HL Deb 02 July 1811 vol 20 cc784-806
Earl Stanhope

moved the order of the day for the second reading of this Bill. The Bill being read by the clerk, his lordship said, he was extremely happy to see around him on this occasion several noble lords who were not present before when he brought the matter forward, as it afforded hint an opportunity of explaining the object he had in view by this Bill. But before he told them what the Bill was, he would tell them what it was not. It was not, as it had by some been erroneously supposed to be, a Bill to make Bank-notes a legal tender; and indeed it would be highly improper that such a Bill should pass; because the person who might refuse a Bank-note on the ground of supposing it to be forged, might be by this means brought into an unpleasant dilemma. He would now state what the Bill was, and his reasons for proposing it; and, in the first place, he would examine if his foundation was good, and then explain the nature of the superstructure it was his design to raise upon it. His Bill went simply to this, that it should not be legal to give more than 21s. for a guinea, or less for a Bank-note than the amount for which it purported to be payable. The idea of offering this Bill originated to him on the bringing up of the Bank Token Bill from the other House; the nature of which Bill was to facilitate the introduction of a new circulating medium. On that occasion he had pointed out to their lordships the necessity of establishing some legal tender throughout the country, other than that which it was now impossible to procure. To illustrate the necessity for this, he would suppose that a person agreed to purchase an estate for one hundred thou- sand pounds, that the title was good, and that no object stood in the way of the completion of the bargain. But suppose, when the price stipulated came to be paid, that the seller should say, "I expect to be paid in guineas, and will not transfer the estate unless I am so paid;" would their lordships think the purchaser fairly or justly dealt with? Would they not rather consider it to be wrong to require him to perform a physical impossibility, by procuring so many guineas? Yet the law, as it stood, did not afford him any remedy against this unreasonable demand. This was precisely the state of the case, and he would now state the principles on which he maintained that the plan he proposed ought to be adopted It had been his peculiar good fortune in life to be acquainted with many great and eminent men, and among them he could not name one whose estimable qualities of the heart and of the head did him more honour than Sir George Saville, with whom he had the supreme pleasure of being intimate. His idea on this subject he would adopt as his own: it was this clear, and perspicuous, and philosophical definition of the circulating medium," that it was and could, be no other than a measure or scale of different things." Thus ten pound was the measure of a certain number of loaves of bread, of a certain number of tickets to the opera, or of a certain number of miles travelling in a hackney coach. The ten pound was the scale by which the relative value of these three articles was measured. To tills definition he would add, in pursuance of the same idea, that this scale was, or ought to be, fixed and unalterable. As illustrations were good to explain abstract propositions, he would endeavour to apply one to this point. Suppose they wished to measure any thing of length, they would take a yard, consisting of 3 feet, or of 36 inches, and by this means might measure a piece of cloth 36 yards long; but it would not do to measure 36 yards by this piece of cloth, for, being elastic, it might at one time reach to 40 yards. A third fundamental principle was, the circulating medium ought not to be attainable without a certain labour or value given. Gold certainly possessed this quality, but so also did other things; such, for instance, as Hamburgh Mark Banco payments. And book entries in this respect enjoyed a very great superiority over gold, if they were put under proper regulations. Suppose any state should open such books in which no person could obtain an entry of credit without performing an adequate public service, was it not evident if he was enabled at some time to transfer that amount, or any part of it, to any other part of the country from that in which this entry was made, that it would be better than if it was paid to him in money? He might lose the money, or might be interrupted on the road, which accidents could not happen to the book entry. Book entries also possessed other advantages over money in rapidity, and in not being liable to depreciation from wear and tear; in the respect of annual interest, and in the immense qualification of being invariable. It was on these principles then, that he founded his proposition. In coming to notice his plan, he had to observe, that he laboured under considerable difficulty. These subjects belonged to government, and were proper for ministers to take up. No other person who proposed any violent change, such as he did, being no less than to change the circulating medium, could expect any very great support. A wise man would therefore try to accommodate his views to existing circumstances, rather than propose a radical alteration of the system. Not to be ludicrous on so grave a subject, he would try to illustrate this part also by a simile. He had found the principle established by law, that payments in Bank notes could not be enforced as legal. A Bank note, like the purchase of a check for admission to a public place, might be changed for something else, for another note; but still that was not the admission, and after various changes, a man might be as far from his purpose as at first. He had endeavoured to fit his plan to this deformed monster. Like the tailor, who made a coat for a person with a hunch back, on being reproached with its ill fashion, he might retort," it was not cut out because it pleased my own fancy, or for any straight well-shaped man; but how could I help cutting it so, as it was to fit a humpy?"—This must be his apology for the shape of his plan, in which he had endeavoured to apply common sense to existing circumstances. He now came to the plan itself, which he had laid down, by desire, to a very distinguished noble and learned lord. [Here his lordship went into an explanation of his otter to lord Eldon, a copy of which will be seen at p. 740.] His grand object was to establish a mode of making payments which would create a possibility of making legal tenders. Always keeping in view that the Bank was, and had proved itself to be, solvent, and limited by government to some extent, he proposed, 1st, That, as in Scotland, it should establish many branches throughout the country: 2dly, That in all these branches it should cause books for entries to be opened: 3dly, That persons possessing Bank notes should be entitled to have a credit to their amount in these books: 4thly, That for such credit they should be entitled to transfer all or part to any other person's account: and, 5thly, as these entries could not be forged, that these transfers should be made a legal tender. Having opened the scheme of his Bank to their lordships, he had afterwards received information that a noble lord, possessing great landed property, because, no doubt, he had thought it right so to do, and that it could not be injurious to the public, had given notice to his tenants, that he should expect them to pay him their several rents in guineas, or in Portugal gold, or in Bank