§ The order of the day being read for taking into consideration the Reports of the Secret Committee on the Resumption of Cash Payments,
then rose and said, that in this instance he was placed in such a situation as peculiarly to justify his appeal to the House for a patient hearing; for as chairman of the committee appointed to investigate the affairs of the Bank, he was about to perform a great and difficult public duty, in calling its attention to a subject of as much importance as ever occupied the consideration of that House. This subject was indeed of universal interest, comprehending as it did the various concerns of an important corporate body, while it referred to the most minute regulations and the most humble transactions in the country. Important as it was, it involved principles so abstruse in their nature, and rested on details so complex and uninviting, as to be but ill calculated for fixing the minds of a popular assembly. It had likewise been exhausted by the great abilities already applied to it on other occasions and in other places; and, under these circumstances, to add either novelty or attractiveness to the question, would be, on his part, a hopeless undertaking. The committee of which he had the honour to be chairman, had been engaged for a considerable time in examining all the principles and details connected with this abstract and abstruse question; and if in bringing forward the resolutions which that committee thought proper to adopt, he should be betrayed into any erroneous observations, he begged that such error might be regarded as his own. With this delicate†677 question, he felt the impropriety of mixing any reference to party feelings or transactions. He could not, indeed, make any such reference without proving himself an unworthy organ of the committee from which the resolutions emanated. For in that committee there was no appearance whatever of mere party discussion. On the contrary, all the members of it devoted themselves most sedulously and patiently to the subject committed to their investigation, without turning aside to any point likely to interfere with a correct and candid decision; and made the public interest the sole object of their exertions and inquiries. It was after such an investigation that the resolutions which he had to submit to the House were adopted unanimously by the committee, with the exception only of the right hon. gentleman on the opposite side. It was right, however, to observe, that a considerable diversity of opinion had existed as to the principles by which our circulation ought to be permanently governed; and that several of the members of this committee who agreed in the main point, arrived at the same conclusion by different courses of reasoning. This, however, only tended to diminish the anxiety which would perhaps have otherwise pressed upon him, because it would now be understood, that he was delivering merely his own sentiments, and that for whatever errors he might fall into, he was alone responsible. In stating the grounds upon which his opinion was formed, he repeated the expression of his hope that he would be favoured with a patient hearing, which was the more necessary, considering the peculiar dryness of the subject, and that nothing was less calculated to excite a lively attention, or to produce an animated discussion. But his mind was relieved from considerable anxiety in the difficult and laborious task which he was induced to undertake, by the concurrent opinion of the gentlemen with whom he acted in the committee, and the great respectability of the evidence upon which that opinion was founded. He was free to say, that in consequence of that evidence, and the discussions upon it, his opinion with regard to this question had undergone a material change. He was ready to avow, without shame or remorse, that he went into the committee with a very different opinion from that which he at present entertained; for his views of the subject were most materially different when he 678 voted against the resolutions brought forward in 1811, by Mr. Horner, as the chairman of the bullion committee. Having gone into the inquiry, determined to dismiss all former impressions that he might have received, and to obliterate from his memory the vote which he had given some years since, when the same question was discussed, he had resolved to apply to it his undivided and unprejudiced attention, and adopt every inference that authentic information or mature reflection should offer to his mind; and he had no hesitation in stating, that, although he should probably even now vote, if it were again brought before the House, in opposition to the practical measure then recommended, he now with very little modification, concurred in the principles laid down in the fourteen first resolutions, submitted to the House by that very able and much lamented individual, He conceived them to represent the true nature and laws of our monetary system. It was without shame or repentance he thus bore testimony to the superior sagacity of one with whose views he agreed on this point, although he differed so much from him on many other great political questions; but that distinguished statesman's opinions on this subject were such as must render his character still more respectable, and his loss more sensibly felt by the community at large. After this preface he had now to proceed to the question with regard to which the House was called upon to decide, namely, whether it was advisable that the Bank should at the earliest possible period resume its payments in cash? After the repeated declarations of parliament, that it was advisable that the Bank should, at the earliest possible period, resume cash payments, he had hoped, that the only points necessary for them to proceed on that night, would be to fix on the period when the restriction should cease, and to adopt the most feasible mode of carrying their intention into effect. But it was impossible for him to conceal from himself that new and extraordinary opinions had been promulgated, which, if the House were prepared to act on them, must inevitably lead to an indefinite suspension of cash payments. When he recollected, that the necessity of a resumption of cash payments was recognized in the preamble of different acts of parliament—when he knew that no one objection was formerly made to the principle of doing so, he 679 confessed he was not exactly prepared to hear, that a principle the very reverse would be contended for. But, judging from certain publications, by which he feared the public mind was influenced, it did appear, that the return to cash payments was viewed in some quarters with alarm; and he came to this conclusion, that, if weight and authority were-given to the principles and sentiments contained in those works, the House must be prepared to legislate for an indefinite suspension. It was therefore, absolutely necessary in the outset, that parliament should make up its mind on this point, whether a metallic standard of value should or should not be resorted to? On this account it was, that, in the second resolution, be had called on the House to affirm the necessity for the adoption of a metallic standard. The House must now make up its mind upon the question whether the old metallic standard should be restored or not, and after an experience of 22 years, it was in his mind impossible that any considerate man should hesitate upon that question, or upon the expediency of returning to the ancient system of fixing upon some standard of value. Upon the necessity of establishing such a standard he could appeal to the opinion of all writers upon political economy, and to the practice of every civilized country as well as to that of our own antecedent to the year 1797. All the witnesses, indeed, examined before the committee, strongly recommended the establishment of this standard, one witness alone excepted (Mr. Smith, a very respectable man), who was an advocate for the indefinite suspension of cash payments. But when this witness was asked, whether the indefinite suspension of cash payments was to exist without any standard of value, he answered, "No—the pound should be the standard." He was required to define what he meant by the pound. His answer was, "I find it difficult to explain it, but every gentleman in England knows it." The committee repeated the question, and Mr. Smith answered, "It is something that has existed without variation in this country for eight hundred years—three hundred years before the introduction of gold." This was, indeed, the only definition he could give. But turning from this attempt at definition, and the theory of Adam Smith, it would be recollected, that Mr. Locke, after elucidating the subject of identity, dispelling 680 all the erroneous views with respect to innate ideas, and endeavouring to penetrate even the properties of eternity, could not, with all his power of reasoning, and subtlety of disquisition, succeed in defining what he meant by an abstract pound. On that point, indeed, this distinguished man was evidently misled himself, and, of course, misled his readers, Sir Isaac Newton, retiring from the sublime studies in which he chiefly passed his life—from the contemplation of the heavenly bodies—from an investigation of the laws by which their motions were guided—entered on the examination of this subject; but that great man came back, at last, to the old, the vulgar doctrine, as it was called by some, that the true standard of value consisted in a definite quantity of gold bullion. Every sound writer on the subject came to the same conclusion, that a certain weight of gold bullion, with an impression on it, denoting it to be of that certain weight, and of a certain fineness, constituted the only true, intelligible, and adequate standard of value; and to that standard the country must return, or the difficulties of our situation would be aggravated as we proceeded. The House would, he hoped, look at our circumstances in 1792, and contrast them with our present condition; for it would be absurd and useless not to look our dangers and difficulties in the face, or to attempt to disguise them from ourselves, while they were known to all foreigners. Every Jewish pedlar in Europe, indeed, was aware of our actual circumstances, and of the means of deriving profit from them. It ought, therefore, to be felt that the difficulties of our situation could not be diminished by our declining to acknowledge their existence, and it was notorious that the restoration of a metallic standard of value was essential to our relief from those difficulties. The issues of the Bank of England were the foundation on which was raised the superstructure of the country banks, and those issues were made either in the purchase of gold, the discount of mercantile bills, or the purchase of government securities. A distinction had been drawn between the issues of the Bank, and the paper issued by foreign governments, and it might be of some importance to examine this distinction. By reference to the accounts it would be seen, that in the year 1815 the advances of the Bank to government amounted to 35,000,000l., and they now 681 amounted to 20,000,000l., the amount of their notes in circulation being about 25,000,000l. Now it was well known that these advances were not made on the security of any tax or duties already imposed, but in anticipation of future revenue. No provision was yet made for payment of the exchequer bills which the Bank held in acknowledgment of the debt created by these advances. How, then, could it be said that the issues of the Bank were regulated by the demands and necessities of the mercantile world? How could they distinguish between such advances to government, and a paper circulation directly emanating from it? There was indeed this difference between them—that if the notes were issued immediately from the government, instead of intermediately through them, an interest of 3½ per cent would be saved to the country. But again it was contended, that it was very different from a forced paper circulation, and the validity of this distinction might also deserve a little inquiry. Was it not received in all ordinary payments, and had he who objected to receive it any remedy but to wait till the resumption of cash payments? But it was said the Bank was safe, their affairs were prosperous, the utmost confidence prevailed, their issues were made upon the best security, and the public faith was pledged to them. This was perfectly true, and clearly distinguished the Bank of England from all other establishments of the like nature. But did it follow that, because the Bank was solvent, there could be no over issue of its paper? If solvency alone was a sufficient proof that there was no excess of circulation, the theory of Mr. Law was just, and the land, as well as the funds, might be safely converted into a circulating medium. There was, in fact, no test of excess or deficiency, but a comparison with the price of gold. This was not indicated by theory alone; the last few years had afforded abundant experience to support and confirm it. The circumstances which had taken place since the year 1816, were such as must fill every man who carefully considered them with a desire to put an end to the present system. In the year 1815, our commerce was in full activity, a great impulse had been given, speculation was at its height, and the exports were great beyond example. But in 1816 and 1817 came the natural result of these overstrained hopes and exertions. A langour proportionate to the degree of 682 excitation succeeded. An immense accumulation of property had taken place, for which there was no demand. Prices fell, the country banks stopped their issues, and thousands were in a moment stricken to the ground by a blow which they could not foresee, and against which it was impossible to provide. The amount of Bank of England notes in circulation previous to 1814, was about 23,000,000l.; in 1815, it was about 25,000,000l.; in 1816, 26,000,000l.; and at the end of 1817, 29,000,000l, together with a large issue of gold At that period trade revived, and importations were made from all parts of the world. Many were deceived by a nominal profit, which, in truth, resolved itself into an excess of currency, and the same scene of distress and embarrassment was renewed. He might refer for the truth of this melancholy statement to a part of the evidence to which his hon. friend near him could, he apprehended, entertain no objection. He was sorry to find that his hon. friend's attention was not quite so lively as he had reason to expect. The evidence to which he was referring was that of Mr. Gladstone, who stated, that the value of grain and provisions imported at Liverpool, from Ireland, in 1817, was 1,200,000l.; and in the last year, 1,950,000l. He added, that in the year 1816, 270,000 bales of cotton were imported at the same place; in 1817, 350,000; and in the last year, 457,000. The consequence of this excess above the demand was, a fall in the price of cotton of not less than 40 per cent. The same gentleman declared, that in 1818, there were in Liverpool, goods to the value of 3,000,000l. above what were deposited there in the preceding year. All this overtrading was productive of no advantage; but as respected the labouring classes it was attended with incalculable mischief. The unequal and fluctuating demands for labour deranged all the relations of humble life. At one period wages were too high; at another there was no employment. The rapidity with which these changes sometimes followed each other defeated all private arrangements, discouraged the steady accumulation of savings, and frequently overwhelmed the labourer with want and misery. He felt himself bound to speak out boldly and decisively upon the subject; for it was impossible to listen to the descriptions recently given by the hon. members for Coventry and Carlisle, of what the situation of the 683 labouring poor was in many parts of the country, and not suspect that, whatever might appear by the returns from the Custom-house, there was some unsoundness in our present system. It was idle, while such distress existed, to speak of. national prosperity. The amount of the poors' rate alone was indeed sufficient to negative any such statement. That the excess of commercial speculation, which led to such evils, was the consequence of an over issue of paper currency, was a fact not to be disputed. A check upon that issue was the only cure that could be applied, and it must be applied by the establishment of a metallic standard of value; for the issue of paper had not, like the wise provisions of Providence, or the prudent regulations of man, any counteracting principle within itself. It went on as long as the excitation lasted, but was sure in its relapse to scatter distress and ruin. Private bankers, at first anxious to accommodate, no sooner perceived a system of declining credit, than in the eagerness to provide for their own security they refused further aid, and increased the want of confidence. This was one of the defects inherent in the system he was describing, and the question now was, whether that system should be continued, because they were afraid to face the difficulties of abandoning it. But if its continuance should be once sanctioned by the House let it not be imagined, that they ought to measure its future evils by its past. Hitherto there had always been some check—the admonitions of parliament had been respected; but if once a hope should be held out that the suspension might last for an indefinite period, that the amount of the circulating medium was to be left to the discretion of the Bank directors, uncontrolled by any consideration but that of their own profits, it would become impossible to estimate the extent of the mischief that might ensue. The committee had felt the necessity of guarding against so fearful a danger, and of inducing an impression on the public mind that the system would be brought to a termination. They felt that a mere declaration on this subject would be useless, and that mercantile transactions would continue in their present course, instead of being adapted to a return of the ancient standard. It would answer no good purpose to promise a resumption of cash payments, without fixing upon some definite period: 684 for such a promise had been already made no less than five times, and every time had proved delusive. The country then, to be satisfied, must see that a serious resolution existed upon this subject. Some decisive measure must be adopted. The events of the last few days, with respect to the public funds, demonstrated the necessity of decision. Four alternatives had presented themselves for the consideration of the Committee. The first was, to recommend the postponement of the resumption till after July next, accompanied by a legislative declaration with respect to some future definite period. But if they had been content to adopt that proceeding, he would put it to the House, whether they would have appeared to the country to be in earnest. What had appeared since the report of the committee was published, clearly proved they would not. It was necessary for them to "screw their courage to the sticking place," in order to convince the world that they had set seriously about the work.—On five different occasions parliament had declared, that cash payments ought to be resumed as soon as possible; and the public now doubted the sincerity of those declarations. A few nights ago, his right hon. friend, the chancellor of the exchequer, was taunted on account of the resolutions proposed by him in 1811. But in those very resolutions, it was distinctly affirmed, that though it was not then convenient to proceed to cash payments, yet they ought to be resorted to as speedily as possible. Those who voted for the resolutions recognised this principle decidedly. In the years 1814, 1815, and 1816, the resumption of cash payments was regularly postponed—and now, in 1819, it was proposed to continue the restriction in a modified form, until 1821. Hence it was necessary that they should do something more than merely restate their opinion that cash payments ought to be resumed. Another alternative, which he was ready to admit he was at first inclined to favour, was—that the legislature should fix a definite period, and make some declaration of principle that might be an instruction to the Bank. But on consideration it was evident, that this would still leave it to the Bank to act upon that declaration of principle as it should think fit; and if they controverted the principle, as they had done, it was not likely that their observance of the declaration would be very strict. Besides, it would be a division of responsibility most 685 unfair to that body, to give to them a discretion as to a plan which they themselves conceived was neither founded in truth nor sanctioned by experience. The Resolution of the court of directors of the 25th of March, placed this point in a clear light. The committee deemed it necessary to ask the Bank for an answer to the two following questions:—
To what farther period, in the opinion of the Bank, ought the restriction on cash payments to be continued?
Have the Bank any suggestions to offer with respect to any assistance that can be afforded to the Bank, by legislative enactment or otherwise, for facilitating the resumption of cash-payments?
The Bank deliberated upon those questions—and in their answer the following passage was to be found:—
That this court cannot refrain from adverting to an opinion strongly insisted on by some, that the Bank has only to reduce its issues to obtain a favourable turn in the exchanges, and a consequent influx of the precious metals: the court conceives it to be its duty to declare, that it is unable to discover any solid foundation for such a sentiment.
