BANK OF ENGLAND—RESUMPTION OF CASH PAYMENTS.

HL Deb 21 May 1819 vol 40 cc604-57

The order of the clay being read, for taking into consideration the Reports of the Secret Committee on the Resumption of Cash Payments by the Bank of England,

The Earl of Harrowby

proceeded to regret his inability, arising from severe personal indisposition, to enter at any length into the consideration of the very important question which stood for discussion. Had it been on other occasions he might have requested the indulgence of their lordships to postpone the discussion, but aware as he was of the intense interest excited by this question amongst the public, he felt it incumbent on him to proceed, though he must be under the necessity of only very briefly entering into the consideration of the subject. His lordship proceeded, in a very low tone of voice, which rendered it difficult to hear what he said, to observe, that it was the less necessary for him, had he been able, to go through the details of the subject, as they were so amply supplied by the re-ports, and the evidence annexed to them. The plan proposed for a return to a metallic circulation was, in his judgment, the best calculated to unite the two classes of opinions which prevailed with regard to this question. Thus, those who advocated the return to cash payments, and who must of course be aware that it was impossible to return to that system on a sudden and without preparation, would see that the express object of the proposed plan was, that return to cash payments which they so much desired, only taking care that the return should be by means of gradual and preparatory steps, in order that no danger might arise from the change. Those, on the other hand, who saw nothing but danger in giving up our present system of paper circulation, and returning to a metallic currency, would see, that by means of the preparatory measures resorted to, with a view to attaining that great object, ample time was afforded, in the interval, in case of any danger arising, to take whatever measures might be deemed necessary to avert the evil. With regard to the petition presented by the noble lord, from petitioners no doubt highly respectable, it appeared to him, that they had entirely misapprehended the object of the plan proposed by the committee, no forced or injurious diminution of the circulating medium being contemplated by the committee, who, on the contrary, had arranged their plan with the express view, by means of its gradual operation, of preventing that forced diminution of the circulating medium, which would undoubtedly be injurious. His lordship, after again regretting his inability to enter into the consideration of the subject, concluded by moving the following Resolutions:

1. 1. "That it is expedient farther to continue the Restriction upon Cash Payments by the Bank for a time to be limit- 606 ed, in such manner and on such conditions as shall be provided by parliament, with a view to insure its final termination at the period to be fixed.
2. 2. "That previously to the Resumption of Cash Payments by the Bank, it is expedient that the Bank should be required, at a time to be fixed by parliament, to give in exchange for its notes gold duly assayed and stamped at his majesty's mint (if demanded, to an amount not less than a number of ounces to be limited), valuing the same in such exchange, at a price not exceeding 4l. 1s. per ounce.
3. 3. "That at the expiration of a farther period, to be also faxed by parliament, the Bank should be required to give in exchange for its notes, gold so assayed and stamped (if demanded, to an amount not less than a certain number of ounces to be limited), valuing the same in such exchange at the mint price.
4. 4. "That at some time between the two periods above mentioned, the Bank should be required to give in exchange for its notes, gold so assayed and stamped, valuing the same at a price between 4l. 1s. and the mint price: and that after the price at which gold shall be valued in such exchanges shall have been once lowered, it shall not again be raised.
5. 5. "That after the period shall have arrived at which the Bank shall be required to give gold in exchange for its notes at the mint price, a farther period to be fixed by parliament should be allowed, and a certain notice given, before the Bank shall be required to pay its notes in cash.
6. 6. "That it is expedient that all laws, which prohibit the melting or exportation of the gold or silver coin of the realm, and the exportation of gold or silver bullion made of such coin, should be repealed."

The first Resolution being put,

The Earl of Lauderdale

rose to move, as an amendment, a set of Resolutions, founded on a view of the subject very different from that taken by the noble earl and the majority of the committee. He therefore urged the propriety of time being afforded for the consideration of his propositions, in the same manner as had been observed with regard to those of the noble lord. He wished them to be print ed, and a future day to be fixed for going into the debate, by which means their lordships would have time to consider the subject more maturely. He thought it impossible for the House, in its present state of imperfect information, to come to a satisfactory decision on the great question of the resumption of cash payments. He, therefore, moved, that all the words of the Resolutions proposed by the noble earl, after the word "that," be omitted, and the following Resolutions submitted in their stead:—

1. 1. "That it appears to this House, that during the greater part of the year 1616, and the beginning of the year 1817, the exchanges with foreign countries were generally such as made it advantageous to import both gold and silver bullion into this country; and that the evidence reported by the Committee proves, that at that time large importations of these metals actually took place.
2. 2. "That since the month of March, 1817, when our silver coin was, by his majesty's proclamation, of date the 1st of that month, established in circulation, the exchanges with foreign countries have been such as to render it impossible to import gold bullion with a profit, and to have made it uniformly advantageous to export that metal, whilst the importation of silver bullion has constantly been attended with a profit; and that the evidence, as reported by the committee, proves beyond a doubt, that gold since that period has been exported to a great amount, whilst silver bullion has been imported from almost every country with which we have dealings.
3. 3. "That, under these circumstances it does not appear to this House, that there is any satisfactory evidence of an over issue of paper, which is always attended with a rise of the price of both gold and silver bullion above the mint price, and a state of exchange that renders it impossible to import either gold or silver bullion with a profit.
4. 4. "That the exchanges, as well as the price of gold and silver bullion, since the introduction of our silver coinage, under the sanction of the act of the 56th of the king, chap. 68, have uniformly exhibited that state of things which has always been experienced, and must always take place, when the value of silver coin is diminished, whether that diminution is effected by lowering its intrinsic or raising its denominative value.
5. 5. "That, judging from the quantity of bullion which the evidence shows us the Bank possessed for some months before and after the mint regulations were acted upon, and from the state of the exchanges, which before the month of March, 1817, 608 rendered the importation of gold and silver bullion highly profitable, as well as from the preference which it is proved the public then manifested to receive Bank notes rather than gold coin, we cannot doubt that, though in the beginning of the year 1817 the Bank had a greater issue of paper than it has at present, it might at that time have resumed payments in coin with perfect safety to that establishment.
6. 6. "That although since the new mint regulations have been carried into effect, our gold coin has been banished from circulation, and the exchanges have been nominally unfavourable, when calculated in that metal, in which payments no longer could be obtained; yet the real exchange has been uniformly favourable to us, when calculated in silver coin, the only metallic coin in circulation; that we cannot, therefore, doubt of the truth of what the common rules of arithmetic may inform us, that if the mint regulations had assimilated the mint prices of the two metals to their market prices, the exchange calculated even in gold coin would have been uniformly in our favour, and that we must therefore be of opinion, that the Bank may resume payments in cash, with safety to that establishment, whenever the mint values of those metals are made to correspond with their market values, provided it has recovered from the injury its funds have sustained, by its having reposed too great confidence in the wisdom and prudence of the legislature, who sanctioned the existing mint regulations.
7. 7. "That it appears, therefore, to this House, that an alteration of our mint regulations, such as will approximate the mint values of our silver and gold coin to the market values of these metals, is a necessary preliminary step to the restoration of our currency to a satisfactory state."

Earl Grey

rose, not to speak on the main question before the House, but merely on the mode in which it would be proper for their lordships now to proceed. One set of resolutions had been moved by the noble earl opposite, upon which counter resolutions had been moved by his noble friend near him. No time had been afforded to their lordships to consider these resolutions, and most of those who heard him were probably ignorant of the grounds and reasons on which they were founded. For himself he must say, that be required time for deliberation, for for he felt himself in a very unfit state to come to any decision. The resolutions moved by the noble earl opposite proceeded, as he understood, on the ground that over issues of paper, had occasioned a difference between the market and mint price of gold and that, to enable the Bank to resume payments in cash within the period fixed by the committee, it was necessary that there should be a contraction of those issues. In this opinion he was disposed to concur. It was not therefore from any objection to the object of the plan recommended by the committee, that he wished for delay. Whatever opposition might be made to that measure, for the purpose of putting off cash payments to an indefinite period, was an opposition on a principle to which he could give no countenance. But what he had looked for was the statement of some reasons to show that it would be in the power of the Bank to carry the plan into execution; but he could find no argument or reasoning in the report that led to such a conclusion. Their lordships had a right to expect, that the explanations which were omitted in the report should be given to the House before they proceeded to deliberate on the proposed plan. This must be felt to be the more necessary, when their lordships saw that his noble friend, who had directed so much of his time to the business of the committee, and who had perhaps more knowledge of the subject than any other man in the country, had come to a conclusion directly the opposite of that expressed in the resolutions of the noble earl. His noble friend was of opinion, that the embarrassment in which the country was now placed with respect to the circulating medium, did not arise from over issues on the part of the Bank, but from the state of the coinage. In this state of doubt, in which their lordships were placed by opposite opinions, was it unreasonable to expect, that the resolutions of his noble friend should be printed, and time allowed for their consideration? He would propose Monday, or any other day which might suit the convenience of the noble lord.

The Earl of Liverpool

said, he had, when the report was laid on the table, expressed his opinion, that it was of great and essential importance that the subject should undergo a thorough discussion on as early a day as possible. A petition had been laid on the table against the plan, and appre- hensions were entertained of its producing commercial distress; but those apprehensions were not the consequence of disapprobation of the recommendation of the report, but of the state of uncertainty which prevailed as to the measures which might be adopted. The mass of evidence in the appendix of the report, contained all the reasoning on which the plan was founded, as well as the principles on which it was objected to. The present question was in some measure connected with that in which the general conduct of the government was involved; and in the situation in which he stood, it was not unreasonable, that he should desire to be in possession of the decision of the House as speedily as possible. As to the question of delay, he would, however, be regulated by the general feeling of the House. If their lordships thought fit, he should wish to proceed now.

The Earl of Roslyn

pressed on the noble earl the advantage of postponing the discussion until Tuesday, as the question would then receive a more careful and satisfactory examination; and as the subject would not be discussed in another place until Monday, where the practical measures must originate, it was evident that no time would be lost.

The Earl of Liverpool

rose, and commenced by observing, that the proposition of the noble lord ought, if there was any new matter or new suggestion for their consideration, to operate as an irresistible call upon their lordships to put off the question. But when every one was aware that the subject matter of the resolutions had been sifted from time to time as minutely and laboriously as any matter that ever was discussed, when the evidence on the table was known to contain every thing that could be said on both sides of the question, when the noble lord had embodied in his counter-resolutions opinions, which he was known to hold, and which he had frequently explained and defended, when they were even made the subject of correspondence in the public prints, he conceived that to delay the discussion of so important a question, would be attended with the greatest inconvenience, without affording in return any adequate advantage. He could state, from his own knowledge, that there were many among those, who doubted the propriety of the plan, most anxious that the discussion should be brought on as soon as possible. Omitting, therefore, those points which related either personally to himself, or particularly to the official situation in which he stood, he should proceed to state the grounds on which he supported his opinions, and to give that full explanation to which the House and the country were entitled. In doing so, as he had already stated, he should keep the general question clear of other topics, in order that it might be discussed upon the ground of general principle, and without reference to individuals, or the retrospection of what they had done. The question was in its nature so complicated and extensive, and in some of its views so abstract, that it was a formidable undertaking for any man to explain it, under all its aspects in the face of their lordships and of the public. He would endeavour to strip it as much as possible of abstract theories, with which it had no practical connexion, and to state on practicable grounds the principle on which he conceived the question to rest, and on which the committee had grounded their recommendation.