notes at a depreciated rate. If this example was followed, it must do incalculable mischief, and to guard against this was the object of his Bill. Various reasons had operated on his mind in favour of creating a new circulating medium, and that of book-entries and transfers. In doing this, he had availed himself of the vehicle of the Bank of England, as he found it established. He maintained that at this moment a pound sterling and a Bank note of 1l. were at par. He proved they were of equal value in this way: Suppose he were to go to a banker's, and lay down 21 one-pound notes on one hand, and 20 guineas on the other, de-tiring that two separate accounts might be opened in his books for these two sums: he would find that they were both to the same amount, namely, twenty-one pounds. It was his wish, for five or six months to come, to maintain the pound note and pound sterling on this equality, which would not be the case were the example of the noble lord behind him (lord King) to be followed, and no legal provision made against that course. [Here lord King, as we understood, asked if they were now at par?] Earl Stanhope said, he had no objection to be catechised by the noble lord, provided he allowed him, in his turn, to become parson. He had shewn that they were-at-par sufficiently to answer his argument, and he defied the noble lord to prove the contrary, He deprecated per- mitting the possibility of this depreciation being created, as it must fill with discontent the most useful classes of the community, those on whom their lordships, as well as others, depended for the payments of their rents, and the means of living. They must be cautious not to offend this large body, and that, too, in a way accompanied by gross injustice. It was on that feeling he had acted on several cases; such as that, for instance, of the Dissenters lately, or any class who felt or apprehended abuse. His Bill removed dangerous temptations, and made the pound and note in his sense, or left them, on a par. This Bill had been commended greatly by those who seldom approved of any motion of his. He was happy at this; but they went even farther, and said it was the very best remedy they had heard, but not yet necessary, as nobody would be found to follow the example of his noble friend. He liked rather to give to people the protection of the law, than any understanding or caprice of other men, which was not a firm foundation. As the noble Secretary of State shewed no disinclination, if any necessity appeared, the question turned merely on the probability of the example set being followed. He had a bundle of instances of this sort, and he only wished that a great many more would say so at once, and then they would proceed to prevent the evil. Here the noble earl produced a number of letters, from several of which he read extracts. One person wrote that his landlord said," What one landlord can do, all can do. If lord King succeeds, I will do the same:" and then proceeded, without a fee, to ask the noble earl's opinion. Another letter stated a recent transaction in Hampshire, where a man bought an estate for 400l. and paid down 100l. of the money, and afterwards fitted up a house and other buildings at the expence of several hundred pounds more. Some time afterwards came the time of payment, when the vender desired to have his money in specie. The buyer could not get guineas, and notes were refused by the vender, who would have his payment in guineas, or his land back again. The buyer was actually trying to raise money by mortgage on his improvements. The only consolation left to the buyer was an intimation from a friend of the vender's that he could inform him where he might obtain the guineas he wanted, by paying twenty seven shillings a piece for them! (Hear! hear! from both sides.) Some might smile, and some shake their heads at this; the whole country might well shake their heads at it. His lordship read another letter which stated the conduct, not of a landlord, but of a lady. He did not know whether the noble lord near him had followed the lady or the lady had followed the lord; but the lady had refused to take any thing but gold, and had asked a person interested, whether he was acquainted with the difference between taking Bank-notes and taking gold. This person, in writing to him, stated an apprehension of the seizure of goods, and a readiness to come and prove the statement made in the letter. Another person, a professional man, had written to him, saying that he had witnessed much of the traffic, and apprehended from it most serious consequences. He stated, that he had been long in the habit of paying and receiving many small sums. A few days ago a gentleman had come to him from another part of the country, and paid him 800l. observing that he had brought with him 300 guineas, with which, or part of it, the other wished him to oblige him in the payment; but he would not part with any of them, saying that he knew a friend, who would give him six or seven and twenty shillings each for his guineas. This increasing traffic, added the writer, occasioned the great stagnation of gold circulation. Besides other accounts, the noble earl adverted to what he had heard respecting practices in Ireland, which had already been alluded to by a noble lord. He mentioned the profitable trick of a landholder's steward, in contriving, by the use of merely one hundred guineas, to procure the payment of a large rent, by compelling the tenants to purchase them, while they were moving in constant rotation from the shop where they were sold, to the agent's office where they were received. In addition to this, he could mention, that no less a sum than thirty eight thousand guineas were landed in Dunkirk lately, from this country, out of one cutter. He had even heard that a clergyman, a friend of a noble lord behind him (he did not know whether the noble lord intended to give him a living or not,) had said that every landlord in England ought to do the same as those whom he had been speaking of. From these statements of facts, communicated to him by respectable correspondents, and read from a mass of communications, he thought that the objection taken to his Bill by the noble secretary of state on the ground of there being no existing necessity for it, could not be supported. Those who objected, merely from the necessity not being apparent, must see from these communications, that the necessity might very speedily arise, and that too, when parliament would not be sitting. All those who agreed with him in the general principle of his reasoning, and the ground, work of his proposition, ought to assent to the enactment of the measure he proposed. He was confident, that, under all our circumstances, the system of book entries was the most practicable mode; and it had also the recommendation of the Secretary of State himself, as the best remedy that had been offered. He was sorry for having troubled their lordships at such length, but the importance of the subject made him feel it his duly to do so; and the more so, because many noble friends were present, who took different views of the subject. The matter was for ministers to consider in good time. It was their particular business to attend to it. He should only say one word more to the noble Secretary of State. Let him take care not to imitate the lazy fireman, who suffered all the houses in the street to be burnt down through his dilatoriness; and when the mischief was done, appeared in the street with his engine. The noble earl concluded by moving the second reading of his Bill.

