HC Deb 22 May 1828 vol 19 cc859-68
Mr. Attwood

, in rising to present a petition from the miners of Holy well Hold, and other districts in Flintshire, said — the petitioners complain, and with reason, of the reduction in the duty on foreign Lead Ore, and of the abolition of One Pound Notes. I understood that some proposition, for again advancing the duty on foreign lead ore, was intended to be brought forward; but, with respect to the abolition of the small-note circulation, I shall take the opportunity of expressing my surprise that government has not thought it expedient or necessary to explain to the House the ground of their proceedings on that subject. They have, indeed, stated what their intention is, but have given no explanation of the reasons why they propose to persevere; the measure in question is not one which, originating for the first time in 1816, is now to be expected to be carried into effect as a matter of course: their whole course of proceedings has led to a contrary conclusion. They, in 1819, adopted a measure, the effect of which was to extinguish the circulation of one-pound notes; but, in 1822, another was passed to continue their existence. In 1826, government again resolved on their abolition; but, of this last law, they showed their distrust before it had passed. Its authors proposed au amendment to curtail its operation. They have not now ventured to extend their measure to Scotland or Ireland; so that, if carried into effect as it now stands, it would be difficult to conceive any legislative proceeding: more absurd or more inconsistent. From 1819, when you passed their first law, to 1822, their second, was a period of three years; from 1822 to 1826, when the third law was passed, was another period of three years; and, from 1826 to 1829, there were also three years, so that, by the time we shall have arrived at April, 1829, we shall have got to a period when a periodical change of opinions and measures will be to be expected from the ministers on this subject. This is no forced statement of mine; it is the expectation which generally prevails in the country and in this House. Do ministers then mean that the House should proceed in this course, without any explanation being given, and do not they mean to show why, in their opinion, a measure, unsafe in 1822, is safe now? Why is it expedient not to abolish these notes in Scotland and Ireland, and yet to abolish them in England and Wales? The reasons given in 1826, for extinguishing this circulation in England, were equally applicable to Scotland. Some new light has, however, since that time broken in upon ministers, as relates to Scotland, but of this the House knows nothing. A committee has been appointed which has probably found reasons why it was advantageous not to apply this measure to Scotland; might not a committee make the same discovery, as regards the other part of the empire? The act of 1826 was adopted in a period of alarm—of a panic in Downing-street, succeeding one in the city; and whether it be fit to be revived or not, it is fit, at least, that the House I should, out of respect for its own consistency, go upon some intelligible principle. This is the last measure for settling the currency on a permanent and satisfactory basis; and are we to leave it on the footing proposed, of one currency in one part of the empire subsisting without limitation, which is put down as injurious in the other. The right hon. Secretary for Home Affairs has, in fact, given the only reason yet afforded for this proceeding; for he said, that if this measure were not now effected, he despaired of seeing it ever carried into execution. This may be a very good ground of proceeding for himself, desirous, as he must be, to preserve the consistency of his own proceedings, but it is no ground for the House to act upon. The question for us is—is it expedient, or not, to adopt this measure at this time? If expedient, let it for that reason be executed, and if not, abandon it. Why, I ask, are we to believe, that a future House of Commons will be less disposed than ourselves to abolish these acts, when it may be expedient to do so; whilst we are called on to take the same step with no expediency proved? But as no expediency has been assigned, I will shortly state what, in my opinion, would be the effect which might be expected from at present withdrawing this circulation; and in that, I shall give a disinterested opinion, for personal interest I have none in this question.

I believe it will occasion temporary distress, of the extent of which, whether great or small, it would be difficult to form a previous estimate; but I think all calculations, founded on the mere amount in circulations, will be delusive. It might require five or ten million sovereigns to replace these notes, an amount not in itself large; but it is to be considered that this five or ten millions of capital is, perhaps, the most active and efficient of any part of the national capital—and puts in operation other capital to a great extent. Bankers, called on to pay off these notes, will reduce the general scale of their accommodations to the farmers, dealers in agricultural produce, manufacturers, and traders—in short, to the productive classes generally. These again, straitened in their resources, will reduce their concerns. The farmer and corn-dealer will carry their goods to the market. This, generally done, will be followed by a depression of prices; by what has been called over-production in short, though, probably, it may take place in the face of impending scarcity.

The landed interest have been strenuous in their endeavours to support prices by their corn-bill, but they have mistaken their course, they can secure remuneration by no corn-bill. Corn is the food of the people; and if it were possible to advance its price by any measure, not giving, at the same time, increased means of purchase to the labourer, such a law would be a legislative famine. The high prices during the war have not been owing to the Corn-laws; they were accompanied with high wages of labour, which no corn-laws could give. If the landed interest desire to secure to their tenantry remunerating prices, such as would enable them to pay the rents stipulated in their leases, their first business must be to secure to the farmer the existence of money of the same value as that which existed when his lease was signed. If they cannot effect that, their business will be to reduce rents; and not, by unjustly exacting false rents from the farmer, compel him to oppress the labourer. Their remedy is, to reduce taxation; not to relieve themselves by an unjust burthen, by doubling it on their tenantry and labourers, but to spend it equally—to take care that taxation shall endure its full share of reduction. And next, with regard to the labourer—if the manufacturers, generally, find their resources lessened, their course must be to discharge their workmen. This, generally done, would press heavily on the labouring class, at present in a condition certainly not prosperous; with low wages, high taxes, little employment, and insecure of that. The result of their condition is to be seen in the appalling spectacle presented by the gaols. On this head, I submit it to the right hon. Secretary, that when he supported the act of 1819, he stated that its great effect would be to relieve the labouring classes from those high prices and fluctuations of the paper money. The right hon. gentleman was then told, and truly told, that he mistook the effect which his measure would produce.

