Lords Sitting of 22 March 1870

MINUTES.
PUBLIC BILLS—First Reading—Dublin Collector-General of Rates Franchise* (44).
Second Reading—(£9,564,191 7s. 2d.) Consolidated Fund*.
Committee—Coinage (36–45); Consolidated Fund (£9,564,191 7s. 2d.)*, negatived.
Third Reading—Income Tax Assessment and Inland Revenue Law Amendment* (37), and passed.

COINAGE BILL—(No. 36.)
(The Marquess of Lansdowne.)

COMMITTEE.
Order of the Day for the House to be put into Committee, read.
Moved, "That the House do now resolve itself into Committee."—(The Marquess of Lansdowne.)
THE DUKE OF RICHMONDsaid, that before the House went into Committee he wished to call attention to one or two provisions in the Bill which he thought were of a somewhat extraordinary character, and required great consideration before it was passed into law. He found that in the Bill, as originally presented to the House of Commons, silver as well as gold was included; but in the Bill now before their Lordships there was no reference whatever to silver, and therefore he should be glad to hear from the noble Marquess (the Marquess of Lansdowne) why such an important omission had taken place. There was another point, also, which required explanation. The Bill provided for the appointment of the Chancellor of the Exchequer as Master of the Mint; but although there was no mention in it of any salary to be received by the Chancellor of the Exchequer for Ids services as Master of the Mint, it appeared from a somewhat singular document, signed by C. W. Fremantle, the Deputy Master of the Mint, and C. Rivers Wilson, the private secretary of the Chancellor of the Exchequer, and presented to the other House a few weeks ago, that it was proposed to give the Master of the Mint a salary of £1,500 a year. Now if that was the case, the salary of the Chancellor of the Exchequer had been increased by that sum. As he considered this a rather extraordinary arrangement, he wished for some information from the noble Marquess on the subject.
THE MARQUESS OF LANSDOWNEreplied, that the Report referred to by the noble Duke was prepared by the two gentlemen whose names were attached to it, with a view of affording Her Majesty's Government a sort of statement as to the administration of the Mint; but it was not prepared as the basis of legislation on this subject; and he did not think the opinion of a private secretary should be accepted as pledging the Government or the Chancellor of the Exchequer to any positive statement of fact. The office of Master of the Mint was formerly a non-political office, but before the close of the last century it became a political office. By the present Bill it was proposed that the scientific duties of the Mint should be conducted by the Deputy Master, and the Parliamentary duties by the Chancellor of the Exchequer. In regard to the

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question of salary, the Chancellor of the Exchequer had himself stated in "another place" that no salary was to be attached to the office of the Master of the Mint. With respect to the omission of silver from, the Bill, the Government were not supposed to make money by the gold coinage; but it did make a considerable sum by the silver coinage, and it was therefore considered advisable to make the omission referred to by the noble Duke.
LORD KINNAIRD: I have given notice of a Motion that this Bill be referred to a Select Committee. My reason is, that this very important measure has not received due consideration; for it passed through its various stages in the other House after midnight, and Amendments were introduced only by Members who represented establishments interested in the question. The noble Marquess stated on the second reading that it contained no innovations and no new principle.
THE MARQUESS OF LANSDOWNE: I said it contained no important innovation, with the exception of the clause transferring the Mastership to the Chancellor of the Exchequer.
LORD KINNAIRD: But I contend that it contains very important alterations. I do not at all complain of the noble Marquess, for of course he was instructed to say what he did. It has been framed on the Report of two gentlemen, who, no doubt, are very good official men; one of them is secretary to the Chancellor of the Exchequer, and the other is the Deputy Master. For any official work more competent gentlemen could not be selected, but they are totally ignorant of the working of the Mint. There are passages in their own Report which will show this. In one passage they say—
"It may be mentioned that the legal remedy of weight for gold coin is ·25 of a grain, but that although by far the larger portion of the recent coinage of £8,000,000 was coined at the low working remedy of ·17 of a grain—and all gold coin passes through the delicate automaton weighing machines, yet the average of rejected work in the whole coinage only amounted to 15½ per cent."
So that "only" 15½ per cent or "only" rather more than one-sixth of all the coinage was bad work, and had to be re-coined. Anyone acquainted with the Mint will know that that is very bad work indeed. Then the Report contains an extra-
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ordinary recommendation that the Mint should be allowed to undertake coinages for foreign Governments. That showed their total ignorance of the working of the establishment, for they could only undertake such coinage by contract; and they would have found on inquiry that at times the Mint is called upon, without previous notice, to coin large sums. If, therefore, they had foreign contracts, they could not fulfil an obligation which is most important when money is scarce, or when there is any kind of panic. It is true that the officers of the Mint cannot be kept constantly employed; but only inexperienced gentlemen would have suggested foreign contracts as a remedy for this. Then the remedy allowance for over or under weight is reduced by the 3rd clause to 0·2. The consequence of so low an allowance will be that a great deal of gold will have to be coined over again, adding immensely to the expense. Clause 11, however, gives a power of reducing oven this allowance; but if this were put in force, it would be like compelling the Israelites to make bricks without straw. A complaint has recently been made by an hon. Member of the other House that the Mint refused gold which he sent to them to be coined. Now I do not think he had much of a case; but there is a general impression that this Bill gives power to anyone to send gold to the Mint. But if this is to be done by proclamation, it will always require the consent of the Government. There are, however, provisions by which the Mint cannot refuse any bullion so sent. Now, provided the bullion is free from lead, antimony, tin, and arsenic, there can be no difficulty in coining it; but if gold containing those substances be sent, the present Mint authorities find it impossible to coin it, therefore there should be a power of rejecting it as not being properly refined; and these substances are found in Australian and Californian, but not, I think, in Russian gold. In 1868 a quantity of gold of this kind was sent by the Bank to the Mint. The coins produced were very brittle,, but £640,000 were annealed after coining, whereby their brittleness was greatly increased, and the Bank naturally made a complaint on the subject. With regard to the introduction of foreign coins, the Bill gave power to the Privy Council to direct that coins coined in any

