Sitting of 7 May 1811

REPORT OF THE BULLION COMMITTEE—ADJOURNED DEBATE.
The order of the day being read, for the House to resolve itself into a Committee of the whole House, to consider further of the Report which, in the last session of parliament, was made from the Select Committee appointed to enquire into the cause of the high price of Bullion, and to take into consideration the stale of the circulating medium, and of the exchanges between Great Britain and foreign parts; the House having resolved itself into the said Committee, Mr. Lushington in the Chair,
Mr. Vansittartrose and said:
Mr. Lushington; Notwithstanding the evident fatigue of the House, in which I fully shared, when I addressed you at a late hour last night, it was not without some reluctance that I could forego the earliest possible opportunity of expressing my astonishment at the extraordinary manner in which this important discussion has been brought forward.
It was, indeed, with no less surprise than regret, that I first found that the Bullion Committee, composed of men so sagacious, so well informed, so conversant in business, so respectable in every point of view; had formed conclusions so different from those which the evidence before them, as well as the public and well known state of things, would have pointed out to me. I was again surprised to find that my learned and honourable friend, the
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chairman of that Committee (Mr. Horner), should, after an interval of reflection, of near a twelvemonth, during which time an active and intelligent controversy had been constantly carried on, respecting their Report, still feel his confidence so undiminished, as to propose to make it, without further inquiry, the ground of a legislative proceeding of the utmost importance. But above all, was I astonished last night, to find that the learned chairman, after recommending to the House, in speech of unusual eloquence and ability, to adopt and record upon its journals, all the principles and reasonings of the Bullion Committee, should propose to stop short there, and to postpone the only practical conclusion to which those principles and reasonings were designed to lead. The last Resolution is the substantial practical recommendation of the Bullion Committee. The other Resolutions are only explanatory and introductory, and might, if they were well founded in fact and law, be admitted, and placed on the journals, with perfect innocence, but perfect uselessness. The learned chairman, however, wishes to establish his premises, but he hesitates about his own conclusion. He asserts the existence of an enormous evil, for which he says, we have a safe and certain remedy in our hands; yet he desires us to recognise the existence of the evil, but to postpone the remedy.
I can only see one method of accounting for such conduct, consistently with the known talents and character of the Committee; namely, that they are not serious in the propositions they have brought forward; that they either suspect some latent fallacy in their own doctrines, or think them inapplicable to practical purposes. While they feel desirous of saving the credit of the theory, they shrink from the hazard of its application; and we now see those gentlemen trembling on the brink of the precipice to which they have led the nation, under the delusive hope of safety, and afraid either to advance or to recede.
But this suspicion, that the Committee are already fearful of the practical effects of their own doctrines, is strongly indeed confirmed by two other circumstances observable in their late conduct.
The first of these is, that the learned gentleman has not thought proper to introduce his motion for a repeal of the Bank Restriction Bill, by a previous mo-

921
tion for a repeal of the laws which prohibit the melting and exportation of our current coin. It is, indeed, very remarkable, that the Committee have in the Report shown great caution and reserve on this subject. They have not, usually, been so diffident; but on this point they rather hint at, than express, an opinion. They call it a law of "ancient, but doubtful policy;" of "questionable policy;" but they do not recommend its repeal, nor has the learned gentleman proposed it.
Yet it is undeniably certain, that if that law can be effectually enforced, the repeal of the Bank Restriction must, upon all the principles laid down by the Committee, aggravate the very evil for which they propose it as a remedy. For it is evidently impossible for the Bank to resume its payments in cash, without the importation of a considerable supply of bullion for the purpose of coinage. This importation must depress the exchange to at least as great an extent as the purchase of any other article to an equal amount, and we should thus, at a great national loss, only make our condition so much worse. For the purposes of exchange it is perfectly indifferent whether the circulation of the country consists of paper, or of coin which cannot be exported.
The only mode in which a metallic currency can have a favourable effect on the exchange, is by its exportation. In that manner it will undoubtedly operate to the same extent as an equal quantity of bullion. And, therefore, an abundant currency of coin, by furnishing a supply for exportation, will produce an effect. But if the exportation is prevented, no effect can be produced. To foreigners it is indifferent whether our internal payments are made in gold, or by any other contrivance.
Do the Committee then mean that the law will be ineffectual, and that the real though clandestine exportation of coin will take place? I will not do the Committee—I will not do the learned gentleman the injustice of suspecting they can mean to countenance a system which gives the illegal a decided advantage over the fair dealer, which habituates and hardens the trader in the evasion and breach of the law; nay, which is carried on by direct fraud and perjury.
To repeal the law, would, on the contrary, lay a fair foundation for their system; and that they have not proposed to do so, affords to my mind a strong presumption,
922
that they feel a latent doubt of its soundness or of its tendency.
Another circumstance not less remarkable, is the conduct of those gentlemen with respect to a measure which lately received the sanction of the legislature, and which is now carried into execution (so far as I can learn), with the happiest effects—I mean the Act for the relief of trade by an issue of exchequer-bills.
The learned mover of the present question was indeed absent during the progress of that Bill; but most of the other members of the Committee were present, and several of them took a considerable share in the discussions upon it.
Yet not one of those gentlemen opposed that Bill, on account of its direct opposition to the principles laid down in their report, or indeed voted against it on any occasion. The great evil complained of in the report, is a supposed excess of the paper currency of the Bank. Now what were the object and the effect of that measure? Its object' was to afford relief to the embarrassments of the merchants and manufacturers, by an issue of paper; and its effect may be, to increase our paper currency in a few weeks, more than the Bank has ever done in the course of several years.
Will it be said that these exchequer-bills are not a paper currency, when they are issued for sums so small as twenty pounds, for the express purpose of being passed in ordinary payments; and when it is obvious that the whole effect and utility of the measure, depend on their being rapidly thrown into circulation, either directly in the way of payment, or indirectly by means of sale or pledge to the Bank, or other issuers of circulating paper? Or will it be said that the Committee were taken by surprise, and not aware of the nature and tendency of the measure, when it appears from their report, that they had the subject distinctly under consideration, with reference to the former Act of 1793, and have reported a clear, and as it seems to me, an accurate opinion upon it?
What says the Bullion Report itself? Adverting to the circumstances of 1793, it contains the following passage:—"In the year 1793, a distress was occasioned by a failure of confidence in the country circulation, and a consequent pressure upon that of London. The Bank of England did not think it advisable to enlarge their issues to meet this increased demand;