He believed that this was the conscientious feeling of the Bank; and he only mentioned the circumstance to show the impolicy of asking a body to act on a principle which they thought untenable. The third alternative was, to prescribe such a limitation of the issues of' Bank notes as would secure the power of the Bank over the foreign exchanges. He, for one, confessed that this always appeared to him to be a very unwise position—and, for this reason, that it depended so much on circumstances, when to say there was an excess or not of circulation. There were occasions when what was called a run on the Bank might be arrested in its injurious effects by an increase of the issues. There were other occasions when such a state of things demanded a curtailment. In the year 1797, when a run was made on the Bank, but when the exchanges were favourable and the price of gold had not risen, it was proved that an extension of issues might perhaps, by restoring confidence, have rendered the original restriction unnecessary; and prevented the evil results of the existing panic. On the other hand, if the run was the effect of unfavourable exchanges and the consequent rise in the price of gold, the alarm must be met by a reduction of the issues. 686 It was, therefore, impossible to prescribe any specific limitation of issues to be brought into operation at any period, how remote soever. The quantity of circulation, which was demanded in a time of confidence, varied so materially from the amount which a period of despondency required, that the House must feel the absolute incapability of fixing on any circumscribed amount. It was impossible to advert to the evidence taken before the committees without being impressed with that conviction. The fourth alternative that remained to the committee was that which had been adopted, and which was disclosed in the resolutions that he had the honour to lay on the table of that House. It proceeded on the principle that the Bank should regulate its issues by the price of gold, the same principle, be it recollected, on which the Bank of England had uniformly acted, previously to the restrictions imposed upon it in 1797. The House would direct its attention to the state of things under which the committee commenced their labours. They found the Bank in the act of paying a certain description of its notes in cash—with the amount of treasure in its possession considerably lowered. Gold, which they were bound to give in payment of their notes at the rate of 3l. 17s. 10½d. was increased to 4l. 1s.—The Bank was in advance to government to a considerable amount; which advance could not be immediately repaid, without producing material disadvantages to the trade and manufactures of the country. Under those circumstances, therefore, the Committee conceived it expedient to postpone, to a period more remote than he believed any man when the question was first introduced had at all contemplated, the return to cash payments according to the ancient standard. That period was fixed at four years from the present time. But at the same time that they deemed such a postponement, under existing circumstances, necessary, they felt it also their duty to provide that such measures should in the interval be taken by the Bank, as would secure them from farther disappointment, and convince the public that they were in earnest. It was unnecessary for him to enter particularly into the details of those resolutions—they were in the possession of every member of that House, and had, no doubt been fully considered. As he before stated, those resolutions declared the necessity of the 687 Bank's conforming its issues to the prices of gold. It was true, that they required of the Bank to be prepared for the payment of its notes at the rate of the Mint price, on the expiration of two years, but under modifications which would render necessary a less amount of treasure to be disbursed by the Bank, than if the restriction were completely removed at that period. The demand for treasure might be considered to consist of what was wanting to the circulation of the country; of what individuals, from motives of caprice or curiosity, might require, or of what speculators might demand with the view of making a profit by the exportation. It was proposed then to secure the Bank for that period from any other description of demand, except that which might be made upon it for the purposes of exportation. Taking for granted that the whole of the proposed plan was fully understood by every gentleman in the House, he should not go more at length into its details, but next proceed to a consideration of the objections that were raised against it. As a part of the plan and preliminary to the resumption of cash payments, the committee recommended that a portion of the advances of the Bank to the government be repaid. That recommendation had been made the source of a general alarm—of an alarm which he could not but consider wholly devoid of any reasonable foundation. It had been said that, if the ten millions which had been advanced by the Bank to government were forthwith repaid, an abstraction to that amount from the circulating medium must be fraught with injury to the trade and manufactures of the country. How such an inference could be formed, or such an apprehension gain ground he was at a loss to understand. It certainly was not in the remotest degree justified by the suggestions of the committee. What they recommended was, a gradual repayment, and not, as had been stated, an immediate and complete discharge of the advances. He must however say, that the amount of those advances required by the Bank to be repaid was much greater than had been expected. He must own he did not think a repayment to that amount necessary, the whole amount necessary in order to enable the Bank to proceed on the new system in 1820. The committee, however, recommended it, because the Bank required it. They wished no obstacle to stand in the way of a resumption of a 688 metallic standard, and agreed in the recommendation, as the Bank insisted upon its necessity. At the time of making their report, therefore, the committee, though not feeling the necessity of a repayment to the amount of ten millions, complied with the demand of the Bank, and recommended as a preliminary, that such a sum should be gradually repaid. On other grounds, he confessed he now felt that it was expedient that a considerable portion of those advances should be repaid. It was impossible to revert to the nature of the communication of the Bank, under date the 20th of May, and which was on the table of that House, without feeling that the moment has arrived, when the nature of the relations existing between the government and the Bank should be changed. Parliament was bound, after such a statement, not to lose a single hour, without recurring to those means which would have the effect of limiting the directors of the Bank to those considerations which originally embraced the sphere of their duties. One paragraph of that communication he begged leave to read.
"Under these impressions the directors of the Bank think it right to observe to his majesty's ministers, that being engaged to pay on demand their notes in statutable coin, at the Mint price of 3l. 17s. lO½d. per ounce, they ought to be the last persons who should object to any measure calculated to effect that end; but as it is incumbent on them to consider the effect of any measure to be adopted, as operating on the general issue of their notes, by which all the private banks are regulated, and of which the whole currency, exclusive of the notes of private bankers, is composed, they feel themselves obliged, by the new situation in which they have been placed by the restriction act of 1797, to bear in mind not less their duties to the establishment over which they preside, than their duties to the community at large, whose interests in a pecuniary and commercial relation have, in a great degree, been confided to their discretion."
In reading that paragraph he preferred no complaint—he disclaimed any imputation against the Bank, but he dwelt upon it, because it contained a melancholy truth, and because it naturally brought home to the feelings of that House the knowledge of the situation in which, from their own proceedings, they were placed. When he reflected on the great object to 689 which, at the æra of the Revolution, the Bank of England was subservient, he could not think of such an institution without feelings of the sincerest acknowledgment. For the directors individually it was impossible for him to entertain any thing but great respect; but they, as a public body, must not be surprised to have their official conduct questioned, and that the House of Commons should at least doubt whether that was the institution, to the discretion of whose directors were or ought to be confided the pecuniary and commercial interests of the British community. Whatever were their opinions, it was now the proper moment to relieve them from the duty of attending to such concerns. The fault was not in the Bank, but in themselves. It was the result of the course that had been followed. That House had too long transferred its powers. On them devolved the duty to attend to the pecuniary and commercial interests of the country. In place, therefore, of casting any blame upon the Bonk, let that House re-trace its steps, and by efficient exertions re-assume its duties, and absolve the Bank from so incompatible an obligation. Let it recover the authority which it had so long abdicated. Reverting to the repayment of the ten millions to the Bank, he could not conceive that such an amount of repayment was necessary, unless the Bank persevered in demanding it. But supposing that that repayment were to be made to its fullest extent, what might be considered its probable consequences? Supposing that for the next two years those advances were to be gradually discharged, at the rate of 4 or 500,000l. monthly, what could prevent the Bank from meeting its obligations in February, 1820, at the market price of the present day? He meant of the day when the report was made; for it was now somewhat lower. Why should such a gradual repayment lead to the contraction of the issues of the Bank? Might not, of the half million, one half be expended in the purchase of bullion, and the other half in the extension of its issues? He could see no necessity for the Bank being obliged to contract them. He implored the House not to be led away by any clamour that might be excited on that head. Let any man read the evidence in the Appendix to the Report with diligence, and he must be satisfied that no such effects would necessarily follow. He would go farther, and 690 endeavour to show that the result of the resolutions which he should propose would be found consistent with an increase of the issues of the Bank. It was said by those who disapproved of the proposed plan, that the Bank must contract their issues, if compelled to regulate them by the price of gold. If that argument had force, it went farther perhaps than its advocates wished. It was an argument against resuming cash payments at all; for if it could be considered an argument against a regulation by the market price of 4l. 1s. it was equally an argument against a regulation by the Mint price of 3l. 17s. 10½d. The mere obligation of the Bank to attend to this regulation of their issues when the payment of their notes was to be made in bars or ingots (let them be called by which name the House pleased) made no difference. Let the House remember what the Bank were enabled to do when they were compelled to pay in specie. From 1774 to 1797, they did that, to which now the objection was made—during that period, they conformed their issues to the price of gold; and he challenged any man to produce an instance, during that period, when the price of gold exceeded 3l. 17s. 6d.—Thus, as long as the Bank conformed to the practice of thus regulating their issues, they found no difficulty, and the price of gold never, increased. At that period, the holder of Bank notes, say to the amount of 250l., had a right to demand of the Bank five pounds, or sixty ounces of gold bullion, impressed with a stamp. Each pound of gold the Mint was enjoined by its indentures to divide into 44½ guineas. Notwithstanding the prohibitory laws, every body knew gold was sent out of the kingdom whenever there occurred such a variation in its price as to afford a temptation to the capitalist or speculator. It was next said, that the price of gold had varied considerably since the period of the restriction; that it rose from the Mint price to 5l. 2s.; and that therefore it was a standard, which, from its variation, could not be depended upon. In that argument there was a fallacy. We did not in that period want gold; we had another substitute, and gold, it was to be recollected, was to be considered in relation to that substitute. Let not the House suffer itself to be led away by any calculation to mistake the price for the value. When people talked of gold rising in price, were they prepared to show that 691 it had risen in intrinsic value? Let them not talk of its price in paper, but in any other commodity of a real and fixed value. Did a given quantity of gold at present command any more corn, or any more silver, than it would have done fifty years ago? When he said corn, he of course well knew that that article was subject to the fluctuations of seasons: but, setting apart that consideration, he repeated, that gold did not, within the period alluded to, to show its increased price, command more of any fixed commodity than in former times. So far from that being the case, it positively commanded less than it formerly did—and on this account, because they had found a substitute for gold, and, beyond that, because they had a greater stock of that metal, and, consequently, its value was less than it was fifty years ago. But next it was stated, that its price was raised by taxation. That was disproved by experience, as it had been found that gold was high when taxation was low, and vice versa. When they spoke of 40 or 50 millions of revenue, it was to be recollected, that the pound remained the standard; and that there could be no correspondent variation between the price of gold and the increase of taxation.—There was another objection, which, at first view, appeared extremely plausible. It proceeded on the principle, that a great increase of revenue made a correspondent increase of the circulating medium necessary. That, however plausible, was not a just inference. He would show an instance in our history, where the increase of circulation, compared with the revenue, had varied in an inverse ratio. He would take the two periods of 1792 and 1809. He took the latter year, because it was a time when there was no complaint of a deficiency of circulating medium; indeed it was the year immediately before the appointment of the bullion committee, when there prevailed an opinion, whether right or wrong, it was not then necessary to argue, that there was an excess of it. If then, there was any truth in the argument that the circulating medium should increase with the trade, taxation, and revenue, it should have varied directly in that year. The fact was, however, that it varied inversely. According to the statement of the late lord Liverpool, the amount of gold in this country in the year 1792, was calculated at thirty millions. Taking it however at five millions less, it, with the eleven mil- 692 lions of Bank notes, gave a circulating medium of thirty-six millions. At that period the interest of the debt was nine millions; the number of vessels employed in commercial concerns was 10,000; the official value of the exports was computed at 19 millions. In 1809 the interest of the debt was thirty one millions; our commercial shipping had increased threefold, and the official value of the exports had risen one half. According, then, to the theory of a correspondent increase of the circulating medium with the trade, revenue, and debt, there ought to have been a considerable increase of the circulating medium in 1809 over that of 1792. But the truth was, that this material augmentation in all its branches was provided for by a circulating medium of nineteen millions. Was it not, therefore, demonstratively proved that such a theory was wrong. It might be difficult to conjecture by what means human ingenuity could provide facilities to make a comparative diminution of circulating medium, at one time, answer for three times the quantity of transfers that it could meet under former circumstances. He was indebted to a noble earl for the means of elucidating that part of the argument; he himself had deserved no credit, as the account from which he should read, was obtained on the suggestion of that noble earl. The right hon. gentleman here read several calculations from the paper to which he had alluded, the object of which was to show, what number of days notes of various denominations remained in circulation in the year 1818, compared with the time that notes of the same denomination remained in circulation in 1792. In 1792 the average number of days that the 1,000l. note remained in circulation, was 22; in 1818, only 13. In 1792, the 10l. note remained 236 days in circulation: and in 1818, only 147 days. In 1792, the total amount of notes of every denomination issued by the Bank was 74,817,000l.: and in 1818, 236,084,933l. The inference to be drawn from this comparative statement was, that a much less circulation was necessary, and would perform transactions to a greater amount, at one time than at an-other: and, therefore, that the doctrine against which he was arguing was absurd. Amongst the various propositions which had been advanced on the subject, was one which at first appeared very plausible, and was made by those who admitted the 693 advantage of reverting to a metallic standard of value. The argument they used was, that a variable standard exposed the country to great danger; but at the same time, as we had now been 22 years without a metallic circulation, it would be extremely difficult and hazardous to revert to the ancient system. These persons maintained, that we ought to regulate the value of gold by the market price; and their plan amounted to neither more nor less than this—we ought to extricate ourselves from our present difficulties, by depreciating the precious metals. They proposed that the Bank should regulate the payment of its notes, not by a fixed standard, but by the price of gold whatever it might be. In other words, in place of the ancient system of the country, by which paper was placed on a par with gold, they would reduce gold to a par with paper. That was a proposition which could be viewed in no other-light than as a fraud on the public creditor. It was in vain to think that such a course would lessen the difficulties of the question. It was in vain to think that foreign nations could be imposed upon by such a deception, or that in their dealings with us they would not calculate upon the depreciation. The result could only be, after having incurred the imputation of a fraud on the public creditor, that the coin would be debased. It was therefore most desirable to revert to the ancient standard of the realm. He felt himself bound to caution the House against all arguments in support of a course, which though fraudulent, would not accomplish its own objects, while it aggravated present difficulties. Let the House be assured, that every deviation from the ancient practice would, hereafter, on the least appearance of public embarrassment, be quoted as a precedent for a more extended departure from that practice. When future suspensions of cash payments were sought, the advocates of such a course would refer to the conduct of their ancestors—they would panegyrise the principle on which, under similar difficulties, they acted—they would call for the adoption of the same principle; and conclude because the price of gold had still farther rose in its relation to paper, that the principle by analogy ought to be extended. Such would be the inevitable effects of adopting the proposition to which he had adverted. The restoration of the value of our currency, was always a striking political feature in 694 the history of the country. Those who took an interest in disquisitions of that nature, must have recognised the solicitude of our ablest and most distinguished statesmen, to accomplish that salutary object. There were, however, three distinct periods to which he should call the attention of that House—periods to which every man must look with feelings of admiration and delight; when the government, not misled by the arguments of those who would continue the abuse, effected the reformation of the coin from its previous debasement. That reformation was accomplished in the reigns of Edward 1st, queen Elizabeth and William the 3rd, all periods that that House must ever contemplate with pride and satisfaction. They were periods too of great difficulty—of difficulties too that stood in the way of the restoration of the standard of value, much more than any the country had now to contend with; but they were difficulties which the sound determination of these monarchs overcame, and answered the arguments of those who counselled otherwise, by the beneficial results of the conduct they pursued. It was, when engaged in the conquest of Wales, and amidst his efforts to subdue Scotland, that Edward the 1st turned his attention to the reformation of the coin of the realm. The energy with which that monarch followed up his purpose, had been the subject of praise with every historian of those times, as presenting a noble instance of wisdom and public spirit. The next period was that of Elizabeth, under circumstances that almost repelled such an effort. On her accession to the throne, she found the coin had been debased to the extent of nearly 400 per cent., in the reigns of her predecessors, Henry the 8th and Edward the 6th. Where there should have been 11 ounces of silver there were only three. The effect was a great rise of prices, and a considerable commotion throughout the country. In the second year of her reign, and under the advice of her minister Burleigh, she determined to restore the value. There were not wanting persons who counselled her against such an attempt; who reminded her of the delicate nature of such an object—who talked of the distracted state of her dominions—of the rivalry of foreign nations—of Ireland being in a state of approaching rebellion—and Scotland declaring war:—who observed to her that Rome, Spain, and France were declared 695 enemies to her title to the throne; yet still she had the manliness to persevere, and, following the admonition of Burleigh, considered all those difficulties as obligations on her to proceed. "So far," said that able minister, "should such considerations be from deterring your majesty from the pursuit, that they constitute the motives for perseverance, as in the end they must raise and establish the character of the country, increase the attachment of your majesty's subjects, and command the respect even of your enemies." Such a conduct was the proudest eulogium on her merits. In the learned and able work by the late lord Liverpool, it was observed, that it had been justly commemorated in the monumental inscription on her tomb. That monumental inscription had been so strongly recalled to his mind by a recent perusal of the eminent writer to whom he had just alluded, that he had been induced to review it. After enumerating the queen's various titles to distinction, it concluded thus—"Galliadomata, Belgiumsustentum, Pax fundata." But above all, "Moneta in justum valorem reducta." Having ourselves so many claims to praise similar to those which the reign of Elizabeth presented, he trusted we should not deprive ourselves of the applause which was so justly conferred upon her—that"she had the manliness to reform the coin of her kingdom." The glories of the present reign fully equalled her's, except in the last particular; but he hoped the hour was near at hand, when the triumphant parallel would be completed.
