Lords Sitting of 5 April 1819

BANK OF ENGLAND—CASH PAYMENTS.
The Earl of Harrowbypresented a Report from the Secret Committee appointed by the House to inquire into the stele of the Bank with reference to the question of the Resumption of Cash Payments. The report stated the notice by the Bank of their intention of paying in cash, certain notes issued prior to 1817, which notice had been acted upon and had caused a considerable drain of specie, and recommended, with a view to

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the more speedy and effectual Resumption of Cash Payments generally, that the Bank should be prohibited from paying in gold the notes for the payment of which such notice had been given. His lordship stated his intention of bringing forward a legislative measure to-morrow, in unison with the recommendation contained in the report, with a view to the speedy passing of which, he should move that certain of the Standing Orders should be taken into consideration to-morrow, in order to their suspension.
Earl Greyexpressed his astonishment at the proposition which had so unexpectedly been made, and which had filled him with dismay and confusion. He felt it difficult, indeed, on so sudden and unlooked-for a proposition, to collect his thoughts upon the subject sufficiently to give an opinion. They were now in the fifth year of peace, and the twenty-third since the first restriction on cash payments at the Bank. After repeated promises on the part of ministers, which had never been fulfilled, they at length came to a period at the commencement of the present session, when inquiry was proposed with a view to the resumption of cash payments, which all desired; they were even told that there was a period somewhere about last October, when there would have been little difficulty in the Bank resuming cash payments, and the chancellor of the exchequer, in the House of Commons, had congratulated parliament that there was already a virtual return to cash payments effected by this very measure of paying notes dated prior to 1817. Could it possibly have been supposed, after all this that a proposition would be brought forward to annul this very measure on the part of the Bank, which was thus made the subject of so much complacent congratulation. What was to be inferred from such conduct on the part of his majesty's ministers? No other conclusion could be drawn than this—that their late conduct with regard to the Bank, their late declarations and congratulations, were founded either in folly or in fraud. Either their conduct had arisen from ignorance, or it was the result of deliberate deceit. Out of this dilemma they could not escape; either they knew nothing of the subject respecting which they promised so much, or they were deliberately deceiving those who listened to them. How was he to judge of the necessity of the measure
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now proposed, when all information was withheld? Undoubtedly, there were some members on the committee whom he highly esteemed and respected but was confidence in them to supersede his functions, and suspend his privilege as a member of the legislature? He could conceive no necessity for such a measure short of that which operated in 1797, to induce the privy council to suspend cash payments at the Bank; and if that case had occurred, he contended that the same course ought to have been resorted to; namely, that the privy council should, upon their responsibility, have directed the suspension of cash payments at the Bank, and then would have come the legitimate functions of parliament to investigate the grounds on which that determination had been come to. This, he maintained, would have been the right and proper course; and that the practice which seemed of late to be increasing, of ministers interposing the shield of parliament between them and their responsibility, broke in upon the proper and constitutional functions of parliament, and led to consequences that no man could foresee or foretel. He had felt it his duty to say thus much upon the very unexpected proposition brought forward by the noble earl, and against which he must now decidedly and solemnly protest.
The Earl of Harrowbysaid, he had not given any notice in his situation as one of the king's ministers, but in his capacity as chairman of the committee, by whom this report had been unanimously agreed to. Neither was there the least foundation for the supposition that this measure was required on the part of the Bank; on the contrary, there was no doubt whatever of the ability of the Bank to make good all their engagements. The reason for the measure was the opinion of the committee, that in order to ensure at the earliest period, the permanent resumption of cash payments, it was expedient to pass the measure alluded to. As to what had been said by the noble earl regarding an order in council as in 1797, there was no analogy between the two periods. In the former case, parliament was not sitting, whilst in the present, parliament was not only sitting, but had actually entered into the investigation of the subject. How, then, could it be said with any regard to constitutional principles, that the privy council ought at all to have interfered?
The Earl of Lauderdalesaid, that if the noble earl meant that the committee were unanimous in the report, he denied that, as he had dissented from it, but if the noble earl meant acquiescence in the object of the report, he undoubtedly admitted that he acquiesced in the views of those who had agreed to the report, and he should feel himself called upon to support the bill when it came before the House.
Lord Hollandcommented upon the extraordinary nature of the proposition of which notice had been given, combined with the extraordinary rapidity with which it appeared to be intended to hurry it through the House. He agreed with his noble friend (earl Grey), that ministers had by their conduct, with reference to this subject, convicted themselves either of ignorance or deceit, the measure now proposed being decidedly at variance with all that they had for some time past held out on the question of the resumption of cash payments. But what did the noble earl (Harrowby) say for this measure? Did he not institute a suit against the Bank, and by alleging that the Bank ought to be prevented from paying the notes which they had given notice they would discharge in cash, in point of fact, charge that body with having adopted a measure either in perfect ignorance of what effects would be produced, or that must necessarily retard the general resumption of cash payments; for this was the character given to these notices of the Bank by the noble earl and the committee? Amidst this inconsistency no reason had been alleged, why the House should be called upon to pass with unexampled rapidity a measure like the present, and therefore he should solemnly protest against it. He decidedly objected to the practice of neutralizing the functions of the legislature by calling upon its members to decide, in the first instance, upon measures which ought to originate with the ministers upon their own responsibility, and then come before parliament for the exercise of their discretion as to the grounds upon which such measures had been adopted. He agreed therefore that the proper course would have been for an order in council to have issued to prevent the Bank from paying in specie the notes they had given notice to pay, and then it would have been for parliament to decide upon the grounds of that measure.
The Earl of Liverpooldisclaimed the idea that any necessity existed on the part of the Bank for this measure. The Bank were perfectly able to make good all their engagements; nor did they desire or call for any measure of this description. It was the opinion of the committee, without reference to any desire, or otherwise, on the part of the Bank, that the object which all equally desired could not be attained within any period that was desirable, if the Bank were allowed to continue paying a certain portion of their notes in specie. This partial payment in specie so involved the question, and so precluded the obtaining the requisite information to enable the committee to form a judgment upon the subject, that it was thought essentially necessary that this partial payment in specie should be put an end to for a time, in order that the general payment in specie might be accelerated. As to the argument that this ought to have been done as in 1797, by an order in council, it was merely necessary to answer, that the two periods had no similarity. In 1797, the parliament was not sitting, and the privy council was called upon to act, in consequence of information communicated by the Bank, and they wisely restrained the Bank from paying in specie, and threw themselves upon parliament for indemnity. But how was the case now? Parliament was not only sitting, but each House had appointed a committee expressly to investigate the affairs of the Bank, which committee had been sitting for upwards of two months, and had used the greatest diligence in collecting evidence and information? How could the privy council act in such a case? How could the privy council know what evidence had been adduced before the committee? How, then, could the privy council come to any determination upon what they did not know? Had the privy council ventured upon such a step, would there not have been speeches without end from noble lords on the other side, protesting against such an unconstitutional assumption of power? He was decidedly of opinion, that it would have been contrary to all constitutional principles for the privy council to have assumed such a power during the sitting of parliament; and he could not but consider the argument of the noble earl as extremely unconstitutional. He perfectly well recollected that the assumption of such a

