§ The House having again resolved itself into a Committee on the Reports of the Secret Committee on the Resumption of Cash Payments by the Bank, the adjourned debate was resumed.
§ Mr. Alderman Heygate
said, he should experience great embarrassment in opening the debate, did he not feel the vast importance of the subject to the comfort and subsistence of the people, and that on such a topic the fascinations of wit and eloquence served rather to bewilder, than to guide the judgment. The question was one of practical importance and on which practical men were most competent to give that information which the nature of the subject required. There was no man in that House, or throughout the country, who more deeply regretted the present state of our currency than himself; no one who more deeply regretted our departure from its ancient standard. Had he sat in the House at the time that the Bank restriction act was first proposed, he should have opposed it, not only on account of the innovation which it constituted upon our former system, but on account also of the fatal consequences which he should have foreseen would inevitably follow. But that restriction was then the consequence, right or wrong, of a war which this country chose to wage, and which, had it continued one month longer would have been her ruin. On the subject before the House, he felt that the opinions he entertained, although they were lately those of parliament and of his majesty's ministers, were not such as were at present popular. He well knew that it was generally held, that our paper was depreciated to a certain extent. He could only say, that great as the authorities, and splendid as the names were, which were cited in the Bank report, as supporters of that opinion; yet his own research and inquiry, which had been extensive and unremitting, had convinced him, not only that no such depreciation did now exist, but that it never could||751 exist. Before they proceeded to discuss the effectiveness and policy of the measure before the House, it was necessary that they should come to some conclusion upon the main question—Was our money depreciated or not? If that were true, then, indeed, they were called upon to devise a remedy for the evil. But if the great fluctuation, for instance, in the price of gold, which was in some instances one of not less than 18s. per ounce per month, resulted from causes that more or less affected the currency of every country, then it was hardly proper to interfere in the manner now proposed. Was the circulation of this country at the present moment excessive or not? If it was, there could be no doubt as to the immediate necessity of investigating and removing the causes of such excess; but if it was not, parliament should pause before it put in force legislative enactments which would occasion only the most distressing consequences. It could not be an excessive circulation, when it was remembered that it was now the same as in the year 1792. It could not be excessive, if a man considered the enormous increase of taxes and property: if he considered, that, taking the two periods, it would be found, that the revenue had increased from 16,000,000l. to 54,000,000l.; that the national debt had advanced from somewhere about 240,000,000l. to 800,000,000l.; that the number of large inclosures, docks, public buildings, and magnificent structures, had advanced in an equal ratio. When to this was added the vast and rapid increase of our commercial relations, he was sure no man could consider that the currency had not been enlarged, without astonishment. Great stress had been laid on the consideration of the superior rapidity with which a Bank note now performed its evolutions, as compared with the rate of its circulation in former periods. He thought that argument had received a satisfactory answer from the honourable Bank director on the preceding night, and he could not pretend to add any thing to what had already fallen from him on that subject. The fact was, that the difference was to be attributed solely to the alteration which had taken place in the mode of conducting the banking system. In the year 1809, it was supposed that the whole amount of Bank notes in circulation was not equal to the entire currency in 1792, and from this it had been inferred by the right hon. gen- 752 tleman, that a much smaller quantity was requisite for carrying on the same number of transactions now than it was in 1792. The fallacy of this supposition arose from the wrong estimate formed of the circulation of the country banks, which had greatly extended itself in the intermediate time. With respect to the argument founded on a comparison with the price of gold, and implying that the price of gold might always be regulated by a reduction of paper, it appeared to him utterly erroneous. As an example of its fallacy, he would refer to the circumstances of November 1817, when the notes in circulation exceeded 29,000,000l., and the price of the ounce of gold was 4l. 0s. 6d. Since that period there had been a reduction of the paper to the extent of 3,000,000l., and yet the price of gold had, during nearly the whole interval and the progress of this reduction, been somewhat higher. He might, were he not afraid of wearying the House, mention a hundred similar instances, but one was sufficient for the purpose of his argument; for if such a result happened at one time, it might happen at any other. Gold at one period had been as high in the market as 5l. 4s. per ounce; and according to the principle contended for on the other side, it could only have been brought down to its present price, by a reduction of 30 per cent on the amount of paper in circulation. No such reduction had, however, taken place, and the price of gold had fallen to 4l. 1s. He hoped the House, therefore, would consider well what principle it was about to establish for the future regulation of the currency, and pause before they imposed on the Bank the necessity of constantly referring to the price of gold, as the only standard for the extension or diminution of its issues. It had been justly stated, that the circulation of the country banks was governed by, and dependent upon, the circulation of the Bank of England. Although he was aware that some persons dissented from it, he himself fully admitted the accuracy of this proposition. Let the House advert, then, to the internal state of this country in the year 1816. At that time paper was on a par with gold, and yet, such was the calamity, and so extensive the distress, at that unfortunate period, that it pervaded every part of the country. The land proprietor could get no rent, the labourer no employment, and bankruptcy occurred in all quarters. Now, ad- 753 mitting that by the next autumn the foreign exchanges should become favourable, the price of gold fall, and the harvest prove abundant; yet every prudent banker would limit his issues, and every prudent merchant and manufacturer his transactions, if the proposed plan should receive the sanction of parliament; and the consequence must be general embarrassment and distress. This anticipation was supported by all the evidence produced before the committee, and in a remarkable manner by that of Mr. Baring. No one could doubt the competency of that individual, who was perhaps the most enlightened merchant in Europe, to form a correct judgment on this subject. But if, on the other hand, the price of gold should rise, and the harvest prove unfavourable, the situation of the country must be more calamitous than any which it had yet experienced. Agricultural produce, although depressed, would be burthened with a weight of taxation imposed under a different system, and would be of less value than before it was imposed. All the industrious and commercial classes must suffer severely. The right hon. gentleman who moved the resolutions who had spoken with so much ability and eloquence on this question, and from whom he was sorry to differ in opinion, had eulogized the conduct of queen Elizabeth in having raised the value of money. There was, however, a great distinction between the period of her reign and the present. The country was not then burthened with a national debt of 800,000,000l., and a revenue of 54,000,000l. What might have been a wise and just and magnanimous policy in that princess, might be highly disadvantageous at this moment. It appeared to him quite fallacious to suppose, that if the proposed plan were adopted, the price of gold would remain as it was at present; for who could say what the, price would have now been, if the Bank had not sent into the market the gold which had been issued by them for the purposes of circulation? How did they know that in February next, the price of gold would be at 4l. 1s. per oz.? If any important events should occur abroad— suppose, for instance, the decease of the reigning prince in France—what security was there that foreign Jews, who well knew what a point the price of gold had reached a few years since, would not deem it a good speculation to make a run upon the Bank of England? In such a case, the 754 situation of the Bank, and indeed of every country bank, must be full of difficulty and hazard. Their only chance of safety might consist in an appeal to parliament, which might not be sitting at the time, and which would naturally be reluctant to interfere, till great distress and inconvenience had been actually undergone. If, however, the recommendations of the report were adopted, every merchant, manufacturer, and banker, would regulate his dealings with a view to the possibility of such an event. There must, consequently, be but little employment for labour, and a great increase of the poor-rates. He knew this to be the feeling and expectation of a large portion of that part of the community engaged in carrying on our agriculture, commerce, and manufactures. With regard to the evidence produced before the committee, he admitted that it had been furnished by persons of great talents and respectability, but they were chiefly London merchants, Bank Directors, or dealers in bullion. None of them were engaged in agriculture or manufactures, and but one country banker had been examined. He did not think the House ought to legislate to this extent, and on a subject of such general importance, upon evidence thus circumscribed. The merchant was in a very different situation from the manufacturer or agriculturist. He had a control over his capital, and could speedily convert it, if it should be his interest or his pleasure so to do. This was not the case with persons engaged in other pursuits, and they stood, therefore, in need of farther protection. Much mischief had been done already, and there was a strong contrast between the state of the country when parliament assembled, and its situation since the appointment of the secret committees. At the former period, credit was high and commerce flourishing; at present, all was stagnation and distress. It was an error to suppose that this distress would soon be at an end. The fall in the price of the funds might be immaterial; but land and manufactures would not easily recover from this depression, at least unless the effects of this measure should be mitigated by a prolongation of the time when it was to be put in execution. Unless this was done, he was satisfied that by Christmas next, there would be no rents paid, and that the utmost pressure and calamity would be felt throughout the country. He did not wish 755 to raise an unfounded alarm. He was stating his conscientious opinions, and should be happy to find that his apprehensions had been groundless. The only object of the new system was, to supply an invariable standard for determining the value of property; but if adopted without some qualification, no man could know what would be the value of his property in February next. It had been said, that before the restriction none of these evils were experienced; but he did not consider this statement correct; for in 1796 there had been very great fluctuations. There was, however, a material difference in the two cases. The mass of the circulation was at that time composed of gold, and there was comparatively but little paper for any sudden alarm to operate on. But in February next, nearly the whole circulation would consist of paper, and there would be but a very small quantity of gold to allay a panic if one should happen to arise. A run upon the Bank, under such circumstances, might compel it to stop payment in a fortnight. The country, which had so cheerfully borne the burthens of the war, did not deserve from government to be exposed to the hazard of losing its circulating medium. He had been astonished to hear from an honourable member (Mr. Ricardo), whose authority on these subjects he respected, an exhortation to the Bank to sell rather than buy gold, with a view to the commencement of this new system in February next. Many observations had been made on the condition of the labouring classes; but if that condition was worse than before the restriction, it must be imputed to the taxes, and not to the operation of that measure. It did not appear that the rise in the price of provisions was connected with the varying amount of paper in circulation; but, however this might be, those classes must suffer greatly by whatever should cause any sudden cessation of employment. He could not help thinking that the report was drawn up in a tone of too much interference with the affairs of the Bank, and that papers had been called for which belonged exclusively to the management of its private interests. The only inquiry which parliament was entitled to make related to the influence which the Bank exercised over the currency of the country. Now, the effect of this measure would be, greatly to increase its power over the currency. The circulation now amounted to 756 25,000,000l., of which 20,000,000l. was issued upon exchequer-bills, and over this the Bank could exercise no control. But a repayment of 10,000,000l. was in contemplation; and it was supposed that this would be restored to the circulation through the medium of discounts to private merchants. The Bank would thus have the power of dispensing this enormous sum amongst such individuals as it should think proper, and he would venture to state, that such a power never was before vested in the hands of any commercial body. He should support the amendment for postponing the period for commencing bullion payments till February 1821, in preference to the original resolution; both because the enlarged time would afford farther facilities for a change of system, and because he did not admit the policy of declaring to all Europe, that our paper currency was depreciated. With regard to the sincerity of the Bank, there could be no reason for entertaining a doubt, after what had been done by the committee, and said in that House; and he thought some portion of that confidence which had been hitherto reposed in them was still due. If they were unworthy of that confidence, they were unworthy to carry on the affairs of the Bank of England. He would only add one word more. If government had earlier paid the advances made by the Bank, the Bank would earlier have resumed cash payments; but since that had not been done, it was unfair to blame them for having delayed that measure so long. They were now called on to adopt this measure, before any preparatory steps had been taken for carrying it into execution. In his opinion, a part of the unfunded debt ought to be funded; and we should have ceased to make loans and increase stock before this plan was resorted to. In what he had said, he had been actuated solely by a deep and solemn conviction, that those who had studied this subject had been guided too much by theory and too little by practice. Let the House consider what the nation had suffered, and what burthens it was at present bearing. He was aware that it was now a fashionable doctrine, that great burthens were to be borne for the sake of the great benefits which resulted from the measures that rendered them necessary; and that it was also fashionable to represent the evils of our present situation as arising from over trading; but if there was at present a system of 757 over trading, it had arisen from the measures of government, which had afforded too great facilities to speculators. He wished to create no unnecessary alarm; he had stated his fears boldly and plainly, that they might be set at rest, and should sincerely rejoice to find them groundless. He could not say less consistently with his sense of public duty at this great crisis, and should look back upon the part he had taken in opposing this plan, with more satisfaction than to any other event of his life. He still hoped that ministers would abandon the graduated scale, and concur in that part of the amendment.