There were three great questions to be considered in the discussion of this subject. First whether it was expedient to return to some fixed standard of value; secondly whether it was expedient and practicable to return to the ancient standard; and thirdly, by what means it was to be done. With regard to the first, he had always contended that the measure of the Bank restriction, from whatever cause it originally proceeded, had enabled this country to weather that dreadful storm in which she was tossed so long, and to get through those difficulties, which, without its assistance, she could never have surmounted. But, while he contended for this, he had never concealed from himself, from their lordships, or from the public, that it was a measure which could not be acted on as a general and permanent part of the system of this country. If he was asked whether it was a principle that might be adopted in all wars, he would say, that no former war bore analogy to the last. If they could show him a time when the whole continent of Europe was directed by one man or one government, not merely to the conquest, but to the ruin, and through the ruin, to the conquest of this country; if they could show him any case that had existed, or point out from any probable course of circumstances, that any such was likely to exist, the question might admit of some dispute, from the production or the anticipation of analogous instances. But if they felt, as he did, that the circumstances were extraordinary and unprecedented, and unlikely, at any future time, to find a parallel in history, they must allow, that the principle need not necessarily be extended to other wars. If ever there was a case, with respect to which it could be said that exceptio probat regulam, it was this. The very circumstances of our situation furnished in itself the strongest presumption that it never could be looked to as a permanent rule. Whatever exertions the country might be called upon to make under those circumstances, they were now past, and the time had come at length, when it was proper to consider what policy ought to be adopted under a total change of affairs. Parliament had already, by providing for the discontinuance of the system after the first six months of peace, pronounced its opinion on the subject. It had also pronounced its opinion since the peace, particularly in the preamble to the act of 1816, where it was declared to be a duty to the country that they should return, as soon as it could be done with safety, to the ancient system.

The first question was, whether it was expedient that they should return to some fixed standard of value. This was the important point; for in his belief the great mass of opposition to the measure would be found to consist, not in the question whether they should return to cash payments sooner or later, but (under whatever disguise it might be stated), whether they should return to cash payments at all. It was an opinion entertained by many, that there should be no standard of value. The first question that suggested itself on looking at such an opinion was, whether this system had ever been acted upon by any civilized country, from the beginning of the world. Besides, he would ask how it must operate? They knew the disgraceful measures resorted to, even in this country, in former times, to depreciate the standard of value; but even that alternative, bad as it was, presented advantages not to be found in the rejection of a standard altogether. It was a change, an alteration, a debasement, of the standard; but still it established something fixed, in the room of something that was also fixed. Nobody of men, he believed, was ever entrusted with so much power as the Bank of England, or had less abused the power entrusted to them: but would parliament consent to commit to their hands what they certainly would refuse to the sovereign on the throne, controlled by parliament itself—the power of making money, without any other check or influence to direct them, than their own notions of profit and interest? The Bank of England issued 20 millions of notes, for which the public had at one time paid the Bank about one million a year interest; and was it rational that the public should pay a million a year, not for the security of the Bank, but for the Bank making use of the security of the nation? Might not government with more propriety proceed to issue its own notes, and save the million a year to the public? He was far from recommending such a course. Nothing could be more unwise than for government to erect itself into a company of bankers; but it seemed to be more reasonable than the other course to which he had just alluded.—This fact was unquestionable at least—that no country in the world had ever established a currency without a fixed standard of value. The standard might be altered as their circumstances changed—as they became richer or poorer. It might be gold, it might be silver, it might be copper, or even iron. It might be any thing that had real value in it; though the metals had been preferred for this purpose by the general consent of all nations. But it could not be paper, which has no value, and is only promise of value; and there was no principle in morals or in policies that could be more clear than—that in time of peace, and without the existence of the dangers to which they were exposed by war, they should not perpetuate a system which could only be justified by the difficulties of the country. And should England, the greatest commercial nation, the nation in which commerce and political economy were best understood, confer for the first time, on any body of men, whatever may be the purity of their motives and conduct, the power of making money according to the suggestions of their own interest, or what they conceived to be the interest of the public. He wished to put this principle in the front of the debate, as the ground upon which he was anxious to rest all the discussion.

The next question to which he had to call their lordships attention was, as to the expediency and practicability of returning to the ancient standard of value. Policy, good faith, and common honesty, called on the state to return to this an- cient standard, if possible. It might be said, that the debts to the public creditor were contracted, when the country was under different circumstances; but such an argument would apply at all times. The engagement was to pay according to a certain standard; and those who engaged to do so were bound by that engagement, if they meant to act honestly. But the consequence of departing from that standard was not only objectionable, as between the state and the individual, it must also operate on the engagements between every individual debtor and creditor in the country. It was impossible in either case to enter into calculations of individual loss or gain. Those who entered into the engagement did so at their own risk, and the state having made or authorised the contract, was bound to see it fulfilled without reference to those who had benefited, or those who had lost. But was this practicable? He was prepared to show, that it was not only practicable, but that no permanent inconvenience could arise from the adoption of the principle he recommended. In the three last years of the war, from the great military exertions which this country made, and the large subsidies it granted to other countries, gold rose and remained at an average price of 5l. 4s. per ounce—being a rise of between twenty and thirty per cent above the standard of the country. When peace came, the country had to retrace its steps, and had the reduction of the price of gold to its former state to accomplish. In 1814 the exchanges became less unfavourable, and the price of gold was lowered. The progress of its return to the original price was interrupted by the return of Buonaparté, and the state of the continent, consequent upon that event. The final peace was concluded at the close of the year 1815. Accordingly about the middle of 1816, the exchanges fell to par—and became soon after decidedly favourable to this country. Gold fell to the Mint price. When the price was stated at 3l. 18s. 6d. it was in fact, during a part of the time, at 3l. 15s. The difference arose from the determination of the Bank to have the exclusive purchase of the gold. With the experience of these, Facts before the country, it was absurd to talk of in conveniences and dangers attending a similar change of things. In twelve months, the country suffered a change in its standard, of from twenty to thirty per cent. In the whole year that followed, the exchanges were favourable, and gold was at, or below the Mint price. It then rose, from causes about which there are differences of opinion, but since that time gold has risen no higher than six and a half per cent above the standard. Even during the deliberation of the committee, and notwithstanding the last act for the continuation of the restriction on the Bank, gold had fallen to 4l. Os. 6d. being only about three per cent above the standard price of the country. He allowed that if it were proposed to return to cash payments within a certain number of months, and if it were in consequence necessary that the Bank should suddenly contract the existing circulating medium, such a proceeding might be attended with inconvenience; but with how much less inconvenience would the country, under such supposed circumstances, have to contend, the difference between the actual and the Mint price of bullion being only about three per cent. than it had to contend with when the difference between the actual and the Mint price of bullion was 20 or 30 per cent!—In this view of the question, it was stripped of a great part of its difficulties.

Now, with respect to the reports which had been made by the committees appointed by both Houses of parliament to investigate this important subject, he certainly had no right to object to any person exercising his opinion on those reports; but it was a notorious fact that the minds of many men were made up before the presentation of those reports. He understood that some of those who were the most adverse to the propositions recommended by the committees, had distinctly declared that they did not want to read the reports—reports on which those committees had, not for a short time, but for whole months, bestowed patience and attention, which could be equalled only by the magnitude of the subject towards which their inquiries had been directed! If he had been successful in bringing their lordships to this conclusion—that they must return to the fixed and ancient standard of value: if he had shown how little difference there was between the actual and the mint price of bullion, and that a very small exertion would therefore, in all probability, effect that object without delay, he should think that he had done enough to persuade them to make that exertion. But it was the object of their lordships committee, while they were anxious to obtain the great desideratum of replacing the currency on its old and established principle, to do so in a manner the most gradual, and the least likely to occasion even temporary inconvenience; in short, to adopt such means of attaining the end in view, as might divest the question, as much as possible, of every rational objection that might otherwise be advanced.

In consequence of this solicitude on the part of the committee, they had adopted a plan, which, whatever might be said against it in other respects, had at least the advantage of operating most gradually and insensibly, most effectually adopting in practice the principle of caution on which the committee wished to proceed. And yet, their lordships were told in the petition which had been recently presented by a noble earl, "That the measures in contemplation, as recommended by the Secret Committees of both Houses of parliament, would tend to a forced, precipitate, and highly injurious contraction of the circulating medium." Now, as the operation of the proposed measures was not to commence until February next, and even then only enjoined the exchange under certain conditions of Bank of England notes for bullion, at a price somewhat above what is now the market price, and as it is not proposed to compel the Bank to return to cash payments for four years, he confessed himself at a loss to understand how such propositions could be termed "a forced and precipitate contraction of the circulating medium of the country."

A noble earl had asked, whether it was in the power of the Bank at any time to bring gold to the Mint price by contrading their issues of paper. He (lord Liverpool) was aware, that although this was a most important branch of the question, it was one on which it was difficult to arrive at an unquestioned opinion. But he believed it would be found, on looking at the report of their lordships committee, that on the examination of practical men, there was not a single individual, even among those most hostile to the plan recommended by the committee, and who entertained the greatest jealousy on the subject of the present inquiry, that did not admit the fact that a contraction of the Bank issues must necessarily have the effect of rendering the exchanges favourable to this country, and of lowering the price of bullion. The point alone on which a great difference of opinion existed on this part of the subject was, the degree of inconvenience with which such a reduction of the existing circulating medium would be attended. Sonic thought the inconvenience would be considerable; others that it would be insignificant: for himself, he never could entertain a doubt, that, if the circulating medium were gold, a reduction of the amount from 50 to 30 millions must increase its value, on the principle that the value of all property increased in proportion to the diminution of its amount: the same must also take place with reference to a circulating medium of paper. In saying this, he must be understood as admitting, however, that other causes might operate in counteracting the effect of such a reduction. What he maintained was, the truth of the general principle, that whenever the quantity of any article was diminished pro tanto its value was increased.

That other causes might operate in counteraction of this principle, was evident from the fact, that the Bank did last year reduce their issues of paper three millions; and that, as there appears to have been no increase in the paper issued by country Banks, the whole of the circulating medium of the country was very much reduced in amount; notwithstanding which, the exchanges were more unfavourable, and the price of bullion was higher than at the beginning of the same year. To what causes was this to be attributed? To the large pecuniary transactions on the continent, and especially in France, which took place towards the close of the year. This was a proof, therefore, of that which he had already admitted, that there might be causes counteracting the effect of a reduction of the circulating medium; but those occasional counteractions by no means affected the general principle. In such events the reduction of issues must be farther extended, and it will at last produce its effect; though that effect may under some circumstances be obtained by sacrifices which some may think not worth the expense at which they are purchased.

He would not have said so much on that part of the subject, had it not been for what had fallen from the noble earl; and he would now proceed to the consideration of the plan recommended by the report, for eventually arriving at the resumption of cash payments. If it were admitted, that the resumption of cash payments was desirable, the question for their lordships to determine was, whether it could be accomplished by any course more gradual, and therefore less injurious, than the course recommended in the report. What were the merits of the plan therein suggested? The advantages of it appeared to him to be these:—If parliament were to call on the Bank to pay in cash, that is in specie, at any given period, the Bank must provide the necessary means for such payments, by the prescribed time. He believed, and he fancied it was also the belief of the Bank, that if they were called upon to pay in cash to-morrow, the demand would not be great for internal circulation. But still they must be provided, not only with sufficient gold to meet the chances of the exchanges actually being against them for a short time, but for the farther demands for coin which fancy or caprice might suggest. The Bank must therefore, under such circumstances, be provided with a large treasure. But the advantage of the plan recommended by their lordships' committee was, that the Bank might open, with a much smaller amount of treasure than if they were obliged to commence their operations by the resumption of cash payments.

