Lords Sitting of 29 March 1811

COMMERCIAL CREDIT BILL.
This Bill passed through a Committee, and was reported without amendment.
The Earl of Lauderdalegave notice, that he should move a clause on Monday, to prevent the Bank from purchasing the Exchequer Bills issued under this act. His lordship also stated, that he should then prove that he was correct in stating that the Bank of Ireland had diminished its issues after the report in 1804, and which had been positively denied by a noble earl on the former evening.
The Earl of Rosssaid, he had not denied that the Bank of Ireland had diminished its issues at the period alluded to; but what he maintained, and was still prepared to contend, was, that the exchange became more favourable to Ireland previous to any diminution of its issues by the Bank. His lordship then proceeded to notice a statement in the Report of the Bullion Committee, which, he maintained, was founded in error; namely, that the Bank of England had increased its issues between June 1804 and 1806, whereas it was proved by documents, that, during that period, the issues were diminished.
The Earl of Lauderdalecompared the present state of the paper currency with former depreciations, contending that the same cause, namely, an excessive issue of paper, would infallibly produce similar effects to those produced by that means in the reign of William 3; to the depreciation of assignats in France; and to what had been witnessed in every one of our colonies. In consequence of an excessive issue of paper, the coin disappeared, and the paper became depreciated—an evil which was only cured by limiting the quantity of paper.
Lord Hollandobserved, that the very same arguments that were now used, by those who contended that the paper currency was not depreciated, were used in France, to prove that assignats were not depreciated.
Lord Redesdalecontended that Bank notes were in a different situation from assignats, being issued on securities which must be paid in a certain and short period, and in payment of which the Bank notes were returned.
The Earl of Lauderdaleobserved, that the assignats were issued on the best security in France, namely, the land, and
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whilst they did not exceed the amount of that security, remained at par with bullion; but as soon as it was known that more were issued than could be taken in payment for the land, then they begun to fall in value, until at length they sunk to nothing. So by the directors of the Bank of England increasing the issue of Bank notes, for which cash was not to be had, the Bank paper had become depreciated, whilst the Bank proprietors had gained the enormous profit of 21,000,000 l. since 1797.
Lord Redesdaleadmitted the cause of the depreciation of assignats, but contended that the assignats were issued by government for provisions, for the armies, and other articles, without any prospect of their being returned, whilst the notes of the Bank of England were issued on securities in payment of which they must be returned within a short period. The Bank notes were merely similar to assignats before their depreciation.
The Earl of Rosslynwished to understand clearly what was meant by this argument, as supposing the issue of Bank notes to be doubled, how would it then apply?
Lord Redesdaleobserved, that the argument did not apply to an excessive issue without the means of return, but to the actual issue, as at present, of Bank notes, only upon securities.
The Earl of Lauderdalecontended that it was merely a collusion for the Bank to issue notes to the bill-holder to pay his bills with.
The conversation ended, and the House adjourned till Monday.