§ Sir H. Parnell
said, that he felt the propriety of stating the grounds upon which he was urged to oppose the amendment proposed by his hon. friend the member for Coventry, and supported by his right hon. friend the member for Knaresborough. Having for a series of years given all the consideration in his power to the question before the House, he thought it his duty to make some remarks upon the present occasion. As to the speech of the hon. member who spoke last, as nearly the whole of it was founded on the assertion, that there had been no depreciation of the Bank paper currency, no one could expect that at this period it could be necessary to go into any elaborate disquisition to reply to it. Those, indeed, who were not already convinced, by the facts adduced and the arguments advanced in that House, could be little likely to attend to any farther elucidation. In respect to what the hon. member had said of the probable bad effects of the proposed plan, the whole of his case was founded on a misrepresentation of the plan, and upon a supposition that things would certainly happen, that never could happen. But to return to a consideration of the merit of the amendment; it was quite a fallacy to maintain that which was offered in its favour, namely, that the effect of the prescription to pay Bank notes in gold, at the rate of 4l. 1s. an ounce, would be to introduce a new standard of value, because the rate of 4l. 1s. an ounce was only the relative value of gold to Bank notes. By the restriction act of 1797, we had suspended the legal standard of our currency, and we had no standard now, nor should we have one, until an act passed distinctly to alter the standard. But the very terms of the Resolutions with respect to the just period of payment in gold, decidedly negatived the notion that any idea was en- 758 tertained of establishing a new standard of value. His right hon. friend had observed, that circumstances might arise before May, 1821, which might induce those who were the warmest advocates of the old legal standard, to change their opinion and to agree to alter the standard to 4l. 1s. an ounce; but he could not contemplate the probability of such circumstances, after parliament had so long resisted all temptations to alter it; and therefore he could not accede to the amendment upon any ground of that nature. The fact was, that if this amendment were adopted, and the Resolution to which it referred expunged, the country and this question would be in the same state as both were at the commencement of the session. But parliament was called upon, by every consideration of policy, to make a distinct declaration of its desire, that the Bank should make payments in cash as early as possible, and that preparations must be made for a complete resumption of cash payments. If indeed parliament declined to pursue the course recommended by the Committee, the resumption of cash payments would be left to the discretion of the Bank, as on former occasions: and it was impossible that, from former experience, such a course could inspire confidence, or afford any satisfaction to the country. For if the discretion were left exclusively to the Bank to prepare for cash payments, there could be little doubt that they would contrive to render the exchanges unfavourable, and to raise the price of bullion a few months before May, 1821, or any other given period, and so to provide as good a case to call for the continuance of the restriction, as was brought forward at the commencement of this session. The project of the committee was, however, to deprive the Bank of this discretion, and in the policy of that project, he entirely concurred. The operation of the resolution to compel the Bank to pay at 4l. 1s. per ounce, would be to establish a positive limit to their issues; for if an excess of paper were issued so as to raise the market price above 4l. 1s., the Bank would buy bullion at a loss, an event they will carefully avoid. But it was not proposed in this project to produce any thing like a precipitate resumption of cash payments, as the worthy alderman, who spoke last, seemed to imagine. For all the evils which the worthy alderman so emphatically described, could only be apprehended from a precipitate or immediate 759 resumption of cash payments. Among what had been disclosed in the course of this discussion, he declared himself peculiarly gratified to witness the general acquiescence in those sound principles which were to be found in the Report of the bullion committee of 1811. Concurring, as he did, at the time, with the wise principles of political economy which that Report embraced, he was happy to find them now recognized by those who had the power to carry them completely into effect; because he was thoroughly satisfied, that the adoption of any system contrary to those principles, must be most injurious to the permanent and the best interests of the country. This triumph of sound principles of political economy was not only valuable for its present purpose, but for the effect it would produce upon all new measures of legislation connected with these principles. It would lead to clearing the Statute book of many most mischievous laws, and to prevent the adoption of many schemes founded on private and partial interests, and wholly inconsistent with the public interest. With respect to the operation of the plan brought forward by the Committee, it was a mistake to suppose that the adoption of that plan could serve to injure the interests of trade, as the only effect of it, relative to trade, would be to diminish that capital which was founded on fictitious credit, or to reduce overtrading; and every considerate friend to the real interest of the country, must wish for such an effect. Another error was expressed in the course of these discussions which rested on an apprehension of the consequences of a reduction of the circulating medium, through the adoption of a plan producing a scarcity of money. This error was founded upon a most mistaken conception of the character of a circulating medium, for what was called in trade a scarcity of money, did not depend on the numerical amount of the circulating medium, but upon the state of the markets. If markets were high, there was a ready sale of goods, and plenty of money. If markets were low, no goods could be sold except at a loss: every one was trying to borrow, who held goods, to enable him to postpone selling them, and thus the number of borrowers exceeded the number of lenders, and produced a scarcity of money. If such a scarcity was to occur, it would be owing to the effect of the plan on the markets, and on commercial credit, and 760 not to its effect in diminishing the circulating medium. The plan certainly might affect credit, by diminishing discounts, this was the only bad effect to be apprehended from it: but if the Bank acted wisely, and did not diminish their discounts, or their paper, but rather increased both for some time to come, no harm would be the result. There was another subject so connected with the question before the House, that he thought it peculiarly entitled to the consideration of parliament. He meant the usury laws. For it was evident; that if those laws remained in their present state they must operate very injuriously with regard to the supply of capital for the purposes of trade, by diminishing the means of obtaining discounts. Had the banking concerns of the country been carried on on the same principles of competition as prevailed in Scotland, the embarrassments of the present period, as to the nature of the engagements between the government and the Bank, would not have existed. He trusted therefore that when these transactions should hereafter engage the attention of parliament, measures would be taken to prevent the recurrence of such difficulties, by putting an end to the Bank monopoly; and that the whole conduct and general management of the banking operations of the country would not be suffered to continue exclusively between the government and one establishment composed of a few individuals. He should regret to see the amendment of his hon. friend carried, instead of the Resolutions of the right hon. gentleman. Should those resolutions be negatived, he despaired of ever seeing the ancient standard of value restored.
said, the House had resolved that it was expedient to return to specie payments as early as should be practicable; and they were now called upon to adopt the plan of the member for Portarlington, which went to provide that there should be no specie at all. The right hon. mover had professed himself unable to form an abstract idea of a pound sterling; and he proposed that the holder of a pound note should rest his confidence on an abstract idea of some other man's power of abstracting from the Bank a portion of its gold for the purpose of exportation, to no participation of which was his note to give him any title. The right hon. gentleman had, in no part of his speech, produced more effect, than by his citation from the 231st, 232nd and 761 233rd pages of lord Liverpool's Book on the Coins of the Realm, wherein he stated, that amidst difficulties and dangers, in war and in pressure, the coinage had been restored from great depreciation by Edward the 1st, by Elizabeth, and by William the 3rd. But had the right hon. gentleman only looked to p. 30 of the same work, he would have found, that Edward the 1st was the first sovereign, who, in his 28th year, diminished the weight of the coin, and reduced the pound sterling; that Elizabeth did nothing more than carry through the measures of the last year of Edward the 6th, when the right hon. gentleman would have found in page 92 of the book he has quoted, but it should seem rather cursorily read, that Henry the 8th having begun the system of debasing the coin in his 18th year, the ministers of Edward the 6th thought it too violent a measure to return to the pound in tale, as it stood before the debasement of the standard of the silver of which the coin was made; and therefore cut the pound Troy into 60, instead of into 45 shillings as before; the operation being executed, as lord Liverpool says, to the general satisfaction of the public; the fact being simply, that the adulteration, not the diminution of the coin, was the evil remedied; and that there was no great shock of values. These monarchs had no debt of 800 millions. The subject was tributary to the crown, not the crown to the subject; and the coin, if once improved, in so much improved their revenue, at every return of it to their treasury. William the 3rd certainly did restore the silver to its weight; and resorted to the expedient of a funded debt to support the measures of his government.—Mr.Gurney said, that he could not but adhere to the opinion he had expressed before, that the restriction had been caused by the growth of that debt, to an amount at which it could not be borne at the old values— that the remunerative price of every production had necessarily increased under increased taxation; and, though not in the same proportion, yet that the price of gold and silver had risen with that of other things.—The government at the peace had, in his opinion most wisely, put forth an excellent silver coinage, which was satisfactory to every body, cutting the pound Troy into 66s. instead of 62s. and he believed in his conscience, that if they had only put forth the sovereign at 21s. instead of 20s., we should have heard 762 of none of these revulsions, and difficulties, and alarms—that it would have been a measure of equal and substantial justice—and that all we have seen and all we have suffered from these repeated fluctuations of credit and consequent derangement of the saleable prices of all commodities, was to be attributed to this erroneous determination, that an ounce of gold should, under the taxation of a debt of 800 millions, pass for no more than 3l. 17s. 10½d. happen what might—from whence the necessary consequence has followed, that it has gone where it would purchase more.— The hon. member for Portarlington had stated the present difference to be only 3 per cent; but that merely proved the depression of price in all other articles; and it must be obvious that under this depression we could not go on—whilst the encouragement offered, was a three years' gradual enhancement of the value of the currency, which was equivalent to working upon a three years falling market; and instead of three per cent. he feared we must calculate whether our farmers and manufacturers could afford to drop 20 per cent upon their prices, and pay their taxes, their workmen, and their rents.— It had been objected, that an alteration in the standard would be a fraud on the national creditor—but, to say nothing of the comparative amount borrowed since the restriction, it should be recollected, there are two parties to a bargain. Had the national creditor called for this? How much of his capital had he lost already, even by the discussion? Had he thought this project really so beneficial to him, 3 per cent consols should have risen to 100 instead of falling to 66. But the national creditor saw, that encreased pressure on, those who must pay him his interest, lessened his security; and he would gladly continue to take his share, in a currency somewhat diminished in value, together with his neighbours—rather than risk the consequences of being exempted from that, which in fact, had operated as a kind of property tax on every man in proportion to what he had to receive; and which had ensured the regularity, if it had lessened the efficacy of the stockholders dividends.—As to the account between the government and the Bank, it seemed to be this: of 25 millions of Bank notes now in circulation, 20 millions were issued in advances to the government. The government had originally imposed the restriction on the Bank, after having drained 763 its treasure for foreign subsidies. The government had been throughout the borrower. The government had urged, and led the Bank—often unwilling—to extend its paper for their accommodation; and now the government turns round on the Bank and says, "We will pay you back half the accommodation paper, we have fabricated between us, and you must find all the bullion, which the public may want to supply its place, or the place of the coin which we have exported, or the public must adjust its reckonings as it can, without either Bank notes or gold." Whether this was very just, or very practicable, or very prudent if it were practicable, is one question—but the question before the committee is, whether they shall adopt resolutions which, shift the matter as you may, come to this— will you at this moment indefinitely increase the weight of your taxation, and diminish the means of bearing it, by cramping your present circulation, without the immediate substitution of a better in its place; and thus forcibly bear down your prices, to the certainty of producing an embarrassment and distress, of which it is not easy to foresee the issue?—Mr. Gurney apologised for thus standing forth against the current of prevailing opinion, and stated, that of the two propositions before the House, he should vote for the amendment of the member for Coventry; as it at least gave time for a revision of the Mint regulations; which, in his view of the subject, was the only measure which ought to be adopted.