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power by the privy council in 1797, though called for by necessity, and when parliament was not sitting, was decidedly objected to, as unconstitutional, by the late Mr. Fox, who argued that parliament ought to have been immediately assembled.
The Marquis of Lansdownewas anxious that no impression should go forth to the public, that there was any necessity for the proposed measure arising out of the affairs of the Bank. The fact was, that the Bank were perfectly able to fulfil all their engagements, and that no measure of this sort was desired on their part. It was the opinion of the committee, that by allowing a partial payment in specie to operate in the way it did, that permanent resumption of cash payments, which was so much desired, would be retarded.
Earl Greycould not agree that any ground had been stated for passing rapidly through that House such a measure as that which was to be proposed, nor could he agree that any thing short of the impending ruin of the Bank, as in 1797, could justify such a measure. He still thought, that the regular course would have been for an order in council to have issued. As to what was reported to have been said by Mr. Fox against the exercise of such a power, he could only say that he was a member of the committee in 1797, and had no recollection of any such objection having been urged by Mr. Fox. He (earl Grey) at that period said, and he was entitled to take credit to himself for his foresight, that the restriction in cash payments then imposed would not be ended in the way anticipated by some, but that it would last for a much longer period than the greater number of those who supported it looked forward to. They had now seen how long the restriction had lasted; and when it was said that this measure was to be brought forward to hasten the period of the termination of the restriction, he could not but consider that it was entirely a pretence, and that the restriction was likely to continue much longer than was now again attempted to be anticipated. He thought the measure pregnant with danger, but aware as he was that several of his noble friends took a different view of the subject, he despaired of being able to produce a contrary impression, and he doubted whether he should attend tomorrow. There being now a question before the House, the only mode he could
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resort to was to move that the House do now adjourn.
The Earl of Lauderdalerose for the purpose of stating, that there was nothing whatever in the situation of the Bank that called for such a measure, that body being perfectly able to fulfil all its engagements. The measure was recommended on grounds that were wholly distinct front any relation to the state of the affairs of the Bank.
The question of adjournment was put and negatived. The standing orders were ordered to be taken into consideration tomorrow, and the Lords to be summoned.