923
and their notes previously issued, circulating less freely in consequence of the alarm that prevailed, proved insufficient for the necessary payments. In this crisis, Parliament applied a remedy very similar in its effect to an enlargement of the advances and issues of the Bank. A loan of Exchequer-bills was authorised to be made to as many mercantile persons, giving good security, as should apply for them; and the confidence which this measure diffused, as well as the increased means which it afforded, of obtaining Bank-notes through the sale of the Exchequer-bills, speedily relieved the distress both of London and the country. Without offering an opinion on the expediency of the particular mode in which this operation was effected, your Committee think it an important illustration of the principle, that an enlarged accommodation is the true remedy for that occasional failure of confidence in the country districts, to which our system of paper credit is unavoidably exposed."
How then could those gentlemen, feeling and expressing as they did, in common with others, the obvious objections which presented themselves against the late creation of Exchequer-bills, and knowing likewise that it was utterly subversive of the doctrines of their report, yet concur in voting for the Bill, but that they entertained so much doubt of the expediency of carrying their own theories into practice, as to give way to a measure, which the public opinion seemed to call for, as required by the extraordinary circumstances of our present situation?
I applaud this instance of their caution and moderation, and it leads me to hope that though they have thought it necessary, for whatever reasons, to propose the present most extraordinary proceeding, they will not feel any disappointment if they find the sense of the majority against them.
My learned friend has accused me of having drawn the Propositions, which it is my intention to submit to the consideration of the House, in case they shall concur with me in rejecting his proposed Resolutions, in such a manner, as to give no clear view of the principles for which I mean to contend. In the first place it is not my object to pledge Parliament to the recognition of abstract principles, but to record facts. I believe the British Parliament to be the most intelligent and enlightened body of men in the world, and it is so happily composed, that no subject
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either of science or of practice can be introduced, which will not meet with many adequate judges, But I by no means think that it is in any large assembly, even so composed, that abstract principles are best discussed and decided.
In the next place, it is not so much to the principles of my learned friend's Re solution, that I object, as to the application of them; I perfectly agree in principles which he has applied to facts, to which, in my opinion, they can have no reference, or which I think wholly un founded; and this will be evident to any' gentleman who will compare his Resolutions with mine.
I agree with him, for instance, when he says, that he is desirous of reverting to the state in which our currency was, previously' to 1797; and though I do not allow that my sixteenth proposition goes the length of admitting, that cash payments are the only security against excess of circulation, I agree that it strongly expresses an opinion, which I strongly feel, that a circulation of cash, and of paper convertible, at pleasure into cash, is the most secure and advantageous to the public interests. But we differ about the means of returning to this state. He is for attempting it positively and absolutely, without regard to consequences, or even to practicability: I am for waiting till a violent and unnatural state of things shall have ceased, during the continuance of which, our object can not be obtained, and the attempt would only aggravate the evil.
Another point on which we agree, is, that it is most important to preserve the assistance derived from the Bank. But how does he propose to preserve it? By reducing the Bank to a situation of distress and ruin, by cramping its operations, and making it a burden, instead of a support, to the public.
I will not now dwell on a point to which I must hereafter revert, but proceed to one on which the learned gentleman has reasoned largely, and with the greatest confidence, which has been most strongly relied upon by those, who, in this long controversy, have reasoned on the same side of the question, and to which no fewer than the first seven of the proposed Resolutions seem exclusively directed. I refer to the standard of value. We are told that our standard is changed or lost, and triumphantly asked, where we shall now find it? One should suppose the standard was something visible and tangible, which

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had been accidentally mislaid, and that we ought to offer a reward for bringing it back again. But I affirm, that a standard in the sense used by these gentlemen, namely, a fixed and invariable weight of the precious metals, as a measure of value, never existed in this country. In order to afford some ground for the argument, the learned gentleman is obliged, in his very first proposition, to affirm, in direct contradiction to the fact, that the "weight at which any such money is authorized to pass current is fixed." Now I would ask at what fixed weight silver money is authorized to pass current? For any sum not exceeding 25 l., it is a legal tender at whatever weight; and certainly of payments made in actual cash, at least 999 in 1,000, are for sums under that value, and were so before the Bank restriction; and can that he denied to be a true standard of value, which is the actual measure of payment in a vast majority of transactions?
The degree in which our silver coin is reduced in weight is familiar to every one; and a paper lately laid before the House shows the great inequality of that reduction in different coins. But they all continue to be equally a legal tender. A note for 5l. may be paid, either in silver new from the mint, and weighing, according to the average weight stated in that paper,

lb.

oz.

dwt.

gr.

