HC Deb 19 May 1826 vol 15 cc1277-82
Mr. Baring

rose to present a petition from lieut. col. Bird complaining of the changes occasioned in the currency of the Cape of Good Hope by large issues of paper-money by the colonial government. The hon. member entered into a description of the various changes which had been effected in the currency of that colony by the Dutch governors, whilst it was in the possession of the United Provinces. By the proclamation of sir David Baird the value of the rix-dollar, which formed the currency of the Cape, had been fixed at 4s., and from that period to the present it had been successively reduced to 3s., 2s. 6d., and finally to 1s. 6d. Nothing could be more arbitrary, unprincipled, nor more injurious in its effect, than this unjust alteration in the currency of any country. He begged it to be understood that the petitioner made no complaint whatever of the government of the Cape, and particularly that the present application had no reference whatever to the noble person who now held the chief office there. He only wished that the House should be made acquainted with the actual effect which had been produced by the changes of which he complained, and this would be best understood by means of a statement of the times and manner in which the various alterations had been made. In 1806, the rix-dollar was current at the value of 4s. From that year, to 1810, its average value was 3s.; from 1811 to 1816, it was 2s. 6d.; from 1816 to 1820, it was 1s. 10d.; and from 1821 to 1825, it was 1s. 6d. at which rate it now continued. All of those depreciations had been occasioned by the extensive issues of paper money, and exemplified a curious fact, into which he would not now enter, respecting the influence which paper money had upon the value of a metallic currency. He knew it would not be easy to return at once to the state of the currency before these changes, nor would it be consistent with justice to do so indiscriminately, even if it were practicable. This, however, might be done, and was quite fair—a graduated scale might be made of the various engagements which had been entered into, and of the value of the currency at different times. It was obviously necessary that some such measure should be adopted; because, as he had been informed from unquestionable authority, many individuals had been ruined by the effect of these changes. He was sure he had underrated the amount of the disadvantages to which the inhabitants of the Cape were exposed, and in one instance particularly, as to the coin which was sent thither from this country by the government. That coin was produced at a gain of twelve per cent beyond its real value, and thus the currency of the Cape suffered this loss in addition to the others. If he had heard that these things had been practised in a barbarous country, he should perhaps Have felt no great wonder at it; but when he knew that the subjects of the British empire were exposed to their effects, he could not hesitate to express his decided censure of them. He begged to inform the House, that the petitioner had applied to some of his learned friends for their opinion as to the circumstances of his case; and they stated, that no redress could be had through the ordinary legal tribunals, and that it was by means of this House alone that he could have justice done him. He knew that the king might, by the advice of his council, and therefore under a certain responsibility, order the 20s. piece to pass current for any sum he should think fit. That power had, however, been exercised in this colony without any responsibility, and to such an extent, that if the House did not interfere, the property and even the people themselves must be sacrificed. He appealed to the knowledge which the secretary for the Colonial Department had of the petitioner for his perfect respectability, and trusted he should hear that it was intended to examine more carefully the case which he had presented to the notice of his majesty's ministers.

The Chancellor of the Exchequer

agreed that the subject of the petition was an important one. The charge which the hon. gentleman had made against the government was so serious, that it required a full explanation of all the circumstances of the case, which could not be entered into at that moment. When the time should serve, he should be ready to justify the course which the government had felt it necessary to adopt. But, before he entered on that justification, he should be obliged to move for some returns, in order to put the House in possession of certain facts explanatory of the nature of the paper currency; and in the mean time he hoped that hon. members would not conclude with the hon. gentleman, that the conduct of ministers had been as unjust and iniquitous as it had been represented. When the hon. gentleman compared the paper money of the Cape with that of this country, he compared two things which had no resemblance whatever to each other; seeing that the former, whether issued by the Dutch or by the British government, was never convertible into specie, nor payable on demand at the will of the holder. Like all other paper-money, the amount of winch was unlimited by the law of the country in which it was made, it contained the essential qualities of depreciation. It never included any obligation on the part of the government to pay it in specie. However this might surprise gentlemen, he could prove it by documents for which he should move. The measure which gave rise to this complaint was a part of a general design to give to the colonies which were overrun with paper-money, something like the benefit of a metallic currency. It became necessary, in putting this into practice, to consider at what rate they should receive the paper money already issued, in exchange for the silver they sent out. This showed also that the government did not feel themselves obliged to take the paper-money at par. The hon. gentleman was mistaken if he supposed that the various issues of paper-money which had taken place at the Capo grew out of the necessities of the British government, or that they had been used in payment of the British troops, or for the public services of this country, but for the local purposes of the colony. He would first put the House in possession of the materials necessary for forming an accurate judgment, and then he should be ready to enter into any further discussion of the matter.

