HL Deb 06 May 1830 vol 24 cc428-45
Viscount Goderich

said, after the time of their Lordships had been so long occupied with petitions, one of which had been withdrawn and another rejected, he was afraid that he could not expect that their Lordships would pardon him, if, upon a subject so uninviting as that of public credit, he should detain them long. He trusted, however, that they would excuse him if he prefaced the Motion with which he meant to conclude, by making some observations on the subject to which that Motion referred. He hoped he should find an apology, and even a justification, in the fact that the subject, which was of great importance at all times, was, by particular circumstances, rendered so additionally important just now, as to compel and command public consideration. That the National Debt was a subject of great importance no man could doubt, who considered that its amount was so great that not less than half of all the money levied by taxation went to pay the charges for it. Owing to the great pressure occasioned by those charges, our present system of taxation was very grievous, for it consisted principally of taxes raised at the moment under the influence of necessity, being intended to supply the immediate demand of the day, and little or no consideration was paid to the ultimate consequences of taxes so imposed. The subject acquired additional importance at the present moment, by the circumstance, that a large part of the community was in great difficulties and distress, who naturally looked with dissatisfaction and disfavour at what was supposed to aggravate the pressure of the public burthens. Accordingly, it was found that many opinions were now prevalent respecting the public debt, such as representing that the public suffered enormously from its operation—that it was an intolerable grievance, and that the pressure was so great, that no relief could be obtained, unless by laying violent hands on the Debt, and committing a gross act of injustice and spoliation on the public creditor, by forcibly diminishing the charge, and forcibly reducing the rate of interest, against which it would behove their Lordships to be on their guard. To meddle violently with the Debt, would be considered a most fatal event, leading to the greatest possible mischief, and there was no part of his Majesty's Speech, delivered at the opening of the Session, in which he more heartily concurred, than in the last part, where his Majesty recommended Parliament, "whatever view it might take of the public difficulties, not to lose sight of the importance of maintaining unimpaired the public faith and the public credit." To that he entirely and cordially subscribed, and deeply should he lament ever to see that advice rejected by Parliament—deeply should he regret to know that Parliament had adopted the opinion that it was necessary to act in what he thought an unjustifiable manner towards the public creditor. It appeared that the view many persons were disposed to take of the National Debt was, in a great measure, the consequence of the actual pressure of the Debt; but partly also, it was the consequence of the wrong view those persons entertained of the possibility of diminishing or getting rid of the Debt: they had formed a false theory, and had drawn erroneous practical conclusions. In the first place, it was supposed that since the termination of the war, little or no progress had been made in diminishing the burthen of the Debt, and it was represented as an act of insanity, as well as injustice, to attempt to pay off in a rectified metallic currency, a debt contracted in a depreciated currency. It was represented that all classes in the country had been for many years suffering under difficulties and distress, which had now reached their acmé; that the only class which had been free from these difficulties was the class of public creditors, who, it was represented, grew wealthy and profited at the expense of the other classes of the community. It was also said, that it had become nearly impossible for the country to go on under such a grievous burthen, and that it was both unreasonable and unjust to attempt to preserve faith with the public creditor in the midst of increasing difficulties and a continually failing Revenue. These opinions were widely diffused—he had read them in many publications—he had seen them in resolutions adopted at public meetings, and he had heard them read in petitions at the Table of that House. It was because he conceived that these opinions were founded in great errors of fact, and were supported by many fallacies in reasoning, and because he thought it might be shown that there were errors in fact and fallacies of reasoning concerning the National Debt, that he had taken the liberty to call their Lordships' attention to the subject, thinking it of public importance to show that some current opinions were extremely erroneous. First, as to the amount of the National Debt, and the efforts that had been made since the war to reduce the charge. It was generally stated, that there had been little or nothing done, and that the whole capital of the Debt had not, in fifteen years, been reduced more than the sum of forty millions. If that were true, very little indeed had been done; but it was inaccurate as to the fact. Even in looking at the question as to the amount of capital reduced, it appeared from the figures that it amounted to sixty millions. But the great fallacy in this matter was to argue—and this was an assumption continually made—as if there existed any such thing as a capital of the National Debt; there was no such thing as a capital of this Debt. He denied that there was any capital corresponding to the debt due to the public creditor. An ordinary debt was composed of capital lent to the debtor; it was competent to the borrower to repay what he borrowed at his own convenience, and in was competent to the lender to demand back his principal. Of these two conditions only one was applicable to the National Debt. By