1

7

7

2;

or in

20 crowns, weighing

1

6

14

7;

or in

40 half-crowns, weighing

1

5

8

2;

or in

100 shillings, weighing

1

2

13

9;

or in

200 sixpences, weighing

1

1

3

3.

The sum of 25 l. may be legally discharged in sixpences, weighing 5lbs. 5oz. 15dwt.; but to pay 25 l. 0s. 6d. would require no less than 8lbs. Ooz. 15dwt. of the same coin.
Now I would ask my learned friend, which of those different weights of silver, all of which would be equally a legal tender, is the true standard?
But in 1797, when my learned friend admits the true standard to have existed, the case was still stronger. The act of 1771, by which the legal tender of silver money was limited to 25 l, a limitation then first introduced, had expired in 1783, and was not revived till 1798. Therefore, at the very time when our standard is supposed to have been most perfect, silver money, of whatever weight, might be tendered to any amount. The whole interest of the national debt might have been paid in crooked sixpences, if the directors
926
of the Bank had thought fit. It is said, that, in 1745, they actually had recourse to such an expedient for a temporary purpose, and it was perfectly legal for them to do so.
It is therefore evident, that, so far as relates to silver money, the first of my learned friend's propositions is wholly unfounded, and that with it the six next, and indeed all the remainder, must fall to the ground. And as the silver coin was, till within modern times, the only legal tender in payments (Mr. Locke even contending that no other substance was fit to be made the standard of value); and as it is still as much a standard in law, and more so in practice, than the gold coin, I might be contented to rest my argument here; but I shall say something respecting the gold coin.
In the first place, no limitation of the current weight of gold coin existed down to the year 1774; and, therefore, all my reasoning with respect to the silver coin applies with equal force to the gold coin down to that time; and this ancient, established, invariable standard so much talked of, had no existence till within the period of his present Majesty's reign. But what was then made the standard? Was it 5dwts. Ooz. 9½gr., (the mint weight of a new guinea), for 1l. 1s., or 5dwt. Ooz. 8gr., the current weight? The difference is not great; but it destroys the principle of a fixed standard as much as if it were, if fixed standard must be something accurately defined, certain, and invariable; and such a standard the metallic currency of this country has never been.
I am not enquiring whether on general principles of policy we ought not to seek to establish such a standard, but I am contending that the learned chairman's Resolutions are false in fact, and his complaints groundless; for we cannot have lost what we never possessed.
The discussion is not only important in itself, as overturning the basis of the learned chairman's proposed Resolutions, but it is closely connected with the leading doctrine of the Bullion Report, that of the depreciation of bank-notes. He says that my propositions are an evasion of the question, and that I ought distinctly cither to admit or deny the fact, that Bank-notes have lost their standard value. Now, I do not conceive myself bound either to admit or to deny, that bank-notes have lost a value which they never possessed, an which the legal coin of the country never

927
possessed, namely, a value estimated by a fixed weight of gold or silver bullion. They never had any other than a current value founded on the public confidence in the Bank, and this value I firmly believe, and have distinctly stated in my third proposition, that they possess as much as ever.
Even in current coins, as I have shown, in the instance of the silver coins, the current value is by no means regulated by the intrinsic or metallic value, and this applies as much to the purchase of bullion as to any other transactions. And I contend that, for all legal and authorised transactions within the kingdom, even such purchases of bullion, Bank-notes are considered and accepted as equivalent to legal coin. My learned friend, indeed, denies them to be equivalent to coin in public estimation. Now, I should like to know in how many cases he has himself found them not equally available for all the purposes to which coin would have been applied?
But before I proceed in this discussion, I should be glad to put a question to an hon. gent, opposite (Mr. Huskisson). a leading member of the Bullion Committee, who has written with great ability on this subject, and which, though a little irregular, he will, perhaps have the goodness to answer, as it may save much time, viz. in what sense the term depreciation, as used by the Committee, is to be understood? For it appears to me, that, in this controversy, the word depreciation is used by those who assert its existence, in different and even incompatible senses.
They sometimes appear to mean that Bank-notes have lost a part of their current value as compared with the legal coin which they represent; and this is the obvious and popular meaning of the word, end the only one which is intelligible to the greater part of mankind. But sometimes the meaning seems to be, that Bank-notes, although passing current at an equal rate with the legal coin, have lost a part of their value as compared with all articles of purchase. I hope the hon. gent. will answer, that the word is to be understood in the latter sense, because he has told the public, "that the value of the gold contained in a guinea, in its state of coin, and when used as currency, is only one twentieth more than that of a pound note*;" and if so, I shall not only
* Question stated, p.39.
928
think it less necessary to enter into a length of discussion, but, which is of much more consequence, I shall consider it as a very important point decided in favour of the public credit of the country.
If the hon gent. cannot be induced at present to give an answer to my question, I must trouble the Committee by arguing the case both ways. It cannot, indeed, be expected that I should bring direct proof of the negative. It is for the Committee to prove the depreciation of our currency, in whichever way they choose it to be understood; and if they mean it in the first and obvious sense, namely, that Bank notes are become of less value than legal money in ordinary transactions, it seems particularly reasonable to hold them to strict proof of the fact, because it is not only most important and alarming, but because, in the first instance, it strikes me as contrary to every day's experience, and it seems to be a fact which, from its nature, cannot be doubtful or concealed. When we are told that a Bank-note of one pound is only worth 17 s., it seems obvious to answer, that no man has ever hesitated to give us 20 s. for it, either in money or in goods. Yet the only proofs of this important fact attempted by the Committee, rest on intricate and abstruse reasoning, and are entirely drawn from circumstances attending the exchange.
They produce a calculation to show, that the fall of the exchange has considerably exceeded the expense and risk of sending gold bullion to Hamburgh; and they also show, by a calculation of the prices of bullion here and abroad, that there is a similar difference between the actual rate of exchange, and the comparative prices at which gold bullion could' be sold in the one country, and bought in the other; and this coincidence they state as a demonstration of the depreciation of our currency.
It seems unnecessary, for our present purpose, to detain the House with any criticisms on the calculations themselves, or even to enter into the abstract reasoning on which the supposed demonstration is founded; for one thing is indisputably clear, viz. that Bank-notes could not be depreciated while they were convertible at any time into their nominal amount in cash; and therefore that whatever circumstances attended the course of exchange, while they were so convertible, they could not be occasioned by the depreciation of Bank-notes. And it evidently