The right hon. gentleman opposite stated, some time ago, that the number of criminal commitments had increased to the amount of six thousand within the last four years. In the year 1804, however, the circulation of small notes was the most unchecked, and in that year the number of criminals increased only by one hundred and thirty-five; but, as we have heard, in the first four years of a gold circulation, the number of criminal commitments increased by six thousand; and the want of employment, which will arise from the further limitation of a paper circulation I have no doubt, will add still more to the number of commitments. It is, therefore, Sir, that I contend, that no measure should be adopted for diminishing the paper circulation without serious consideration. I am not, and never have been, a friend to an unlimited paper circulation; but I think no measure should be carried into effect without reference to the situation of the country, and the condition and natural character of the people. When the national revenue is free from the embarrassment in which it is now involved—when the agriculturist is not menaced by the prospect of ruin—when the tenantry of the country are not exposed to reverses which end in their indiscriminate ruin—when our gaols are no longer crowed with criminals—when we hear no more that unnatural cry of a redundant population—when the improvement of the country is steady and unimpaired, alike in war and peace—perhaps I may be induced to consent to doubtful experiments on our paper currency, but certainly not in the present state of the country. There are some measures which falsify all calculation; but I think that, by one act of parliament, you have doubled the debt, and put a forced value on every contract and engagement. Let any gentleman consider the altered situation of this country since we first began to tamper with its paper circulation.

During the war, our paper currency enabled us to meet the difficulties of our situation, and to bring that protracted contest to a successful close. Since the circulation of small notes was abolished, however, we have not been able to make any exertion; nor do I believe that we shall ever again be able to make the same exertions as we made when there was a small-note circulation. There never was a country which presented so degrading and humiliating a contrast, as England during the war, and England since the peace. The situation of this country, be it remembered, was always prosperous, under whatever circumstances, of peace or war, down to that miserable period when we occupied ourselves in re-establishing,—not a metallic standard merely, for a metallic standard adjusted to the value of the paper standard it superseded, could have been established with no obstruction to our general career of prosperity; but,—a metallic money differing in value from the money it supplanted.

This country, Sir, is in such a state of disorder and weakness, produced by those changes, that I do not believe it is equal to the present difficulty, light as that would have been to it, in any other time. It is upon these grounds I contend that no measure can be carried, diminishing the circulation of small notes, without difficulty, nor ought any such measure to be carried without the fullest inquiry. I have taken this opportunity to state my opinions on this most important question, and I have now only to move you, Sir, that the petition which I hold in my hand be read.

Mr. Secretary Peel

protested against the proceeding adopted by the hon. member. He must say, that on a petition, the principal prayer of which was, that the House would take into consideration the state of the trade in Lead Ore, the introduction of the topics on which the hon. gentleman had addressed the House was a little out of order. He knew that the state of the currency, the increase of crime, and other important topics, might be incidentally introduced into such a discussion; but when he had received no notice of the discussion, and when others who might wish to take part in it were absent, he put it to the candour of the hon. member, whether it ought not to be discontinued. To shew the unfairness of the views taken by the hon. member, he would just refer to one statement, in which he had asserted that England and Scotland were in precisely the same situation with respect to the circulation of small notes. In making that statement, did the hon. member think it fair to hide from the House the important fact, that, for the last century Scotland had possessed a circulation of notes under 5l., and that it was not until the Bank Restriction act that 1l. notes had been permitted in England. Until then the circulation of Scotland had been for a century a paper circulation, while that of England was exclusively gold. The hon. member might say that, in his opinion, there were reasons for making the circulation of the two countries the same, but it was impossible to contend that their circumstances were exactly similar. He should make no further observations at that moment, as his right hon. friend, the chancellor of the Exchequer, had postponed his motion on this subject, at the desire of many members who were interested in its discussion, and who could not be present that night; and he trusted, for that reason, the House would suspend their opinion until the subject came properly before them.

Mr. Liddell

, sir J. Graham, and Mr. Western concurred in stating, that the subject was one of great importance, but that this was not the time for its discussion,

Mr. Baring

said, the object of the bill which the chancellor of the Exchequer proposed to introduce, was simply to prevent the Scotch paper money from coming into England after such a circulation had been declared disadvantageous for this country. He acknowledged the ability and extensive information of his hon. friend and colleague, but on this occasion he believed he was entirely wrong when he appeared to wish them to return to a depreciated currency, which, instead of relieving the difficulties of the country, would materially increase them. To what was much of the present distress of the country to be attributed, but to the tampering with the currency? And if any thing that had been done was good, as an argument on this subject, it was, that they should avoid that error in future. He trusted that we should persevere in the system which was now laid down; the strict adherence to which would best provide for our security.

