§ On the motion for the second reading of the bank of Ireland restriction bill,
rose to state several observations, which he felt it his duty to do, as he had reason to hope they would be not wholly without their use, although he should not formally resist the motion. The discussion which had already taken place on this important subject, had, he was persuaded, produced much benefit. The principles ha had frequently submitted to their lordships, were of that nature, that the more they were examined, the more conviction they carried with them; and so imperious was their necessity in the present circumstances of the nation, that he could not be too urgent with their lordships to give them their serious and repeated consideration. The stale of Ireland grew daily into a stronger proof of the accuracy of his former arguments. He would call on every noble Lord connected with that country, to give 698 testimony to the truth of that assertion. He wished those noble lords to lay before the House their own personal information on this subject; for it was his sincere desire, that the real grounds of his anxiety should be as plain to their lordships, as to himself. The fact was, that the bank paper in Ireland was so depreciated as to be at a discount of to per cent. It was falling every day into more discredit. The consequent distress was scarcely to be imagined. All articles of consumption rose so rapidly, and distrust was so generally spread, that the evil was most truly alarming. He called, upon any one conversant with the internal affairs of Ireland, to deny what he asserted. But there was a proof of the depreciation of I bank paper that could not be refuted, in the: conduct of his Majesty's officers in Ireland They paid themselves their salaries and pensions at par. If the bank paper was good for that for which it was issued, why not take it themselves. No& for they know they must lose 10 percent, by it. if one of those officers had 100l. to receive, he knew it would produce him no more than 90l. if in bank paper; and, therefore, he took care to be paid at par. His lordship contended, if this was reasonable because of the depreciation, that all other persons should be paid in like manner. Whoever were not so paid, were defrauded. The depreciation, however, was established by the fact of those officers being paid at par; if it were not otherwise notorious. And this depreciation was the result of the bank being restricted from paying its issues in cash. If it were not so, he would be glad to hear what beside occasioned it. He knew that attempts were made to account for it otherwise, It was said that, the disturbed state of the country and the apprehension of invasion, were the causes. But tact was against this reasoning. In the last war, when there was, an open rebellion in Ireland, when a French army was in the country, and a French fleet off the coast, the discount was only at 9 per cent, while in 1802, in time of peace, it was from 12 to 13 percent. It is the quantity of paper issued by the Bank, that is the cause. Those issues have been rising in their monthly proportion from the time the restriction took place. In the last year they had increased beyond those of the preceding year, nearly 400,0001. They had increased, on the whole, to five times their amount at the time the bank restriction bill first passed. But they could not increase, in this enormous disproportion, without falling in their value. The reason is simple. There is no check against issuing bank notes beyond the 699 real demand for them, that is to say, beyond that capital they represent when the transaction is fair, but their being convertible, at the pleasure of the holder, into gold at the bank. This is a natural and inevitable check against improper issues; for, when such are attempted she overflow of bank notes is apparent, the holders are alarmed, and go to the bank and demand cash. The check is, therefore, perfect. The bank find this; and knows it cannot issue too many notes without toe attempt recoiling on themselves. But, such is the delicate nature of this affair, that though this check is complete, no other can be found. Even the integrity of the directors themselves is no check; they cannot tell when the issues grow too large, if they are now convertible into cash. It was the custom of the Banks of England and Ireland, to keep a certain quantity of cash to answer current demands. After the passing of the bank restriction bill, they could replace that sum in their coffers by notes; for they must, thenceforth, pay rotes with notes, and the money in their chests would produce interest. This compels an increased issue, and that depreciates the paper, and that again, by degrees, increases the issues. But there is no criterion by which to know when they get too far, because the overflow cannot be carried back to the Bank for cash. He meant to say, there was no simple criterion, without danger. There was a criterion, indeed, but it was a dangerous one. The depreciation proves the disproportioned issues; but that it is slow in its operation, as a proof, the fact at present too plainly proved. The directors, therefore, themselves