929
follows, that if the same circumstances which occur at present can be shown to have taken place while the bank continued to pay in cash, their existence is now so far from a demonstration, that it does not even afford any presumption, of such a depreciation. Among many instances, I shall only cite two or three, and leave it to the cool consideration of the Bullion Committee to reconcile them to their theories us they can. And I am the less inclined to take up the time of the House with any detail on this subject, as my right hon friend the Treasurer of the Navy has entered into it so fully, and as it seems unnecessary to multiply examples of a circumstance which occurs so frequently, as that of a rate of exchange, much exceeding the expence and risk of the transportation of gold from one country to another.
In January 1760, for instance, the exchange between London and Hamburgh was near eight per cent in favour of London. The expence and risk of importing gold from Hamburgh to England, could not at that time have much exceeded three per cent.; so that, according to the principles laid down by the Committee, this fact amounted not to a presumption—not to a ground of inference only—but to a demonstration, that the currency of Hamburgh was depreciated. Yet it is well known, that no paper currency was then, or has ever been issued by the Bank of Hamburgh; and it is as little possible that the effect can be produced by any debasement of the metallic currency of Hamburgh, because all bills of exchange are paid there in Bank money, which represents a deposit of fine silver by weight.
The very same year, however, the exchange varied so much, that in November it was six per cent against England. This therefore was, according to the arguments of the, Committee, a demonstration of a depreciated currency in England. Yet there was at that time and long afterwards, no paper currency in England, but what was immediately convertible into cash at the will of the holder.
One later instance, however, deserves particular notice, from the peculiarity of the time when it happened, which was that of the restriction of cash payments at the Bank. This, as most of us must remember, at first produced a great alarm, and was considered as a formidable crisis of public and private credit. Among
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other effects, a great fall of the exchange was confidently, and, I will allow, not unreasonably expected from it. Yet, after the first intelligence, the exchange continued gradually to rise; and within a few months in November 1797, became more favourable than it has ever been known; being above thirteen percent, in favour of England; and this at a time when the expense and risk of sending gold from Hamburgh to England amounted to about three and a half percent, only, and when the circulation of England was principally carried on in a paper currency, which might have been supposed to have suffered some diminution of its credit, by the novel and extraordinary circumstance, of its being no longer convertible at pleasure into cash, and when there was at Hamburgh no paper currency whatever.
So far as the supposed demonstration rests upon calculations respecting the price of gold bullion, I will venture to say, that its variations have been too irregular to afford any certain ground of reasoning whatever.
In England, for instance, it has usually happened, that when the exchange became unfavourable, the price of gold rose; and when the exchange has been favourable, that it has fallen (though by no means in any certain and assignable proportion); and this is intelligible, and consistent with theory.
But in Hamburgh the very reverse has been the case:—the price of gold continued to rise from January to September 1809, though the exchange was growing, more favourable the whole time; it then fell without any material variation of the exchange, and continued at the lower rat" when the exchange became less favourable.
But what is more remarkable, the price of gold at all the places respecting which the Committee seem to have made any inquiry, at Hamburgh, Amsterdam, and; Paris, has considerably exceeded the par price. At Amsterdam, it has been no less than seventeen and a half percent above par, which exceeded the highest price in London*. Now, if the high price in London be a proof of the depreciation of our paper currency, the high price at all those places must be equally a proof of the depreciation of their paper. But at no one of those places does any paper currency exist,
* See Mr. Rutherfurd's Hints from Holand