Lord King

rose and said:*

My Lords; entertaining strong and decided opinions on the subject of paper currency, which I have never lost any opportunity of expressing, both in my place in this House, and by every other means in my power, I have always been ready to discuss the subject in general, and naturally feel, at present, most anxious to justify my own conduct, in consequence of the charges which, on a late debate, have, in my absence, been made against me.

Under these circumstances, I must crave your lordships' pardon, if I feel compelled to speak of myself, and of my private concerns, in an assembly where such topics in general are so improper; but the course of the late debate renders that detail imperative on me, and, indeed, the question has assumed that shape that it cannot be treated otherwise than by di- * From the original edition, printed for J. Ridgway, Piccadilly. viding it into two principal parts: 1st, My individual conduct; and, 2dly, the general subject of the present depreciated currency of the country, and the alarming projects held out of destroying the ancient standard of value, and of subverting the basis, and denomination, of the lawful money of the realm.

I shall therefore proceed to state plainly, and explicitly, my reasons for refusing at this time to receive Bank-notes at their nominal value, in certain cases, and to avail myself of the remedy provided by the law.

Since the late decision in the House of Commons it appears to be the declared intention of the government, that the restriction shall continue to the end of the war, however distant that period may be.

The subject is thus brought home to the individual interest of every man whose property is yearly, even monthly, deteriorated in consequence of the unnatural state of the currency of the country. Under these circumstances, therefore, I have thought this the proper lime to make a stand in defence of my property, and to endeavour to protect myself from further spoliation and injury

During the last twelve years, we have seen the depreciation of Bank-notes progressively advancing in the most alarming manner; and every hope and prospect of amelioration being destroyed by the recent resolution of the House of Commons, there appeared to remain no other choice than either to submit with tame; and patient resignation to receive payment in currency, of whatever value it shall please the Bank of England, in their forbearance and moderation, to permit henceforth to belong to the currency of the country; or to have recourse to the remedy which individuals possess by law, and which I shall hereafter shew has been purposely allowed and secured lo them by the law.

There is also another reason, which I confess has had some influence with me in this determination. It was asked, insultingly, in another place, whether any person had ever yet ventured to refuse Bank paper in payment or satisfaction of a lawful debt; and on that foundation, it was attempted to be argued, that in point of fact, there, existed no difference in value between paper and gold, and no actual depreciation. By bringing this question to issue, at least one of the remaining wretched supports of this fatal system will be overthrown.

In this state of things, for the defence of my properly, I have thought it advisable, in the management of my private concerns, to inform my tenants holding lands under old leases, and under old leases only, that I can no longer continue to receive Bank-notes at their nominal value, in payment, or satisfaction, for such contracts, and I am now prepared to assert, not the bare legality, for that is unquestionable, but, what I am much more anxious to prove, the justice and equity of the course I have thought myself obliged to adopt. The plain broad principle upon which I have acted is, to require payment in a currency of the same intrinsic value which the currency possessed at the date of each respective agreement, and in order to as certain this intrinsic value, I calculate the amount of gold which the stipulared rent was able to purchase at the date of the lease or agreement, and require the same weight of gold, or a sum in Bank notes sufficient to purchase that quantity of gold at the present time. I offer this alternative as an accommodation to the tenant, in case he makes the option of paying in paper money, instead of fulfilling his agreement by payment of his rent in the lawful gold coin of the kingdom.