meaning perfectly justly, may be very long before they discover that they have made too large issues. But, if there could be fraud supposed, to what ruinous extremes might not issues be carried? There being no criterion of their excess, but the disappearing of gold, and the depreciation of the notes, the palpable discovery of the excess, and the total annihilation of the notes, might be one and the same act. It was not to be forgotten, that the first depreciation of the notes was the only slow operation in this kind of transaction. After the first, the depreciation goes on rapidly, till they may suddenly crumble to dust, as has been seen in many instances, which their lordships would easily call to mind. He, therefore, conceived this to be a subject too weighty for their lordships to treat it otherwise than with the most solemn consideration. He did not mean to impute wrong to the mo- 700 tives of the Irish bank directors, for those enormous issues he had remarked. Their private characters were unimpeached. But he must say, they were extremely reprehensible in their public capacity, for the excess of the issues. Every man in Ireland who received l00l. was robbed, by the operation of that excess of 10l while, the bank proprietors were the only gainers by this system. Having no call for cash, they may employ their capital, producing interest and their excess of paper producing interest also. Thus they had increased their dividend one percent, within the last year, and the price of their stock was continually increasing. He had, on a former occasion, proposed that the Bank of Ireland should be compelled to pay their notes in Bank of England notes. Had this been adopted, there would not have been this discount on Bank of Ireland notes. The Bank of Scotland are compelled to pay in Bark of England notes; and their notes are at par. It would be the same with the Irish Bank, if it was under the same compulsion. It had been said, that, I to obtain Dank of England notes, it must purchase them with gold; and, therefore, to compel it to pay in those notes was to compel it to pay in gold. But he denied that. The Irish Bank would purchase the Bank of England notes with bills of exchange, as all other articles of merchandise are bought. The sole effect would be to make the notes of the two Banks convertible into each other, which they ought to be; and, therefore, to prevent the Bank of Ireland notes being at a discount. There was another great evil occasioned by the overflow of Bank of Ireland notes, which fell chiefly on the labouring classes of people. This was the forgery of these notes. To such length had this gone, that no person in the interior and remote parts of Ireland would lake a bank note without the person's name who had it being indorsed on it. But of what use was this to the ignorant labourer in Connaught, who could not read? If his note was forged with which he went to buy bread, he could not read the names of those who semed to stand as his pledges for its validity. The loss of forged notes, therefore, chiefly fell on the very poorest of the people. On the whole, his lordship maintained, that the present bill created all those evils he had stated, especially the depreciation of the bank notes, and the rate of exchange with this country. Of this latter, he would give one more eminent proof. In a quarter where the bank notes had not yet got into a general circulation, in the 701 north of Ireland, exchange was at par, or, he believed, something above par. He should nor move the clause in the committee, to which he had alluded; but there were clauses in the bill on which he would take occasion to offer some observation.
The Earl of Limerick
observed, that the noble lord had nor thought proper to bring forward that charge against his Majesty's officers in Ireland, who had paid certain pensions and salaries at par, which he had threatened on a former night; and, therefore, he supposed his lordship had abandoned it, having found on better information, that it was untenable. He had pledged himself, and would hive been glad to have met his lordship on that charge. With respect to the bill, his lordship said, it was too late to discuss the policy of it, after passing the Bank of England restriction bill. The Bank of Ireland must be restricted, as long as the bank of England is. And it would be as unjust to demand of the Bank of Ireland to pay in cash, as to make that demand on the country private Banks. He had lost a great deaf, as well as others, by the discount, He did not mean to trouble their lord-hips further; but he felt himself called upon to say thus much, by what fell from the noble lord.
rose to explain. He had never pledged himself to bring forward a charge against his Majesty's officers in Ireland, for paying at par. He only required to know the fact; without stating the use he meant to make of it. As to what he said to night on the point of paying at par, he only observed incidentally, that those officers pay themselves at par, which was acknowledging that Bank of Ireland notes were not worth as much as they were issued for; and also, that they might have paid others at par as well as themselves.