931
excepting the notes of the Bank of France, which are inconsiderable in their amount, and payable in cash.
Instances are also mentioned in the report itself, in which gold has been sold in England, previously to the restriction of the Bank payments, at eight, ten, and even twelve percent, above the mint price. In these cases, as well as in the foreign cases I have mentioned, and in many others which might be referred to, the effect could not arise from the depreciation of paper currency. It most have had some other cause; and why should not the same effect be now ascribed to the same cause, whatever it may have been, which produced it in these different instances?
The Committee are unwilling to admit the fact of a general scarcity of gold. I can only say, that the rise of prices in countries in which the exchange is favourable, as well as where it is unfavourable, seems to afford a presumption either of scarcity, or of a generally increasing demand. But I do not affirm the fact, I am not assigning a cause for the high price of gold. It is for the Committee to prove, that it can have no other cause than that which they assign, and in this proof they have completely failed.
I have already observed, that the burthen of proof ought to rest on those who assert the depreciation of Bank-notes. We who deny it, need only appeal to common observation and opinion. And it is difficult to have stronger evidence of the general opinion, than the Appendix to the Report contains. One gentleman only, of whom (as he is not named) we know nothing more, than that he resides abroad, therefore has not had the means of forming his judgment on the spot, states an opinion, that, "as he valued every thing by bullion (a mode of valuation wholly different from that which we are now discussing), he conceived the paper currency of this country to be depreciated to the full extent of fifteen to twenty per cent.;" but that "he never heard the solidity of the Bank of England doubted either at home or abroad;" while every cue of the other witnesses (some of the most considerable bankers and merchants in England) states most positively, that Banknotes are not depreciated. I do not refer to these testimonies as decisive of the fact, but as proof of a concurrence of opinion among persons extensively engaged in business. But I think we have something
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like direct proof to offer, in contradiction of the fact of depreciation, and that of a very simple and very decisive nature.
It is well known, that, as the law now stands, Bank-notes are not a legal tender. A person offering them in payment, it indeed protected from arrest upon mesne process; but the creditor may refuse to accept them, and proceed to judgment and execution, either against his person or effects, until payment is obtained in lawful money. Now in nearly fourteen years that this law has subsisted, I know of no instance of such a proceeding. It may be said, that in small payments the expense and inconvenience of a law-suit would have exceeded the advantage. But this cannot be said of large sums—large mortgages, for instance.
A hint seems to be given me by a learned friend (Mr. Morris), that some such instances will be produced. They have certainly escaped my inquiries, and, I think, must be few and obscure. But I should not allow any such instance to prove the depreciation of Bank-notes, without fully considering its circumstances. It may have taken place in transactions notoriously illegal, or connected with the clandestine exportation of coin; it may have been the result of malice and vexation; or it may have originated in mere caprice, perhaps in a wager or some such motive.
Such a proceeding might indeed be considered as severe and oppressive. But is there no such thing as a rigorous creditor to be found? Are men universally, and without exception, so scrupulous in enforcing their legal rights to the utmost? But I will suppose they have been restrained by the fear of censure and of loss of reputation; and I desire no better argument; for in a matter, which, after all, is completely a question of opinion, to show that the general opinion and feeling of mankind is with us, is to gain the cause. Bank-notes, then, are established as equivalent to cash, not by law, but by the general concurrence and agreement of the nation; while in other countries, the law has frequently attempted to fix a value upon paper currency, which opinion and practice refused to it.
Accordingly, it is not even asserted, that any difference is made between cash and Bank-notes, in any bargain or transaction whatever. I know of no illegality in such bargain. A tradesman may lawfully say, "The price of such an article

933
is six pounds, but I will take five guineas in gold; the price of such another is one pound, but I will take seventeen shillings in silver;" yet no instance of such a practice has been produced.
A few instances of this sort of dealing, would indeed be of no great importance. A small premium has long been given by bankers and others to collect silver coin, for their small payments, even in the present degraded state of silver money; yet it was never considered as a proof of the depreciation of guineas; and similar motives of convenience might lead persons to collect cash for a particular purpose, without any idea of its being generally of superior value to Bank-notes.
But if no such practice has in fact been introduced, it is impossible to have a stronger practical proof that Bank-notes are not in a stale of depreciation.
On this subject we find a curious inconsistency in the reasonings of those who maintain the depreciation of our currency. We are told at one time, that Bank-notes have really lost their value in the public opinion, and that if they still pass current at their nominal value (which no one has been bold enough to deny, though it is a fact destructive of their arguments,) it is only owing to the force of law, and the fear of prosecutions. Yet we are told by the same persons, that it is utterly impossible to support, by the force of law, a paper currency which has lost its value in the public opinion, and that any attempt to enforce its currency, would be more likely to hasten than to retard its depreciation.
In this latter opinion I am much inclined to coincide. Such at least has been the result of experience in those countries, the paper currencies of which have by the Bullion Committee been so strangely compared with that of the Bank of England.
These are the American paper money, the French assignats, and the Austrian government paper. Abundance of other instances, just equally applicable, might be adduced, for they want almost every circumstance of similarity. The profusion with which, in those cases, the currency was multiplied, would alone take away any ground of fair comparison. The American paper began with an issue of 3,000,000 dollars in July 1775; in one year they were increased to 20,000,000; yet they still circulated without any considerable depreciation. In December
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1777, they were multiplied to 70,000,000; and were then fallen to half their nominal value. Yet the issue still went on, and in October 1779 there were 200,000,000; passing at ninety percent loss and in the next year the issue ceased, as they were no longer accepted at any value whatever.
The progress of the assignats was similar. In April 1790, the first issue took place to the amount of 400 millions of French money. In September 1791, they had been multiplied to near 1,500 millions; and in fifteen months more to 2,300 millions; and the issue continued with increasing rapidity, till they were totally discredited.
Of the amount of the Austrian paper money I cannot speak with any precision; but from some late proceedings of the government it may be inferred to be not inferior to any of the sums I have mentioned.
Now if the notes of the Bank of England had been multiplied in the same manner, I cannot doubt they would have shared the same fate; but when I see that they have in fourteen years increased only about twelve millions (of which only three millions and a half are in notes exceeding 2l. value,) and can distinctly trace the causes of every step of that increase, I cannot forbear asking the gentlemen of the Committee, whether it was just, or wise, or beneficial, to make such an invidious comparison?
The amount, though a striking, is, however, by no means the only circumstance of distinction. The paper money alluded to, was in every instance a new paper issued by a government already involved in debt and discredit, and struggling for an immediate resource—the notes of the Bank have for a century been established in full credit as issued by a corporation of the highest reputation for wealth and punctuality, and known not to be debtor, but creditor, to an immense amount, both to government and to individuals.
The paper of those countries was issued not with any view to profit, but to supply the exigencies of war, and measured in its amount, not by any views of commercial advantage or public convenience, but by the necessities of bankrupt governments. The Bank never issues its paper but for value received, and for a certain profit, and regulates the amount of it by the demands of public accommodation.—Their paper was forced upon the people

