§ "Having so plainly stated the principle on which I expected those, who had entered into contracts with me, to discharge their engagements; I hardly thought it necessary to add, that I consider myself as under the same obligation to those who have demands upon me under any old contract or engagement. I take this opportunity of stating, that I not only hold myself bound, and am ready, to satisfy all such demands, by payment of the same intrinsic value which the currency had at the date of each respective contract; but that I have already acted upon this principle in a payment of considerable amount.
§ "The Bill now before parliament will place some impediments in the way of those who desire to carry into effect an equitable adjustment in the payment of old contracts; but methods may be devised for an equitable arrangement without much trouble or expence. For this purpose, ascertain the weight of standard gold which the currency was able to purchase at the date of the contract, and let the payment be made in the same weight of standard gold. Coined money was invented for the general convenience; but if it cannot easily be procured, payment" may be made in uncoined bullion of the same standard.
§ "For instance, if the price of gold at the date of the contract was 4l. 5s. per ounce, then, in the proportion of 4l. 2s. to 31. 18s. the Mini-price, it will require the weight only of 95 guineas and 1/8 0/2 as the equivalent for 100 guineas; and as that weight of standard gold may afterward" be sold at the market price, the landlord who receives it at that rate (an act of favour and concession on his part) will be indemnified for the increased depreciation of paper since the date of the contract, and at the same time will have regulated the payment according to the intrinsic value of the currency at the date of the lease.
807§ Earl Bathurstsaid, notwithstanding the very able manner in which the noble lord who had just sat down had defended his
For all contracts made before any depreciation had taken place, it will of course require the weight of 100 guineas in standard gold to discharge a demand for 100 guineas; but if, instead of standard bullion, a preference, for the sake of convenience, is given to Portugal gold coins (which, as an article of commerce in demand, are more valuable), an allowance may be made in proportion to their superior price in the market, requiring the weight of 98 guineas in such coin for 100 guineas due.Since the restriction on cash payments in 1797, the natural check and safeguard against excessive issues of paper-currency has been removed; and it is confessed, that the Bank has not been guided in regulating the amount of their notes either by the price of gold bullion, or by the state of the foreign exchanges. All paper, not convertible into gold on demand, is in its nature liable to depreciation from excess, and the amount of such depreciation "is measured by the excess of the market-price of bullion above the Mint-price. When the paper-currency is not able to purchase as much gold as it promises to pay, then in proportion to that smaller quantity which it can command at any given time is the depreciation of the paper. Since 1799, gold bullion has progressively advanced in price, in proportion as the real value of the note (by which the gold has been purchased) has declined.The alteration of the intrinsic value of the currency has been so considerable, that it is become necessary, for the just and equitable liquidation of contracts made prior to the depreciation of the currency, or at any time during the progress of that depreciation, to ascertain the real intrinsic value of the common currency in which all contracts have been estimated, at the date of each respective agreement. For this purpose, it must be ascertained what quantity of standard gold any given sum of the common currency was able to command at the date of the agreement; and the payment of the same quantity of gold, or the value of that quantity, will be the equitable fulfilment of the contract, according to the intent and meaning of the parties. A payment in paper-money of inferior value is a payment in name only808 conduct, he would still maintain, that the measure which he was now about to adopt would be mischievous to the country, andand not in reality; a payment in good and lawful money, according to the letter, may be a payment of more than was intended by the spirit of the contract.It has been said, that no contracts since 1797 could have been expected to be paid in gold. If such contracts stipulate for payment in gold, they are nevertheless binding on the parties, and any modification must be considered as an act of favour and concession. Such contracts ought, on every principle of justice, to be fulfilled according to their spirit and meaning. The restriction act at first was expressly stated to be only temporary; and for ten years, there was no important depreciation: it was not before 1808 that any serious injury was sustained. The hope that the currency would be restored to its former value, might have induced many persons to submit to a loss of five or six per cent.; but are there no limits to the endurance of an injury, and is the patient acquiescence for so long a time to be now urged as a conclusive reason against all future attempts to resist a manifest fraud and public injustice?It appears, that any considerable increase of the amount of notes in circulation has an obvious influence in producing an advance of the price of gold, and a correspondent diminution of the real value of the pound note. The average price of wheat for England and Wales, which from 1771 to 1785 was forty-six shillings the quarter, and from 1786 to 1797 was fifty-two shillings, has since that period, in the short space of fourteen years, experienced an advance in price greatly exceeding the advance of the whole preceding century. Before the Bank restriction, and even during the two first years, it required 18 quarters of wheat to purchase one pound weight of standard gold, which was coined into 44 guineas and a half; at subsequent periods it has required only 14 quarters and half a bushel, 12 quarters and 2 bushels, to purchase a pound weight of gold, even at the apparent high price of gold. These calculations are made on the average prices both of corn and gold for five years, and five years, omitting the two years of dearth 1800 and 1801. In the last year, 1810, the average price of wheat was 106s. 2d. the quarter, and the price of gold for that year was 4l. 11s. the ounce;809 an act of injustice towards his own tenants. He was exacting from the tenants a sum which they were not aware of at the time when they received their leases, and which, if they had been aware of, would perhaps have had the effect of preventingit required then only 10 quarters 2 bushels and I peck to purchase a pound of gold; which same quantity of gold fourteen years before required no less than 18 quarters of wheat to purchase it. Considering the facts here stated, it is impossible to maintain that the price of gold has increased of late years; on the contrary, there is every reason to believe that a real and sensible diminution in the value of the precious metals has taken place, comparing them with wheat and labour, usually considered as the best criterions and standards of value.The pound troy is, by the regulation of the Mint, coined into 44 guineas and a half, of the weight of 5 dwts. 9 3/8 9/9 grs.; but guineas, if