§ Mr. G. Dawson moved that 19,000l. be granted for the charge of Gold and Silver Seignorage for the year ending January, 1831.
§ Mr. Poulett Thomsonsubmitted to the right hon. Gentleman opposite, the propriety of making some alteration in the present mode of doing business at the Mint. At present there was no charge for seignorage, and the expense of coining for individuals from bullion was defrayed by the public. He thought it would be much better were some charge affixed which would save the public this expense, and at the same time not hold out a bounty to melting the coin of the realm. He should object, however, to any seignorage exceeding the cost of the coining, as that would be pro tanto a depreciation of the currency.
Mr. Warburtondid not agree with his hon. friend, the member for Dover, that there ought to be the imposition of this seignorage, for such a charge would be equivalent to a depreciation of the intrinsic value of the coin of the realm to the amount so imposed. In the French Mint, a charge amounting to 100,000l. a year was levied for seignorage of gold and silver coin, and the expenses of the Mint of France were nevertheless greater to the public than were those of the establishments in this country.
§ Mr. Poulett Thomsonexplained, that he was misunderstood by his hon. friend. He had never intended to impose an expense calculated to depreciate the coin; but merely required a payment, in the shape of seignorage, equivalent to the expense incurred by the public in performing the work of coining for individuals.
Mr. Davies Gilberthad a great objection to any plan of seignorage, for the effect would be, that the amount, be it one or two per cent, or whatever other sum, would fall on the last holder of the coin, in addition to his loss by the depreciation of weight.
§ Mr. Humewished to know in what manner the profit of eight-and-half to ten per- 1362 cent upon the coinage of silver was appropriated for the public service. It was known that this profit was considerable, and it ought to go in reduction at all events of the 19,000l. a year which was expended at the Mint.
Mr. Herriesreplied, that there had not been of late any silver coinage, except about 100,000l. for the Colonies, during the year before last. At one time there had been a considerable profit on the coinage of silver at the Mint, but the amount was duly carried to defray the expense of the gold coinage. The latter had always been charged to the public (without seignorage) since the reign of Charles 2nd. It was obviously necessary to maintain the establishment for its prompt fabrication, to guard against the difficulties to which the transactions of the country might be exposed upon an emergency arising out of any fluctuation of the exchanges. The 19,000l. now required, he must observe, was not for the establishment of the Mint, but to pay the expense incidental to the gold coinage.
Mr. Baringlooked upon the present plan at the Mint as not only one by which the public sustained an unnecessary loss, but as furnishing likewise a premium to the party who brought his bullion to the Mint for coinage, at the expense of the country. The question of seignorage was, he knew, a difficult one; and there were many different opinions concerning it, but he believed that there could be but one opinion of the plan followed at our Mint. Whenever parties took bullion there they immediately received coin in its place, so that if the market price of bullion were equal or a little lower than the settled price given at the Mint, the owners of the bullion made a large immediate profit at the public expense. This was absurd. At least, those who carried bullion to be coined should wait till it was coined, and not receive money for it immediately. To keep a large quantity of money ready coined to meet such demands was a great expense. The system ought, in his opinion, to be altered.
Mr. Herriessaid, that the business of the Mint was governed by fixed regulations, which were deemed salutary for the public. Formerly the mode of transacting it was such that the Bank of England became the sole great importer or monopolist of bullion, and enjoyed from that situation a profit upon procuring coin for individuals. 1363 Having the monopoly it never gave more than 3l. 17s. 6d. per ounce for bullion, while the Mint price at which it received coin in return was 3l. 17s. 10½d. The Bank sent its bullion to the Mint, and could afford to wait a short time to have it coined, because such a corporation must always have a quantity lying idle in its coffers, and the interest of the money was therefore no object to it. Not so individuals; they could not afford to lose the interest of the value of their bullion for four or five weeks, while it was in progress of coinage at the Mint, and the consequence was, that they were obliged to deal for this money with the Bank. This course had, however, been of late altered, and, as he believed, beneficially for the public. In the committee of 1819, the House would probably recollect the valuable evidence given by Mr. Mushett, of the Mint upon this subject, which suggested a great improvement in the Mint practice and price. On the occasion when the change in the currency was soon after carried into operation, it was deemed right to act upon Mr. Mushett's suggestion. The Government was then naturally anxious to afford every facility to the public to meet the new state of things which that change must cause, and they had prepared a large issue of metallic currency to meet the withdrawal of the paper-money as speedily as possible. A good deal of the silver at that time provided was not eventually wanted, and the funds so employed were afterwards used in promoting the supply of gold coin, so that all the arrangements providently tended to suit the public wants. By thus throwing open the facilities to the public at large, which were previously enjoyed by the Bank, the importing merchant became a gainer to the amount of nearly one-half per cent, and the expense of the Mint was still only the same to the country that it was when the Bank, from the circumstances he had already stated, enjoyed the whole profit of the supply of coin. Surely, then, the present practice was preferable for the public generally. If the country returned to the old system, the Bank would gain all the advantages, it would again become the monopolist of the coin, and would make a profit at the expense of individuals.
