CURRENCY.

HC Deb 17 March 1896 vol 38 cc1181-253

MR. HERBERT WHITELEY (Ashton-under-Lyne) rose to call attention to the Currency and to Move:— That this House is of opinion that the instability of the relative value of gold and silver since the action of the Latin Union in 1873 has proved injurious to the best interests of this Country, and urges upon the Government the advisability of doing all in their power to secure by International Agreement a stable monetary par of exchange between gold and silver. The hon. Member said he need scarcely point out, that as a new Member he should not under the ordinary course of procedure have taken upon himself this responsible duty. No doubt his position was, however, fully understood, that having been successful in the ballot for that evening for a place to bring forward this great question of Currency reform in which he took much interest, and the Rules of Procedure not allowing him the option of passing this on to a more experienced Member, upon him devolved the task of so doing. Well, in this House which included so many new Members, he thought that amongst them all he should gain ready acquiescence and probably sympathy when he said, that bad as it was to have to stand up to make what was practically one's maiden speech, almost the last subject that any one of these hon. Gentlemen would choose, when so doing would be the most intricate and contentious one of Currency reform. On those grounds, he did not intend, indeed it would be presumption on his part to attempt the task, to enter into the argumentative or theoretical side of the question. That was essentially a matter for experts of whom there were many present, and to them he left the duty of bringing forward those arguments, which from their experience they knew to be most important, most relevant to the issue before the House. There was, however, one point of view from which, perhaps, he might claim the right to speak with some little knowledge, and that was its practical side and bearing as regards the commercial interests of the country. He did not argue that this was the highest standpoint from which it might be regarded, nor even the greatest, for to agriculturists its importance was still wider, but to them he left the statement of their own case and he looked for their cordial support. But, as regarded the effect upon commerce of the present system of currency, although like the right hon. Gentleman the Leader of the House, who in his private capacity as a Member would, he hoped, give the powerful support of his voice and vote, unlike him or the hon. Baronet the Member for North West Manchester, whose knowledge and interest in this subject were well known, and who would second this Resolution. He had not the honour to represent the City of Manchester, but he represented one of the great centres of industry in the north of England, and, he could further claim, among Members of this House when Parliament was not sitting, to be one of the few, and, perhaps, the most regular attendant at the great centres of exchange and distribution. Seeing the close touch in which he stood with these bodies, he might claim some acquaintance with the general tone and feeling as regarded this matter of the commercial interests of the north; and, beyond all doubt, it was that this great question of Currency was one to them of the deepest and almost vital importance; and the desire that some solution, and settlement of this matter should be found, was one most urgently felt. With still greater confidence could he say that this feeling among the working classes of all trade was still more general—indeed, it was almost universal, and, for this reason that the backbone, the very foundation of all trade undertakings must be confidence, and that owing to violent fluctuations between the gold and silver metals which for many years had been so frequent, this beyond everything has made confidence impossible, and contributed, especially with silver-using countries, beyond all else to cripple and hamper the various industries of this country. He would emphasise this by using the words of the right hon. Gentleman the Member for Bodmin, which he used when speaking on this subject last year:— Every process is made more and more scant and more contracted when a man knows he is producing something which would not bring him back as much next week as he could have got for it last month. We sometimes heard it argued that we were the great gold-owning country of the world, and, therefore, we should stand to lose by any change which would depreciate its value. This argument, he believed, could be proved unsound, but we must also remember that we were the greatest silver owning Empire of the world, for we possessed one-third of all the silver that was in use; but in one other thing we were greater than even in these, our vast agricultural, commercial, and as the great manufacturing shops of the world our magnificent industrial interests. We were workers before financiers. As the former lie believed we shouid derive overwhelming advantage from any change which would bring stability and confidence into our dealings with other nations, and this at a cost of no corresponding permanent disadvantage to the latter, or to any other section of the community. It was argued sometimes that the tendency of this change would be that the price of commodities would be raised. Well, the price or rather cheapness of a commodity depended very much on what you had got to spend; your cheap commodities are not much use to the tens of thousands of the unemployed, which during the last weeks have been found in our industrial districts, and if there was truth in the assertion that prices would rise, this, he believed, would be more than compensated by the greater regularity and pay of our working classes, owing to improvements in all industries. At all events, this was the opinion of almost all the great leaders of trade societies, hard headed men representing all classes of commerce, many of whom he knew personally, and for whose opinions he had the very greatest respect. These men have studied this matter carefully, and in the interests of those they represent, with the result that they are amongst the most enthusiastic supporters of Currency reform. He had endeavoured to show that this international agreement of a stable monetary par of exchange between gold and silver would be of advantage beyond question to agriculturists, and almost equally beyond question to industry. There remains only the point—was this possible? In answer to this he could only quote the well-known Report of the Gold and Silver Commission. The words of the monometallic Members of the Royal Commission, who included the right hon. Member for the University of London (Sir J. Lubbock), were— We think that in any conditions fairly to be contemplated in the future, so far as we can forecast them from the experience of the past, a stable ratio might be maintained if the nations we have alluded to were to accept and strictly adhere to bimetallism at the suggested ratio. We think that if in all these countries gold and silver could be freely coined, and thus become exchangeable against commodities at the fixed ratio, the market value of silver as measured by gold would conform to that ratio, and not vary to any material extent. They further added— We are fully sensible of the benefits which would accrue from the adoption of a common monetary standard by all the commercial nations of the world; and we are quite alive to the advantage of the adoption by these nations of a uniform bimetallic standard as a step in that direction. He did not feel that he had a right to occupy the attention of the House any longer. He was indebted to them for the courteous and kindly hearing which they had given him, and he would leave to others the task of entering upon the matter in more ample detail, derived from their experience and study of the question.

* SIR W. HOULDSWORTH (Manchester, N.W.)

, in seconding the Motion said, it would be useful in the first place clearly to put before the House what the Resolution really was and what the Movers meant by it. He understood there was a considerable difference of opinion as to whether it was a bimetallic Resolution or not. The Amendment, which stood in the name of the hon. Member for Cardiff (Mr. Maclean) indicated that he did not view it as such, because he was the champion of monometallism, and apparently he was prepared to accept it with an addition which he thought only an improvement. But for himself, he held that it was distinctly a bimetallic-Resolution, as it embodied all the principles for which bimetallists had all along been contending. In the first place, it said that the instability of the relative value of gold and silver was an evil, injurious to the best interests of the country; in the second place, that this instability was caused by the break up of the bimetallic system through the action of the Latin Union in 1873; thirdly, that it would be advisable for this country to do all in its power to secure a stable monetary par of exchange between gold and silver; and, fourthly, that the best and, as he believed, the only way to maintain that par of exchange was through an international agreement. He hoped the House, therefore, would understand that this Resolution pledged the country to the principles of bimetallism, and he thought the sooner the country was thus pledged the better. ["Hear, hear!"] The Leader of the Opposition last year, when Chancellor of the Exchequer, accepted a somewhat similar resolution upon the ground that it was a bimetallic Resolution without bimetallism being named in it. [Laughter.] They had again considered his feelings, for there were many who loved the thing, but who seemed to hate the word. [Laughter.] And it was the thing they wanted. If they got that, they would not quarrel about the word. ["Hear, hear!"] It had been said that there was a great difference between the Resolution as originally put down and as it now appears in its present form. But it was precisely the same Resolution in different words. [Laughter.] At least, he could I not understand the difference between asserting that international bimetallism would be beneficial, and asserting that the destruction of that system in 1873 had been injurious to the best interests of the country. He would have been very much surprised if the hon. Member for Cardiff had opposed this Resolution. His hon. Friend did not lightly throw aside an opinion that he had once formed. Now, a few years ago he read a very able paper advocating the introduction of the bimetallic system into this country.

* MR. J. M. MACLEAN (Cardiff)

What was the date?

* SIR W. HOULDSWORTH

said, it was 1882. The paper was read before the Society of Arts, and in it he said:— Everyone now admits that the vain attempts of Western nations to maintain an exclusive gold currency have had a disastrous effect upon commerce, and that they are likely, if not soon abandoned, to cause a permanent reduction in the value of all kinds of property. The only controversy now is which nation ought to be the first to set the example of going back to the use of silver. The fear of being involved in a common destruction must have influence with all the States engaged in this unprofitable wrangle, and induce them to accept a compromise which shall give free play to both gold and silver. All the symptoms, therefore, are favourable to the rehabilitation of silver, and the speedy triumph of bimetallism, which alone can extricate Europe from its difficulties. … It is, therefore, a sound instinct which has prompted so many influential firms in London, Liverpool and Manchester, who have business relations with the East, to urge Upon the Government the expediency of adopting the principles of bimetallism. The Resolution spoke of a stable monetary par of exchange. It was impossible to conceive that they could secure that, if it was desirable, without a bimetallic system. ["Hear, hear!"] Here, again, his hon. Friend would support his view, because in the same paper he said— If all nations were agreed to have a fixed relative value between silver and gold, no nation could be left with a mass of the cheaper metal whilst another would get the more valuable one, because the metals would have a certain fixed value to each other all over the world. He thought that, unless the hon. Gentleman had changed his views—and, if he had, no doubt he would give his reasons for such a change—he might be claimed as a true believer in bimetallism. ["Hear, hear!"] He now wished to say a few words with regard to the progress of the movement—a progress made against many prejudices, against the whole press of the country, with few exceptions; and against the disinclination of ordinary men even possessing considerable intelligence to study the subject. The Bimetallic League consisted of several thousand members, including all classes of the community—merchants, manufacturers, agriculturists, and a very large number of the labour organisations. In the memorial presented to the late Chancellor of the Exchequer were the names of many influential men in the City, including some sixty bankers. The League had branches in the Colonies, and it had shown its strength by raising a guarantee fund of £50,000. But the most striking tribute to their influence and power was to be found in the formation of the Gold Defence Association in order to arrest their progress. ["Hear, hear!"] That, however, seemed to be a very select body, consisting entirely of officers, a president, and about 50 vice-presidents, but with no army behind them. ["Hear, hear!" and laughter.] In the Debate of 1890 the late Chancellor of the Exchequer spoke of trade as reviving, but any Gentleman who knew the facts of the last four years would be able to decide whether he (Sir William Houldsworth) was not the truer prophet in saying at that time, that after a short revival, trade was again declining. ["Hear, hear!"] He believed there would be no permanent revival of trade until this currency question was settled. The right hon. Gentleman at that time suggested that the great fall in prices had been arrested. (Sir WILLIAM HARCOURT dissented). Well, that was his impression. He did not know whether the right hon. Gentleman looked forward to an unlimited fall in prices. But the fact was that the index number, which was then in 1890 72, had fallen for the year 1895 to 62, and was now only 61.4, so that prices had fallen very heavily during the past four years, in addition to the fall of 30 per cent between 1873 and 1891. Then there was the case of the Income Tax. He confessed that that was one of the strongest arguments brought forward by the right hon. Gentleman to prove that trade was good. He believed, however, that the profits of industry had been decreasing and not increasing during the last twenty years. His conviction was that the Income Tax assessments were kept up by the larger profits which the distributors had made, while those of producers had fallen. But he had always felt that a time would come when the Income Tax returns would show a decrease. We had now arrived at that period, because the assessments in all schedules in 1894 was only 706 millions, against 712 millions in 1893. In schedule D they would find the assessment was 361 millions in 1893 and 351 millions in 1894. He did not wish to create an impression that things were worse than they really were, but he would like to point out that there were two great dangers ahead unless this question was settled. The first danger was that of foreign countries increasing their hostile tariffs. The position on the Continent and in the United States was such that the Governments of the various countries must attempt something to relieve the agricultural and trade depression which existed in those lands as well as in our own, and any one who had followed the controversies and Debates in the Parliaments of those countries must see that the questions which occupied their minds were increased protection on the one side, or international Bimetallism on the other. It would be a very serious matter indeed if those countries raised their hostile tariffs and thus excluded our goods. Increased protection as was shown a very few months ago in the case of the United States very seriously affected our trade in Yorkshire. The other great danger—and he believed it to be the greater of the two—was the competition of silver using countries with gold using countries. The yellow man with the white money was against the white man with the yellow money. The East—Japan especially, and China to some extent—were advancing by leaps and bounds, under the artificial stimulus of depreciated silver, in the making of all kinds of articles, and was thus coming into competition with us in neutral markets, and even in our own country. That was the great danger we would have to face if there was not soon established a stable monetary par of exchange between gold and silver. The competition of silver-using countries would force our industries into a state of depression from which it would be very difficult to raise them. He would venture to give the House one concrete case of this severe competition. This was an extract from a report by a gentleman who had had great experience in the East:— I have here before me, for instance, a Japan-made shirt. It is of good quality, hand-made. That shirt cost $2. In the days of the four-shilling dollar, therefore, to go no farther back it would have cost 8s., could not have competed with an English-made one, and would have no existence. It still costs $2; but the fall of the dollar to 2s. reduces its equivalent cost in English money to 4s., and it cannot be made in England at that price. The Times which was not very favourable to Bimetallism, published on October 28, 1895, a special article on "Indian Affairs." The writer said:— As European statesmen are now compelled to recognise in Japan a predominant factor in Eastern politics, so British capitalists and Indian millowners are being forced to acknowledge her successes in the great commercial struggle of the nations. … India enters on the struggle with her mints closed and with the mints of Japan open. The avowed object of the closing of the Indian mints is to create an artificial scarcity of coin in India and to give to the rupee an artificial value. We have from the first pointed out the economic dangers incident to this experiment. In proportiod as the artificial appreciation of the rupee affords permanent relief to Indian official finance in regard to gold obligations, it lays a permanent burden upon Indian production in the competition with silver-using countries. The writer went on to say:— One does not require to believe in Bimetallism in order to recognise the enormous advantages which the manufacturers in a silver country enjoy in competing with gold countries.. That was the great danger that lay before us if a monetary par of exchange between gold and silver was not established. He would now turn to the consideration of how the question stood in various parts of the world. But, first, he would point out that there was nothing in the Motion which necessarily involved this country becoming a Bimetallic country. What the supporters of the Resolution desired was International Bimetallism. They wanted a Bimetallic system set up; and the question whether this country should be itself Bimetallic was a question of the future when a conference took place between the various nations. He saw no difficulty, except possibly the sentiments of some foreign countries in international Bimetallism being set up, with different nations contributing in different forms and to different extents for that end. The one condition necessary in order that the ratio agreed upon might be maintained was that there must be a sufficient number of large countries that were purely and entirely Bimetallic. The Government of the United States held the opinion that, if only France or Germany were to join them, that would be a strong enough combination to maintain the legal ratio, whatever it was. Certainly there might be a combination of Powers, without every country joining in it, which would be sufficiently strong to maintain the ratio. The position in Europe and in the United States was very different from what it was a short time ago. Even when the conference at Brussels was held, the attitude of Germany and France was one of apathy. But now things were changed. During the last few years, almost during the last few months, there had been evidences in every country of a desire to have some settlement of the Currency question by establishing, if possible, a stable monetary par of exchange between gold and silver. As to the United States, everyone there, with very few exceptions, was in favour of international bimetallism. There was an idea that the silverites were bimetallists and that the "sound money" men were not. But that was not the case. The sound-money men were international bimetallists from the very nature of their principles, because their object was to maintain silver in the United States on a parity with gold. To do this they must either replace the gold withdrawals by continual borrowings, which could not be satisfactory, or they must resort to international bimetallism. The silverites were also for international bimetallism, if that was possible; but, despairing of that, and only because they despaired, they were in favour of the United States going to free coinage of silver herself. Before the French Chamber there was a Resolution, similar to that before the House, which had secured the signatures of 347 Deputies out of a possible 520. There was no doubt that the Resolution there would be carried by a large majority. It was supported at public meetings all through France and by all the French agricultural societies. France was perfectly prepared to enter into an international bimetallic agreement. Resolutions identical to that under consideration by the House were to be submitted to the German Reichstag and the Prussian Diet, and they were certain to be carried by large majorities. In Belgium the Ministry had declared that they would have no hesitation in joining an international bimetallic league Holland was perfectly unanimous on the subject. In Denmark a Resolution was to be introduced, Austria had expressed herself as favourable to negotiations, and Russia had made a communication to the German Government that she would be prepared to join a Bimetallic combination, adding that if circumstances remained as they were, she would be compelled to adopt a gold currency. He appealed to the House to take advantage of this favourable position of affairs. The circumstances never were more favourable for preliminary negotiations, and he believed that the present disposition of continental nations was very largely due to the Brussels Conference. He did not ask Her Majesty's Government to initiate negotiations, for he believed overtures would be made to it. He had heard the right hon. Member for West Monmouth (Sir W. Harcourt), say that he had no objection to bimetallism if other nations agreed to it.

