Lords Sitting of 27 June 1811

GOLD COIN AND BANK NOTE BILL.
Earl stanhope,pursuant to notice, rose to introduce a Bill upon the subject which he had mentioned, and on which their lordships were summoned that day. The subject to which his Bill referred was of the most material importance to all classes and descriptions of people in the country He was aware of the objection which would lie as to the late period of the session; but that was not an insuperable one. He had lost no time in coming forward. He saw a letter yesterday the contents of which surprised him not a little. In consequence of this, he repaired to some of the most eminent bankers, and also to some lawyers—two classes of men whom he thought the most likely to advise him well upon the subject. He had the satisfaction to find, that those among the bankers whom he had consulted, were of opinion, that something was necessary to be done in consequence; and farther, that what he proposed were the most proper measures to be adopted. He then came down to this House, in order to consult with some members upon the subject. He did not wish to mention any names in what he was about to refer to, as he did not wish to make a charge against any person. He had received information, the substance of which was, that a person of large landed property in the country, from some motives or other, had given notice to certain of his tenants to pay him their rents, now due, at Midsummer, in gold; but he further heard, that this person had either insinuated or expressed, that if he should take Bank notes in such payment, he should only take them at the rate of 16 shillings in the pound! But if it were for 19 shillings and sixpence, or any deterioration or depreciation, it could not be of much importance with respect to the principle. What might be the consequence of such a procedure? In the first place, it would be a gross injustice towards the tenants. Suppose one of these owed him 400 l. sterling, would it be just to call on him to pay, 500 l. in the shape of Bank notes? For such might be the effect. But he would go farther, and ask, if such landlord received notes in that

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way, what was he to do with them? Suppose he owed his coach-maker the sum of five hundred pounds, would he pay those notes at the rate of sixteen shillings in the pound, and so put 100 l. in the coachmaker's pocket? Money which he had just taken out of the pocket of his tenant! Suppose the example of the person to whom he alluded, were to be followed to any extent during the recess of parliament, what a series of calamities must ensue! And this at a period when the legislature could not interfere. Evils which it would be beyond its power subsequently to remedy. Cases like those of the French assignats might occur; evils, he repeated, might ensue, which it would be beyond the power of parliament to relieve or rectify. The plan which he submitted on a former evening would have obviated all such evils as he contemplated, and by establishing a system of transfer, the principle of a legal tender might safely be adopted. But, when once paper was depreciated, it would be impracticable to restore it to its original value. Let the great cases of America and France be looked to for the illustration. The national paper of America was at one time at a loss of 97 percent, verifying the simile of Tom Paine, who said, that when Congress first issued its paper, it was like a very large snow-ball, but which from the very warm hands it passed through, returned to them no bigger than a nut. But in the case of France, the hands the national paper went through were much warmer, as their paper, at one time, could be purchased at the rate of 7s, per cent.! We should look with care and caution to our own national paper. To speak figuratively, he regarded the Bank of England at one of the bottom planks of the ship of England; if we permitted it to be bored through, we risked the whole vessel. The Bill he was about to propose, would guard against such an evil. He hoped when ministers came to consider his measure, they would know better what to do when it should come to a second reading. He begged leave to observe, that when a person proposed any thing, it generally became a consideration, whether or not he had any interest in what he recommended. With respect to himself, there were several malicious lies afloat. It was reported he was in debt 100,000 l. and that if what he adverted to were to take place, it would operate to his injury. Fortunately, he owed nothing to any body. It was also
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said of him, that he intended setting off to America, and meant to carry away eighty thousand pounds out of the family estates. But these were infamous falsehoods, and uttered by the last person in the country that should have uttered them. In the present instance, he assured their lordships, he was actuated by no party motives. The remedy he now proposed was as simple as the evil was alarming. To obviate if, they had nothing to do but what the Bill proposed, namely, To render it illegal for any man to pay a larger sum than 21 s. for a guinea. To render it illegal for any person to receive a less sum in the case of a Bank note, than the value therein expressed a" payable to bearer; these were the leading provisions, and the beneficial tendency, or rather the saving and preserving effects of such a measure, were incalculable. The farmers he regarded as an oppressed set of men. It was a most incumbent duty of the legislature to protect them. The evils which he contemplated would more especially affect that meritorious class. They would spread like a contagion. Their lordships knew the flame that spread in consequence of the proposition of the noble viscount then absent (lord Sidmouth) respecting the Dissenters. Any thing which would so essentially affect the, interest of the farmers would in like manner be instantly communicated from one end of the country to the other. The noble earl then presented his Bill, which, he moved should be read a first time; which was accordingly done. It was intituled. An Act for making more effectual provision for preventing the current Gold Coin of the realm from being paid or accepted for a greater value than the current value of such coin; for preventing any, Note or Notes of the Governor and Company of the Bank of England from being received for any smaller sum than the sum therein specified; and for staying proceedings upon any distress by tender of such notes.