The next and the most striking advantage of the proposed measure was, that the Bank would begin to put it in operation on a perfectly fair principle. Without recognizing any permanent depreciation of the standard, the report recommended to arrest the evil where it was. It proceeded on the ground, that if bullion could not be issued at once at the mint price, it might in a short time be issued at that price, of 4l. 1s. per ounce, at which it was when the report was drawn up. To follow, therefore, the suggestion of the report, would be to make an earlier beginning, from which gradually to work to the unrestrained payment in specie. This could not be done by means of coin, without such a diminution of the intrinsic value of the coin as would be attended with great inconvenience; but with bullion, under the regulations recommended by the committee, it might be done with out the same objections. The plain and intelligible principle of the proposition therefore was—not to put off the opening of the Bank until it possessed such an abundance of coin as would meet all contingencies, but to begin at the existing market price of gold, arresting the evil where it was, and so gradually working to the desired consummation—If any doubt could arise on this part of the proposition, it appeared to him that it might be fairly applicable to the postponement of the period when it was proposed that the operation of the measure should commence, It might be asked, "When postpone it so long?—If we are to begin with the market price of bullion, why not commence at the earliest day on which it may be practicable to carry the plan into effect?" He really thought, that on the first view of the subject, it was difficult to meet that question.

He could see no reason for not taking something higher than the present market price of bullion, as the foundation of the measure, and making it immediately operative, were it not for the two circumstances of the great repayments that it appeared advisable to make of the advances from the Bank to the public, and of the necessity of a considerable loan; both of which would counteract the advantages that might otherwise result from the proceeding.

With respect to those Bank advances, their lordships would see in the report, that the Bank directors stated the indispensable necessity of their being repaid by government. But if the opinion which prevailed in a large part of the city of London on that subject could be accurately ascertained, he believed it would be found, that the greatest jealousy existed on the subject of that repayment. He fairly confessed, that if there were to be no alteration in the system, he should consider that jealousy to be well founded; for he believed no merchant or other individual, however respectable the Bank of England (and no man was less inclined to deny its respectability than himself), but would rather that the circulating medium of the Bank should be partially founded on government security; respecting which there could be no partiality or favor, or caprice, than that the whole of it should be issued upon commercial discount. As, however, the Bank was to be called upon gradually to resume cash payments, the gradual repayment to the Bank of a portion of the advances made to government seemed to him to be a just proceeding. The advances of the Bank to government amounted at this time to less than 20 millions, and it would be seen by the evidence, that the Bank had recently considered a reduction to that amount as sufficient. It is true that a part of the balances of government in the hands of the Bank had since been taken from them: for this an allowance should be made. In his opinion, the repayment of five or six millions was all that the Bank had a right to expect. He did not think that they had a right to demand ten millions. He was bound to say, that the repayment of such a sum did not appear to him necessary; although he was so anxious to remove all pretence or excuse against the execution of the proposed plan at the earliest possible period, that in his opinion it ought to be accorded. But he had an undoubted right to declare, with reference to the interests both of government and of the Bank itself, that the repayment ought not to be sudden. In the reports of the committees of both Houses of parliament, a gradual and not an immediate' repayment of those advances was recommended. If done gradually, he was persuaded that no injurious effects whatever would result from it.

There was another point to which he wished to advert, namely, the reduction of the issues of the Bank. He did not believe that any such reduction would be necessary for the purpose of lowering the price of bullion, and enabling the Bank to provide themselves with it for the purpose prescribed in the proposed plan. Even those who differed the most from the committee on the other parts of the subject, agreed that the continuation of the Bank issues at their present amount would be sufficient eventually to bring the exchange in our favour. This fact also deserved consideration, namely, that when their lordships' committee began to sit, bullion was 4l. 3s. an ounce; at the present moment it was only 4l Os. 6d., and this fall had taken place from natural causes, and without any reduction of Bank issues. On that point, therefore, he experienced no alarm. It formed no part of the proposed system, that the reduction of Bank issues should be sudden. On the contrary, by pursuing the plan recommended in the report, it would be so gradual as to occasion no inconvenience whatever to the trading community. One great object of repaying to the Bank so large a portion of the advances made to government, was to enable them to purchase bullion, for the purpose of supplying the place of the paper gradually withdrawn.

On the subject of the amount of circulating medium necessary in order to carry on the various transactions of the country without difficulty, much difference of opinion naturally existed. It would be found to be the opinion of some of the witnesses examined by the committee, that the commercial world would be always against the resumption of cash payments; as it would diminish the facility with which they at present obtained accommodation. Several individuals had communicated to the committee their opinion of the amount of specie which would be necessary on the resumption of cash payments. Among the rest, a very able evidence had been given by Mr. Alexander Baring, than whose statements and sentiments on the whole of this important subject, he (Lord Liverpool) had never heard any thing more intelligent and comprehensive. From that gentleman's opinion, however, on the amount of specie that would be necessary, under the circumstances which he had just described, he certainly differed materially, but he agreed with him and with others as to the advantages which the existing system had produced during the war. It had enabled the country to make efforts to which its means would otherwise not have been equal. He readily admitted likewise that in peace the same system afforded facilities to commerce which it would not otherwise enjoy. While the Bank of England was not bound to pay its notes in cash while it could regulate its issues merely by the convenience of the public, and by those issues accommodate at discretion mercantile individuals, of sound capital, it would go greater lengths in doing so, than it would venture to do if it were under the necessity of regulating its issues by the price of gold. A facility was, thereby, given to merchants under the existing system, which they would certainly be sorry to lose. He would go a step farther: the existing system appeared, under certain circumstances, to be favourable to the public at large. In the event of any distress, the Bank could go on with its issues, so that those who would otherwise be poor should not be poorer, and that distress might meet with relief. Undoubtedly this must frequently have the effect of mitigating evil, of obviating difficulty, and of diminishing temporary suffering. It must frequently give ease and facility to commercial transactions, and enable individuals engaged in those transactions to surmount obstacles, which in the ordinary state of the circulation would be insuperable. But it was by no means an unmixed good. On the contrary, it was attended with great disadvantages. The consequence of it was too often an encouragement to speculation, to unsound dealings, to the accumulation of fictitious capital; from all of which, in the course of a given number of years, a greater quantity of evil would probably accrue than of real advantage. Even, therefore, on that narrow ground, although no one could deny that the existing system gave occasional and valuable facilities to trade, yet it was manifest that on the long-run it tended to destroy that solid and secure foundation on which the commerce of a great nation ought to rest. To return to a currency of standard value, might be in some degree to limit mercantile transactions, but it would be to place them on a firm and honourable basis. People would know where they were. From the beginning he had been of opinion, that we could never get back to our ancient system of currency, without temporary inconvenience. The only question was, whether it would be wise to adjourn the evil day. Even by the very appointment of the committee to investigate this subject, some temporary inconvenience had been incurred. But if farther proceedings were to be adjourned for a year longer, the same course must be re-commenced, and the present, which would then be a gratuitous inconvenience, must be again submitted to.

There was one point of great importance, and to which he wished the more particularly to call their lordships' attention, because he knew that it was one which had made a greater impression on the minds of some persons than any other circumstance. He meant the comparison of the circulating medium of the present day with the circulating medium of former times. The argument which at the first view was sufficiently captivating, he would endeavour to state in as strong a manner as he was able. It was assumed that the circulating medium at this time was not greater than it was in 1797, antecedent to the bank restriction—and it was asked whether it was possible that the circulation could therefore be excessive or even sufficient. Now he admitted that the whole circulating medium was not greater at present than in the year 1797, or even in the year 1792, before the war; that the revenue had been augmented in the interval from 16 millions to more than 60 millions; that the commerce of the country had tripled or quadrupled; that the agricultural and other transactions may have increased in equal proportions; and yet it was possible that the same amount of circulating medium which existed at the first period might be sufficient at the last, or might even be excessive, though he did not say that it was excessive at the present moment.

The whole fallacy of the argument to which he referred, had arisen from not considering the great difference between a metallic and a paper circulation. Before the war the circulation (assuming it to have been 50 millions) consisted of 30 millions of gold, and about 20 millions of paper. It now consisted (independent of the silver coinage for small payments) of about 50 millions of paper. Previous to the close of the American war there were few country banks. They were confined to the great commercial towns, and to some of the large cities. The county bank system grew up in fact between that period and the commencement of the succeeding war. Until this system had made considerable progress, the transactions throughout the country were in a great measure carried on by small hoards of money. Individuals received their rents in specie, and kept a considerable amount of specie by them to pay their bills as they came in. But by the extension of the banking system, the habit of keeping specie is almost wholly done away. There is now scarcely such a thing as dead capital, except the small proportion which is kept in the respective banks. Besides the power of paper, by its easy conveyance and transmission, enables a small amount of it to perform ninny times the same operation which an equal quantity of gold or silver can perform.

In addition to these circumstances commercial ingenuity has since devised a variety of means by which the greatest and most complicated transactions may be carried on by the smallest quantity of paper. He would in the first place beg leave to read a note which would be found in the very valuable work of Mr. Colquhoun, which refers to the evidence that was collected on this part of the subject before the bullion committee in 1810. "A refinement in giving velocity to the circulating medium, by uniting many bankers into one, for their private convenience, is practised by about two-thirds of the 71 private bankers of the metropolis, comprising chiefly those who reside in the city. According to the report of the bullion committee, the daily payments made to these bankers (46 in number) amount on an average to 4,700,000l. If that sum were to be paid daily by one debtor to his creditor, without the intervention of banking, and in coins, even of gold of one guinea each, the multitude of people that would be required to convey the specie from place to place, would crowd the metropolis from one end to the other, since even more than 4,700,000l. would probably be wanted. To make payments in all the variety of sums which would be necessary by the customers of the whole 71 bankers and the Bank of England, it might require five, ten, or perhaps twenty times 4,700,000l. daily. As the matter however is contrived, instead of this enormous sum of 4,700,000l. in coin, these daily payments, amounting in a year to fourteen hundred and fifty seven millions, are made by means of the comparatively trifling sum of 220,000l. daily for 310 days, or sixty eight millions yearly. The merchants agree that their orders on their respective bankers shall not be presented until the end of the day, when these 46 bankers meet and settle and exchange ail the drafts and orders on each other, paying the difference in bank notes, which is calculated to amount on an average to 220,000l. a day. If about two-thirds of the private bankers in London pay one thousand five hundred millions yearly for a part of their customers, how much must that yearly sum be increased by what the whole of the bankers and the bank of England pay, including the public revenue and loans, the latter exceeding one hundred millions alone? When it is considered also, that the vast and almost incalculable number of payments are all accomplished by means of about twenty millions in bank notes, the velocity of its circulation will appear to be most truly astonishing."