not reduced below the weight of 5 dwts. 8grs. continue to be a legal tender. At that weight, viz. 128 grains, the pound troy of 5760 grains is equal in weight to 45 instead of 44½ guineas. Promissory notes and tokens of the Bank of England, to the amount of 46l. 14s. 6d. can virtually and lawfully be discharged only by the payment by that corporation of 44. and a half guineas, or gold coins to that amount; and as 44 guineas and a half is only another name for a troy pound-weight of standard gold, every 46l. 14s. 6d. worth of Bank notes is an engagement to pay a troy pound weight of standard gold. [From the Theory of Money, printed for S. Highley, 24 Fleet Street, 1811; a work containing a variety of useful information upon this subject.] A Bank-note, or any paper-currency, neither has, nor can have, any value but what it derives from being a true representative, not merely of the coins of the realm, but of a certain quantity of gold; because the coins of the realm have themselves, and can have, no value but what they derive from the quantity of sterling gold contained in them, and the gold coins in use are legal tender so long only as they contain the quantity of gold declared by the King's proclamation to be contained in them.In the earl of Liverpool's Treatise on the Coins, an account is given of the different treasons against the pound sterling which have been committed at different810 their acceding to the leases. In all the leases which he had granted subsequent to 1797, the tenant had a right to conceive he was to pay in paper, and not in gold, and therefore he ought to have told the tenant he would insist on having his renttimes; a brief summary of which may be usefully inserted:
s. d. 1. In the 28th year of his reign, Edw. 1. coined 1lb weight of silver into 20 3 2. — 18th — Edw. 3. — — 22 2 3. — 20th — Edw. 3. — — 22 6 4. — 27th — Edw. 3. — — 25 0 5. — 13th — Hen. 4. — — 30 0 6. — 4th — Edw. 4. — — 37 6 7. — 18th — Hen. 8 — — 45 0 8 2d year of her reign. E1izabeth — — 60 0 9. — 43d — Elizabeth — — 62 0 The reformation of the coin (in those times the only circulating medium) seems to have formed no inconsiderable part of the grievances for which parliaments attempted to obtain redress from those sovereigns, who, urged by their necessities, had degraded the coin for the purpose of defrauding their subjects.Since the establishment of a more regular government acting by general rules in the administration of the national affairs, according to the well understood interests both of the government and people, no sovereign of England, since the reign of Elizabeth, has had recourse to the expedient of making further innovation in the standard of the currency. The legal standard has remained unaltered ever since the time when queen Elizabeth made the last alteration in the silver coinage, and gold has since been made the only legal tender in all payments above 25l. in value.The use of the second table is to shew, by inspection, the real quantity of gold which the current paper-money was able to purchase in any given year, that quantity, or the weight of the number of guineas in the 3d column, being, according to the spirit of the contract, the equitable payment of 105l.; the 4th column shews the value of the weight of gold equal to the number of guineas contained in the third column, at the price of 4l. 14s. per ounce; the 5th and last column shews the further depreciation of paper money for every hundred pound since the date of the contract.It would have been a much easier and shorter method to have paid the difference of the value of Bank-notes by an addition to the nominal sum equivalent to the depreciation; but this practice would hive exposed the fact to daily view, and would811 paid in gold. The noble lord had stated, that in those cases where the leases had been granted within the last two years, he had made no alteration; and that all that he asked for was an indemnification for the alterations which had taken plate in the value of the currency since the restriction act. What sort of a principle was that, he would ask, which was not the same at all limes? But the truth was, he did receive an indemnification by the increase of rent at the granting of every new lease, if a long lease were granted a greater rent was required than for a short one. The sum required for a lease of 7 years, was greater than that for a lease of 4; the sum for a 14. years lease was greater than for one of 7; and for 21 years, greater than for 14. On what other principle but the probability of a progressive depreciation, was this advance of prices asked? The noble lord, according to his own principle, must have been more aware than any other person, of the depreciation, and having been aware, would exact, at the time of granting his leases, a proportionate advance: yet now he was requiring to be paid a second time for that rise. Upon the principle of the noble lord, for all the leases granted by him in 1801 and 1802, he ought to have allowed a deduction of rent in 1804 and 1805; for the price of gold was higher in 1801 and 1802, than it was in 1804 and 1805. If he did not make any allowance to his tenants then, he was not entitled to ask them for any addition at present. He would put it to the noble lord, if he hadhave carried with it irresistible conviction; and the legislature has lately interfered to prevent the depreciation from becoming thus palpable and manifest.If gold is in demand for the payment of contracts, for instance, for the discharge of rent, it will now be necessary for the tenant to require two prices for his produce, one for gold, and another for paper; or he may, if more convenient, dispose of the whole of his produce for the ordinary paper currency, and purchase the weight of standard gold (if gold coin cannot easily be procured) requisite to discharge his rent or bond-debts, according to the spirit of his contracts.It has sometimes been said, that the total disappearance of gold, and universal substitution of paper in all payments, prove, that it is impossible to procure gold but it must be recollected, that the812 made any such allowance? He must have been more aware of the increasing depreciation than any man living, from his known talents, and the attention which he had paid to the subject; but his tenants would not be aware of the intention of the noble lord, that he was going to set up a principle, that the rent was not to be a fixed Sum, but should fluctuate according to the price of gold. The noble lord had stated, that he had adopted this line of conduct for the purpose of calling the attention of government to the subject, in, consequence of certain Resolutions which, had been adopted by the House of Commons. But why did he not adopt this course earlier in the session? He seemed to have put it off to the last period, that he might elude the vigilance of parliament. As to the question of depreciation, it was attended with great difficulties. He would, however, proceed to make one or two observations on what fell from the noble lord on this subject. He had said, that the advance in the price of gold must be attributed to an excessive issue of paper. Then in proportion as that issue diminished, the price of gold must fall. But if they looked to the papers which had been laid before the other House, they would be found not to confirm this doctrine; for the price of gold has risen when there was a decrease in the issue of notes, and fallen when the issue