It was unnecessary to revert to the numerous difficulties with which king William had to contend, engaged as he was for the existence of the liberties of England and of Europe. Yet when he had to struggle for those great objects, and for the stability of his own throne, in the year 1695, he determined to recover the ancient value of the coinage, considerably debased since the reign of Elizabeth. He did so, though opposed by a powerful party, whose motives proceeded from the spirit of opposition alone. And here he had to contrast the conduct of that day with the spirit of enlightened patriotism so manifest in the labours of those who, however differing on other questions, disdained to introduce party feelings in the investigation of the objects of the late committees of that and the other House of parliament. It was impossible to revert to the manner in which 696 the arguments on which at the Revolution the reformation of the coinage was opposed, without being struck with their coincidence with the arguments of the present time. The House had only to look to the discussion between Mr. Lowndes and Mr. Locke, to see how analogous, the objections that were then urged to the measure were, to the objections urged at the present period. It was contended by Mr. Lowndes that the value of silver had increased to 6s. 3d. an ounce, from 5s. 2d., which was the rate in the reign of Elizabeth—that the former was a period of barbarism, on which no precedent could be founded—that France, desirous of providing a metallic currency, had made great importations of corn—that it was not the quantity, but the denomination, that gave to the coinage its value, and that a shilling was the real standard of value. It was well observed by Mr. Locke in answer, that to have value, coin must consist of a certain weight, quality, and assay—that the Mint by its indentures were bound to give the due proportions of each. He maintained that the pound weight of silver was the standard of value, and that the coin was depreciated, and not the bullion raised. The present value of silver he affirmed to be as formerly, 5s. 2d., and therefore not at all altered, except in comparison with a deteriorated currency. Silver in coin was the same in value as silver in bullion. It was perfectly true, he said, that an ounce of silver, which the Mint regulations determined to be only 5s. 2d. in value, had risen to 6s. 3d.; but that was only because the silver com had been clipped or reduced in value, by the difference between 5s. 2d. and 6s. 3d,"If," said he," Mr. Lowndes still doubts of the depreciation, give me 5s. of standard weight and fineness, as originally coined, together with 2d., and I will with that sum purchase for you an ounce of silver for which you now pay 6s. 3d." Mr. Locke had no abstract idea of a shilling or of a standard of value, as detached from something substantial and tangible. In reverting to these discussions, he (Mr. Peel) was naturally reminded of another discussion which took place at the same period. He alluded to the difficulties which Martinus Scriblerus was represented to have felt, in the amusing work of that name, in following the metaphysical speculations of his tutor Crambe. Being asked by his father, if he could 697 form an idea of an universal man, he replied, that he conceived him to be a sort of "knight of the shire, or the burgess of a corporation who represented a great number of individuals; but that he could form no other notion of an abstract man. To puzzle him still more, his father enquired, "if he could not form the universal idea of a lord mayor?" To which he replied, "that never having seen but one lord mayor, the idea of that lord may or always returned to his mind; that he had great difficulty to abstract a lord mayor from his fur gown and gold chain; nay, that unfortunately the only time that he saw a lord mayor, he was on horseback, and that the horse on which he rode not a little disturbed his imagination. "Upon this," said the history, "Crambe (like another Mr. Lowndes, or those who could form an abstract idea of a pound sterling), swore that he could frame a conception of a lord mayor, not only without his horse, gown, and gold chain, but even without stature, feature, colour, hands, head, feet, or body, which he supposed was the abstract idea of a lord mayor." Mr. Locke, unfortunately, was not so penetrating. He could frame no conception of an abstract standard of value, without reference to an existing substance; and was therefore obliged to put up with the vulgar idea, that a pound was a certain quantity of metal of a given weight and fineness. At the time of the new coinage, at the period to which he had just alluded, prejudices in theory, and misconceptions in reasoning, were not only to be encountered, but the greatest financial and political difficulties were to be overcome. When king William proceeded to reform the standard, he had, at the moment when the chancellor of the exchequer (Mr. Montague) was compelled to borrow, under every discouragement, five millions for the wants of the state, to encounter an expense of three millions, which the new coinage would cost. The reasons against calling in the deteriorated currency for the purpose of a re-coinage, were, that at that time a war raged, which required the undivided exertions of the country; that the public resources should not at such a time be wasted on an unnecessary object, or a doubtful experiment; that the expenses incurred would be more than the nation at such a period could bear, and that its discontents might be excited by fresh grievances to acts of rebellion. The enemies of this expedient 698 moreover argued, that should the silver coin be called in, it would be impossible to carry on the war abroad, or to prosecute foreign trade, inasmuch as the merchant could not pay his bills of exchange, nor the soldier receive his subsistence. The main arguments opposed to the project, as well as those which were offered to encourage that monarch in his determination, were so ably stated by the historian, that he begged leave to read them to the House. The arguments used in reply by Mr. Montague, as stated by the historian, were, that the existing system was a disease which increased daily, and would, if not remedied, strike such root as to affect the vital principles of the constitution, and inevitably overthrow it: that the enemies of this country would feel intimidated by the adoption of such a measure, and would be inclined to offer a peace on more honourable terms than could otherwise be expected from them; when they found that this country had the firmness to amend its depreciated currency, even amidst all the dangers with which it was surrounded; and on which they reckoned as a means of effecting its ruin; that they would also hold the wisdom of a parliament, who advised such a measure, in higher estimation than they otherwise could do; and in a word, that their respect for a country which so placed, could surmount so many difficulties, would be greatly increased. Fortunately for the country those arguments prevailed, and in spite of all the obstructions thrown in its way, the coinage of the country was established on a fair and permanent footing. He would ask, if there was any thing in the present state of the country that could be urged against the adoption of such a measure, with more force than the arguments he had just cited had been at the period alluded to? Was there any thing that could be brought forward to induce parliament to postpone any attempt to establish a permanent standard of value in the country? He felt surprised when he heard it urged that this country was indebted for all its glory and all its military honours to an inconvertible paper currency. Was it not in the recollection of the House, that this country had enjoyed its full share of prosperity and of military glory before the year 1797; before we were blessed with an inconvertible paper currency? It was urged that we were differently situated from other countries, with respect to our paper 699 currency. He admitted this; but it must not be forgotten, that there were other circumstances which rendered the situation of this country different from others. The House should recollect, that in all the efforts which she had been called upon to make, England had preserved her faith inviolate. This feeling it was that prevented her from taxing the funded property of foreigners. This upright conduct it was that cheered the country in the hour of danger, and caused her to exult in the hour of victory, from a feeling that her dangers had been surmounted and her victories gained without the slightest violation of her honour. This feeling it was that supported the country in that dark and dismal voyage through which she had gone; and now that they had reached the other shore in safety, let them not abandon the great principle which had been instrumental to their safety; let them not discard the guide by which we were led and protected. Let them adhere to that good faith in time of peace, and towards the public creditor, which they had practised in war, and towards the foreigners whose country was at war with them. Let them recollect, that the fluctuations of price which an inconvertible paper currency occasioned, were injurious to the labourer, who found no compensation in the rise of his wages at one time for the evils inflicted by a depression at another. Every consideration of sound policy, and every obligation of strict justice, should induce them to restore the ancient and permanent standard of value. He had thus discharged his duty in bringing the resolutions recommended by the committee of which he was a member before the House, and he was afraid he had occupied its indulgent attention too long. He was aware that there were various other topics to which he had not adverted, and to which he did not think it necessary to advert. But there were two points which he could not sit down without taking some notice of. The first of these was the effect attributed by a noble lord in another place to the mint regulations in raising the price of gold, and rendering the exchanges un-favourable. To the examination of that opinion he had given the maturest consideration of which his mind was capable; and the result was, that he thought the objections urged against those regulations were without any solid foundation. By the present Mint regulations, a pound of 700 silver was certainly coined into 66, instead of 62 pieces called shillings, and of those pieces, four were withheld by the Mint as a seignorage; but this he conceived was calculated to repress, rather than encourage, a great circulation of silver. Silver was merely a money of convenience for small sums, not coined like gold at the pleasure of individuals who brought it to the Mint, and without loss, but coined by order of the government. Its depreciation therefore could not affect the price of gold, or drive it from circulation. When he recollected that from 1773 to 1797, a more deteriorated silver currency existed, and that that currency was then a legal tender for 25l. instead of 40s. as now, without at all affecting the price of gold, he thought he might quote experience in support of his argument against the theory of the noble peer. Indeed he was convinced that the disappearance of gold could be fully accounted for in another way, and that the mint regulations had no effect in driving it out of the market. The second point which he understood was to be objected to the present measure was, the proposal of a plan to compel the Bank, intermediately between the present time and the period mentioned in the report, in order to prevent any material fluctuation in the rates of exchange between this and foreign countries to deliver for their notes bullion in quantities not less than 60 ounces, at the market price. He warned the House against the adoption of a measure so fatal—a measure fraught with destruction to the ends to be attained—a plan which would reduce gold to the standard of paper, instead of paper to the standard of gold which would inevitably lead to the interminable continuance, the total adoption of a paper medium, and only multiply ad infinitum the difficulties with which the question was at present surrounded.
He had now brought his observations to a close. He felt indebted to the House for the attention with which he had been heard; he had previously entertained opinions different from those he now advanced, but he trusted that he had maintained those opinions as independently and as consistently as he now did those he advanced at present. Many other difficulties presented themselves to him on discussing this question; among them was one which it pained him to observe, and that was the necessity he felt of opposing himself to an authority to which 701 he always had bowed, and he hoped always should bow with deference; but here he had a great public duty imposed upon him, and from that duty he would not shrink, whatever might be his private feelings. In turning his mind to this question, he had attended much to the evidence given before the committee; by that evidence he had been guided in a great degree. He did not mean the evidence of mere theoretical men, but of men of practice, and acquainted with the nature of the commerce of the country, and from that evidence he drew the conclusion, that we ought to return as soon as possible to the ancient and permanent standard of value. From the nature of that evidence, and of the other information he had received, he felt himself called upon to state, candidly and honestly, that he was a convert to the doctrines regarding our currency which he had once opposed.
The first resolution, namely, "That it is expedient to continue the restriction on payments in cash by the Bank of England beyond the time to which it is at present limited by law," was agreed to.
The second resolution, namely, "That it is expedient that a definite period should be fixed for the termination of the restriction on cash payments; and that preparatory measures should be taken, with a view to facilitate and ensure, on the arrival of that period, the payment of the promissory notes of the Bank of England in the legal coin of the realm," was agreed to.
The third resolution, namely, "That in order to give to the Bank a greater control over the issues of their notes than they at present possess, provision ought to be made for the gradual repayment to the Bank of the sum of 10,000,000l.; being part of the sum due to the Bank, on account of advances made by them for the public service, and on account of the purchase of exchequer-bills under the authority of acts of the legislature," was agreed to.
Upon the fourth resolution being read, namely "That it is expedient to provide, by law, that from the 1st of February, 1820, the Bank shall be liable to deliver, on demand, gold of standard fineness, having been assayed and stamped at his majesty's Mint, a quantity of not less than 60 ounces being required in exchange for such an amount of notes of the Bank as shall be equal to the value of the gold 702 so required, at the rate of of 4l. 1s. perounce."