It will be seen, that by the arrangements to which allusion is here made, the sum of 220,000l. daily performs the operation of nearly 5,000,000l. or 20 times its amount. But he had farther information to lay before the House upon this very important branch of the subject. It appeared by the papers before them that the average circulation of Bank of England notes in the year 1818 was about 27,000,000. He had called for an account of the number of bank notes and bank post bills of each denomination, issued in that year, and he found they amounted, together with those re-issued, to between 25 and 26 millions in number, and that the emission from the Bank of these notes of all descriptions in the course of the year amounted in value to nearly 240,000,000l. Of these the 1l. notes constitute about 20 millions—the 2l. and 5l. notes, which had no existence in 1792, about 10 millions more—and the remaining 210,000,000 may be compared with a similar account made up of the circulation in the year 1792. It will perhaps surprise the House when they learn, that of the circulation of the larger notes in the year 1818, the number of 1,000l. bank notes alone amount to 112,000, and represent in their issue from the Bank, 112,000,000l.; that is, nearly the half in value of the whole of the bank issue in that year. In the year 1792, the number of notes was 819,300, which represented in their issue, nearly 75,000,000l. sterling. The number of 1,000l. notes was in this year 40,000, representing, according to this calculation, about 40 millions.

But there is another paper, which is drawn up for the purpose of ascertaining the number of days that a bank-note of each denomination remained in circulation, at these respective periods. In the year 1792, the notes of 1,000l. remained out, upon an average, 22 days. In the year 1818, only 137 days. In the year 1792, the 10l. notes remained out 236 days; in the year 1818, 137 days. In the year 1792, the 300l. and 500l. notes remained out 24 days; in the year 1818, 14 days. In the year 1792, the 100l. notes remained out 84 days; in the year 1818, only 49 days. As he should move for these papers to be laid before the House, he would not trouble them with farther particulars; but to whatever qualifications these calculations may be subject, the House would see, from what he had already said, what an astonishing improvement there was in the means of accelerated circulation in the course of the last 30 years; and how small a comparative proportion of currency might therefore be now necessary, compared with what was formerly required for the same purpose. These principles might be applied still more extensively to the circulation of the country than to that of the metropolis. In the metropolis, the transactions have been, for a century, carried on, in a greater or less degree, by the medium of paper; but in the coun- try, the paper circulation is in a considerable measure a recent creation: and the facilities of using it with economy have been in a course of improvement from year to year.

Upon a subject of this nature, it was obviously impossible to fix any nice proportion; and if he was asked what was the only criterion of a circulation being sufficient or excessive, he must answer, that it could be found only in its value when compared with the precious metals. Whether a paper circulation should continue for small payments, in combination with specie, was a question of expediency; but if it was to continue, its real value could only be ascertained by its convertibility into specie. It was a most singular circumstance, that in one of the most populous and commercial parts of the kingdom, in the county of Lancashire, where enterprise of every kind was carried to a greater extent than in any other district in the island, the greatest part of the circulating medium was carried on by bills of exchange; and when a respectable and intelligent individual, connected with that county, was asked whether any inconvenience resulted from that system, he replied, "None whatever." The tendency of this was to show, how little well founded was any alarm respecting an insufficiency of circulating medium. Whatever temporary inconvenience or distress might arise from any sudden change, he was satisfied that where there was real and substantial wealth in any county or district, that county or district would soon find a circulating medium for itself. He had explained to them what ingenuity had already accomplished in this respect, and he repeated that the same spirit of enterprise and talent which when directed to mechanics had discovered the powers of the steam-engine and the spinning-wheel, and had applied them to the purposes of life, had been found not less successful in devising means for circulating the property of the country in the most expeditious and profitable manner.

There was only one remaining point to which it was necessary for him to advert, and which he should do in very few words. He alluded to the opinions which a noble earl had embodied into the resolutions he had moved respecting the mint regulations. The noble lord would have an opportunity of explaining himself upon this subject, and there were others who would follow him, who would be fully competent to comment on what he might offer on this part of the subject. He would beg leave only to refer those members of the House, who were desirous of being informed upon this part of the question, to the evidence in the Appendix, of Mr. Page and Mr. Fletcher on one side, and to the very able, and, as he thought, satisfactory evidence of Mr. Mushett on the other. He could conscientiously say, that he had felt most anxious to hear and consider every thing that could be offered on this point. He had heard the noble earl over and over again—he entertained no mere doubt than he had done at the commencement of the inquiry, and he had the satisfaction of thinking that several noble lords who had doubted, now entirely concurred with him. He could perfectly understand that in countries where gold and silver coins were both of them legal tender to any amount, that if the proper proportion was not observed in the value of the metals, the favoured metal would come in, and the other go out; but in this country, where the Mint was not open to the public for the coinage of silver; where government kept the silver coinage in their own hands; where its amount was so limited as not materially to exceed the necessary demand of the public for it as matter of exchange; where silver was not a legal tender for more than 40s. he really could not understand what the mint regulations regarding the silver coinage could have to do with the state of the exchanges or the price of gold—how it could be supposed that 27,000,000l. of Bank of England paper, and 23 millions of country bank paper could be the representative of a silver coinage not legal tender beyond 40s. and in its total amount not exceeding 4 or 5 millions, was beyond his imagination to conceive. The principle advanced, if true, would apply equally to our copper coinage—it would apply still more strongly to the old silver coinage, which, although depreciated by wear to nearly 30 per cent. was nevertheless legal tender, at least to the amount of 25l. and yet never banished the gold from circulation. In fact, when so depreciated, a premium was often given for it, from its small amount in quantity, and from the use of it in small payments.

He had now introduced this important subject to the consideration of the House in all its different bearings. He felt most desirous that the House should concur in the report and recommendation of their committee. They had proposed the plan which was now before the House, from a conviction that it would attain the desired object without material public inconvenience; they were deeply anxious that the country should return to some fixed standard of value; they were anxious to return to the ancient standard of value; they were anxious to return to it with the least practicable delay; they were anxious to return to it with the least possible distress. It was because this plan appeared calculated to obtain the object by certain, but progressive steps, that they had recommended it to the House. It insured an early, though, not an immediate commencement, and that at a standard which now existed. The measures which were to follow were all to be taken so gradually, that the operation of the latter parts of the plan might take place almost insensibly, even if the precaution of some contraction in the circulation should be necessary for that purpose. His own pursuasion was, that no such contraction would be necessary; that most, if not all the inconveniences which might arise from the experiment., had been incurred already; and that if parliament would steadily adhere to the course recommended, they would see the ancient standard of the country restored without material distress to any class of his majesty's subjects.