The following is a copy of the Notice:

'By the lease dated 1807, you have contracted to pay the annual rent of 100l. in good and lawful money of Great Britain. In consequence of the late great depreciation of paper money I can no longer consent to receive Bank-notes at their nominal value, in payment or satisfaction of an old contract. I must therefore desire you to provide for the payment of your rent in the legal gold coin of the realm. At the same time, having no other object than to secure payment of the real intrinsic value of the sum stipulated by agreement, and being desirous to avoid giving you any unnecessary trouble, I shall be willing to receive payment in either of the modes following, according to your option.

First, In guineas.—Secondly, If guineas cannot be procured, by payment of Portugal gold coin, equal in weight to the number of guineas requisite to discharge the rent.—or, thirdly. By the payment in Bank-notes of a sum sufficient to purchase the weight of standard gold requisite to discharge the rent,—The al- teration of the value of paper money is estimated in this manner: The price of gold in 1807, the year of your agreement, was 4l. 2s. per ounce; the present market-price is 4l. 14s. arising from the further depreciation of the value of paper; in that proportion an addition of 14l. 12s. 8d. per cent, in paper money will be required as the equivalent for the payment of rent.'

In the above instance there is a difference of 14l. 12s. 8d. per cent, in the currency between the year 1807 and the present time. In the case of an agreement dated 1796, when the market-price of gold oil not exceed the Mint-price, because the currency was then in a pure and perfect state, the difference between the payment in gold or in paper money amounts to the whole of the actual depreciation of the currency at this day; and if the market price of gold was 4l. 14s, on the 10th of May, when the calculation was made, it follows, that in the proportion of 3l. 18s. the Mint-price of gold, to 4l. 14s. the present market-price, one hundred pounds will give one hundred and twenty pounds nine shillings. The principle hung thus clearly stated, the only dispute which can arise, as to the equity and fair dealing of the transaction, must proceed from a doubt as to the correctness of the data on which the calculation is founded. The prices of bullion at the different periods are taken, as far as they can be collected, from the returns made by the Mint to the House of Commons, as far as they reach; and since the 5th of March 1811, the price of gold is taken from Wettenhall's prices-current, the same source from which the officers of the Mint derive their information: if there is any error, it is therefore open to correction.

Where, may I ask, is the hardship of this demand? The price of the produce of land, tile price of labour, the price of every great staple commodity, are all affected by the value of the currency which serves to circulate the wealth and industry of the country. In proportion as the currency is depreciated, the price of wheat, of cattle, of all the produce of the land, and of every commodity, is augmented. Of course it must always be understood, that in all cases the price of very thing whatever is regulated by the supply and the demand, and, when so determined, is afterwards affected by every variation in the intrinsic value of the cur- rency by which they are circulated. The covenants of a lease secure the payment of rent in the lawful money of Great Britain, (these are the express words of the contract): the lawful money of Great Britain contains a certain known weight of gold of a certain known fineness of standard; and if Bank notes, from any cause whatever, will no longer purchase that weight of gold which, according to the regulation of the Mint, ought to be contained in a certain given sum of lawful money, they will no longer fulfil an old contract according to the spirit and essence of the agreement.

In the case of a contract made for a fixed sum at a distant period, under the uncertainty and irregularity of a paper currency not convertible into gold at the will of the holder, the only equitable course for both parties to adopt appears to be, to ascertain the quantity of bullion which a pound note of the common currency was able to command at the date of the agreement, and for every pound of rent, or interest, or principal sum due, to require the same quantity of bullion, or the amount of debased currency sufficient to purchase that quantity of bullion. This is the true and equitable payment and satisfaction of such contract.

on every sound principle of law and equity, the landlord is entitled to receive the real intrinsic value of the stipulated sum, in good and lawful money; or at least in currency equal in value to the currency at the date of the contract. He is strictly in law entitled to the legal gold coin of the realm, if such is the condition and obligation of the contract; as matter of favour and concession, he may consent to receive his payment in any other shape, for the convenience or relief of the party bound to the fulfilment of a contract; but a payment in a debased paper currency, is a payment in name only, and not in reality. It formed no part of the stipulation of the bond. There is no limitation to the extent to which a loss, proceeding from that cause, may be carried. To put an extreme case, which no man can assert to be impossible, because in another country it has actually been exceeded: a note of one pound may not be worth or pass current for more than one shilling, consequently all commodities would be advanced to twenty times their former value. In a case so palpable, it would be impossible for any one to imagine, that a payment, in such de- graded currency, would be in any sense a satisfaction for a contract concluded be fore the depreciation of the currency had taken place. It would be impossible to deny, that, by such a payment, the landlord would be defrauded of nineteen parts out of twenty of his just demand.