§ Lord Grenville
said, the noble Earl had made a strange assertion, when he said, it would be as unjust to ask the Bank of Ireland to pay in cash, as to make the same demand of the private and country banks. His lordship did not seem to be aware, that the legislature had never interfered, and God forbid it ever should, to enable private banks to pay their own issues in a depreciated circulation. To the noble lord who opened the debate, the country was highly indebted for bringing forward the discussion. He agreed with the noble, lord, that much good had resulted from former discussions on this subject. The industry and talents employed by his lordship on this intricate question, had afforded much light to every impartial person, As to the 702 bill before the House, he had, on a former occasion, moved for certain papers, which, though not a positive rule to shew the proportion between paper and cash, would have given a result sufficiently accurate. The House had negatived that motion. Of that negative he would say nothing; he would only observe, that, since every door was to be shut, every information with-held, it, would be better for their lordships to pass every measure without discussion; and he must add, that that was the only instance he ever knew in that House of such papers being denied. He had reason to believe, if the papers had been produced, they would have shewn the proportion of paper over cash to be inconceivable. In one account which he had seen, of a receiver-general of the land tax, in 100l. he had received only 11 in cash. He believed this case not to be singular. And the excess of paper, as he had argued on a former occasion, he believed to be owing chiefly to the operation of the bank restriction act. Since 1797, when that act passed, the issues of the Bank of England had doubled, and those of the Bank of Ireland had grown to five times as much as they were at that period. It had been urged, that he was not consistent, in opposing this bill, since he was one of those with whom the measure originated. He owned the share he had in that. But he had contemplated it as a measure of necessity only, excused only by the peculiar circumstances which called for it. Because he had given it his approbation, first for a short period, then for the remainder of the last war, it did no; follow that he was bound to prolong it during the peace, and afterwards again to the conclusion of the present war. And is it to be argued, that because he had recommended a temporary measure from necessity, he was to support it ever after? He would submit to no such argument. And, if he had seen that this measure had produced great evil, and that the evil was increasing, he would say, that he was the mere bound to recommend the House now to recall it, for having been one to introduce it nor would he shrink from his duty, from the dread of being deemed inconsistent.—The noble earl used but one argument for the bill, which was, since the Bank of England Restriction Bid is passed, you must also pass this& He believed that was too true. But he would argue from that, the necessity of revising the whole measure, of reconsidering the whole system. The subject; could not be too often, too much dwelt upon by their lord-hips It might be said, that the English. Bank Restriction Bill cannot be 703 repealed this session; this was no reason for dismissing the policy of the bill without discussion. No ore, he believed, would wish to see the bill rashly or hastily repealed. It must be done deliberately and with preparation. But their lordships might weigh the subject now and hereafter, and be prepared to re-establish the Bank on its old foundation, without any violation of their lordships rales.—The threat of ruin that menaced from the present situation of the country, as to its circulation, was great. The recurring to the old system was the only road of safely. The ablest writer on subjects of this nature, who had reduced the chaos of maxims to a philosophical order and luminous principles, Dr. A. Smith, had said, there were two sorts of paper, distinct in their character from each other; the former, by which the great dealers carried on their traffic; and the oilier, by which the consumer bought of the small, dealer. When the latter paper, he adds, comes to be prevalent, the ration is in great danger; and if, in such a case, it be invaded, it is impossible to contemplate the consequences without horror. The case put by this great man seemed to be nearly completing. In Ireland, the depreciation of the circulation is already very great; here there are symptoms of depreciation of the circulation. There is nothing to be seen between the consumer and dealer but paper. What Dr. Smith deprecated has arrived in part, and the rest is hastening on.—Need he inform their lordships why the able writer spoke with such terror of an invasion, with such previous circumstances? it is because the only medium by which the great bulk of the nation, the labouring people, can procure bread, in such a case, is a paper circulation, which is annihilated instantaneously by an invasion. Suppose the enemy landed, and in possession of a town on the sea coast, which has a bank, the centre of a district; that is, whose notes are the only circulation for 20 or 30 miles round. The notes would (for the moment at least) be annihilated, and the entire labouring class would be reduced, not merely to beggary, but to want. The honor of such a scene is too great to be pictured. He would give their lordships an instance, which might shew what was to be expected in case of actual invasion. A report was spread in the town of Newcastle, that the enemy was landed. Instantly there was a run on all the hanks of that town. The proprietors were obliged to send messengers post to London, act for Hank of England notes, they would go no more than the country notes, but for gold. The shock was given all the way 704 from Newcastle to London, and produced the like effects. If such was the result of an alarm, what would an actual invasion do? Their lordships would easy conceive, by carrying their eyes forward to the rapid and destructive progress such things make.