was increased. He had also stated, that a depreciation was attended by a general rise in the price of all other commodities. No doubt if a depreciation of the currencywhole question rests precisely on the inferior value of our paper-money compared with gold; and there fore, as long as any considerable difference exists in reality, it is a manifest absurdity to imagine that payments will be made indifferently in gold and paper, when one currency has been 10, 15, and even 20 percent, less in, value than the gold coin. Let the value of the paper currency be restored to the value of the legal gold coins, and payments will again be made in gold and paper indifferently; let the opposite course be persevered in, and allow the depreciation to become so sensible that gold shall be demanded generally in preference to paper money in satisfaction of old contracts, and in this manner the demand for gold will establish two prices, one for commodities sold for paper, and another for those sold for the gold coins.813 should take place, it would be attended with a general advance of the price of all other commodities; but he would venture to say that a general rise might take place in the price of commodities without any depreciation of the currency. This might take place from an encreasing trade, and various other causes. But he would ask: was the fact such as had been stated by the noble lord? Was there a general advance in the price of commodities? Let the noble lord compare the current prices at present with those in 1808, and he would find that a large proportion of commodities, and those by no means inconsiderable commodities, had fallen in price. He would find that iron and wood, unfortunately for the noble lord adduced as instances of a rise in price; tallow, cotton, and a great number of other commodities, had experienced a great fall in them. When there was a depreciation in the currency, there would be a general advance in the price of commodities: but if there was a general advance it did not follow that there was depreciation. He had another observation to make: the measure of 1797 had been adopted by all succeeding administrations, and in particular by the administration to whose measures the noble lord acceded, and which he had supported. But the session of parliament, during which his friends were in administration, passed away, without either repeal or limitation of the restriction act being introduced. He believed there was not even a scrap of paper to shew that that administration had ever turned their thoughts to the subject. No doubt they acted wisely, and it would have been an unwise course to have acted otherwise; and the present administration had acted also properly in continuing the system. He concurred with the principle of the Bill of the noble earl, but, at the present period of the session, he thought it advisable to avoid making any legislative enactment on the subject. He hoped there would be a general disinclination in the country to follow the conduct of the noble lord; but if the evil should ever become general, it would be unfit for the House to suffer it to continue. It would be proper for them then to inquire into the instances of oppression which might take place. The noble earl who spoke first had mentioned several cases. Under these circumstances be thought it would be advisable to avoid making any laws on the sub- 814 ject at present, and that this alteration might be effected with more propriety at some future period.
Lord Hollandwas perfectly ready to profess that he was not much acquainted with the doctrines respecting the circulating medium, much less so than many others of their lordships; but as far as he understood the subject at all, he assented to the doctrines of his noble friend (lord King); and this, together with the manner in which his noble friend had been attacked, both in and out of doors, made him anxious to deliver his opinion, and to share with his noble friend the obloquy and clamour that had been so loudly raised against him. He had no hesitation in saving, that if this measure passed, it must be only the first of a series of bills more daring than any this country ever saw, in order to attain an object which no government had a right to accomplish, and which, in reality, no government could effect. The noble earl who spoke last had gone so far as to assert, that the demand made by his noble friend was unjust towards his tenants, and mischievous to the country. On the contrary, he would maintain, that should it appear, as he had no doubt it would, that his noble friend was only dealing fairly for the interests of his own family, acting according to the laws of the land, and in consonance to his own rights, even though his conduct should be hostile to the system pursued by government; all that would only prove that their system was a had one, and the sooner it was done away with the better. Instead of exciting a clamour against the conduct of his noble friend, should it not rather be received as a warning, that it was high time for government to retrace its steps, and if possible correct the evil before it was beyond the reach of remedy The whole matter might be resolved into this short argument. Bank notes were either depreciated, or they were not; if there was no depreciation, then his noble friend's demand could do no harm, and gold could, of course, be obtained; if there was a depreciation, then he must contend that his noble friend was giving the country a warning in time, by which they might profit." Lay not this flattering unction to your souls," as if the present system could go on much longer. Were this Bill carried, recourse must be had to the principle of a maximum, and all the other measured which originated in France from the law 815 that forbad the circulation of assignats but at its nominal value. The law of the maximum proceeded not from wickedness or folly, but from the previous steps that were taken. People would not bring their commodities to market, when they could not get what they wanted in exchange, and hence all the measures of force adopted to prevent the people from famishing. This Bill once made a law, he defied parliament to stop in the tremendous career; and to the very same complexion as in France would the matter come at last in this country. There was no other remedy but making the Bank resume its payments in specie. There was no choice, no other medium left. The Bank must either pay in gold, or things would go on, till parliament would be actually forced to adopt the most abominable measure of a maximum. The noble earl had stated, what in his mind was the ground of advancing rents on granting leases. He said that, it was founded on a calculation of the advance in the depreciation of money. But how much did these fatal words," Good and lawful money of the land," stand in the way of such an idea? Did not these words expressly mean, that the landlord was not to be paid in a depreciated currency; and was not the Bank-note depreciated, when a pound-note and seven shillings were currently given for a guinea? But the true reason why the landlord granted a long lease, was that his tenant might have an opportunity of improving the laud to his own advantage, and thus leaving it ultimately in the hands of his landlord of more value than he found it. He must again repeat, that his noble friend had, in his mind, acted agreeably to the interests of his family, the law of the land, and his own rights.