In order to prevent any misconception and false statement of my conduct, I take this opportunity of openly stating, that so far from taking any undue advantage by making, in this year, or last year, or at any time, an agreement for land at a greatly advanced rent, calculated on the advanced price of all produce in consequence of the debased state of the paper currency, and then taking advantage of the law, and calling on a tenant, under such circumstances, to pay in gold, or the value in gold, equal in fact to an addition of twenty percent, at the present market price of gold; I am, on the contrary, ready to reprobate such conduct, as most unfair and unjustifiable. My conduct has been totally different; I have strictly abstained from making any such demand, or from requiring a compensation for any alteration in the value of the currency for two or near three years, though such alteration is not inconsiderable. I shall continue to receive payment in Bank notes, until, by a further depreciation, the notes, at some future period, shall become visibly and sensibly deteriorated below their actual value at the date of the leases in question; I shall then expect to receive that difference, if any, whatever it may be. And further, I am prepared to say, that if, by the unexpected event of the restoration of the currency to an improved state, I shall be perfectly satisfied to receive such rents, diminished in proportion to the improvement of the currency at any future period, compared with the currency at the date of such leases. For all land let to tenants at will, I shall continue to receive Bank notes, conceiving the land to be let for the price of the times, or that I have at least the power of obtaining, if I please, the fair price of the times.

To place this subject in a clearer light, and to remove any remaining prejudice, respecting the oppression or hardship of the proceeding, it may be useful to explain the nature of rent. Rent is generally defined to be the value of that part of the gross produce of a farm which remains, after making full allowance for all expenses, taxes, and profit of capital em- ployed by the farmer in the cultivation. The gross produce is generally supposed to be divided into four shares, three of which are allotted for the above purposes, and one for the rent: this last portion is then estimated at the average price of produce daring some preceding years, and thus converted into a money price for the mutual convenience of both landlord and tenant.

But the effect of the depreciation of the currency is to augment the price of all the four shares of the gross produce of the, farm, of those which are to defray the expenses, as well as of that portion from which the rent is supplied. It will be found that the tenant suffers no loss, if he is required to make only an equitable compensation, equivalent to the depreciation of the currency; he has already received an advance in the sale of his produce; he is only prevented from acquiring an additional profit, to which he can have no just claim. To any increase of price, in consequence of the increasing opulence and prosperity of the country, the tenant is in every sense justly entitled: the two causes of increased price are totally distinct; the one arises from the fair increased demand and consumption of the country, which may well have entered into the calculation of the amount of rent; the other proceeds from an anomaly in the currency, which never could have entered into the contemplation of the parties.

I presume it will not be denied, that paper currency is in its nature liable to depreciation, after having witnessed the example of so many countries on the continent, of the Assignats in France, of the paper-money of Sweden, of Portugal, and the most recent instance of Austria. The symptoms of depreciation have manifested themselves unequivocally in this country; they are apparent in the advanced price of bullion keeping pace with the excessive issue of notes, in the unfavourable exchange, and in the general rise in the price of all commodities. The average price of wheat, which, from the year 1771 to 1785, was forty-six shillings; and, from 1786 to 1797, was fifty-two shillings; has since that period, which it must be remembered was also that of the Bank restriction, increased in a very different ratio. In the twelve years, from 1798 to 1810 (omitting 1800 and 1801, years of dearth), the average price of wheat for England and Wales has amounted to seventy one shillings the quarter.

At the price of fifty-two shillings the Quarter, it required eighteen quarters of wheat to purchase a pound weight of gold, which by the mint is coined into forty-four guineas and a half. It appears, that during five years, beginning in the year 1802 and ending in 1806, the average price of wheat was seventy shillings; and as in the same years the mean price of gold bullion was nearly 4l. 2s. per ounce, or 49l. 4s. per pound, it required fourteen quarters or half a bushel of wheat, at seventy shillings, to purchase a pound of gold at that market-price of bullion. During the last five years, eighty-five shillings a quarter may be stated as the average price of wheat, and the mean price of gold has been nearly 4l. 7s. per ounce, or 52l. 4s. per lb.: it required therefore only twelve quarters and two bushels of wheat, at the price of eighty-five shillings, to purchase a pound of gold, even at the advanced rate of gold, during these five years.

It may be inferred from the highly advanced prices of wheat, compared with former times, and particularly its rapid increase since 1797, that the paper currency has suffered a material alteration of value. But from this examination of the relative value existing between corn and gold bullion, after making great allowance for the advance in the price of wheat in consequence of an increased demand, it may also be suspected that the supply of gold itself has been likewise very considerably increased; or, in other words, that the real price of gold has been most sensibly diminished. This view of the subject has convinced me of the propriety of not submitting any longer to the loss which arises from the present great inferiority of the value of the note to that of gold, seeing that the gold itself, compared with the best standard of value, has in all probability become really much cheaper and more abundant than at any former time.