the contract the State had entered into with its debtors, it had the right to pay them off whenever it was convenient or advisable for the State to do so; but, by the terms of the contract, the public creditor could never claim from the State a single shilling of what he had advanced. The utmost which he was entitled to claim—and to that alone had the State pledged itself—was the payment of an annuity. That was all the public debt consisted of, and the evil and pressure it caused all arose from the necessity of paying certain annuities, which were either permanent or temporary: the payment of them was what the contract specified. It was a great error to argue this important question on the supposed immense capital of the Debt. The only question for the public was, in what degree the pressure occasioned by the charge for this Debt was felt. He would compare, not the nominal amount of the Debt, but the charge at different periods; and he would compare it when the charge was highest. There would be one account among those he meant to take the liberty to call for, which would put the facts on this part of the case before their Lordships, but he had been able to make out from documents, laid before the other House of Parliament, some facts which would explain to their Lordships what that information would be when produced. According to the view he took of the National Debt, it appeared to him that its amount had been reduced very considerably beyond the amount of what was ordinarily supposed to be the case. The year when the charge was the highest—the funded and unfunded debt being estimated together, as they generally were in practice, and had been frequently connected in laws—the year when the charge for both funded and unfunded debt was the highest, was 1816. By comparing that year with the present year it would be found that a diminution had taken place in the annual charge for the debt of not less than 4,300,000l.; equivalent, he contended, to a reduction of the capital of the Debt to the amount of 150,000,000l. The total charge for permanent and terminable annuities, and for the expense of management for the public debt in 1816, was 30,648,055l. The total charge for unfunded debt for the same year was 2,290,696l. The total charge, therefore, for the funded and unfunded debt at that period, was 32,938,751l. or very nearly thirty-three millions. At that period the charge was the highest; and he would compare that sum with the charge now incurred for the payment of the Debt. In 1829, the total charge for the permanent and terminable annuities, and for the management of the Debt, was 28,277,117l., being a diminution, as compared to the same head of expense in 1816, of 2,370,938l. The interest on Exchequer bills in 1829 was 878,494l., being less than the interest on Exchequer bills in 1816 by 1,412,202l., The total diminution of charge for the National Debt then in 1829, as compared to 1816, being 3,783,140l. That was, he thought, a pretty considerable sum. Compared with the reduction which was usually assumed to have taken place, it must be found a great advantage. It was little or nothing to have reduced the nominal capital of the Debt forty millions at three per cent, which would only be an annual saving of 1,200,000l., but by what he had stated, it would appear to their Lordships, that the actual saving was two millions and a half more. It was unfair, then—it was in fact an error, to describe the reduction of the Debt in the common way, by the nominal amount of the capital reduced. But it would be taking an imperfect view of the subject were he not to refer to an operation which was then in progress, and which, when completed, as it would be in 1831, would make the diminution more considerable than he had mentioned. He alluded to the plan for reducing the 4-per-cents. He had never entertained a doubt that this measure was practicable, nor had he ever entertained a doubt that it was just. A great clamour had been raised against it, and a great deal of nonsense had been both written and said, and several steps had been taken with a view to enhance the difficulties of the undertaking, or to defeat it altogether. Those efforts had been unavailing, and indeed it was absurd to suppose they could have been successful. That the measure was not unjust, the conditions of the contract would distinctly prove. The stock now reduced was originally the 5-per-cent Stock, and it was the same Stock that was reduced in 1822; and then it was distinctly stated, that it would be liable, after a certain period, to be reduced still further, if circumstances made it convenient. When his noble friend (Lord Bexley) carried that reduction into effect, with what he might call marvellous success—for it was as great a financial operation as ever was undertaken—the terms of the new contract were, that the holders of the 4-per-cent Stock then created should be liable to have it reduced at the expiration of seven years. That period expired in October, 1829, and that stock was now liable to be reduced whenever the Government might find the reduction convenient. If the Government had used any means to force up the price of stock it might have been unjust, but it was impossible to believe that it had ever contemplated any such thing. If it could conveniently reduce this interest, the Government would have committed a great blunder, it would not have done its duty, if it had not carried the measure into execution. When that measure was completed, the saving on the interest of the debt, the year following, would not be less than 778,000l. to be added to the sum he had already mentioned as the diminution of the yearly charge. Another saving made during the present year would be on the interest of Exchequer bills, which would not exceed 750,000l., being 128,000l. less than the charge for 1829. If their Lordships were to add the saving on the interest of Exchequer Bills to the saving by the reduction of the 4-per-cents, their Lord- ships would find the amount of the actual saving.