§ Mr. Ellice
rose to propose an amendment. Though it might appear presumptuous in him to claim the attention of the House, after the very able speech of the right hon. gentleman who had just sat down; yet he could assure them, that he rose with no presumptuous feelings, but he thought it due to himself to state his objections to the proposed resolution. When he did so, he did it from no hostility to the general principles of the report. In those general principles, so ably stated, and so eloquently illustrated by the right hon. gentleman, he entirely concurred; and he had offered himself to the House in opposition to two of the resolutions, not because he differed from their general object, but because he did not agree to the application of them to the actual state of things. He would not weaken the force of the right hon. gentleman's statements or reasonings by repeating them. They would meet with, general concurrence. The opposition to them arose from an idea that the application of the principles of the report would be inexpedient at the present time; but it happened unfortunately that those who enforced that inexpediency, specified no time when it would cease, and the return to cash payments be effected with safety. He could mention, from his acquaintance with business, several circumstances which would confirm the able statements of the right hon. gentleman. The difficulties and distress of 1816 were fresh in the recollection of all. Great, however, as those difficulties were, he wished that the remedies applied by the chancellor of the exchequer had been avoided. In consequence of the great exports of 1814 and 1815 gold had been brought into the country. Its price accordingly fell, and continued to fall, till 1817. The distresses of the country gradually disappeared, and every thing began to wear a smiling aspect. To counteract this favourable and improving state of things, towards the middle of 1817 the issues of the Bank became again excessive, produced an artificial prosperity, encouraged speculation, and led to the overtrading which had since produced so much embarrassment and the consequences of which, he was afraid, we were only yet beginning to feel. The right hon. gentleman had well stated, that the common people derived no benefit from this tem- 703 porary and artificial prosperity to compensate for the accumulated evils of a change. In 1818, our exports had greatly increased; but he would ask the noble lord who boasted of their amount as a test of our prosperity, or he would ask any of those from whom the noble lord was in the habit of receiving his information on commercial subjects, whether even 50 per cent had been realized on the nominal amount of our exported commodities? The want of returns for them was the cause of the present depression of our trade. If by issuing paper to increase prices, commodities were rendered so dear that foreigners could not buy them, was not a great injury done to the trade of the country? He, therefore, hoped that means would not be resorted to again to raise prices in a similar manner. The consequences of the measures of 1817 were not yet fully felt; we should feel them more and more till our return to the ancient standard of value was completed. Although he agreed in the principles of the report, he would beg to propose an amendment. The three first resolutions met his views; but he differed from the recommendation of the fourth. Although he did not concur in the principle of the chancellor of the exchequer, who in 1811 had procured the passing of a resolution, declaring that Bank-notes had not depreciated, in the face of facts, more glaring than those on which the opposite doctrine was now supported and acknowledged; yet after a period of 20 years practice, he was averse to acknowledge, in a legislative enactment, that we had been acting on a depreciated currency. The permission given to the Bank by the fourth resolution, of paying their notes in gold at the rate of 4l. 1s. per oz., while the Mint price was 3l. 17s. 10½d. was a virtual acknowledgment of this depreciation. If it was absolutely necessary to attain the object of a return to cash payments, he would even concur in this resolution; but he thought the necessity might be avoided by the amendment he was about to propose. He would first propose, that the government should be compelled at a certain period to commence repaying the Bank the advances specified in the third resolution of the 10,000,000l. His reason for this was, that the right hon. the chancellor of the exchequer had already failed in fulfilling his engagements to the Bank. In the last year a payment of 704 9,000,000l. was promised to the Bank by monthly instalments of 1,000,000l.; but it appeared that in May only 500,000l. or 600,000l. were paid; that nothing was paid in June, nothing in July, and that in August, instead of paying, the chancellor of the exchequer applied to borrow money from them at a lower rate of interest. The Bank was, therefore, almost justified by the conduct of government to them. The first resolution he would propose as an amendment, was, leaving out all the words after "that" in the fourth resolution, to substitute the following: "it is expedient to order by law, that the sum of 10,000,000l. of the Bank advances to government be repaid, by monthly instalments of 500,000l. beginning with the 10th of June, and that no intermission take place till the whole be repaid." A resolution of that nature would tend to allay the ferment caused in the public mind by the agitation of the question; and from what took place in 1816, the House would perceive, that such payment could not have any serious effect in narrowing the issues of the Bank. Having thus explained the nature and object of his first amendment, he would now proceed to state the other resolutions which he proposed as amendments of the right hon. gentleman's resolutions. The next was,—" That, in the opinion of this House, the Bank ought not to advance any money to government on exchequer-bills, or treasury-bills, beyond the present sum advanced by them, or beyond the sum that shall remain due to the Bank after the 10,000,000l. are reduced, without the authority of parliament." This resolution would, if agreed to, have the effect of preventing any apprehension that the measures adopted for the purpose of facilitating the resumption of cash-payments must fail on account of the necessities of government. The object of his next resolution was, to put it in the option of the Bank to pay in the legal coin, or in gold, at the Mint price. If the House would agree to this resolution, it would operate in bringing matters to the same point at which the right hon. gentleman wished them to arrive. It was not pretended that it was likely that any great demand would be made for gold. It was the less likely, as these very measures must tend to lower the price of gold. The resolution was, "That the Bank have it in its option to pay, after the 1st of May, 1821, either in legal coin, or in 705 gold, at 3l. 17s. 10½ per oz." He had one other amendment to propose, which would prove his attachment to the ultimate object aimed at by the resolutions of the right hon. gentleman. Since by the preceding amendments more indulgence was given to the Bank, he thought it but fair that one year should be curtailed from the period proposed for the final and full resumption of cash payments. His amendment was, "That after the 1st of May, 1822, the Bank pay its notes in the legal coin of the realm." With the last resolution moved by the right hon. gentleman no person could find fault, all were agreed as to the expediency of repealing the laws against the melting and exportation of coin. He begged pardon of the House for having occupied so much of their time. He was sure that the amendments he proposed, if agreed to, would prove as effectual as the resolutions of the right hon. gentleman, and at the same time get rid of the inconveniences which incumbered those resolutions. The first of those inconveniences was, the necessity of having a depreciated currency in the mean time, till the Bank could pay at the Mint price; and the other inconvenience was, the want of confidence in the government for giving the aid necessary to the Bank. He would be the last person to attempt the introduction into this debate of what the right hon. gentleman's speech was so perfectly free from, any party feeling. But from the course of conduct adopted by the right hon. chancellor of the exchequer, he felt himself bound to say so much respecting the degree of confidence to be placed in government on this occasion. In what he had offered to the consideration of the House he had been actuated solely by a wish to forward the object so much desired by all who had the welfare of the country at heart, and from a feeling that he was justified from experience in the course he had taken.
The Chairman read the 4th of the original resolutions, and the resolution proposed as an amendment, and put the question.
§ Mr. J. P. Grant
said, that he felt at least as much reason to entreat the indulgence of the House as the last speaker. He assured the House, that he would be as short as it was possible for him in explaining the nature of the objections he made to the resolutions proposed by the committee. Feeling himself bound by 706 his duty to the House, by his duty to the country, and by his duty to himself, small as the degree of value might be which the House would attach to any opinion of his, to state his objections to the proposed measure, he begged the indulgent attention of the House while he submitted to their consideration a matter that was in itself extremely important. He fully concurred in the general view so ably taken by the right hon. mover of this question. He was as little able to understand an ideal nominal value, as Mr. Locke, or the other authorities which had been mentioned. The country was now suffering under the consequences of a departure from the established standard of value; and there was not any one who did not see the necessity of returning to the ancient regulations as soon as possible. And here he could not help congratulating the House and the country on the conversion of his majesty's ministers from their former opinions. It was to be lamented that they had not been so converted long ago; but even now he was glad to find them acknowledge that all the principles on which they had acted—all their transactions with the Bank—all their financial plans during the war—were bottomed in error. This they acknowledged by assenting to the resolutions now before the committee. For any previous misconception of the right hon. gentleman on this question, the handsome apology he had made was fully sufficient, and the candid and manly avowal which he made of his error, did him great credit. But it was different with the government—it was their duty to watch over the public interests, and any acknowledgment that they had neglected to do so, could not be received as an apology for their having persevered in a system so ruinous as that which they had pursued. They, the House, and the country, were now aware that the whole system of funding and of borrowing from the Bank was attended with disastrous and ruinous consequences; and if pursued much farther, would be still more so. But upon this view of the subject he would say no more. There was one point on which, though not supported by the report of the committee, he wished to call the attention of parliament—he meant the Mint regulations. On this part of the question he was borne out by many respectable gentlemen who gave evidence before the committee, who were of opinion that while those regula- 707 tions continued, the Bank could not with safety return to cash payments. The master of the Mint would recollect that his opinions on this question were not new. He appealed to the right hon. gentleman whether, when he had detailed to the House the seignorage on the new silver coin, he had not then stated in reply, that the two metals could not continue current in the country, and that the silver would expel the gold. Since that time he had seen no reason to alter his opinion; on the contrary, all that had since happened, and the reports of the committees, confirmed his opinion, and he was quite persuaded, and would repeat, that it was impossible to resume payment in gold at par, or the Mint price, unless the Mint regulations respecting silver were altered. Some persons were of opinion that gold ought to be depreciated to, the value of silver and Bank paper. This was an expedient which he thought was to be avoided at all hazards. But if they meant to have gold issued for any other purpose than for exportation, they must alter the regulations of the Mint. He was aware that, after one had been fully convinced in his own mind of any opinion, he was apt to overlook the objections which could be urged against it. It might be so with him; but he was not insensible, that men of the greatest talents, and capable of applying their minds with the utmost vigour to profound and intricate researches, did not agree with him in opinion. But it seemed quite manifest, that if the Bank was to pay in gold without any alteration in the regulations of the Mint, the gold would be exported as the gold already issued had been exported. It could not have any effect on the currency of the country. And what was there so salutary and necessary in those regulations, that they should be retained against even the conviction of one man, that they were most unwise and injurious? Mr. Locke, Mr. Harris, the late lord Liverpool, all the great men who had examined the subject, agreed that there could be but one standard of value. When two metals were issued, and one was depreciated, the one overrated had always driven the other out of circulation. If any doubt existed on this point, the evidence of Mr. Rothschild, who stated that the gold issued by the Bank had never gone into circulation, but had been immediately exported, might remove the doubt. If gold were exported to France, 708 it was with profit; if silver were imported into this country, it was with profit. From the evidence given before the committee of the Lords, it appeared that at Paris, which was the only market for gold, gold was at 7s. 4½d. per oz. more than in London. There was consequently a profit to that amount upon every ounce exported to Paris. If you converted paper here into silver coin, and with that silver coin bought gold, which you exported to Paris, you made profit at the rate of 15½ of silver to one of gold. You must, in order to compare the values fairly, convert your money into a metal common to both countries; if you then convert your paper into hardware, that is into silver, bring it to this country, and buy gold at the Mint price, 3l. 17s. 10½d. and you make this profit, gold was superior to silver in the proportion of 1 to 15½.; that was, silver was depreciated below the standard value of gold 1 in 15½.: profit was therefore made of the exportation of gold into Paris, or the importation of silver into London, at the rate of 1 to 15½. What was the relation in consequence of the pound sterling to gold? You had a premium for delivering silver in London, weight for weight, and fineness for fineness: you had a premium for delivering gold in Paris, bought with silver coin in this country. He spoke in the hearing of merchants who understood those matters better than he did, and who must at once perceive the force of his argument, if they did him the honour to attend to him. But without going into calculations, they had here broad facts. There was a premium upon the exportation of gold from London to Paris; there was a premium, upon the importation of silver from Paris to London. If all these facts were so, they ought to arrive at this conclusion—that paper was depreciated as compared to gold, not as compared to silver. This conclusion the witnesses before the lords' committee fully established. The evidence of those witnesses was the stronger, and the more free from suspicion, as they doubted the very conclusion which their evidence established. Mr. Baring, whose intelligence on the subject the House would very readily admit, was asked the following question:—"Supposing there had been no Bank paper in circulation, and that our silver coin 6½ per cent depreciated, issued in sufficient abundance, had been the only circulating medium, would not the value of gold have naturally risen, and would not the foreign ex- 709 changes become unfavourable?" He answered—"No doubt of it; in that case the silver coin must have been the legal tender of the country, and the standard by which the price of gold and of our foreign exchanges would have been regulated." This was the evidence of a person who thought that the Mint regulations had no effect whatever, although he was astonished at the singular coincidence of the issue of the silver coinage, and the depreciation of paper. In this evidence he had admitted that silver would produce the same effect, but chose to ascribe it rather to the paper, and to say that silver could not produce such an effect, because government retained in their own hands the power of regulating the amount of the issues. Mr. Mushett's evidence in like manner explained the depreciation that had taken place in Bank paper. In the evidence of Mr. Haldiman also, were the following questions and answers:—"Can you state to the committee how much per cent difference in value exists between our old silver coin and our new silver coin, in consequence of the seignorage taken at the Mint by the last Mint regulations? I presume, by the old silver coin, is meant the old silver coin in its perfect state; if so compared with the new silver coin, it would be rather more than six per cent."—"Is not that nearly the present difference between the market and Mint price of gold? I am not aware of the last market price of gold; but if between 82s. or 83s., the difference would be about five per cent between that and the Mint price."—"Supposing that there existed no paper currency in the country, and that, there was no gold in circulation, and farther, that our present silver coin, depreciated six per cent by the seignorage taken out of it, was the only circulating medium, would not the market price; of gold, measured by such a currency, stand nearly six per cent above the Mint price? I conceive that it would."—In the evidence of Mr. Harman appeared the following questions and replies:—"Exchanges having become un-favourable in April 1817, and you having stated that from that time you lost all confidence in the permanency of the exchanges, was it ever, in conversation among the directors, attributed to the issue of the new silver coinage which took place in March 1817? We never attributed the unfavourable state of the exchanges to that circumstance."—"Had 710 you among yourselves any conversation concerning the effect of this measure? Frequently; and had our doubts whether the alteration which took place in the coinage of the silver might not have an unfavourable effect on the price of gold."—Mr. Harman was subsequently asked, "If it was proved that gold had uniformly been exported since that period (the issue of the silver coin), and silver uniformly imported with a profit, what effect would, that have in your opinion?" To which he answered, "If it was proved that that had taken place to any great amount, I should think differently from what I now do." By the evidence, therefore, of those gentlemen, it appeared to be their opinion, that if circumstances were such as they were known from other evidence to be, the result would then be that which he contended it actually was. If the facts were such as had here been proved, could they avoid ascribing them to their proper cause—the seignorage on silver? If they attended to the period at which the silver had been issued, they would find farther confirmation of this opinion. The rates of exchange and the price of silver varied at the same time. From July 1816, to July 1817, the exchanges were favourable. Gold was at the Mint price, and would be lower if the Bank had not kept up its price. If they had it in evidence that the depreciation took place at the same time that silver coin had been issued, they were bound in fairness to inquire whether it was the paper that had been depreciated or the silver; and the paper had conformed itself to the silver. The concurrence in time so accurately, demanded at least farther investigation. He asked whether there were any other proofs of an over issue of Bank paper but, the unfavourable state of the exchanges. The hon. gentelman here referred to a letter of Mr. Harman's, given in to the Lord's committee, stating the amount of paper issues at various periods, and hence inferred that there had been no over issue. The silver coin had been issued in March 1817, and in April (it had been stated July in one part of the evidence, but it ought correctly to be April) the depreciation had taken place. No effect could accompany a cause more accurately. In fact, it was incumbent upon those who supported the opinions of the reports to show, that the depreciation of paper in comparison with gold was caused by, the over issue of the former. This had not 711 been done, and he denied that it could be proved. If members looked to those periods when the issues of Bank notes were greatest, they would find that gold was often cheaper, and the exchanges more favourable, than when the circulation was more limited. The hon. member then read from a paper a number of dates within the last few years, and the amount of Bank notes in circulation at each of of them, giving also the price of gold at each particular date.—That paper proved, that when the issues of the Bank were highest, gold was cheaper, and the exchanges more favourable, than when they were very considerably contracted. The evil complained of, then, if owing to increase of issues, could not be said to proceed from excess of issues on the part of the Bank of England; but perhaps it would be said that this excess was from the country banks. This he denied: and he had in support of his opinion the evidence of Mr. Loyd, Mr. Smith, and many of the witnesses before the committees, that the issues from the country banks were at the present moment more limited than at any former period, it had been said, that when the Bank had issued the sovereigns, they continued the same amount of notes as before, and had thereby materially increased the circulation; but this was erroneous, for it was admitted, that, with a few trifling exceptions, the sovereigns were almost all used for the purposes of exportation. Taking, then, these arguments as admitted, he could not see any ground for the assumption, that paper was depreciated by the over issue. It had been urged, that the same nominal amount of circulating medium which might have been necessary at a former period, could not be so now, as from the speed with which notes circulated, and the improved manner in which business was transacted, a much less quantity would represent property to a greater amount. This seemed a plausible argument; but it was incumbent upon those who used it, and who complained of the over issues, to show that the present circumstances of the country in its commercial relations was such as not to require the present amount. They should show that a less amount would be sufficient, which he contended they had not done. An attempt was made to show that a smaller amount of circulating medium in the present day answered the purpose of a much larger at a former period, by the right hon. gentle-§712 man who had read a paper to show the amount of notes, and the time of their circulation at the period of 1792 and 1818. The right hon. gentleman had endeavoured to show, from this and from the comparative quantity of business done by each note, that the same amount of notes now would represent a much greater proportion of property. Now, he (Mr. Grant) conceived that this argument was erroneous, and he contended that the issue of Bank notes did not show so much the amount as the mode, of mercantile transactions. According to the variation in that mode, so might the amount of the notes issued appear to represent a greater or less amount of property. Reasoning thus, and he gave his opinions upon mature deliberation, he could not agree in the conclusion which the right hon. gentleman had drawn, that a great part of the depreciation of our paper currency was owing to its over issue. He could, he conceived, trace the decrease of our gold coin, its high price, and the comparative depreciation of paper, to another cause—to one which, he heard with surprise, was meant to be continued—the Mint regulations; a system unknown in any other part of the world, novel in this country, and unproductive of any benefit. This impolitic and absurd system was resorted to on the alleged ground that by it the government would have a check upon the price and amount of the coinage. This check was sought to be established by a double means: the first was, restraining the issue of silver, by keeping the coinage in the hands of government, they taking a seignorage; and the second, by rendering silver not a legal tender beyond the amount of 40s.; by which latter check, it had been stated by several witnesses before the committee, and among the rest by Mr. Mushett, that they mainly depended upon the first check as a safeguard against traffic in the coin. These checks he contended, would be, as he maintained they had already been, found ineffectual towards the proposed end. No Jaw, he argued, could afford a protection to our coinage, while it afforded, as did the one of which he then spoke, a constant inducement to its sure violation, and our Mint regulations would in this respect be found as ineffectual as the law which prevented the exportation of gold—a law which, it was unnecessary for him to observe, was daily broken with impunity. By our pre- 713 sent Mint regulations we gave an encouragement to the importer of silver, and gold was rendered scarce by being sent out of the market to purchase it. A profit of 8½ per cent was held out in favour of a counterfeit silver coinage; and with such an inducement, what was there to hinder ingenious and speculative men from working mints in France or any other part of the continent, making silver coin exactly resemble ours in appearance and fineness, and transmitting it to this country, where they could get a profit of 6½ per cent upon it? The difficulty of detection would be exceedingly great. The imitation of our coin in base metal might be easily discovered; but such an imitation as that to which he alluded could with great difficulty be detected. The consequence would be, that while the temptation continued, silver coin would abound in this country to the exclusion of the gold. No argument could be drawn in support of the measure from the state of the silver coinage in the reign of William 3rd; for, though at that time it was made a legal tender to the amount of 25l. by tale, and over that sum by weight, yet in the tale a reasonable allowance was to be made for wear, and if, as was the fact, it became to be very much reduced by wear, it could not be considered a legal tender, and if taken as such, it was by common sufferance; but the same argument could not apply to our silver coinage now. Neither could the currency of the Dutch schellings in a deteriorated state afford an argument in favour of the system of the Mint regulations; for, according to the evidence of Mr. Page, those schellings were rather used as counters, than passed as value to their amount; at least they were not taken as such by the Bank of Amsterdam. Indeed, so great an objection had the late lord Liverpool to the system of seignorage, from a conviction of its bad effects, that in the contract with Mr. Bolton for the copper coinage, it was stipulated that the coin should be of equal value with the metal given, minus the expense of coining. If the experiment, which for the first time we were about to make, were to answer, what good would result from it? But if it should not answer, there would be a drain of gold upon the Bank which it could not stand. It would be like pouring water into a sieve. He could only say, that he viewed the trial with the greatest apprehensions for its consequences.