—His lordship proceeded to point out the injurious effects which the restriction originally imposed on the Bank of England had produced in Ireland, by occasioning a similar restriction on the bank there. Not only had it operated to the disadvantage of merchants in their pecuniary transactions, but peculiarly grievous was it to the middling and lower orders of the community, by whom the depreciation of the paper currency, which was forced upon them by virtue of this new restriction, was felt as an actual diminution of their income, and the consequent enhancement of the price of the necessaries of life. He again deprecated the idea of the present being taken up as a party question, or connected with any set of politics. He viewed it in its consequences as materially involving the welfare of the bulk of the people in the United Kingdom of Ireland, upon whom the want of a sufficient quantity of the circulating medium of coin produced the most distressing consequences, and diffused a spirit of dissatisfaction, complaint, and penury, and which the proposed continuance of this restriction on the bank, his lordship considered, as ill-calculated to retrieve.—After expatiating upon these topics considerably in detail, his lordship expressed his satisfaction at the appointment of an inquiry into the subject in Ireland, and his earnest wish was that an investigation should be set on foot on the part of both Houses, as the subject affected G. Britain as well as Ireland. It was by no means, as he had before observed, too late, and one great object for consideration, in endeavouring to remedy the evils of an excessive paper circulation, should be, a gradual taking off the restriction upon the bank: that corporation should be enabled, but gradually, to resume their cash payments: not, however, without due and full notice being given. The withdrawing of the small notes from circulation, would necessarily induce the introduction of cash to the like amount, to fill up the chasm; this, of course, should not be hastily done.—Suppose, he observed, that within 3 months the one pound notes were to be called in, and, in another subsequent interval, the notes of two pound, the; most salutary effects would be produced in reference to what he had suggested. These were, however, only parts of the outline, which might be recommended to the attention of a general committee of inquiry, the 705 expediency of which, under the present circumstances of the country, the noble lord solemnly and impressively enforced.
§ Lord Hawkesbury
observed, that the arguments produced by the noble lord did not, in his opinion, warrant the conclusion which was attempted to be drawn. An investigation into the affairs of the Bank of Ireland would, in the present circumstances of the country, produce an injurious rather than a beneficial effect. No case had been made out which was sufficient to justify such an interference. The inconveniencies which it would produce, and the alarm which it would excite throughout the country, would far more than counterbalance any supposed advantages which would attend it. The bill of restriction which it had been found necessary to continue for some years past, was, he was ready to confess, not a measure in itself desirable, but which was found necessary to prevent greater inconveniencies than if such a bill had not passed. The experience of a few years had pointed out the expediency of such a measure, nor did he apprehend it was politically safe and adviseable in the present state of warfare, and when the minds of many were alarmed with the threats of invasion, to revert to the old system of admitting payments in specie to be demanded of the bank. It was true, that a considerable increase in the quantity of notes had been issued by the Bank of Ireland since the measure of restricting the payment in specie, had been adopted. It was to be observed at the panic time, that this did not produce a proportionate decrease in the quantity of the current coin, and this his lordship thought could be clearly proved from an examination of various official documents, some of which lie held his hand, and from facts which had occurred in the history of coining in this country.—In the year 1793, the number of provincial banks were at least 400, and within a given period after the restriction was laid on, they were number from o50 to 360. Me contended, that the paper circulation did not tend to drive the coin out of the country. A diminution of the cash in the country, to whatever degree it may occasionally take place, was atributable to very different causes: if may arise tiara the balance of trade and of payments, which, as they were in favour or against a country, tended either to extract cash or to cause an influx of it. The demands for coin at the Clint were, during his Majesty's reign, and more especially the latter part of it, incomparably greater than at any former periods: during the present reign, the coinages exceeded 64,600,000l in his last Majesty's 706 reign 11,000,000l.; in that of George I. 8,000,000l. of Queen Anne 2,000,000l. and in King William's reign 10,000,000l.; for the last twenty years 32,00O,00Ol. were coined. So much for the amount of specie coined and circulated