The Duke of Wellington

said, that by a reduction of the rate of interest on Exchequer bills there would also be a saving.

Viscount Goderich

, in continuation: That made the argument he was stating so much the stronger; but without including that, the reduction of the charge on the National Debt for the next year, as compared with 1816, would not be less than 4,689,000l. It might be supposed that this was overrated, that something might be demanded to pay off the dissentients, who held 4-per-cent Stock, and who would not take 3½-per-cent, and therefore he would stale the saving at 4,500,000l. This was, he contended, a very considerable reduction. The sum of 4,500,000l. interest was equivalent to a reduction of 150 millions of capital at 3-per-cent. If in 1816 it had been stated, that in the year 1830 the National Debt would be reduced 150 millions—if his noble friend near him, Lord Bexley, had then made such a statement, he would no doubt have been regarded as a visionary—he would have been charged with exciting false hopes, and of giving flattering accounts to delude Parliament and the country. It was, however, a fact, that in fifteen years the annual charge had been reduced 4,500,000l., which was equivalent to a capital of 150 millions. That statement would show their Lordships that it was a great mistake to assert that no progress had been made in reducing the charge for the Public Debt since the war. The next point he would direct their Lordships' attention to was the fallacy of the statement or opinion entertained by many persons, and, among others, by a noble friend near him (Earl Stanhope), that it was wrong to pay in a sound restored currency a debt which had been contracted in a depreciated currency. If it were true that we were so paying in a metallic currency a debt contracted in a depreciated one, without an equitable adjustment of the difference of value between the two currencies, there could be no doubt that we were pursuing a very prejudicial course with respect to the public interests. But we were not, and the error which induced some persons to think we were, lay in its being assumed that the whole debt had been contracted in a depreciated currency, Nothing so extravagant, though some people nourished all sorts of extravagant opinions, could however be seriously asserted. Admitting a certain depreciation of the currency, as there was no real capital of the Debt, its only effect would be to enhance the annual charge for the nominal debt. If he were to extend the depreciation over as long a period as possible, it would not amount to twenty per cent on the whole debt, and only amount to twenty per cent on the whole charge. What was the effect of a depreciated currency, unless to raise the nominal prices of merchandise, using the term in its most extensive signification—and to compel a borrower to borrow more money than he need, or would have borrowed to meet his expenses, but for this rise of price? During that period of the war in which the loans in a depreciated currency had been contracted, the average rise of price might be taken at twenty per cent—that is, Ministers had to borrow twenty per cent more than they would have borrowed but for the high price of commodities—or, they were obliged to add to the charge of the debt contracted during the depreciated currency in the proportion of twenty per cent. It appeared from figures, that the annual charge for the sum borrowed during the depreciation amounted to 17,500,000l. and taking twenty per cent on the total sum borrowed during that period, that made the additional charge amount to 3,500,000l. Twenty per cent on 17,500,000l. was 3,500,000l.; that is to say, but for the war there would not have been such large loans, and but for the high prices consequent upon a depreciated currency, there would not be this additional charge for the loans made during the war, amounting to 3,500,000l., Unless the charge on the Debt had been since the war reduced 3,500,000l., the country would be paying, the currency being now on an improved fooling, a portion of debt contracted in a depreciated currency. Well, then, had the charge on the public Debt been reduced 3,500,000l. since the war? He need not answer the question in the affirmative, as he had just shown a reduction ofupwardsof4,500,000l., the difference between the charge now, 29,000,000l., and in 1816, when it was 33,500,000l., to speak in round numbers for the sake of clearness. It was therefore a great fallacy to say that they were then paying in a restored currency for a debt contracted in a depreciated one, without any equitable adjustment of their relative difference. The fact was, that a portion of the Debt more than equivalent to that portion contracted in the depreciated currency had been paid off, consequently, he was entitled to say, that the remaining portion had not been, as was in his opinion incorrectly asserted, contracted in a depreciated currency. The next point he should offer a few remarks upon was, the objection, or assertion, he did not know which he should call it, that the Stockholder was now deriving advantages from the general low prices of commodities, at the expense of the other classes of the community. Now he for one was far from being an enemy to low prices; indeed, he believed no body was but sellers, each seller too only was so far as his own merchandise was concerned: buyers liked low prices, which he conceived were most advantageous to the general interests of the public. He therefore, were it only on that ground, did not grudge to the stock-holder the advantages which the present lowness of prices might afford him, supposing, if their Lordships would, that he did derive a greater advantage than his neighbours from that circumstance. He thought it unfair to charge