* SIR W. HARCOURT

Oh, no! If England was not included.

* SIR W. HOULDSWORTH

said, that even with that condition, there was an opportunity, by passing this Resolution, of doing something which would be of the greatest value and importance to the whole of the industry, trade and commerce of the country. He begged to second the Motion.

* THE CHANCELLOR OF THE EXCHEQUER (Sir MICHAEL HICKS BEACH,) Bristol, W.

About a year ago the House of Commons passed a Resolution, which has already been alluded to, to the following effect:— That this House regards with increasing apprehension the constant fluctuations and the growing divergence in the relative value of gold and silver, and heartily concurs in the recent expressions of opinion on the part of the Government of France and the Government and Parliament of Germany, as to the serious evils resulting therefrom. It therefore urges upon Her Majesty's Government the desirability of co-operating with other Powers in an international conference for the purpose of considering what measures can be taken to remove and mitigate these evils. That Resolution was accepted by the right hon. Gentleman opposite on behalf of the Government of the day. It was unanimously approved of by the House of Commons, and I do not think that the House of Commons, and I am certain that Her Majesty's Government do not, wish in any way to recede from that Resolution. [Cheers.] The Resolution which has now been moved—though perhaps I might criticise some of its terms—appears to me to be in its meaning absolutely identical with the Resolution passed last year; and I should not have intervened thus early in the Debate had not my hon. Friend who seconded the Resolution stated that in his view it was a Bimetallic Resolution, though it did not necessarily involve the adoption of Bimetallism by this country. Looking to the enormous importance of this question, it is right that I should lose no time in expressing my own opinion upon it, holding as I do the office of Chancellor of the Exchequer, and, what is of far more importance, that I should lose no time in stating to the House the policy which Her Majesty's Government think it right to pursue in this matter. I may congratulate my hon. Friend who moved this Resolution upon the modesty with which he approached the question. I shall endeavour to imitate him, for I have no sympathy with the confidence with which some persons—and those not always the best-informed,—lay down the law on one side or the other of this question. ["Hear, hear!" and laughter.] You may hear monometallists speak of Bimetallists as if they must necessarily be lunatics or idiots—[laughter]—as if the whole theory which they hold must be necessarily so impossible and wrong that it is useless even to argue against it. On the other hand, you may hear Bimetallists who cannot believe that anyone can oppose their favourite theory except on the ground of some selfish interest in connection with the existing system of currency in Great Britain. [''Hear, hear!"] I confess that the more I have studied this question, the more complex and difficult it appears to me. [Cheers.] I will quote to the House some words in justification of this view from the Report of the Royal Commission. That Commission, composed of very able men, many of whom were experts in the matter which they were considering, stated at the outset of the Report:— There is hardly any fact connected with the subject on which there are not considerable differences of opinion. Even if the facts were admitted there would still remain an element of doubt caused by the uncertainty as to whether we have taken into consideration all the factors necessary to enable a conclusion to be formed; and in addition to this the influences which affect the prices and the relative value of the precious metals are so subtle and various that it is difficult, if not impossible, to assign to each its true weight. In my belief those words are absolutely true. [Cheers.] He would be a very wise man who could estimate correctly what has been the exact influence of our system of currency in the past upon the fortunes of this country and of the world. It is not in the power of any of us accurately to foretell and gauge what would be the result of a change in that system. [''Hear, hear!"] As far as I am able to understand the matter, it seems quite impossible to fix a ratio—[cheers]—which shall be absolutely independent of the market fluctuations between two articles like gold and silver, both of them used for other purposes besides the coinage for which that ratio would be fixed, and one of them capable of being produced in almost unlimited quantities. [Cheers.] But, on the other hand, I do not by any means imply that, if an international agreement of the kind suggested by my hon. Friend were undertaken by a sufficient number of nations for the purpose of fixing a ratio between gold and silver for coinage purposes, that agreement would not influence the market fluctuations between the two metals, and possibly bring these two metals nearer together in value than they are at present. ["Hear, hear!"] It seems to me that unless anyone is bold enough, as I am not bold enough, to dissent from the unanimous opinion of the Royal Commission, they cannot deny that such an agreement would exercise such an influence. For the Royal Commission reported unanimously that:— In their opinion the bimetallic system of the Latin Union exercised a material influence over the relative values of the two metals and kept the market price of silver approximately steady at the ratio of 15½ to 1. And so, again, take the most important question of the ratio which should be fixed in any such agreement. I am told that the United States would probably desire that the old ratio of 15½ or 16 to 1 should be adopted. In view of the present market price of silver, it seems to me that to fix any such ratio would be an act of absolute dishonesty to creditors. [Opposition cheers.] It would probably cause a financial panic with all its possible results to the credit of the country, such as has been in previous Debates frequently predicted by some of the highest authorities. But suppose, as others have suggested, that the ratio fixed were a ratio representing, or approximate to, the market value of the two metals at the time the ratio was fixed. That would in itself be an admission of the power of the market in controlling the matter, and would involve, therefore, subsequent variations from time to time in accordance with the market price. I do not at all see how any such process would fulfil the vague and extravagant hopes which are entertained by the advocates of Bimetallism. [Opposition cheers.] The very fact of entering into an agreement of that kind would be some danger to the States which entered into it. It would be liable to be broken in the event of political convulsions or in the event of war. If it were broken, what would be the result upon the monetary system of the other States which had joined it? And the very fact that there might be such doubt upon its permanence would materially interfere with its success. But really I do not wish to detain the House by abstract argument upon this question. What I really wish to impress upon the House is its extreme difficulty and complexity, its vast importance to the country—I believe no more important subject to the country can be conceived—and the extreme danger of altering the currency without we are absolutely sure that the circumstances warrant it. [Cheers.] What is the present situation? My hon. Friend painted a very dark picture of the condition of the country. It is always agreeable to say we are ruined. [Laughter.] I venture to cast some doubt upon the view of my hon. Friend. I should hold, from the information I am able to obtain, that, as a whole, the country was singularly prosperous. ["Hear, hear!" from Sir William Harcourt.] If I look to any of the ordinary sources of information, I fail to gather that the last four years have been the most disastrous years that have ever befallen England. The wealth of the country is very great, it is diffused more generally, perhaps, than in any previous period of our history. [Cheers.] The volume of our trade is enormous, and is increasing and improving since last summer. [Ministerial laughter.] The working classes—though of course there is still, as I fear there always will be, poverty and suffering in the land—are, generally speaking, in receipt of higher wages than they have ever been before—wages which purchase for them far more of the comforts and necessaries of life than they ever did before; and lastly, perhaps from my own point of view, I may venture to add I believe there never was a time when any country in the world was able to bear an enormous burden of taxation with less discomfort to the taxpayer. [Cheers.] Therefore I am bound to say that, if I look to the condition of the country generally, I see no reason whatever that would justify a change in our currency system. [Opposition cheers.] I admit there are two great interests which are specially suffering. There is, first, the great interest of agriculture. No one will deny, least of all shall I attempt to deny, that that interest is in a most suffering condition, and especially that part of it which is engaged in the production of wheat. Then, I take it, from my hon. Friends who have moved and seconded the Resolution, that the great cotton, industry of Lancashire is also suffering. Now, what is the cause of their depression? I take it that the cause in both cases is low prices. Some would say—Never mind that; low prices are an inestimable benefit to the nation at large, and if any industry suffers by them that cannot be helped. I cannot accept that view without very considerable limitations. I think that even the stern economy of the right hon. Gentleman opposite (Sir William Harcourt) would be softened by more humane views if low prices, in his mind, involved the ruin of the agricultural industry of Great Britain, or the ruin of the great cotton industry of Lancashire. It is essential for the House to inquire to what causes are those low prices due. Are they due to anything that would be cured by the adoption of Bimetallism? Are they, in other words, due to the appreciation of gold, or to the fall in the value of silver? Now, it has been constantly suggested that the low prices of agricultural produce are due to the appreciation of gold, and a few years ago it was generally and perhaps almost universally assumed as a fact, that gold had appreciated. A good deal has happened since then. It was considered that the demand for gold exceeded the supply; that the production of gold was insufficient to keep pace with the demand for gold in consequence of the demonetisation of silver and the adoption of a gold coinage by certain important nations; that, consequently, it was probable that gold had appreciated; and that it was proved by the low prices of certain articles that gold had appreciated. Well, I think the first of these views is open to very great question. Is the demand for gold in the coinage of the world greater than the supply? Now, it is quite certain that the production of gold has very largely increased within the last few years. The production of gold in 1895 was double what it was in 1885, and it stands now at a higher point—the annual production—than it ever reached in the most splendid times of California and Australia. But the question may possibly be rather of the relation between the total stock of gold and the existing demands on it than of the annual production. How does that stand? There never was a time since 1844 when the stock of gold in the banks was so large as now. The Bank of England is, of course, bound to keep a certain reserve of gold against its note issue. That reserve is, I think, more than double now what it was in 1893. And if I were to pursue the inquiry into the amount of gold in the great European banks, I should be met with the same result. Does that mean that there is a scarcity of gold? There is no scarcity of gold. [Cheers.] Does it mean that the gold is kept by the banks instead of being diffused through the country and improving trade? Well, the rate of discount never was so low. And yet it is a very remarkable fact that the same year which has shown this enormous and unprecedented stock of gold in the vaults of the Bank of England, also shows the lowest prices on record. I find that the index number of the Economist newspaper, which was 2,235 on January 1st, 1890, was reduced to 1,999 on January 1st, 1896, showing a fall of 10 per cent. in prices. I doubt very much—but I speak of this with great diffidence, because it is a very obscure subject—whether in such a country as this prices are affected to any extent by the volume of our metallic currency. ["Hear, hear!"] I think the effect of the volume of the metallic currency on prices varies inversely with the banking facilities of any country, and I agree with the words which were used by the right hon. Gentleman opposite last year, when he said that— Metal with us is the measure of value. It is not the instrument of trade. We conduct our trade, the greatest in the world, on the smallest metallic basis of any country because we have the largest credit. But let me turn to the other aspect of the question. Can it be proved that the fall in price of certain articles of agricultural produce is due to the appreciation of gold? Now, I think if it were due to the appreciation of gold, surely the fall of value in the prices of articles would be universal and would be uniform. But that is absolutely contrary to the fact. [Cheers.] There are some articles of agricultural produce which have fallen very largely. Wheat has fallen 50 per cent., comparing the average prices of the decade between 1865 and 1875 with the prices between 1891 and 1895. Other articles have fallen less—barley, 32 per cent.; oats, 25 per cent.; wool, 26 per cent. The best classes of beef and mutton have fallen much less; the best class of mutton has fallen only 8 per cent. Cheese has fallen 15 per cent.; butter, 10 per cent.; hay, 16 per cent.; straw and poultry not at all—I believe poultry has actually risen. May not there be a reason for this fall in prices which has absolutely nothing whatever to do with any question of the appreciation of gold? Surely the fall has been, as Mr. William Henry Smith said in this House some, years ago, in the articles of which the production is practically unlimited, and not in the articles of which the production is practically limited. The fact is this—that the fall in these articles is due to foreign competition—[cheers.]—and foreign competition is due, first, to peace, which has enabled greater industry to be applied to their production; secondly, to the more efficient use of capital due to the better organisation of credit; thirdly, perhaps to the use of the telegraph; fourthly, to the vast extension of railways in new countries—in America, in the Argentine Republic, in Russia, and in India—which has brought the produce of these countries to the sea; lastly, and perhaps most of all, to the wonderful improvements in our Mercantile Marine, in the size of ships, in the cheapness of the working of marine engines, so that, in fact, the harvests of the world can now be brought from the places where they are produced to the very door of any country that may require them as cheaply as if they were produced in that country itself. Let me ask the House to observe that this is true mainly and mostly of certain articles. It is true of corn, because corn is an article which is specially adapted for production by unskilled labour in new countries. It is true of wool because of the enormous increase in the flocks of sheep in Australia and other parts of the world in the management of which little labour is required. But it is not so true by any means of articles which require more skilled labour to produce them, or which are more of a perishable nature. And when you come to articles like, for instance, straw, which is extremely bulky, so that the cost of its transport would be out of all proportion to its value, there you find an article which has not fallen in value at all. I think I have said something to show that there are great and important causes to which the fall in agricultural produce, which has been so injurious to the farming industry of this country, is due, rather than to the appreciation of gold. But then I turn to what may be due to the fall in the gold price of silver. It has often been argued that the fall in the gold price of silver has brought Indian wheat into very serious competition with wheat grown in this country. That may be true to some extent, but this is a fact, that the imports of agricultural products from silver-using countries are now only 2 per cent. of the total amount of agricultural produce imported into this country, which competes with agricultural produce grown at home, and the Indian harvests cannot be—both from the varying amount of their exportation, and from the total amount that could be exported—anything like as potent a factor in determining the price of wheat in the world as the harvests, for instance, of countries like Russia or of the Argentine Republic, which have not a silver currency, but an inconvertible paper currency. I find that in the year 1894 only half the amount of wheat was exported from British India that was exported in the previous year; and I find that the amount exported in 1894 was very little higher than the amount exported in 1877, when silver was nearly double the juice at which it stood in 1894. [Cheers.] My hon. Friend, who seconded this Motion, said a good deal about the effect of the low price of silver in silver-using countries in the East upon the competition of these countries with Lancashire. I think he referred mainly, if not entirely, to the cotton industry of Lancashire. I am not aware that other trades have complained of this competition, and if they have not I should very much like to know why. Why is it that the cotton industry of Lancashire is the particular trade that complains of this competition, because if there is this great importance attached to the bounty that may be due to the fall in the value of silver, surely it would apply to other trades besides the cotton industry? But this, at any rate, I believe to be the fact, that the cotton industry of Lancashire is not quite expiring. I am informed that the number of spindles and looms is increasing in Lancashire.