935
by the authority of government, though notoriously passing at a discount in transactions of all kinds—the notes of the Bank are no legal tender, but pass freely, and have not been discredited in any instance.
It is unnecessary to dwell further upon this comparison, but I must shortly touch upon a case which arose near home.
I have been alluded to as a member of a Committee, which, in the year 1804, examined the state of the exchange with Ireland, and which was of opinion that the notes of the Bank of Ireland were in some degree depreciated at that time. I certainly was a member of that Committee, and concurred in their opinion; but the circumstances proved before us were too different from the present to afford any fair ground of argument from analogy in this discussion.
It appeared not only that the current coin was publicly sold at a premium, but that an established difference of price existed between payments in coin and in Irish paper, while the paper of the Bank of England produced the same premium as guineas. But if, from those circumstances, I infer that the Irish paper was depreciated, I think it doubtful whether that depreciation was owing to any excess of issue, although it appeared that the paper, both of the Bank of Ireland and of private banks, had been rapidly increased, and that an immense number of notes for very small sums, called silver notes, had been introduced into circulation. I rather believe that, from the apprehensions naturally remaining, in consequence of the rebellion in 1798, and from some recent circumstances of alarm, a degree of suspicion and discredit attached itself to all paper issued in Ireland, and had extended itself from the notes of the private banks to those of the Bank of Ireland itself. But from whatever cause the state of the Irish currency at that time might arise, no inference with respect to the notes of the Bank of England can be fairly drawn from it, unless the circumstances of the case were similar.
I cannot leave this first and most important part of the case, without reminding the Committee that I am not bound to prove a negative—that the Committee have undertaken to prove the fact (a most alarming fact, if it be true) of the depreciation of our currency, and that they have produced no proof but what is, in the highest degree, vague, inconclusive, and fallacious.
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It is of the utmost importance in this discussion to keep the consideration of the two kinds of depreciation completely distinct, and it is by confounding them that the Bullion Committee appear to me to have puzzled their readers, and, (if I may be excused for saying so) to have puzzled themselves. I shall, therefore, take the liberty of distinguishing them, by calling the one a depreciation from discredit, the other, a depreciation from excess. A depreciation from discredit can only take place in paper or other representative currency, and not in that which has an intrinsic value, and it would undoubtedly have the consequences attributed to it, by the Committee, of producing an unfavourable exchange, and raising the price of bullion. It would also have other most injurious effects, for it has scarcely ever happened without leading to national bankruptcy; and I am not afraid of pronouncing that terrible word, because our situation is completely different from that of any country in which such a calamity has ever taken place.
But a depreciation from excess may equally take place in metallic currency; and though, when it arises from an increase of paper currency, it is always dangerous, because it has a constant tendency to produce discredit, yet, so long as it only shows itself in a general rise of prices, its effects will be of a totally different nature. Experience indeed has shown, that great variations may exist in the amount of circulating currency without producing that immediate effect upon prices, which the Committee represent as invariably and necessarily following even small and local changes.
In this age of revolutions, in which the most tremendous experiments have been made on the structure of society and the happiness of man, great experiments have, among the rest, been tried upon currency. When the French revolution broke out, the circulation of that country was almost wholly metallic, and abundant in amount. A paper money was then introduced, and rapidly augmented. But the price of commodities by no means increased in proportion to that augmentation, nor indeed varied much, till that paper became discredited. In the confusion which ensued a considerable rise took place. After some years the paper, being totally discredited, disappeared and metallic money again took its place—at first in scanty proportions,