§ Mr. Wellesley Pole
assured the committee, that he felt too strongly how ineffective any thing he could say must be, after the splendid speech of his right hon. friend, to trouble them at any length upon the great question' before them. In the results come to by the secret committee, of which his right hon. friend had been the worthy chairman, he most completely agreed; there was not a sentence in the report which was not a fair deduction from the evidence taken before the committee, intricate as it was, and difficult as it undoubtedly had been to sift and compare in all its parts. He most cordially agreed with his right hon. friend in all that he had said of the temper which had been manifested by the members of the secret committee during its long and laborious investigations; nor should he do justice to the right hon. gentleman opposite (Mr. Tierney) and his friends, were he not to say, that nothing could have been more manly, honest, and assiduous, than their conduct in the committee during the three months of its sitting. They appeared determined to forget all party feeling, and to unite in endeavouring to discover the best means of benefitting the country. But, although he cordially concurred in the report of the committee, he felt that he should not act candidly if he did not declare, that, for one, he should have been most willing to have had the report, and the present resolutions framed in the spirit of the amendment moved by the hon. gentleman opposite, had he thought that that could have been done consistently with the duty of the committee to the House and the country, after the paper which the Bank director sent into the committee in answer to the two questions which had been proposed to them. He felt the greatest respect for the directors of the Bank of England, and believed that they were actuated by the best motives; but he would leave it to any member of the House, or any candid man in the country to say whether, after the production of the paper to which he had alluded, the committee could with consistency or propriety, have left it to the Bank to determine when, and under what circumstances, the payments in cash should be resumed.
He would not trespass any longer upon the time of the committee by adverting to the general question; indeed he should not have risen at all, if it had not been for what had fallen from the hon. and 715 learned gentleman who spoke last: he perfectly agreed with that learned gentle-man, that the particular considerations which he had pressed upon the attention of the committee were of very great importance, and entertaining the opinions which the learned gentleman did upon the subject, it was undoubtedly his duty to bring it distinctly under the consideration of the committee. The opinions, however, of the learned gentleman upon this point were by no means new; they had appeared before the public in a great variety of shapes. They had been urged with uncommon assiduity and perseverance by one person highly gifted with talents, and possessing great information, and especially upon this particular point. They had been pressed upon the attention of the public, under the signatures of the "Old Merchant," "Mr. Hardcastle," and others; and to do the learned gentleman justice, he had to-night spoken the language of "Mr. Hardcastle" and the "Old Merchant," very correctly. The best answer, perhaps, which he could give to the learned gentleman, would be to state distinctly the principles upon which the Mint regulations were founded. They were not adopted without that degree of consideration which the importance of the subject demanded; and if they were erroneous, those who had advised the Prince Regent upon the subject had much to answer for. From the time of the silver coinage in the reign of king William, the greatest inconvenience had been felt from the circumstance of both the precious metals having been considered as standards of value. The legislature could fix the value of the coin, but it could not fix the value of the gold or silver bullion from which the coin was made; the relative prices of the precious metals would vary in the market from time to time like other commodities, and as the prices of bullion fluctuated, an effect was immediately produced upon the coin; it was therefore found quite impracticable to keep the coin of the two precious metals in circulation together; both being standards of value, the one by law and the other by common consent, they became competitors with one another. In the year 1773, the silver was so depreciated, that although it remained nominally a standard of value, yet all our exchanges with foreign countries, as appeared by a reference to the best authorities, were measured by the gold coin. The gold coin in circulation 716 at that period was much worn and reduced in weight; a circumstance which was found materially to affect our exchanges; it therefore became necessary to call in the light gold and recoin it; and in 1774, when the great reformation in the gold coin took place, it was in fact made the sole standard of value. Gold coin was, by the act of 1774, ordered to be taken by weight instead of by tale as heretofore; the weight of the guinea when it issued from the Mint was 5 dwts. 9 4/10 gr. but the light guineas in circulation were very much below that standard; when therefore they were called in and recoined, the new guinea was declared not to be a legal tender under the weight of 5 dwts. 8 gr.; one grain and the fraction being allowed for wear by circulation. The immediate effect of bringing our gold coin to this state of perfection, was, as Dr. Adam Smith has observed, to turn the exchanges throughout Europe in our favour. When the gold coin was reformed, the silver coin in circulation was, as he had already stated, worn to a very great degree; it was reduced to the amount of between 25 and 30 per cent; and a great quantity of it which had many years before been taken out of the country was now brought back in its reduced state: the late lord Liverpool, apprehensive of the inconvenience which might arise from this light silver coin coming into competition with the perfect gold coin as an unlimited legal tender, proposed a law which parliament adopted, prohibiting the further importation of light silver coin, and limiting the legal tender of that which was in circulation, by tale to 25l. in any one payment; beyond that sum the silver coin was to be taken by weight at the rate of 5s. 2d. an ounce. This was a temporary measure adopted at a time when it was thought impossible to arrange the monetary system permanently, though, in fact, it established our currency upon the footing, in point of principle, on which it now existed; that act remained in full force from 1774 to 1783. The silver coin then, during that period, was a legal tender for all sums under 25l, being, as he had before stated, deteriorated near 30 per cent. and though, during the whole of that time, the Bank was open for cash payments, and the gold coin was in the highest state of perfection, yet no gold, coin was drawn out of the country, nor did gold bullion ever rise above the Mint price; how then was it to be apprehended, 717 that a silver coinage, reduced in weight only 6 per cent below the old standard, and a legal tender only to the extent of 40 shillings, could drive the gold coin out of the country?
The learned gentleman seemed to have been aware of the difficulty of arguing against so delusive a fact, and in order to get rid of it, he had contended that at the period alluded to, the depreciated silver coin was only taken by sufferance; but a short statement would show the fallacy of the learned gentlemen's reasoning. By the act of the 9th and 10th of William 3rd, in order to prevent the currency of clipped, and unlawfully diminished silver money, it was enacted, that silver money should not pass if diminished otherwise than by reasonable wearing. If it was unlawfully reduced, or was clipped, or defaced, it was to be rejected and cut.—At this period the old deteriorated silver had been called in, and a practice prevailed of clipping and reducing in weight the new silver coin just issued. It was to put a stop to these practices, to force the old, coin that remained in circulation into the melting pot, and to protect the new silver from being reduced in weight by fraudulent means, that the act in question had passed. But it had become perfectly obsolete many years before the act of 1774, which limited the silver coin in circulation as a legal tender to 25l., and it never was in the contemplation of the legislature to refer to it. The very title of the act of 1774, explained its meaning. It was "An Act to prohibit the importation of light Silver Coin of this Realm into Great Britain and Ireland, from Foreign Countries, and to restrain the tender, thereof beyond a certain sum; "and accordingly, the clause limiting the tender has no reference whatever to weight or reasonable wear for any sum under 25l. but simply says, that no tender in payment of money, made in the silver coin of this realm of any sum exceeding 25l. at any one, time, shall be reported in law to be a legal tender for more than its value by weight after the rate of 5s. 2d. an ounce. This act which, as he had already stated, was in force without intermission from 1774 to 1788, was made perpetual in 1799, and the preamble stated, that "Whereas an act passed in 14th of the king, entitled an Act to prohibit the Importation of light Silver Coin of this realm, from Foreign Countries, and to restrain the tender thereof beyond 718 a certain sum." The coinage of silver was also prohibited from 1798, yet it never entered the imagination of any man, that the silver coin in circulation, deteriorated as it was near 30 per cent. could be refused as a legal tender to the extent of 25l., and in fact it was universally circulated, and passed in all payments.
It had been contended by the learned gentleman, that we had altered the Mint price of silver, by making the proportion in our silver coin as 14⅓ to our gold, and that foreigners would calculate their exchanges with us, not in gold, but in our depreciated silver coin. But the fallacy that ran through the whole of this argument arose from his not recollecting, that this silver coin was not a legal tender beyond 405., and that the coinage was in the hands of government. The learned gentleman had stated that sovereigns might be taken to France, where they might be exchanged for silver, at the rate of 15½ pounds of silver for one of gold, and thus the man who had obtained his sovereigns at the rate of 3l.17s. 10½d. per oz. by selling them at the rate of 15½ pounds of silver for one of gold, would actually obtain for his ounce of sovereigns 4l. 5s. 3d. The learned gentleman could, no doubt, for a pound either of gold bullion or of sovereigns, obtain 15½. pounds of silver at Paris; and if he could bring that silver to England, and coin it, and issue it without expense or reduction for seignorage, at the rate our silver is coined, then no doubt he could realize his profit. But, under our present regulations, the learned gentleman must, upon a little reflection, be convinced, that no such profit could be made. Any person purchasing silver under the circumstances described, and bringing it into this country, not being able to coin it, must use it merely as bullion in the market. Government had never supposed that by any Mint regulations they could prevent gold or silver bullion from rising in price, all that could be done was, to prevent the coins of the two precious metals from clashing or competing with each other, and this he contended had been effectually done by our present system of coinage. But was it a new discovery of the learned gentleman, that a pound of gold standard bullion, or of gold coin, would purchase 15½ pounds of silver at Paris? Was not the learned gentleman aware, that this had 719 always been the case—since the Mint regulations at Paris had been established? It had been so for many years, and yet the learned gentleman now stated it as if it had been the effect of our new silver coinage. If the learned gentleman's calculations of the effects produced by the new silver coinage were correct, gold should be in the market 4l. 5s. 3d. an ounce, being the value of the silver it would purchase in Paris, and silver upon the same principle ought to be 5s. 6d.; yet, at the time he was speaking, gold was 4l. 0s. 6d., and silver 5s. 4d., and, it was remarkable, that in all the variations which had taken place in the price of the precious metals since the new silver coinage was issued, they had never been at the relative price at which they ought uniformly to be, if the learned gentleman's theory was correct. They had risen, and fallen, and varied, as they always would, in the market; but unfortunately for the learned gentleman, gold had never been at 4l. 5s. 3d., and silver at 5s. 6d. at the same time.
The learned gentleman had said, that that the present system was quite new, and would answer no good purpose: in reply to this he had only to state, that it had been established after much deliberation, and that in fact it was the same which had been recommended by the late lord Liverpool. It had also the sanction of another high authority; namely, Dr. Adam Smith. In common with most other writers on political economy, Dr. Smith was of opinion, that it was a great evil to have two metallic standards of value to an unlimited amount. The learned gentleman, however, wished that we had continued to act on the old system. But what was the old system? It was, that the subject had the power of coining gold and silver at the Mint to any amount, and that both coins were legal tenders to an unlimited extent. To permit this, was contrary to the opinion of all the most skilful political economists. Dr. Adam Smith said, it would be highly desirable to have the silver coin regulated on the same principle as the copper, which was limited as a legal tender to the amount of one shilling, and he thought that the limitation of the silver tender ought to be for the change of a guinea, and that the silver might be rated as much above the market price as it was below it at the time he wrote. This appeared to him (Mr. Pole) the correct view of the subject; indeed, it was that in which late regulations had been 720 framed; and he had found, upon examining the proportion that was taken for silver coin, that it came to within a farthing of that which Dr. Smith recommended. It had also been the opinion of the late lord Liverpool, that a seignorage should be taken upon silver, and his lordship advised that the coinage should be put into the hands of some great corporation, such as the Bank, to prevent an excessive issue which might thus be controlled by government. So that, in point of fact, the recommendation of lord Liverpool corresponded in principle with what had been done, more efficaciously by being taken into the hands of government. The learned gentleman would hardly dispute that, previous to the adoption of the regulations now in force, the state of the silver coinage was such as was very inconvenient to the nation. He need not recall to the recollection of the House the state of the country at the time they were made. They had now been in operation for more than two years, and he might venture to say, that there was this proof of their efficacy, that not a murmur was now any where to be heard relative to the coinage—yet when the regulations for the coinage were first proposed, there was an outcry against them in the very same quarter whence the objections which he was now considering proceeded. The noble "Old Merchant" had then asked, how a measure so rash and imprudent could be attempted, as to change the silver currency of the country? And insisted, that it would cause the greatest distress among the lower orders, that the shopkeeper, the small trader, the poor man, would be ruined. The chancellor of the exchequer had stated, that he hoped the expences would not exceed 500,000l. This calculation was met by a still more positive denunciation of the evil consequences of any attempt towards a new silver coinage; and it was maintained, that the expense would be twenty-fold more than the sum mentioned by the chancellor of the exchequer; half a million!! said the noble "Old Merchant." You are completely mistaken, it will cost you at least nine millions and a half, and that enormous sum must be taken from the pockets of the shop-keeper and the small trader, and an incalculable injury will be done to the country! Calculate, said the noble "Old Merchant," upon one in twenty of the trash now in circulation being counterfeit. I tell you nine- 721 teen in twenty are of that description." The result, however, had shown, as appeared by documents upon the table of the House, that the whole expense of the new coinage, of the exchange of the coin, and the recoinage of the old coin, including all contingencies, did not amount to more than 520,000l. Such were the predictions when the new coinage was announced. But the gold coin and the rate of exchange never entered into the noble "Old Merchant's" contemplation at that time. He predicted, indeed, the loss of the new silver coin, which, he said, would all leave the country in the course of six weeks. The event, however, had shown how completely the noble "Old Merchant" had been mistaken, and he (Mr. Pole) could not but entertain a sanguine hope, that the present prophecies, however, confidently delivered, would prove to be as erroneous as those to which he had just alluded. Indeed, if the effect of the regulations for the last coinage were compared with those of any former period, it would be found that none had ever been so completely successful. The new coinage in the reign of king William, which cost the country nearly 3 millions Stirling, had been, attended with many difficulties, and had occasioned a great deal of distress throughout the kingdom, nothing of this kind had occurred in 1817. Throughout the whole kingdom there was hardly an individual who had lost a shilling or a sixpence; and he had not heard a murmur on the subject from any corner of Great Britain. There was now no want of change, and he hoped soon to see the time, when there would be no want of bullion. The learned gentleman, in the course of his speech, had expressed an apprehension, that, in addition to all the other evils to be brought upon us by our present system of coinage, we were liable to have coin exactly similar to our own fabricated abroad, and thrown in great quantities into our circulation; for this purpose, he said, there could be no doubt that mints would be established on the continent, and the profit of thus counterfeiting our coin would be 8½ per cent. He owned he had no such apprehension; the counterfeiting of our coin had never proceeded in any similar manner—during the whole time that our silver coin in circulation had been reduced in value 30 per cent; and that if the learned gentleman's project had been practised, there 722 would have been a profit on the fraud of more then 30 per cent. Such a thing had never been attempted; all counterfeits of our coin had been fabricated at home, and made of base metal; or when the coin was much worn, and the impression wholly effaced, had been produced from stolen plate beat thin for the purpose: and this he was convinced would always be the case. We had no example of a contrary practice: the counterfeit coiner proceeded upon quite different principles from those suggested by the learned gentleman; and it would be utterly impossible for such an operation as the learned gentleman had mentioned to take place, without its being almost instantly detected. All experience was against such an attempt being made; and even if it were to be made, and succeeded, he could not see how it could produce the effect of driving the gold coin out of circulation. As to the copper coin, the learned gentleman was quite mistaken in the view he had taken of it. At the time when he (Mr. Pole) wrote the paper upon which the learned gentleman had commented, which he had laid before the secret committee of the House of Lords by their desire, the copper coinage was circulating at a seignorage of 72½ per cent. This, though there was nearly a million of it in circulation, was found not to cause any inconvenience to the public, because as it was limited as a legal tender to twelve pence, it could only be used for the accommodation of change, and like the silver coin, could produce no effect upon our exchanges, or the value of the precious metals.