MR. GEORGE WHITELEY

It is very much less.

* THE CHANCELLOR OF THE EXCHEQUER

That is the information that has reached me. I am also informed that the wages of the operatives employed in the cotton industry are better than they were.

MR. G. WHITELEY

They are 10 per cent. below the standard list.

* THE CHANCELLOR OF THE EXCHEQUER

I believe the fact is that more of the profits of the industry go into the pockets of the operatives than before, and less into the pockets of the masters. That might be a fact to be regretted if it led masters to abandon the cotton industry. But why should they abandon the cotton industry? Is the Lancashire cotton trade with silver countries a losing one? If it is I am curious to know why our exports of cotton goods to these silver-using countries have increased, comparing 1873 with 1894, by a percentage three times as large as the percentage of increase in the trade between Lancashire and other countries that are not silver-using. ["Hear, hear!"] I do not at all wish to deny that the fall in silver may have influenced the competition between Lancashire and the East, but I I believe the danger of the competition—and I believe it to be a very real danger—is more due to other causes. I believe it is due, in the first place, to the fact that the cotton is nearer at hand there to the mills; in the second place to the fact that the market is on the spot; in the third place—and by far the greatest of all—to the extreme cheapness of the labour. That labour is probably made more cheap by the effect of the fall in silver, and therefore the competition becomes harder. I admit to that extent that the fall in silver has been an evil. The fluctuations in the rate of exchange between gold-using and silver-using countries have also been an evil. I fear such fluctuations are inseperable from a difference in standards. We may wish, all of us, that there could be only one standard in the whole civilised world; but I am afraid that is a dream that is not likely to be realised. But even the influence, injurious though it may be, on commerce, of the fluctuations of the rate of exchange has been minimised by the operations of the exchange banks. What, after all, is the great evil as it affects ourselves, is the influence of the fall in silver upon the fortunes of our great dependency of India. I think it has always been admitted by all Parties in this House, that the great fall of silver has been a serious difficulty to the Government of India. A few years ago the Government of India took the step of closing the mints against the free coinage of silver. Since that time they have, to a great extent, achieved what I imagine was their object, in preventing the fall of the rupee. But there has been this remarkable result—the price of silver since the Indian mints were closed has very largely fallen, and every year there is an increasing divergence between the market value of the coined rupee and the market value of the silver which is in that rupee. In fact, India now has an inconvertible, appreciated currency. ["Hear, hear!"] That is not a position—however much relief it may have given for a time to the Government of India—which, I think, can be held to be a satisfactory or final solution of this great question. [Cheers.] I therefore do believe that, in the matters which I have alluded to, there are, as this Motion states, evils affecting this country and our Indian Empire in the present low value of silver, and we are perfectly ready, as we have always been to join with foreign countries in conference as to the best way in which those evils may be alleviated. But I would wish to say that there is a part of the Empire which is not included in the United Kingdom, and which is not included in India, which has great interests in this matter besides ourselves. I refer to our Colonial Empire. ["Hear, hear!"] We have in the United Kingdom a population of 38,000,000. Our colonies have a population of 20,500,000. Of these no less than 15,500,000 are on the basis of a gold standard, with imports and exports, in 1893, of £227,500,000—four-fifths of the total colonial foreign trade. That includes all the great self-governing colonies, and the bulk of the Crown Colonies. On the other hand there are silver currency colonies, containing a population of 1,500,000 and with a trade of £48,000,000; and there are colonies with the peculiar rupee currency of India, containing a population of 3,500,000, and with a trade of £12,000,000. It is obvious, that in dealing with this question, the interests of our gold-standard colonies cannot and ought not to be neglected. [Cheers.] And let the House remember that each and everyone of these colonies, whether it be a self-governing colony or a Crown colony, is, and I think always has been perfectly free to choose its own currency for itself. Therefore, vast as the population of India is, great as are the interests of our Indian Empire, you have, I will venture to contend, even apart from the United Kingdom, enormous interests on the other side. ["Hear, hear!"] What is the policy which, as a Government we intend to pursue? As I have said, we are willing, we are anxious, seeing that there are evils in the present low value of silver, and in the fluctuations in the value of the two metals, to enter into a conference, or into negotiations, which certainly I believe at the present stage would be much better than a conference, with other countries upon this subject, but we are not prepared to abandon the gold standard in the United Kingdom. [Loud cheers.] I have expressed, I think, very frankly my own opinions on this important subject to the House, but it, is very well known that there are some of my colleagues who do not agree in these opinions, and who, like my right hon. Friend the First Lord of the Treasury, are confirmed and pronounced Bimetallists. ["Hear, hear!"] But we all agree in this, that we should not, be justified in proposing or accepting a departure from the gold standard of the United Kingdom. And why? Let me read the words which were used by my right hon. Friend the Leader of the House in 1890. He said:— Nothing can be done, nothing should be attempted which is against the views and the wishes of the great practical financiers and bankers of this country. It would be folly and madness in any Government to go in advance of the educated commercial opinion of the country in this matter. We cannot, therefore, alter the gold standard of the United Kingdom; but, with that reservation, we are prepared, in the words of the Resolution, to do all in our power to secure by international agreement a stable monetary par of exchange between gold and silver. What are the prospects of any such agreement? I fear they are not very brilliant. [Cheers.] It will be remembered that in the conference of 1893 the United States proposed a Bimetallic Resolution. It was opposed by Germany, by the Scandinavian nations, by Switzerland, and by Austria, who declared themselves gold monometallists. France and the Latin Union were only prepared to accept it if Great Britain, Germany, Austria, and Russia would join a Bimetallic union, so that the Resolution fell to the ground, and the vital question of what the ratio should be in the event of such an international agreement was never even touched. [''Hear, hear!"] We made suggestions for increasing the use of silver. They were discouraged and withdrawn. If it be possible for other nations to join in a Bimetallic agreement which seemed good to themselves, I have little doubt but that the Indian Government would be prepared to assist by re-opening the Indian mints to the free coinage of silver, and that we might endeavour, by other minor means, to promote the increase of silver in coinage and thus aid in an international agreement on this great question. But we can go no further. [Cheers.] This great capital is the monetary centre of the world. [Cheers.] Our trade and commerce are probably greater than any other country has ever enjoyed. Our wealth is enormous. It arises from investments arid enterprise in every quarter of the globe. All of this has been built up on a gold standard; and the great majority of the men, able and experienced financiers, who control the work of this gigantic machine, are of opinion that its permanence depends upon the maintenance of our existing monetary system. [Cheers.] With that opinion before us, no responsible Government of this country could take any other course than that which I have indicated. [Loud cheers.]

* MR. J. M. MACLEAN

said, he believed that the object with which he had placed his Amendment on the Paper had been fully justified by the declaration they had obtained from the Chancellor of the Exchequer. That statement was so satisfactory, so far as the position of this country was concerned, that he did not think it would be necessary for him to proceed with his Amendment. ["Hear, hear!"] The Chancellor of the Exchequer, as it seemed to him, had made out a very good case why this country should not enter into any negotiation or any conference at all. The right hon. Gentleman said he was not going to allow the currency system of this country to be interfered with, but that he was going to let the bimetallists have their own way anywhere else. The world was all before them—[laughter]—where to choose a place for their experiment, but he really did not understand why this country should be an assisting party to any experiment of that kind. ["Hear, hear!"] The Chancellor of the Exchequer seemed to indicate that poor India was to be stretched out on the rack again and vivisected for the benefit of the rest of mankind. He said that everybody agreed that the depreciation of silver had been a very great misfortune for India. They all agreed that it had been a great inconvenience to the Indian Government, but he demurred entirely to the proposition that it had been a calamity for the people of India or for the trade of that country generally. He regretted very much the experiment of closing the mints, for that was really giving encouragement to speculation in silver, and he feared that if another change was now introduced it would only lead to more gambling of the same kind. India had fully recovered from the effects of the closing of her mints. There had been a very remarkable expansion in the circulation of currency notes, which had taken, to a great degree, the place of rupees, and there had also been a large number of rupees brought into circulation from the hoards accumulated in India through many centuries. In that way the need of the country for a large currency had been supplied, and he did not think India was likely to be the gainer by any bargain that might be made for the opening of the Indian mints on condition that the Latin Union reopened their mints. The hon. Baronet the Member for Manchester, being apparently gravelled for lack of matter, was kind enough to make a personal attack on him (Mr. Maclean), referring to a paper which he road 15 years ago at the Society of Arts, in which he believed he stated, for the first time in England, it was a great mistake to suppose that, although the Government of India lost money on remittances to this country, that India as a country was adversely affected by bimetallism. He had studied this question in India for some years, where it was a popular subject for discussion long before it was introduced in this country. Speaking generally, he should say the study of bimetallism was a fascinating intellectual exercise for people of subtle minds with a strong taste for paradox. He was not of a metaphysical turn of mind himself, but he confessed the subject had great attractions for him, and coming fresh from India, where his business experience had been acquired, he devoted his paper mainly to the Indian aspect of the case, indicating his belief, towards the end, that what India gained had perhaps been lost by England. There were probably very few hon. Members who could say that all their opinions of 15 years ago were those which were held by them at the present moment, and he thought it some advantage to a man to have been able to survey a subject from different points of view. As he gained greater experience and knowledge of the course of trade of this country he certainly changed his opinion on this point, but he had always guarded himself to the extent that he said bimetallism was only possible if they had a stable ratio agreed to by all countries and if the Government took under their own control the production of the silver in the mines, thereby making a Government monopoly of it. Those two conditions were impracticable and could not be carried out, and he thought it was unfair of the hon. Member to appeal to him as if in doubt whether he was a monomentallist or not. If the hon. Baronet remembered his paper of 15 years ago he might also have remembered his speech of eight years ago, when he moved an Amendment to the Resolution of the right hon. Member for Sleaford and declared that the result of the careful examination of this question made by the Royal Commission had satisfied him that bimetallism was utterly impracticable. When the Commission said it was impossible for them to lay down a fixed ratio, that made an end of the whole business. He thought the hon. Member for Manchester might have done him the justice to remember that, and might also have known that, when he was Member for a Lancashire borough, he lost no opportunity of impressing upon his constituents the fallacy and futility of this scheme of bimetallism for remedying any evils they suffered from. The discussion of the question to-night had been as to how it affected the interests of this country. The Mover of the Resolution stated that the present system of currency had been injurious to the best interests of this country. He thought the speech of the Chancellor of the Exchequer had traversed the whole ground of reply to statements of that kind. The supporters of the Motion had utterly failed to show that trade was at present in that languishing condition in which alone men would desire to have a change of the currency system in the country. He noticed an absence of familiar arguments he knew very well. It used to be said that appreciation of gold was a great misfortune for the owners of landed property in this country whose estates were mortgaged, because the rents had fallen, whilst they had to pay the mortgages in appreciated gold. As a matter of fact, there was such a plethora of gold in this country that any mortgage which fell in could be renewed at a lower rate of interest. With regard to the state of trade and industry, he noticed the other day, in one of the pamphlets with which the bimetallists deluged the country, the heading, "Desperate Condition of the Labour Market," and on opening the pamphlet to see what it referred to he found it was a little paragraph, describing some contemptible affair at Liverpool. Just contrast that with the statement in the Labour Gazette, in which it was shown that every industry in the country was at present in a remarkably prosperous condition. There was one feature which proved conclusively that the working classes themselves were very much better off than they were. If they took the index number of 100 for the year 1860, as indicating the average rate of wages amongst the principal trades at that time and compared it with the number now, which had risen to 192, they would see that, in fact, the wages of labour had practically doubled within the last twenty-five years. They had more than doubled when it was remembered that they purchased so very much more than they did in those times. They heard a great deal about low prices, which they were told were a calamity to many industries in this country. He did not believe they were a calamity for the agricultural labourer even, and certainly not for working men who dwelt in towns. He should like to remark that Lancashire opinion was by no means unanimous on this question. The resolution in favour of bimetallism was carried by a very small majority indeed in the Manchester Chamber of Commerce, whilst those of Oldham and Blackburn absolutely rejected it. He knew he could hold a meeting in Oldham in favour of monometallism, just as easily as the Member for Manchester could hold one in favour of bimetallism. He had often heard operatives in Lancashire say:— It would be a very much better thing for us if we had bimetallism introduced, because we could sell our goods for higher prices. His reply was this:— If the theory of bimetallism is correct, you would have to pay a higher price for your bread, cotton, tea, and everything you consume. The cost of production would be very largely increased. Then you say you would get higher prices for your goods abroad, but the countries from which we get these products would not be nearly so prosperous, and would not be able to buy so many of our goods, therefore there would be a shrinkage of trade, and the trade of the country would fall away, so that the operatives of Lancashire would be no better off than they are at the present moment. He thought it was a pity that Lancashire, once so famous for self-reliance and independence of spirit, should come so often to this House in these days and ask for the protection of the Legislature for its trade. Where was the sturdy spirit of the men of Lancashire they used to be so proud of in the old days? There were, no doubt, important causes at work which were likely to injure the trade of Lancashire, but those causes could not, by any means, be summed up in a bounty given by manufacturers in silver using countries. He would point to some remarkable figures to show that it was not in the silver using countries that the great competition with Lancashire had sprung up. On the contrary it was the silver using countries who were the best customers of Lancashire at the present day. Where Lancashire had suffered was in the markets of the Continent of Europe and America, and this was easily intelligible when they saw that of the total increase of 5,824,100 spindles during the last four years, the silver standard countries only gained an increase of 1,039,100, while America increased her spindles by 1,295,000, the Continent by 1,890,000, and even the United Kingdom by 1,600,000, or a great many more than the increase in the silver using countries. Was not that one of the prominent causes why the trade of Lancashire did not increase in the same ratio with which it increased in former years? Oldham was the seat not only of the cotton industry in the spinning of yarns, but it was also the seat of great industries for the production of machinery used in the cotton mills all over the world, and he remembered the proprietor of one of these mills telling him that he had fitted up nearly 100 mills in Russia. Could they suppose that competition of that kind could go on and the people of Lancashire still be able to increase their trade as fast as they used to do? It was the old story of the eagle being killed with an arrow feathered from its own wing. The products of the machinery thus sent abroad came into competition with those of the cotton mills of Lancashire. If such large profits were not made now as formerly by individual millowners, it was because a great proportion of these profits had gone away to workpeople, and he thought one of the causes of the present trouble in Lancashire was that the leaders of the working men had gone further than they were entitled to, that they interfered too much with the management of the mills, and were frightening from their own country, capital, energy, enterprise, and inventiveness, which used to be applied so freely to industry, so that these great factors in trade went abroad for the benefit of people who were competitors of Lancashire. These were causes which helped to account for the present condition of things. The Resolution went on to urge upon the Government the advisability of doing all in their power to secure by international agreement a stable monetary par of exchange between gold and silver. Phrases of that kind appeared to afford unimaginable joy to bimetallists. The phrase, however, was nothing better than a nebulous hypothesis. In his view this stable ratio of exchange meant real instability, because it was to shift from time to time according to the production of silver. It had been contended that the ratio should be settled by agreement between the United States, Germany, France, Belgium, and other silver-using countries, but he did not believe that those countries would ever come to any agreement upon the subject, unless with the help of England, which was what they had been seeking for all along. England had always maintained a thoroughly independent position on this subject; so much so that she had been charged with selfishness in refusing to help the silver-using countries by joining in this movement. The adoption of Bimetallism had failed on the Continent, because the closing of the mints was the consequence, and not the cause of the depreciation of silver. In his view trade was not so greatly affected by the depreciation of silver, seeing that a large portion of it was conducted by telegraphic indents for goods, so that business transactions were closed at once, and could not be affected by a prospective fall in exchange. In these circumstances he failed to see why we were bound to change our whole currency system. Bimetallism meant gambling in silver and the debasing of our coinage for the benefit of silver holding and producing countries. If we joined this movement we should violate the sanctity of contracts, introduce confusion into our trading system, and should undermine and finally destroy that splendid fabric of commercial supremacy, based upon sound finance, unstained credit, and perfect confidence, which had been built up by the practical sagacity of so many generations of Englishmen.