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and afterwards in greater abundance. Yet the price of articles did not fall in proportion to the scarcity of currency, but continued, and still continues, much higher than before the revolution, when coin was much more plentiful.
Another instance took place in Prussia. In that country, previously to the French invasion, money was in considerable plenty, and yet prices were generally low. It has since been drained by the exactions of the French to such a degree, as to occasion general poverty, and a great scarcity of cash, yet the price of most articles is higher than formerly.
I certainly do not mention these cases with a view of contradicting the general proposition, that an increase of currency will occasion an increase of prices, but to show that it is capable of some modification, and is rather to be understood as applying to the general system of nations, connected with each other by commerce, than to a particular nation, and still less to particular districts in the same country.
Assuming, for the present, that within the two last years, in which the exchange has fallen so remarkably, the prices of all articles have risen proportionally in this country (a fact which I shall presently examine), I take upon myself to affirm, that such a circumstance not only would not have the effect ascribed to it of lowering the exchange, but would have an effect directly contrary. I affirm this not only en what appears to me a clear principle of reasoning, but on an authority to which I should have expected the Bullion Committee to pay some deference—that of the late sir Francis Baring. And I am happy that this reference to his evidence affords me the opportunity of joining in that tribute of regret for his loss, and respect for his memory, which was paid by my right hon. friend (Mr. Rose).
To sir Francis Baring the following question was proposed in the Committee:—"Supposing the excess of the circulation of paper to be in a degree such as to increase the price of commodities, would that increase of price produce any effect upon the foreign exchange, until it arrived to a degree so as to check the exportation of merchandise?" Sir F. Baring replied:—"An excess of paper circulation will, no doubt, affect and raise the price of the whole of the productive labour and industry of the country. The proportion that is exported will participate to the extent of its value; and as the necessary
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consequence of high prices is a redaction on the demand, it must operate decisively on the foreign exchanges, unless they are supported, or the fall counteracted, by an export of bullion. But until the demand or exportation is checked, an increase of price will produce a beneficial effect on foreign exchanges."
This opinion, independent of the weight it must derive from the sagacity and experience of a person so distinguished among commercial men, seems to rest on the most evident reason; for I think it easy to prove, that if our currency had in fact become of less value, this circumstance could not possibly have occasioned a fall of the exchange. If, indeed, in consequence of a rise of prices, a diminished exportation should take place, the exchange might eventually, and after a time, be lowered; but till a diminution happened (the contrary of which the Committee assert,) it is clear that the effect of a rise of prices must be to raise, not to depress, the exchange: because any given quantity of goods exported would represent a greater amount in value, and therefore have a great tendency to turn the balance of payments in our favour.
It may indeed be said that the foreign consumer will not consent to give more for British goods on account of any enhancement of their value at home, and that the British exporter will be obliged to supply him at the former prices; but if this be the case, it is obvious that any change of prices, or, to express it otherwise, any alteration of the value of currency at home, can have no effect upon the foreign market, nor consequently alter the balance of payments, or affect the exchange. But this can only take place in cases in which the foreign consumer can raise or procure from other quarters similar articles, so little inferior to the British in quality and cheapness, as to make it more advantageous to him to substitute them, than to submit to the increased price demanded by the British merchant.
It appears then, that a diminution of the value of currency at home, may have the effect of improving the exchange, but cannot by possibility depress it; and therefore the whole of this part of the reasoning of the Committee is erroneous.
But though the Committee have chosen to assume the fact of a general and recent rise of prices, for the sake of drawing from it the infereuce of a depreciation of currency,

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they have neglected to bring any proof of the fact itself. They seem to have made no inquiry on the subject, and have stated the comparative prices of no one article except bullion. Now the price of bullion depends on causes peculiar to itself, and has no connexion with the general prices of other commodities.
It may be indeed, at first sight, supposed, that when the price of every thing else rises, that of bullion will rise too; but this is not the case, and for very simple reasons.
The price of gold bullion in the market must depend, like that of other articles, on the comparison between the supply and the demand, either for use at home, or for foreign exportation; but the demand for both is of a peculiar kind. The demand for use at home is two-fold—either for manufacture, or for coinage. The quantity of gold used in manufacture is too small to have any sensible effect upon the price: and as at present the price of gold which can be sworn off for exportation, is higher than that of gold not exportable, it is clear that whatever quantity may be wanted for manufacture, will be taken from such gold as cannot legally be exported. It is also a convenience to the goldsmith to make use of such gold as has passed through the Mint; because he is sure it is of the exact standard fineness; while, if he uses foreign gold, he must incur some expense and trouble in the refinement and assay. And though the manufacturer is prevented by law from melting coin of the current weight for his use, he is under no such restriction with respect to that which has lost its currency by being worn below the legal weight.
The demand for gold for the purpose of Coinage must therefore regulate the price of bullion, so far as depends upon home consumption. This may be considered as a demand unlimited in point of amount; for the Mint is legally bound to receive and strike whatever quantity of gold may be brought to it. But it is evident, that this demand, as it must always prevent the price of bullion from falling materially below the Mint price, so it cannot, in any ordinary case, raise it above the Mint price; for no man will carry gold to the Mint to be returned to him in a less valuable state than it was before. I say, in any ordinary case, because I am aware that the Bank has sometimes been obliged to purchase gold for coinage at a considerable loss. But this has always happened
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in consequence of the foreign demand for gold, occasioned by an unfavourable exchange, draining away our coin by clandestine exportation; and has, therefore, no connection with the demand at home, of which only I am now speaking, and I do not see that it can ever happen from any other cause.
Now, upon both these branches of the domestic use of gold, it is evident that a rise in the price of other articles can have no effect. It could not vary the demand for manufacture, and the Mint price would continue to regulate coinage; unless indeed, in consequence of any supposed excess of circulating money, the Mint should be stopped by order of government, which would of course lower the price of bullion.
But that which puts it out of all question, that the present rise in the price of bullion is owing to a foreign, and not a domestic demand, is a circumstance before adverted to, viz. that the price of gold which is legally exportable, is about five percent higher than that which is not so.
Now, the demand of bullion for exportation must arise principally out of the state of the exchange; and the price will be regulated by the rate at which bills can be obtained. Sometimes, indeed, an accidental scarcity of gold in some country abroad may occasion it to be sent there, although a remittance by bills may appear, on calculation, more favourable; and in a few instances, foreign importers may, for particular reasons, refuse payment of any other kind, as is said to have been lately the case with some of the importers of corn, and occasionally to have happened with contraband dealers in other articles.
But the regular and principal demand of bullion for exportation, arises from its being a more advantageous mode of remittance than bills, when the exchange is unfavourable. As soon as this is the case, gold bullion, which we will suppose to have been kept till then at the Mint price by the demand at home, begins to be sought after for exportation; exportable gold rises higher than that which cannot be legally exported, and is first sent abroad. A clandestine or fraudulent exportation of coin, or ingots produced from coin, soon follows; and the price will continue to fluctuate with the variations of exchange (not, however, preserving an exact proportion), but remaining such as to afford, in general, some small advantage in remittance by bullion in preference to bills.

