed on them by parliament.

The clause was agreed to, and added to the bill by way of rider Mr. Manning then proposed his clause.

The Chancellor of the Exchequer

objected to it on the ground that it would be improper to tie government up to any specific period when this sum was to be paid to the Bank. The hon. director knew that if the Bank had made advances on the present loan, as they had done on former loans, provision might easily have been made to repay this sum. Of the present loan of 12 millions, 6,000,000l. was in exchequer bills, and the other 6,000,000l. was to be made good by monthly payments of 600,000l. out of which it would be impossible to pay 500,000l. per month to the Bank. It was intended to take 12,000,000l. from the sinking fund, but this was to be applied to the current ser-vice of the year. The hon. member was aware, that of this loan, near three millions would be to be paid after April. It was intended that the proposed sum should be paid in the course of this and the next year, but he could not consent to fetter government to a specific mode of payment, which it was more than probable they would be unable to fulfil.

Mr. Ellice

was of opinion, that there was strong reason for binding government on this subject, and thought that whilst' every thing was required from the Bank, nothing was done for them. He admitted, however, that there might be difficulty in making regular payments during the present year. The Bank, he conceived, acted wisely in refusing to make any advances upon the present loan, under the circumstances in which they were now placed.

Mr. J. Martin

suggested, that if the Bank were to sell exchequer bills at those periods when they had just paid the public dividends, their own notes would flow back, and in some degree enable them to regulate the currency.

Mr. Primrose

supported the clause, on the ground that the House ought to see distinctly that means were adopted for carrying their own resolutions into effect. One of his reasons for voting in favour of increased taxation was, that the Bank would thereby be enabled the more effectually to control its issues.

Mr. Huskisson

observed, that the 5,000,000l. was not a divided sum. A specific provision had been made for its repayment, and it could not be otherwise appropriated. Although monthly instalments might be inconvenient to the treasury, he had been glad to hear from his right hon. friend, that as far as equitable payments could be effected, that end should be consulted. The supplies and expenditure for the year ended with the year, and the excess never reached beyond the April quarter; the payments from the sinking fund might not be concluded till one quarter after.

Mr. Manning

expressed his disposition to modify his clause, so as to make the payment of the sum alluded to complete by the 1st of May, 1821.

The Chancellor of the Exchequer

observed, that the re-payment of the sum referred to by the hon. member had no immediate connection with the present bill. The sum of five millions, due by government to the Bank, had already been voted in the committee of supply, and that sum would of course appear in the appropriation act, upon the discussion of which it would be competent to the hon. member to bring forward his proposition.

The clause was withdrawn.

Mr. Ellice

then moved, with a view of recording his disapprobation of resuming cash payments by intermediate steps, that the fifth and sixth clauses should be omitted.

Mr. Peel

thought it extremely desirable to retain these clauses. The hon. gentle-roan, in arguing on the effect which this measure would have on the value of paper, had taken the maximum of depreciation, and had said that, if you take a bank-note to the Bank, you will receive gold in exchange at the price of 4l. 1s. per ounce. That, however, would be the case during the first period of the resumption only; and if the holder of the note were to keep it in his possession till the final resumption, he would receive gold for it at the Mint price. His principal objection to the motion was, that it would have the effect of abrogating the resolution which allowed the Bank time for preparation.

Mr. Pearse

thought that various causes might arise to affect the exchanges and raise the price of gold, to the serious loss of the Bank. Among these possible causes were to be contemplated foreign loans. Indeed, the impression that a Prussian loan was to be raised in this country was very general. He was certain the conduct of the Bank had always been regulated by a desire to limit their advances, and at the same time a wish to assist government to the utmost of their power. He supported the amendment.

Lord Castlereagh

hoped the hon. director would see, that there was nothing in the state of the exchanges, or in the present situation of the country, to render the working of this measure alarming; and that the House ought not to be deterred from adopting it by the contemplation of possible occurrences. He had heard the report of an intended foreign loan, and the result of the inquiries he bad made was a firm conviction that it was unfounded.

The House divided on the question, "That the words proposed to be left out stand part of the bill:" Ayes, 166; Noes, 21. The bill was then passed.

List of the Minority.
Barnet, James Longman, G.
Boswell, Alex. Manning, Wm.
Callaghan, Gen. Marryat, Joseph.
Denison, J. W. Mellish, Wm.
Douglas, W. Pearse, John
Dent, John Robarts, A. W.
Forbes, Charles Robarts, W. T.
Gordon, Robert Sinclair, George
Heygate, Ald. Smith, Samuel
Innes, John TELLERS.
Irving, John Ellice, Edward
Lawson, M. Grant, J. P.