§ Considered in Committee.
§ (In the Committee.)
§ New Clause (Defacing gold coin under weight not to be obligatory).— (Mr. Montagu.)
§ Question again proposed, "That the Clause be read a second time."1238
§ MR. A. O'CONNOR (Donegal, E.)
On a point of order, Sir, I beg to remind you that I was in possession last night at 12 o'clock when the discussion closed.
§ * SIR R. FOWLER (London)
I merely wish, in relation to this clause, to call the attention of the Chancellor of the Exchequer to the very bad state in which a great deal of the gold coinage in circulation is at the present time. The right hon. Gentleman is, no doubt, quite aware of this, and I will only mention it as a question of some gravity, to which I hope during the Recess the right hon. Gentleman will be able to give attention, and that he will see his way to deal with the subject next Session.
§ SIR W. HARCOURT (Derby)
I understand that last night the Chancellor of the Exchequer objected to the insertion of this clause, and I confess I think his objection was well founded, for the clause would destroy altogether such security as we have against the circulation of depreciated gold coins and damaged gold coins, which certainly it is very necessary to maintain. There is no doubt the condition of the coinage of the country has fallen into a state not creditable to the greatest commercial country in the world. Everybody must admit that. For a short time when I was at the Exchequer I had to consider the subject, and I certainly thought it required immediate attention. The estimate made at that time of the sum that would be required to put the gold coinage in a proper condition was between £600,000 and £700,000, and no doubt the three years that have since elapsed have still further deteriorated the coins and they are in a worse condition, so that the sum required is still larger. It is not creditable to England which has a gold currency—aud I am very glad we have—that we should have this gold currency depreciated to the amount of half a million sterling. Our gold coinage has been for a long time the basis of the monetary system of, I may say, the whole world, and I think one of the first duties of the Government should be to put that coinage into a proper condition. I am very glad that the Chancellor of the Exchequer has begun this duty, though in a tentative and experimental way, for, of course, it is only with a small part of 1239 the question that this Bill deals. I am glad of it, for many reasons, but particularly because it indicates that the Chancellor of the Exchequer still intends that we shall keep gold as the basis of the currency of the country, and that he has not adopted any new-fangled ideas of bi-metallism, which would certainly have the effect of driving gold from the country, and all the money spent on the restoration of the gold coinage would be so much wasted expenditure. This Bill can only be justified on the assumption that the Chancellor of the Exchequer means to maintain gold as the basis of our currency. Of course, the first question the Chancellor of the Exchequer has to consider is, who is to bear the cost of restoring the gold coinage of the country?
I am sorry to interrupt the right hon. Gentleman; but he is not speaking to the clause before the Committee.
§ SIR W. HARCOURT
I would ask indulgence at this time of the Session, otherwise I must move the postponement of the Bill, in order that I may have more latitude in discussion. The Chancellor of the Exchequer is well aware that I have forwarded the progress of this Bill, and I understood that I should have the opportunity of making a statement on this subject; but, unfortunately, there seem to be so many restrictions surrounding us now, that I scarcely know how it is possible to express an opinion on this or any other subject.
The right hon. Gentleman is aware that the opportunity for a general statement is on the Second Reading, and it arises again on the Third Reading; but a general statement cannot be made on the question of inserting a particular clause.
§ SIR W. HARCOURT
It is useless to talk of discussion upon the Third Reading, because, at this period of the Session that stage is an idle form. I should have thought that one might have been allowed to make some observations on this clause; but if that is not so, I can only regret that a Bill which is certainly of very considerable importance should be passed without discussion in the House of Commons.
§ MR. A. O'CONNOR
I regret that at this stage it is not competent for the right hon. Gentleman to pursue this interesting topic, but probably 1240 he will find the opportunity to do so on the consideration of the Report. In regard to the clause which it is proposed to add, I desire to urge upon the Chancellor of the Exchequer the very reasonable character of the proposal embodied in it. At present the law in regard to light gold coins is of a very extraordinary character. Anyone being tendered a gold coin below a certain standard of weight is bound there and then, being provided —and the law contemplates that he shall be provided— with a pair of scales, to take out the scales and weigh the coin.