The Earl of Lauderdale

observed, that if the noble earl who last addressed their lordships felt how difficult a task he had undertaken in explaining his view of the subject, how much more must he feel, who had to argue it in a more extensive manner, and to explain his impressions, founded as they were on principles much more difficult of elucidation. He could assure their lordships of one thing—that if he had failed to form a correct judgment on the subject, it was to be ascribed entirely to the incapacity of the man, for nothing that assiduity could accomplish had been neglected by him in his inquiries. Before he should enter upon the arguments which immediately affected the question, he would say something of the causes of our present difficulties, which the noble earl had treated of very inadequately. When the noble earl said that a fixed standard of value was necessary for this great mercantile country, he only repeated what he (the earl of Lauderdale) and the noble lords around him had been contending for during the last 12 years, and what the noble earl had uniformly contradicted. The noble earl's doctrine had always been, that Bank paper had never depreciated in value. If it had not, why complain now of a variable standard, and urge the necessity of recurring to a fixed standard? The noble earl's opinion was on the records of that house. Did not the noble earl give his support to that act of the legislature, commonly called lord Stanhope's bill, which absolutely denied any depreciation of the Bank paper? Then how reconcile the support of that legislative measure with the present acknowledgment of its being a variable standard? It was not, however, his intention to contend with the noble earl on that point. On the contrary, he congratulated himself, the House, and the country, upon such a convert to sound principles, on a question of such importance. But, having avowed opinions which for 12 years he had been controverting, the noble earl seemed now anxious to force Bank-paper into proper value. It was not, he could assure the noble earl, so easily forced. One of the noble earl's propositions was, that the Bank should give gold at a certain price for their notes. Like all new converts the noble earl was so eager to proclaim his change of opinion, that nothing could satisfy him now, but that parliament should declare the depreciation of Bank paper. The exchanging of Bank notes for gold at 4l. 1s. per ounce, was a substantial declaration to that effect. It was as much so as if it had been enacted, that the ounce of gold was worth 5l. 5s. when gold was. at that price three years ago. But what was the market, price of gold this day? Who in that House could undertake to tell him the market price of gold this day? Was it because 4l. 1s. was paid in Bank paper for gold, that that was assumed as the market-price? That was a fallacious foundation. Who knew that if gold now bore that proportion to Bank-notes it was likely to continue? He would show that it was morally impossible it should continue. Did not the noble earl recollect the difficulties they had during the examination of the committee as to that particular point? When Mr. Goldsmid, the Bank broker, was asked, what alteration the laying out of 500,000l. in the purchase of bullion by the Bank would have on the exchanges? he answered, two per cent. And when that answer was followed up by the question, how such an alteration would affect the price of gold? he replied, from 4s. to 4s. 6d. The fact was, as proved from the evidence, that when they spoke of the price of gold, they spoke of the sum the Bank paid for it, as there was no market, or indeed no demand for it except when its purchases were in operation. It was in October last at its highest price, but after that no purchase was made by the Bank. If the House looked at the returns, it would find there had been no foreign gold brought into the market On what grounds then had the noble earl assumed that the price of gold was to continue at an average of 4l. 1s. per oz.? Their lordships were called upon to fix upon what the price of gold was to be six months hence, when they could not tell what its price was at this moment, and much less what changes might take place in the course of six months. He did not contend that it was not highly desirable to return to the ancient standard. But if the question were, whether the Bank should resume cash-payments two years hence at 3l. 17s. 6d., or whether the intermediate plan should be adopted, in order to contract the issues of Bank paper, he should prefer the resumption two years hence at 2l. 17s. 6d., taking other securities respecting the issues of Bank paper. The noble earl had argued, that the Bank by reducing its paper issues would reduce the price of gold; since, by diminishing the quantity of paper, its value, like that of all other commodities, must be increased, and since the increase of the value of paper must reduce the relative value of gold. He was of the same opinion. But the noble earl was so young a disciple in this school that he did not know the symptoms which presented themselves to his observation. The noble earl had said there was no evidence before their lordships respecting an overissue; but he (the earl of Lauderdale) on the contrary, would prove, that there was distinct evidence in the report on their table that there was no over-issue. In 1813 and 1814, when the depreciation was said to be greatest, silver was in like manner depreciated, so that paper had not varied from the price of gold more than silver had varied from it. Paper and silver retained their relative value unchanged. In the year 1813, he had himself published a statement of the correspondent prices which gold and silver bore to each other, from an average of the prices in those countries where a metallic circulation existed. They were from 15 to 1, to 50 to 1. In 1814, the Bank note resumed its value. Gold fell to 3l. 18s. 6d., and the state of the exchanges became favourable. From that period there was no proof that paper had resumed its value. After this time, it was true, the Bank accumulated gold; and in the month of March, 1817, the silver coin was issued. Gold coin was then thrown into circulation. The Bank ordered gold coin to be paid, but they could not persuade men to take it. Gold and silver were flowing in from every quarter. The Bank collected more treasure than it had ever had in its possession before. A director had given evidence before the committee, that their treasure was then greater than at any former period, in proportion to its circulation; but he came back next day to correct his evidence, having found that the proportion had been greater at two former periods, but the treasure then in possession of the Bank was the greatest it had had at any time. In January, 1817, when the issues were 27,000,000l., could not the Bank with safety have resumed cash-payments? Their lordships saw that it had more treasure than at any former period; that it had gold flowing in upon it from all quarters; and that it had the general aversion to take gold in its favour: could any man doubt that the Bank of England could then have resumed cash-payments? There were very nearly 2,000,000l. more in circulation of Bank-paper at that period than now. In March, 1817, the new silver coinage was put in circulation. Mr. Haldimand, a Bank director, who had not understood this subject, had stated, in his evidence, that the exchanges were ever since unfavourable to us. He (the earl of Lauderdale) derived the greatest confirmation of his doctrine from the exchanges having ever since been unfavourable, and from the price of gold having risen. But what per-haps was more extraordinary, was, that there never was more variation in the issues of Bank paper, than within that interval. It varied from thirty millions to twenty-five, and yet the exchanges continued uniformly against us. With these facts undeniably before the noble earl, how could he conclude that the mere contraction of issues would give the Bank a command over the exchanges? It did strike him, that the reverse of that state of things which existed throughout the year 1816 and the beginning of 1817, was attributable to those regulations of the Mint, by which the silver coinage of the country was depreciated 6½ per cent. Let the House consider the operation of such an influence. Take the amount of Bank of England one-pound notes, at eight millions—that of the country banks at the same amount; that was 16 millions, the correct amount, he believed, of that species of notes in circulation. For these 16 millions, the silver coinage was a legal tender—in other words, one half of the circulating medium of the country was depending for its value on a silver coinage depreciated 6½ per cent—a depreciation bearing almost an exact proportion to the adverse rate of the exchanges. The exchanges had become unfavourable, and gold had risen the very month after the issue of the silver coinage. He therefore affirmed that since the Mint regulations, the exchanges had been nominally unfavourable, when calculated in gold, and yet that the real exchanges had been uniformly favourable when calculated in silver, the only metallic coin in circulation. Mr. Baring acknowledged that it was a singular coincidence, that the issue of the silver, and the unfavourable turn in the exchanges, happened at the same time. He (the earl of Lauderdale) asked him if he thought it possible that the silver coinage should go out of the country; and his answer was, that it was perfectly impossible. In fact, silver bullion had been imported with profit for three years. In confirmation of that fact, they had not only the evidence of Mr. Fletcher and Mr. Page, who stated, that they had received silver in dollars and various other shapes; but they had the evidence of Mr. Goldsmid, the bank broker, that there had been a great influx of silver from South America, from the West Indies, from Gibraltar, and from several other places. There was but one conclusion that could be drawn from these facts—that the exchanges were really favourable to us. The noble earl was therefore incorrect when he argued upon the unfavourable state of the exchanges. They, on his (the earl of Lauderdale's) side of the House, admitted, that they were nominally unfavourable, but contended that they were really favourable since the depreciation of the silver coinage. In the beginning of 1818, the bank paper in circulation was 29,000,000l.: gold was then 4l. Three months afterwards the quantity of paper in circulation was reduced 3,000,000l.: yet the price of gold rose to 4l 3s. This was its price in November last. How was that to be accounted for? Here he begged to remark, that what the noble earl had stated as to those improvements and expedients adopted by the London bankers, which diminished the necessity for so large a circulating medium, appeared to him the greatest quackery; and he had heard the noble earl's observations on the subject with the utmost astonishment. The noble earl might have found those improvements in the bank at Amsterdam at an earlier period than he had mentioned. A large quantity of money was paid into Coutts's, for instance, which must be handed over to Baring's, or money is paid into Baring's which must be handed over to Coutts's, or the money remained in the house into which it was paid. If the sum was in one note, or in a few notes, the labour of counting or transferring the money became easier. The improvements alluded to might therefore save labour to clerks, but he could not conceive how they could save any part of the circulating medium. But silver was really our standard of value. He was ready to contend before the 12 judges, that according to the fair construction of the statute, silver was our legal standard. The sum of 6,809,000l., which the Bank had paid in gold for its notes, had been paid at the rate of 3l. 17s. 10½d.; and the labour of collecting the notes for which the money was paid. There was 5 per cent which the Bank always paid for gold in exchange for its notes, and 2 per cent for the labour of collecting them: this accounted for the rise of gold. These were proofs that paper had not been depreciated during the last two years, and that the exchanges were favourable. It would have been impossible to import silver if paper had been depreciated. There was therefore not only no proof of the depreciation, but the proof was the other way. If we had to send 100l. of our currency to Paris, it would take 108l. to answer the purpose. Taking the exchange of 23.80, a draft from Paris upon London for 100l. would make a profit of 4280 grains of silver. This was precisely the depreciation in our silver coinage. If, then, things that were equal to the same thing, were equal to one another, the depreciation of silver and the unfavourable exchanges exactly corresponded. Was not this evidence conclusive as to silver coin being our standard? In January and March, 1817, there had been large issues of paper; yet no banker would receive the gold that had been at the same time issued. No evidence at all appeared to show any depreciation; but all the proofs were on the other side. The issue of the silver coin had at once made the exchanges unfavourable to the extent of the depreciation of the silver, and the paper of course became of the same value as silver. Upon these views it was, that he had drawn up the resolutions which he had laid upon their lordships' table. Those resolutions declared, that the depreciation of silver had occasioned the apparently unfavourable state of the exchanges since its issue, and that the exchanges were really favourable to us. All that he had said proved that the exchanges were, in fact, favourable to this country; and would any man assert that the Bank might not, at this moment, resume cash payments? He would venture to prophecy, that if it did, there would not be a demand for a single guinea. The noble earl, no doubt, had had many conversations with individuals who had stated their objections to the resumption of cash payments: he (lord Lauderdale) had also had his interviews, and he found that a difference of opinion prevailed: he had shown his resolutions to some gentlemen, and had told them what he now told the House, that he thought the resumption of cash payments could not be too early; and that it was advisable to revert to the antient standard of value as soon as possible. He had now advanced to the most important branch of the subject: the discovery which had been made, and which the noble earl considered so valuable. That would of course depend upon its results. It was introduced as a plan by which payments in specie could be returned to with greater facility than by any other mode. He, on the contrary, felt a strong persuasion, that the great grievance threatening the country at this moment was, lest that plan, coupled with the existing Mint regulations, should be carried into effect. In the first place, it was said, that it would provide the country with a cheap circulating medium; that it would prevent great part of the existing capital of the kingdom from going abroad, for the purpose of purchasing what, in fact, was unproductive. He was convinced that this opinion proceeded throughout on a mistaken notion. If a cheap circulating medium were thus obtained, it would operate most unfairly against the traders and manufacturers of the country; the effect of it would be to remove a great part of the existing capital of the country to France, for the purpose of acquiring gold. On the subject of productive capital, Dr. Smith's work contained some absurd ideas: holding all circulating medium to be unproductive capital, he said that if a part of the gold in circulation were sent out of the country, manufactures and materials of greater use were obtained instead. An important distinction ought to be drawn between a gold capital and a fixed capital. It would be highly injurious to export fixed capital to the amount of 15,000,000l. How was gold to be obtained? It could only be obtained in one of two ways, according even to Mr. Ricardo: either that the Bank should purchase the manufactures of the country, and undersell at such a rate as to force them upon the markets of the continent, and from thence draw the gold into Great Britain; or the Bank, as indeed it had done partially in 1816, must give a higher price for gold, as 3l. 18s. 6d.; when, in truth, the value was only 3l. 15s.: in other words, they must give such a price for gold bullion as would induce adventurers to bring it to them. In one of those two ways, and those only, gold could be brought into the country: and to accomplish either of them a new demand must be created for our manufactures, unless their lordships could entertain the notion of Mr. Ricardo, that whether there was an extension or diminution of the demand, was a matter of perfect indifference, because the quantity of manufactures must be always the same. The proposed plan abstracted from the manufacturers a demand to the extent of 15,000,000l.; and not only that, but it deprived the country of 15,000,000l. of wealth, which brought back gold coin. What, he would ask, must be the situation of the empire, should it be involved in foreign wars? A foreign war never occurred without the necessity of sending gold out of the country. If there were a specie circulation of 30,000,000l., it could be more easily spared than if so small a supply as 4,000,000l. only were in the Mint. He granted willingly that the country was rich enough, but it was by the labour of its own hands that it must acquire the means of getting gold: even if a gold mine were discovered in the country, it could not be raised without manual exertion: it could not be obtained from foreign countries without sending abroad some of our labour as an equivalent; and his object was not to deprive the nation of that quantity of wealth and exertion. If this principle were good for nothing; if it were fit that the legislature should interpose to prevent the purchase of gold, he wished to know why the noble earl did not go farther—why was not a sumptuary law passed to prevent the purchase of plate, or the conversion of productive into unproductive capital? He did not know how to make any distinction, or why the noble earl should stop where he had done. Of this he was well satisfied—that there was but one safe plan to be pursued, and that was, to allow things to take their own course; for this reason a sumptuary law had always been deemed impolitic; men must be left to act according to their fortunes, although it might partially discourage the manufactures. He contended, however, that the plan proposed equally discouraged them, while the circulation formerly possessed operated in the contrary direction: if the gold had not disappeared, some of our manufactures would have found their way upon the continent. But he was anxious to examine whether the plan were in itself practicable. It was an experiment quite of a novel nature, and it was impossible to suppose that it would not be attended with singular effects. Gold and silver used as metallic money, had a double use: whichever was adopted as the standard of value, performed a double duty. First, it was the measure of value regulating the price of all commodities; and secondly, it performed a very important duty as an equivalent for ordinary payment. Now, what would be the consequences of this measure? It was well known from the examinations before their lordships committee, that at a former period, when gold rose in value, the directors of the Bank diminished their circulation: the result was, that gold was brought into the country, which filled up the gap to the exact extent which the real demands of the community required. If, however, under the new system, gold came into the country in bars, and the issues of the Bank were diminished, it could not have the same effect of correcting the evil as when gold circulated in the shape of coin. This was an inevitable disadvantage attending the plan. How would the noble earl, or any body else, like to carry about them 30 ounces of gold? What would the dashing tightly-clothed gentlemen about town say to it, especially those who had no pockets? In fact, the plan deprived gold of one necessary duty which as coin it performed. But could the plan ever be brought to bear? and what steps, coupled with the present Mint regulations, must be taken to bring gold into the country, and to put it into any useful shape? He was willing to allow that this might be attained, provided two or three things could be accomplished—first, if the government could get the quantity that was needed; and next if they could limit the silver currency to the amount they wished. It would be said, that the act permitted the seizure of coinage under certain circumstances; but it was unfortunately so worded, that silver to any amount could be brought into the country. Supposing this difficulty overcome, and the foreign importer and the home manufacturer were prevented from interfering, could the government limit the amount of bank-notes? The price of gold which was 4l. 5s. per oz., must be reduced to 3l. 17s. 10½d. When, however, gold had been reduced to that price, a difficulty would occur if it did not come into circulation, or fill up the place of the bank-notes withdrawn. Under the old system, things would fall into their natural order; but under that proposed, the bars might remain in the Bank so long, that there would be no equivalent for the paper withdrawn, and the only thing the Bank would then have to do, would be to issue paper again, to give the public the convenience of a circulating medium. Now, what was the great objection to a paper system? Neither more nor less than this—that it placed it beyond the wit of man to say, what amount would be required for circulation in the year, or even from day to day. Yet the Bank directors on the one hand, and the government on the other, were to make an attempt which was impracticable, and which the noble earl would soon be compelled to acknowledge was impracticable. The noble earl had said, that he built his hopes on the power of government to limit the silver coinage—upon its power to make a scarcity; but how was any man to estimate the degree of scarcity?—how could he ascertain the quantity? The noble earl knew, that there had been applica- tions from all quarters for silver coinage—that the Mint was delivering at the rate of 35,000l. a-week at the present moment. Where, then, was the criterion, and how was the scarcity to be ascertained? The plan might be brought to succeed, but only by making a scarcity of paper greater than would be necessary if payments were to be resumed in gold coin, and by making a scarcity of silver coin. These difficulties induced the petitioners, whose remonstrance he had laid before the House, to contemplate the subject with great dread: for if he understood the plan at all, it was absolutely necessary, for the purpose of obtaining foreign gold, that not only the issue of paper should be greatly reduced, but the silver coinage must also be lessened to a degree of great inconvenience. No man could hesitate one moment upon that sound principle of currency, that men should be left as much as possible to themselves: they ought to be allowed to acquire for themselves what was necessary for their own purposes. If the metals were properly stamped and weighed, with the observation of the principle above stated, it was impossible that the currency could be deranged. With regard to the copper coinage, to which the noble earl had adverted, he (the earl of Lauderdale) had never been more surprised than when he heard it asserted that the copper money of the country had been coined at a seignorage of 72 per cent. He referred to the opinion of the late lord Liverpool upon this subject, and to the contract made with Mr. Bolton for the copper coinage: and contended, that in truth copper money had been thrown upon the public to the extent of 1850 tons, without any seignorage at all; and this the noble lord knew to be the last copper currency brought into circulation in this country; the returns which had been laid upon the table that very day showed, that not one halfpenny had been coined since, excepting what was executed by Mr. Bolton without any seignorage. The noble earl had said a great deal on the analogy between a silver and a copper currency: but he (the earl of Lauderdale) could not discover the resemblance. Was there in truth any similarity? Copper coin had been stated to be legal tender to the extent of one shilling; but as far as his lordship knew any thing of the law, this was not the fact: he had no hesitation in asserting, that it was an error in point of law: two penny and penny pieces had indeed been made legal tender to the amount of 1s. but halfpence were only legal tender to the amount of sixpence. In fact, an instance had come within his own knowledge, where a person had refused, and was supported in that refusal, to accept copper as payment for a debt of 1s. He should be glad, then, to know how the noble earl would execute what he proposed. He wished the noble earl not to imagine that he (the earl of Lauderdale) did not consider a copper coinage a great grievance: if evidence were wanting, he could have proved before the committee, by bankers and others, that the copper coinage in some parts of the country had been so abundant, and particularly at Wolverhampton, that the shopkeepers and other tradesmen did not know what to do with it. He had heard, indeed, of a trader at Wolverhampton, who was ready to give copper for any bill at a certain date without requiring any interest. Persons in the country were not, however, those only who had suffered by the accumulation of copper coin, as the brewers and others in town could testify. Several brewers had rooms filled with copper money. These were hardships upon the public; but how, he wished to be informed, could a copper currency effect the banishment of gold, irk the same way that silver might accomplish it? At least, if it did, it could only be by a process both operose and complicated. A person having copper, but requiring gold, must first procure sixpences, and having procured 40 sixpences must purchase a note, and having thus obtained a certain quantity of notes, might purchase gold. It was undeniable that 6,000,000l. of our gold had very recently been exported to France; and the minister of finance at Paris had admitted that French gold had been issued to about that amount, coined from English sovereigns. Upon this subject, as he had already said so much that it might be considered dry and uninteresting, he would refer the House to a curious proclamation, which would afford some entertainment. When James 1st came out of Scotland to take possession of the crown of England, be issued a proclamation, giving currency in England to the coin of Scotland. This coin being of less intrinsic value than the coin of England, soon drove it out of the market, and rendered it necessary shortly afterwards to issue a new coinage, in order to equalise the value of the coinage of the two countries. Under similar cir- cumstances, the same result would perpetually recur. He maintained, that an alteration in the mint regulations was a preliminary step absolutely requisite to be taken before the Bank could resume payments in cash; and recommended it as an experiment well worthy the consideration of that House and of the whole country. Indeed, he entertained but little doubt, that, if it were tried, it would be attended with the greatest ultimate success. It was his decided opinion, formed upon the proofs which he had submitted to the House, that the proposed resolutions were sporting with the commercial greatness and prosperity of the country. He therefore moved, that after the word "that" in the original resolutions, the resolutions, which he had previously laid upon the table, should be inserted in their stead.