It must be kept in view, that payment in gold is the condition of the obligation, and that, in most instances, the option proposed is much to the advantage of the tenant, and intended as an equitable modification and abatement of the legal demand. In the North of Ireland it is not unusual to require rents to be paid in specie, and the effect has been to retain the gold coin in those districts where that practice continues.

Having acted on principles, such as I have described, and being satisfied with my own conduct, I shall not be deterred by clamour, or by any imputation what-ever, by which it may be attempted to prevent me from insisting, at the same time, with firmness and moderation, on a just and legal demand. It may suit the interest of some persons, by such unworthy means to attempt to put down that which they hesitate and fear to do, by legislative interference, notwithstanding the facility with which, of late years, acts of parliament have been passed, to suit the convenience or inconvenience of the moment. It was attempted in France to intimidate individuals, who preferred the good metallic money to worthless assignats, by branding them with the charge of incivism, or incivic practices, in the revolutionary phrase; and, to judge from the language of his Majesty's servants, who are endeavouring to inculcate the acceptance of paper money as a moral and political duty, we are here also to be governed according to the true jacobin doctrine, which required individuals to regulate their conduct not by their own proper interest and convenience, but according to some speculative principles. In a well-regulated state, the proper interest of individuals is inseparable from that of the government, and it is the duty of government to take care to avoid any system or state of things in which individuals, pursuing their own interest, and acting legally, shall have the appearance of acting at variance with the public interest If the notes of the Bank of England are not depreciated in value, and if, in fact, there is no difference between paper and gold, the preference given to the latter will be an idle preference, of no public inconvenience, because it will not be followed. If the value of the Bank paper is really at par, it is not in the power of any individual to alter the fact; and any attempt to do so would be despised as it deserved: but if, on the contrary, the Bank-paper is greatly inferior in value to gold coin and bullion, it is highly meritorious to expose and resist a system, through which the whole community is impoverished and defrauded.

I must desire to be informed by what; new rule, by what new order of things, an individual is bound to account in parliament for his conduct in the management of his private affairs: if he has claimed his right only, it is his by law; and if he has demanded more than his right, the poorest man in the country may have redress against him.

Having now, my Lords, as I conceive, proved the justice of my conduct, by a statement irresistible in a court of equity, I shall proceed to the other part of the subject, and I shall, in the first place, endeavour to show, that in the year 1797, the law respecting legal tender was by design left without alteration. The legislature, contemplating the inconvenience to which individuals were exposed, by the Bank restriction, took away the power of arrest: as long as the value of gold and paper money was equal, there was no temptation to insist on gold; but if gold was demanded, the debtor had it in his power to buy bullion, and take it to be coined at the mint, the law, in the mean time, protecting him from arrest. The legislature, when it sanctioned the Bank restriction, in 1797, most assuredly never contemplated the depreciation of the currency as now existing to so great an extent. The association agreement, to receive Bank-notes, entered into by the members of the privy-council, and the great merchants and bankers in London, was perfectly voluntary: it was entered into on the presumption that the currency was then, and would continue to remain at the full standard of value. At that lime it was little expected that the Bank of England note of one pound, which had always been able to command a certain weight of standard bullion, would ever be so reduced in value as to contain sixteen shillings and seven-pence only, instead of twenty shillings, its former intrinsic value; a defalcation of three shillings and five pence in the pound on all fixed income, a privation much greater than the income-tax, the heaviest burden ever imposed at once on any country. * That at least is *The following Table will show the real Value of a one Pound Bank-note, at the Market price of Gold.

Market price of Gold per oz. Real Value of Note.
£. s. s. d.
3 18 20 0
3 19 19 8 7/10
4 0 19 6
4 1 19 3 1/10
4 2 19 0 3/10
4 3 18 9 5/10
4 4 18 6 8/10
4 5 18 4 2/10
4 6 10per Cent 18 1 6/10
4 7 17 11 1/10
4 8 17 8 7/10

paid for the public service; but is it to be endured, that a Bank-tax of near double the income-tax shall be taken from the income of individuals, not for the public service, but for the sole gain and benefit of that corporation? I am almost tempted to say, (if the Bank is so accustomed to the vast gains it has acquired, by the continuance of (he restriction, that it will not consent to forego them), that the government would make a provident bargain, by paying five or six hundred thousand pounds annually to the Bank, stipulating, in return, that the Bank should reduce the quantity of notes in circulation, until their intrinsic value was restored.

Some step must be taken to put an end to all the manifest injuries, both public and private, arising from the depreciation of the currency. To consider it in one point of view, the public expenditure this year of ninety millions is equivalent to seventy four millions only of currency of the former standard; but as the interest due to the public creditor is a fixed sum, the extraordinary expence incurred in this single year, in consequence of the state of the currency, has been little short of ten millions sterling. It is now evident, that it will be found impossible to avoid augmenting the pay of the army, of the navy, of all the servants of the government, unless you speedily interpose and take effectual measures to restore the value of the currency.