observed, that he had that morning referred to that most excellent work, alluded to in the speech of the right hon. gentleman (Mr. Peel) last night, the work of the late lord Liverpool on coins; and he felt it necessary to say, that a different interpretation was given by the right hon. gentleman, both to the principle acted upon when the standard of value was fixed in the reigns of Edward the 1st, and queen Elizabeth, and to the observation of lord Liverpool thereon. It was true, that the measures of that period were the subject of rejoicing with the country, but it was not that the standard of value was raised, but that a fixed one was adopted. The great evils then felt, were similar to those under which the country during the Bank restriction suffered, namely, that nothing was certain or permanent, but that the standard fluctuated with the wants and distresses of 764 the government. Queen Elizabeth had only followed up the course commenced in the reign of her brother Edward 6th, who, though he lowered the standard, put an end to the uncertainty; and it was observed by lord Liverpool, that she did so in an inferior manner. The cause of the measure was, that the want of a certain standard of value occasioned frays at fairs and markets, and the people were glad to come to any fixed and settled principle, by which they might know the intrinsic worth of what they possessed, and thus be freed from those frequent occasions of quarrel.— He objected to the plan proposed in the resolutions of the right hon. gentleman, but not upon the principle. No man felt more strongly the solidity of the grounds on which the report of the bullion committee were founded, however feebly he might have given expression to that opinion; he did not, therefore, differ as to the principle of those resolutions, but he quarrelled with the mode in which it was to be carried into operation; he did not quarrel with the substitution of bullion for specie, on the contrary, he approved of it; but he disapproved of what he considered the positive injustice of returning to the ancient standard value. The general change of opinion that had taken place amongst those who on former occasions denied the validity of the arguments of the bullion report, was a convincing illustration of the advantages of public discussion on such questions. This remark he could not help applying to the worthy alderman who had opened the discussion this evening, and who had advanced opinions completely contradictory. Although strong opposition might be made to truth while prejudice prevailed, yet truth always prevailed; and he had no doubt that the worthy alderman, by exercising the ingenuity and candour which he evidently possessed, would bring himself to adopt that which he now opposed. The worthy alderman had denied that paper had been depreciated by the issues of the Bank, and yet at the same time admitted that the gold paid by the Bank had been raised in value, and sent out of the country by the issues of the Bank. The Bank" had paid gold, and at the same time issued their paper; the paper, not being able to go abroad, as having no independent value, remained in this country, necessarily depreciated; and thus the proposition which the worthy alderman had denied, that paper had been 765 depreciated, was established by the very fact which he had argued upon, that the gold had been driven out of the country by the issues of paper. He was sorry that the right hon. gentleman (Mr. Peel) had said, in making a manly confession of his error, that he felt no shame or regret in doing so. When the right hon. gentleman had so forcibly and justly described the great distress which the system occasioned, and when he had at the same time recollected, that he had always given his vote to ministers in resisting that inquiry which had been again and again called for from his lordship's side of the House, he could not help saying, that the right hon. gentleman might have spared a little regret, if not felt some shame, that he had assisted in resisting inquiry, and refusing the relief which was required. What were the opinions of the right hon. the chancellor of the exchequer, no man could tell. He adopted these resolutions, and yet he told the House that he retained all the opinions he had ever entertained on the subject—opinions diametrically opposite to the resolutions. The right hon. gentleman had not explained how this could be; and it was extremely difficult to conceive how the resolution declaring a one pound note and a shilling to be equal to a guinea, recorded in that House, and the resolution giving 4l. 1s. for an ounce of gold, could be entertained at the same time by the same unchanged mind [a laugh]. He knew not whether the noble lord near him (Castlereagh) had changed his opinion; but he did recollect that, on a discussion in that House, in the year 1804, on the Irish currency, when it was proved that the exchange between Dublin and London, where the currency of both was paper, was between five and six per cent below par, and when the exchange between Belfast, where a metallic currency existed, and Dublin, was six per cent above par in favour that Belfast, the noble lord had argued that such effects did not prove that the Irish paper currency was depreciated. He would be glad to hear how such a contrariety of opinion as the adoption of these resolutions manifested, could be reconciled or explained. He hoped the noble lord would give the House more information on this point than the finance minister had thought proper to do. His objection to the mode of recurring to cash payments, which the resolutions embraced, was, that it would occasion a degree of distress to the country which ought 766 not to be inflicted at any time, and least of all in the present time of pauperism and wretchedness. It would raise all money payments about 3 and ⅓ per cent. At that rate would the interest of the public debt and all fixed salaries be increased. He objected, too, to the repayment at this time of ten millions to the Bank. This sum could not be repaid but by a loan. A loan, it was believed, was to be contracted for to the amount of 22,000,000l. By raising the public debt at the rate of 3⅓ per cent. the country would have to pay 1,500,000l. more of taxes, the interest of the loan of 22,000,000l. would impose another million; and thus the country would in effect have to pay 2,500,000l. more in taxes. He put it to the House whether the country was able to pay so great an increase of taxes as 2,500,000l. This increase of burthen, too, was to be imposed at the time when the depression— although he did not believe that so much depression as some gentlemen represented, would be occasioned by the resumption, and its preparatory arrangements: yet he was convinced some depression would be occasioned—this increase of burthen was to be imposed when this depression made the country still less capable of bearing it.—It appeared to him most desirable, that in place of reverting to the ancient standard of value, that the present rate of depreciation should be taken, and the standard fixed in place of 3l. 17s. 10½d. at 4l. 0s. 6d. It would be said, that such an arrangement interfered with all existing contracts. He doubted the fact. The greater portion of these contracts must be supposed to have occurred within the last 22 years, the period when the suspension of cash payments commenced. As to any transactions since 1797, they had been entered into in a depreciated currency, and in that currency ought payment to be made? Since 1797, the currency had been often depreciated more than at present, sometimes even to 25 per cent. In contracts between individuals, there would therefore be more injustice in recurring to the old standard than in retaining the present depreciated standard. The same observation applied to the public creditor. The greater part, by far, of our debt had been contracted for in depreciated currency. It was very hard to call upon the country to pay for this debt in coins of the ancient standard. It was true, injustice would be done to the creditor who had given 767 the loan before 1797, but there was injustice in all cases, and his plan contained the less and avoided the greater injustice. By this plan, too, the objections of the hon. director (Mr. Manning) and other gentlemen would be met, who complained of resolutions that went to fix a rate for future transactions, while many unforeseen circumstances might render that rate extremely unjust. It was one great additional argument in favour of the plan, that it would facilitate the operations recommended in the resolutions, and shorten the time for final resumption. It also took away all pretence for ascribing difficulties that might arise to the return to cash payments. Any distress that might be occasioned by a stagnation of trade, or by overtrading, which he believed was the cause of much of our present distress, would be ascribed to the measures for the resumption of payments by those who now deprecated the resumption, and whose clamour would, on the pretence that every distress arose from those measures, increase till they could ultimately prevent the recurrence to cash payments. The graduated scale recommended in the resolutions he thought extremely objectionable. 4l. 1s. was the highest rate of payment, the lowest was 3l. 17s. 10½d. Great difficulty would be occasioned by this in all contracts. A lease would be taken when the rate was 4l. 1s.; in the course of three years, the rale would be 3l. 17s. 10½d., the rent would be increased 3 or 4 per cent. Again, a gentleman would borrow 1,000l. when the rate was 4l. 1s.; at the end of three or four years this gentleman would pay interest for more than the 1,000l. which he had borrowed. Me fell, he admitted, the force of the objection against the legislature acknowledging the depreciation of paper. It was an undeniable fact that it was depreciated, but ministers had formerly, in folly, denied this fact, and ministers now wished to establish it in injustice. The legislature could not without not only inconsistency, but injustice, acknowledge the depreciation, unless his amendment was at the same time adopted. This amendment would compel the Bank to fall in with the views of parliament. The Bank would, he apprehended, act now as they had done in 1816. He could not see how the proposed resolutions would convince the directors that parliament was in earnest in the desire to return to cash payments, since, in 1816, 768 no such conviction had been impressed on them. In 1816, it was well known that, in a full House, every speaker had been puzzling his brains how he could most strongly express the determined anxiety of parliament to return to cash payments at the end of two years. The directors at that time, expressed the utmost anxiety to resume their payments in cash, in two years. After the bill passed, they took measures to effect that object, and things were in a very promising train. The exchanges were favourable, and gold was so much reduced in price, that the Bank purchased a greater quantity of treasure than they ever had in their possession before. But, just as the time for resuming cash payments arrived, they completely overthrew the scheme—they issued a great quantity of paper and a considerable portion of gold. The exchanges became unfavourable—the gold went out of the country—and the directors ultimately came to parliament, declaring that the Bank would be ruined, if payment were insisted on. What was there, he should be glad to know, in the present plan, to prevent a similar course of operation? The Bank might go on purchasing treasure—they might place themselves in the situation in which they stood in 1817—and, by a fresh issue of gold and paper they might ultimately defeat the object which the committee had in view, as they had done in 1818. An hon. director had declared last night, that the Bank were sincere in their desire to pay in cash. He doubted it. As a proof of their sincerity, he had stated, that they paid away 7,000,000l. of gold, at a considerable loss. Now, the House might infer, and fairly infer, that, while the Bank were losing by the issue of gold, in their capacity of Bank directors, they were gaining a very great profit, by the sale of that article, in their capacity of bullion merchants. In the paper which the Bank had sent in to the committee, in answer to certain questions propounded to them, they said, that, before they resumed cash payments, they ought to have as much gold in their hands as they possessed when the Restriction act was passed, which was about 30,000,000l. exclusive of what they might afterwards be called on to pay for the notes they had at that time outstanding, being about 11,000,000l. Mr. Baring was of opinion, that they ought not to resume cash payments unless they had from 40 to 45,000,000l. in their coffers. Now, in 1817, the 769 Bank stated they had a greater quantity of treasure than they ever before possessed —say 40,000,000l. They said, at present, they ought to have gold to the amount of 30,000,000l. and a surplus to pay their outstanding notes, before they resumed cash payments—and to collect this they called for a delay of four or five years. They had used but 6 or 7,000,000l. for the exchange of notes. If, therefore, they had got rid of all this mass of treasure, it was clear that it must have been by some other operation than the payment of their notes [Hear, hear!].