Lord King

said, that after the very able exposition which they had heard from the noble earl, it was hardly necessary to say any thing in favour of the original resolutions, of which he heartily approved. When he heard, from a certain class of persons, who had petitioned their lordships, those resolutions objected to, as tending to a forced and precipitate reduction of the circulating medium, he could not help considering their objections as proceeding from a wish to prolong, to the utmost time in their power, the duration of the restriction; for, if the country was ever to return to payments in specie, he would defy any man to devise a plan more easy, more moderate, or less tending to produce distress, than that contained in the resolutions before the House. The restriction had certainly enabled the Bank to accommodate some classes of the mercantile world; and by producing, through the means of the increase of the quantity of the currency, a rise of prices, had changed the distribution of wealth and the employment of capital. By putting an end to the restriction, an alteration in the employment of capital, and the distribution of wealth must be produced in an opposite direction to that which the depreciation of the currency had produced. That this should take place as gradually as possible, was certainly desirable, though some distress must at all events be produced. When we talked of putting an end to facilities which the restriction afforded, it was to be remembered that those were facilities afforded to some classes at the expense of others. They were afforded to the merchants who were able to procure discounts at the Bank, at the expense of those who could not obtain them, and at the expense of all fixed annuitants, and all creditors on money contracts, by the depreciation of the currency consequent on the increased issues. This process was no addition to, but a diversion of, the wealth of the country; it was robbing one class to afford undue advantage to another. The wealth was taken in part, it was true, from those who did not actively employ it, and given to those who did; but whatever increase to the general riches was thus effected, was at the expence of injustice to those classes whom it was the duty of the legislature to protect. Those accommodations too, at this moment, tended to aggravate an evil under which the commercial world were labouring—the system of over-trading, of increasing shipments to an extravagant amount in one year, while in the next a proportionate diminution of demand below the average, and a proportionate languor ensued.—Under those circumstances, the committee had inquired what was the course to be pursued. On the one hand, if the attempt had been made to cause a speedy resumption of payments in specie, much misery must have ensued. On the other hand, if they had only done what had been so often done before, if they had only fixed a period at which the Bank should resume payments, without taking measures to compel it to make preparations for doing so, those persons must have been exceedingly credulous indeed, who, after the repeated failures of former acts, could have expected any thing but failure again. The Bank had never made the proper preparations at the proper time; they had never so reduced their issues as to bring down gold to the mint price. They would have followed the same course; they would have again come to parliament with a special case, and again obtained a farther time, as they had before. The committee had, on consideration of their circumstances, decided on such a plan as on the one hand extended the period at which the resumption of cash payments was to take place, so far as to diminish the chances of distress; and. on the other hand, afforded some security that the Bank should take the proper means of preparation. The noble earl had truly said that by fixing the time when the Bank should be obliged to give bullion at a cer- tain price in exchange for its notes, the evil was thence arrested. Then for the first time the Bank would be obliged to take a metallic standard; then for the first time would the public have a security beyond the discretion of the Bank directors. The numerical amount of Bank notes could be no guidance for the amount of issues. The only rule which could be given for their regulation was to keep gold at the mint price. This was the only check on the vicious practice which 22 years usage had accustomed some to consider as the natural state of the currency of the country. The noble earl who had just sat down had taken a view of the subject peculiar to himself, and had contended that no depreciation existed in the currency, but that the price of gold and the state of the exchanges, were to be attributed entirely to the mint regulations. It appeared to him (lord K.) that those regulations had not that effect. If the two metals were allowed to circulate in the country, one of these two arrangements was of necessity to be adopted. Silver should be made the standard, and gold should pass at an agio; or while gold remained the standard, such a seignorage should be taken on the silver coin (which circulated for convenience sake) as would secure it against destruction on the accidental variations of the relative value of the two metals. The deduction of 6½ per cent as a seignorage on the silver coin seemed to him a judicious measure to prevent the trouble of an agio. But because the silver coin on which a seignorage was taken, and which was not the standard, remained in circulation, no inference was to be formed that the currency was not depreciated. If, indeed, paper had been issued to such an amount as to depreciate the currency more than 6½ per cent the silver coin also would be driven out of circulation. But the Bank, aware that the country would not have tolerated the destruction of a coinage which had cost half a million, had cautiously kept its issues within bounds, no doubt with that object in view. A question of his to one of the witnesses had produced an answer which confirmed this idea. He regretted, as this had been the effect of the silver coinage, that it had not been issued half a dozen years before the peace, as the means resorted to by the Bank to prevent it from being melted, would have prevented the depreciation of the currency to the amount of 25 per cent and all the consequent misery. The noble earl who had just sat down, had shown that a considerable importation of silver had taken place, which, according to the noble earl, was not possible when the exchanges were really against us. But it was manifest that the noble earl's inference was not correct. In the time of Buonaparté gold was imported at a time when the whole currency was confessedly depreciated; it was imported because there was a demand for it to be re-exported to France to pay for corn when that country would not receive our manufactures. The noble baron concluded by giving a cordial support to the resolutions.

The Earl of Lauderdale

was surprised that his noble friend should express an opinion, that the parties whose petition he (the earl of Lauderdale) had presented, were desirous of perpetuating the paper currency. If his noble friend had read the words of the petition, he would have seen that they merely stated, that the measure in the contemplation of the secret committee would tend to a forced resumption of cash payments, which would injure alike the manufacture, agriculture, and commerce of the country. He himself bad had a conversation with the committee which drew the petition up, and from that conversation he was inclined to think, that they had come honestly forward, without any idea of perpetuating the paper currency. The petition was signed by some of the most respectable citizens of London, and would have been much more numerously signed, had not several individuals refused their signatures from a motive of self interest and fear, not at all unnatural to men in their situation. They were afraid that they should be considered dependent on the Bank, and such an idea would be very detrimental to their credit as merchants. He did not wish to state any thing to their lordships as proof which had not been proved; but he must say, in contradiction to the assertion of his noble friend, who had declared that the Bank directors had contracted their issues to prevent the melting down of the silver coinage, that he had asked Mr. Baring a question upon that point, who had answered, that as he was not a director, he could not tell, but he thought that it might be so. In consequence of this reply, he had asked some of the directors, whether they had ever limited their issues for the purpose which he had just specified, and their reply upon their oaths was, that they never had.