Mr. Hume

was glad that the act regulating the currency of England had stopped short of Scotland, and he believed that this country must, ere long, return to what he would call a sound currency of paper and gold—a paper currency that was convertible into gold on demand. By banishing such a currency from this country we had crippled ourselves, and the difference in the currencies of the three kingdoms was productive of the greatest inconvenience: there was one currency for England; another, totally different, for Scotland; and a third, of a mixed kind, for Ireland; and the whole was now to have the additional patchwork of a bill, to prevent Cumberland, and the northern parts of this country, from enjoying the same advantages as Scotland.

The Chancellor of the Exchequer

said, he had postponed the discussion of his bill at the request of many gentlemen who could not attend that day, and from no fear that he should not be able to justify its necessity to the House.

Mr. Stuart Wortley

thought, that under such circumstances, the present discussion was misplaced.

Mr. Dundas

said, that the government had not given up the measure with respect to Scotland from caprice, but because they had been satisfied by evidence, that the present currency of Scotland was the most advantageous for that country, and they had therefore allowed her to follow her own course of prosperity in her own way.

Mr. Monck

said, he could not suffer the observation of the hon. member for Aberdeen to go abroad without contradiction. That hon. member had spoken of the necessity of a paper currency convertible into gold, and seemed to suppose that such a currency would add to the security of the country. Why, it was just that sort of currency which destroyed the security, whenever a panic occurred from any cause whatever. What was it that occasioned, in 1825, the failure of twenty-five out of every hundred bankers, but the power of demanding that their notes should be immediately converted into gold? That convertibility, therefore, constituted the danger which parliament had wished to avoid; and he trusted that they would not depart from a course which experience had proved so necessary.

Mr. Attwood

observed, in explanation, that if the right hon. Secretary had attended to the former part of what he had said, he would have seen that the character of the petition was accurately described; the complaint was of injury from two causes, the introduction of foreign lead ore, and the abolition of small notes. He had used no argument which did not strictly bear on the petition. With respect to the practice of debates on petitions, he observed that it was generally deprecated by one party, and approved by another; but it was surely advantageous to discuss frequently, and on various occasions, questions of difficulty and importance. The right hon. Secretary had been mistaken, in imputing to him the allegation that Scotland and England stood on the same footing with respect to the circulation of small notes. His statement was, that the right hon. gentleman's colleagues, when they brought in the bill of 1826 for abolishing small notes in England, supported that measure by reasons applicable in the main to Scotland and Ireland, as well as to England; and he had pointed out the inconsistency, therefore, with which they were now chargeable in proposing, without explanation, to carry their measure into effect in the latter part of the empire, and not in the former. His hon. friend and colleague, Mr. Baring, had charged him with exaggeration, in his estimate of the mischiefs arising from these measures relative to the currency. Now the degree of mischief thus occasioned must be estimated from the extent of difference effected in the value of money. He (Mr. Attwood) had taken it at fifty per cent., or one-half; but had expressly said, that he gave such estimate as vague, and that neither that estimate, nor any other, could be taken as pretending to an approach to accuracy. But he well remembered the estimate given by his hon. friend himself—in answer to a calculation of the late Mr. Ricardo, who had said the difference was three or four per cent. His hon. friend, in answer, gave his own opinion, which was, that the money of Mr. Peel's bill differed in value from the paper money it superseded, to the extent of perhaps twenty-five or thirty-three per cent., and on many articles as much as fifty per cent. There was little difference, therefore, or, in fact, none, between what his hon. friend called an exaggerated estimate and his own. The difference of money, in which the debt was contracted, and in which it was now to be paid, was very great; and never was there a greater mistake made, than that which was made by that very extraordinary man, Mr. Ricardo, in his estimate of the effect produced on the value of money by the alteration which took place in the currency in 1819.

On the question, that the petition be printed,

Mr. Attwood

added, that his hon. colleague had observed, that his estimate was overcharged, not in the extent he ascribed to the alterations in the value of money, but in the evils he ascribed to the abolishing one-pound notes. But all he had said on this head was, that this abolition would occasion some degree of general pressure and difficulty extending to all the productive classes; but what degree, he neither himself pretended, nor could any man pretend, to estimate. It was doubtful how far it would go. His hon. friend admitted that the value of money had been altered from twenty-five to perhaps fifty per cent. That alteration had been effected in the legal money of the country, by the act of the government secretly, without its being known that such an operation was in progress; and if any man would consider what the effect of such a measure must, be, in a country like this, operating on all its public and private pecuniary engagements, altering to that extent, all monied contracts, he would be convinced, that it would be difficult to make any statements of the effects of such measure which could be considered as exaggerated. It was from the disorder thus occasioned, that he looked on the additional pressure which the reduction of one-pound notes would occasion, with apprehension.

Ordered to be printed.