—They had bought gold at 3l. 18s. 6d.—but, after the operation they had performed in 1817, gold rose in price—and, though they declared that they lost 9d. on every sovereign they issued, there could be no doubt but that as bullion merchants, they made a great gain on the sale of a large quantity of bullion [Hear, hear!]. Therefore, he doubted their sincerity—for it appeared to him that they had a clear and manifest interest in the fluctuation of the price of gold. The hon. director last night complained of the want of confidence in the Bank. He had, two or three times in the course of his speech, declared, that if they withdrew their confidence from the Bank, the greatest calamity would befal the country. He must confess that he had not any great confidence in their wish to resume cash payments—and he conceived they had an evident interest in abstaining from them. On another ground, he thought they did not deserve confidence—they had no fixed or settled plan for carrying on their affairs. In 1816, when the subject of the restriction act was before the House, it was debated whether the Bank might not return to cash payments at their own pleasure, on giving notice to the Speaker, without any interference on the part of the House. He thought this object might be effected without giving any public notice. The chancellor of the exchequer said he had no objection, provided the Bank had none, and referred him to Messrs. Harman and Owen, the governor and deputy-governor of the Bank. He showed them the clause, to which they objected. He asked them their reason; they answered, it was giving them a discretion which they did not wish to have. His observation was, "that they might or might not exercise the power it gave them, as they pleased."— "No I" said they, "it is quite impossible—we will have no discretion. We wish to be in the hands of parliament— 770 and, if you give us this discretion, we must pay in gold the next day." What was their conduct now? They were crying out for discretion. Where then was their sincerity?—where their anxiety to pay in cash? Some years ago, a bill was passed in the House of Lords, in consequence of lord King's requiring his tenants to pay in gold, deducting a certain sum for the depreciation of the paper currency at the time. The bill to which he alluded went to make Bank notes, to a certain extent, a legal tender. That bill, when it came before the House of Commons, he (lord Folkestone) had resisted; because he looked upon the plan adopted by lord King, as a sure mode of preventing all the gold from going out of the country. It would, indeed, have had the effect of creating two prices; but still it would have preserved a portion of gold in the country. The Bank directors came down, and supported that bill, tooth and nail. The alarm which the proceeding of lord King produced, proved the depreciation of the Bank paper, which they denied— but still it secured the means of bringing about that object which they always declared they had in view, namely, the resumption of cash payments. They, however, supported the government measure, and this circumstance, combined with others, led him to place very little confidence in the Bank. He believed they would use their efforts to obstruct a return to cash payments; and, by the proposed plan, they were allowed a terra of four years in which to accomplish their object. If his plan was adopted of fixing the period at which cash payments were to be resumed, and allowing the Bank to pay in gold at any intermediate period, it! would, he had no doubt, have the effect of reducing the market price of gold much below its present rate. He did not mean to oppose the principle of the proposed plan. He had entertained similar opintons to those which it contained, from the time he was first able to form an opinion on the subject. It was impossible to overthrow the principles upon which it was founded, and of this every member would be more fully convinced, the more he turned his mind to the subject. When he mentioned cash payments, he begged to be understood as meaning bullion payments; for he was of opinion, that it would be better if the Bank was never to pay in cash. He did not mean to fix the amount in notes for which bullion was to be given—whe- 771 ther it was to be at the value of sixty or of thirty ounces was not the question; but he thought it would be better if persons desirous of obtaining gold coin should have the option of procuring a certain quantity of bullion at the Bank, and of getting it coined into the metallic currency of the country, deducting, if necessary, a seignorage to a small amount, for the expense of such coinage. He hoped the House would calmly consider what he had thrown out, before they adopted the plan proposed by the committee in its present form.
said, that the arguments against the principle of the present measure, had been so fully met last night, that it was unnecessary to say any thing more on that head. The House had heard much of the alarm which prevailed on this question. Now, whatever was the cause of this alarm, it was the duty of the House to allay it as soon as possible. It was admitted on all hands, that whenever a measure of this kind was adopted, it would produce a shock in the country; and if so, it was the duty of parliament to render it as slight as possible. It had been the fashion of late to abuse the Bank directors and the plans adopted by them for some time past. The noble lord who spoke last was of an opinion, that the Bank directors would use their efforts to prevent a return to cash payments. He wished to know how the Bank directors could be so far interested as to do this? If it was shown to him that the directors were holders of Bank stock to an immense amount, he would agree that they had an interest in opposing such a measure. But the fact was otherwise. There was not a single director who was a holder of stock to a larger amount than was necessary by the charter, to his filling his situation. If there was any direct or tangible charge to be made against the directors of the Bank, let it be brought forward; but let them not be attacked on such vague and indefinite grounds as those already stated. When the Bank had issued between six and seven millions of specie, at a loss, he could see no reason for suspecting that they were not sincere in their desire to resume cash payments. The experiment had been tried, and had failed. It was then very easy to say, "this is a bad measure." But, if the Bank directors had previously come to the House and said, "Is it not better, before we proceed to a general measure, that we 772 should see what effect will be produced by the payment of a part of our notes in specie?—Would not that proposition have been considered a most desirable one, every way worthy of adoption? He was sure that the shock which they dreaded to the public interests was the sole motive of their conduct, and that they would endeavour to accomplish the object of a return to cash payments without being bound to the intermediate measures proposed by the committee. With this conviction, he would propose an amendment to soften down the harshness of the plan, and to lessen the shock which it was occasioning. The argument in favour of the intermediate measures was, that by taking the price of gold at 4l. 1s., and 3l. 19s. 6d. it would not be demanded. He had heard to-day that gold was down to 4l. an ounce, so that the prospect was likely to be realized. But why impose upon the Bank directors the necessity of regulating the exchanges, which might depend on other causes than their issues? or show a distrust in their sincerity, which was by no means warranted? That they wished to return to cash payments was proved by the experiment which they made in 1817, so much to their own loss. The experiment had failed; but it proved their sincerity. There had been a great deal said in the discussion concerning restricted issues, and a forced circulation. He denied that the Bank had created or could create a forced circulation. If they issued their notes only on approved rules and on good credit, how could they be said to force the circulation? The only mode of supplying the currency was by the discount of bills (he did not allude now to advances on government securities); and if the directors said, upon their honours, that they discounted no bills on doubtful credit, or for periods longer than 60 days, how could they be said to send forth more notes than were necessary to carry on the commercial business of the country? or, in other words, how could they thus create a forced circulation? On the subject of restricted issues, there was a great and a prevalent misapprehension. A restricted issue could only be a refusal to discount good bills at legal dates; and such a restricted issue, it would easily be allowed, must be injurious. The hon. gentleman, after several other observations on this subject, and on the state of country banks, proceeded to say, that as the country desired a return to cash payments, that 773 return should take place with as little Injury as possible. He would therefore propose an amendment on the resolutions of the hon. gentleman (Mr. Ellice) who moved an amendment last night on the original resolutions. Like him, he would move that the 4th and 5th of the original resolutions should be erased: but he could not agree in the proposal of the hon. gentleman to make a legislative enactment compelling the chancellor of the exchequer to pay the 10,000,000l. to the Bank at definite periods, and by fixed instalments. The chancellor of the exchequer was unworthy of his situation, if he could not be trusted with doing what was best for the public service. He therefore proposed that the words of the fourth and fifth resolutions be expunged. If alarm had been created, it was desirable to allay that alarm. He did not entertain a doubt that the Bank would prepare for resuming cash payments at the time fixed by parliament, without being bound to pay in bullion by the graduated scale of the intermediate period.
said, that the best course for the hon. gentleman to pursue, with respect to his amendment, as there was already an amendment before the committee, would be to vote against the 4th and 5th resolutions, when the question was put upon them.
