HC Deb 22 February 1821 vol 4 cc895-901

After several Petitions had been presented complaining of the Agricultural Distress,

Mr. Curwen

said, the distress was of a general nature; there was no class of society exempt from it. He rejoiced to see so many petitions presented from all parts of the country, because he hoped that they would force upon ministers the consideration of the subject. Looking at the miserable state of the people, he was, he confessed, astonished to find persons of information and ability, talking of the prosperous state of the country, and urging the amount of the excise duties as a proof thereof.

Mr. Ellice

wished to make one observation on what had fallen from his hon. friend with respect to the amount of the excise duties forming any criterion by which to judge of the prosperity of the country. He desired to refer his hon. friend to exactly the same statement made by the chancellor of the exchequer in 1816—the year approaching nearest in many features of national distress to the present period—that the Excise for the preceding year, had exceeded in amount that of the two former ones. As he was upon the subject, although he had not come into the House with any intention of taking part in this discussion—he might also refer to the plan then adopted by the chancellor of the exchequer, for the relief of the prevailing pressure. To use his own words, the right hon. gentleman had said, that the most effectual relief would be, to increase the amount of tire circulating medium, "by placing an additional guinea in the pocket of every man in the kingdom"—which could be easily effected by loans from the Bank—the nation was again inundated with paper money—prices were immediately raised—but although the result of these measures was the temporary relief which had been anticipated—he feared the aggravated distress now afflicting the country was in a great degree to be ascribed to them.—In the preceding year—considerable progress had been made towards attaining that great end which had been so much desired by all parties—and which the country was certainly then in a better situation to effect than at any subsequent period—the resumption of cash payments. The accumulated stock of colonial produce, from our own possessions, and those of France, Holland, and Spain, which encumbered our warehouses—found its way to the continental markets—a simultaneous demand took place for our manufactures, and in return, considerable sums of the precious metals were imported into this country.—These favourable circumstances had enabled the government to reduce their debt to the Bank from 35 millions, which it had been in August 1814, to less than 19 millions in February 1816, which, taking into consideration the public balances, was less than its present amount, supposing all the payments recommended by the committee to have been punctually made to this time; it was in such a state of things that the chancellor of the exchequer, for the purposes of the moment, plunged the country by his financial arrangements, into all the evils of the system from which it had been so nearly extricated by the peculiar and favourable circumstances to which he had adverted, and which had ultimately brought us to the desperate condition so forcibly painted by the peti- tioners.—The hon. gentleman then commented on the steps taken by the Bank at the period to which he referred, and their subsequent attempt to counteract the effect of this new issue of paper upon the foreign exchanges and the Bullion market, by a cotemporaneous issue of the specie which the balance of trade on the return of peace had enabled them to accumulate. These operations of the Bank and the government had created a fictitious market for the precious metals in this country, which existed at the period of the appointment of the secret commit tee to inquire into the expediency of resuming cash payments in 1819; and if he could presume to set up his humble judgment against the opinions of such eminently qualified men, the committee had either overlooked this circumstance, or given less weight to it, in their calculation of the effects which the measures they subsequently recommended were calculated to produce, than it was fairly entitled to. The Bank was again almost drained of its treasure, the coin issued from the months of September and October 1817, till the time at which the committee was appointed in February 1819 varied from 2 to 600,000l. a month, and amounted to about seven millions. All the sovereigns coined in the preceding year appeared to have gone first: when this stock was exhausted, the guineas followed; not one of either found their way into circulation, and it was afterwards found they were nearly all accounted for, in the mints of 1'aris and Brussels. The amount thus exported tallied exactly with that coined at our mint in the two years (none having been previously coined since 1813) and with a return from the mint—of the gold imported by the Bank for the coinage of 1817 and 1818. In the twelve months preceding September 1817, the issue of gold coin had not exceeded altogether 50,000l. and the price from the reduction of paper scarcely exceeded the mint price—at this time the effect of the paper issue began to be felt, and had it been left to its own operation without being checked by the issue of gold—the price of the precious metals would, in all probability, have risen to the same height, to which the in crease of the paper curency in 1813 had carried it. The directors of the Bank, goaded by the present imputations on their expressed desire to resume cash payments, determined unfortunately to prove their sincerity by the course they adopted; not considering that they must discover a mine under the Bank to enable them to supply the demand which a continued over issue of paper would create. It was under these circumstances the appointment of the committee of 1819 took place; and the first measure they were called upon to adopt was, to recommend the suspension of further money payments by the Bank; altho', as he had before stated, in his opinion they had either overlooked, or greatly under-rated the effect produced by those which had been made, on the state of our currency. They found certainly the price of gold reduced by these operations to 4l. 2s. per oz. and at least led the country to suppose, that the. depreciation of prices, which might be apprehended from a restoration of the ancient standard, would be in proportion to the difference between 4l. 2s. and 3l. 17s. 10d., instead of which, in his opinion, they ought to have fairly represented the probable sacrifice required, by estimating the difference between the price, which the financial operations of 1816 were calculated to produce, if the Bank had not interfered by supplying the market with gold to prevent an advance, and the ancient standard. This price he felt satisfied would have been nearer 5l. 10s. than 4l. 2s. and much as he was attached to the principles on which the committee founded their report, much as he repudiated the continuance of a fluctuating standard of value regulated solely by the joint discretion of the government and the Bank, he now regretted he had not recorded