Lord Redesdale

hoped, that a few observations from him on the present important question, would not be considered as intrusive. He expressed himself totally averse to the prolongation of a paper system, not convertible to a metallic currency, and was decidedly of opinion, that the arrangement pointed out by the committee would produce a salutary effect, if a sufficient quantity of coin was introduced into the country prior to the payment by the Bank. If a sufficient circulation was given to the country, this measure might lead to cash payments. Even although the money received for the taxes were sent to the Bank for the use of the persons applying for cash, the distress in the country would be great. The Bank, it seemed to him, had been at one time in a situation, which would have rendered the resumption of cash payments easy, but that opportunity bad not been embraced, for since that period 20 millions of the valuable metals had been sent out of the country. There had been some language made use of relative to the Bank directors which they did not deserve, for they had acted honourably,—and he entertained no jealousy of their conduct, nor had he seen in any part of the report, marks of a jealous disposition towards them, how much so ever the feelings of other individuals might be irritated against them. With respect to the silver currency, he had not been able to bring his mind to coincide with the arguments adduced by the noble earl on that subject. The noble earl had stated that the law had its defects, he was aware of these defects and had twenty years ago endeavoured in the other House of Parliament to introduce an act for remedying these grievances. With respect to any danger from an importation of counterfeit coin from other countries—he meant coin of the same metal, but lighter in weight—that might easily be obviated by assimilating the practice which prevailed in weights and measures to coin, and making it seizable on the discovery of its lightness. Altogether to prevent counterfeit coin from being sent from foreign countries into this was impossible, but the quantity would be much reduced by its being rendered liable to confiscation. All false coin must either be sent from foreign countries, or be issued from a Mint here, in either of which case, confiscation would tend much to prevent its circulation.

Lord Grenville

said, that the noble earl who had opened the debate, had explained the plan which he had proposed to their lordships in so luminous and argumentative a speech, that there was very little occasion for him to add a single word upon the subject. But having considered this restriction as one of the greatest calamities under which this suffering country had laboured; having frequently had occasion to lament and deplore the part which he had himself taken, on its original proposition, in prolonging it for the term of the then existing war; having avowed his error in so doing, as became an honest man, at the commencement of the last war; and having prophesied but too truly all the distress and misery which would befall the nation in consequence of it, he could not help expressing his joy and satisfaction, that the country was at last arrived at that period, in which it could look forward with certainty to the repeal of this injudicious and unfortunate measure. He could not remain silent when a measure was proposed to their lordships, which was almost positively certain of success, but must be allowed to add his voice, weak and humble as it was, to that of those who had spoken so ably and eloquently upon it. The noble earl had said that the Bank had been of the greatest utility to the government during the war, and had advanced many large sums to carry it on with vigour and energy; he did not mean to deny this assertion; but he could not help observing, that it was his opinion that no permanent advantage had been derived from the connexion between the government and the Bank, sufficient to compensate the evils to which it had given birth. He need not tell their lordships his opinion regarding the war which we had waged with France—that must be sufficiently well known to all of them; he need not repeat to them what he had often before stated, that he considered no sacrifice which could be made, too great to bring that war to a successful termination; but he must inform them, that even with those sentiments, he was of opinion that the restriction was an evil of such magnitude, that the sooner it was abolished, the better it would be for the country. He did not believe that any men sincerely wishing the welfare of their country could at any time resort to such a measure, without a sorrowful apprehension of the difficulties and dangers to national and individual interests which ║ must result from it, and with out a conviction that it was for the moment absolutely essential for a particular crisis. Certainly, if the question were, whether any extraordinary exertion might at a particular moment avert an impending danger, to meet such a momentary crisis it might be necessary to resort to a forced circulation; still such forced circulation should not be continued beyond the momentary necessity. For he held it to be a maxim, that there was no difference in principle or effect, between excessive issues forced upon the country at par, by legislative enactment, as soon as they became depreciated; and the more direct system pursued by Austria, Prussia, Russia, and the other continental governments, of at once fixing an arbitrary value upon the national currency. He was inclined to express his sentiments on this subject in the strongest manner, because, hoping as he now did, that an end, would at length be put to the restriction, he wished to impress his country with that serious view of the question which, which after long and anxious and laborious deliberation, he was convinced was the true and only aspect which could bear the test of principle. He was disposed to go very far on this point; he would say, that under any circumstances, a restriction on cash payments, or in other words, a forced, and consequently an excessive paper circulation, must be attended with greater evil than good; he would refer to its natural effects, commercial distress, increase of prices, increase of taxes; and he would say, that these circumstances must so cramp and contract all the natural energies of the country, as even in time of war to obstruct the necessary efforts, and thus produce a mischief far overbalancing the advantage accruing from the facility of loans. The war terminated just before the breaking up of the bubble, and it was fortunate, it was providential, that it did: for its continuance, jointly with the continuance of the restriction, would have inflicted such distress on the country as it would have been impossible to bear. If, when no farther exertion was necessary than to wind up the war expenses, it had been found to be not only imprudent, but impracticable to remove the Bank restriction: and when it was necessary to have recourse to those methods of raising money, usual only in war, what would have been the case if the country had been called upon to make fresh and extra ordinary efforts for the farther conduct of a war, or rather for existence? It would have been this—that the country would have had to learn, by its absolute destruction, the effects of a measure intended to preserve it existence. He did not expect to live to see the practical results of any of his opinions: but he was anxious to be explicit, that future statesmen, who might propose a similar measure, might at least not be enabled to say, that the opinion of such a measure having once saved the country was unanimous. So far from wishing to be thought a party to such a doctrine, he hoped (if indeed any opinion of so humble an individual as himself could be expected to be remembered, he would not say after his death, but even for the few remaining years of his life)—he hoped that it would be recorded of him, as his decided conviction, that in proportion to the danger under which the country laboured, he would almost say in proportion to the extent of that danger, was the impolicy and desperate madness of such a measure as they were now considering how to rescind. Having providentially emerged with success from the war (for Providence would not suffer such an example of morals and Jaws as this country afforded to be lost to the world), they had now to deliberate and decide, whether, in time of peace, they would consent to prolong the measure of restriction indefinitely, and place its control in the hands of those who acted on a system by which it was impossible it could ever be terminated. It was with great surprise and pain that he had heard a most intelligent witness (to whom the noble earl had referred) declare, that the suspension act afforded great facilities to industry and commerce, without any countervailing evil. There were others who maintained that the measure was of the greatest service to the commercial world, although it might be injurious and even ruinous to the other interests of the community. With the latter part of this opinion he perfectly agreed; from the former part he must express his most decided dissent. The facilities of commerce returned on commerce with aggravated mischief; and whatever temporary advantages might be furnished to individuals, it rarely happened that those individuals did not ultimately suffer tenfold injury. He would refer to the memorable example of 1816. There was, indeed, nothing new in the progress and effects of a depreciated currency. For a time all seem- ed brisk, and cheering; the vessel rode along in full sail, and with favouring current, but it never failed to happen that the calm sea became troubled, that the flattering gale swelled into a storm—such a storm as that from which this country had with difficulty saved itself, and from the effects of which it still suffered, and would long continue to suffer. As an illustration of his argument, he would refer their lordships to the list of bankrupts, from the year 1790 to the present time; and their lordships could not fail to remark the striking coincidence of increased bankruptcies with the system of increased facilities. While the Bank was lending money with one hand, with the other it was shaking the foundations of contracts, affecting all prices, and involving the country in distress, and individuals in ruin, and in a proportion tenfold greater than any advantage that could arise from their liberal issues. He could willingly dwell on this subject, if he were not afraid of detaining their lordships: he could show how the miseries of 1816 followed on the issues of the preceding year; he could show how the excessive issue of country paper which could not maintain itself, like bank paper, by legislative enactment, led to a fearful depreciation, and without any fault of individuals, by the mere force of the system involved the whole kingdom in one general desolation. Not only its trade and commerce, but its agriculture, its landed interest, even classes the most remote from connexion with, or even knowledge of the paper system, found themselves suddenly consigned to total and inexplicable ruin. If their lordships could see at their bar, nor merely the victims of commercial failure, but those numerous persons of all ages, sexes, and classes, who had unconsciously suffered without even understanding how and whence the evil fell upon them, such a spectacle would fill their lordships with horror, and he sincerely believed, that not only no voice would be raised for the maintenance of such a system in commerce, but not even in war. In commerce, as in war, there could be but one sure basis of management, and that was a currency regulated by a standard of metallic value; not that metal was necessary as metal, but because it had the indispensable quality of value: for without value it was impossible to represent value it was as absurd as it would be to attempt to mea- sure weight by that which had no weight, or to measure length by that which had no extent. On this ground a metallic standard had been adopted in this and in all well regulated countries. On its first introduction, the fineness of the metal being settled, the next thing was to take given weights, and those weights expressed the denominations of value. The original names of the divisions of money, in almost all known languages would be seen to refer to weight. Thus, the shekel among the Hebrews, the talent and mina among the Greeks, the pound, the sesterce, the as, among the Romans, the livre among the French, the pound, shilling, pennyweights, or pence, among ourselves, all showed their origin by their names. Our pound, under the Saxon monarchy was a pound of silver: the French livre under Charlemagne was a pound of silver; the metallic standard of the two kingdoms being the same. The value of the pound had not been altered in this country since the time of Edward 6th, but in other countries new value had been from time to time affixed to that denomination. In France especially, what was called the pound of silver, was now little more than an 80th part of its original value. Every such instance of reduction was a fraud upon the people; and it was remarkable, in looking back to those periods, when such deteriorations were established, that they were uniformly periods of discontent and turbulence. In the reign of Edward 6th, an attempt to reduce the pound to one-fourth of its value, inflicted misery not to be endured. There was an apprehension of an insurrection throughout the kingdom, and of a total revulsion of the social system: so that the advisers of the measure were compelled to retrace their steps, and bring the currency to that state in which it was at present. Yet even then, from the sudden change, calamity ensued almost equal to that which was apprehended. These were his grounds for asking, whether we ought to go on with a system of variable value, or adopt some plan in order to arrive at the end of a system, which while it continued no one could say he did not hold his property, not indeed at the mercy of a despotic government, but, at the mercy of a body of indiduals who, constituted for other purposes, took upon themselves forsooth the guardianship of the interests of the country! He wanted no such guardian- ship. He wanted a currency established on public faith—on public laws; and for this he should look to the wisdom of parliament. If there were no other objection to the paper system, he would object to it on account of the self-assumption in this body of men of the right of calling themselves guardians of interests, which they would pretend parliament was unable to maintain. The question now was, would parliament perform its own duty; or leave interests so important at the absolute disposal of men, who, however respectable individually, yet as a body not only were not invested with the trust they assumed, but held a trust in its nature totally incompatible with it? His noble friend near him had asserted his opinion of the necessity of a return to a standard of value; and certainly that opinion was not uncalled for on presenting such a petition as his noble friend had that night presented; for when all classes acknowledged that something at least ought to be done towards a return to such a standard; when none ventured to deny that at some period cash payments should be resumed, it behaved those who came forward with such unqualified abuse of the proposed plan, to propose themselves some plan, or to suggest, at least, the propriety of one. The depreciation of paper had been nearly one-third, and the loss to all classes of the community who held it to that amount. Whether or not that depreciation arose from excessive issues, it was impossible, nay, there was no disposition now, in any class, to deny, that paper had been depreciated more than 30 per cent. Against the recurrence of such an evil there was at present no security whatever. Parliament had, by repeated acts, first fixed the termination of the system, then prorogued it, then prorogued it again. Could any man hope that what had not been hitherto done, would now be done decidedly and beyond all doubt? He meant to cast no reflexion on the Bank, but he could only judge how they would execute their trust, by the way in which they had executed it in time past. If their lordships looked at the conduct of the Bank on preceding occasions, there was no expectation to be entertained of a greater probability of the Bank's resuming cash payments at the end of the next two years, than at the term now specified by the act of parliament. The exchanges at one period had righted themselves, and the resumption might have taken place without injury. At that time, the only useful step that the Bank should have taken they did not take. In 1817 the price of gold and paper were at par; what did the Bank do? They increased their issues, and at the same time issued gold. When gold and paper were thus at the same moment poured into the market, there could be no difficulty in accounting for the rise of gold. He did not dispute the sincerity of their intentions, but certainly it was most unfortunate that it did not occur to them, that the issue of gold, without a corresponding deduction of paper, must raise the price of the former article. Even now they did not seem to admit the principle of the bullion report, so wisely and irrefragably established by that great man, the late Mr. Horner—a report, which could not be read without instruction and admiration, for the depth and soundness of its doctrines, and bitter regret for the premature loss of a statesman who was so calculated to serve and adorn his country—a loss which was never more severely felt than at the present moment. If the Bank now allowed the truth of that report, there might be some hope that they would prepare for the resumption of cash payments, by regulating their issues of paper in conformity with the issues of gold. But as they did not acknowledge that principle, whatever might be their talents and integrity, they were the last individuals to whom a discretion should be allowed unaccompanied by such provisions as should secure the object at last, which all wished to be accomplished. As to calculations which had been made respecting the quantity of a circulating medium, he thought they were little to be depended on. He did not think that it depended on capital, commerce, or manufactures. If he could form any judgment, he would say that the same quantity of circulation might, by an increased rapidity, perform twice its ordinary operation. He saw no reason for supposing that even the payment at present of the Bank-note at par would produce any serious evil. The utmost loss would be three per cent. This he did not conceive a serious objection: for at a time when it would have been thought sacrilege that the, Bank should ever suspend its payments, there were frequent fluctuations in value to the amount of 5 per cent without any serious evil. Why, then, was this loss of 3 per cent objected as an insuperable difficulty? His opinion, indeed, had been, that cash payments might have been safely resumed at the end of this year. It would neither be just to the plan itself nor to the country, nor would it accelerate sufficiently the discharge of that most important duty which was now imposed upon their lordships, of removing the present pressure, if the plan were not carefully studied and well understood. But at the same time he must say, that the noble earl had stated grounds upon which he could not go along with him. The noble earl's description of the difficulties which they would have to surmount, before the Bank could resume cash payments, was most ridiculously exaggerated. What would they say at law of those, who, being required to resume their payments in cash, should increase instead of reducing their issues in paper? But it was time that this connexion between the government of the country and the Bank of England should be dissolved. It was a duty, of all others, the most imperative upon their lordships. As the matter stood now, the fact was this—that the Bank had not acceded to the propositions of government. They had not pursued the course which was expressly intimated to them. To this there was always a ready answer—"the necessities of government." If, on the other hand, it was asked, what should be done in regard to the Bank's resuming cash payments, they were immediately admonished to "remember the state of affairs between the government and the Bank." Government, and parliament itself, were thus placed in the hard condition of a debtor, who could not assert his own dignity, nor vindicate his own rights. Now, he said that their lordships must destroy this state of things, if they meant to restore order to their finances, and security to the government. It was incompatible with all the principles upon which the Bank was first constituted. It was not merely incompatible, it was in direct contradiction to them. It was in contradiction to all precedent; for the history of all the banks in Europe would prove that those which had fallen, all fell from the same cause, from the same fatal circumstance—dependence upon the government. If their lordships meant to have what they once possessed, an accredited Bank in this country, they must have one established upon the only principle upon which it could exist—a total inde- pendence of the government. It was, therefore, upon that ground, much more than from any private wish of his, that he now earnestly pressed the repayment of the advances, as absolutely necessary before the Bank could resume cash payments. It was therefore, also, that he most heartily concurred in the measure, as the first step, advancing, he really hoped, to the ultimate result of dissolving the ominous and dangerous confederacy between the government and the Bank. It was true, indeed, that they might throw difficulties in the way of the resumption of cash payments, by the exertions necessary to be made for the repayment of those very advances. Some provision, therefore, of gradual operation seemed indispensable; and he knew of no other mode that could be adopted, except the present—the one before them; unless it was possible to restrict, by numerical amount, or with reference to the price of gold, the issues of notes by the Bank. Their lordships must be satisfied, by the paper which had been read to them that night, that the numerical amount of such notes was no true nor certain criterion by which those issues could be regulated. Here remained then nothing but to revert to the true principles by which alone government could restore the finances, and by which they must regulate the approaching progress of the Bank towards the resumption of cash payments. They must revert to the legitimate standard of this country, in respect to its currency. It was not the value of that currency, but the value of the metal by which it was regulated, as paper was regulated by the price of bullion. In the bullion report, which hereafter, he did not doubt, would form a standard constant and unerring, in the political economy of this country, and of the great merit of which he was by no means aware till lately, from having had constant occasion to refer to it, their lordships would find this subject clearly treated and defined. They would find that the object of that report was, to restore the currency to its real and legal standard—gold bullion. He dwelt upon these two words, because one of the objections taken to the plan was, that it was a departure from the ancient system of the country; because it had been termed a fanciful scheme; and had been considered as a departure from true and received principles. He repeated, on the authority of those who had most scienti- fically considered the subject, on the authority of that admirable report, that gold bullion was the true legal and ancient standard of the value of the currency in this country. It was therefore, to that only that they must refer their currency. There was no objection to it throughout the country, and all principle was favourable to it. But if any man had determined to give his judgment upon the subject, without having read the reports relating to it, at least let him inquire whether there ever existed any other standard. This had been called a novel experiment. What! Was that a novel experiment which had been always adopted in establishments of this description? What had preserved those establishments, in the midst even of the melancholy desolation occasioned by protracted wars?—a desolation which, among its numerous attending calamities, had involved the Bank of England in the disgrace of paying in a depreciated currency, and the government in the disgrace of recognizing it. It was a plan recommended by men of science, by men who had made these matters the object of great study and deep research. If the objection to it proceeded from such men, he for one should receive it with all the deference which it gratified him or every occasion to pay to talent and to learning. His own experience at least enabled him to say, that greater lights on this important subject had not been derived from those who had practised, than from those who had written upon it; but the present plan was recommended by men who, to profound and intimate acquaintance with the theory of the subject, united the most extensive practical experience. Above all, it came recommended by a name which of all others in Europe would be most likely to recommend any question of political economy. Men, indeed, without science, experience, or information in the details of this, extensive matter, and only such, considered and treated this plan as whimsical and impracticable. But let it be remembered who those were who supported it, men of unexceptionable character for knowledge, practice, and sagacity. He saw no objection to it whatever, and with him its greatest recommendation was this—that although it did inevitably prolong, much longer, indeed, than he wished, the period at which the mischief he so much deprecated should terminate, yet, at its very outset, it recognized and recommended the sacred standard of me- tallic value, which unfortunately had been almost lost sight of, which for the last 20 years we had nearly given up altogether, and which could alone restore its native vigour to our finance. Their lordships would thus have the satisfaction of knowing, that the very first step which they made was on the right principle, and in the right way. He was sorry to have consumed so much of their lordships time; but the deep interest which he took in this momentous subject, would not permit him to leave the discussion without strongly urging the incalculable advantages of the proposed measure. It was not his wish, or his design, in any thing that he had now said, to reflect on individuals, or on the conduct of the Bank of England. That it had not been regulated by sound policy or wisdom could not be matter of dispute. Confident as he felt that they might have more rapidly resumed cash payments, yet under existing circumstances it was highly probable, that they thought the doing so might have shaken credit, and engendered alarm. It was upon his persuasion, that the reverse would be the result of the plan under their lordships' consideration, that he most heartily declared he gave it his entire, unlimited, and unqualified approbation.