the stock-holders with those advantages, for it should be remembered that they had had their evil day while other classes had the sunshine of high prices. On this ground, also, he should not grudge them the benefit they might derive from low prices. But, moreover, what did the low rate of interest, the low rate of prices, mean as an exclusive advantage to the stockholder? Why, that funds, that stock, bore a high price, so that the holders might now sell them for more money than they paid for them, and by so much reap a profit. But all this while it should be borne in mind, that the circumstances which induced the present low rate of interest, and all its consequences, were also highly favourable to the other classes of the community. For example, such of their Lordships as had mortgages on any part of their property, contracted, say at five per cent, must find the present low rate of interest highly favourable to paying off those mortgages, by borrowing money at 3 or 3½ per cent. He spoke from his own experience in this way, and also from what he had heard of others, who, like him, found it very convenient now to reduce the interest on debts contracted at a higher than the present market rate of interest. And the argument equally applied to all claims on all landed or other property, showing that the advantages which it was conceived the stock- holder derived exclusively from low prices, were generally shared by the public. By this low rate of interest the public would be gainers to an enormous extent, so far as the charge of its burthens was concerned; for it had enabled Ministers, as he had explained, first to reduce the 5-per-cents to 4-per-cents., and next the 4-per-cents, to 3½-per-cents. He repeated, then, that it was unfair to speak of the stockholder as deriving advantages exclusively from circumstances which occasioned distress to other parts of the community. The next point to which he should direct the attention of their Lordships was, the alleged impossibility of going on under what was called a failing Revenue. If it were true that little or no reduction had been made in the amount of the public Debt,—that no reduction had been made in its charge,—the alarms of many well-disposed persons might be considered to be not wholly without foundation. But when it was considered, on the one hand, that not less than 4,500,000l., of reduction had been made in the charge of the national burthens, as he had explained; and that, on the other hand, a considerable reduction of taxation had been effected without a diminution of the Revenue, he could not for a moment enter into the gloomy views of those who predicted so unfavourably of our resources. To make the matter plain, he would take the Revenue derived from the Excise and Customs in the twelve years, from 1817 to 1829; and he found, that in five of those years the Revenue was less than in 1829; in the remaining five, something more. Taking the three years,—1817, 1818, and 1819, the Revenue derived from the Excise and Customs stood in the following order:—in the first of those years it was 32,740,000l.; in the second, 36,252,000l.; and in the third, 35,776,000l. But in 1829, he found the Revenue derived from the same sources to be 37,000,000l., though not less than 9,000,000l. of Excise and Customs' taxes had been repealed. This fact in itself showed that the Revenue was not falling off, and the assertions founded on so erroneous an assumption required no refutation. It proved that, however distressing the difficulties under which we at present laboured might be, they were but temporary, that the resources of the country were still unimpaired, and that all that bad been said about our being near to a state of bankruptcy was founded in misapprehension. To make the matter still more evident he would enter a little more into detail. He should wish to direct the attention of the House to the following-returns of Revenue derived from the Customs and Excise for the last four years, as he thought they would set at rest all gloomy predictions respecting the prosperity of the country. The average revenue derived from the customs in the years 1826, 1827, and 1828, was 17,477,000l. The revenue derived from the Customs in the last year was 17,211,000l.—showing, he admitted, a falling-off of upwards of 250,000l. Some stress might be laid on this defalcation, which was accidental; but he did not think the amount of it required any explanation; and the rather, as it was more than made good from other sources. The average revenue derived from the Excise in 1826, 1827, and 1828 was 19,456,000l. The revenue of last year was something more, being 19,540,000l. The revenue derived from Stamps in three antecedent years was 6,873,000l., that of last year was 7,101,000l. The Assessed and Land Taxes in the three antecedent years amounted to 4,772,000l.; in the last year they amounted to 4,896,000l. The Post-office, during those three years, produced 1,513,000l.; in the last year it produced 1,481,000l.;—a falling-off which, were it necessary, he might explain by some alteration which had taken place in the mode of remitting bills of Exchange by letter. Taking, then, the whole Revenue thus derived in the three antecedent years, and comparing it with that of last year, he found an increase of, he admitted, but little amount: still, however, it was an increase, though the contrary had been stated to be the fact; the amount of the Revenue, in the former three years, being—50,087,000l., and in 1829 50,280,000l. He might be told that, all things considered, this was a falling off. Why, bless their hearts, what did they want? He begged pardon for speaking so colloquially; but were they to be frightened out of their senses by an accidental defalcation in one quarter which would probably be