The noble earl had said, that the last administration was equally accountable with the present for the continuance of the Bank restriction. But that administration, it was to be recollected, lasted only about a year, three months of which were employed in a negotiation for peace; and had it been attained, the Bank restriction would have ceased of itself.
He would now shortly advert to the speech of his noble friend the mover of the present Bill. He never listened to the speeches of his noble friend without information and instruction; and, however much he admired the ingenuity which he had displayed on the present occasion, 816 and gave credit to his honourable intentions, yet he felt convinced that his noble, friend was recommending a series of, measures which would involve the country in the greatest calamities. A noble lord high in office (lord Liverpool) seemed on a former night to approve of this Bill as a, remedy; adding, however, that the evil was not so great as to require it at present, though it might do so in time. Now, he, on the contrary, would maintain the very converse of these two propositions, namely, that the evil did exist to a very great degree, but that this measure ought neither now nor at any future period to be the remedy. Mr. Burke, when speaking of the assignats, had justly observed, that it was the very essence of Bank-notes to be founded on credit, and that the great distinction of the Bank of England notes was," that they were powerful upon change, because incompetent in Westminster-hall." The instant the Bank note was supported by the hand of power, and not by credit, then its value would, rapidly sink away. Where was the justice of coming with the arm of authority, and saying," take this-note for a guinea," when it was known that the guinea was worth 27 shillings? But his noble friend had said, there was no remedy left—it was Hobson's choice—you must take it because nothing else was to be got; though he would not have it made a legal tender. This reminded him, of the story of a gentleman who was fond of deep potations at his table, and who used to say to his guests," I press no man, to drink more than he chooses, but still I, make it a rule, that every one who stays-should be expected to drink." Of course, those not inclined to drink deep soon rose to fake their departure, upon which he, used to ask his servant, in their hearing, whether he had let loose the great dog to walk about the passages; so that either way he had them. And thus, the Bill did not make Bank-notes a legal tender, but it would so operate that we should soon not be able to get any thing else. It was a legal tender in disguise, and would banish all money from circulation, while it necessarily increased the issues of paper. His noble friend had again quoted the saying of Sir G. Saville, of its being possible to make any thing the measure of value. He agreed to it so far, but then it must be that which the people at large agreed to take as a measure, and not what the government chose to force upon them. Value must consist either in opinion, or in 817 intrinsic use. And here he would call to I the recollection of the House, what Mr. Burke, in his Letter to a Member of the National Assembly, had said on the subject of the assignats. He could not now quote the expressive language of that great man, but the substance of it was," that the assembly might place the government in what hands they chose, but if once they declared paper to be coin, (he real governors of the country would be the coiners of that paper." Should this Bill pass, the government of the country would be no longer in the bands of King, Lords, and Commons, but in those of the Bank; and all the multifarious transactions of men, in all the walks of life, would be left lo their control Their lordships were interested with the government itself, not to place the happiness of the country at the discretion of the Bank directors. He must, therefore, enter his solemn protest against this measure. If once adopted, we could not stop; the Bank-notes would run the same course with the assignats, and after passing through various stages of depreciation, would at last end in being absolutely valueless. He knew that a great deal might be said of the inconvenience of paying in specie; but if that was not done without delay, or at least a period fixed for the resumption of cash payments at the Bank, the neglect would not fail to draw down the greatest evils upon the country.
The Earl of Rosseobserved, that all the arguments of the noble lord who had just sat down rested on this foundation alone, that the paper currency was depreciated. Now, that was the very question to be decided; and there was one argument which, to his mind, was decisive, that no depreciation had taken place. The value of any useful article could only be depreciated by too great abundance. There was every reason to believe that the amount of notes of the Bank of England now in circulation did not exceed the mass of circulating medium compounded of notes and gold in 1798. Was a less quanitity of currency required now than in 1798 to conduct the mercantile transactions of the country? Surely not; our domestic transactions had, on the contrary, greatly increased, and therefore there could not be a superabundance of the circulating medium, which could be the only cause of its depreciation, particularly as nobody doubted the credit of the Bank. The question was, whether a remedy should 818 be applied to prevent the evils which a noble lord's determination was likely to produce. He thought there should, and that the present Bill presented that remedy of all the measures of Mr. Pitt, who was certainly one of the greatest financiers that ever lived, the Bank restriction was that which was attended with the greatest advantages. Had it not been for that great operation, the country would long ago have succumbed before the enemy. It was asserted by some, that if the quantity of circulating medium was reduced, it would increase its value. But, then, look at the other consequences. It would cramp and confine the industry of the country; it would put a stop to the operations of agriculture and commerce; the country would suffer the most tremendous evils. This would be the effect of making the Bank pay in gold, as its issues would necessarily be contracted in proportion. He wished this measure to be extended to Ireland also. The situation of the people in the north of Ireland was at present most calamitous; they were completely at the mercy of their landlords. Many of them would only take their notes at a discount; and if there were any noble lords from that part of the empire now present, he would ask them, if there was not a class of persons there who would only receive notes at one value, and issue them at another? Could there, he would ask, be a more monstrous injustice than this? Many persons flattered themselves that few would follow the example which a noble lord had that night declared his intention to set. He thought most highly of the good sense and patriotism of the people of England; yet, when men thus saw an opportunity of getting an addition of 20 percent, on their rents, was it to be supposed, that only a few would avail themselves of it? He conjured their lordships to adopt the measure, and that without delay.