* MR. SAMUEL SMITH (Flintshire)

said, that he hoped the House would permit him to make a few remarks on a subject which he had carefully studied for upwards of 20 years. He allowed that matters had greatly changed since some of them took up the question over 20 years ago. The destruction of the bimetallic system was far more complete now than it was then. Most of the leading countries had gone upon the gold standard, and the revolution of prices caused by this movement had apparently been consummated Prices of commodities had fallen on the average nearly 50 per cent. since 1873—that was to say, £1 would buy almost twice as much now as then—and there were many signs that the tide had begun to turn, and the present tendency was rather upwards. The yield of gold had also increased enormously, being now about £40,000,000 against £20,000,000 in 1873; and in view of the immense reserves held by the national banks they could not speak of a scarcity of gold. The pain and the misery caused by the fall of prices in the past 23 years had been immense. Large classes of producers had been ruined; we had had innumerable labour wars; and at times our commercial fabric seemed almost tottering to its fall. But at last the tide seemed to have turned to some extent; readjustments had been made; and there was hardly the same urgent necessity that there was some years ago to grapple with this question. He was free to make these admissions, because he did not approach this question as a partisan, but as a lover of truth. The action of the silver currency countries had had a most important effect on the prices in gold countries. The silver countries sold their products at the same silver prices they did 23 years ago, and were well paid, and the result was that wherever silver had come into competition with gold it had forced gold prices down to its own level. He held that it was not difficult, even after the admissions he had made, to show that this country would be a great gainer by the establishment of a stable par of exchange between gold and silver. From the middle of the seventeenth century the relative value of the two metals had not varied much more than 3 per cent. in either direction until 1873; that was, for 200 years the divergence was not more than had sometimes been seen in a single week during the last few years. In face of this it was preposterous to say that there never was a stable par of exchange. What had been could be, and he believed it was quite possible to set up a par of exchange by a wise international arrangement. He could not quite agree with some of his friends as to the ratio. Some of them contended that it was possible to set up the old ratio. He must admit that the readjustments made it very difficult to attempt such a huge alteration as would be involved in forcing up silver to double its present price. He quite admitted that the present price of silver was not a natural price, and that it would never have fallen to 30d. but for the demonetisation and the closing of the mints. But still it was there, and the trade of the world had adjusted itself to its present position, and he did think that the nations that really desired to re-establish silver must do it at a different ratio than 15½ to 1. If asked his opinion as to the proper ratio, he should like to see it at a parity with 1s. 4d. for the rupee, which was the arrangement made when the mints were closed in India. Everyone knew that for 20 years the Indian Government had been struggling with financial difficulties, owing to the fluctuations in exchange and the immense fall in the value of the rupee. But he wanted to call attention to one great evil which had resulted from this state of things—that was the closing of the mints, which he believed was inevitable under the circumstances. He wished to point out that it was a very unfortunate thing that we created in India an artificial currency in place of an automatic currency; in other words, the value of the rupee in India was no longer the value of the metal, as the value of the sovereign was the same as the metal which went into it. We had been obliged to goin for an artificial currency, and now the rupee had increased in value to 15 or 20 per cent. more than the silver which composed it. There was a great danger of illicit coining. Indeed, he thought it was impossible to prevent rupees being smuggled into a country of so vast an extent as India, with many native states and so extended a seaboard, so long as an artificial value attached to the coins. The hon. Member for Cardiff made a great deal of the activity of machine-makers in Oldham and Lancashire, as a proof that the cotton industry was increasing. It was unfortunately true that nearly all the machinery made in Lancashire went to foreign countries. There had been an immense demand for machinery for India, China and Japan, and from all he could learn our great competitor in the future would be Japan. Undoubtedly one of the reasons which gave Japan a great advantage was that she was a silver-using country, and that the cost of production was much less than in Lancashire, which worked on a gold currency. It had been plain to him for many years that this country would not change its gold standard. He must admit that the difficulties were insuperable. Long habit, long tradition, the violent prejudices of the moneyed classes, and many other reasons, made it very unlikely that this country could give up its gold standard. That was no reason, however, why we should not give any help we could to other countries which had not anything like the reasons we had against setting up a bimetallic system. He believed in Germany a moderate amount of encouragement would have a good effect, while in America the two parties were almost balanced, and some aid from this country might turn the scale in favour of the bimetallic system. The great aid we could give was undoubtedly the reopening of the Indian mints, which was a very large undertaking, seeing that they would probably take about one-fourth or one-third of the entire silver production. He thought it was coining to be understood by the Powers of Europe that this was about as much as they could expect the British Empire to do. They had come to understand the position of England better than they did 20 years ago. His belief was they were more likely to come to a practical working arrangement now than they were 10 or 15 years ago. He believed both parties in this country were coming to understand that there was considerable common ground between them. This Debate showed it. He remembered the time, 20 years ago, when everyone who took up this matter was regarded as a fool or a lunatic, and he believed they were approaching something like a working compromise, and that if, in a European conference, this as well as other countries, would approach each other in a practical and businesslike way—as on the present occasion—good would result. He hoped the House would pass this Resolution. It did not pledge this country in any way to a particular policy, and it was a Resolution which would greatly help the cause in other countries. It would be a great pity that this country should do anything to injure the cause in other countries. All the Resolution did was to say that this country was alive to the advantage of setting up a bimetallic system where it could be set up. Ho believed the vast bulk of thoughtful men in this country now looked with a good deal of regret to the breaking-up of the old bimetallic system of France, and if that system could be set up again he thought there was hardly a man in the House who would not give it any aid he could short of altering our own standard. ["Hear, hear!"]

On the return of Mr. SPEAKER after the usual interval,

MR. G. WHITELEY

, animadverting on the speech of the Chancellor of the Exchequer, contended that it was quite possible to maintain a ratio between the precious metals though their production varied in extent. The Chancellor of the Exchequer had said that the wages of all standard trades were higher now than they had been in the past. But he should like to know what trade he was referring to. So far as he could ascertain the wages of no trade were as high now as they were in 1873. If the country was in such a singularly prosperous condition he could not understand why they had appointed a Committee to inquire into the distress from want of employment. Then the Chancellor of the Exchequer said the stock of gold in the banks was evidence of prosperity. But it seemed to him that stocks of gold were proofs of slackness of trade, for when trade was busy gold went into circulation. The Chancellor of the Exchequer asked how it was that the Lancashire cotton trade, of all trades in the United Kingdom, suffered so much from the appreciation of gold. It was because the export of cotton goods from Lancashire to India amounted to 62 per cont. of the total export of goods from this country. In the face of the serious competition in India it was no wonder that Lancashire was the first to cry out. As to the effect of the over-production of silver, he would ask the Chancellor of the Exchequer how it was that, though the total production had annually increased 9 per cent. since the Bimetallic law was broken, silver had depreciated in its gold value by 100 per cent.? It did not arise from increased production, but could only be produced by the appreciation of gold and the consequent demonetisation of silver and the increased work that gold was called upon to do. The Chancellor of the Exchequer said it would be impossible to consent to any standard which was opposed to the great volume of banking opinion in this country. But he looked upon the opinion of bankers with a certain amount of suspicion. They were not engaged in trade, agriculture, or mercantile pursuits. They toiled not, neither did they spin. They simply sat at the receipt of custom. The production of general commodities had not increased since 1873 to anything like the extent that it did before 1873. During the 22 years preceding 1873, the production increased about 70 per cent., whilst prices rose 50 per cent., whereas in the 22 years since 1873, production had increased only 35 per cent., whilst prices had fallen 40 per cent. In the 22 years since Bimetallism was discarded the total production of precious metals had been, of gold, 505 millions, and of silver, 549 millions; the excess of silver production over gold production was only 9 per cent. How was it that silver had depreciated in its gold value by 100 per cent.? That did not arise from increased production; it could arise only from increased appreciation of gold, and the increased work it had been called upon to do. Now. admitted that down to 1873 the ratio was constant at 15½ to 1—as the consequence of production it might have been 17 to 1—and yet the value had fallen to the proportion of 31 to 1. It would take all the special pleading of the right hon. Baronet to get over these figures. It was urged against Bimetallists that they were playing the game of silver-producing nations of the world, and of those countries which had large stocks of silver, and the question was asked whether we were going to constitute England the dumping ground for those nations. The United States possessed in sterling value 131 millions of silver against 130 millions of gold. What advantage would the United States derive from Bimetallism over the general average of mankind? In India there wore 590 millions worth of silver, or more than one-sixth of the total production of the world during the last 400 years. When hon. members spoke of the possibility of our markets being flooded with silver they overlooked the fact that we were the holders of one-third of the silver of the world, so that we could shoot it into other countries as much as they could shoot into this. He denied that the wages of the working classes had not fallen. They had fallen within recent times from 10 to 15 per cent. Low prices would undoubtedly be an advantage to working people if work was constant, but it was not constant. He submitted that the working classes and their leaders were the best judges in these matters, and it was worth noticing that almost all the leading operative delegates throughout the country were Bimetallists. They knew perfectly well that, although trades unions might regulate wages, and keep the rate up, they could not control work. Lancashire men felt very strongly on this question, because monometallism had ruined their industry, as well as practically ruined the agricultural industry. If we could return to the Bimetallic law as it existed before 1873, he believed we should see a renewal of prosperity,

