Lords Sitting of 15 June 1819

GOLD AND SILVER COINAGE—MINT REGULATIONS.
The Earl of Lauderdalerose, in pursuance of the order of the day, for the consideration of his motion for obtaining the opinion of the judges on the subjects of legal tender and standard of value. His lordship moved, that the acts of the 21st of Geo. 2nd, the 13th of Geo. 3rd, ch. 72, and other acts relative to
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the coinage, be read; which being done he observed, that he had been induced to call for the opinion of the judges in consequence of what had passed in the late discussion respecting the Mint regulations. It had been argued, that as it was declared in a report of the privy council that silver coin had been depreciated 25 per cent from the year 1774 to 1779, the Mint regulations by which silver was depreciated only 9½ per cent could have no injurious effect. He was, however, decidedly of opinion, that according to the existing laws the depreciated silver was not from 1774 to 1779 a legal tender by tale to any amount whatever. It was material that this question should be decided, before their lordships came to the consideration of the bill now on their table; for if his view of the state of the coinage was correct, that bill could have no effect. There was a wide difference between circulation by sufferance, and circulation by law. Depreciated silver might serve as counters if it circulated by sufferance; but all money of a just value would disappear if the circulation of such pieces were enforced by law. The noble lord knew that about 33,000,000 l. of the coin had, during the present reign disappeared. What was the cause of this? Was it any thing else than a depreciated currency? On this ground he urged the necessity of ascertaining what had been the legal tender from the year 1774 to 1779. He wished it to be determined by the authority of the judges, whether, during that period, silver, 25 per cent depreciated, was a legal tender for any sum. His reason for adopting the measure of the proposition was, that by the laws which existed previous to 1774, namely, the 9th and 10th of king William, it was expressly declared, that silver was not a legal tender if it had sustained any greater loss than that arising from reasonable wear. His lordship then quoted the preamble of the act of the 13th of the king, chap. 42, which recites the acts of the 9th and 10th of king William, and entered into a detailed argument, to show that the law as established by the latter acts remained in force until 1779. The act of 1774 had expired, and was repeatedly renewed, from year to year until 1783. As the acts of king William had, during the period referred to, been the sole regulators of the currency, he was entitled to assume upon his first question, that silver coinage depreciated 23 per cent was not a legal tender to the ex-

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tent of 25 l. or for any other sum. With regard to the second question, its object was, to ascertain whether gold or silver was the legal standard of value. He might have no doubt of the import of the act of parliament himself, but what was understood by the judges to be the law on this subject ought to be known. Upon that question the effect of the bill on the table in a great measure depended. A clause in the act of the 56th of the king provided, that the pieces of coin should pass for what their denomination imported; but the system of coinage introduced under that act made a material difference between the silver and gold coin of the country. Since sir Isaac Newton's time, gold had been coined in the proportion of one to fifteen of silver. Instead of depreciating, gold had since that time become more valuable in comparison to silver. It vas the opinion of many well-informed persons, that gold had risen to the proportion of one to 15½ of silver in the market value. The Mint regulations, however, reduced it to the proportion of 1 to 14 and a fraction. Now, he wished to know what was the effect of this change as to the standard of value? Was the silver raised to the gold, or the gold depressed to the silver? His lordship referred to several proclamations issued respecting the new coinage, and inferred from them, that the gold had been depressed to a level with the silver. He read the proclamation of March 1st 1817, on the issue of the new gold coin, declaring that they should be called sovereigns, or 20 s. pieces and argued that it was impossible to affix any other meaning to that proclamation, than that the sovereigns were to pass each for 20 s. lawful money of the realm. If that was not the case, the sovereigns were tied down to the value of a depreciated coin. He might be told, that this depreciated silver was only a legal tender to the value of 40 s.; but whatever was the extent of the legal tender, the two metals could not circulate together with a difference of 9½ per cent between them. Gold might be said to be the standard of value, which doubtless was the object of the act of parliament; but, in fact silver was the ultimate standard, for it was made the regulator of the gold. It would be well, therefore, if the language of the bill their lordships had to consider were in this respect altered, for whenever the price of gold was referred to, whether it was to be paid at the rate of 4l. or 3l. 17 s. 6d., silver was by the
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very terms made the measure of value. After referring to an article as a measure of value, how could it be asserted that the thing measured was the standard, and not the thing measuring? In short the language of all the acts of parliament implied that silver was the standard of value. The second question which he wished to propose to the judges, however, was whether under the act of the 56th of the king, chap. 68, the gold and silver coin were equalized by raising the value of the silver coin, or lowering the value of the gold. His lordship concluded by moving, "That the Judges be called upon to give their Opinion on the questions he had stated."
The Earl of Liverpooldid not think it fitting or proper to require the attendance of the judges on the questions propounded by the noble lord. When the weighty and important duties which the judges had to discharge, and the manner in which, their time was occupied, were considered, their lordships must be convinced, that it would not be right to throw any additional burthen upon them, except in a case of great necessity. It was for their lordships to consider whether a case was made out which would justify the adoption of the noble earl's proposition. In his opinion no sufficient ground was laid for the motion, because it did not appear that any result which such a proceeding might have would facilitate the decision of their lordships on the measure now before the House. Whether the act of the 56th of the king, and the proclamation respecting the coinage, had or had not been drawn up in an inaccurate and unworkmanlike manner, he should not discuss. The object of the act, and the proclamations had been obtained. There was not an individual in the city of London who had any doubt on the subject. He did not mean that there was not a theoretical difference of opinion as to what ought to be the standard of value. Some thought that gold ought to be the standard, others silver; but every one knew what the practical effect of the law was. With respect to the first question, his own opinion was very different from that of the noble lord. He believed that no diminution of weight from wear affected the legality of the tender. Under the act of the 13th of the king, which was renewed and continued to 1797, their lordships were aware that silver had been a legal tender to the amount of 25 l. In its depreciated state,

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then, silver had circulated with the gold, without driving it out. In the same manner, copper, on which there was a seignorage, had circulated without driving out any other coin. The noble lord could produce no instance of any other country on which the coinage was established on the system on which it stood in this. He had, therefore no point of comparison. One great advantage of the present system was, that it tended to counteract the effect of a fluctuating price of silver. The principle of the present system was, that one metal should be taken as the standard of value. The other coins had only reference to the gold as a means of expressing its fractional parts. The silver might with reference to the gold, be leather coin or counters. A sufficient check against any injurious effects from the state of the silver coinage existed in its limitation. It could only be coined by permission at the Mint, and was in its nature merely a set of counters provided by the government. The law by which not more than 40 s. was a legal tender was a farther guard against any pernicious effect. When the investigation in which their lordships had been lately engaged began, the price of gold was 4l. 5s. per ounce. It was now 3l. 19 s. If the silver coin had the effect of driving the gold out of the country, how did it happen that it did not keep it out? From the fall of the price, it appeared that it had returned, in spite of the theory of the noble lord. The gold followed the course of exchange, which was effected by the state of the currency, in combination with the operations of trade. Upon the whole he did not see that any information calculated to assist their lordships in their deliberations could be obtained from the judges, and he should therefore give his negative to the motion.
The question was put and negatived.