The Earl of Lauderdaleregarded the present subject to be paramount to all others in point of importance; and the magnitude of the question was such as would render it criminal in ministers to dismiss parliament at present, without coming to some determination upon it. The noble lord who spoke last had asserted broadly, that the paper was not depreciated, because the issues of the Bank" were not greater than the compound mass of gold and paper in circulation in 1798. But were the notes of the Bank of England 819 alone to be considered? Why, the private Banks had doubled since 1798, and now there existed the extraordinary number of 720 private Banks, all issuing as much paper as they could possibly circulate. Whenever the notes of any country were withdrawn from circulation in any number, then the effect was, that the value of those which were left increased. This was the case in the North American colonies, and it was the same in the reign of king William, as he should afterwards shew. He was anxious to know whether ministers really approved of this Bill. Could they figure to themselves any advantage from it? Who was it that they wished to relieve? Was it the tenants? Why, the noble lord was perfectly willing to receive Bank-notes at their present value compared with the coin of the country. So far, then, they would circulate as before. But were this law to pass, he had not a doubt that it would not only diminish the number of Bank notes, but also depreciate them. He really thought that the only object of his noble friend, in proposing this measure, was to feel the pulse of the House and of the country, on the subject. The noble lord had asked, whether this was not a new state of things? No: at the latter end of the last century, circumstances almost exactly similar occurred. In the year 1695, men were going about purchasing notes for the purpose of paying their debts; and after they had collected a great number at a depreciated value, they brought them forward, and paid them to their creditors, who were obliged to receive them at their full amount, or to go without any pan of their demand. In proof of this the noble earl read an extract from Mr. Drake's account, in 1699, of the attempts made at the above period to diminish the value of bank notes. He contended that two species of circulating medium could never exist at the same time in equal credit; for if one rose in value, the other must be depreciated; and if gold rose, paper, which was to represent it, if it once lust the confidence of those who were to receive it, must sink in the same proportion as the other rose in value. This was the case in France when the louis in gold was worth. 1200 assignats in paper. Nothing could be more wretched and miserable than the situation of the people under these circumstances; notwithstanding which, no sooner was the whole of the paper swept away from the face of the country, which it was in the space of one 820 day, than from that moment, the very same country, from being greatly distressed became highly flourishing, by getting rid of a set of wicked and mercenary individuals, who delighted to make their own fortunes upon the ruin and misery of the public at large. Many arguments had been urged to shew that the credits of the Bank of Scotland were similar to those proposed to be introduced by the present Bill; but he denied that any proof had been adduced in support of these assertions; and he was sorry to observe, that for want of more substantial arguments, ministers had been driven to resort to that miserable one, that the last ministers, who were only in office one year, had not taken any step to remedy the grievance that was now so loudly complained of. It was, extremely unfair to urge such an argument in their own defence; because they well knew that the late ministers were, during the greater part of the time they were in office, engaged in a negociation for peace; which had they succeeded in effecting, would have put an end to the Bank restriction. Had they continued in office longer than they did, he was convinced they would have shewn their zeal for the interests of the country, by attending, in the most serious and effective manner, to this most important and desirable measure of causing the Bank to resume their payments in specie.—Before he sat down he would conjure ministers maturely to consider the nature of the measure they were now about to adopt. He knew very well that the noble earl who brought forward this Bill was possessed of great ingenuity; but he did not seem to have studied the nature and extent of its provisions. Could they bring forward an effectual remedy? No; the only way they could do it would be to make Bank notes a legal tender—a measure which he believed no man would venture to bring forward, either in that House or the other, without a great risk of being called to the severest account. The noble earls in his letter to the Lord Chancellor, had assimilated the pledges of the Bank to be given by this Bill, to those which were in force relative to the royal Bank of Scotland; but nothing could be more different; for in Scotland there was not a bank-note in circulation which the Bank was not obliged, to pay in cash whenever it should be demanded. To this had been owing the very great improvements in that country, and the reason why the rents there had in the same space 821 of time risen to a much higher state than they had done in England. Speaking of the argument of the noble earl (Bathurst) as to the injustice with which he had charged his noble friend (lord King) of acting towards his tenantry, his lordship declared, he never heard such nonsense. He felt ashamed of the House when he reflected on the mode in which the question had been urged. Ministers had adopted a measure, for which they had not been able to advance a single argument, except that of condemning an individual for pursuing a course with respect to his own property, which the law most fully and directly sanctioned.
§ Lord Redesdalesaid, if every landlord in the country were to insist on his tenants paying their rent in gold, they might very soon come to the point of asking two hundred for one, because for the tenants to obtain gold would be impossible. The noble lord said, that the statute of Edward 6 applied only to gold and silver, and not to any other circulating medium. If the noble earl persisted in the present Bill, and it should be adopted, it might be necessary to introduce the words of that statute, and make them applicable to paper. The act of parliament, which in 1797 laid the restriction on the Bank, made paper the same as gold, with respect to debts and public credit; and, whether the legislature were right or wrong in that measure, he thought that having said so, it how became the duty of parliament to protect the people in what had been done. Coin had been some how or other driven from the country; and if tenants could not get gold to pay their rents, they must be protected from being forced out of their farms, for not being able to effect impossibilities. The plan proposed by the Bill was, that bank-notes should be protected from depreciation, as gold was by the statute of Edward 6, that no man shall be compelled to take such notes; but if they did take them, it should not be for less than a pound. He did not think the words of the Bill would have that effect; yet the state of things required that some provision should be made against the existing difficulties and inconveniences, and he should therefore give his support to the Bill.