* MR. J. KENYON (Lancashire, Bury)

said, the hon. Member for Stockport had argued that large quantities of silver would be sent to this country from the United States, and that we should receive a benefit by sending over merchandise in exchange. Our experience of the United States would not support the conclusions of the hon. Member; the people of the United States were quite ready to get as much as they could for their silver or raw material without considering the people to whom they sent either. The strong point of the present situation, as it affected the great mass of people, was the very low cost of living. The working classes of this country—in fact, the entire 38 millions of the people of the Kingdom—could live at a rate of 40 per cent lower than the rate at which they could have lived 25 years ago. Surely that was a great advantage for any country in the world. ["Hear, hear!"] In regard to the rate of wages, he knew from experience that it was very much higher than it had ever been in our generation. The great mass of the people were receiving higher wages than they had ever received before; they were paid higher wages than were paid in any other country in the world, except perhaps the United States, but they were not subjected to the fluctuations in employment or to the extraordinary changes in the rate of wages, which prevailed in that country. The advocates of Bimetallism had laid great stress upon the low prices of products arising, as they alleged, from the high price of gold. He thought the causes of the low prices were to be looked for elsewhere. The improvement in steamships enabled produce to be brought to this country from all parts of the world, more cheaply and quickly. Nor had the world stood still in other respects for the past 25 years. Chemistry had been at work and had made discoveries, which turned into money the bye products of commerce, which, 25 years ago, were thrown away as useless. Take the case of wool. The price of the commodity had been very much influenced by its enormous production in the Colonies. But that was not all. Some years ago, when a New Zealand farmer killed a sheep he threw the carcase into the tallow-pot. Now he sent the carcase down to Auckland, and there received from one of the refrigerating firms 3d. per pound for it, and this enabled him to sell his wool at a lower price than he could have done formerly when he got nothing, comparatively speaking, for the carcase. Then there was cotton. Some years ago cotton was shipped from America at considerably higher prices than had prevailed recently; but at that time the cotton seed was burned as useless. Now it was a very valuable article indeed. Oil was first extracted from it, and the husk was then made into cakes for feeding cattle. All those large products enabled the producer of cotton to sell the raw material for a lower price. Again, he would recommend any hon. Gentleman who studied the statistics with which they had been flooded by the Bimetallic party, and by the Gold Standard party as well, to take into account the quantities and the weight of the different cloths dealt with in those statistics. A favourite system was to give the money value; but he submitted that it was a deceptive mode of comparison. When they compared the prices of raw material in vogue ten or fifteen years ago with the money value of exports at the present time, they got an erroneous idea of the state of trade. It should be remembered that the production of yarn and cloth from machinery in Lancashire was 25 per cent. more now than it was 25 years ago. Several Members had spoken of Lancashire trade being bad. Lancashire trade was at the present moment in a most extraordinary position. The working-people of Lancashire, as he had endeavoured to show, were in a satisfactory condition. According to the Labour Gazette published on the 15th of this month—taking the whole of the trades of the country—there wore only 4 per cent. of the- people unemployed, and that was a condition of things to give universal satisfaction. But it was true there was a dark side of the picture. It was true that the condition of employers was very bad indeed, and that it had been so for many years. But he submitted that the real cause of this state of things was the abuse to which the Limited Liability Act had been put. That Act had been availed of in Lancashire to an absurd and ridiculous extent. During the last six or seven years there had been a craze for building mills in Lancashire. The last thing thought of was whether the mill was required. The promoters had no capital; the mills were built entirely on credit: they were mortgaged before they were roofed; the machinery-maker supplied the machinery on as long a credit as he possibly could; and from the cotton-broker who supplied the cotton down to the man who supplied the brushes, everyone connected with the mill in any way was asked to take shares. Out of the 60 mills which had been built in Lancashire during the past seven years, 40 were not required, so far as the demand for yarn was concerned. The consequence was that immense amounts of yarn were produced, were thrown upon the market, prices fell, and it was natural that men who were doing a legitimate business, and were trying to make a living out of the trade should be disheartened. That was the reason why Lancashire trade was not good for employers. The Hon. Member for Cardiff had asked Lancashire men—where was their old independence?—and where was their ability to get out of a difficulty? They were trying to get out of the difficulty. The Hon. Member for Chester was good enough to suggest to the Blackburn Chamber of Commerce that it should send out a Commercial Mission to China. The Blackburn Chamber of Commerce had taken up the idea with great enthusiasm, and he hoped that before the end of the year the members of that Commission would be on their way to do what they could in opening up the trade of the Yangstse-Kiang, which, as a consequence of the Japanese War, was free to the merchants of all the world. Bimetallism was tried in Calcutta in 1893. On the 22nd of June of that year the value of the rupee was fixed at 1s. 4d., and the standard broke down in ten days. A miserable experience for trade followed during the next year, and if that was an example of fixed standards, he, personally, wanted no more of them. Why should there be a fixed standard for silver and gold? There was plenty of gold in the world, and the quantity was increasing. The New York Commercial Chronicle put the output for 1893 at 41 millions, while that of 1885 was only 21 millions, and the average for the five years succeeding 1885 was 22½ millions. If Bimetallism with a fixed ratio were tried, the result would be in two or three years that our American cousins would have all the gold, and we should have all the silver.

* MR. G. HARWOOD (Bolton)

said, that though he was strongly opposed to Bimetallism, he was sure that none of the Lancashire Members who advocated Bimetallism did so with any selfishly interested motives. He wished to confirm the statement made by the Chancellor of the Exchequer that the wages in Lancashire were higher now than ever, measured by the actual amount received. The 10 per cent. list was a purely imaginary standard, made when the production was much less than at the present day.

MR. H. WHITELEY

That list is in force at the present moment, and all wages are calculated from it.

* MR. HARWOOD

said, that wages never were paid at that full rate. Although the amount received per pound might be 10 per cent. less than when the list was fixed, yet owing to the increased production the amount actually received was much larger than before. In his own case, where at the full rate by that list the amount received was 25s. a week, at a rate 10 per cent. lower the amount now received would be £2 10s. The hon. Member for Cardiff attributed the bad trade in part to the trade unions, which had forced wages too high. As an employer, he felt it to be his duty to contradict that statement. In regard to the cotton trade, the trade unions had been great factors for the success of the trade. Whereas formerly there were disturbances three or four times a year, now there were only occasional fights, which were fair and square, and this was for the advantage of the trade in general. Though wages had been raised, the rise had paid the masters well. In his trade they did not believe in badly-paid labour; and as an employer, any reductions in wages would be the last remedy for the supposed evils to which he should consent. As to the bad state of trade in regard to limited liability companies, silver had nothing to do with it. It was the unnaturally forced development of the trade which had led to an unnatural increase of the capital accounts. These concerns had been built at an enormously exaggerated price, and every one connected with them had had plunder out of them. The capital accounts ought to be written down one-half and then the business would be found to pay fairly well. One of the greatest hindrances to the increasing prosperity of the Lancashire cotton trade would be any tinkering or meddling with the currency. Bimetallism nowadays had taken the place of the old theological and metaphysical discussions of the middle ages. But he was convinced that the old economic principles on which he had been brought up were sound, and that the principles at the bottom of Bimetallism were unsound and foolish. He did not think that any action of the Government could have the slightest effect upon the stable value of silver. There were limits to the possibilities of Parliamentary interference. To make any metal whatever money had not the slightest effect upon its fluctuations in value, which depended upon the cost of production. He held this to be true in spite of all that might be said by any Royal Commission or Chancellor of the Exchequer. Much was said about the appreciation of gold. During the discoveries of gold in Australia and America, the cost of production was diminished, and the supply was increased, so that the price of gold fell. Then for a long time there were no new discoveries, and the consequence was that the value of gold rose. Now, further great discoveries had been made, and the value of gold would once more fall. The fact that gold had been money all this time had had nothing to do with the various fluctuation in its value. What had Parliament to do with regulating or bolstering up the price of silver? Such matters should be left to the free play of the market. He was certain that his opinion would be the opinion of Lancashire before long. [Laughter.] What had been the cause of the feeling there for Bimetallism? The case had been represented with that mysterious language of which Bimetallists had a particular patent, that Bimetallism would somehow improve their trade—they did not know how. The people thought it was a sort of Abracadabra which was going to open the door to wealth and plenty. He had faith enough, however, in his countrymen to believe that they would come to see that Bimetallism would be disastrous to the commercial position of this country, and particularly disastrous to the welfare of Lancashire.

* MR. A. WYLIE (Dumbartonshire)

pointed out that the party of monetary reform had increased during the last 15 years from a very small body of hard-thinking men, insignificant in regard to numbers, to a powerful organisation which, he believed, by the vote to-night would show that it had a majority in the House. One of the principal objections urged against the proposed reform was that the adoption of a Bimetallic standard would be a direct violation of one of the best recognised principles of political economy, namely, that supply and demand should regulate the interchangeable value between any two commodities. The objectors forgot that by the present system an enormous premium had been conferred upon gold. If it was within the province of the Legislature thus to enhance the value of one metal, it was equally within its province to divide the advantage between the two metals, and to restore silver to that position which it occupied from time immemorial previous to 1873. In his opinion the course which this country ought to pursue was clearly indicated by the path of duty—its duty in connection with our great dependency in the East. Nowhere in the world was there presented such an anomaly as that of two parts of the same great Empire, with such an enormous volume of trade passing between them, having two entirely distinct and separate currencies, subject to violent fluctuations, which had been productive of the most disastrous consequences to the Imperial finances of India and to the commerce of both countries. Single-handed he believed this country was quite able to establish a fixed par of exchange between its own currency and the silver currency of India, but the Resolution pointed to a more excellent way. The other countries in Europe, almost the whole of them, were not only willing but anxious to join in some agreement which would secure a stable par of exchange between the two metals. He hoped that at the end of the 19th century this country would not stand in the way of dealing with a system which in some respects was worse even than the barbarous system of barter. He had much pleasure in supporting the Resolution.

* SIR JOHN LUBBOCK (London University)

said he was glad when he saw the Resolution as originally put down by the hon. Member for Ashton, That this House is of opinion that the establishment of Bimetallism would be beneficial to the best interests of the country, because he thought that at last our Bimetallic friends had made up their minds to venture out into the open, and let us have a proposal which would fairly and squarely bring their views before the House. It was therefore a disappointment to monometallists to find that they once more thought better of it, considered it prudent to avoid a direct issue, and had omitted all reference to Bimetallism from the Resolution. The resolution still seemed to him far from satisfactory. For instance, fluctuations in value between gold and silver were no doubt inconvenient, but it seemed an exaggerated estimate to say that it was injurious to the "best" interests of the country. Was it, again, consistent with the dignity of the House of Commons to make any complaint of action by foreign countries as regards their own currency? ["Hear, hear!"] Past experience left little hope of any practical result from another conference. Our delegates to the Brussels Conference, in a report signed by all, including the hon. Member for Manchester (Sir W. Houldsworth) expressed their conviction that unless there should be a radical change in the monetary policy of Germany, Austria-Hungary, and Russia, an international agreement for fixing a ratio between the values of gold and silver must be regarded as beyond the range of practical politics. They continued that, in spite of the desire to arrive at some practical compromise, it was found impossible to discover any ground of agreement. … Germany and Austria-Hungary gave only vague and general assurances. M. Tirard, the representative of France, stated that France "was perfectly satisfied with the present monetary situation." Italy and Belgium "endorsed the policy and views of France." And finally, the Commission, in adjourning, expressed the hope that careful study would result in the discovery of an equitable agreement which would not infringe in any way the fundamental principles of the monetary policy of the different countries. It was not surprising, under these circumstances, that our Commissioners told us they were unable to share these hopes—that discussions had "shown such divergence that there was little prospect of an agreement." Anyone reading bimetallist literature or listening to bimetallist speeches would derive very inaccurate ideas as to the use of the precious metals. We constantly heard of silver being demonetised. Why, so far from this being the case, the populations mainly using silver were twice as numerous as those with a gold standard. We might divide the nations into those using inconvertible paper numbering 200,000,000, gold 360,000,000, and silver 800,000,000. No doubt the silver standard had been abolished in Germany, and a considerable amount of silver replaced by gold; but the increased amount of silver taken in the United States for currency purposes had more than counterbalanced the falling-off in Germany. The Gold and Silver Commission summed up this part of their report by saying: "When all the facts are taken into account, it seems doubtful whether there has been on the whole any great diminution in the use of silver for currency purposes." This was, moreover, entirely confirmed by the last report of the Director of the United States Mint, from which it appeared that the amount of silver coined in the last two years was almost exactly the same as that of gold, and the amount of silver coin in circulation was estimated by Mr. Probyn, in an interesting paper in the last number of the Statistical Journal, at 3,100,000,000 ounces, against about 200,000 ounces of gold. But was there any reason to believe in a deficiency of the two metals taken together? Here again he relied on the high authority of the Director of the United States Mint. He said that whereas the amount of the world's money in 1860 was 3,400 millions of dollars, it had risen in 1893 to no less than 8,021 millions. Lastly, was there any scarcity of gold? The stock held by the Banks of England, France, Germany, and the Associated Banks of New York was no less than £186,000,000, showing an increase of £65,000,000 in ten years. The output of gold last year was the largest ever known—over £40,000,000 or more than that of gold and silver together 25 years ago It seems very odd that we should be told that there was a scarcity of money when every business man knows that, as a matter of fact, it is so abundant that bankers are lending at ½ per cent. But would bimetallism be possible? Could any law prevent fluctuations of value between gold and silver? We must remember that the precious metals were not used for coinage only. The amount of gold alone used in the arts was estimated at about £12,000,000 a year. Moreover, between 1870 and 1890 there was a great fall in the production of gold, while that of silver increased from 53,000,000 ounces to 166,000,000. Would any business man say that under such circumstances the value of silver could be prevented from falling in relation to gold? It had often been said that the Gold and Silver Commission were unanimously of opinion that the ratio could be maintained. In the first place, Mr. Birch and he in a separate memorandum expressly said that, as far as they were concerned— Having regard to the great uncertainty as to the probable future production of the mines, the large use of the precious metals in the arts, and to the number of countries which would still remain outside the combination, we doubt whether any given ratio could be permanently maintained. And what was the opinion of their colleagues? They said it "might" be. No doubt it might. But they did not say that it would. On the contrary, they said:— It seems probable that the most extended international agreement would load from time to time, in some of the countries included in it, to the existence of a premium on either the gold or silver coins, and it cannot be denied that an agio on any part of the coinage would be a serious evil. What was the opinion of the investors generally? In the case of the United States Loan of 1895 we had a striking object-lesson. The United States Government insisted on the right of repayment in currency, and consequently, instead of 3 per cent. had to pay 3¾ per cent., a difference of over 20 per cent. and involving a loss of $13,500,000. This was no isolated instance. Ten years ago 100 classes of currency bonds and 40 classes of gold bonds of the United States railway companies were officially quoted by the London Stock Exchange. The quotations of currency bonds had now shrunk to 28 classes, whilst those of gold bonds had increased to 200 classes, a conclusive evidence of the distrust of currency securities entertained by investors. But then they might be told that desperate evils required desperate remedies, and no doubt the condition of agriculture was most serious. But was it due to the fall of silver? Anyone listening to bimetallistic arguments would suppose that English farmers were being ruined by our markets being flooded with produce from silver-using countries. Now, what were the facts? We imported a little over £150,000,000 worth of produce which competed with that of our farms—meat, wool, butter, cheese, and, above all, wheat. What proportion came from silver-using countries? Those who had not looked into the facts would be surprised to hear that out of the £150,000,000 only £3,100,000 came from silver-using countries, while £147,000,000 came from those using either gold or inconvertible paper. Clearly, then, it was not the fall in silver, but the fall in freights and the enormous development of railways that brought this increase of competition. The countries which sent us such great supplies of wheat were the United States, Southern Russia, Argentina, and India. In 1870 India had 5,000 miles of railways, she had now over 20,000; Southern Russia had 7,000, she had now 19,000; Argentina had 700, she had now 8,000; the United States had 53,000, they had now 176,000. Taken together, these four countries had in 1870, 66,000 miles; they had now 223,000, an increase of no less than 157,000 miles, which, of course, had opened up an immense territory. This was the true explanation, and the fall in silver had really nothing, or hardly anything to do with it. He hoped, then, that it was clear that the depression of agriculture was not due to the fall in silver. He did not deny that the position of the currency in France and the United States was far from satisfactory. But why should we change ours? Our joining a bimetallic union would give it no strength, unless, indeed, we changed, not only our law, but our habits. No more silver could be used in circulation except by displacing gold. At present we had the proportion of gold and silver coin which suited the convenience of the public. To replace half the gold by silver would be most inconvenient, and, after all, would scarcely affect the permanent value of silver. ["Hear, hear!"] The real strength of the bimetallic movement in this country was the belief that it would raise prices. Did the hon. Member for Ashton believe it would raise the price, say, of wheat? If so, surely it was a very serious thing to tamper with the currency in order to raise prices. He saw no reason whatever for changing our currency, and overwhelming reasons against it. Was the country as a whole suffering? Were our trades and manufactures falling off? Certainly not. As regarded India the exports and imports, excluding Government stores and treasure, amounted in 1873 (in tens of rupees) to £57,000,000, and in 1893–94 to £110,000,000. And how did we stand at home? As regarded the working classes, in 1873 there were 38 paupers in every 1,000, now there were only 23; the average rate of wages had risen from £43 8s. in 1873 to £53 16s. in 1891. Agriculture, no doubt, was suffering, but he had shewn that this was not due to the fall in silver. How about trade? The Clearing-house transactions in 1868 amounted to £3,400,000,000; in 1873 they were £6,000,000,000, an exceptionally large amount, but in 1895 they were £7,000,000,000. The averages of exports and imports for the ten years ending in 1873 were £560,000,000; last year they were £680,000,000. We must, If however, allow for the fall of prices. we took this at only 25 per cent.—and it was no doubt more—it would bring up the amount to £850,000,000, showing an increase of no less than £290,000,000 in 21 years. But we were told that our trade with silver-using countries had suffered. So far from this being the case, in 1873 the amount of our exports to silver-using countries was 14.3 of the whole; it was in 1894, 20.1 per cent. He admitted the depression in agriculture and in certain trades, but this only made the general progress all the more remarkable. The total amount on which income tax was paid in 1873 was was £514,000,000; in 1894 it was £706,000,000, showing an increase of no less than £192,000,000 in 21 years. He should like, in conclusion, to refer to the opinions of two or three great authorities as to the importance of maintaining our present standard. Mr. Alfred de Rothschild, speaking at the Brussels Conference said:— England owes a great part of her wealth to the confidence which her monetary system has inspired both at home and abroad, to the fact that our banknote represents sovereigns, and that a bill drawn upon England from any part of the world will at maturity be paid in the same metal. The delegate of Russia, M. Raffalovich said:— One of the sources of England's strength is that she has become the monetary centre of the world, the place where you may always be certain of getting payment in gold. This is now one of the conditions of her greatness, interfere with that certainty, and you will break one of the conditions of that greatness. ["Hear, hoar!"] Last, but not least, he referred to the great authority of Mr. Carlisle, the United States Secretary to the Treasury. "The pound sterling," he said— has made London not only the principal market, but the clearing-house of the whole world. No matter what standard of value they may adopt, all their international balances are subjected, at last to the lest of the pound sterling, and all their international bills of exchange are naturally attracted to a common centre, because it is there and there only that a uniform and recognised measure of value will be applied to them. England not only realises great profit from her own trade, but takes toll out of the international trade of all other countries, for the simple reason that the balances are settled upon the basis of her standard of value. ["Hear, hear!"] He hoped the House would never consent to abandon their standard, which had helped to make London the monetary centre of the world, and which was one of the main conditions of their wealth arid prosperity. ["Hear, hear!"]