within the country, at different periods. On this ground, therefore, no deficiency could have happened, as to the quantity of the current coin. The scarcity which had arisen must have operated from extraneous and temporary circumstances. Such were the two years of scarcity, during the years 1796 and 1797 in addition to which, large sums were sent nut of the country in the way of loans, or foreign subsidies, during the war in which this country was then engaged. But when bountiful seasons afterwards succeeded, and the continental war drew to n close, money never became more plentiful. This was particularly the ease during the latter part of 1797 and 1798; and that, too, at a period when the restriction from payment in specie was imposed upon the Bank of England. These considerations sufficiently proved that the stoppage of the bank was not the cause of the evil complained of, but that it was owing to the large remittances in cash which had been sent to foreign countries in purchase of com, and which amounted to several millions, and to the large subsidies and loans to foreign prince, as well as to the considerable sums Sent for the support of our armies in foreign parts. In 1709, another unfavourable season occurred, which produced effects still more injurious than the former, and this was again succeeded by a similar bad harvest in 1800. During these two years, no less a sum than between 20 and 30 millions had been paid to foreign countries for corn and other articles of provision, which produced, of course, a great effect in the balance of trade with other countries. Added to which, in 1799, the continental war was renewed, fresh treaties were entered into, and fresh loans and subsidies were sent to foreign powers, without also taking into the account the very considerable expense which was incurred, and the sums sent abroad en account of the Egyptian armament. All these causes had more or less their combined influence to produce that scarcity of cash which had been so much complained of throughout the country. In the present perplexed state of our trade with foreign parts, a temporary interruption had been occasioned with respect to those remittances which our merchants had reason to expect it came, however, within his own knowledge, that mere are, at this very moment, large sums of 707 bullion in store, in several towns on the Continent, and intended to be sent to this country as soon as circumstances would admit of a conveyance. His lordship observed, that at the commencement of the war in 1793, there was no considerable want of coin in this country; and even up to 1795 this inconvenience was not felt. He had already stated those causes which occasioned the inconveniency in the years 1795 and 1796, and some of the succeeding years. His lordship begged, however, to be understood, as not arguing in favour of a too extended paper circulation, for he was sensible that this might be pushed too far. But, even in this case, he was not aware how far an appropriate remedy could be adopted. He felt rather inclined to refer that remedy to the natural course of events, than to produce alterations in the political machine, which he was apprehensive would rather do mischief than produce a benefit. Speculators, indeed, might suffer; but he thought it was better to leave the evil to work its own cure, than to hold out encouragement to persons of this description.—With respect to the supposeable event which the noble lord (Grenville) has alluded to of an invasion by the enemy, and coupling, as his lordship did, this circumstance with that of the paper circulation, he could only say, that he knew of no attempt to remedy such an evil but what might tend to produce a still greater one, and such he considered would be the impracticable attempt of forcing the country banks 10 combine together in support of each other. In this case, the effects would be most alarming and ruinous to those banks which might not meet with such support. Banks solvent today must, in such a case, become insolvent to-morrow. But as to the argument of the noble lord, derived from the supposition of invasion, it might be sufficient to observe, in the first place, that such an evil might never actually happen and.2dly, that a partial invasion could net be an evil so as to produce financial embarrassments, and pecuniary distress, to any great extent. Bur, even supposing an invading army were to obtain a temporary fooling in the country, he did not apprehend that even in that case it would produce that dreadful effect upon the credit of the country, and of individuals, which had been supposed. In support of this opinion, his lordship referred back 10 two periods in the history of this country, when, in addition to a foreign invasion, it had also to encounter internal enemies, and who had penetrated into the very heart of the country. He meant the years 1715 and 1745. Upon a retrospection 708 to the latter of these periods, he did not find the list of bankrupts to be greater that year than in the preceding or subsequent one. He acknowledged that the circumstances between those times and the present were not altogether similar; but, however, it was owing to the same public spirit which supported public credit then, which, he had no doubt, would shew itself now, if circumstances called for it, and would not fail to produce a similar effect.—As to Ireland, that country stood upon a different footing from this in various respects; but in this there was an agreement, that so long as it was judged proper that the restriction from payment in specie should be imposed upon the Bank of England, it would be found necessary that the same should be continued on the Bank of Ireland.