It had been asked, how the crown lawyers could have recommended such a measure as the proclamation of the 1st March 1817, declaring, that the silver coin should not be received at the Mint and exchanged, unless the shillings weighed three penny-weights fifteen grains, and the other coins in proportion, if they conceived that by the act of 1774 (made perpetual), the silver coin was a legal tender by tale to the amount of 25l. He could not but think it extraordinary, that those who urged this objection should not be aware that the 56th of the king empowered his majesty, by proclamation, to repeal the act of 1774; that it was accordingly so repealed on the 12th February 1817, and that under the 56th of the king the old silver coin had been called in, and exchanged, before the proclama- 723 tion of the 1st March issued. This proclamation was issued to enable persons who had hoarded old silver coin to exchange it for the new coin. It was, as the proclamation expressed it, "for the ease of his majesty's subjects," and had nothing whatever to do with the calling in of the old silver coin in circulation, which had been exchanged without regard to its weight; and, in fact, the old coin was cried down before the proclamation in question issued. This, therefore, was an indulgence to the public; and when the new coin was issued it was perfectly consistent with justice to issue such a notice—He was ashamed to have detained the committee so long, but he thought it his duty to lay before them those statements relative to a subject which had been so erroneously treated by the learned gentleman. If the learned gentleman was right, his objections were most serious; but he trusted he had said enough to show, that no weight whatever was due to them, They were unsupported by any of the persons who were examined by the secret committee of the Lords (who had heard much evidence on this subject), excepting Mr. Page and Mr. Fletcher, and their lordships had declared their opinion to be diametrically opposite to that contended for by the noble "Old Merchant" and the learned gentleman; and the evidence of Mr. Mushett had so intirely satisfied the secret committee of the Commons, that they had not thought it necessary to call any other witness on that part of the subject.
§ Mr. Tierney
said he had heard with the utmost satisfaction the able and eloquent speech of the right hon. gentleman who had proposed to the House the resolutions which they were that evening called upon to discuss. He could assure that right hon. gentleman that if a compliment from so humble an individual as himself could give him any gratification, he would gladly offer it: but in truth he was afraid to do so, lest he should be thought to be paying a compliment to the principles which himself and many of the friends around him had been advocating for a long series of years. It was, however, a source of sincere pleasure to him to hear those maxims for which he had so long been contending avowed as maxims of true policy in that House, especially as such ample justice had been done to them by the right hon. gentleman who had now, for the first time; adopted them. He had 724 to return him his sincere thanks for this service, and above all, he had to return him thanks for the just and eloquent compliment which he had paid to the memory of a dear and lamented friend of his. He should have received still higher gratification from the events of the present evening had that friend been alive to witness the establishment of those principles which he had been the first to propose to the attention of parliament. The eloquence with which he had explained, and the ingenuity with which he had defended them, had always attracted the admiration of the House, but it was reserved to a later period to acknowledge that they were no less true than they were ingenious. There was another instance, to which it was scarcely necessary for him to refer, where a similar act of justice has been done to a man, whose loss was lamented and regretted by every individual whom he had the honour of addressing—he meant sir Samuel Romilly: the plans which that illustrious character had proposed for the amendment of the criminal law, though ridiculed and rejected as wild and impracticable theories during his lifetime, had been adopted since his death, and taken into the most serious consideration which parliament could give them. The right hon. gentleman had just done justice to one of these distinguished characters; and he trusted that it would not be long before the House would do justice to the other. As far as he could gather the sense of the House, there was a pretty general concurrence in the opinions of the right hon. gentleman. He might be wrong, but there seemed to him a pretty general concurrence at least on his side of the House. Whether on the other side the assent to the right hon. gentleman's propositions was reluctant or not he did not know. He should not have risen, at least at this period of the debate, had he not been personally alluded to, by the right hon. gentleman, as the only member of the committee who had declined giving his assent to this plan. That was not exactly the fact, for a Bank director, who was on the committee, had differed from the majority, though when the question was put, he (Mr. Tierney) was the only dissentient member. In justice, however, to the other members of the committee, he had to say, that the investigation was throughout conducted in a most exemplary manner; and that the impartiality of the right hon. gentleman, as chairman, 725 could not be exceeded. He (Mr. Tierney) much lamented that he could not concur in the proposition that had been submitted to the House: no man was more anxious than himself for a speedy resumption of cash payments; no man had perhaps shown less leaning towards the Bank directors, but justice ought to be done to all parties. He would state plainly, and without reserve, his reasons for preferring the amendment of his hon. friend, and for recommending it to the House for adoption. Those who supported the Resolutions, and those who supported the amendments, all were agreed, at least he hoped that all or nearly all were agreed, that the sooner the ancient metallic standard of value was restored the better. There might be a few; indeed he knew there were such from the evidence furnished to the committee—who maintained that the Bank restriction could be continued without inconvenience; such a view of the subject he entirely abjured; he disclaimed all community of interest and feeling with them, and although he disagreed with the right hon. gentleman who had introduced the subject, he perhaps even more widely differed from the monstrous doctrines that had been broached on the other side. He was well convinced that there was no security for the empire but in a recurrence to a metallic currency. No man's property could be safe, or even have a value until that wholesome state were restored; and the only dispute would be, whether the method of restoring it now proposed, was such as ought to meet with the approbation of discreet men.
The plan of the right hon. gentleman, or rather of the committee, lay in a narrow compass. It was, that the Bank, in February next, should pay at the altered standard of 4l. 1s. all demands upon them to the extent of 60 ounces of gold; that in October they should pay them in gold at the rate of 3l. 19s. 6d. and by the 1st of May, 1820, revert to the old Mint standard of 3l. 17s. l0½d.: but it did not stop there: for the plan was to continue for two years from that date, during which the Bank was to pay its notes in bullion at the Mint price. The drift of the whole was, that in 4 years from the present date, that was in the ninth year of peace, the country should have a prospect, though a distant one, of enjoying once more the blessing of a metallic currency. The country was much indebted to his hon. 726 friend behind him for employing his mind, so well endowed upon all subjects, upon this; but he was by no means convinced that the plan his hon. friend had suggested ought to be adopted. The House, however, would bear in mind that the project of the committee was not his hon. friend's plan: it was a proposition of a totally different description, for it deferred all payments in bullion for two years, and did not at last give the country a specie currency until the lapse of two years more. It was true that some sort of stepping-stone to Mr. Ricardo's plan (for it was idle to conceal the name) might be prudent; but he could not without alarm and abhorrence see an attempt thus made to introduce for no less a term than 18 months, a standard of value unknown to the usages of the kingdom: it was in fact raising the-price of gold because the price of paper was lowered: "if your paper," said the minister, "will not come to my gold; my gold must come to your paper: if the mountain will not come to Mahomet, Mahomet must come to the mountain." Perhaps the most eloquent of the many eloquent passages of the speech of the right hon. gentleman related to this subject—to the danger that might arise from altering the ancient permanent standard of value; and it was this that produced in his (Mr. T.'s) mind, the greatest degree of alarm: he feared that the principle of the ancient standard, being once broken down, would never again be restored. The system was proposed on the other side as a security against possible dangers; but he would ask in his turn, if there were not in that very system a possible danger of establishing a precedent of most injurious consequences? Suppose (to put a case) every thing went on as well as could be desired from hence until October; that there were no complaints of a drain on the Bank, or of a want of! currency for the supply of merchants; what answer might be made to the application to carry into farther effect the plan of to-night? What security was there that the wishes of the country would be complied with, or that an application would not be made by ministers to parliament, stating that the 3l. 19s. 6d. was not a sufficient price for gold, and that 4l. 1s. must be continued, or the kingdom would be exposed to imminent perils? It would be said, perhaps, "we have had 18 months of this state of things, and why should we recur to another?" Who would 727 answer for the right hon. the chancellor of the exchequer in such a case? It was not very unlikely that petitions in numbers might be presented, in order that the standard might remain at the same rate. Suppose at the termination of four years some unforeseen circumstances should occur like those of 1797, which induced government to think it impolitic to perform their engagement; they might then say, the Mint price of gold is not enough, let us go back to 3l. 19s. 6d. per oz., or supported by precedent, they might even urge the necessity of returning to 4l. 1s. the price allowed three years before. Surely this was a very possible danger against which there was no guard, and the country might be deprived of all hope of ever returning to cash payments at all: the Bank restriction itself might be proposed at the very moment when people thought a wholesome currency was restored. For his part, he should wish to cut off at once all retreat to the doctrines which had so nearly ruined them all during the last 25 years. If war should again break out, the first thing they might hear would be—let us go back to the 3l. 19s. 6d.—and then let us go back to the other step—and then a bill passed in 24 hours suspending all cash payments—and so the wheel might go round, till they came to where they now were. This deserved the serious consideration of every gentleman in the country. Without introducing much of party into this subject, he was bound to say that he must look with extreme jealousy at every danger of alteration in the plans of an administration, which, by the proceeding now before the House, reversed every principle which they had formerly considered sacred. What security had the nation, after all that had passed, that they would not again retrace their steps? Having lately had a new light break in upon them, respecting which he was reluctant to speak harshly, what confidence could the people feel that in a few years they would not be visited by a fresh illumination? It was the interest of ministers now to adopt one course, and they adopted it; but it might be their interest on some future occasion to adopt another course, diametrically opposite; and what pledge did they give that they would not desert the line they were now pursuing? What then was to be gained by this much-boasted discovery? Here he night make many observations upon the drain upon the Bank, and on the reduc- 728 tion of discounts; but he forbore, because he was persuaded that the House would hear them to much greater advantage from some of the directors or merchants whose interests were concerned. He objected to the plan, because in his conscience he believed it to be so full of danger, that nothing could justify it but paramount necessity. If cash payments could not be restored without it, then he would give his consent to it, but not till then. He meant to put the matter fairly, and he hoped he had done so.