M R. GEORGE WYNDHAM (Dover)

said, mention had been made of Argentina. There was a gentleman there farming 20,000 acres, by name Mr. Brett, and he could sell corn at a pound in London and carry back in paper worth £3 10s. in Argentina. It might be asked what this had got to do with the Motion before the House, but he thought that its connection was apparent. It was obvious where the the benefit was. It was an inducement to grow wheat in Argentina, and while that was directly injurious to the British farmer it was indirectly injurious to the manufacturer. The temptation was to take back paper and not other articles of profit. In these Debates some hon. Member spoke as if the principle of barter existed—as if Argentina took back goods for goods. One of the main planks in the bimetallic platform was that there were so many millions of people now using silver currency. Of course, they must all treat with great courtesy those who repudiated their opinions, but it was difficult to say what the principles of the monometallist were. The right hon. Gentleman the Chancellor of the Exchequer had said that ho was prepared to acccept the Resolution, but he was not prepared to see any such ratio as 15½ fixed as between silver and gold. The right hon. Gentleman said that it would be dishonest for any Government to fix that ratio between silver and gold. But were the Latin Union dishonest in 1873, and were the late Government dishonest in 1893, when by closing the Indian mints they forced the ratio down from 22½ to 30 in three days? It appeared to be the view of some people that it was dishonest to diminish the creditors' gains, but that it was honest to pile up the debtors obligations. Ho believed that the British artisan would trouble his head very little about Copernicus when lie understood that the present currency system of the world was putting a bounty on the labour of the yellow against that of the white races. No doubt, in. relation to each other, gold was dearer while other commodities were cheaper. But that was only true in the West, which used gold—it was not true in the East, which used silver. In discussing this question they had only to deal with the dearness of gold and its results. What were the results of the dearness of gold upon agriculture? He would take the case of Argentina in the first place. It might be asked what bimetallism had to do with a country which had an inconvertible paper currency. It had this to do with it—that in Argentina our wheat trade was killed directly, while indirectly other exports were injured because, instead of taking back other commodities it paid them to take back paper again. He would ask the question whether our exports had diminished. Let him compare the twenty years before and after closing the mints in 1873. The average exports in the years 1851–4 were of the value of £84,000,000. In 1872 that value had increased to£316,000,000, or 375 per cent. in twenty years, while the average value in 1891–4 was £287,000,000, being a positive fall of 9 per cent., the population having in the meantime increased by 25 per cent. Turning to the East, where silver and note paper was the currency, it would be found that, whereas the Argentine premium on gold was 250 per cent., it was 100 per cent. at Bombay. What was true in India was true all over the East. In that part of the world the prices of labour had not increased, and therefore they could give their gold customers a reduction of 50 per cent. It was absurd to think that Lancashire by its pluck and industry could go on competing against places where labour was cheap and which obtained the advantage of 50 per cent. profit when they sold us their goods. We were told that we were rolling in wealth, and that the receipts from the income tax were increasing. But to pay income tax was the privilege of the creditor class, and it was the man who did not pay income tax that was being received. The figures he had quoted, showed that that all the prosperity of which they were told was accompanied by a steady shrinkage of our exports, running side by side with an increase of population. He did not believe that the right lion. Gentleman, the Chancellor of the Exchequer would maintain for a moment that the more our exports fell oft', the happier we should be. In order to show the results of the existing system upon other industries he would take the case of tin. At the Straits Settlements tin could now be sold for £65 instead of £130, and it was stated that if silver continued to fall, those Settlements would be able to shut up every tin mine in Europe. Then again, with regard to coal, the cost of putting a ton of Japanese steam coal on board which used to be 16s. was now only 8s.; with regard to boots, Northampton had now lost the contract for supplying half the Indian Army, in consequence of the fall in the price of silver. It had boon said that it was only in the articles that were produced simply that this Eastern competition affected us. But the umbrella was rather an elaborate article of manufacture. Formerly the Chinaman, not in order to keep off the rain, but to support his own dignity, bought a 15s. umbrella, whereas now the Japanese sold 360,000 umbrellas a year in Shanghai to the destruction of the English manufacture. But things were going further than that. Very shortly they would come over here and supply us with our own articles. Owing to the advantage they had in the possession of a peculiar kind of wood, the manufacturers of Shanghai would shortly be able to put on the English market a cottage piano for the exiguous sum of £25. He would not go into the arguments as to the practicability of fixing this ratio, but unless a ratio was fixed we must make up our minds to live in the future in a monometallic paradise. [Laughter.] We must reconcile ourselves to seeing our mines and factories shut and our lands out of cultivation, and then we should look at the British artisan—lucky fellow—with no work to do, gazing at his household utensils made of Straits Settlements tin, on Japanese coal burning in his grate, and on a cottage piano from Shanghai—[loud laughter]—enjoying the privilege of the rich of twirling his thumbs, and wondering how much the pawnbroker would give him for the whole lot. [Laughter.] When it was said we were a creditor nation, we forgot who were our debtors. Our own children. [Cheers.] For every bale of wool the Colonies used to export they must now export two if they were to pay the debt we had piled up. This financial policy, which said that a man who had contracted to pay interest in gold must continue to pay it in gold, although he had to shear twice as many sheep and work twice as many hours as he did, was the financial policy of a Shylock. [Cheers and laughter.]