§ Lord Grenvillerose and said: My Lords, in addressing you on this occasion, it is painful to me to observe, that I cannot remember in the course of my life to have ever seen the ministers of this country placed 822 in so disgraceful a situation as that in which they appear this night. Whatever may be the variety of opinions entertained upon this subject by different persons there is no man in the community who does not feel that this is by far the most important question in the whole circle of the political interests of the empire. I know that the House of Commons has already, by coming to certain Resolutions, expressed their belief that by so resolving, they had set this question entirely at rest. If the dangers, indeed, which being set before the view of that House, were intended to be counteracted by these Resolutions, had been purely visionary, the object had been perhaps accomplished. But if, on the contrary, we have now a practical test of the reality of the danger—if the predictions of those who pointed it out have been since completely verified—if in every day, and every succeeding hour, the evil is increasing—we have a manifestation of the futility of the supposition that the vole of the House of Commons would put a period to the discussion. I did not feel disappointment, my Lords, for it was what I expected, though I confess it was with a sentiment of indignation that I found only one of his Majesty's ministers rise on this occasion; and that he, declining all enquiry, all examination into the state of the alledged depreciation of the currency, should confine his whole answer to an attack on the private conduct of my noble friend. Provided men sinned not against the laws—provided they made the laws the rule of their conduct—it was an ancient maxim of wholesome government to permit them to act, under all circumstances, by their own discretion, and not to interfere in any manner, by regulations of any kind, or authority of any description, to debar them from the right of exercising their free and unbiassed judgment. It was left to the period of the French Revolution, it was left for Robespiere, for the Jacobin Club, and for the present ministers, to pronounce upon the private actions of individuals, and to determine whether they deserved the character of civism or incivism. My Lords, if men are to be governed by rules, those rules ought to be clearly expressed and generally understood, not left to the interpretation of political parties. In alluding to my noble friend and relation (lord King),'., I am sure that the censures applied to his conduct were most unmerited. I know and love the character of that noble lord; 823 I know his public spirit, his extensive in formation, his acquaintance, equalled by few, with the subject now before us. My Lords, I also know the private virtues that adorn him, the kindness of his temper, and the benevolence of his heart; and if I were called on to name the last man in the country likely to commit an act of injustice and oppression, it would be my noble friend. If the time is arrived for the introduction of new principles of government, and if my noble friend is to be required to explain the reasons which govern his private proceedings, in this assembly, will your lordships tell me where these principles are to stop? Are the merchants likewise to be called to your bar, to be interrogated as to the mode of managing their business, or to be instructed by government in the means of conducting their commercial transactions, so as to produce the greatest share of advantages to the country? Is that maxim of political science which influenced the policy of the government till it was subverted by the rash measures of the Board of Trade, to be at length utterly relinquished? That maxim which has been sanctioned by the most eminent statesmen and writers, and in the justice of which I most heartily concur, that the best way of promoting the public, was to give unrestrained freedom to the prosecution of individual interests, the aggregate of which constitutes the mass of national prosperity? It is not my intention, my lords, to trespass on your patience by following my noble friend through all the detail of his lucid and manly speech. In answer to the observations upon it, made by the noble lord (Bathurst) I content myself with appealing to the law, the plain understood law of the country. It is by that law that the members of the community must regulate their conduct, and not by party doctrines in parliamentary debate. I do not wonder at the wrath of ministers being directed against my noble friend: I do not wonder at the cowardly attempt to raise a public clamour against him, because he has been the immediate means of proving the fallacy of their belief, that they had set this question finally at rest. If, however, they had been animated by one spark of justice, or ordinary candour they would not have held him out as a solitary example, but have fairly admitted what has been stated to you by a noble lord, this night (lord Rosse) that he had only imitated what has been the common practice in the north of 824 Ireland, as well as the conduct of numerous individuals in this part of the empire. But this would not have suited their design, this would have been to admit the existence of the mischief that is coming upon us, and the only way of accomplishing this purpose was, if possible, to deter him by clamour and invective, from persisting in pursuing the dictates of his judgment. The question, however, is now said to assume a public character, and in this light I perfectly agree with those noble lords who have dwelt on the urgent necessity of applying an early remedy. The kind's ministers, indeed, from whom it was natural to hear something on such a subject, do not favour us with the slightest observation. I believe, my lords, and I have before expressed this opinion, that the moment is at length arrived when, if the evil be not arrested it must advance with an accelerated progress, till it produces a stale of calamity, not only unequalled by any thing that has hitherto ever affected this nation, but which it is almost impossible for the imagination to conceive. We are, however, in that miserable style of argument by which the measures of administration are generally defended, desired even now to shut our eyes to this alarming and extensive danger, and are told still to confide in our shield and buckler, as a certain armour against all the perils that surround us. A noble and learned lord has informed us that when Mr. Pitt first adopted the mensure, of the Restriction, he contemplated at the same time its indefinite duration. Really I am at a loss to know where the noble lord acquired this knowledge, but I do feel it to be my duty to declare, and it is a declaration which the part I took in the public councils at that period warrants me in making, that the most painful day both to Mr. Pitt and ray-self, of his and my political life, was that on which the circumstances of the country were deemed such as to impose on us the necessity of coming to parliament with that proposition as a temporary measure. By what considerations we were afterwards induced to extend it for successive short periods, it is unnecessary to explain; suffice it to say, that they are considerations which I shall ever deeply regret had any influence upon my mind. I do assure my noble friend that I have long since fully concurred in the arguments which he has urged against the original policy of that restriction. It must be in the memory I of some who hear me, that I did oppose in 825 my place in this House, the Bill