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foreign country shall be current and be a legal tender at such rates, up to such amounts, and in such portions of Her Majesty's dominions as may be specified in the proclamation. Now, it may be desirable to have an international coinage if it can be done without individual loss, but a power of this kind to introduce foreign coins ought not to be given to the Government. We had at the present time before us the inconvenience and loss to individuals which had been caused in France by the introduction of the debased Papal coinage. This is a new provision, and ought not to be passed without serious consideration. No doubt, the clause may be amended in Committee, if I am not successful in getting the Bill referred to a Select Committee. But the most important question of all is the appointment of the Chancellor of the Exchequer as Master of the Mint. I see that he is to be "The Master Worker and Warden of Her Majesty's Royal Mint in England and Governor of the Mint in Scotland." Now, as I stated the other night, a public Department ought not to be conducted by men who have no practical knowledge, especially when you consider the delicate nature of the machinery and the close supervision that is daily required to prevent robbery and peculation. It is very important that either the Master or the Deputy Master should be a man of practical knowledge. No doubt there is a great deal of official business which can be done well by an unprofessional officer, if his colleague is an efficient man. I do not, however, see what Parliamentary duties will devolve on the Master. I stated the other night that great robberies have notoriously taken place; and I maintain that these peculations and robberies still continue. If I had an opportunity before a Committee I could prove this; but the Returns which I have obtained will show the correctness of what I am stating. I was not surprised the other evening at a particular Return being refused, for the officials of the Mint naturally dislike further exposure; but the Returns before us clearly show that under the term "waste," which should rather be "stolen," large sums are lost in coinage. There ought to be no loss in coinage if the Mint was properly conducted. There might, indeed, be a small loss of £100 on the million in the melting
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department; but in the coining there should be a gain on every million of at least £59, making the net loss £41. Instead of this, however, there is a loss as these returns show, of £460 on every million coined. What becomes of that sum? It must go into some one's pocket, and, in point of fact, it is abstracted. Look, too, at the large sums which are paid to the Bank of England for loss every time there is a coinage. At one time there was a loss of £1,132 on every million for loss of gold abstracted and not returned in coinage. From 1851 to 1857 there was a loss; in the next two years there was a gain; the next two years there was a loss; and the following years there was a gain, and after that losses. Now why should not the gain continue? Why was there a gain? Because the men were properly looked after, and could not abstract the precious metal. It is true that the "sweep," which is not included in these Returns, may account for part of the losses; but these Returns prove a very serious state of things in the Mint; I hope your Lordships will agree to refer this Bill to a Select Committee, or will hereafter agree to an independent inquiry into the Mint, conducted by other gentlemen than the Chancellor of the Exchequer's private secretary and the Deputy Master. I contend that very gross mismanagement somewhere exists. Since I came into this House I have received a letter from a gentleman who was employed by the late Earl of Derby to report upon the formation of the Mint in Australia. It is right that I should read it, for it confirms what I have just stated. The writer says—
"I am sure you will excuse my addressing you on the subject you referred to in the House of Lords on Friday evening—that of the Coinage Bill brought in by the Chancellor of the Exchequer and Mr. Stansfeld.
"The purport of this Bill is one of the highest importance to the commercial and industrial interests of the nation, and yet it has been allowed to pass the House of Commons with scarcely an opportunity of discussing its principles.
"I do not know whether your Lordship is aware that the Bill has been evidently framed on the recommendation of a 'Memorandum on the Mint,' one of the signatures to which is that of MR. Lowe's private secretary—C. Rivers Wilson. It appears something like a clerk in a banking house being called upon to furnish credentials for his employer's character and ability. In this 'Memorandum' it is proposed by the framers that the 'Master' shall have £1,500 a year. Surely the Chancellor, who has already taken upon himself