What then was the real ground of this proceeding? Neither more nor less than this—that the Bank was not to be trusted. Ministers might now talk for ever to the contrary, without avail; the fact had almost been avowed by the right hon. gentleman, that it was absolutely necessary to take some security from the Bank, in consequence of the conduct it had pursued, and the opinions it entertained. As to the opinions of the Bank, he (Mr. Tierney) was as hostile to them in general as any man; but in justice to that establishment, it was but right to say, that the opinions of the Bank had been, and, until the resolutions of the right hon. gentleman were agreed to, still were, the opinions of the House; they still remained on their Journals, the right hon. the chancellor of the exchequer having prevailed on the House to adopt them in 1810, in opposition to the resolutions of Mr. Horner. Since that time light had certainly broken in upon the chancellor of the exchequer; and who should assert that light might not break in upon the Bank directors? If a decided opinion of the majority of the country and of the House had made converts of ministers, and had induced them to abandon a course they had undeviatingly pursued for the last ten or twelve years, was it unfair to suppose that the Bank directors might be converted also? He did not contend that those gentlemen were at all warranted in entertaining the strange and wild notions they had promulgated; but practically how did the matter stand? The committee maintained as an abstract principle, and as statesmen and philosophers, that the issue of paper governed the price of gold, and therefore that the issue of paper ought to be regulated with a view to the safe resumption of cash payments; but the directors, not pretending to be judges of political economy, merely replied, that there would be a run upon them, and they must call 729 in their paper for the purpose of protecting themselves. The issue then was between statesmen and philosophers, acting upon solid principles of political economy, and Bank directors who considered only their own peculiar convenience, and private interests. It had always struck him with astonishment that 26 such well-informed gentlemen could be found to maintain that the price of gold was in no way regulated by the issue of paper: that seemed a monstrous proposition, and the directors were now in a manner bound to admit, when they found all the rest of the world differing from them, that they must be in the wrong: they were even abandoned in this opinion by their old friend, the chancellor of the exchequer, who having been long under the wing of the Bank, was determined now to act and think for himself; he even required from his ancient associates, the directors, some security that within a given space of time, they would do what was right towards the resumption of cash payments. The argument on the other side amounted to this, and to nothing else—that the Bank of England was no longer to be trusted, because it was evident, from some expressions used by the directors, that they would not take the proper and necessary measures for paying their own notes. He should be glad to know how it was possible to say any thing more severe against a body of men in trade? It was saying, in truth, that they were unwilling to take the shortest road to pay their debts: it was an imputation on their integrity; the legislature would not trust them to the extent of dealing honestly by their creditors: it was telling them that their object was not to resume cash payments, that they would postpone and avoid it by all means, unless compulsion were put upon them, for which purpose they were to be absolutely chained down. Undoubtedly the Bank seemed to be acting very foolishly, even with a view to their own interest, for in a pecuniary point of view, the plan was most favourable to them. At least, therefore, the Bank were acting upon a disinterested principle in opposing the plan, unless it were to be supposed that they did not understand what was, or what was not, for their own benefit. Was it not, however, extraordinary, that so much pains should be taken to obtain a security from the Bank, and that the House should take it for granted that government would do what 730 was right? The evidence was directly in the teeth of this, for it showed that the Bank had uniformly endeavoured to do what was right, and that government had as uniformly resisted it. The crime of the Bank, if crime were the proper word, was that which had brought many men to ruin—keeping bad company: they seemed to have had a blind affection for, and a foolish confidence in, the chancellor of the exchequer, who had now reduced them to this melancholy pass, and a melancholy pass it was indeed. The course of things had been this:—In 1816, parliament passed a bill, declaring that cash payments should be resumed in 1818: the Bank took steps to effect it, by advertising that they would pay a certain portion of their notes in specie: in the year following, 1817, they went farther, and agreed to pay all notes dated before January of that year, amounting to many millions. But what did the chancellor of the exchequer do? He stated in the House with the utmost triumph, that the Bank were paying gold, and that a specie currency was actually commenced. This was the same chancellor of the exchequer who now declared, that the Bank was not to be trusted. It was contended by the friends of the ancient standard of value, that the Bank ought then to have reduced its issues; but it now turned out in the evidence, that it had not been done, and that if stupidity were not the right word, as applied to the directors, guilt was undoubtedly the right word, as applied to the ministers. The evidence of Mr. Harman was decisive: he stated that the Bank did not decrease its issues, for it had no control over them, as the whole management was taken out of its hands by government. Was it not then most extraordinary, that no security was to be taken from the chancellor of the exchequer, while the right hon. gentleman was extorting the most peremptory securities from the Bank; in short, the shepherd was to be put into the stocks, while the wolf was to be allowed to prey upon the flock. He felt no regard for the directors in their corporate capacity; with three or four he was acquainted, and to one he was related, but private feelings should have no influence upon his conduct; and when he recommended that all the securities should not be taken from them, he did it upon public grounds. He could not figure to himself any thing more mischievous than for the government to hold 731 up the Bank to the world as unworthy of public confidence: a private establishment would have been ruined by it, and the Bank of England was now only to exist under the control, and at the discretion of ministers: the directors were no longer to decide upon the increasing or decreasing of their issues: they were not to be trusted with the management of their own affairs: three months ago the Bank was respected by all classes, even courted and conciliated by ministers: now it was abused by its oldest friends, and abandoned by the whole world. As long as there was a Bank it was our interest to maintain its character; upon that depended the estimation in which the public would hold the currency: and a more extraordinary recipe for. government was never heard of than this—that because some new light had broken in upon those hitherto "in middle and utter darkness," the strictest securities were thus to be demanded, and the utmost rigour displayed. Did he then not wish for securities? He did wish for them; and as the most effectual security, he required that the Bank should be paid the advances it had made to the full extent demanded. If they wanted 10,000,000l. let them be paid, and then let the House pass some 6trong resolutions, that at the time appointed a specie currency should certainly be restored. Thus the whole responsibility would be thrown upon the Bank, and harmony might yet be restored, if all communication between the Bank and government had not been quite cut off. The House had seen some strange political reconciliations among ministers, and sure he was that a re-union between the chancellor of the exchequer and the Bank would be much more to the advantage of the country than the personal coalition to which he referred. The Bank would then have no excuse for neglecting to prepare—nay, he would go the length of saying, that if after the repayment of the debt, it did not take the necessary steps to resume cash payments, it would forfeit its character, and he for one would vote its conduct in such case a violation of its charter, and support the appointment of a new Bank, and the annihilation of the old. If the directors deservedly forfeited confidence, away with them; but it was most unfair that ministers should insist that the machinery of Thread needle-street should work as easily as ever, and yet withhold the very oil from which it derived its 732 facility. His firm conviction was, that after what had passed, if the 10,000,000l. were paid, the Bank would be ready in two years or sooner to resume cash-payments. He was one of those who believed that the ordinary current of the Bank, unless checked by war, a deficient harvest, or some other cause of equal power, would necessarily bring the exchanges right, and that in healthy times it would be found much more difficult to get the gold out of the country, than to entice it into it. For this opinion he could state many reasons, were he not afraid of wearying the House. The House would do well to consider what the consequence of the postponement for four years would be, and in what a state of jeopardy the government would be placed in the event of the breaking out of a new war. If in the course of 4 years such calamity might be expected, was it any thing less than madness not to have made arrangements sooner? All these things pressed upon his mind in favour of the amendment which provided that the Bank should be paid its advances in certain proportions monthly to the extent required. Yet to vote the money for such a purpose was doing nothing; the House had voted it last year, but the chancellor of the exchequer had never paid it: it now appeared that the directors had had some communications with the chancellor of the exchequer and lord Liverpool, with a view to resuming cash payments in July: it was agreed that a million a month should be repaid to the Bank, and parliament confirmed this understanding by its vote; but what was the result? The chancellor of the exchequer paid 750,000l. in May-refused to disburse a shilling more, and now turned round upon the Bank and accused it of being negligent and improvident. It turned out also on the evidence, that the Bank had remonstrated against the foreign loan as injurious to the exchanges, and this previous to the proposal of the renewal of the restriction; yet the chancellor of the exchequer had come down to continue it only for one year, when he must have been morally certain that a specie circulation could not be retored by the date appointed. Thus he had wilfully deluded the country, and yet wished to appropriate to himself all the confidence the public justly felt in the Bank. The directors might have been duped, but at least their dupery was less injurious to the nation than the conspiracy||733 of ministers. He was far from concurring in the wild and visionary doctrines set forth in some of the pamphlets published on the subject: but when he found that so many men of good intentions were hostile to the present plan, he could not help thinking that there was something at the bottom wrong. It would be asserted, no doubt, that such men did not understand what they were talking about—that they argued against the principles of such and such approved writers; this might be a very pleasant answer for ministers, but it would not satisfy those who would be severe losers by the scheme. Next it would be urged, that such doctrines encouraged panic, but it was one of the chief beauties of the amendment, that it put an end to all causes of alarm. However, panic was a very favourite word on the other side; but had not a man, with a 10l. note, some cause to complain, who, when he took it to the Bank, was told it was good for nothing, unless he could bring with it others to the amount of 240l. This must excite in him a degree of alarm for the consequences; and yet, because he could not command the sum required, he was to be denied his gold. Suppose he wished to bury it in his garden—suppose he told the Bank that that was his fancy: the answer would be, that the legislature had prevented it. What would be the result? It was a necessary part of the plan that Bank-notes should be made a legal tender, but that could not be effected without gross injustice. The distinction between a person with 240l., and another who had only 10l. in Bank-notes, was most iniquitous: the one might amass his ingot, while the other could only trust to his paper. Suppose a man having a 10l. note in his hand, were to walk into the Bank, and demand gold for it. "No," replies the clerk, "you shall get no gold for that, but go back and procure 240l. and then you shall have an ingot. If you are frightened about the value of the Bank notes, more shame for you; a man of your limited fortune has no right to be frightened." It had been, said that no evidence had been called before the committee as to the merits of this project, and it was an extraordinary truth, that from the moment it was resolved upon, no human being was consulted as to its effects. It was made a point of honour that the directors should have no communication with the committee; they were tattooed, and driven 734 out of the room, and day after day performed at the door a melancholy quarantine. At the present moment, excepting privately, ministers knew nothing of their opinions, and the plan before the House. They had, indeed, been asked about Mr. Ricardo's system, and their answer was not one of the wisest, when they spoke about paying at the Mint price of the day. Mr. Baring was the only soul who had been asked a question on the subject, and he distinctly stated it as his opinion, that the best course would be to leave to the Bank the conduct of its own concern, repaying it the advances which it had made to government. Ministers must, therefore, not be much surprised, if they found the plan scouted out of doors. If the claim of the Bank were allowed to the extent of 10,000,000l. not only all indelicacy would be avoided, but the security would be greater; and if government were to be trusted at all without any guard upon their conduct, there was no occasion for the plan. Parliament would probably meet before either February or October; and if in the intermediate time the Bank did not take the necessary steps to resume cash payments, it would then be sufficiently early to call the directors before the House. There was no difference in allowing the Bank two years, and limiting it to short periods, excepting that the latter fettered all discretion. There was another argument in favour of the amendment of his hon. friend: could any one doubt that the plan of the right hon. gentleman was the cause of the depression of the funds? Would any commercial man hesitate to say, that if the amended plan were adopted, the consequence would be an immediate rise in the funds? He was himself satisfied of that fact. How could the conduct of the chancellor of the exchequer produce credit or confidence in government, when even in time of peace he was about to have recourse to a loan? The machinations of government had already reduced the consols to 66. Was it not a material object at a time like this, when there was so much alarm, and so much cause for it, to do every thing which could tranquillize men's minds? Oh but, says the chancellor of the exchequer.—"Who cares for alarm? Rely upon me and all will be right." But who could rely on men governed by no fixed opinion, who to-day professed themselves converts to right principles, because they could not help themselves; and who to-morrow 735 would return to their old errors and absurdities, if left to their own wills? One right hon. gentleman had triumphed over his colleagues in having maintained a consistent opinion from the beginning, and he sincerely congratulated him on such a cause of triumph, because he felt that it was a benefit to the country that such opinions should be held by a man in high office; but his colleagues were not entitled to respect or confidence for one moment, after the disgraceful part they had acted. One minister had maintained what was right, that the issue of paper governed the price of gold; while another as strenuously insisted that a pound note and a shilling were equal in value to the guinea. But the joke was, that the chancellor of the exchequer, who had broached the last enlightened maxim, now asserted with all his might that a pound note and a shilling would not purchase a guinea. Would it not be a disgrace to the House to keep on its journals such a resolution as that he had now alluded to, in conjunction with the resolutions proposed this night? The principles of the two were diametrically opposite, and to reconcile them was impossible. Ministers now wished to have the credit of taking an enlarged view of the question; but sad work they made of it. What defence they could set up he knew not; and how, notwithstanding their sudden change to just principles, they could acquire the confidence of the country, he was at a loss to discover. The right hon. gentleman and the noble lord had in fact entered into the committee without any plan of any kind, and for any good they did, Gog and Magog might as well have been sitting on each side the chair. There they might have remained, had it not been for the ability of the chairman who had helped them out of their scrape. By some good luck a plan came to them, either by the two penny post or by some other conveyance; immediately they took hold of it, they shouted Te Deum, and thanked God for sending them a scheme which was directly in the teeth of the whole system on which they had acted for the last 25 years. He should recommend the amendment of his hon. friend, as most likely to conciliate the public mind, and to allay these alarms which had sprung out of the bad management of the chancellor of the exchequer. He should therefore propose, either that the amendment be adopted, or that the House should adjourn the farther 736 consideration of this momentous question.
The Chancellor of the Exchequer
said, that he would not content himself with a silent vote on the present occasion, lest it might be imputed to him, that he gave merely a sullen acquiescence in the plan proposed by his right hon. friend. So far from that, it received his most cordial approbation, persuaded as he was, that it was admirably calculated to insure that most desirable object, the resumption of cash payments. Had he felt differently, he trusted that he should have had the candour to express his opinion without reserve. He had always been of opinion, that it was highly advisable, that the restriction should be removed whenever the commercial and political relations of the country, rendered such a measure safe and practicable; and it was on that ground, that he had, on a former occasion, proposed to the House a resolution to that effect. Such was still his opinion; front that opinion he should never deviate; and, therefore, he could not be charged with inconsistency on that score. He had never argued or imagined that this country could, with safety, persist in upholding a paper circulation, without a fixed standard of value; contrary to the practice of every other nation. The committee, at the commencement of their deliberations, had determined to avoid all theoretical reasonings, and to address themselves to the practical part of the question. That was the course which he intended individually to take on the present occasion. He by no means wished to shrink from any opinions which he had formerly avowed; but he begged that the House would take those opinions from the printed documents, from the resolutions on their journals, which he had had the honour of proposing to parliament, and from his own recorded arguments, and not from the representations of those, who, without much regard to candour or civility, had chosen to state them for him. The extraordinary pressure of the times had rendered a temporary suspension of metallic payments (however the necessity of such a deviation from ancient principles might be regretted) wise and politic; but he could assure the House, that the object of government had always been a return to cash payments as soon as possible. The question therefore was not whether they should or should not return to cash payments; but what was the fittest opportunity, and most convenient mode 737 of accomplishing that purpose. The object of the proposed amendment was, to get rid of the original resolutions, and of the whole plan of the committee. He could not therefore consent to its adoption; although he had no objection to that part of it which suggested the repayment of the advances from the Bank to government, to be made in monthly instalments, except that it might not be advisable to restrict the proceedings of the treasury to so precise a course. That, however, was a matter of detail, which might be settled at a more convenient opportunity. Among the strange occurrences of the day, was the spectacle of the right hon. gentleman opposite, vindicating the Bank directors! It was the first time that he had been known to compliment them; but, perhaps the right hon. gentleman was the more readily induced to adopt this new practice, by supposing that it was at the expense of government. For the first time, the right hon. gentleman had discovered, that in all past proceedings between the Bank and government, the former was uniformly right, and the latter uniformly wrong. He had censured government for not repaying the Bank in 1817, but the Bank itself did hot wish it. It was not a little singular, that the hon. member who had moved the amendment on the present occasion, was one of a deputation, who in 1818 had waited on the earl of Liverpool and himself, to request, that the repayment might not be farther extended. The right hon. gentleman said, that the proposed plan held up the Bank directors to public obloquy. This he (the chancellor of the exchequer) positively denied. He had been too long acquainted with those gentlemen, to doubt their integrity and honour; but he did not on that account think the resolutions less necessary; for, whatever confidence he might place in the Bank, he was persuaded that nothing but the appointment by parliament of a specific period for the resumption of cash payments would satisfy the public. By the adoption of the resolutions proposed by his right hon. friend, the country would be approaching, with a slow but a sure step, towards the accomplishment of that desirable object. Without some preparatory measure like that now recommended, however great might be the exertions of the Bank to resume cash payments', the public would be as little prepared for such a proceeding: as they were at present prepared for 738 the resumption of cash payments in July next; although by the existing law the Bank was liable to pay its notes in specie at that time. The measure was therefore intended rather to warn the public to be prepared for such a change in the internal economy, of the country than to impose any constraint upon the Bank, or to exhibit towards it any distrust; and he was persuaded that such was felt to be its character by the Bank directors themselves. A variety of plans had come under the consideration of the committee, but he gave a decided preference to the one before the House. The plan which was founded on the principle, that the Bank should pay in bullion at the market price, afforded no advantage as a regulation of value; for the market price varied every day. Another plan recommended that Bank notes should not be paid on being presented, but only at the expiration of a certain period after. That, however, might cause a very injurious difference in the actual value of notes of the same nominal amount. The plan of restricting the numerical amount of the issues of Bank notes was also in his opinion very objectionable, and would place the Bank in an embarrassing situation; as there were many considerations to attend to besides the numerical amount of the issues, and as the fear of exceeding the amount prescribed by parliament would plunge the Bank into perpetual difficulties. The proposition for altering the standard could afford only a momentary advantage; and its fallacy had been sufficiently exposed by his right hon. friend. Having thus briefly hinted at the different measures, which had been suggested in competition with the plan suggested by the committee, he would now turn his attention to the objections that had been raised against the resolutions proposed by his right hon. friend. And first, with regard to the regulation for the permanent resumption of cash payments in four years. In the hon. gentleman's amendment the term of three years was proposed. Now, according to the regulations recommended by the committee, a regulation would take place almost amounting to cash payments at the expiration of two years, and therefore earlier by one year than the hon. gentleman proposed. The right hon. gentleman had asserted that public opinion was against the plan. It was true' that public clamour had been excited against it; but he trusted that the discus- 739 sion then in progress, and that which had taken place in the other House of parliament, would disabuse the public mind, and allay its temporary fermentation. A depression of the funds had unquestionably taken place; but he denied that there was any thing in the plan to occasion it; and he hoped a few days given to the consideration of the plan would induce the public to concur in his conviction of its superiority to every other proposition that had been made. It appeared to him that, however desirable the resumption of cash payments was, the public had hitherto experienced no inconvenience from the paper currency, as it had answered internally every purpose of metallic payment. The proposed plan, however, would prove highly advantageous by providing against any unforeseen event, arising from public alarm, or sudden commotion. The right hon. gentleman had, in one part of his speech, alluded to the evidence before the committee on this subject. Now, on a reference to the report it would appear, that of fourteen gentlemen examined by the committee, ten, including the governor, and deputy-governor of the Bank, were in its favour. Three (Mr. Rothschild, Mr. Smith, and Mr. Harman) were certainly against it; and one (Mr. Ward) gave no decided opinion on the subject.—Referring to Mr. Baring's evidence, which was certainly the most important of any, from the detail of facts and reasonings into which that gentleman had entered, he must say that he could not avoid thinking it very extraordinary that the right hon. gentleman should describe that evidence to be unfavourable to the proposed plan. So far was that from being the case, that a perusal of Mr. Baring's evidence would show not only that he had expressed his approbation of the plan, but that he had explained in the clearest manner the grounds on which that approbation was founded. Mr. Baring had declared that he thought the plan perfectly practicable, and in fact that it was a plan which had long been in operation in the Bank of Hamburgh, one of the most esteemed in Europe for its mode of conducting business. In the opinion of Mr. Baring, he (the chancellor of the exchequer), on the best consideration that he had been able to give to the subject, perfectly concurred. He was confident that when the arguments in favour of the plan became generally known, the alarm that had been felt would be dis- 740 sipated. As to the allusions which had been made to the financial conduct and operations of his majesty's present government, he should only remark, that it was not often that a government had undergone such an ordeal. All its most secret transactions had been brought under review; and he thought it not a little creditable to it, that the right hon. gentleman had discovered so little to find fault with. He should sit down, with the natural anxiety which a member of the government must necessarily feel as to the judgment which parliament would form of its conduct, but with perfect reliance that nothing would be discovered to impeach its integrity, and that the deliberate voice of parliament would confirm its judgment.