made good in the next? They ought not to look to days or quarters, but to the average of years, and that average would show that there was no foundation for desponding views, for thinking that every puny whipster that pleased might snatch the sword from our side, or that we were so fettered as to be unable to offer any effectual or becoming resistance. He maintained that the energies, the resources of the country were still unimpaired, and were never more equal to any demands, which might be made on them for the assertion of national honour. It might be said, however, that, though the present aspect of the country was favourable, and that though the reduction he had pointed out might have been made in the national burthens since the peace, yet there was no ground to warrant us in looking forward to the continuance of those favourable circumstances, or to further reductions. He was not able to say whether this were true or not. He thought it highly probable. He could not take upon himself to say that, by the end of the next fourteen years, there would be other reductions equal to those of the last fourteen. But what inference ought to be drawn from this? Why, only that it was the duly of Parliament and of Ministers to superintend with unceasing vigilance the whole system of taxation, to see how far reduction might be effected, to determine what were the effects of the present distribution of the several taxes, particularly of those on productive industry, which ought to be removed above all others, in a word, to effect every possible reduction compatible with the exigencies of the State, and preserving inviolate the public faith. He for one did not mean to impute any lack of this necessary vigilance to the present Government, in whose disposition to economies he had great confidence. There was one other point upon which, before he sat down, he was desirous of making a few remarks: he meant the transactions between the Government and the Bank of England, relative to the issue of Exchequer Bills. He thought it highly desirable that the issue of those bills should be restricted as much as possible. He was aware that of the 20,000,000l. which were said to be floating in the market, 6,000,000l. only were in the hands of the Bank, and that even of those it was said but 1,600,000l. or l,700,000l. passed directly from the Government, the remainder having been purchased by the Bank in the money-market. He was aware also that they were a very convenient sort of security, as indeed was evinced by the premium which they bore in the market; but he still thought that they were what was vulgarly called so ticklish a species of se-purity, that too much caution could not be observed in the issue of them. This was the more necessary, as the period of the renewal of the Bank Charter approached. Indeed he thought it quite essential that the Government should pay off all the Exchequer Bills held by the Bank before they came to consider the subject of the renewal of the charter. So long as the Bank had those Government issues in its hands, it had a purchase, more or less, on freedom of action in the Government, and consequently it was highly desirable that the Government should free itself from the operation of such restraint with as little delay as possible. He should propose that they should first pay off those held immediately by the Bank, though at temporary inconvenience: and next, that they should buy up those in the money market at large. There were many results ensuing from a large issue of Exchequer Bills, to which he should willingly direct the attention of their Lordships, did they fall within the scope of his present Motion. It was sufficient to remind them that the holders of such bills had the power, once every year, of demanding the amount they gave for them from the Government. In other words, that they possessed the power of embarrassing the financial arrangements of Ministers. He had now brought his observations to an end. He professed to have no object in view in his remarks, except the removal of those erroneous impressions, which were so prevalent on the important subjects thus cursorily explained. The present financial position of the country, in his opinion, exhibited no grounds for alarm or despondency, however heavy the pressure of our debt might be considered. It ought to be frankly admitted that we suffered much from that pressure; but it ought also to be asserted, that the energies of the country were rising superior to its burthens. The reason why he felt most concerned at an opposite view being taken by any person was, from the effect which the expression of it might have on other nations. If desponding language were to be held by this country, nothing but danger could surround her, and the alarm once given, he would not give many years purchase for the peace of Europe. The consequence would be, that England would be driven from the high station she had hitherto held—an object at which all other nations thought that it was their interest to aim. The influence of England on the Continent was, to a great extent, founded on the confidence that foreign nations had in the honour, integrity, and good faith of this country; but that influence was essentially built on a conviction of our strength; and feeling that that strength was not yet impaired, he was convinced that nothing could be more disastrous both to other nations and ourselves, than to invite attacks by assuming an appearance of decay. England still, in his opinion, had all her wonted resources within herself; and if the time should ever come when she was to be attacked, he did not doubt that— Our castle's strength would laugh the siege to scorn. The noble Viscount concluded by moving for several Returns to elucidate the statements he had made.

