The Earl of Liverpool
moved the order of the day for taking into consideration the Amendments made by the Commons to this Bill; and they having been read and agreed to, his lordship moved, that a message be sent to the Commons, informing them that the House had agreed to the said Amendments.
The Earl of Lauderdale
then rose, and took a review of the circumstances under which this Bill had originated, and the whole subject connected with it. His lordship attributed the adoption of the Bill by ministers, not to the notice given by lord King, but to the decision of the Judges in the case of De Yonge, and was of opinion that the real object of the Bill, as altered by ministers, was to give redress (if he might use the term upon this subject) against the decision of the Judges. The question as to the depreciation of Bank-notes, was one which certainly required the most deliberate investigation, and perhaps was a subject which rather "ought to be written upon than debated. There were, however, certain facts, which it was quite impossible to controvert, and which must, in his opinion, clearly demonstrate the depreciation. The gold coin of the country was not admissible in circulation, except it was of the standard weight and fineness. Five pennyweights eleven grains was the standard weight of the guinea, and it was gold of this standard weight that Bank notes promised to pay, or fractional parts in silver, of a fixed standard, if, therefore, the Bank note was convertible into gold, and the price of gold rose, the value of the Bank note must rise in the same proportion. If a 1111 Bank note promised to pay a yard of cloth of a certain breadth and fineness, and there was no difficulty in procuring the yard of cloth to discharge the note, if the price of the cloth rose, the value of the note would rise also. But if the cloth could not be produced in discharge of the note, then the note would become depreciated so, if the gold was not forth-coming to pay the note, the latter must also become depreciated. The price of gold having risen above the expressed value of the note, was complete evidence of the depreciation of the latter. The Bank note was of no value in itself but only of value from its representing a certain quantity of gold. It was impossible in any other manner to affix a value to it. Those who argued on the other side had a notion that the Bank notes represented certain commercial transactions, and that they were issued upon the credit of certain commodities. But if this were the case, the Bank note issued upon the security of any one commodity would fluctuate in value, according as the price of that commodity rose or fell. How, then, was any one to ascertain the value of Bank-notes from the value of all the commodities upon the security of which they were issued? This was beyond the reach of any one. The only criterion of the value of the Bank-note must be the sum in gold or silver of standard weight and fineness, into which it was convertible. It was in vain to setup any other criterion of value, for by none other could the value of the Bank-note he kept up, or the note be prevented from becoming depreciated. What, then, was the object of the Bill? It was nugatory as to preventing the landlord from insisting oh his rents in gold, as it left him all his legal remedies except that of distress. The object of the Bill, then, was to force the circulation of a depreciated currency at a nominal value. It bad been said, that the arguments applicable to a paper currency issued by the authority of government were inapplicable to notes issued by a private Company. But where was the security? The directors had a duty which they owed to their constituents, the proprietary, paramount to any interest of the public; and if a profit was to be derived to the proprietors from an additional issue of Bank-notes, it would be no excuse on the part of the Bank Directors for not doing so to state to their constituents, the proprietors, that the interests of the public required it should not 1112 be done. Their lordships had only "to look, in point of fact, to the documents on their table, to prove that the issue of Bank notes had been increased without reason. It would be seen that the amount of Bank notes in circulation, which in 1808 was I7,540,000l. bad increased in 1811 to 23,420,000l. making a difference of 5,880,000l. in three years. It had been said, that the increase of mercantile transactions required this increase of circulating medium; but it was well known that if there was an increase of transactions there was an increase of credit, and that a less amount of circulating medium was, in fact, required. So far, however, from there being an increase of mercantile transactions, he had been informed by several commercial men, that there never was a greater diminution of mercantile transactions than within the last six months.