§ Mr. Manning
said, he had to plead the example of an hon. member who had preceded him, for referring to what had passed in another place. Much stress had been laid in that place by a noble earl on a paper which was" presented to the House, containing a calculation of the number of days during which all notes from 1l. to 1,000l. circulated. Though this paper was curious, no inference whatever could safely be drawn from it, on account of the entire alteration of the practice of the bankers since the restriction. Previously to 1797, it was well known, that when a banker received a note he put it into his till, and paid it out again to the individual who had a demand on him. But at present it was the practice of the bankers to send in their parcels of notes to the Bank, from one to sixty parcels in a day, with an earnest request to the clerks not to mix them, that they might be able to trace them to their customers. Any gentleman who drew a check on a banker must now perceive, that it was always paid in new notes, which were regularly supplied from the Bank of England. The inferences which were drawn from this curious paper, that so many millions of notes supported so many hundred millions of circulation, were, by this plain fact, shown to be entirely "worthless. The "right hon. the' master of the Mint had said, that he had gone into the committee with an intention to fix the resumption of cash payments at a distant period; but that his opinion had been entirely changed by the communication of the directors of the 25th of March. He did not intend to defend all the proceedings of the court of directors, or of any court; bat it was to be recollected, 741 that they could not apprehend any thing for themselves, and that the solicitude they had expressed was for the country. They were anxious to allay the alarms which had been spread throughout the country; and he was authorised to say, that the Bank directors were taking no steps at the present moment to reduce the circulation of the country or cramp its agriculture or commerce. But if the House withdrew its confidence from the Bank at a moment like the present, they could not be answerable for the consequences. At present there was, however, no ground for alarm, though he warned the House that if the resolutions were passed they might have a tendency to! create a foundation for it. To-prove the sincerity of the Bank in its desire to resume cash payments, he referred to the evidence, p. 150 and 151 of the Appendix, of the governor and deputy governor, and Messrs. Thornton and Harman. But he knew not how any one could doubt the sincerity of the Bank, after the issue of six millions of gold in 1817, and their engagement to pay many millions more. However their wisdom, might be called in question, he knew not what better evidence could be afforded of their sincerity. The resolutions, if passed in their present shape, would have the effect of-fettering the Bank so as to cause an inconvenient reduction of the currency. He referred to the case or 1796, when the bank notes were reduced from 14 to 9 millions,. and through the scarcity of money the consols fell to 47, though notwithstanding this the restriction was deemed necessary. The issues of the Bank, he contended, did not solely, regulate, the price of bullion, for when Buonaparté landed in France gold fell 18s. per oz and when, the battle of Waterloo had been gained it fell 15s. though the amount of notes were the same in both cases; With the three first original resolutions he agreed; but from the others he should dissent, as the obligation on the Bank to pay at the intermediate times in bullion, at a certain price, without reference to circumstances, might have a mischievous effect on the country. He should, if nothing else was proposed, vote for the resolutions of the hon. member for Coventry. There was, however, one part of those resolutions from which he dissented, namely, that which forbad the Bank from purchasing government securities. He called to the recollection of the House the sacrifices 742 which the Bank had made for the service of the country. When subsidies were paid to foreign powers, they had purchased gold without considering the loss. When the duke of Wellington was in the peninsula, they had never hesitated a moment in procuring, at any price, the gold required for the public service. At a time when a silver coinage could not have been effected, they had supplied its place with tokens at a loss to themselves, according to the best estimate, of a million sterling. Great had been the sacrifices made by the Bank for the convenience of the public service; and those sacrifices had been always submitted to cheerfully. He objected to any scale in the price of gold between the present period and 1821, because he was persuaded, that at that time, unless any unforeseen circumstances intervened, cash payments would be resumed; of this he was certain, as far as human foresight could go. With reference to the Bank restriction act, if bank notes at the time of its enactment had not been so scarce, that measure would not have been necessary: and he only feared that if the present measure were pushed too far, we should be much in the same situation we were in at the time alluded to. He must therefore vote against the resolutions which followed the first three; the fourth and fifth he most decidedly objected to.
§ Mr. Ricardo
said, he was fully persuaded of the truth of the declaration of the hon. director, that the Bank wished to resume cash payments, but he was just as fully persuaded that they did not know how to set about it. When called before the committee, the directors individually admitted that the price of bullion and the rate of exchanges were affected by the amount of their issues; but when collected in their own court they resolved that "they conceive it to be "their duty to declare, that they are unable to discover any solid foundation for such a sentiment." And now, in the Remonstrance which they have made to the chancellor of the exchequer, they again admit that the exchanges are affected by their issues, for they condemn the measure recommended by the committee for restoring the exchange to par, on the ground of its being calculated to force them to contract the amount of their circulation, which they represent as fatal to the public interest. When they avowed such inconsistent opinions, and after the 743 experience which the House had of their conduct, it would be the highest indiscretion in parliament not to take out of their hands the preparations for the resumption of cash payments. He did not think this a question only between the Bank and ministers, as it had been argued by his right hon. friend (Mr. Tierney), but rather one between ministers and the Bank on one side, and the country on the other. He was therefore disposed to concur with his right hon. friend in any measure which might be devised to keep the ministers also under control. One principle was clear, it was of the utmost importance in the consideration of this subject, it was this, that those who had the power of regulating the quantity of the circulating medium of the country, had the power of regulating the rate of the exchanges, and the price of every commodity. This power clearly resided in the hands of the directors of the Bank, and it was a most formidable one. It quite astonished him that Mr. Harman could imagine that it was in the power of an individual to influence the exchanges against the wish of the Bank; which was just as reasonable as to suppose that an individual, could regulate the price of corn or any other commodity of general consumption. This question was one of immense importance in principle, but in the manner of bringing it about was trivial, and not deserving half an hour's consideration of the House. The difficulty was only that of raising the currency 3 per cent in value [Hear, hear!]. And who could doubt that even in those states in which the currency was entirely metallic, it often suffered a variation equal to this, without inconvenience to the public [Hear!]. In this country we had nothing but paper in circulation, and therefore every variation in he value of our currency was shown by the price of gold, but where metal alone circulated, it could not be doubted that gold might, from various circumstances, become more or less valuable, and thus affect all contracts, though from their being no other standard to measure it by, its variations were less palpable. His particular reason for supporting the measure under consideration was this. By withdrawing paper, so as to restore the note to its bullion value (an alteration, by the bye, only of 3 per cent.), the House would have done all that was required [Hear, hear!]. But if the House adopted the proposition of the hon. gentleman 744 (Mr. Ellice), another variation in the value of the currency would take place, which it was his (Mr. R.'s) wish to guard against. If that amendment were agreed to, an extraordinary demand would take place for gold, for the purpose of coinage which would enhance the value of the currency 3 or 4; per cent in addition to the first enhancement [Hear, hear!].—As to the plan under the consideration of the House, it was that which the Bank directors, if they were wise, should wish for [hear!]. They should wish to fill the circulation with paper, and so long as they had the privilege of giving, gold bullion for their notes, there would be no coin in circulation—they would have the monopoly. They had no real interest in the depreciation of the currency; it would be rather their interest to raise it, even to double the value. They were in the situation of creditors, not of debtors; their whole capital being in money or other securities representing money [Hear, hear!]. As to the resolution which bore that the government should repay the Bank a certain sum, he could not agree with it. The House having taken a security that the currency should be of a certain value, they had done enough, and should not farther interfere with the proceedings of the directors, who should answer to their proprietors only for the management of their concerns. The Bank might, if this resolution were agreed to, feel some difficulty in putting forth the amount of currency which was required. For though what the directors thought a check, namely, the rate of interest on money, was no check at all as to the amount of issues, as Adam smith, Mr. Hume, and others had satisfactorily proved; yet as the Bank directors were governed by certain traditional limits, or something like limits, in discounting to individual merchants, they might have difficulty in keeping up the requisite amount of currency. A director, in his evidence before the committee, had said, that the Bank did not confine themselves to this limit where the individual's credit was undoubted; but it should be recollected that the Bank was a cautious and timid body, and if they had no other means of supplying the requisite amount of circulation but by discounting bills, he feared the public might suffer from a scarcity of money. He was certainly for leaving them to conduct all such transactions according to 745 their own discretion and pleasure, provided only that such a check was established as should guard against a redundancy. The proposed mode of resuming cash payments appeared to him the easiest that could be imagined. The Bank would be placed under no restraint at first, nor any sudden necessity of reducing its issues. An opportunity would be afforded of effecting the object in the most gradual manner; and even when bullion payments should be made at the Mint price, the inconvenience would be but inconsiderable. Till October 1820, the Bank need make no reduction, and then a slight one [hear!] and he had no doubt that if they were cautious they might arrive at cash payments without giving out one guinea in gold. The Bank should reduce their issues cautiously; he only feared they would do it too rapidly [hear!]. If he might give them advice, he should recommend to them not to buy bullion, but even though they had but a few millions, if he had the management of their concerns, he should boldly sell. Every sale would improve the exchanges, and till gold fell to 3l. 17s. 6d. there would be no necessity for the Bank to make any purchases. He was only sorry that the Bank was not to be obliged by the resolutions to buy all the bullion offered to them at 3l. 17s. 6d. lest through excessive caution they might starve the circulation. The Mint, it was true, was to remain open to the public, who might coin the bullion which they obtained from the Bank. Mr. Mushett, whose evidence respecting the coinage was worthy of attention, from its accuracy and general ability, had stated, that with a capital of 300,000l. the Mint could supply the public with 12,000,000l. a year. Yet a year was a long time to wait for twelve millions, and it might easily happen, that in the interim between the reduction of the Bank issues and the supply afforded from the Mint, the country might seriously fed the deficiency. It was on that account that he should have wished a resolution inserted, to compel the Bank to give its notes for bullion (at 3l. 17s. 6d.) on demand. With the exception of this omission, the plan was, in his opinion, perfectly safe and gentle.—With regard to what had fallen from his right hon. friend (Mr. Tierney) respecting the graduated scale of payments not having been submitted to the directors, he referred him to the examination of Mr. Thornton before the Lords committee 746 where he would see that that gentleman's evidence was wholly in favour of the plan. He was quite astonished that such an alarm prevailed at a reduction of perhaps one million in four years, and could only ascribe it to the indiscreet language of the Bank [Hear, hear!]. The hon. director had that night told them not to withdraw confidence from the Bank. The House did not withdraw its confidence from the Bank from any doubt of its wealth, or integrity but from a conviction of its total ignorance of the principles of political economy [hear, and a laugh]. The Bank had had ample time to reduce their issues, so as to lower the price of gold; yet, in spite of the times repeatedly fixed for the resumption of cash payments, they had never done so. It was not the business of the directors to consider the interest of the public. That was the business of his majesty's ministers; and when the hon. director told them that the directors had lost so much on the purchase of gold, and so much on the issue of tokens, his question was, why had they done so? Their business was with the interest of the proprietors, for whom' they were trustees, not with the interests of the public. The directors were answerable to the proprietors for these misapplications of their funds. He (Mr. R.) had been astonished that the undivided profits of the Bank had been so small, which he should have imagined, must have at least amounted to ten millions; but now, by the confession of the hon. gentleman, the matter was explained. The directors had scattered a million here and a million there according to their views of the wants of the ministry or the country, without any regard to the interest of the proprietors [Hear, hear!]. The hon. director had advised them not to cramp the currency, and had referred to their experience of 1797. But that was not a parallel case. It was a season of alarm and panic, when every man had wished to have gold in his house in fear of an invasion. His right hon. friend (Mr. Tierney) had asked, what, under the plan proposed was the holder of 10l. to do, for he could not get bullion at the Bank. According to the amendment, the right hon. gentleman was I in no great hurry to give this poor mart either bullion or specie. But were they doing nothing by the plan for the holder of notes of 10l.? The holder of a 10l. would be improved in 747 his condition; for by restoring the currency to its proper value, and by making 1,000l. worth what it purported to be, instead of what it now really was, worth only 970l., his note of 10l. would be proportionally increased in value. Although he should not go to the Bank for gold, he might resort to any goldsmith who would let him have the proportion of gold to which his note was entitled; and the difference to him would be so trifling, as not to be worthy of consideration in the decision of a great question.—It had been said, on the part of the Bank, that, they were ready to pay, if repaid the advances which they had made to the government. But how came they to make those advances to government, if not assured of repayment at a certain time? The Bank had not been forced to make those advances, but the directors had such an extraordinary disposition to act as ministers [a laugh, and hear, hear!]. It would however, be better if those directors would rather attend to their own interests, and those of their constituents. A most fearful and destructive depreciation had at one time taken place; but from that we had recovered, and he was happy to reflect that we had so far retraced our steps. We had nearly got home, and he hoped his right hon. friend would lend them his assistance to enable them to reach it in safety. He would venture to state that in a very few weeks all alarm would be forgotten, and at the end of the year, we should all be surprised to reflect that any alarm had ever prevailed at a prospect of a variation of 3 per cent in the value of the circulating medium. His own general opinion was, that an unfavourable state of exchange must always proceed from a redundant currency. If corn were imported and paid for in bullion it was a proof that bullion was the cheapest commodity. Suppose all the Bank-notes now in circulation to be withdrawn, and their place filled by gold coin, would not gold become infinitely cheaper? If our paper had been of any intrinsic value, it would, having become cheap from excess, have been exported also. He thought it right here to pay the tribute of his approbation to the late excellent regulations of the Mint. He entirely approved of making gold the standard, and of keeping silver as a token currency. It appeared to him to be a solid improvement in the system of our coinage. Nothing, could be clearer than that government had the power, by 748 limiting the quantity, to regulate the value of the silver; it was on that principle that the committee to all other persons recommended the reduction of paper currency. The hon. gentleman (Mr. J. P. Grant) indeed had observed, that the silver coin might be imitated abroad; supposing this to be the fact, the value of the silver coin might be lessened, but that of the gold would not therefore be raised. The silver was not a legal tender above 40s., and gold might always be demanded. It was true that 105l. might be offered in silver instead of 100l. in gold; but this could have no effect in altering the relation between gold and all other commodities. He should be happy to argue this question with the hon. member or with the, noble "Old Merchant," [a laugh!] on some occasion when it would be less irrelevant to the subject under consideration.—The hon. member sat down amidst loud and general cheering from all sides of the House.
§ Mr. Alderman Heygate
then addressed the chair, but the impatience of the House produced a temporary confusion, in the midst of which, after one or two observations, the worthy alderman sat down.
suggested, that as there was but little hope of the House being able to come to a decision on this important question that night, it might be more satisfactory to the worthy alderman himself that the debate should be now adjourned till to-morrow, when he would have a more favourable opportunity of stating his views to the House.
§ The question of adjournment was then put and carried, and the other orders of the day being disposed of, the House adjourned at two o'clock.