In Portugal and Sicily, the loss incurred by government, from the adverse exchange in the last year, is not less than twenty per cent. on all money remitted to those countries; and it is in vain to attempt to conceal the fact, that the expences of the government at home, in the

4 9 17 6 3/10
4 10 17 4
4 11 17 1 7/10
4 12 16 11 4/10
4 13 16 9 2/10
4 14 20 per Cent 16 7 2/10
4 15 16 5 1/20
4 16 16 3
4 17 16 1
4 18 25 per Cent 15 11
4 19 15 9
5 0 15 7 2/10
5 1 15 5 3/10
5 2 15 3 5/10
5 3 16 1 7/10
5 4 15 0

supplies for the navy, and for the ordnance, are all equally augmented. The only advantages, indeed, which the government derive from the continuance of the Bank restriction, are some certain accommodations which it received from the Bank, in discounting exchequer bills and government securities, and the shameful profit of defrauding the public creditor, by compelling him to receive payment in depreciated paper money. It has sometimes been argued, that the value of gold, by some unusual circumstances, has of late years greatly increased; and it is contended, that gold, which is the common standard and measure of value in all pans of the world, is not in this country the best suited for that purpose, or at all comparable in certainty and steadiness to the standard value of the Bank of England note on examination it will be found, that this alledged dearness of gold depends entirely on the commodity which you have to give in exchange for it. It is perfectly true, that if you have only Bank paper to give in exchange, the gold is extremely dear in the exact proportion as the paper to be given in exchange is become cheap; but if you have corn or labouur which have been considered as the most perfect standard of value, it will be found that gold is really much cheaper than at any former time, as less labour and less corn will now command the same weight of gold. The same result will be found to take place universally in every quarter of the globe. In France, the money prices of all commodities appear to have risen one fifth since the Revolution. In every country, it will be found that the prices of commodities, of food, and of labour, have risen, or, what is the same thing, that gold has in fact fallen in value. That the supply of gold imported into England is very large, may be seen from the evidence of the greatest bullion-merchants in London, who say you may procure any quantity, provided you will pay the price.

It is further said, that all the gold in England is clandestinely exported to France in payment for corn, which we must of necessity procure, and which they will not consent to give us except in exchange for gold. It is perfectly true, not only that the exports, but the imports of gold, are in much larger quantities than at any antecedent period.

All the bullion, which in the shape of tribute, and in the ordinary course of commerce, flowed constantly from Spain and. Portugal into France, and through Franca to the other parts of the continent, has now, from the total interruption of all intercourse, ceased to be carried in that direction.

A new and more easy channel has been discovered, by which the produce of the-gold mines of South America, can be distributed over the continent of Europe; the more open communication and intercourse which has lately taken place between Great Britain and the Spanish and Portuguese settlements in South America, has opened a new road, through this country, for the passage of the precious metals from the new world, where they abound, to the old continent, which docs not produce them. That this is the new course of commerce is obvious from the state of our commercial relaition and easy access to South America; it must be so in the present state of the world. It follows of course, that the geld must be cheaper in this country than in other countries to which it is afterwards exported; it is in the nature of things that it must be dearer in France, by all the expence of transport, risk, and insurance, which is incurred by the export of bullion.

The proposal of introducing an alteration of the law of legal, tender, which has been intimated with a view, I suppose, of feeling the way, before so dangerous an innovation of the general rules of law and justice shall be openly avowed, is the most pernicious and destructive ever ventured to be made by the wildest theorist in any civilized country. All the fatal consequences of such a measure, once carried into execution, no man can possibly fore see. But of this we may be well assured, that it threatens to subvert the whole sys tem of the political economy of the country; that it will overturn all fixed and certain standard of value, and totally destroy the spirit and meaning of all contracts and engagements between man and man.

By such an act, you at once declare bank-notes to be a forced paper currency, no longer resting on the basis of voluntary circulation; you will proclaim to the world that your bank-notes are assignats to all intents and purposes, differing in degree only, and not in kind. Mr. Burke, when contrasting the paper money of England with the assignats in France, describes them as powerful on the exchange, because impotent in Westminster Hall. How little did that great man imagine when he was describing the horrible system of the French assignats, that he was also drawing the future picture of his own country!

A forced paper currency, once established by law, will leave no means of retreat; it will advance thenceforward with rapid strides towards that horrible system of finance which ruined millions in France; if once you start on the same course, you must inevitably run the same race. Your enactments must be either ineffectual, or intolerably tyrannical. The symptoms of rapid depreciation have already unequivocally appeared, and a legislative enactment, vainly intended to support the value of your paper money, will prove here, as, infallibly as it has proved in all other countries where the same fatal measure has been adopted, the immediate forerunner of the last crisis of the paper system.