§ SIR W. HARCOURT
Sir, I rise to order. This is the very argument I was trying to pursue on this clause. It was upon the liability to replace-light gold coins that I was speaking, and I thought it was most material in reference to this clause which proposes that no person shall have imposed upon him the liability to destroy a light gold coin, as is the law now; I had agreed that the Chancellor of the Exchequer was right in opposing the clause, and was about to refer to what had been done in former times when you, Sir, stopped me. I was speaking on this clause, as I thought, in the most legitimate way.
I am sorry if I misunderstood the right hon. Gentleman, and interrupted him in the discussion of the clause. I confess I was greatly deceived, for I thought he was entering upon a wider discussion embracing such questions as bi-metallism, the maintenance of a gold currency and the cost of restoring the gold coinage. If he was discussing the clause, which I confess I thought he was not, he has a. perfect right to continue to do so.
§ SIR W. HARCOURT
I had made a parenthetical remark upon bi-metallism and had passed away from that and was discussing the question of who was to pay for the replacing of light gold, and at the moment you stopped me, Sir, I was about to refer to the policy of Sir Robert Peel, and what had been done in previous periods.
To discuss the point is scarcely relevant, for I have invited the right hon. Gentleman to proceed.
§ MR. A. O'CONNOR
I was observing upon the conditions imposed by the existing law whereby any person being 1241 tendered a piece of light gold is then and there required to weigh, cut, break or deface it. That is an obligation thrown upon every member of the community, which I will venture to say in 999 cases out of a 1,000 it is perfectly impossible to discharge. It is an obligation the discharge of which is attended with considerable risk; in point of fact, it is an obligation impossible to discharge. But see the absurd position in which the Government may be placed under the existing law. If I cash at a post office an order for £1 and receive the money from an agent of the Government, I am not only entitled, but I am bound to examine the money, and if it is light, as it very often is, I am required to deface the coin. Suppose, therefore, an individual goes to a post office and defaces, in accordance with the directions of the Statute, the money which the Government hand him in discharge of their fiscal obligation, what is the position of the Government? They will be bound to replace at their own expense this coin so defaced, unless, indeed, they prefer to make the unfortuate postmaster responsible for the money he is using on their account, they not having supplied him with money of standard weight. The whole position is perfectly unreasonable, and may be made by those who choose to indulge in this kind of freak perfectly ridiculous. The Post Office would be placed in a very inconsistent and embarrassing position if this, which is open to any member of the community, were actually done. What can be the use of perpetuating this clause of the Act of 1870? There is no practical benefit arising from it, and, under the circumstances, I think the Amendment of the hon. Gentleman, whom I am sorry not to see in his place, is one that ought to commend itself to the Government.
* MR. BARING (London)
I only want to point out one thing. I am quite aware that the law is as the hon. Member for Donegal has stated it, and that the obligation lies upon all persons, but, as a matter of fact, it is attended to by no one except the Bank of England. Now, if this clause is passed, the Bank of England will be morally prevented from doing what it now does to keep the currency of the country in as good a state as by this means is possible. If we pass this clause the Bank of Eng- 1242 land will be bound to return light gold to its depositors instead of making it unfit for circulation, and thus to assist in the circulation of light gold, and I do not think that is desirable.
§ * THE CHANCELLOR OF THE EXCHEQUER (Mr. GOSCHEN, St. George's, Hanover Square)
The hon. Member behind me has in a very few words-stated the main objection to the clause moved by the hon. Member opposite. I admit there are such imperfections in the law that it has broken down to a great extent; but still there remains the security that the Bank of England does watch over the gold circulation, and does not allow light gold to get into circulation. As we are dealing with only a small part of the question it would not be wise to repeal the existing safeguards against the circulation of light gold. The right hon. Member for Derby shares the view that the present protection ought to be maintained. Large sums might in light sovereigns be sent from abroad, and might pass-into circulation; but these are now clipped when received, and so their passing into circulation is stopped. The removal of the existing protection would, increase the amount of light gold current in the country, and thus aggravate? the evil which we are now attempting, to deal with. Therefore I cannot accept the clause now proposed. No doubt the three years that have passed since the estimate was made of the loss from, gold coinage have aggravated the evil, and have caused it to be somewhat greater than it was calculated to be at that time. I should be glad if it were possible to put down the Third Reading of the Bill at a time when the right hon. Member for Derby could speak on the interesting subject of the coinage; but in the present state of business I cannot pledge myself to any such arrangement, although I gladly acknowledge the assistance I have received from the right hon. Gentleman, and should be happy if I could return his courtesy by affording him a fuller opportunity of discussion than is afforded by this clause.