The Earl of Carnarvon
said, that none of the arguments of the noble lord who had just sat down, satisfied him of the necessity of the measure now proposed for the adoption of their lordships. The restriction in question was adopted only as a temporary measure, and as a remedy adapted to the then circumstances of the country, but no argument could from thence be inferred, that this restriction was not to be removed as soon as possible. He differed from the opinion which the noble lord seemed to adopt, as if the forced circulation of paper currency would not force the circulation of specie out of the kingdom; for, as soon as the latter got out of circulation, it would no doubt, be sent abroad, although it would, no doubt, return again, not as coin, but as bullion. The restriction on the Bank, though at first adopted as a temporary measure, yet, from its having been renewed year after year, would naturally produce the effect of inducing the Hank not to keep so much ready cash as it would otherwise do; and this very circumstance was one cause of the scarcity of the circulating medium. His lordship contended that before this bill passed, evidence ought to be produced, that she causes which imposed the restriction upon the Bank at first, still continued. It seemed clear enough that these renewed restrictions had not attained the end originally proposed, namely, the re-taining, within the kingdom, a sufficient quantity of the circulating medium for the public service, nor would this end be answered till the Bank renewed its payments. And with respect to Ireland, if it should appear that the situation in which that country found itself, was owing if the previous restrictions which had been imposed on the Bank of England, this, his lordship said, was an additional reason in his mind for altering 709 the system which had been adopted respecting it.
supported the motion. He considered the present state of the Bank, both of England and Ireland, as a solecism in the history of finance. There was no less than 20 millions of paper in circulation, for which the holders could only require payment in the same kind. He confessed when the measure of the Bank restriction was first adopted, he did not foresee that at the distance of 7 years they would be again discussing the same measure.—With regard to the situation of Ireland, its paper was in a most unfortunate state, and he was very happy to find that a committee had been moved for in another place, by a right hon. gent, of the greatest talents (Foster), and who thoroughly understood the subject. If it were possible to afford any Parliamentary relief to Ireland, he was sine there was no person more able to point it out than the right hon. gent, to whom he alluded.—He did not agree with those who thought that no advantage could result from the appointment of committees of this kind, for if they were not able to suggest every practical measure that could be adopted, at least they pot the House in possession of facts that could be depended upon, and upon which they might from their judgment.—With regard to the state of exchange of Ireland, for the last 5 years, mote money had flowed into Ireland from this country, than had been drawn from it, in consequence of the lo ins which she had made in this country, and the balance of trade, if carefully examined, would not, he was sure, be found to be against Ireland. Therefore, it was not a real exchange against Ireland, but a depreciation of her paper, because if a person were to pay a hundred pounds in Ireland, in Bank of England notes, or a hundred guineas, he would obtain a draft upon England for the whole amount, without any deduction. With regard to the bill before the House, he should give his vote for going into the committee, because, in the present situation of affairs, he did not see how the restriction could be taken off the Bank of Ireland.