§ Mr. J. Smith
said, he never contemplated any question with half the anxiety with which he approached the present. Though he approved of the resolutions, the course which he should have recommended would have been that of continued confidence in the directors of the Bank. He did not deny that they might have committed errors; but when he looked back on their past conduct, he saw much to approve, and little to censure— much to excite gratitude, and nothing to destroy confidence. He would not say that they had saved the country during the war; but he would say, that by the assistance they lent at critical periods, they had powerfully contributed to its preservation and glory. He, therefore, could hear nothing against them without interposing his feeble tribute of applause. The reports in circulation against them were as false as they were injurious. In their mode of conducting the business of the establishment they had shown no personal selfishness. He might mention, what he believed the country did not know, that there was not one of the Bank 774 directors who held more Bank stock than barely entitled him to be elected to the office in which he was placed. They managed, therefore, the affairs of others with only a small stake themselves in the interests which they superintended. Speaking on this subject with a friend in the direction, that friend said that it was a misfortune to him to be a Bank-director, as otherwise he might have become rich by being a proprietor of 6tock. This tribute was due to a body of men whose characters had been grossly misrepresented. With respect to the plan to be adopted, he, when examined before the committee, gave it as his opinion, that it would be advisable to fix a certain period for resuming cash payments, but at the same time to allow them the option of paying in specie at any intermediate period, if they thought it expedient to do so. He felt obliged to the committee, as the House and the country must do, for the labour and attention which they had bestowed in inquiring into this subject; they had decided differently from his opinion, but he was not inclined to find fault with the decision to which they had come. The House were told that this question caused great alarm in the public mind; he did not know how this alarm was caused, but it certainly could not be by the plan now under consideration. An alarm might be caused by any attempt to resume cash payments, or to pay in bullion at certain prices. For himself, he wished the proposition had come originally from the Bank, and if it had, he was convinced that no alarm of this kind would have prevailed. What was the present plan? It was that bullion was to be issued at a certain period; and unless some very strange and unexpected event took place, there was no chance of the Bank being called upon to advance any bullion at the rate of 4l. 1s.; as who would attempt to speculate in gold, when they knew that it was to be issued at a certain period by the Bank? He would be as apt to feel alarm as any man, if he saw cause for it; but when he saw that even now the exchanges were becoming more favourable, such an apprehension was perfectly groundless. From the evidence of the hon. member for Portarlington (Mr. Ricardo), who was so fully competent to judge of this and all other measures of political economy, it appeared that the Bank would require very little if any additional bullion to carry the present plan into execution. 775 He confessed, however, that he felt surprised at an argument used by one of the Bank directors, that the Bank would require as much bullion now as if they were to pay their notes at 3l. 17s. 10½d. in February next. From this it would appear as if the Bank intended to purchase gold, and by raising the market price against themselves, cause the difficulty which was urged against cash payments on former occasions. He, on the contrary, was of opinion, that supposing no uncommon occurrence to happen, it was impossible that a single ounce of gold should be required from the Bank at 4l. 1s. Nobody would buy dear to sell cheap. The alarm was therefore perfectly groundless. He did not know what it meant. Was a return to cash payments, a return to a standard of value, an evil to be dreaded? No drain of gold could take place: the alarm ought, therefore, to be dispelled. Those who felt it, reasoned as if the Bank ought to have as great an amount of gold on the 1st of February as if it was then to resume cash-payments. This was a mistake; the less gold the Bank bought the better, if they could keep it below 4l. 1s. per ounce; as they might by coming into the market for large purchases raise the price. If that were true, the Bank might purchase gold and raise the market against themselves. This was what could, and what was in reality calculated to raise the alarm of which so much had been said. If he were to advise them, he would say that there was no necessity for the purchase of a single pound of bullion at the present moment by the Bank. The House was aware, that the Bank had, in 1817, a greater quantity of treasure than at any former period. It was known that about 6,000,000l. of this had been issued; the Bank must therefore have a large balance of gold in hand. There was one recommendation of the committee on which he wished to offer a few words. It was that of paying a sum of 10,000,000l. to the Bank. In looking over the evidence, he found that a great variety of opinions prevailed as to the sum necessary for the circulation of the country. Mr. Harman was of opinion, that 20,000,000l. would be sufficient. If the Bank was paid a sum of 10,000,000l. of the debt due to it by Government, so much must of course be taken from the circulating medium of the country. How was this void to be filled up? It might be said, that the 776 Bank would use this sum in discounting bills for the convenience of the mercantile world. But what sort of Bills? The country was now smarting under the effects of the speculation and overtrading caused by the facility with which money was obtained on bills not founded on real mercantile transactions. This he conceived was a part of the question, which ought to be viewed with great jealousy by the country. It appeared from the appendix to the report made by the lord's committee, and he thought that it ought not to have appeared, that by some accident the funds requisite for the payment of the public creditors were not forthcoming. Against this difficulty the governors of the Bank however provided. He was one of those who wished that the government of the country should at all times be strong, and not one of those who would wish to cramp the energy of government. He had reason to differ from the members of the present government, for this cause, amongst others, that although they possessed the means of being strong, they did not exercise their strength by bringing forward several measures of great benefit to the public, which he was confident that they might carry by even a little exertion. He objected to the proposition of his hon. friend on this ground, amongst others, that if adopted, it would diminish the proper strength of government. He could not omit to express his opinion of the firmness and constancy with which the Bank had supported the government during the long and arduous struggle in which we had been engaged. He thought that when the exchanges and the price of gold were so near par, and when there were so many circumstances accelerating the facility of that desirable event, a return to cash payments, it was a bad time to take away the discretion of the Bank, and to adopt measures in respect to it that had the appearance of coercion. From a long course of experience, and a close observation of the conduct of the Bank directors during a succession of difficult and perilous conjunctures, he could not help saying (though he condemned a certain paper, and believed its effect would be most strongly to shake the public confidence), that he should more approve of measures for carrying the principles of the committee into operation, which met the views, and were attended with the acquiescence and ap- 777 probation of the Bank; and it struck him, that to tie up the hands of that body in the manner proposed, was rather an ungracious return for the powerful and ready assistance they had invariably lent the government and the country during a twenty years' war. As for the gold bars proposed in the resolutions of the member for Oxford to be given out, he was perfectly certain that they would never be called for from the Bank; and that neither in February next, nor October, nor the following May, nor at any time, would there be a considerable demand for gold from it, unless the Bank itself provoked it by an indiscreet purchase of bullion.
§ Mr. Pearse
contended, that for thirty years the Bank had not taken a single step which ought to expose them to the slightest distrust on the part of the public; and denied the assertion of an hon. gentleman opposite, that they were not competent to the conduct of their own affairs. With respect to any evils that might be apprehended on the subject under the consideration of the committee, as far as the Bank directors had power they would endeavour, as they always had endeavoured in similar circumstances, to prevent them. It had been said, that the Bank Directors had no serious wish to return to cash payments. He declared most solemnly, that from the moment of the restriction to the present hour, in all the conversations which he had held with every one of the directors, there was but one hope expressed, namely, that the time for the resumption of cash payments might speedily arrive. Of this fact, the conduct of the Bank three years ago, in commencing payments in gold (by which they sustained a considerable loss), afforded sufficient proof. For himself, he looked with confident expectation to see such a favourable state of exchange produced by natural causes, that the Bank would have no necessity to reduce their issues in order to perform the operation required of them. On that subject, in what a condition was the Bank placed! By one party they were told, that if they did not contract their issues, the price of gold would remain too high; by another, that if they did contract their issues, the commerce of the country would be cramped. Thus situated, it was impossible that the Bank could act tightly in the opinion of a large portion of that House. He was happy to say, that that establishment stood in higher estimation out of 778 doors; and that while hon. gentlemen were depreciating the character of the Bank in parliament, that character was the subject of admiration and confidence in every other part of the world. Those who were inimical to the Bank indulged in bold assertions, ungrounded on fact. For instance, if the House would only look at the amount of the issues of Bank-notes at various periods, and the price of bullion at those periods, they would find that all the assertions respecting excessive issues by the Bank were groundless. As to the resolutions proposed by the right hon. gentleman, he was so firmly convinced that the exchanges would come round by that period in favour of the country, that he had no objection to that which directed that the Bank should resume payments in cash by the end of four years. But he had a great objection to the intermediate propositions respecting payments in bullion: which, in his opinion, would tend only to a species of gambling on the exchange that would be very injurious to the Bank. The Bank would, by that means, not be allowed fair play in their efforts for the attainment of the object which they had in view, in common with that House; for he would again flatly contradict the assertion, that the Bank were not disposed to pay in cash, when the state of the country would allow them to do so. As to the objection urged against the Bank, that they had been a species of legislators interfering with the commerce of the country, he could only say, that the power of doing so had been forced on them, and that they exceedingly lamented it. He contended, that in all the trials and difficulties which the Bank directors had to encounter, they had uniformly conducted themselves with prudence and circumspection; and were they to-morrow to set their stupid heads together, as some gentlemen delighted in representing them—to issue an undue proportion of paper, they would not be able to keep such an influx afloat for a week! A diminution of our paper currency would give the monied market, in some instances, the advantages in respect to the precious metals; but after the effect of artificial causes, the natural effects would soon correct the excess.
§ Mr. Ricardo
, in explanation, denied his having said that the Bank were insincere in their declarations. He meant no personal hostility to them, as individuals, or as a public body; but be was of opinion, 779 that they had taken wrong steps, and that they did not understand the subject of the currency.
§ Mr. Wilmot
agreed with the last hon. member, that the Bank directors were sincere in their declarations for the resumption of cash payments. If any doubt arose on that head, gentlemen need only refer to the period when the Bank issued some millions of sovereigns in addition to the circulating medium of the country. If, however, the directors had evinced the regard and anxiety for the public which they now professed, all those sovereigns would not have so suddenly disappeared, and the public embarrassments would have been prevented. The hon. director, speaking, no doubt, the sentiments of his brother directors, had stigmatized a set of men by terming them jobbers and gamblers. They could not prevent jobbers and gamblers; as the persons so denominated were only imitating their superiors. He confessed his astonishment at the objections of the Bank directors to the graduated scale recommended by the committee, because he believed, that had the directors been left to themselves, the plan now under consideration would have been that which they would have adopted. In the discharge of every moral obligation commercially, this country had always stood higher than any other in the world. Parliament was now acting with its usual wisdom in recommending the adoption of the present measure to the Bank. It would revive public credit, and produce that confidence in the Bank which they had never before experienced. The opinions within these walls were highly favourable to the Bank of England; but the opinions without doors, fostered by the clamours which had been noticed, were dangerous to public credit. The hon. gentleman said, that the difference of exchanges arose from an excess of Bank-notes. It was therefore necessary to compel the Bank by an act of parliament to resume cash payments at a given period. The profits of the directors, by discounts, and the power of government securities, were sufficient to answer every temporary inconvenience on the part of the Bank. A proper understanding of the question, and the speedy decision of the House, would allay the fears and alarms of the country; and the people would rejoice when they found that sound principles of political economy were sanctioned by parliament.