The Duke of Wellington

said, he considered that the Government and the people were under the greatest obligation to his noble friend for having introduced the subject to their notice, and for the manner in which he had treated it. He would not weaken the effect of the admirable speech of his noble friend, either by commenting upon its matter, or by repeating over again anything that he had said. In general he agreed with all that had fallen from his noble friend, and he congratulated their Lordships in having had laid before them so admirable a statement of the true state of the National Debt, and of the interest paid by the nation on that debt. There was only one part of the statement of his noble friend to which he must confess he could not give his entire concurrence. The part to which he alluded was that in which his noble friend had, with his customary candour, commented upon that topic which usually went by the name of the Equitable Adjustment. His noble friend had admitted that an increase of the Debt was occasioned by the depreciation of the currency, and had stated the amount of that at twenty per cent. It was certainly true that there was a large increase in the price of commodities during the depreciation of the currency; but the allowance that his noble friend had made appeared to him to be a very large allowance indeed. His noble friend had admitted too much he thought in stating the annual increase of the charge on account of the Debt contracted in a depreciated currency at 3,500,000l. To calculate it they ought to take the difference between the market price of gold and the Mint price in 1819, when the Bank Restriction Act was repealed. The dif- ference then was abour four per cent, and as the amount of charge for the Debt at that period was 30,000,000l., this difference of four per cent made 1,200,000l., That was all which could have been saved by sacrificing the honour and credit of the country, by what was called an Equitable Adjustment. By the measures that had since been taken—there had been an actual saving of 150 millions to the country—a circumstance which ought to give them hopes that every thing that was required by the country might be done with good faith and honour, instead of resorting to the national bankruptcy that was recommended by some—he begged to say that he was not in this alluding to his noble friend, Earl Stanhope. His noble friend had concluded by some observations on the Unfunded Debt. It was true that the amount of Exchequer bills was twenty-five millions; but of that sum four millions had been issued on account of public works, and would be repaid without causing any charge to the country. Of the remaining twenty-one millions, six millions were held by the Bank of England; so that instead of twenty-five millions, there were only fifteen millions actually in circulation; and it did not appear to him that that amount was too large, considering the present state of the credit of the country. All these matters, however, would, of course obtain the anxious consideration of the Government; and he was sure that the advice of his noble friend would have weight with the Chancellor of the Exchequer, as well as with himself, when the subject came to be taken under consideration. He could not allow the excellent observations of his noble friend to pass without these few remarks, and he hoped that it would be found that the speech which he had made would have its due effect both with the Parliament and the Government. At least he could assert that it was the intention of the Government to follow the example that had been set, and both reduce the national expenditure, and the National Debt, to the utmost of its power.