§ Lord Carysfort
was against the bill, considering the present circumstances of both countries. When the restriction of the Bank of England was first laid on. the notes issued by it amounted to between 6 and 700,000, but now they amounted to more than 2 millions. The difficulty would be greater now to the Bank it the restriction were taken off; but whilst it was to be taken into consideration, on the one hand, the loss which the Bank of Ireland would sustain by resuming payment in specie (and in which case it ought to have the assistance of the 710 government), so, on the other hand, it ought to be seriously weighed, the enormous loss which is sustained by the whole of the people of Ireland, by the considerable depreciation of their paper money. It was impossible to calculate the vast extent of the mischief which was occasioned by this circumstance. The incomes of the people of Ireland were already lowered ten per cent, and this alone was a greater injury than any which the Bank of Ireland could sustain, by resuming its payments. Besides which, it ought to be considered, the corporation of the bank must feel an interest in what so nearly concerns the welfare of the whole people of Ireland. In Gt. Britain, although Parliament has restrained the issue-of coin from the bank, yet it has put no restraint on the medium of circulation between one part of the kingdom and another; but, for the people of Ireland, no common medium is provided, by which they can carry on their commerce with facility; this was felt by Ireland, as a great evil, and he thought it was incumbent upon Parliament to provide a remedy. A noble lord (Hawkesbury) had admitted the existence of the evil, but it was with concern he heard him speak so doubtfully as to the practicability of the remedy This did not sound like the language of an; able statesman and politician; for it was the duty of such to seek for, and to apply such remedy as the exigency of the case might require.—The present bill, his lordship was convinced, would only prolong the cause and increase the effect. For the first time, it was continued during the war, and not made annual, as former bills. For these and other reasons, he was against its going into the committee. As to the noble secretary's assertion, that the number of banks were diminished, this was no proof that the quantity of paper was; indeed, from the instances of increase in the Bank of England and Bank of Ireland, it might more fairly be inferred the reverse. With respect to his lordship's theory, he said, that actual balances of issues had been all along in favour of Ireland; and it so, en those principles, she would not experience any scarcity of coin.
The Lord Chancellor
conceived, that few of the observations which had been entered into by noble lords, had application to the question then before the House, which was, whether the present bill should go in to a committee? And what was the object of that bill? Nothing more than to continue in Ireland a regulation which had been adopted, and still continues in Gt. Britain; and which, while it exists in one country, must exist in another. He should consider himself as doing the greatest injustice and injury, not 711 only to the bank, but to all the people of Ireland, if he did not assent to the measure. As a member of the United Parliament, he felt himself bound to embrace (if he might be allowed the expression) with a fraternal care, the interests of the people of that country, and to see that their commercial concerns should not receive any sudden or dangerous shock; which must be the case it all the parties belonging to banking concerns in that country were to be now rendered liable to pay in specie. Fie was also one of those who had originally supported the present measure.—While he was speaking upon this subject, he could not help taking notice of the practice winch had prevailed for several years, of passing acts only for a short time, and renewing them successively, for short periods. It was practive highly mischievous and injurious to the independence of Parliament itself; because it begot a habit of inattention and negligence on the part of Members of Parliament, to subjects on which they were bound to exercise a degree of parliamentary jealousy; because, conceiving they might have an opportunity of opposing a particular measure every time of its renewal, they neglected to oppose it at all. He, therefore, would always wish to see laws passed in the first instance, for as long a period as it might be conceived necessary for them to exist.—He admitted there was great weight in what had fallen from a noble lord (Grenville) near him, as to the expediency of taking off the restriction; but, supposing that to be done, it was necessary that it should be done gradually. Now, it this bill was frustrated, it would be obvious that the restriction would be wholly removed, and that suddenly. So, too, with respect to the sentiments of another noble lord (Carysfort), who complained of the prolonged duration of the bill it was clear that all question on that point would be best discussed in the committee. He professed not to understand how the restriction on the Banks could diminish the quantity of cash in circulation, more than the differences between the actual issue of notes and the issue at the time of the restriction taking place; or suppose the issues then 12,000,000, are now 18,000,000. According to this view, the diminution of cash, owing to this cause, could only be 6,000,000. With respect to the accounts moved for by a noble lord (Granville), to shew in what currency the payment of the taxes was made, he had opposed it, because they could not be made up in time: of the result he had no doubt. He conceived the principle circulation of Bank notes was in the metropolis, and within ten 712 miles; in all other parts, nine-tenths of the circulation was in private bank notes.