§ * SIR R, FOWLER
May I suggest that if the Bill were set down as the first order to be taken after midnight it would give the right hon. Gentle- 1243 man the opportunity for making that interesting speech, to which I am sure we should be glad to listen.
§ SIR W. HARCOURT
I have no desire to make an interesting speech; what I want to do is to discuss the clause, and that has been my object from the first. This clause, as I understand, is directed to the question of relieving the holders of light gold from liability in respect to its being below standard weight, and on that I was desirous of making some observations, and will endeavour to do so, and if I have the misfortune to be out of order I will sit down again. Under the present law the last holder is responsible for the lightness of a sovereign. I can remember the extreme inconvenience people sustained when Sir R. Peel put the coinage in order more than 40 years ago, and when shopkeepers kept scales, weighed sovereigns, and charged customers 6d. or 8d. for depreciation. It is not possible to return to a system like that now. Even under the pressure of the American War, when Lord North replaced the coinage, the State bore the cost, not the last holder, and that was also done in the time of William III., when Sir Isaac Newton was Master of the Mint. The cost now will not be much larger than it was in the time of Lord North. This Bill adopts the principle that the State is to bear the cost of replacing the coin. This clause proposes to discharge everybody, including the Bank of Ragland, from liability in respect of light coin. When light gold comes to the Bank of England it is clipped and taken out of circulation. The coinage would not have been in its present condition if the Bank of England had discharged that duty better and more extensively. When I was at the Exchequer I found the Government itself issuing light sovereigns—a most improper proceeding. That is to say light coins were paid into the Post Office, the Customs, and the Inland Revenue in large quantities, and of course the first duty of the Government is to obey the Act, and either to pay the light gold into the Bank of England or see that it is not repaid by the Government. I gave stringent orders that no Government Department should re-issue any light gold. The difficulty in the pro-evinces is that in many great towns there are no branches of the Bank of England, 1244 and therefore money received by the Post Offices and other public departments is paid into private banks, which re-issue the light gold. The country bankers keep all the best sovereigns and send them to the Bank of England, and the light sovereigns they pay to the public. That is one of the reasons why the coinage has got into such a bad state, and this clause would make it worse by relieving the Bank of England from any obligation whatever in this respect. The hon. Member opposite (Mr. Baring), who upon this subject speaks with some authority, will allow me to observe that I think the Bank of England, in reference to the coinage as well as to other matters, ought to render more service to the public in having more branches in the country. There is no other country in which national banks do not offer greater facilities by means of branches than the Bank of England does in this; and it ought to do more in return for the remuneration it receives from the State and the advantages it enjoys under its charter. All Governments in succession have been responsible for the coinage being in its present condition, as it is more than 40 years since anything has been done to replace light coins. The life of a coin may be said to be 20 years, and after that it begins to be light to a slight extent, so that the Chancellor of the Exchequer is not too soon in beginning to do something. But, after all, the coinage of 50 years ago being dealt with, there will remain coinage since then in almost as bad a condition. I was about to ask the Chancellor of the Exchequer out of what fund he proposes to meet the cost or what he proposes to do, and perhaps I may be allowed to say this—The Chancellor of the Exchequer has at his disposal a considerable fund, derived from the profit he at present obtains upon silver and upon copper, and amounting now to about £130,000, and out of that he could perfectly well keep the gold coinage in good order. It is a great windfall to have got this great surplus at the Mint. There is another thing not altogether alien to this question. Everybody knows that the coinage of England, from its high standard and universal currency, is sought for all over the world; but it is sought for not only as coinage but as bullion. People are glad to get English sovereigns which 1245 carry assurance of their value, and send them to be melted for bullion abroad, so that, in point of fact, we are assaying bullion for foreign merchants. I shall be glad of the Chancellor of the Exchequer will bear this in mind when he is considering the whole question, and consider if any further security can be taken that the English Mint shall not be employed in assaying for foreign countries for melting purposes. It is obvious that there is a great loss on the coinage by this means. While I concur with the Chancellor of the Exchequer in opposing this clause, I agree with others that the responsibility for the lightness of coins ought not to be put upon the last holder; but as this is only a temporary measure, it is not expedient to discharge everybody from the liability of endeavouring to protect the coinage. I hope the Chancellor of the Exchequer will take these larger matters into consideration, and, when he is able to place the gold coinage in a sound condition, that he will take every precaution against its ever falling again into its present condition, and to prevent its being used illegitimately by being melted into bullion as soon as coined.