The Marquis of Lansdowne

felt it to be of importance that this plan should be put forth with all the authority by which it could be given to the public, because he was convinced it would prove a safe and direct means of returning to cash payments. Before he proceeded, however, to state his reasons in support of the plan, he felt it necessary to advert to the objections of his noble friend near him; for, were the opinion of his noble friend well founded, all the expectations promised from the plan must be hollow. Unless the principles which his noble friend contended for, with respect to the coinage, were proved to be incorrect, the proposed plan must be nugatory. His noble friend's objection resolved itself into this question—whether it was better to have only one standard of money or two? The principle on which the coinage of the country at present stood, was that of one standard, which was gold. Silver might consequently go out or return, without in any degree affecting the exchanges. The mere circumstance of silver being a legal tender to the amount of 40s. did not affect that result; for no foreign or home merchant, in any money-transaction, would take into consideration that small portion of silver into which he did not expect to convert his bill of exchange, and in fact could not expect to convert it. But he had to contend with his noble friend on various grounds, and under various shapes; for Mr. Mathews, in his "at home," did not assume more characters, or support them more successfully. In his character of "an old merchant," his noble friend complained that those who opposed his doctrine took two different grounds—the limitation of the sum, and the legal tender; but the fact was, that both those circumstances operated to prevent any evil. Nothing could be more dangerous, the continuance of nothing ought more strongly to be deprecated, than that of the state of things which had for some time existed in this country, wherein, as it had been truly stated, no man could call his property his own, and which took from the Crown one of its noblest prerogatives, one which had always been accounted inter magna coronœ regalia, and transferred it to a company of merchants.—With regard to the plan itself, it had been opposed by some who thought that the paper circulation had been of the greatest advantage to the country. Were this true, their lordships would be relieved from all difficulty on this subject. But there were two very different paper systems—one in which notes were convertible into cash; and another in which they were not convertible. The former was fraught with the greatest evils, as it was the means of diverting capital from productive to unproductive labour. But it was not merely commercial operations which this system had injured. It had led to serious inconveniences in the measures of government and the legislature. He had hoped that a proposition would have been brought forward for putting an end to the purchase of exchequer bills by the Bank; but he understood that a measure having that object was expected to come from the other House. This practice of making advances by the Bank to the government, made in fact no difference between their notes and paper issued on account of the state, except that the corporation had the benefit of the transaction instead of the public. Adverting to a bill introduced about two years ago, for enabling persons to transfer stock to Ireland, he observed, that had he then been aware of its character, he should have felt it his duty to oppose it. Stock, no doubt, was an article which we were very well able to export; but the bill had the effect of reducing considerably the value of all stock in Ireland, for it increased the debt, without at the same time creating a sinking fund to counteract it, and it also altered the rate of exchange between England and Ireland within a few weeks, to the amount of six and a half per cent. He now noticed this as an apposite illustration of the evils that resulted from the present system, for had the country had the advantage of a metallic currency, no such transfers of property would have taken place. He trusted it was the unanimous wish of their lordships to remedy the system. He gave his warmest support to the plan, as it was calculated to bring about cash payments without any violent change. In voting for the resolutions, he, however, wished to be understood as not binding himself to the principle contained in them, as a permanent system; that would be a subject for future consideration in parliament. He had, however, every hope of its success, in producing the restoration of the ancient metallic standard of the country.

The resolutions proposed by the earl of Lauderdale were then negatived without a division: after which, the original resolutions were put and agreed to.