The Earl of Liverpoolgave the noble, mover ample credit for the purity and, correctness of his motives in coming for ward on the present occasion. He agreed with him as to the great importance of the subject, which was one which merited the serious attention of the legislature; and the arguments of the noble earl certainly carried great weight with them. At the very late period of the session, however, just on the eve of its close, and

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under all the circumstances of the case, he thought it would not be advisable to proceed any further with the measure at present. When the great extent and magnitude of the subject were considered, he thought their lordships must generally be of his opinion. He was ready at the same time to admit the probable efficacy of the remedies proposed, as far as they went. As to the immediate necessity for their adoption, were it principally rested on what was said, as to the intended act of a single individual, he could not subscribe to the existence of that necessity. Under the circumstances, he could not believe that the intention would be persevered in, or if it were, that the example would be followed by any other person. For the evils contemplated by the noble earl, the proposed remedy, as far as he considered it, would be thought to be the most efficacious. By it, one great and material objection, that which referred to making notes a legal tender, was in a great measure obviated. Generally speaking, the subject in question was not proper for legislative interference, except in cases of positive necessity of which, as yet, he saw no proof. It would be preferable to rely upon the general principle of the mutual confidence and good sense of the people at large. Here he did not sec a sufficient case made out to induce a departure from that principle. The period of the session, when most of the members had left town, and when such an important proposition could not be adequately discussed, was also a most serious objection. As to the particular case alluded to by the noble earl, he understood it was not only as was stated by him, but that the alternative of receiving the Bank paper only at a depreciated state, was made a positive condition! That the rents should be paid either in British or foreign coin, or in depreciated Bank paper! But he should repeat his firm belief, that such an intention, even if acted upon, would induce no other person so to act; the example would not be folowed. He was aware of the injustice of such a procedure under the circumstances, but he had no apprehension as to the prevalence of such an example, and on the grounds he had already stated, no necessity existing—no adequate case was made out, for such an important act of legislative interposition. He felt it his duty, should the noble earl move for the second reading of the Bill, to move, That it be
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read a second time on that day three months.
The Earl of Lauderdalesaid that, with respect to the case of the noble lord, who, it was said, insisted upon payment of his present rents in specie, he would call to the recollection of the House, that some months since he had positively stated that such a practice obtained in Ireland; and since that period numerous were the anonymous letters he had received, informing him that various instances of the kind occurred in that country. He was not decided as to the propriety of pressing such a Bill at this period of the session. It should be printed, and an opportunity of general consideration afforded as to the nature of the remedy proposed. A mode of proceeding which the noble secretary of state admitted to be the best, under the present circumstances. He must oppose the principle that it was preferable to rely on the discretion of individuals in a concern of such vital importance, than on a positive law of the land. It was not to the conduct of individuals, but to the protection of parliament that the people should lock; and it was incumbent on the legislature to take the subject into its most serious consideration, at the earliest proper opportunity.
The Earl of Limerickobserved, that what had been just stated by the noble lord did not apply to the South of Ireland, as there was not any instance in that part.; of the country of a landlord making such a demand.
The Earl of Lauderdalesaid, he had not alluded to the South but to the North of Ireland.
The Earl of Clancartywas anxious to know what part of the North of Ireland, as in the province of Ulster Bank notes were refused to be taken as early as the passing of the Bank restriction bill; and as they came gradually into circulation, they were taken in payment in many in stances at a discount, but that practice was rapidly declining.
The Earl of Lauderdalewas aware of the practice to which the noble lord alluded, but he also knew an instance, which he had formerly stated, where a landlord called upon his tenants to pay in gold, and the latter having represented to the steward the impossibility of procuring gold, they were each told that there were 100 guineas at a chandler's shop in the neighbourhood which might be purchased; and it was a fact, that with those

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100 guineas, passing from one to another, a rent of 7,000 l. was actually paid.
The Earl of Clancartywas very desirous of knowing who the party was to whom this circumstance referred. His lordship then observed upon the black malignity which must have actuated the individual who had been referred to in the early part of the debate, as having demanded payment of his rents in gold, or that he would only take Bank notes at a depreciated rate.
The Earl of Lauderdaleobjected strongly to the term black malignity, contending that the noble lord alluded to might have been actuated by the purest patriotism, in determining to force upon the government the consideration of the situation of the country, to which his Majesty's ministers seemed determined to shut their eyes.
Earl Grosvenorwas of opinion that the subject merited the serious attention of the House. He thought, however, in the proceedings on the present occasion, they ought to be guided by circumstances, and not come to any hasty decision as to the Bill.