—A great deal had been said on the subject of notes issued by private bankers. But it should be recollected, that on these there was a powerful check against the too extensive issue of paper. If the holders of their notes came to demand cash for them. Bankers might tender the notes of the National Bank in payment: these might be refused: the debtors in the mean time were privileged only from arrest; but if the creditors still insisted on cash, and there was none to give them, the bankers must ultimately be thrown into person. The private bankers were principally supported by credit; and that credit rested on the properly they were supposed to possess, as being sufficient to answer the demands upon them. Such persons, when they had a sufficient capital, were unquestionably very useful men. It might happen sometimes that the holders of such private paper, if they chose to act, up to all the severity which the law-allowed them, would make a sudden demand on the bank from which the paper issued; and that demand could not be satisfied, because the property that was to support the credit of the firm, must have been laid out in different securities, and could not be collected in sufficient time to answer those sudden demands. What then would be the consequence of such demands? That the persons making them must bring ruin, not only to the debtors, but probably lose all chance of obtaining the amount of their demand. A system of credit and good faith must therefore be kept up in the country; and it might receive the most dreadful shock from any sudden change, such as would follow the rejection of the bill then before the House. It was a most fortunate circumstance for the trade and commerce of this country, that paper credit existed to the extent it did, and that mercantile men reposed such confidence in each other. As a proof of the existence of such credit, he would de ire any man who wanted to raise the sum or 2.000l. on a landed estate, to call on all the monied men from Temple Bar to White-chapel, and he would find that not one of these would advance the money on the security of his estate, until he had employed attorneys and special pleaders to inquire into all the titles, and examine all the deeds, by virtue of which he held it. But let him fill his pockets with bills drawn by mercantile men, even to an amount much beyond the sum of 2,000l. and provided they were drawn by fair and reputable traders, every one of them would be accepted with 713 out a moment's hesitation.—These observations must convince the House of the necessity of carefully abstaining from any sudden and violent measure, by which the system of public credit might be affected. Perhaps it might be said, that it was necessary to put a stop to the circulation of paper, for which there existed no sort of security whatever. This circumstance put him in mind of a species of paper, which was very frequently issued in the country, known by the name of "accommodation bills" It was no uncommon practice for persons who had not one shilling property, that could serve as a security, to draw bills, which bills were accepted by others, and endorsed by others again, all equally destitute of property. These were circulated through the country to the great injury of those through whose hands they passed. In the exercise of his professional duty he had an opportunity of knowing an instance of one house having issued bills of this kind to the amount of 400,000l. without half a farthing property to support it. It was easy to see (acquiring goods with this issue of paper) how the proprietors might grow rich, but, at the same time, how others would grow poor indeed&—He conceived discussions on these subjects useful, and though he could not agree with the noble lords who opposed the motion, he had listened to what fell from them, as well as others, with satisfaction and improvement. The restriction was originally an evil prescribed by necessity. The national banks were enabled to pay their own notes with others of their own: it was however a mistake to suppose that private bankers could, or even with Bank of England notes. They were compellable to pay in cash, and were only exempted from arrest on tender of Batik of England notes; but if afterwards sued to judgment, they were compelled to pay the cash. This was a hard case, and a great exercise of power in the legislature; but so it was, and not as seemed generally conceived, that private bankers were not obliged to pay in cash. However hard, he was among those who originally advised the measure, as the lesser evil of the two, and indeed as prescribed by an over-ruling necessity of the case.—Lord King said a few words in explanation; after which the question was put and carried, and the bill ordered to be committed to morrow.—Adjourned.