on the Journals, what was his opinion at the time—and every hour's experience since had tended to confirm it—that 5l. 10s was much nearer the standard at which the country might be able to cope with the distress left by the war—the competition her trade and manufactures burthened with taxation, had now to expect—and the overwhelming load of debt, which the short-sighted policy of the last twenty years had left us to contend with—than the standard of 3l. 17s. 10d. recommended by the committee. That determination now having been adopted, the effect he had anticipated it would produce having been felt andborne—by every other interest of the country—except the landed proprietor and agriculturist—who were now, he feared, but entering upon the last trial which awaited them; he would be the last person in the House, if the country could wade through the difficulties imposed on it, to desire any alteration of the present system; but when the noble lord (Castle-reagh) had only expressed his commiseration for the sufferings of the agricultural interest, and his readiness to go into a committee of inquiry on their complaints, provided the proceeding was not to interfere with the corn laws, the currency, or the collection of taxes affecting the farmer, he meant for his own part to protest against so useless a waste of time, and such an utter trifling with the grievances of the people. He had been drawn unexpectedly into this statement of his opinion—first of the pernicious effect of the paper system on the transactions of the country, and secondly of the distress which the late alteration had unnecessarily produced—and he entreated the House no longer to deceive itself as to the imminent danger and difficulty in which the country was placed. We were now, he was afraid, on the brink of an imminent crisis, and our situation required all the prudence, determination, and wisdom, which every party possessed, to save us from irretrievable ruin. The merchant had lost nearer a half, than a third of his capital which had been invested in foreign trade, and there was little hope from the state of commerce, of his being able to employ what remained with any prospect of tolerable remuneration. The evidence now taking before the committee on foreign trade up-stairs, but too clearly proved that the ship-builder and owner were earning on their respective occupations, with a certainty of loss, and were compelled to pursue them, that their establishments might be preserved, and their ships might not decay from being laid up—and they are tempted to persevere, from some unfounded hope that better times would arrive, as had before been the case under the varying feature of the war, and the fluctuating system of a paper currency. The farmer also recollecting the relief he obtained in 1816, had been induced to go on, paying his rent and taxes out of the little of money he had saved in better times, in the hope of markets improving, for his accumulated stock—till his capital is exhausted—the very course he pursued has aggravated his difficulties—and he now comes before us with his petition in the forlorn hope that we can again raise the value of his produce, to enable him to meet engagements contracted on the faith of the continuance of high prices. Every branch of productive industry is in the same situation, and if the manufacturers in Lancashire and Yorkshire, enjoy a temporary exemption from the generally prevailing depression, there is too much reason to fear they are also destined to experience a reverse, from the revulsion which the agricultural distress must produce in the home-market. In short, look which way we would, every thing appeared hopeless around us. He would put a simple case in illustration—he might almost say of the state of the country generally—but certainly of the situation of many even to whom he was then addressing himself. Suppose a gentleman of landed property, who had a well-paid rental in 1813 when the price of wheat was upwards of 100s. of 6,000l. per annum; upon a general calculation it might be estimated that one third went in the first place to satisfy jointures, portions to younger branches of his family, and interest of debt—there then remained 4,000l. for his expenditure. The price of wheat, and other produce in proportion, falls to between 10s. and 50s.—his rental of course declines one half—the same debt is to be deducted—and 1,000l. remains, instead of 4,000l. for the maintenance and support of his situation and his family. The jointure, the portions, the debt, are all proportioned to the value of the property artificially raised by the paper currency—but must now be satisfied at the altered standard, out of means reduced one half in amount. The hon. member for Cumberland had talked of a reduction in the interest of the fundholder—or of taxes What adequate relief would either measure afford in the case he had stated? The hon. gentleman then begged pardon of the House for being led by accidental circumstances into this discussion, which he felt might have been postponed to a more appropriate moment. Although he would not, without protesting against the exceptions of the noble lord, assent to the appointment of the proposed committee to inquire into the complaints of these petitioners, still he thought they were entitled to all the attention which the House in commiseration to their situation, could pay to them—but still he felt, that to hold out any hopes of relief from a committee, which was neither to consider the effects of the currency, the corn laws and taxation—or the agricultural interests—would be to practise a delusion on the public.

Mr. Grenfell

could not concur in opi- niun with his hon. friend, that a great error had been committed by the committee of 1819, in the principle of the standard which they had recognised; on the contrary, he thought the principle of that report the soundest that could be recognised. It would be recollected, that when the committee sat, the Bank of England had the option by law of issuing the gold coin of the realm in payment of their notes. The law had since restricted the Banks of England and Ireland from paying in specie. Now he thought that, under the present circumstances, it was extremely desirable that that restriction should be removed; and that the Bank should have the option to pay in specie.

Mr. Huskisson

expressed his regret, that Mr. Ellice should have so suddenly brought the House into the discussion of a subject which required to be handled with much caution.

Mr. Baring

conceived that his hon. friend had done a public good by bringing the question before the House. It was not a subject to be settled on what was called a grand debate; it required great consideration, and the House should not shrink from the avowal of the truth. He was not disposed to touch the law which had been lately made upon the subject; yet it was his conviction, that the attempt to bring about the restoration of the currency was at the bottom of the public distress. He sincerely hoped that the distress and embarrassment of the present day would operate as a solemn warning to future times, not to depart from the established standard of value. Ordered to lie on the table.