Against such a monstrous proceeding we have the authority of Mr. Pitt himself. We have also the authority of judges in Westminster-hall. In the court of Common Pleas, upon a question whether banknotes were made a legal tender by the Restriction Act, Mr. Justice Heath held this language:

"Whatever inconveniences may arise, the courts of law cannot apply a remedy. I think indeed the legislature acted wisely, having the recent example of France before their eyes, to avoid making banknotes a legal tender; for in France we know that legislative provisions of that kind, in favour of paper currency, only tended to depreciate the paper it was designed to protect, and were ultimately repealed as injurious in their nature *."

We have indeed the experience and example of France, as a warning to avoid the same calamities: in support of the assignats, there was legislative interference, and penalties and terror ever ready at command, exercised with unrelenting severity and unceasing vigilance. But I ask, did ever that system of terror stop the depreciation, or uphold the finances of France? Has the forced paper currency of Austria (the most recent instance) preserved the finances of that empire? on the contrary, their destruction is also nearly completed.

It may be instructive to us to know what has been done in other countries, to modify * Bosanquet and Puller's Reports, vol. ii. p. 526, Case of Grigby v. Oakes, and correct the disturbance of all contract" occasioned by the progressive depreciation of their respective currencies. In France, and in Austria, it has been found necessary to establish a rule for the equitable performance of contracts. When the frenzy of the Revolution had subsided, the French government, after the destruction of their assignats and mandats, and the consequent reappearance of metallic money, ascertained the value of the Louisd or, as compared with assignats at different periods. When the Louis of 24 livres purchased 600 livres in assignats, it is clear that an engagement made in assignats at that rate was 25 times the value in good money. When the Louis was worth 1,200 livres, a contract made in assignats was 50 times the value of the metallic money. And in this simple manner, according to any given market-price of the Louis at a given time, contracts were reduced to their real value.

The remembrance of the assignats has, however, in a great degree, put an end to leases in France; and if they are ever now made, the rent is stipulated to be paid in certain measures of corn. It may shortly be found necessary to have recourse to the same precaution in England. The practice has, no doubt, its inconveniences; no man can calculate the exact amount of his income for any particular year, because it will depend on the seasons and the casual supply of that year: but if, instead of the money in which the rent is paid actually containing or faith fully representing a fixed certain weight of gold of a certain standard, there shall be substituted a currency subject to depreciation, in that case the undefined loss will far outweigh any possible inconvenience" and the landlord in his own defence must again resort to the antiquated mode of former ages, and stipulate for a certain measure of the gross produce of the land.

It is said that some legislative interference is absolutely necessary to protect the tenants against the demand of their landlords, and on that account the Bill is favourably received by those who profess to support the interests of the former. Little, indeed, do these men understand the interest of the tenant, who exhibit such total ignorance of the great and permanent interest of the agriculture of the country, to which the interest of the tenants and of those who follow agriculture as a profession is inseparably united If once the impious breach is made in existing contracts, if once the legislature interferes with a violent hand, and tears out of the contract those positive stipulations, in faith of the due performance of which one of the parties has resigned and delivered over his valuable property, in the firm reliance that he shall be permitted to receive what he considered as a valuable equivalent, but which condition is after-wards totally abrogated by an ex post facto Jaw, there is an end of all faith both in public and private transactions. No man can henceforth place his dependance on the faith of contracts; the lands must be occupied by yearly tenants, for no landlord, after so dreadful a lesson of legislative injustice, will assign his properly for a fixed term to the chance of an uncertain value. There has already appeared a visible and general unwillingness to agree to new leases for long terms; and any suspicion of the possibility of interference with existing contracts, will extend that unwillingness to make leases even for the shortest periods.

My Lords, the difficulties of our situation have proceeded from long continued legislative interference; from having deserted the old sound maxims and general rules: the further you proceed in this course, the more difficult is your retreat. I well re-member the emphatic words in which our present situation was described in a former debate in this House: it was forcibly said," that legislative interference was heap" ed on legislative interference, difficulty was added to difficulty, until at last the original object lies overwhelmed and buried under the incumbent mass and rubbish of superadded matter." It is in vain to imagine that any interference can uphold the value of Bank-notes, if they are deficient in intrinsic worth, if less gold is given for the paper than that paper promises to pay. The attempt is against the natural order of things, and is pregnant with every mischief. Whatever may be the consequences, I am convinced the discusion must do good; the subject has been suffered to rest for several years, and by that neglect the depreciation has gradually and progressively advanced; and no possible effect arising from agitating this question, and bringing it to issue, can be go pernicious as the actual state of our degraded currency. In the year 1803 I op-posed the Restriction Bill; I resisted it in parliament, and endeavoured to expose the system, which I thought so injurious to all public and private interests. I fore- told the consequences; and, having now unfortunately seen my opinion confirmed far beyond my expectation, of all men I am the last to be blamed if I have now had recourse to a remedy founded both in law and justice. * * This Speech is taken from the original Edition printed for J. Ridgway, Piccadilly; to which is added the following

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