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so many offices of finance, can scarcely be fitted for adding to them the arduous duties of 'Master, Worker, and Warden of Her Majesty's Mint in England, and Governor of the Mint in Scotland,' and by consequence Master of the branch Mint in New South Wales.
"The Bill, my Lord, is evidently urged upon Mr. Lowe by a certain class of officials for the sake of showing a 'miserable economy,' as your Lordship remarks; and the first Schedule dividing our coins into metric weights, is highly objectionable in a Bill of this character. Another objectionable feature in the 'Memorandum' signed by Mr. Lowe's secretary is that of recommending our Mints to enter into contracts to execute foreign coinages.
"Surely, my Lord, this is not a fit office to be filled by an English Chancellor of the Exchequer, and I trust that the Bill will not be allowed to escape a Select Committee."
Now, that letter from a gentleman well acquainted with the subject will show that I have not uselessly occupied time in drawing your Lordships' attention to the state of the Mint; I suppose I shall not succeed in getting the Bill referred to a Select Committee, but I hope that there will be some inquiry. I understand that it is proposed to send a deputation to foreign countries to see how the Mint is conducted there. Now, surely we have the best machinery in the world, and foreigners come from all parts to see it. The loss is easily explained for the gold is stolen, and no information on that point will be elicited from foreign Mints, where perhaps there is a still larger loss. However agreeable it may be to some of these gentlemen to have a trip to the Continent by way of inquiry, I am quite sure that no information will thereby be gained such as may not be obtained by proper inquiry into the management of the Mint. I move that the Bill be referred to a Select Committee.
Amendment moved, to leave out all the words after ("That") and insert ("the Bill be referred to a Select Committee.")—(The Lord Kinnaird.)
THE MARQUESS OF LANSDOWNEsaid, with reference to the Report upon the Mint, to which allusion had been made, that Mr. C. Rivers Wilson was well versed in all matters relating to coinage, and represented this country at the International Congress at Paris; while Mr. Fremantle, since the death of the late Master, had discharged the duties in a way which had led to no complaint. The noble Lord (Lord Kinnaird) objected to power being given to make
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foreign coins current in the British dominions; but this power already existed, and in some of our dependencies it was necessary to exercise it. At Hongkong, for instance, Mexican dollars were the medium of circulation; and though it was not in contemplation to apply the clause to this country, he could see no harm in the proviso on that subject. With regard to the diminution of the remedy allowance, there was every prospect of our machinery being so improved in the course of a few years that the waste would be materially diminished, and in that case the old remedy ought not to be retained. The power to take gold to the Mint for coinage was not altered by the Bill. In a recent case, indeed, a tender of gold had been refused owing to the vacancy in the Mastership; and it was not desirable that this interregnum should be protracted. He denied that there had been any great or habitual peculation at the Mint. There had been a case of a servant of the Mint being dismissed on account of being detected in peculation; but he did not believe that any extensive or systematic peculation had been practised. The fluctuation in the waste, to which the noble Lord had referred, was attributable to the varying quality of the gold, for some had to be fused several times in order to obtain the required fineness, and each fusion was attended with a certain loss. He believed the Mint was as well conducted as was possible with the present machinery, and he entirety denied that habitual peculation prevailed. Every effort was being made to improve the appliances, and Mr. Fremantle was about to inspect the Mints of other countries, which, he believed, would lead to the adoption of some improvements. He hoped the noble Lord would not obstruct the progress of the Bill, which had received the sanction of the other House of Parliament, by pressing his Amendment.
LORD KINNAIRD: I have no wish to cause any inconvenience by delaying the Bill, and I therefore withdraw my Motion. I reserve, however, to myself the right at a later period of the Session of moving for a general inquiry. Meantime, I should like to know who are the gentlemen proposed to examine into the machinery of foreign Mints? There can be no more competent official man than Mr. Fremantle; but I hope the gentleman who will accompany him will be a judge

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of machinery, for I do not suppose that Mr. Fremantle would pretend to be acquainted with machinery.
VISCOUNT HALIFAXsaid, he did not believe any person in the kingdom had a better knowledge of this subject than Mr. Fremantle had.
Motion (by Leave of the House) withdrawn: then the Original Motion agreed to; House in Committee accordingly.
Clauses 1 to 7, inclusive, agreed to.
Clause 8 (Coinage of bullion taken to the Mint).
LORD KINNAIRDsuggested a proviso that such gold should be free from lead, antimony, and other substances, so as to admit of its being coined without previous refining.
THE MARQUESS OF LANSDOWNEsaid, he would consider the suggestion before the Bill was reported.
Further Amendments made: The Report thereof to be received on Thursday next; and Bill to be printed, as amended. (No. 45.)
House adjourned at a quarter past Six o'clock, to Thursday next, half past ton o'clock.