§ * MR. GOSCHEN
Perhaps I may say in reply to the right hon. Gentleman that I am quite favourable to taking these larger questions into consideration. But it would be premature to lay before the House the plans of the Government before I have reduced them into proper form. I fully admit the importance of dealing with the question to which the right hon. Gentleman has called attention with regard to the taking of gold coins from this country, but, perhaps, exaggerated ideas of the loss sustained will be avoided if I say that the total annual cost of the coinage of gold is not much more than £2,000 a year. We ought not to lose sight of the advantages we gain by the high standard and the universal currency of our sovereign. Next Session I hope to introduce a measure dealing with the incidence of the loss on light coins.
§ MR. A. O'CONNOR
I am sorry the right hon. Gentleman has not referred to the issue of light coins by the Post Office. The Customs no longer receive light gold as they did some years ago, but the Post Office Authorities still issue light gold in direct contravention of the Statute.
§ * MR. GOSCHEN
I do not propose to make any change in the law; but the hon. Gentleman, as I understand, calls on me to make a change in the practice. His proposal, as it seems to me, would make it necessary that the Post Offices generally should clip the coins, and I am bound to say I think it would give rise to a good deal of complaint to introduce that practice just upon the eve of our dealing with the whole question. I think it would cause considerable dissatisfaction, and I doubt whether the advantage that would arise from the adoption of that practice for six months would be equal to the public inconvenience it would cause. Of course it would be necessary to supply the post offices with the necessary plant, and to instruct the officials as to how to use it, and I am doubtful whether the cost of doing so would not equal the saving that might arise from taking of the light gold out of circulation at the expense of the holders.
§ SIR W. HARCOURT
I do not think the Chancellor of the Exchequer altogether appreciated the point of my hon. Friend's remarks. It is not thought necessary that the Post Office should clip the sovereigns and charge the last holder for it, but that when the Post Office receives light gold it should pay it into the Bank of England, and allow the Bank of England to charge the Department with the loss. It it were paid into the Bank it would not be re-issued. I understand that the practice of the Post Office is to pay it into local banks. If that course is followed, of course the local banks re-issue it. The objection that has always been urged against my proposal is that there are no branches of the Bank of England into which the Post Offices can pay the money. I am quite opposed to the Post Offices having scales and marking the gold when received. I do not think the public would stand such an inconvenience as that. I do think, however, it is an evil that any public department should be the means of re-circulating light gold.
§ * MR. GOSCHEN
I appreciate the point put by the hon. Member and emphasised by the right hon. Gentleman. If the law were revised now it would doubtless be the duty of the Government to deal with this matter. I certainly think it would be unwise to enforce the law strictly with regard to clipping coin, 1247 but I will once more with pleasure look into the question of the responsibility of Post Offices for the re-issue of light -coin. I will see what regulations can be made on the subject. It may be difficult to carry out the suggested practice in the smaller Post Offices; but, at any rate, I will take the matter into my consideration.
§ MR. A. O'CONNOR
The point I wish to bring out is, that the last holder when he takes his money to the Bank of England is penalised to the extent of the loss of weight, but he might protect himself if he followed the provisions of the existing law. The Post Office Authorities are breaking the law, because they do not avail themselves of that same provision, and they are still saddling this charge on the unfortunate private holder.
§ Question put, and negatived.
§ Several verbal Amendments agreed to.
§ Bill reported; as amended, to be considered to-morrow.