§ On the order of the day being read for the second reading of this Bill,
§ Earl Bathurstwas proceeding to observe upon the tacit acquiescence of some, and the feeble opposition of others, in another place, to this Bill, who last session vehemently opposed the measure, when he was called to order by
Lord Holland,who observed, that another place could only mean the House of Commons, and that it was irregular to comment in that way upon their proceedings, or to use what passed there as a means of influencing opinions in that House.
§ Earl Bathurstobserved, that there were other places where opinions were expressed besides the House of Commons. After explaining what he intended by the argument he was about to use when interrupt- 1082 ed, his lordship proceeded to comment upon the arguments adduced against this measure last session, when it was predicted that it would produce a still further depreciation of the currency of the country, and a still more unfavourable state of the exchange. Those who used the argument of depreciation, urged that the paper currency was depreciated on account of the hgh price of bullion. Since the passing of the measure, however, of last session, the price of bullion was lower, and the exchange was less unfavourable. The measure, therefore, had not produced any of the effects which it was predicted it would. The unfavourable state of the exchange he attributed to our foreign expenditure, and observed, that that unfavourable state of the exchange, combined with a paper currency, enabled the country to carry on a profitable trade in the export of gold, until, from the demand here the price rose so high that the export ceased to produce a profit, and then the gold naturally returned. His lordship then entered into a history of the recoinages in 1695 and 1774, and of the acts of parliament and proclamations respecting the coin, for the purpose of shewing the effects then produced upon the circulation of the country and the state of the exchange, chiefly in answer to the arguments used by the earl of Lauderdale, in a book published by his lord-ship, and with the view of controverting the statements of the latter noble lord. Calculating the Gold Coin of the country at 39,000,000l. and subtracting from it 9,000,000l. exported in 1798, there did not now remain in circulation, his lordship observed, out of the 30,000,000l. more than about 12 or 13,000,000l. The deficit, therefore, was to be made up by a paper circulation, and he contended, that under all the circumstances of the increased trade of the country, there were no more Bank notes issued than were necessary for the circulation of the country. If, therefore, there was no excess in the issue of Bank notes, and he maintained that there was, it rested with those who supported the argument of depreciation, to prove that there was an excess.
Lord Kingobserved, that the noble earl had entered into a variety of minute statements, but had carefully kept out of sight the real object of the Bill, which was to-make Bank notes a legal tender. By the measure of last session, Bank notes were made a legal tender out of court, and now 1083 they came to be made a legal tender in court. Thus, whatever title they might choose to give the Bill, it was neither more nor less than to make Bank notes a legal tender. His lordship then adverted to some of the arguments used by earl Bathurst, and observed, that it was fallacious to state that an increased issue of Bank notes was in consequence of an increased trade and revenue; the revenue was in 1810, 65,000,000l. and the issue of Bank notes 22,500,000l. whilst in 1811, the revenue decreased to 62,600,000l. and the issue of Bank-notes increased to 23,400,000l. The depreciation of the paper currency was in fact acknowledged by ministers themselves in their conduct, though not in words. What was the reason for passing the Bill which had been that day read a third time, for increasing the annuity of the Princesses from 30,000l. to 36,000l. but because 36,000l. now was only equal to 30,000l. ten years ago? The same argument applied to Bills which were continually coming before them for increasing allowances of different descriptions. Was it not, therefore, manifestly unjust to pass such a Bill as the present, to compel persons to receive payments at a depreciated rate? His lordship alluded to the action he had brought against a Bank Director for 50l. for rent, for the purpose of trying the question, and read a notice which had been served by his agent upon the officer of the court, cautioning him against taking Bank-notes in any payment into court, that being the question at issue, whether he (lord King) was to be compelled to receive Bank-notes, or could insist upon good and lawful money. The officer of the court did, however, notwithstanding this notice, receive the payment in Bank-notes; and his lordship contended that this was a power of dispensing with the law, which no officer of a court had a right to assume. His lordship maintained that this Bill would be characterized by posterity as a most iniquitous law, and must lead to the most ruinous consequences. They were called upon to make a legal tender the notes of the Bank of England, without any securities against an excessive issue, and a consequent excessive depreciation.—If the present measure was to be persevered in, his lordship contended that the practice of granting leases must cease. It was impossible to say how much in the course of six or seven years Bank-paper might be depreciated. He appealed to the noble earl with whom the present measure 1084 originated, who he knew felt for the labouring classes of the community, to reflect how cruelly this measure must militate against them; to noble lords on the other side it would be useless to appeal, they had already shewn, on the occasion of the Frame Breakers' Bill, that they were insensible to the sufferings of the labouring poor. To the noble earl, however, he thought he might appeal with safety on this head, and he asked of him, Did he not admit that, if we had a metallic circulating medium in this country, instead of a paper currency alone, the price of corn would at this moment have been less than it now was by at least one-fifth?
§ Earl Stanhopedisclaimed all connection with the manufacture of the swaddling cloaths in which the child, of which he was the parent, was now drest out. The child itself, however, he had no hesitation in acknowledging and supporting. Noble lords seemed not to know in what a pound sterling consisted. He would tell them first what it was not, and then he would tell them what it was. It was not a pound troy, or a pound averdupoise—they were measures of weight:—a pound sterling, was not a measure of weight but of value. In not attending properly to this distinction lay the greater part of the fallacy of the arguments on the other side. It was impossible for him to say that one of his hands was raised and another depressed, without comparing them to something that was fixed in its position. Noble lords who opposed this Bill had formerly contended that gold was of a fixed value; yet he now found an admission in a pamphlet by a noble earl (Lauderdale), that when gold began to be exported from a country, then that which remained rose in value. He declared it to be his firm conviction, that if he had not stopped his noble friend (lord King) by introducing the Bill of last year, we should soon have had Bank notes in this country where French Assignats were in France.
The Earl of Lauderdaleargued against the Bill. After calculating the various profits of the Bank, he maintained that the principal effect of the measure would be, to put into the pockets of 600 bankstock holders the enormous sum of 17,525,000l. by the most ruinous mode of taxation which could be devised. Every country in which a paper circulation had 1085 been forced on the people had been invariably ruined, and whatever evils might befal this country in a like attempt, their obstinacy against every kind of remonstration deserve it in some measure.
§ Lord Grenvilleopposed the Bill. He compared the present proceedings of government to those of the French with respect to the assignats.—The noble lord dwelt at length on the evils which the people experienced by the depreciation of paper, which depreciation he attributed to an over issue on the part of the Bank.
The Earl of Liverpoolcontended that the existing circumstances of the country were to be ascribed to natural and simple causes, namely, the great foreign expenditure, and the considerable increase in the importation of grain. The argument of the noble baron who preceded him, was directed rather against the original measure of the suspension of cash payments, than against the present Bill, the object of which was to prevent the occurrence of injustice and oppression. Adverting to the supposition that there were two prices in the market, a cash price and a paper price, he denied the fact. On this point he was ready to meet the noble lords, guarding himself at the same time from the inference of maintaining that there might not have been a solitary instance or two of the existence of two prices. All he contended for was, that it was not a general practice.
The Bill was then read a second time, and ordered to be committed on Friday.
The Earl of Lauderdalegave notice, that before the House went into the committee on Friday, he would move an enquiry into the nature of the connection of the bank of England with government.