for extending the restriction to the end of the war, and even then considered the propriety of the virtual resumption of cash payments. Does the noble earl think then, that blame is rather due to me than to those ministers who now sit in silent apathy, and see the evil approaching to its maturity with the most perfect insensibility? With regard to my conduct when last I held an office in his Majesty's government, I beg leave to remark that I was from the month of February to the November following, engaged with many of my noble friends near me, in endeavours to preserve what we considered to be the greatest boon that could be obtained for the people of this country, a safe and honourable peace. Had that event been happily accomplished, the Bank restriction would have been consequently at an end. If called on to account for the subsequent four months which I passed in office, I am called on to perform a task of which I am not ashamed. From the moment when I found that a safe and honourable peace was not to be obtained, I bent the whole force of my mind to prepare and mature a permanent system, which by wise precaution and provident arrangement, might so economize and husband our resources, as to enable us to continue the contest, not merely for a few years, but to the most distant period. Without any of those extraordinary exertions which have since been made, and in my opinion for the must impolitic purposes, this system would have operated in the most beneficial manner. I did not forget that the restriction was a permanent evil, but I conceived that the most effectual mode of dispensing with it, was to place the government in such a situation as to deprive the Bank of the plea of its necessities to continue their own profits. I know that it is not, as it was said to be declared by the Chancellor of the Exchequer, the want of gold in which the necessity of the continuance of the restriction originates. It is in the exigencies of the government, and in profuse and wasteful expenditure. To supply those exigencies, and to support that expenditure, you permit the Bank to make unlimited issues and spread through the country a depreciated currency. It is for this purpose that his Majesty's subjects are compelled in amount to pay their income tax, once to the revenue, and twice to those who profit by the restriction. This state of things is now openly 826 avowed and defended, as necessary to the support of government. Necessary it may be, while the annual expenditure is 90 million sterling, but that is an expenditure which it is absurd in the highest degree to imagine you can maintain. However grateful to your wishes or flattering to your pride, you must at length renounce this vain idea. With all my respect for the logical acuteness of the noble lord near me, I do not think he has acted up to his own sense of the utility of definition in his explanation of paper at par, and paper under a depreciation. Neither do I agree with him, that bankers are exclusively the true judges of its real value. I consider a paper currency to be depreciated when in the transaction between man and man, less gold is given for the paper than that paper promises to pay, and that in proportion to the difference between the sum promised as to the sum thus paid, is the extent of that depreciation. The noble and learned lord has put an extreme case, equally applicable to all periods, and has said, that if gold was required to the fulfilment of all contracts, it could not possibly be procured. There never, however, was a time, and I am ready to establish the fact, when there was more or even so much gold in the country as at the present period. No difficulty is experienced in obtaining any quantity, as stated in, the evidence before a Committee of the House of Commons, if the price is only offered. We were formerly accustomed to draw our supplies from foreign countries, not always well disposed to us, and sometimes in open hostility. The demand for gold, as will ever be the case, was still, notwithstanding the hazard and difficulty, more or less supplied. You have now free access to the countries which produce gold, you are the masters of the seas, you pursue the trade without the slightest interruption from any state, and the consequence is, that you both import and export in larger quantities than at any antecedent period. It is to a destructive policy alone that the evil must be attributed. It has advanced slowly, progressively increasing, like the Mississippi and South Sea schemes, and, like them, if not checked, it must end in the most extensive ruin and calamity. My lords, it has often fallen to my lot to point out the inevitable results of the issue of the asssignats in France. How little did I then imagine, that, in the description I then gave, I was but anticipating what, in the course of twenty years, would 827 be the faithful picture of my own country! How little did I then apprehend that the established credit of Great Britain, that her flourishing finances and proud resources, would perish by the same hideous monster, appearing in all his pristine deformity!
The noble lord then commented on the pernicious tendency of the Bill, which, though declared by the noble earl who brought it forward, not to be intended to make Bank-notes a legal tender, yet went so near it as to create great risk of committing gross and flagrant injustice. The noble lord next proceeded to animadvert with great strength of argument and observation upon the danger of making paper a legal lender. His Majesty's ministers appeared now to be adopting measures which had been stigmatised by all eminent authorities upon such subjects as most injurious to a state. They had determined to issue tokens for three sterling shillings—tokens which, according to the standard value in the sterling shillings, would not be worth more than 2s. 4d. In this instance he must contend, that they were not satisfied with a depreciated paper, unless they accompanied it with a debased coin. If this measure were fit to be adopted, he should be glad to know, why the tokens were not to be issued by government for the profit of the public? He could see no good reason why the profit should go to the Bank of England, rather than to the treasury. The tokens were to be prepared in the King's mint, and under the immediate sanction of ministers, and if the nation was to take the mischief of the issue, the public was entitled to the profit—He had thus long detained their lordships, because he felt it necessary, to state explicitly his opinions upon the present measure. But he had by no means exhausted the subject; he had not even expressed all the considerations which suggested themselves to his mind upon the question. If the measure were to be persisted in, he should often have to address their lordships upon it; not that he was not perfectly aware how little useful it was to address their lordships upon such occasions; but because, feeling as he did respecting this measure, he should not think that he had performed his duty if he failed to state his sentiments fully. Whatever might be the future misfortunes of the country in consequence of these measures, he was sure that he could bear his proportion of them with the fortitude of a Man conscious of having discharged his 828 duty in endeavours to avert them: but when he considered how particularly it had fallen under his observation on a former occasion to watch the progress and effects of similar measures in that unhappy country, France, he should be criminal not to use all the means in his power to prevent their introduction into his native land.