said:—Mr. Brogden; I am one of those who have always contended, that the currency of this country could never be placed on a solid foundation, till the notes of the Bank of England were again convertible into specie, at the will of the holder. This doctrine I have hitherto maintained in very small minorities, but have now the satisfaction of finding that it is generally, I might almost say universally, admitted and acknowledged. Eight years ago I moved in this House for a return of the exchequer bills purchased by the Bank of England. My motion was opposed by the chancellor of the exchequer and the Bank directors, and of course negatived: but I now see it asserted in the Report, of the secret committee (of which the chancellor of the exchequer and the Bank directors, who took the leading part in opposing my motion, were members), that it is "necessary to limit and define the authority of the Bank to purchase exchequer bills, and to bring under the constant inspection of parliament the extent to which that authority may be exercised." Another Bank director has this evening admitted, that this practice occasions an issue of Bank notes not called for by the necessities of the public, as well as places their funds out of the reach of their own control. It is gratifying thus to find, that truth and reason, however they may be opposed, and for a time obstructed in their progress, will ultimately prevail. Much as I admired the speech of the right hon. gentleman, the chairman of the secret committee, who proposed the resolutions now under consideration, I could not but think it defective in one respect; that he declined entering into any detail, respecting the plan of obliging the Bank to pay in bullion on a graduated scale of prices at different periods. This plan is altogether novel and unprecedented; and therefore certainly required some explanation. It also appears to me, not only to be liable to various objections that have been urged against it, but to be exceptionable in point of principle; for I can see no just reason why the creditors of the Bank should accept payment in bullion, at a higher price than that at which the Bank are bound by law to discharge their notes in the legal coin of the realm. This plan, seems to give the Bank an opportunity of taking advantage, either of the fears or the necessities of its creditors; for those who call for payment in bullion at once, 781 must take about nineteen shillings in the pound, instead of being paid in full. One hon. gentleman says, the Bank will never be called upon to pay in bullion at eighty one shillings per ounce; but it is rather a singular recommendation of a plan, that it will prove totally inoperative. If so, it cannot answer the intended purpose of serving as a check upon the issues of the Bank, and must be altogether useless. But I fear that it may prove worse than useless. What security can the hon. member give, that while this plan is in operation no alarm will be excited by any occurrence, either foreign or domestic. In such an event, a run would take place upon the Bank, and therefore they ought to be provided accordingly. This is the opinion of Mr. Alexander Baring, and no man's authority stands higher upon all matters of commercial intelligence. He has declared in his evidence before the secret committee, that it would require nearly the same quantity of bullion for the Bank to undertake to pay in bullion at 81s. per. ounce, as to pay at the Mint price of 3l. 17s. 10½d. He has also declared, that the Bank could not, without great pressure upon the public, procure the necessary quantity of gold to recommence cash payments, within less than three or four years. To his views of the subject I fully subscribe, and therefore consider the plan proposed in the resolution now before the House, of calling upon the Bank to pay their notes in bullion on the 1st of February next, as putting the existence of that establishment to hazard. One hon. member (Mr. Ricardo) not only considers it unnecessary for the Bank to purchase bullion, but recommends the directors to sell all they now have, in order to turn the foreign exchanges in our favour, and thus bring it back again with advantage. That the best and most certain mode of amassing a large quantity of any commodity within a short given time is, not to buy more, but to sell what you have already, appears a most paradoxical proposition. If the Bank were thus to suffer their bullion to slip through their fingers, and none of it should happen to find its way back again, I should be glad to know whether parliament would consider it a sufficient apology for their not having provided themselves with a sufficient quantity of bullion, in compliance with their injunctions, that they had acted upon the whimsical advice of this hon. gentleman. The 782 publicity given to the situation of the Bank by the report of the secret committee, will very much increase the difficulties and disadvantages under which they must provide a large quantity of gold within a given time. Their wants will be speculated upon not only by foreigners, but by individuals here, who are always ready to turn the necessities of the public to their own advantage; and who will forestall the markets abroad, in conjunction with their correspondents in every part of Europe, and thus excite a general and formidable competition against the Bank. In every point of view, therefore, I consider the resolution which requires the Bank to pay in bullion within eight months from the present time, as a precipitate and unwise measure, which may oblige the Bank, in self-preservation, to resort to such a contraction of their issues, as will occasion the most severe and general distress—The secret committee, in their report, push their theory to an extent to which in my mind it will not hear them out. They lay it down as an axiom, that the Bank, by reducing the issue of their notes, may bring the foreign exchanges in favour of this country, and thus command a supply of gold to any extent that may be required. I admit that by contracting their issues they may correct the depreciation arising from excess, and produce a considerable effect upon the foreign exchanges; but I must contend that the foreign exchanges are also affected by other circumstances, over which the Bank have no control, and which may completely counteract all their operations. Will it be maintained that the investment of British capital in foreign loans last year, to the amount of ten millions, or that the purchase of foreign corn to probably the same amount, had no effect upon the foreign exchanges. What has taken place, may take place again. The instalments upon the French loan will continue to be paid till June 1820; and I believe that stock must be sold at such a price, us will tempt British purchasers to invest more capital in it. It is true, that, our harvest bears a very promising appearance, and therefore we may hope that no farther drain upon us will take place for the import of foreign com; but the result is yet in the hands of Providence, and our expectations may be disappointed. Even if we gain this advantage, we must set off against it the present state of our commerce. Overtrading is 783 naturally followed by undertrading; for one extreme leads to another, and with discouraging markets and diminished capitals, we cannot expect the same resources, and the same favourable balance of trade and payments, as were formerly derived from the successful enterprise of our manufacturers and merchants. The necessity imposed upon the Bank of procuring a large supply of bullion will also have a very unfavourable effect upon our foreign exchanges: so that upon the whole, I doubt whether we can reasonably expect them to take that favourable turn which the report of the secret committee so confidently anticipates. The committee, finding facts to be in opposition to their theory (and facts are very awkward things for theorists to deal with), slip out of the dilemma in which they are involved, by admitting that "no conclusion can be drawn from the numerical amount of Bank notes in circulation at any given period." This admission concedes all I contend for, that the foreign exchanges are governed by oilier circumstances, and not solely by the amount of Bank notes in circulation. Ought we then to legislate upon doubts and uncertainties, and oblige the Bank to pay in bullion at so early a period as the 1st of February next, when the probabilities are against their having the means of so doing, either with safety to themselves or to the public? One very important part of the subject, referred to the consideration of the committee, is wholly overlooked in their report. I mean the present Mint regulations, which fix a much lower relative value between gold and silver, than is established in any other country of Europe. According to our Mint regulations, an ounce of gold is worth fourteen ounces and a quarter of silver. According to the Mint regulations of France, an ounce of gold is worth fifteen ounces and a half of silver, and according to those of Holland and some other countries, 15¾ ounces of silver. The difference between our Mint regulations in this respect, and those of France, which approach the nearest to them, is 8½ per cent; so that whenever the market price of silver in this country reaches the Mint price, there is a profit, of 8½ per cent on importing silver and exporting gold, supposing the Bank to pay in bullion or specie at the Mint price; and I will now explain the nature of this operation. If I import 14¼ ounces of silver from France, and sell them here†784 at the Mint price, I can take the Bank notes which I receive in payment, and demand for them from the Bank 1 ounce of gold. This ounce of gold I send back to France, where I receive for it from their mint 15½ ounces of silver; thus realizing a profit of 1¾ ounce of silver, or 8½ per cent upon the transaction, which requires only fourteen days to perform, and may be carried on to any extent. In the report of the secret committee of the House of Lords, this danger is adverted to; but they consider this danger as guarded against by silver not being made a legal tender for more than 40s. If the Mint were the only market for silver, the observation would be conclusive; but the great market for silver in this country is, for exportation to India and China. Three months ago, when the regular China ships were fitting out, the demand was so great, that dollars, which are worth 2d. an ounce less than standard silver, sold at 5s. 9d. per ounce; and a large quantity of French crowns were imported and shipped, because a sufficient number of dollars could not be procured. The profit upon this transaction would then have been much greater than I have stated; and as the export of silver to India and China is likely to increase, in consequence of the very disadvantageous sales of British manufactures in those parts of the World, some new arrangement of the Mint regulations ought to be made before the Bank is obliged to pay in gold at the Mint price, or the demand for silver will drive our gold out of the country. On a former occasion, I observed that the Secret Committee consisted of too many theorists and too few practical men; and the perusal of their report has confirmed me in this opinion. Mr. Burke has remarked, that "nothing in nature is so hard, as the heart of a thorough-paced metaphysician." "These philosophers," le says, "consider men in their experiments, no more than they do mice in an air pump, or in a recipient of mephitic gas. They are carried on with such a headlong rage towards their desperate trials, that they would sacrifice the whole human race, to the slightest of their experiments." The complexion of the report of the secret committee, has somewhat of this tinge. It mentions with the most philosophic composure, "the difficulties that must be encountered, during the resumption of payments in specie, but considers them as outweighed by the impor- 785 tant and permanent benefit of restoring the standard, by which, previously to the year 1797, the value of commodities was measured: and which, though variable in a certain degree, is much less exposed to fluctuation than any other that can be devised." Now, Sir, I who am no philosopher, but a plain practical man, am in the habit of comparing the good and evil to be derived from any measure with each other, and striking the balance accordingly. In this case, the good to be derived is correcting a depreciation of 3 per cent in our paper currency twelve months sooner or later; and to obtain this, we are called upon to hazard the security of the Bank, and to inflict the most serious distress on every class of the community. Nothing can be more unfortunately timed than this experiment. The distress of the agriculturists is extreme. In the county where I was born, where the farmers used first to supply their own vicinity, and then send their surplus produce to London, they are now supplanted in both markets by foreign corn, which is selling all around them at such a ruinous depreciation of price, that they cannot afford to employ their labourers, and are actually throwing many of them upon the poor rates. The distress among the manufacturers is so great, that cheap as bread is, they cannot afford to buy it with the wages they now earn. The commercial part of the community find their capital daily diminishing, by the depreciation in the value of all commodities; their warehouses are full, their purses empty, and failures among them continually taking place. Is this a period to add to the pressure which is already so severely felt by every class of the community and to deprive them of that accommodation which they have been in the habit of receiving from the Bank of England; as you must and will do if you adopt a measure, which will oblige the Bank to resort to a violent and precipitate contraction of their issues. An honourable member (Mr. Ricardo) says, there is a great panic abroad; but that though men are frightened, they ought not to be frightened. This is very philosophical; but putting the case fairly between the philosophers and the alarmists, I really think the latter will be found to have reason on their side.. Independently of the causes of alarm which I have already stated, it must be considered, that the public are now fully apprised of the difficulties of our financial situation. They 786 know that there is a deficit of 13½ millions to be provided for, in order to make our annual revenue and expenditure meet, and they farther know, that the only two sources from which this sum can be drawn, are the sinking fund and taxation. When we recollect the repugnance to taxation, that of late has been manifested in this House whenever the subject has been mentioned, it must be confessed that the situation of his majesty's ministers, as well as of the country, is sufficiently embarrassing; and I am persuaded that the apprehensions which at present exist in the public mind, are not likely to be removed, till the finances of the country are placed on a solid and satisfactory footing. Many observations have been made in the course of this debate upon the conduct of the Bank Directors. I am far from approving of all their measures, but must say, that I think they have been very harshly treated upon the present occasion. The hon. member for Portarlington not only censures them in his capacity of member of parliament, but complains as a proprietor of Bank stock, that in their transactions with the chancellor of the exchequer they have given advantages to the public at the expense of their constituents; and that he expected a surplus of undivided profits of 10 millions instead of 5,200,000l. Really, Sir, I should have thought that the extravagant profits already divided, would have satisfied the most rapacious Bank proprietor; and that not one of them would have reproached the directors for giving some accommodation to the public; when he considered the enormous advantages they have made at the public expense, since the suspension of cash payments. The directors have also incurred the displeasure of his majesty's ministers, by refusing to concur in a measure, which, in the note of their committee of treasury, they say they considered would have been deluding the public with an expectation not likely to be realized. If such were their sentiments, I give them credit for the spirit and independence with which they acted; and wish they had shown the same spirit in 1817, and had refused to make the chancellor of the exchequer those lavish advances upon exchequer bills, which so unjustifiably increased the amount of their notes in circulation and brought such serious evils upon the country. It seems rather hard, however, that the right hon. 787 gentleman should abandon them in the hour of distress, after all the accommodation he has received at their hands. It has been asked, what confidence can be placed in the Bank Directors? I think that we have now the best possible security for their good conduct. Formerly, they acted in concert with his majesty's ministers and a majority of this House, now the ministry and the whole House are against the Bank Directors, and therefore we may confidently rely upon their compliance with our injunctions; indeed, a hint has already been given them, that if they are refractory they may expect an abrogation of their charter, which no doubt will quicken their obedience. With respect to the resolution immediately under the consideration of the House, my objections to it are insurmountable: neither do I approve altogether of the amendment proposed by the hon. member for Coventry. We all agree in the expediency of resuming cash payments, the only difference of opinion is as to the best and safest mode of so doing. I should wish to negative this and the next resolution (by which means we should get rid of the graduated scale of payments in bullion, and give the Bank till the 1st of May 1821 to pay at the Mint price), and to adopt all the other resolutions as proposed by the right hon. the chairman of the secret committee.