Mr. Baringexplained, that even this advantage was given to individuals at the expense of the public; and why, he again asked, should the latter be called upon to 1364 give a premium to people to import bullion for individual profit? He denied this alleged advantage of coining for nothing, and thereby giving a premium of that kind. He knew very well that Mr. Mushett was an able, and excellent public officer, and he knew also that he had acquired (honourably and fairly it was true) a handsome private fortune. It appeared from the evidence which he gave before the committee, that his office at the Mint derived a profit from the quantity of coin there provided. By the change in the system, the right hon. Gentleman had taken the public money from the Bank and given it to individuals. The right hon. Gentleman had done that on mistaken principles, for the Bank never had a monopoly, and could not have had without a very great sacrifice of capital. It derived certainly some advantage from the former practice, but not sufficient to tempt individuals to enter into competition with it, which they might have done. On the subject of the silver coinage he would beg leave to make a few remarks. In his opinion, the silver coinage of the country was placed at this moment in a very awkward predicament. He did not mean on so inconvenient an occasion as the present to go into the comparative merits of a gold or silver standard for coin, but he must remark, that the current value of the silver coin, and the market price of silver, stood at this moment in a totally different proportion towards each other from that in which they did when the last Act passed, and yet the Act was expressly founded upon that mutual relation. The Act regulated that 66s. should be coined out of the pound weight of silver, worth at the market price intrinsically 62s., and it was founded on the opinion that this difference of value would not be a sufficient inducement to the coiner to produce false money. But what was the case now? The difference was as 59s. to 66s., so that the relative value between the metal and the money, which was the whole foundation of the bill, had of late entirely altered in favour of the fabrication of a spurious coin, and the subject must, he had no doubt, in another Session be entirely looked at and revised. He had heard something of the excess of the new silver coinage which had been prepared at the Mint, and he thought that first the manufacture of the money and then the withdrawal of this great load of silver, was a clumsy, awkward, and 1365 absurd operation. Where was the bulk of this silver now? It clearly was not in circulation, for it was admitted not to be required. Was it in the Bank or the Mint? The right hon. Gentleman talked of the value of affording facilities to the public to obtain specie. But, he would render much more advantage to the community would he enable persons to import the precious metals from the States of the New World, at a less expense than at present, than he could render by this gratuitous plan at the Mint. It was very material to reduce the expense of freights, and much more good would be done by that, he was convinced, than by employing the funds of this country to coin bullion free of seignorage for individuals. Besides, he had heard there was a spurious silver coinage in circulation, concerning which, he should be glad to obtain some information.