* SIR WILLIAM HARCOURT

I must congratulate my hon. Friend the Member for Dover on having accomplished a feat I have never witnessed before, that of making bimetallism amusing. [Laughter.] It is a refreshing incident in this Debate which I think will be long remembered and will make memorable a discussion on a subject which has been up to this time, I must say, intolerably dull. ["Hear, hear!"] The speech of my hon. Friend is not the only amusing feature in the transactions of to-night. Next to him I think I must give the honours to my hon. Friend the Member for Manchester, who seconded this Motion. The first thing he seemed to be anxious to do was to assure us that this was really a bimetallic Motion. That reminds me rather of the inexpert draughtsman who, having delineated some animal, is not confident that all the world will recognise it and writes under it "This is a lion." [Laughter.] That it was in truth originally a bimetallic Motion nobody could doubt, because the word ''bimetallism'' was in it; but for some reason or other he expunged that word and has inserted other words which, I agree with the hon. Member for Cardiff, are somewhat difficult without his exposition to understand. We are told that we are to have an international agreement for a stable monetary par of exchange, but we are not told what the par of exchange is to be or how it is to be stable. But there was something still more entertaining about the exposition of the hon. Member. He said that this is a bimetallic Motion, but he then proceeded to explain that this international bimetallism is not to be a bimetallism of all nations but of only a few, and that it was not at all necessary that one of them should be the British nation. [Laughter.] This is a modification of the international bimetallic arrangements which probably will surprise the Reichstag and other deliberative bodies who he assures us are occupied at this time in passing similar Resolutions. But if each should explain that the international agreement for a stable monetary par of exchange includes all other nations, but not themselves, their deliberations are hardly likely to lead to any certain conclusions. Then there was another thing the hon. Member said which hows that these Motions are annually improving. As they go on they become less and less bimetallic every year. I observed last year that ''bimetallism'' had been taken, out of the Resolution. I am always very willing when I can to agree with my hon. Friend, and the more he endeavours to meet our views the more willing we may be to agree with him. The Motion last year ordered the late Government to summon a conference, but the present Government are treated more considerately. The hon. Member having had experience of a bimetallic conference is not very anxious to repeat the experiment. He agreed with me that he did not think much of conferences, and he thought that on the whole this matter would be better conducted upon the basis of negotiation. But this I will observe—that the great charge made against the late Government was this. I was suspected of having in some secret manner instructed one of the delegates to the conference to declare that England did not intend to depart from her gold standard, and it is said that that was the cause which led to the failure of the conference of Brussels. But what will be said of the Chancellor of the Exchequer? As a preliminary to negotiation he has made a statement, which I may say was worthy of the position which he holds as the responsible Minister who represents the finance of this great country. He has made a speech of which I will say that I have never heard one which surpassed it in ability, in closeness of reasoning, and in frankness and down-rightness of statement. [Cheers.] The right hon. Gentleman is not one who sits on the fence on this question. [''Hear, hear!"] He has his opinions and he states them clearly, and he has delivered the determination and the conclusions of the English Government upon this subject, and that opinion will go forth to-morrow to Europe and to America, and it will be a declaration on the part of the responsible Government that England does not intend to depart from its present monetary system or to give up the gold standard upon which for the greater part of this century it has acted and upon which its unequalled prosperity has been founded. [''Hear, hear!"] That is a thing that will be understood in the Reichstag, with its majority of 100, and everywhere else, and it is right that it should be understood. It has not been creditable to England that up to this time there should have been any doubt as to the views of the Government upon a question of this capital importance—a question upon which the financial, commercial and social existence of this country in a great degree depends. We are now in this position. We have at last a clear statement of the view of the English Government, whatever may be the opinions upon particular disputed points in this controversy which individuals may hold. There is on this question, I admit, great room for the exercise of philosophic doubt—[laughter]—and subtle minds may arrive at conclusions very different from those of ordinary commonplace people, among whom I reckon myself. But I find myself in accord with, I believe, the great majority of the practical men who have to do with the finance and the commerce of this country. The hon. Member for Manchester does not even ask that we shall initiate a conference or negotiations. We are to wait for other people to come to us. Of course we cannot initiate a conference or negotiations to establish a stable monetary par of exchange unless we are prepared ourselves to say what is to be the basis of that stable monetary par of exchange. But when another Power comes to us and says, '' We have made up our minds as to what is the stable monetary par of exchange,'' we are to be prepared to say to that Power, ''No doubt it is an excellent thing for you to adopt, but we shall not adopt it ourselves." The present Government have been very successful recently in bringing to a practical conclusion the Concert of Europe—[laughter]—but when they demand the Concert of Europe upon a stable monetary par of exchange, and when they start that Concert with a declaration that they desire that the rest of the Powers of Europe should adopt bimetallism, but that they do not intend to adopt it themselves, I do not think—although, of course, I admit the diplomatic capacity of the existing Administration—that they are very likely to arrive at any practical result. I do not understand how you recommend a particular process to other people by telling them that, though it may be very good for the "likes of them," you yourselves will have nothing to do with it. ["Hear, hear!"] Yet that is the course which is indicated in the speech of the hon. Member for Manchester. Am I not right in saying that this Resolution, as expounded by the hon. Member for Manchester, is what may be called the euthanasia of bimetallism? ["Hear, hear!"] I should think that this would be almost its last appearance upon the scene. We shall see what is the opinion of the rest of the world with regard to a scheme which you recommend to them and disavow for yourselves. I hardly think I can be wrong in believing that that will not be a successful method of accomplishing the object that you have in view. As to the arguments upon this question, the Chancellor of the Exchequer has said everything that I intended to say so very much better than I could hope to do that I shall not attempt to cover the same ground. But there is one point upon which I have been very much attacked—namely, the question of the fall in prices—and I should like to make this observation, upon it. It is a very remarkable thing that, if you examine any industry whatever, you will find that the great object of those concerned in it is, either by economy of labour, or by new inventions, or by some process or other to cheapen the article which they produce, and therefore you have the whole industrial world in various ways occupied in cheapening the articles they produce, and you say that, when they have accomplished cheapening the article and lowered the price, that is such a tremendous evil that you must set to work by some artificial process to counteract it. ["Hear, hear!"] There is a remarkable inconsistency about that proceeding. It is assumed that the fall in prices is a great evil. Now a rise in prices may be a good thing or a bad thing. A rise in prices which is due to an increased demand, which leads to more capital and labour being employed, is a good thing; but if there is no additional demand, if no additional capital is employed, and consequently if no additional labour is employed, simply to raise prices by an artificial process like that of bimetallism is no advantage at all. That is a distinction which people ought to bear in mind. [''Hear, hear!"] I will only touch very briefly upon one or two of the points which belong to this great controversy. There is a fixed idea in the minds of bimetallists that what they call the rupture of the Latin Union arose from the members of the union closing their mints, that that was the result of the Franco-German war, and that it was the conduct of Germany that induced France to give up bimetallism. Even so accomplished a student of this question as the First Lord of the Treasury seemed to be under this impression. I asked him, if this was such a good thing for the Latin Union why they did not go on with it. He stated that it was the action of Germany in 1873 which threw the burden on the bimetallic system. ["Hear, hear!"] That is the bimetallic theory on that subject. The objection I have always had to the bimetallic argument is that it is always contrary to known facts. [Laughter.] That is not the cause which broke up the bimetallic system in France at all. The cause of it did not arise; in the Franco-Gorman War or in consequence of the action of Germany. There wore two Commissions in France on this question in 1868 and 1869. One of those Commissions reported before Germany did anything, and before the outbreak of the war. The Report stated that:— On the general market silver tends to depreciate while gold is rising. More than five hundred millions in silver 5-franc pieces are already accumulated at the Bank of France, and the public is no longer ready to receive those heavy pieces. Silver appears to be falling into disfavour, and we must hasten to demonetise it; if we do not, we shall be left encumbered with the inconvenient metal. What, then, is the use of saying that France gave up their bimetallism on account of the action of Germany after the war when it is seen that, in the opinion of the great majority of the Commission, two years before the war broke out France gave it up because the French people did not want the silver, because they would not take it, and thus it lay accumulating on their hands. The whole of the fabric upon which the great part of the bimetallic argument is founded falls to the ground by that fact. I will not say anything about the scarcity of gold. It was never so abundant. In the last 25 years a greater amount of gold has been produced in the world than was produced in the previous 30 years, which include the great discoveries of California and Australia. Therefore the fall in prices is not due to the scarcity of gold. I would like to say a word on another fallacy—the fallacy of the term "appreciation of gold." Appreciation of gold is only another form of stating that there had been a fall in prices; it is exactly the same thing. [Cheers.] I saw an illustration the other day which I thought a very good one. It was said, ''The tide falls;" you look at London Bridge and you say " It is not the water that has fallen, it is the bridge that has risen." [Laughter.] It is the same thing when you speak of the appreciation of gold. If you have bad harvests corn is dearer; if you have a good harvest it is cheaper. In the good harvest you get more wheat for a sovereign and therefore you say "The sovereign has risen;" in a bad harvest you get less and you say ''The sovereign has fallen." Is it possible to conceive a greater fallacy than that? And yet those are the kind of fallacies on which this bimetallic theory is based. [Cheers and "No."] There has been a great deal said about the evil which happens from the diversity in the exchange. That, of course, is true as regards the inconvenience in the exchange, but it has been already pointed out that that inconvenience occurs as much, and even a great deal more, in the countries you deal with, countries with depreciated paper, and bimetallism will not effect a cure for this; it will not relieve you of your difficulty in Argentina or in any other country. The hon. Member for Dover said:— Oh, but look what an immense advantage those people have with their depreciated currency; it enables them to sell their umbrellas and their cottage pianos to such advantage. [Laughter.] Will my hon. Friend allow me to carry his argument to this conclusion? The more you depreciate the currency the more prosperous you will be. [Laughter.] Thus, do not let us have bimetallism; let us have depreciated currency, and the hon. Member for Dover as Chancellor of the Exchequer. [Laughter and cheers.] The more you depreciate the currency the more umbrellas and cottage pianos we shall have; that is the argument of my hon. Friend. [Laughter.] It is a most remarkable thing to note the great alarm as to the imports and the exchange. When my hon. Friend the Member for Dover talks about Japan I ask him, Why is it that Japan undersells us? Is it on account of the depreciation of silver or the appreciation of gold? No, I will tell him. It is because in Japan the people work 11 hours a day, seven days a week, and for nominal wages. [Cheers.] You will not cure that by bimetallism. You do not suppose that the Japanese are going to adopt the eight hours day or the six-day for the seven-day week. You cannot, therefore, stop this competition by adopting bimetallism, because the competition from which you are suffering is from countries where wages are very low and the hours very long. [Cheers.] It is said that India, and the silver-using countries have such an advantage in dealing with other silver-using countries, but it is a very remarkable thing that the exports of India are very much larger to gold-using countries than they are to silver-using countries. It is also a remarkable fact, and this is contrary to the whole bimetallic theory, that the proportionate increase in our trade was much larger to the silver-using countries than it has been to the gold-using countries. ["Hear, hear!"] I find that 14 per cent. of the increase of the exports of the whole trade was to silver-using countries in 1873, and in 1895 it was 20 per cent. This I will say about India, and I think it is a warning which the House ought to take. It is a very solemn warning which is given in the Report of the Royal Commission upon this subject. You affirm that the present system of currency is favourable to the industry of India. There is no doubt that is so. It may be unfavourable to the Indian Government in the exchange upon the home payments here, as we know it is. But your case is that it is a stimulant to industries in India; that it enables them to carry on trade which they did not carry on before. What will be the effect on India if this House is going to legislate deliberately with reference to the currency for the purpose of restraining and putting down those industries in India? The language held upon this subject in the Report of the Royal Commission is very well worthy of the attention of the House. They say that the effect on the Indian mind of leading them to believe that one of the objects of the change in the currency is to attack an industry which you regard as a rival to your own is one which will naturally produce immense discontent there. [''Hear, hear!"] I will say a word upon what is one of the most important features of this case, and that is the question of wages. Bimetallists say that if prices rise wages would rise. That is not true. In the time of highest prices wages were much lower than they are now. [Cheers.] Every chapter of history tells you that that is the fact. Wages are higher now than they were 25 years ago, the date to which you go back in this matter. Their purchasing power is at least 50 per cent. higher. The people who above all have benefited by these low prices are the working classes of this country, and they know it. [Cheers.] What are these great imports? They are imports of cheap commodities to the working classes—tea, sugar, tobacco, all the articles which are increasing every year. Talk of the distress of the country! Why, look this year at the increase from the Customs—an increase beyond expectation and beyond the estimate. Look at the condition of your working classes. Look at their food, look at their clothes compared with what we recollect in the days of high prices. ["Hear, hear!"] I should like to give an example as a proof of this. We know perfectly well that in the Civil War in America, when they had the inestimable boon of a depreciated currency, which my hon. Friend the Member for Dover thinks such an enormous advantage to a nation—[laughter]—and when they suspended their cash payments, what effect it had upon the wage-earners. The real truth is that prices did go up, but they went up much more rapidly than wages. I have a paper here, written by one whose authority I think everybody will respect—Lord Playfair—with reference to what occurred at that time. It was founded on the table of prices and wages and purchasing power in the United States, and this is what is said:— Depreciation in our currency standard had caused a rise in both prices and wages, but prices had risen so much faster than wages that the wage-earner had been forced to work for less and lees every year until in 1865 he was working for less than four-fifths of what he had received in 1860. There is a practical example of a rise of prices followed by that depreciation of the currency which it is the object of bimetallists to bring about. There has been something said about England as the creditor country, and nobody who heard it will have forgotten that remarkable speech which was made by Mr. Gladstone in this House when he last spoke upon this subject, when he held up to the scorn of mankind the proposal that the great creditor country should go, hat in hand, to beg the world to pay 10s. in the pound. [Laughter] That is practically the result that the bimetallic system would bring about. ["Hear, hear!"] Of course it is said we receive more for our money. The fact is, we are not paid in gold, as everybody knows, but in commodities. These are the commodities upon which our people live, and therefore we are to go round the world to beg them in return for the gold we have lent them to send fewer commodities. Is it possible to conceive idiocy going further than that? [Laughter, and "Hear, hear!"] We, who have lent £100,000,000, perhaps £1,000,000,000, to foreign nations, are to beg them to give us less in exchange for that money than they do at present. ["Hear, hear!"] It is really hardly possible to state a case of that kind and imagine any person would adopt it. I know they say that under the bimetallic system silver will really be exactly worth as much as gold. If you believe that, will you show the sincerity of your belief by giving an option to the creditor as well as the debtor? ["Hear, hear!"] If you really believe that silver is equal in value to gold, why is not the creditor to have the option of saying, "I will take it in gold and not silver," and why is it only the debtor who is to say, "I will pay in silver and not in gold?" You know perfectly well that the two things are not equal, else you would have no hesitation in adopting that position. [Cheers.] That is the argument of Mr. Herries, which was brought forward in this House, reproduced from ancient Debates, by Mr. William Henry Smith, who was then Leader of the House. Mr. Smith said, upon his experience—and no man was more experienced in business than he—that the very first effect of introducing a Bill to carry out the bimetallic system would be that there would be a panic in this country, that every man who knew when the Bill passed into law he would receive silver instead of gold, if he had money at call, would demand repayment at once. ["Hear, hear!"] That is perfectly obvious. Why, in the world, if I am to receive next week for my gold depreciated silver, am I not to go and ask for my gold at once? Mr. Smith, with his experience, said that that would undoubtedly be the case, and that was stated by Sir Robert Peel, the greatest Finance Minister we ever had, and was repeated by Mr. Gladstone. ["Hear, hear!"] I was wrong in saying Sir Robert Peel was the greatest Finance Minister we ever had; Mr. Gladstone was the greatest, and he stated upon his responsibility that that would be the result of carrying out this bimetallic system. ["Hear, hear!"] I ought not to occupy too much of the time of the House, otherwise I should like to have given figures which would have shown, step by step, that, in every class of the community, beginning with the humblest and going up to the highest, the progress of this country since the bimetallism of France came to an end has been incredibly great. You will find that, with the higher wages, there has been an immense increase of consumption by the working classes. Take the test of the Income Tax, which the hon. Member for Dover says is only paid by the capitalist, what does he think about Schedule D? See what the increase upon Schedule D has been! Look at the accumulated wealth as shown in the Death Duties, and compare what they were in 1873 with what they were in 1895. Look at what the Chancellor of the Exchequer said as to the condition of Finance. Does that look as if for 25 years you had been under a false monetary system, and as if this country had been degenerating in trade and commerce? Look at the tonnage of vessels, which has multiplied to a degree you can hardly believe. ["Hear, hear!"] Look at the increase of your building societies, and at the enormous increase in the premiums of your life insurances, which is as good a test as you can have. ["Hear, hear!"] The progress of this country is the refutation of the whole of your arguments. What is it we are called upon in this Resolution to do— To secure by international agreement a stable monetary power of exchange between gold and silver? In 1892, the American Government proposed to establish a ratio for the coinage of silver. The former Chancellor of the Exchequer refused to go into conference on such a footing. Then you had the Brussels Conference, and bimetallism was not accepted there. The overwhelming voice of all the nations was against it, so much so that the United States, who called the Conference, would not put it to the vote at all. It was adjourned on this vote. These were the words on which the adjournment were moved:— to find some agreement which should not infringe in any way the fundamental principle of the monetary policies of the different countries. The Conference, moreover, was not to meet again unless they had some specific proposal. It was not to be a fishing inquiry which made the Brussels Conference almost ridiculous. I suppose a ratio was to be stated. Who is going to make these specific proposals? It is quite understood that we are not to propose it. We are not prepared to do anything of the kind. But, even if this were brought about, have you considered what it is to put the currency of Great Britain into commission under a foreign syndicate? [Cheers.] Are you going to have a currency Zollverein in partnership with the great military monarchs of Europe? You will have no "splendid isolation" there. [Laughter.] Your cruisers and men will not be needed to protect English commerce. You will be there in a minority of one, and if they want to strike at your commerce in this international syndicate, which is to settle the currency of Great Britain, they can do it far more effectively than ever they could on the high seas. I advise you to consider that matter pretty gravely. The Report of the Royal Commission says, that— At the present the action of this country is unfettered and not dependent on the course taken by any other Power. This condition of freedom would cease as soon as you became a party to an international agreement. The dangers arising from this course would be aggravated if it was found necessary, as we think it would be, to embody in the international agreement detailed stipulations with regard to the coinage currency or internal financial arrangements of the several countries.