The Lord Chancellorwas not prepared to give any opinion as to the expediency of adopting the measure proposed by the noble earl, but he felt called upon to say, that in proposing that measure, the noble earl could be actuated only by a sense of the public good, and that therefore, under all the circumstances of the times, he thought the noble earl entitled to the thanks of that House, and of every well-wisher to the prosperity of the country for having thus brought the subject forward for their lordships' consideration. It was far from being a question to which he would very readily assent, to make a bank "note a legal tender. The ordinary objections against it had much weight in his mind, such as that they were liable to be fictitious, &c. &c.; but in other respects he did not conceive that such a case as that adduced by the noble earl could of itself be sufficient to authorise such an interference of the legislature. The case, however, in itself, called for very serious consideration, though he had, in the good sense and patriotic spirit of the country, a sufficient guarantee that it would not be followed to any extent. Besides, as the law already existed, he thought that the property of the tenantry was sufficiently secured, and it might be unwise to enact new laws on that head until circumstances
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absolutely called for it. He was not fond of examining into the motives of any man's conduct, but the conduct of the, noble individual who had been alluded to, he could not exactly ascribe with a noble lord to pure patriotism. If he ordered a coach from his coach-maker, at 100 l. and afterwards paid him that 100 l. in Banknotes, surely he could not consider it as fair and liberal to require that the same coach-maker, when he had 100 l. to pay him for rent, should bring that sum in gold, and not in Bank-notes? For surely it could not be considered as very fair in any man, that he should pay his own debts in Bank-notes, but that when others had debts to pay him, they should be paid in a different coin from Bank notes, or that he should be indemnified for the difference that might appear to exist between paper and gold at the moment of payment. At best, this was a sort of pure patriotism which he little understood, and was little disposed to imitate.
The Earl of Lauderdalecomplained that he had been grossly misrepresented by the noble and learned lord. When he said that such a determination might have been resorted to by any individual from motives of pure patriotism, his meaning was, that such an individual might run the risk of incurring odium and unpopularity for having adopted such a resolution, though he might have taken it up merely with a view to make ministers feel the magnitude of the evils, which by a false and fatal measure, they had inflicted on the country; which evils, there was every reason to dread, would every day become more aggravated. In this view of the question, whoever acted upon such, motives might fairly be said to have been influenced by pure patriotism in taking such a resolution, and it was in that view only of the case, in which he conceived that such conduct might have been suggested by such motives. As to the case of the coachmaker, it was pretty well understood that tradesmen now acted with reference to the present circumstances of Bank paper, and that when they gave in a bill they would keep that circumstance in their eye; and perhaps in the case of the coach maker, the bill would have been 120 l. instead of 100 l. adding 20 l. per cent to his bill, in consequence of The present supposed depreciation of Bank paper. Why then was not a landlord to look on his side for an indemnity against any such supposed loss?
The Lord Chancellor,in explanation, supposed, that in 1801 he had contracted with his coach-maker to furnish him with a coach in 1811, for 100 l. perhaps in 1801, gold was to be had for 3l. 16 s. and in 1811 the price was raised to 4l. 16 s. The coachmaker would, no doubt, have adverted to this circumstance, and justly, had he (the Lord Chancellor) requested gold in payment for rent due, the very day after the coachmaker had been paid his bill in Bank-notes. This he observed, to shew the unfairness and injustice of requiring a debt due to a landlord to be paid in gold coin, while the landlord would pay his own debts, perhaps to the very same tradesman, in Bank-notes only.
Earl Stanhope,in reply, thanked both sides of the House for the fair interpretation which they had put upon his motion, and upon the motives which had induced him to bring it forward. He could assure them that they had done him no more than justice. His only wish was, to give an opportunity to his Majesty's government of providing against a feeling, the evil consequences of which he most seriously dreaded. The present alarm respecting the depreciation of Bank paper arose, like most alarms, from false fears and ungrounded prejudices. There might soon, perhaps, be no gold in the country; and he would say, so much the better. All the mischief of the present moment arose from falsely considering gold as the proper or only circulating medium. On this subject, he much admired an observation of sir George Saville's, an observation most just and philosophical. In a conversation on the subject of a circulating medium, he recollected that good and wise man to have observed, that the circulating medium was the measure of the relative value of things. For example, that ten pound notes would purchase to that amount a certain number of guineas, a certain nunmber of loaves, or of Opera tickets, or the travelling a certain number of miles; and, that thus the price of every necessary, or enjoyment, might be regulated by the value of a Bank note. If the same rule did not exist now, it was from prejudice and idle fears; and he would again repeat that it was to be wished there were no gold in the country. As to the measure he had the honour of proposing, it was simple and intelligible, and applicable to the circumstances of the moment, and if it were not adopted by ministers, on them would lie the responsibility
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for the consequences. He would content himself with moving, That the Bill be now received, read, and that it be printed.
Some conversation here arose between the noble mover and lord Liverpool, respecting the day to be appointed for the second reading of the Bill. Lord Liverpool wished it to be read a second time to morrow; as he then intended moving, as an Amendment, That the Bill be read a second time that day two months. Lords Stanhope and Lauderdale objected to so early a day, and proposed Monday; for which day the second reading was ultimately fixed.