The Earl of Liverpoolobserved, that the question before their lordships had been argued with a view to the ulterior measures which the noble earl who brought the present measure forward had in his contemplation. For his own part, he wished, in any thing he should feel it necessary to say upon this Bill, not to be understood to give any opinion or approbation of those ulterior measures. The principle of the Bill under consideration he had certainly approved of; and when first the measure was opened to their lordships, he had declared it to be the best remedy for the evil in the contemplation of the noble mover. And this declaration he had made, founding his opinion upon the principle of the measure of 1797, that it was not desirable to extend the principle of legislation beyond the necessity of the case. He had, however, on that occasion, conceived that it might be better to let the question rest upon the law as it stood, be cause he was then of opinion that the example mentioned by the noble earl would not be generally followed. This opinion of his was not founded upon any impression that he had any right to inquire into the precise degree of public spirit and principle which individuals might be influenced by in the regulation of their private concerns, but because he thought it would not be for the interest of any individuals to follow that example. The interest of landlords and tenants could not be separated, and consequently any act that would bear hard upon the tenant must be injurious to the landlord himself. If the example of the noble lord were to be followed generally, the tenants would indemnify themselves by raising the prices of the articles they brought to market; but if it were not followed generally, the particular tenant would not have the means of indemnifying himself by a rise of prices, and the consequent injury he would suffer would also be felt by the landlord. Though, he had at first thought, that upon the whole it would be better to leave the law as it stood, yet when he attended to the principle of the measure under consideration, 829 and particularly to the doctrines of those who had opposed it, he began to feel that the remedy should be upheld; that if parliament should separate before the adoption of such a measure, much public inconvenience might be the result; and the remedy which was now easy, would perhaps then be ineffectual. If ever a question had been exhausted in the history of the proceedings of parliament, it was the present. It had not only been discussed day after day for many successive days, but a very considerable number of publications had been written by able, acute, and ingenious men upon both sides of the question. Whatever difference of opinion there might have been as to the origin of the evil, upon the propriety of binding the Bank to resume cash payments at any definite time there appeared to be very little difference. Upon a division on that question, in another place, the minority did not exceed 47. The noble baron who spoke second in the debate, had stated that Bank notes were depreciated, because they did not now purchase as much food and other necessaries as formerly, and had instanced wheat and corn. But the papers on their lordships table shewed that the rise in the price of corn was attributable to other causes. The consumption had increased considerably beyond the produce. The 400,000 quarters formerly imported were now consequently increased to 6 or 700,000. This was not owing to depreciation, as by reference to the price of iron, timber, wool, cotton, feathers, tallow, and hides, which were known to have fallen in price as gold bullion rose in the market. The measure of restriction had been resorted to in the first instance to prevent the Bank from paying in cash, and to keep the bullion in the country; and he knew it to have been the opinion of the great man who originated the Bank restriction, that the public creditor should never be placed in a worse situation than any individual having equivalents in any other species of security. But the public creditor, if compelled to take notes at par for his dividend, whilst the tenantry would be allowed to take them at a depreciated rate, would be greatly injured. The noble baron had said, that gold enough could be had, if we were willing to pay the price for it. He knew not upon what authority this had been asserted; but he knew that one of the most extensive and respectable merchants perhaps in the world, who was apt much in the practice of giving his 830 support to his Majesty's ministers, had decidedly slated in the House of Commons, that if he wanted guineas, he should not know how to get them. If the Bank could procure gold, it would find its way out of the country. This was owing to the unexampled state of the world, and the convulsed state of commerce. He agreed with the noble baron, that our exertions in the prosecution of the war had the effect of a drain upon the coin of the country; though he differed from him in thinking that the exertions we were making were well worth the price we paid for them. When he considered the consequences that might follow from the example pointed out by the noble mover, he thought it would be unwise to reject the Bill, as such rejection would lead to consequences highly injurious to tenants, but still more injurious to the public creditor.
The Earl of Lauderdalebriefly explained, and referred to the evidence of Mr. Merle and another, to shew that gold might be had as heretofore.
§ Earl Stanhoperose to reply. Before he should say any thing upon the subject of the Bill, he must observe, that a noble earl had stated" that he had views of his own ill bringing forward this measure," and he wished for an explanation.
The Earl of Lauderdaledisclaimed distinctly having ever intended to say, or having ever conceived, that his noble friend could have had any views of interest in the measure.
§ Earl Stanhopeexpressed his satisfaction at the explanation given by his noble friend, and added, that he had not conceived it possible for his noble friend to suppose that he could have had any views of interest in bringing such a measure. But when such words struck the ear, they ought to be explained; and he should be extremely sorry that any person who had heard the words should think them applicable to him. He had always been a speculative man, and very little given to views of self-interest. He had always thought, that the man who was in possession of a large property not gained by his own talents and industry, but derived from the mere accident of birth, was in fact but a trustee for the public; and owed it to that public, to return some part of that estate for its benefit. To shew that he could not only preach, but practise, he would say that he had never received a shilling "from the public, and that thou, sands and thousands he had expended for 831 the advantage of the public. He should never have said this, but that the words so satisfactorily explained had been used, and this led him to the answer to the question of his noble relative (lord Grenville) "what he meant to with the small transactions? In reply to this question, he had to state a fact which, he was persuaded, would give their lordships satisfaction. He had, after many years of application, at much expence, and with the assistance of the ablest artists, discovered an effectual mode of preventing the forgery of bank notes. It was a thing hitherto thought impossible, but he had discovered the means of striking off a million of plates, all of them proofs; and when he had it complete, he should give the invention gratis to the Bank for the public good. When he came down to the House, he imagined that ministers would have thrown out his Bill; but the arguments of his noble friends against it had made converts of them, a task which he could not accomplish; so he had to return them thanks, right and left.
§ A division then took place,
| For the second reading | 36 | |
| Against it | 12 | |
| Majority | — | 24 |
§ The Bill was then read a second time.