THE FIRST LORD OF THE TREASURY (Mr. A. J. BALFOUR,) Manchester, E.

Is that a unanimous Report?

* SIR WILLIAM HARCOURT

We cannot all be unanimous even on bimetallism. [Laughter.] And the syndicate of nations who are to settle the currency in England, to determine the conditions of the money market of London, who would they be? Countries overloaded with silver which they do not know what to do with. They would be countries which can produce an unlimited amount of silver, and if you can only raise the price they will run it down again by unlimited production of their silver mines. When you have your agreement how long would it last? The Chancellor of the Exchequer says, the first war would destroy it. Then when you have revolutionised the whole of your monetary system in this country, the first breaking out of a European war would destroy your system and throw the whole of your commerce and finance into confusion. You will place the great money market of the world at the mercy of a hostile combination. Is that common sense? Why, this argument was put forward only a year or two ago, and the then Chancellor of the Exchequer (Mr. Goschen) said:— When war was declared, or before it was declared, one country might take measures to attract gold to itself, and that might alarm other countries and there might be a scramble for gold under which the agreement would break down and general confusion would arise. Then I think it would he wrong to call a Conference in the belief that we might carry out something we could not effect without the consent and cooperation of foreign countries. What is it you want us to do? The very thing he advised us not to do. The Chancellor of the Exchequer has quoted the words of the First Lord of the Treasury:— I certainly should not think it far from lunacy to attempt to force on the United Kingdom and the City of London a form of currency which they did not thoroughly adopt and believe in. Does he think the City of London has thoroughly adopted and believes in bimetallism? In the same Debate there is a notable sentence used by the right hon. Member for St. George's, Hanover Square. Speaking of this Report of the Royal Commission, he said:— It is not on a divided report that the Government can take the immense responsibility of tampering with the currency. That was a very wise remark—"It is not on a divided Report." Will he allow me to add that it is not upon a divided Cabinet that the responsibility can be taken of tampering with the currency of England? [Cheers.]

THE FIRST LORD OF THE TREASURY

I do not know that the right hon. Gentleman has kept up the Debate on the level of amusement to which it was raised by the hon. Member for Dover, but I admit he has made a long, interesting, and important speech. In the time left to me I cannot traverse the whole of it, but I can touch on the main heads of argument the right hon. Gentleman has used. Before I do so, let me gently remark that the right hon. Gentleman has, on certain subsidiary points, made himself a sponsor for various very extraordinary views. Among other things, he allowed us to understand that the commercial position of a manufacturing country depends upon the lowness of wages and the number of the hours that the operatives work in that manufacture. He has told us, if we have anything to fear from Japan it is because the English artisan asks for short hours, works but six days a week, and has good wages, whilst the Japanese artisan works long hours, has small wages, and works seven days a week; and on these grounds he forecasts the future commercial and manufacturing supremacy of Japan, ["No, no!" and "Hear, hear!"] He distinctly told us that if we were being undersold in the neutral markets of the world and in our own these were the reasons, and I hope the Labour representatives on his side of the House will take note of his views. ["Hear, hear!"] Then he gave us an account of the abandonment by Franco of the bimetallic system; he said France did not wait for the results of the war of 1870 before determining to give it up, but already by a Commission she had made up her mind that the system was one she could no longer hope to maintain. I do not know where the right hon. Gentleman got his information, but I am informed that the report of the French Commission to which he alluded was considered by one branch of the French Legislature before the war of 1870, and they declared in January of that year that the bimetallic system should be reaffirmed; so that before the war of 1870, and in the face of that Commission—so I am informed—with full knowledge of what it had to say, France deliberately reaffirmed the bimetallic position. The right hon. Gentleman told us that, holding as we do that the present condition of exchange between England and India afforded an artificial stimulus—a stimulus, he did not say artificial, though I think it is—to Indian manufactures, we should ask what would be thought of our policy by the Indian population if we deliberately adopted a new system under which that stimulus to Indian manufactures would be put an end to. That might be a good argument from some points of view, but it is not from that of the right hon. Gentleman, for he was a member of the Government which forced upon India an artificial currency, which tampered with Indian currency, which tampered with the currency of 200 millions of Her Majesty's subjects for the deliberate, avowed, and openly expressed purpose of raising the value of the rupee above the market price, with the inevitable result, in so far as it was raised thus artificially, that the stimulus to Indian exports would be diminished. I think I am absolved from dealing with that argument when it proceeded from a gentleman who has done more than any one to prove its futility. The right hon. Gentleman then went on to use an argument which I am glad to think has scarcely been alluded to in the course of the Debate—the argument of the creditor country. There is no argument that has brought us into creater discredit or into juster discredit with countries on the Continent, with America, and with our own Colonies than the creditor country argument.["Hear, hear!"]

* SIR W. HARCOURT

Why?

THE FIRST LORD OF THE TREASURY

I will tell the right hon. Gentleman why. The right hon. Gentleman tells us, and tells us truly, that the debts of this country are paid in commodities which are estimated upon a gold basis; and that the result of the appreciation of gold, which has gone on during the last 20 years, is that the creditor country paid in commodities gets a very much larger proportion of commodities than on the original gold value of the commodities it had the slightest right to. Does the right hon. Gentleman think that this creditor argument is one which commends itself to those who have got to pay debts in this country? What they ask, and what we ask, is that some standard of debts which could be valid over a long period of years should be adopted, not only between individuals, but between countries. We hold—and this is held by the best scientific economic opinion of every party all over the world—that this would be more effectively secured by the bimetallic system than by the monometallic system. [Cries of "No!"] I do not say that that opinion is right; but I do say that it is the opinion of all economic authorities. ["No, no!"] If foreign countries hold, as they do hold, that the single standard has the result of artificially increasing the burden of their debts to this country, they will think, and think truly, that the right hon. Gentleman is not so much occupied in maintaining what is called an honest currency as with the object of obtaining a currency which will get more than their just debts from our debtors. ["No, no!"] I pass from these outworks of the right hon. Gentleman's speech to the main contention with which I understood it to be occupied. The policy of the Government has already been expressed by my right hon. Friend the Chancellor of the Exchequer. He has told the House that the Cabinet is of opinion—as, if I may say so, I have always been of opinion—that it is absolutely impossible to force upon the commercial and banking classes of this country a form of currency against which they protest and which they are not prepared to accept. ["Hear, hear!"] I admit that, while my right hon. Friend the Chancellor of the Exchequer has perfectly accurately represented the policy of the Government, if it had fallen to my lot as Chancellor of the Exchequer to carry out the same duty, there might, perhaps, be a slightly different colouring put upon his expression of opinion. [Laughter.] The drawing of the picture was absolutely correct; but the toning and shading perhaps leave, from my point of view, something to be desired. [Laughter.] My right hon. Friend had a perfect right to speak as he has spoken. He is a believer in a single standard, as I am a believer in a double standard. We are absolutely agreed as to the policy to be pursued. The difference between us is this—that while my right hon. Friend rather triumphs in the opinion which is so largely held in the City of London amongst the banking classes in regard to our present system of currency, I regret that that opinion should exist. I think that in this case, as in other cases, they have rather lagged behind sound opinion on the subject, and that the time will probably come when they will take the view already taken by the great mass of scientific economists, that the bimetallic system of currency is one that ought to be adopted, not merely by other nations, but by us also. I am encouraged in that view of the future opinion of this country by the revolution in that opinion which has already taken place. ["Hear, hear!"] I distinctly remember the time when, if a Debate on this subject took place in this House we should have heard one Member after another declaring that the bimetallists denied the laws of supply and demand, the effect of production on value, and all the rest of it. That view is, I am glad to think, abandoned—["No, no!"]—and if not absolutely abandoned, those who hold it are a small and belated minority, who have not taken the trouble to make themselves acquainted with the literature of the case. [Laughter,] I think it will be admitted that it is not now open to any man who professes to be an educated man, to pretend that what is held by the great majority of the French nation, the great majority of the Italian nation, the great majority of the Belgian nation, the great majority of the German nation, and by practically the whole of the American nation, is one that is open to that kind of criticism? And as a matter of fact, there is not a single instructed economist in the country who would now venture to repeat anywhere and in any company, however ignorant, the arguments that once would have been received with general approval and greeted with universal applause. [Cheers.] The whole trend of civilised opinion is in the direction of a double standard—[Cries of "No!" and cheers]—and I confess that I look forward to a period when it will be accepted, not merely by the great commercial nations of which I have been speaking, not merely by the great manufacturing classes of Lancashire, and by the vast majority of the representatives of agriculture, but also by the great body of opinion within this great commercial centre of the Empire. [Cheers] I do not think it would be profitable or convenient that I should deal in detail with the advantages which may be anticipated from some settlement of this question. But one point I must deal with. It has been constantly assumed by the monometallist speakers that we have some power by our own action to settle the debt-paying value of our own standard of exchange, and that it is competent for us to say, "We stick to the gold standard, no nation can disturb us; we remain in splendid isolation as regards our currency." That is not in the power of this or of any Government. [Cheers,] It is not in the power of this or any nation. Whether we like it or not, the laws of nature are too strong for us. ["Hear, hear!"] Whether we like it or not, the currency of one nation does depend and must depend upon the action taken by other nations in regard to their currency. The action of Germany and France may alter the whole value of the debt-paying capacity of your standard; and if tomorrow the great commercial nations of the world did what in my opinion they have the power to do, if they chose to exercise it, and were to say, "England refuses to join us. We will leave her on one side. We will adopt a bimetallic system, and let her get on as she chooses with a monometallic system," the result of that would be, I admit, entirely beneficial to us, but it would also entirely upset the present debt paying capacity of the standard which you think, by your own powers, authority, and Legislature, you have chosen to establish. [Cheers.] The truth of the matter is that there is no subject in the world which is more proper for international arrangement than currency. There was a time when commerce was broadly speaking, confined within the limits of the country which issued the currency in which the debts contracted under that system had to be paid. That has been broken down by the advance of civilisation, and, at the present moment, in spite of your tariffs and the ridiculous system by which one nation tries to exclude the products of another nation—in spite of all that, the civilised and commercial nations of the world form one community. [Cheers] They form one community for the purposes of commerce, and, therefore, for the purposes of contracting debts and paying them. It is perfectly ludicrous—and, if we were not accustomed to it, we should think it perfectly intolerable—that the standard of those debts should differ with longitude and with latitude. The Chancellor of the Exchequer recalled to the memory of the House the ludicrous fact that, at the present moment, within the limits of this one Empire, men's debts are measured by three different standards. They suffer from alteration by three different sets of causes, and they are subject to variations from influences arising from three different quarters. You have a gold standard in this country and a silver standard in the Straits Settlements, and in those two countries the demand for gold and the demand for silver respectively depends on how the debt which is to be liquidated was contracted. And in India there is a third standard. It is not a demand for gold or a demand for silver, but a demand for that anomalous article invented by the right hon. Gentleman opposite, imposed by him upon the 200,000,000 of our follow subjects in India, and differing from both the gold and the silver standards. [Cheers.] Nothing shall persuade me that it is in conformity with civilisation and common sense that the commercial world should long tolerate so inconvenient, cruel, and absurd a system. [Cheers.] I hurry on from these general considerations to the, after all, far more important question involved with regard to policy which this country is to pursue in the future. I understand we are to pass this Resolution unanimously. ["No!"] So I am informed. What is to become of it? [Cheers] The right hon. Gentleman (Sir. W. Harcourt) has done his little best to secure that nothing shall come of it. My belief is that a great deal will come of it, and I regard the Resolution itself and the Debate by which it is accompanied as an invitation from this country to other countries as concerned as ourselves, to adopt a common system of debt-paying standard upon a reasonable basis. The right hon. Gentleman, in order to make that impossible, has let it go forth to the world that, in his opinion, under this Resolution, the British Empire is doing nothing towards establishing a bimetallic system. He has dwelt on the fact that the United Kingdom is going to maintain its present system, and he has asked: How can you ask foreign nations to alter their system when you announce in. your speeches, if not in your Resolution, that you do not mean to alter yours? That would be an admirable argument if the United Kingdom were coincident with the British Empire. [Cheers.] But, as a matter of fact, it appears to me that under this system we are pledged, and the House is pledged, after the speech of the Chancellor of the Exchequer, to do as much or more for the bimetallic system; and for the rehabilitation of silver as it is in the power of any foreign country to do. With this Resolution we go to foreign nations and tell them that, though you can hardly ask us to make this great change in our habits, we will do for you as much as you can do for yourselves; we will make this great contribution to a bimetallic system—we will go back upon the deliberately-arranged method of providing a currency for India; we will re-open the Indian mints, we will engage that they shall be kept open, and we shall, therefore, provide for a free coinage of silver within the limits of the British Empire, for a population greater in number than the populations of Germany, France and America put together. [Cheers.] I do not think that will be regarded by foreign nations as a slight contribution to a great problem. I think, on the contrary, they will feel that in, carrying out that great alteration and smaller changes which have been accepted by previous Administrations, and will be accepted by this Administration, we shall be contributing our share towards that great object which, if foreign nations are now willing, can, I believe, be carried into effect; and whatever be the views of Gentlemen in this House, whether they be monometallists or bimetallists, I cannot believe that they are so shortsighted, whether from the point of view of English commerce, of English foreign or internal commerce, or of English foreign relations—they cannot be so shortsighted as not to desire that if this great question can now be finally settled once and for all, we should not do everything in our power, subject to the limitations which I have described and which my right hon. Friend has given in more detail, to contribute to that great end. I am glad to think that the House of Commons to-night will be unanimous about this Resolution. [" No!"] I am glad, then, to think that the Resolution will be carried by a large majority [Cheers], and I hope it will be understood abroad—in Germany, in France, and in America—that this country is perfectly prepared to bear its fair share in any system which may, once and for all, put the international currency of the world upon a basis just both to the debtor and to the creditor, and a basis far less liable to change than either a monometallic gold basis or a monometallic silver basis can possibly be expected to be. [Cheers.]

Resolution put, and agreed to amid cheers.