Mr. Hudson Gurney

said, he wished to call the attention of the House to what he could not but consider a very great injustice. He meant, the situation of those persons who were creditors of the Orphan Chamber, at the time of the capture of the Cape. The case of one family, partly resident in Holland and partly in this country, came within his own knowledge. It was that of a person dying, and his property, by the laws of the colony, being placed in the hands of the fiscal, and lodged in the Orphan-house for the children left minors and orphans; the rix-dollar being then at 4s. 6d. At the time of the ceding of the colony to this country, the security of these investments was guaranteed by the English government, and government lands were understood to stand mortgaged as security for these funds. This guarantee was recognized in many subsequent proclamations; but the government issuing more paper for the occasions of the colony, the exchange with England rose from 15 per cent in 1803, to 200 at one time, and 180 since, against the Cape. That family had received scarcely any interest for eleven years, a small part having only been remitted, at that immense loss. The rix-dollar paid in at 4s. 6d. having been thus fixed by government at 1s. 6d., persons in this position presented a case entirely different from that of the colonists, who had been paying and receiving, in Cape currency, during its fluctuations.

Dr. Lushington

said, it was not his hon. friend's fault that this petition had not been presented before, for application had been previously made by the petitioner, both to the under Secretary of State for the colonies, and to the Secretary of the Treasury, for compensation. This was a question of very great importance to the Cape of Good Hope; and he did trust that it would be considered with as much favour by his majesty's government as a similar case from another colony had been, some time ago, when earl Bathurst, with great consideration and humanity, referred the petitioners to the Privy Council, who rescinded that part of their former order under which the parties had been aggrieved. As to what the chancellor of the Exchequer had said about its not being obligatory on the government to pay the paper-money in circulation at the Cape, that was a declaration which he had heard with the utmost astonishment. He could not conceive it possible that the government could have issued, and received money for these notes, without holding themselves bound in common honesty to pay them. That, however, the right hon. gentleman seemed to look upon as a matter, not of right, but of grace and favour.

Mr. Ellice

denied the doctrine of the Treasury, with respect to the analogy between the Cape currency and that of this country. The issue was made by an English governor, and the government obtained for their notes at from 2s. 6d. to 3s. the rix-dollar. It was, therefore, most unjust for them to pay off those notes' at half this value.

Mr. Herries

said, that the learned civilian had clearly misunderstood his right hon. friend, who had merely, as he understood him, intended to say that the paper issued at the Cape did not purport to be convertible into money: and this, any hon. gentleman who happened to possess a bank-note of the kind in question, would discover to be the case. The fact was, that paper had never been at par, except upon two occasions, when large portions of it were called in and paid off by the Dutch government, who immediately afterwards issued a larger; amount than that which they had cancelled. The object of the measures, the Operation of which was complained of by the petitioner, was to introduce British coinage into all the colonies, in lieu of the various descriptions of paper which at present circulated therein. In some cases the paper was that of a former government, issued previously to our possession of the colony; in some it had been so issued under circumstances of great embarrassment, in others the absurdity had been resorted to of striking out a large hole in the centre of a Spanish dollar, and then it was declared by proclamation, that the piece so deteriorated in value should pass for one shilling more than it would have done if it had been entire. It must be evident from these facts, that the measure determined on by government was not only a proper but a necessary one. It was an act of justice to the colony to substitute a metallic currency in lieu of a paper one subject to such ruinous fluctuations. The Treasury had, previously to enforcing the introduction of the metallic currency, bestowed great pains in considering on the manner in which the clause should be brought about so as to produce the least possible inconvenience to the colonies. If government were called upon to pay 4s. for every rix-dollar which they took up, they might as well at once take upon themselves to pay the whole of the debts of the colony; When the order went from this country, fixing the par of the rix- dollar at 1s. 6d., an accompanying order was sent out, that every individual who chose to place 1s. 6d. in the public chest should receive a rix-dollar for it. That measure was thought necessary to operate as a check on any sudden injury that might arise to the people in the colony from the change.

Mr. Baring

said, he did not think the hon. member had seen the essential points of the complaint. He agreed generally as to the policy of establishing a metallic currency in the colony; but such a step ought to have been preceded by a measure something similar to what might be termed an equitable adjustment; but though he thought the establishment of a metallic currency a correct proceeding, he considered government wrong in taking the extreme end of the line to fix the value of the rix-dollar. It fluctuated from 1s. 6d. to 4s. and it would have been better to have taken a medium rate. He hoped that a committee would be appointed to inquire into the best mode of regulating the currency, and of suggesting a method for the repairing the evils attendant on the change from a paper to a metallic one. The appointment of such a committee would, in his opinion, satisfy all parties.

Mr. H. Gurney

asked, whether he was to understand, from the hon. gentleman, that the creditors, previous to the capitulation, were to be paid at the rate of 1s. 6d. instead of 4s. 6d. the rix-dollar, or whether their case would receive further consideration?—No answer was given.

Ordered to lie on the table.