§ Mr. Frankland Lewis
maintained, that the evidence which had been adduced before the committee was sufficient to show that the report had not been drawn up without the aid of practical men, and that it did not materially differ from the result of their experience. As to the idea of the committee dictating to the Bank, he repelled it with the greatest indignation. If the Bank would pay its notes in specie on demand, it might attend as much as it pleased to the convenience or interests of the commercial world—so far it might safely go but no farther: the instant the company stepped beyond a certain limit in the exercise of its discretion, it stepped too far. Last night a Bank Director had pleaded very pathetically for the allowance of a general discretion as to the issue of notes; but would the House concede to the Bank of England a power it refused to the crown? Since the reign of Henry 1st, parliament had deprived even the king of the right to alter the standard of the currency; and what reason could be assigned for permitting the Bank, by the expansion or contrac- 788 tion of its issues, to vary the standard of the currency? To give the company this discretionary power would be to revive all the evils of the days of Henry 8th and Edward 6th. The jealousy of our ancestors in this respect ought not now to be deserted. He was unwilling to put any thing that bore the appearance of restriction on the power of the Bank to relieve commercial distresses; but when they did so, they in truth only levied a tax upon the public at large, and applied the proceeds to the aid of individuals. Such a relief was contrary to the very foundation of property in this country, and was reviving some ancient but at the same time most injurious usages. No doubt could exist as to the necessity of some regulations for the government of the Bank, in the minds of any men but the directors, and with them he did not wish to debate about principles of policy and economy on many accounts; tie wanted only to reduce them to their former wholesome habits and system; and unless they were so reduced, at the end of two years from the present date, the House might have to go over the ground it had now trodden, and the country would have anew to suffer the consequences of such a proceeding. He hoped that from henceforth the question would be set at rest, and that the general affairs of the nation would be restored, not merely to order, but to prosperity.
§ Mr. Peter Moore
remarked, that it could not with justice be said that the present plan came by surprise on the Bank, because from the sentiments uniformly expressed on this subject by parliament, as well as from the general principles of justice, the Bank must have known that they would be required at some time to pay their debts. The only question really before the House was, whether the present plan was the best calculated to attain that object, and whether the time proposed was the most proper? He trusted that no member of that House would countenance a supposition that the Bank alone were competent to determine the period fit for the discharge of their engagements to the public. He congratulated the hon. gentlemen on his side of the House, at finding the opinions for which they had encountered obloquy and struggled in vain, now adopted almost unanimously by those who formerly opposed them.
§ Mr. Abercromby
said, that having been 789 appointed one of the members of the committee, he had commenced his duties with strong opinions, which he did not expect could be shaken, and which all he had heard and seen tended to confirm. He regretted that he was under the necessity of differing from his right hon. friend (Mr. Tierney) who had declared his intention of supporting the amendment; but after the most patient and impartial inquiry, he had come to the conclusion, that the plan recommended by the committee was extremely desirable, and would prove most beneficial. Entertaining this conviction, he should not only desert his duty if he threw obstacles in the way of the adoption of the plan, but if he did not avow his distinct approbation. He could not, however, avoid observing, that it must be a matter of the deepest regret to the House and the country, that the favourable opportunity for resuming cash payments in 1816 was allowed to pass: a permanent and healthy system might then have been introduced, without requiring the nation to endure the distresses undoubtedly occasioned by the present struggle. In point of fact, the measure now suggested was as necessary to the political interests as to the moral character of the country; and though a great deal had been said about the injury the Bank might or might not sustain, very little had been urged in favour of the great mass of the people, who had been suffering under so many difficulties and privations, while the directors and proprietors were heaping up wealth. The objection taken by his right hon. friend as to the injustice done to a man who had only 10l., and wished to obtain gold for it, had been satisfactorily answered by the member for Portarlington. But another point urged was, that this plan established a precedent for departing from the established standard of the kingdom. All that could be said in reply to this suggestion was, that the great object of the measure now under consideration was directly the reverse; it was to prevent a departure from the ancient standard. The question was one of vital importance, and he hoped that after its decision no measure of finance would be voted by the House, without a reference to its great bearings-He trusted that the good sense of the country would soon remove the delusion under which it at present laboured, and that this would be the last time parliament would be called upon to discuss the sub- 790 ject. A large majority in favour of the plan would give a weight to the determination of the House, and he hoped that on this account the hon. member for Coventry would consent to withdraw his amendment. It would be well if it could go forth to the people, that the great body of their representatives had concurred in the plan, and that though differences of opinion prevailed, they were not so marked as to require that the sense of the House should be taken.
said, he had listened to the course of the debate with the utmost attention and had been anxious to reserve himself for a later period of the night, that he might not only receive information from the views of others who thought with him, but that he might offer answers to the objections that might be started. As, however, those objections were few, and not likely to increase, and as a favourable opportunity seemed now to offer itself, he could not refrain from making such observations as occurred to him. In adverting to the importance of the measure, he did not place it in too high a scale when he said, that no question of greater interest to all classes of the community had ever called for the deliberation of parliament. He was sorry to observe, that a degree of alarm prevailed out of doors, and he could find nothing in the tenor of the measure now proposed to justify it: at the same time, the House would not be surprised, if, on a subject of such vital moment, a degree of anxiety prevailed in the country, taking in its first impression the colour of alarm. He saw nothing in the plan but what ought to inspire confidence; and only a short time would, he was convinced be necessary to bring the public mind to a correct view of the question. It was not at all extraordinary that a peculiar degree of agitation should prevail at a moment when the pecuniary concerns of so many individuals were involved in the result, of the nature and effects of which they were not yet in a situation to judge. Under these circumstances, it became the bounden duty of parliament to lay before the nation a full and fair statement of the subject. It was in vain to suppose that commercial affairs could be conducted in a beneficial train of exertion until the public could ascertain what was the real condition of the national finances. It was not to be supposed that any lasting check had been given to our means of prosperity. True 791 it was, that those means of prosperity were at present standing still; the employment of capital and the exertion of industry paused and rested, until it could be ascertained how they could best be brought into action. The noble lord said, he drew consolation and hope from what was called the existing stagnation of trade: he saw in it a revival with more than former vigour; and it ought to be an incentive to the House without delay to come to an examination of the state of the currency, and of the remedies it required. He would venture to predict that if the House acted upon the bases laid down in the report, with the wisdom and energy belonging to the British parliament, the alarm now prevailing would quickly disappear—capital and industry would resume their stations, and would operate with success in a new and untried direction. We had always this consolation, under such circumstances—that when industry was chocked, it was only in fact clearing its channels, and removing temporary obstructions. He should endeavour to argue this question upon practicable grounds, and in doing so, he should endeavour to show that his own opinions were consistent with those which parliament had so recently recognized, in its determination to adopt those measures for the great object in view, which might be most safely applied under the existing circumstances of the country. He knew that there were complaints against this system, which must in fact exist in regard to any other: on its first adoption, some inconvenience must be occasioned; he knew that there were also complaints against its supporters, for some inconsistencies, some abandonment of principle in regard to the opinions they might be supposed to have entertained upon former occasion. He agreed with the hon. member who spoke last, however, as to the possibility of arriving at the same conclusions by very different trains of reasoning; and it was possible to account for discrepancies of opinions, at different periods, by a very plain statement. He was sorry to observe that a right hon. member opposite had departed from that spirit in which this discussion had latterly been conducted, more especially as he was not aware that there had been any fundamental difference in their views. The noble lord said, he had never argued the question in any other light than that the suspension of cash payments by the 792 Bank of England was a measure infinitely to be regretted, and only justifiable on the ground of strong necessity. What was the object, indeed, with which the right hon. gentleman opposite had brought forward his resolutions at that time, if it was not to recognize the principle of the Bank's resuming cash payments in two years without any intermediate steps? How, then, did he and his right hon. friend differ? He entirely concurred with his right hon. friend, that the time was now come for some practicable arrangement. With regard to the simple question before the House, he was not aware that there was any dispute between himself and the right hon. gentleman, as to the expediency of its object, but only as to the means of its execution. As to the monetary system of the country, they were never at issue upon that point. He must in candour tell the House, that he was one of those persons who had held the opinion, that there were no fairgrounds for considering the Bank note to be depreciated. Whatever might be the fact upon that head, he could only say, that the measures he had formerly voted for, under this feeling, had effected all the good which was expected to result from them. With regard to the depreciation, he would, with the leave of the House, read a passage from the report, which contained two of the answers of the hon. member for Portarlington (Mr. Ricardo), who was not less clear in his opinions than happy in illustrating them. The noble lord here proceeded to read a part of that gentleman's evidence relative to the fluctuations in the price of gold, particularly as to the proportionate depreciation contrasted with the lower prices of gold bullion of the Bank-note, and, arguing upon the admission of Mr. Ricardo, that it was so depreciated, entered into a train of reasoning to show that the diminution of value was not positive, but relative only; that in his (lord Castlereagh's) opinion, that diminution or depreciation was never such, as to be experienced in the purchase of home commodities, manufactures, or produce: that it was a currency which answered in that respect, all the purposes of a metallic circulation, without being exposed to similar fluctuations: and that in advancing this, referring to former occasions, and the opinions he then held, he by no means meant to maintain, that the resolution of his right hon. friend went to say, that gold and paper were alike, or 793 had the same relative internal value. He had only adduced a particular instance, supposing also the particular period of his former opinions. He would here beg to refer the House to the condition of the country at the time of passing the Bank restriction act. Where would it have been, had that act not been passed? Did the House believe that the operations of the state could have been carried on without its assistance? or without taxes? or that the country could have been supported without loans? What, then, would they have done had the Bank been obliged to contract its issues, to keep up a metallic currency, which at the same time that it cramped those issues, would have drained its treasures to preserve? He begged therefore that the House would not allow any thing like calumny to pursue a body of men who had done so much. If they were said to have misconducted themselves, why the House must own that they must have considered themselves charged with a higher duty than that of regulating their mere banking business [Hear!]. The House was bound to imagine that the good they had done was not done upon narrow views of mere commercial advantage, as to a banking concern. It was, on the contrary, highly commendable to that body, that they had never suffered such contracted views of profit to interfere with their great and honourable and zealous services to the country; that they had never permitted motives of such an interested description to hinder them from affording that prompt and vigorous relief, which, had it not come from them, he could assure the right hon. member, he was himself utterly ignorant whence it could have proceeded. Here then, he would also assure the right hon. gentleman, and the House, that he would never shrink from any principles that he ever held before on the subject.