Mr. Herriesexplained, that there had not been within the last three or four years any new silver coinage, except that for the Colonies. The coinage alluded to was that prepared after the passing of the bill for putting an end to small notes and to facilitate its operation for the public. He was at the same time willing to admit that he believed there was at present a larger silver coinage than the wants of the country required, and he apprehended the surplus was accumulated at the Bank, for there was none in the Mint. As to the rumour that there existed a spurious silver coinage which had found its way into circulation he meant not a counterfeit or false coin but one of silver, of the same quality and fineness as the Mint coinage, which was supposed to have been fabricated in a foreign country and introduced into this to secure the profit which might be derived from the difference between the nominal value of the coin and market price of the silver. He had not the leas reason to believe there was the smallest truth in this supposition; indeed, from all the information which he could obtain, he thought there was no truth in the rumour, and for this reason, a quantity of silver coin had been selected as spurious, and sent to the Mint, where it underwent a careful examination, when the result was, that every single piece was ascertained to be the genuine fabrication of the Mint He had no other reason than this for disbelieving the rumour, and he knew that pot a single piece other than the legitimate 1366 silver coin had been detected at the Mint. Many examinations had been made to detect the supposed imposition, but in no instance had any thing been discovered different from the true coin. He had already said, that the expense to the public was now the same as when the Bank had the chief business of providing bullion in its hands, but the public generally had greater facilities than formerly, to get bullion coined, and now shared in the advantages that were formerly the exclusive possession of the Bank. The public certainly could not lose by the Government keeping prepared a considerable supply of coin ready for the public service; it must always have large balances in its possession; and was it not just as well, if not bettor, that these should be in the shape of gold coin ready for issue than lying dead at the Bank? There was no additional expense, and there was a provident arrangement for the public service.
§ Mr. Huskissondid not mean to argue that the expense of this Mint process was greater than the advantage derived from the increased facilities afforded to the public in the manner mentioned by his right hon. friend; but he quite agreed with the hon. Member opposite (Mr. Baring) that great public benefit would be derived from decreasing the expense which was at present attendant upon conveying the precious metals into this country. By increasing the facilities of transport a real advantage would be derived, and a saving of at least one half per cent assured for the importing merchants. Why should the merchants who speculated in the import of bullion have a duty of two per cent, and sometimes, if the vessel touched at Jamaica and other places of 3 or 3½-per-cent imposed upon them for its conveyance in Government packets or ships of war? He knew for a certain fact, that the importation would have been infinitely greater from South America, if it had not been for the existence of this tax. Merchants were quite ready to pay the same freight as was paid for public treasure brought in the King's ships.
§ Sir G. Cockburnsaid, that the tax was not so great as the right hon. Gentleman had stated. Its average was formerly only about one and a half per cent, it was at present at most two per cent. The reason of the imposition of the tax was, because the naval officers had often to make good great losses to the merchants. He 1367 knew a case in which an officer had to make good to merchants the fourth part of the invoiced treasure. It would be most unjust not to give such a remuneration to the officers as would cover the risks they ran. Another reason for increasing the charge was, that the Admiralty desired to discourage the practice of sending bullion by the King's ships. The advantages of that were so great, that captains sometimes ran after freights rather than after pirates. He had, however, to add, that henceforward, the freight was to be the same from Rio Janeiro as from Jamaica; and that it was intended that in no case should the freight be more than one and a half per cent.
§ Mr. Huskissonsaid, that any naval officer carrying public treasure would consider himself well paid at one per cent. He therefore thought that the freight paid by merchants ought to be much lowered. In the case mentioned by the gallant Admiral, the captain had himself to blame, as it was his duty to see that the bullion shipped accorded with the invoice. He did not think that the responsibility of the commanders of packets would be found of much avail, should the treasure they were intrusted with be found deficient.
§ Sir G. Cockburnobserved, that there was a great difference between officers carrying money for the Crown and for merchants. If an officer used every proper care of the money intrusted to him on the part of the Crown, but should by misfortune lose it, the Crown would absolve him from repayment. But in cases of money intrusted to him by merchants, he was responsible to the whole extent of his fortune for its safety.
Mr. Alderman Thompsoncomplained of the high rate of freight imposed on merchants, inasmuch as there was an invariable agreement that the naval officer should only be responsible to the amount of one quarter of the sum intrusted to him. As to the other points brought under discussion—the advantage of individual importers of bullion—that was much exaggerated. The advantage which the Bank gained was trifling, as it was always obliged to keep a large balance in hand.
Mr. Maberlythought the Government had a right to charge a freight for money imported in King's ships, but he thought that the profit ought to be put in the public purse.
§ Mr. Humereminded the House how often he had pressed the subject upon the Government. If a naval officer were a Member of the House, or connected with Government, he was immediately put into a fast-sailing frigate, which sailed along the coast of South America, took in one or two millions of dollars, and thereby put into the pocket of the officer 20,000l. or 30,000l.
Mr. Baringremarked, that the only return for British manufactures from South America was gold and silver, and unless bullion were brought home upon fair terms, the effect would be, to destroy the trade.
§ Vote agreed to.