The Earl of Stanhope

said, he felt himself called upon to say a few words on this question, and to declare that his views of it were totally different from those taken by the noble Duke on the opposite side, and other noble Lords on this side of the House. Instead of the triumphant statement made by the noble Viscount (Gode- rich), he wished to call their Lordships' attention to the real situation of the country, comparing it to what it was when that great financier, Mr. Pitt, guided its resources. There was now a total wreck, not a vestige of the Sinking Fund remained. He wished to deny that he had ever said that an equitable adjustment would he inequitable in principle; this assertion had been attributed to him, but he denied it. If indeed his view of the state of this kingdom were dark and gloomy, as perhaps it was,—it was a view that had been formed from much reflection, and he confessed that there was not an individual in the House who contemplated the situation of the country with deeper awe than he felt. Again, he wished to ask, in case this country should go to war, what would be the situation of the Minister who sanctioned war, unless accompanied by a Bank Restriction Act? If such a measure were not adopted, it would involve the impeachment of the Minister. It was, in his opinion, utterly impossible to continue the currency of this country in its present form, and he was astonished that noble Lords, who assumed a high tone of defiance, should entirely have overlooked the important consideration of the agio of exchange, as connected with the exportation of gold. With regard to an average of prices, he would refer their Lordships to the year 1819, from which period, prices had fallen fifty per cent, and in many cases more. This gave no concern to the noble Viscount; he exulted in low prices, which, if accompanied by a state of prosperity, were a blessing;—but a curse—a frightful curse—when arising from a great reduction in consumption, and a great increase in the value of money. Under such circumstances it was absolutely impossible to continue to raise the same amount of taxation. We were not able to sustain low prices, coupled with high taxation; which was a contradiction of terms; that was he repeated utterly impossible, and the evidence of facts proved it. To those who had had the misfortune to conduct the Administration of this country, he would say, that they were exposed to this dire alternative—they must either retrace their steps, and restore the currency to the state in which it was at the early period of lord Liverpool's administration, immediately after the peace, or proclaim a national bankruptcy. The mode in which we might restore this country to prosperity, if we had recourse to an equitable adjustment, must be by striking off from the capital of the Debt seventy per cent, and reducing all public payments in the same ratio. Such an overwhelming reduction could only be productive of the most frightful consequences for every class; and it would be summoning them to resist such a proceeding by physical force. He knew that in some countries, particularly in Austria, an equitable adjustment had been effected; but the situation of that country, as compared with this, was totally different. Their Lordships were aware that there existed for many years in that country two distinct species of currency, and the relative value of the two was the best criterion of the amount of depreciation to be adjusted. Such also would have been the situation of this country, had an Act of Parliament not been passed, making it penal to circulate guineas at more than 21s. Thus, the very foundation upon which an equitable adjustment could be effected, was wanting in this country. An equitable adjustment could not therefore be accomplished, compatibly with strict justice; but, at the same time, it appeared perfectly obvious, looking at all that had occurred since 1822—after suffering the greatest distress—bearing in mind what took place when the law for altering the currency came into operation—and that, reckless of the consequences, we still continued this measure; looking at all these things, it was obvious to him that there was but one of two ways for us to adopt—either to try what was termed an Equitable Adjustment, or again to effect an alteration of the Currency. His noble friend did not seem alarmed at the decrease of the Revenue; he drew a flattering picture of our resources, but his expectations were wholly fallacious. With regard to the reduction of the Assessed Taxes, he believed that in the parish of St. George, Hanover-square, a considerable diminution had taken place. The noble Duke had done him the justice to say, that he was not one of those who recommended a public bankruptcy; at the same time he must state that he concurred with the noble Earl who presented the petition from Northumberland, in the opinion that the country could not go on as at present. The course which he would recommend to his Majesty's Ministers would be, to retrace their steps, and to place the Govern- ment in that situation which would enable it to lighten the burthens of the public Debt. In conclusion, he begged to apologise for having so long detained their Lordships; he did not intend to do so, but the subject was one in which he was deeply interested, and could never hear mentioned without being tempted to take part in the discussion.

Lord Bexley

observed, that the noble Lord near him contended that the country could not go to war without a Bank Restriction so long as the war might last. Now he thought that nothing could be more impolitic than such a measure; for it would be the most effectual means of crippling the resources of the country.

Lord Carnarvon

said, that that credit which the just confidence of mercantile men enabled them to give each other in this country, which was the surest means of keeping the capital of the country in a state of activity, would admit of a paper currency, and would give us an advantage over the nations of the continent. A paper currency however was perfectly distinct from a Bank Restriction Act, nor did the former necessarily require the latter.

Motion agreed to.

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