—He would now state the grounds, very shortly, which induced him to think the proposed measure the best calculated of any yet submitted to parliament, for effecting the purposes contemplated by the legislature. Looking to the evidence which had been submitted to the committee, it was impossible to disguise from themselves the impossibility of returning to a metallic currency without causing some pressure to the country. Adverting to what had been submitted as the resolutions of the committee, he could only say that he was disposed to concur in whatever suggestion 794 might be offered, that at all tended to the attainment of so very desirable an object as the resumption of cash payments; and to push any measure of that description as far as might be consistent with our prosperity. If any change of circumstances could now be operated, that should assimilate with the former condition of things as regarded the state of the currency, undoubtedly such a change would be infinitely more satisfactory than any thing else. It was the wish of government to have postponed the agitation of the present question for sometime longer, thinking that very many causes were at present in operation throughout continental Europe which greatly affected the resumption of cash payments, almost indeed to prevention. These circumstances, combined with foreign loans, the large sums of money taken by them out of the country, and the extensive investments of capital in foreign funds, they considered, might have so operated with parliament as to have locked up this question until another session, when it would have been less difficult to deal with it than at present but they were diverted from that circumstance by the determination of parliament itself, and the public anxiety; and surely the House would go along with him, in saying, that this was a subject which, once entered upon, could not be left unsettled. As to the committee, the question was not left open to their discretion, whether the Bank could return to payments in specie or not. The only question for their investigation was, how that measure could be effected in the shortest space of time, and with the least possible injury to the community? Government, therefore, satisfied itself that by adopting, on the part of the Brink, the measure of bullion payments, it greatly accelerated the return to cash payments. So that, with relation to the opinions of the hon. gentlemen on the other side, and of the Bank, as far as regarded the principle of the ultimate resumption of such payments in cash by the Bank, at the expiration of four years, and of the previous repayment of a portion of its advances to government, there was no difference, or very little, between them. The difference was upon the previous or intermediate deliveries of bullion. Really, he thought the Bank took a very wrong view of the subject, and one by no means warranted or reasonable. With respect to its own interests, this plan was one of 795 the utmost advantage; and if adopted, would remove from its mind every doubt: if the exigencies of the country called for paper, however, he should have no objection to meet their wishes, supposing them excited by an unfavourable harvest, or some other unlooked-for cause. It was incumbent on the House to adopt some measure of the present description, seeing that now the time for it was come. The Bank should remember, that although the Mint standard of gold was 3l. 17s. 10½d., no serious consequences were likely to result to them in consequence of this plan, as they would commence their issues under the protecting price of 4l. 1s. This was of much importance, inasmuch as it would of necessity completely prevent any run upon their precious metals. With regard to the supposition that the repayment to the Bank was to be made at once, and that the whole amount was suddenly to be withdrawn from circulation, it was a delusion which he was satisfied could not last above a few days. That repayment would be made gradually, and with reference to the convenience of the Bank, as well as the accommodation of the public. Nothing so wild and absurd as the idea of accomplishing this repayment per saltum, had ever been contemplated by the committee, or could have entered into a rational mind. The Bank would be enabled to throw back by the medium of discounts, the paper thus restored to it, into general circulation, and could not by any possibility find itself crippled in paying gold bullion for its notes at the protecting price of 4l. 1s. per ounce, which already exceeded the market price. It was not, however, called upon to issue gold till February next, and the protecting price at which it was to be issued would continue for a year and a half. The exchanges would, there was every reason to believe, improve in the mean time, independently of the operations of the Bank. But the truth undoubtedly was, that the Bank held the regulation of the market price of gold in its own hands; and as to any ground for future apprehension or alarm, he conceived that it would be more expedient for parliament to deal with the danger when it arrived, than suffer the prospect of it to arrest the course of the present measure. If a later period than that of February next had been suggested, the public might have regarded the proceeding merely as a provisional arrange- 796 ment. There was no reason for dealing speculatively with contingent evils; and were some unforeseen calamity to fall upon us, or a bad harvest to cause large importations of foreign corn, it would be early enough to provide for such difficulties when they occurred. By fixing the commencement of the new system in the month of February, a time was selected when, in all probability, parliament would be sitting. It was admitted, on the other hand, by all sides, that it was most desirable to restore our currency to its antient principles; and there was certainly nothing in political appearances at present to warrant the supposition that parliament would hereafter find it necessary to abstain from carrying this measure into full effect. It was no small testimony to the excellence of the plan under consideration, that it had produced an union of sentiment, and had been approved of by the concurrent opinions of two committees, formed of persons who differed upon most other political questions. With the exception of the right hon. gentleman (Mr. Tierney) who differed with the committee on one branch of the plan, and of an honourable director, there had been an unanimity of opinion; and in the secret committee of the other House on the same subject, there had been but one exception to a similar unanimity. To this he might add, that of four Bank directors examined by the committee, three had approved of the principle of the measure. The whole alarm which had prevailed had arisen from a false and inaccurate notion of the mode in which the details of the arrangement were to be effected. That alarm, however, would, he was convinced, immediately subside, and be quite at an end, when the financial measures which his majesty's ministers had it in contemplation to propose for the service of the year should be submitted to parliament. The capital of the country, he confidently believed, would soon be brought into full activity, and we should safely, and by almost imperceptible steps, return to our ancient system of circulation.
§ Mr. Ellice
hoped, that the House would indulge him with a hearing for a few minutes, whilst he endeavoured, in justice to his own character, to set himself right with regard to an allusion which had been made to him by the right hon. the chancellor of the exchequer. It was true that he had been one of a deputation 797 of four who had waited on the first lord of the Treasury to deprecate an early return to cash payments. His own objection, however, was simply to any large repayment to the Bank during a state of alarm, conceiving that the worst way of curing one extreme was to rush into the other. He had deprecated the sudden re-payment of the advances at a critical moment, though he wished those advances had not been made. His amendment was consistent with this view of the subject. In his amendment, he had not contradicted any of the principles of the original resolution. His object was to guard, in the first place, against that mischief, the sudden reduction of the currency by means of the repayments of the Bank advances, which he had feared last year; and in the next place, to make the Bank and the government independent of each other, that they might not hereafter, as they had done heretofore, shift from one to the other the responsibility of the failure of those measures which parliament had entrusted to them for the restoration of a sound currency. He wished also to avoid the necessity of admitting, by a legislative measure, the depreciation of the currency. As to his resolution forbidding the Bank to make advances to the government, his hon. friend (Mr. Ricardo) had said, that the Bank should not be restrained from the employment of their capital as they pleased. In this he perfectly agreed; but he would say, let them first satisfy their debts. Let them pay their notes in cash on demand. As the committee, however, seemed so nearly agreed in opinion, he was unwilling to disturb their unanimity by pressing his amendment. It was of such importance that the principles should be agreed to, that he would wave his objections in detail. He was only sorry that the noble lord had held out the possibility that the question might be again brought into discussion next session. He hoped when once settled it would never be reconsidered.
§ Mr. Ellice
then with the leave of the House withdrew his amendment.—Lord Milton attempted to address the House, but the confusion was so great, and the calls of "question" so loud and reiterated, that in a few moments he sat down.—Mr. Marryat, and several other members, offered themselves to the committee; but the clamour was so great, that it was impossible to hear what was said. In the midst of this confusion, Mr. W. Smith 798 rose and said, that in consequence of the disgraceful state of the House he should move an adjournment.
said, he did not rise to obtrude on the committee his sentiments on this subject, as they were already known: he was not anxious to state the reasons which induced him. to vote for this measure, or to scrutinize the reasons which actuated others; but he rose to conjure the committee, if they valued the effect which their decision on this subject would have on the country, to give a patient hearing to every gentleman who wished to state his opinions on the plan proposed, more especially to those who dissented from the resolutions. One effect of their unanimity that night would be lost, if any grounds were given for supposing that it had been obtained either by members suppressing their own opinions, or what was worse, by clamouring down the opinions of others [Loud cheers.]
§ Mr. Irving
shortly addressed the committee. He objected to the repayment of the ten millions to the Bank, as likely to be attended with inconvenience. He also objected to the 4th and 5th resolutions.
§ Mr. T. Wilson
expressed an opinion different from that of the report of the committee, with regard to the degree of confidence which ought to be reposed in the Bank; for it ought, in his judgment, to be left to the discretion of the Bank to decide at what period the resumption of cash payments should commence, and thus a sufficient opportunity would be afforded to the directors of that corporation to prepare for such resumption. This course of proceeding was, in his view, the more expedient, considering the circumstances in which the Bank was placed; those circumstances being materially different from any period heretofore, when this question was brought under the consideration of parliament. With regard to preparations for the resumption of cash payments, he was decidedly of opinion, that instead of purchasing bullion, the provision of that article should rather be left to the natural operations of trade. On his part, he had no hesitation in declaring, that the Bank was as fully competent, as well as willing, to resume cash payments, if left to the exercise of its own discretion, as the country was to surmount all its difficulties, if its intrinsic energies were duly excited and judiciously directed.
Mr. Peel rose
to reply. He said he was not desirous to trouble the House with 799 any unnecessary speeches, and was too anxious to carry the resolutions, to trespass upon the indulgence of the House usually granted to persons in his situation. On one or two points he had been misunderstood; but he did not think the misconception of sufficient importance to waste the time of the House in explanation. He congratulated the committee that they were now about to attain the object which they had in contemplation, and that they were at last in sight of the goal from which they had started two and twenty years ago. He sincerely hoped, that the difficulties which some had anticipated would not prove so great as their apprehensions had represented them, and he trusted that parliament would derive from their recent experience this salutary lesson—not to resort again to any variable substitute for the ancient standard of the country. Having said thus much, he had only to add a proposition calculated to render the seventh resolution correspondent with the fourth. The amendment was merely verbal, but it was necessary because it would appear from the present wording of the seventh resolution, that it was left to the discretion of the Bank to pay in gold at more than 3l. 19s. 6d., provided it did not exceed 4l. 1s., within the interval between the 1st of October 1820 and the 1st of May 1821. To obviate this error, therefore, he proposed, that the Bank should be called upon to pay in that interval at the rate of 3l. 19s. 6d., or at some sum between that and 3l. 17s. 10½d.
Here the call for question! question! became loud and universal, but Mr. Cripps calling for a division,
appealed to the House to corroborate him in the statement, that throughout the examination of this question he had never manifested a wish to obtrude his observations on the House. But he hoped it was not now a question whether the House were to acknowledge the principle of a necessity for the country to return as soon as possible to cash payments by an undivided vote, which would of course produce more effect in tranquillising men's minds than any reasoning, however satisfactory, or any majority, however triumphant, on a division. An undivided vote upon the principle at least was become, from recent events, more necessary than ever, to show the public that the House was in earnest in its attempts to restore the ancient standard, of 800 which the House and almost every one had lost sight for two and twenty years, and of the revival of which he had sometimes been almost induced himself to despair. Since, however, it was now resolved, by some of those who had dissented from the argument adduced in favour of this principle, to proceed to a division, and defeat that unanimity, which had so happily prevailed in the other House upon this subject, and which was so essentially necessary in his mind to the restoration of perfect confidence on the part of the public, he should claim the indulgent attention of the House to the arguments which had prevailed with him as a member of the committee, to adopt the principle of the recurrence to the ancient standard.
Here a loud cry of "withdraw the opposition!" interrupted the right hon. gentleman for some time, and we observed Mr. Cripps on his legs addressing the House.
continued. If he were then to understand that the opposition made by the hon. member was withdrawn, he would give one of the most satisfactory proofs of his sincerity in wishing for the adoption of the principle, by not attempting to occupy the time of the House any longer.
agreed to withdraw his opposition; and Mr. Manning also concurred in this proceeding, reserving to himself, however, the right of stating his objections to the proposed measures on a future occasion.
said, that undoubtedly the acquiescence on this occasion of his hon. friend who spoke last, would not preclude him from expressing his dissent from any of the details of the bill which would be brought forward, founded upon the resolutions of the committee. But he would take the assent of his hon. friend and others in this instance, as nothing less than an acquiescence in the unanimous determination of parliament, that the country should return, as speedily as possible, to the ancient standard of value in the establishment of a metallic currency [loud and universal cries of hear, hear!].
§ The resolutions were agreed to without a dissentient voice; and were ordered to be reported to-morrow.