—The noble earl then entered into a calculation to shew that the increase of Country Bank notes, against a further increase of which the security was taken away by the present bill, had within the last three years, amounted to a sum which, added to the 5,880,000l. increase of Bank of England notes, made up a sum of 14,000,000l. When such an excessive issue of paper had taken place, and when there was no security against a still further excess, it was quite impossible for any legislative measure to prevent its depreciation; and to attempt to force the circulation of this depreciated currency at its nominal rate of value, was pregnant with the most fatal consequences. This nevertheless, was the real object of the Bill, however it might profess to relieve the tenant from any supposed attempt at extortion on the part of the landlord. It did not, in fact, relieve the tenant, there was merely a hint to lord King; but the real object was to attempt to keep up the nominal value of the paper currency, and the only effect of which must be to reduce the value to be paid on all contracts to such a sum as the directors of the Bank of England, in conjunction with the country bankers, should please to reduce it to by the excessive issues, and consequent still further depreciation of their notes. The Bill would, at the same time, be productive of a serious evil to bankers. It was well known that they were now obliged to give a premium for silver, in order to obtain change to pay the fractional sums in checks drawn upon them by their customers. This they were 1113 forbidden to do by this Bill, under penalty of the pillory; and without being enabled to do it, how were they to carry on their trade? how were they to procure change to pay the fractional parts of checks? If, however, this Bill was considered so good a Bill by those who supported it, why was it not extended to Ireland? Why were the landlords in Ireland to be allowed to insist on their rents in gold, which the landlords in Great Britain were forbidden to do, unless upon the most vicious principle in legislation, that the crime, as it was now to be called, was so frequent in Ireland, that it was in vain to attempt to check it; and that it having only just commenced in England, it was to be met by a legislative enactment? In every point of view in which the Bill could be considered, it appeared to be nugatory with respect to its professed object, and most pernicious in its real one; that of attempting to force the circulation at a nominal value of a paper currency which was clearly proved to be depreciated, against the further depreciation of which there was no security, and in which there was proved to be an excess of issue of M millions, within the last 3 years—an issue which bad no parallel in the history of any country, with the exception of the French assignats.—He was aware that it might be very difficult to say how we were to retrace our steps in order to retrieve the mischief arising from the present state of the circulation. He however thought, that by proper management the Bank might be enabled, without risk, to pay in specie in a much shorter time than was generally supposed. But it was absolutely necessary that some steps should be taken to restore that sound and healthy state of circulation, without which the credit of the country could not long be maintained, and to place the paper currency of the country upon its only sure and certain basis, that of gold.
The Earl of Liverpool
could not allow the question to pass without observing upon some of the statements of the noble lord. The value of the gold coin of this country was not to be estimated according to its weight in gold, but according to the value fixed upon it by the reigning sovereign of the country. The value of bank notes, as for every purpose of internal negociation, he contended, was by the general consent of the country declared not to be depreciated. There were no persons out of that House who had expressed their 1114 opinion, that the conduct of the noble lord who had given rise to this Bill, was so far proper that they themselves would wish to follow his example; and their not following it was a proof that they did not think any depreciation of our Bank paper had taken place.
The Earl of Lauderdale
, in explanation, thought it was not fair to judge what the opinions of noble lords, or of any other persons, must be, from their following or not following the example of lord King. If every person who agreed that there was a depreciation of paper were to follow the line of conduct suggested by his noble friend (lord King), he suspected the noble Secretary of State would find the present Bill a less effectual measure than he now supposed it. The noble lord was bound to take them as they preached, not as they practised.
§ Earl Stanhope
strongly sopported the opinions he had formerly delivered, and in which he was happy to find the noble Secretary of State concurred, as to the cause of the value affixed to the current coin of the country. It was only by violating the law, which prohibited the turning guineas into bullion, that the value of a guinea could be raised above that conferred on it by the proclamation of the King, or the act of the legislature. Why noble lords and others had not followed the example of the noble lord (King) he could easily explain. They did not wish to expose themselves to the execration of the country. The noble earl had said this Bill was meant as a hint to lord King. Certainly he did mean it as a hint to his lordship, and to all who should act like him. He did not know whether the noble earl had ever studied at Oxford. Those who were acquainted with the University of Oxford, must have heard of John King's 'broad hint.' It was this: that when a person had been warned that his company was disagreeable, and that his further presence, therefore, was dispensed with, and he failed to take the hint, that then he should be kicked down stairs. He had now given lord King the hint; and, if his lord shop did not chuse to take it, he should move, next session, to give him John King's broad hint.
The Lord Chancellor
begged to remind the House, that, having already agreed to the Amendments made by the Commons on the Bill, the question now was, whether a message should be sent to the Commons, stating that they had agreed to those 1115 Amendments.—The question was then put and agreed to.