Lords Sitting of 1 April 1811

COMMERCIAL CREDIT BILL.
The Commercial Credit Bill was read a third time.
The Earl of Lauderdalemoved to leave out the clause, empowering the Commis-

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sioners to advance Exchequer Bills on the security of Heritable Bonds in Scotland, observing that it was contrary to the principle of advancing money to merchants, and that, from the nature of the security, the money could not be forthcoming with in the time limited by the act.
Earl Bathurstobserved, that the clause merely empowered the commissioners to take heritable bonds as an additional security. The same clause was in the Bill of 1793, and no inconvenience resulted from it.
The Earl of Lauderdaledenied the necessity of the clause.—The question was put that the clause stand part of the Bill, and agreed to.
The Earl of Lauderdalethen moved to leave out the clause empowering the Commissioners to advance exchequer bills to the incorporated banks of Scotland, upon the ground that there was no necessity for it, the banks not standing in need of any such assistance.
After a few words from earl Bathurst, who stated that this clause was also in the Bill of 1793, the question was put, that the clause stand part of the Bill, and agreed to.
The Earl of Lauderdalethen adverted to the notice he had given on Friday, his object being to leave out the clause empowering the Bank of England to purchase exchequer bills issued under this act, and to substitute another clause prohibiting them from so purchasing them. His lordship observed, that the analysis of the measure with this clause as it now stood, was, that the merchants having a quantity of goods for which there was no market, the Bank could not accommodate them with discount, but by the interference of government, advancing exchequer bills to the merchants, the Bank would take the exchequer bills as a security, and issue their notes for them to the merchants, thus increasing the issue of Bank notes, which was already too great.
Earl Bathurstcontended, that this would be, by a side wind, destroying the advantages of the Bill, as the exchequer bills, which the Bank were prohibited from purchasing, must necessarily be at a discount, whilst other exchequer bills would be at par. Nor would it prevent the issue of bank notes, as those possessed of the exchequer bills must sell them in the market, and purchase others which the Bank could take, and for which of course bank notes would be issued. There was, besides, a
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constantly operative cause which produced a reflux of bank notes into the Bank, as it was found by experience, that although the dividends were paid every quarter in bank notes, yet that, after a short period, the whole amount of bank notes in circulation was nearly the same as before.
The Earl of Rossagain adverted to the question of the exchange becoming favourable to Ireland, contending that it was not the result of a diminished issue by the bank of Ireland.