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Now, neither in this case, nor in (he occasional exceptions I have mentioned, can any alteration in the value of domestic currency, shown by a variation in the prices of commodities, produce any effect on the price of bullion, except by affecting the course of exchange: and as it has been already shown, that a general rise of prices has a tendency to improve, not to depress, the rate of exchange, it is clear that it must have a corresponding tendency to lower the price of bullion, and not to enhance it.
It is indeed clear, that the price of bullion, which is always convertible into money, and which is principally used for that purpose, has a much closer connection with the value of the current coin than with that of commodities; and therefore, that a general rise of the prices of articles of trade, which indicates a diminution of the value of money, must tend to depress, and not to raise the value of bullion, and would actually do so if not counteracted by the regulations of the Mint.
The price of bullion, therefore, affords no true test of the general scale of prices; and the Committee having given us no other, I have endeavoured to ascertain the fact by an extensive inquiry.
I have not only procured abstracts of the current prices of the principal articles of trade for several years past, but have obtained extracts from the books of Greenwich hospital, the Foundling hospital, and some other charitable institutions, with the view of tracing the prices of the ordinary articles of necessary consumption.
I will not trouble the House with a dry detail of the accounts, but state what appears to me to be the general result.
The general scale of prices had been progressively but slowly advancing for many years previous to the Bank restriction, and does not appear to have been affected by that event. But the scarcity in 1800 and 1801I produced a great and permanent effect, particularly on the price of labour. Since that period, the same gradual augmentation has taken place, as before it; and it has been so far from being remarkable in the two last years, that though the price of provisions has been high, from causes sufficiently notorious, that of most articles of merchandise is considerably reduced. The last period of three or four years, is indeed remarkable for great and sudden fluctuations of the prices of merchandise, corresponding with the extraordinary and violent changes
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which have taken place in commercial policy; but the present state of prices is so far from justifying the opinion of a currency depreciated from its excess, that it would rather lead to a contrary inference, if it were not easy to be accounted for by obvious causes.
I think, therefore, that the Bullion Committee have as little foundation in fact for asserting, that our currency has lost its value in comparison with other articles, as for stating (if they mean to state it, which I am still unable to ascertain), that the notes of the Bank of England are depreciated in comparison with our legal money. The question is indeed of much less importance; and the fact, if true, would, as I have endeavoured to show, have produced effects wholly different from, and even contrary to, those attributed to it in the Report.
So much stress, however, is laid on the state of the exchange, that I think it necessary to recall your attention to it.
To any one who peruses the evidence and accounts laid before the Committee, without a disposition to seek for occult causes, there will appear no difficulty in ascribing the unfavourable state of the exchange, to circumstances notorious and undisputed.
All the witnesses examined attribute the fall of the exchange to the balance of payments being turned against this country, by the large importations from the Baltic, and of grain from France and Holland, by the operation of the French decrees, and of the American embargo, at once rendering exports difficult, and preventing the adjustment of accounts and remittances, and by the great expenditure of government abroad, in subsidies, and mliitary and naval services.
To go into the particulars of these accounts would lead to a tedious detail of figures; and upon the last head, one of the most important, the Committee confess their information to be imperfect. These circumstances also, were so ably discussed by my right hon. friend (Mr. Rose) last night, as to render it less necessary to examine them in detail.
The effect of the American embargo, I shall, however, touch upon, as I do not recollect that he explained that part of the subject; but it is so clearly stated in the evidence, as to require little elucidation. It there appears, that the Americans, who were uniformly debtors to Great Britain, for manufactures exported to a much

943
larger extent than the value of their produce received in return, were also creditors to the continent of Europe to a considerable amount, and that their debt to England was usually discharged in part by bills on the continent, which, of course, had the same effect on the exchange, as an export of British goods of the same value.
Our importations from the Baltic usually much exceed our exportations to the countries on its shores, and this is more especially the case in time of war, on account of the increased consumption of naval stores. The indirect mode of payment by means of the American bills, was therefore particularly valuable; and when it was stopped, an effect was produced equal to the loss of a great export of our own. The evil was also much increased by the sudden and unexpected nature of the interruption.
The same mode of remittance would also have been important, with reference to the importations of corn from France and Holland, many of which are stated to have been paid for in actual cash, from the impossibility of making any other return, and which might have been discharged by the American bills.
But even if I had not been able to assign any ordinary and well-understood causes for the present state of the exchange, and to show that they were capable of producing such effects by reference to former experience, I should not have admitted any circumstance attending the exchange at the present time to be satisfactory evidence of the state of our internal currency. For I cannot allow that principles and reasonings fairly applicable to the phenomena of exchange, in ordinary cases, have any application to a state of things so novel and extraordinary as that which now exists. The adjustment of exchange is, perhaps, the nicest and most artificial part of the commercial system. By a complicated arrangement of the various money transactions of all commercial countries, it finally determines the mode of payment most advantageous to each, and least chargeable upon the whole. It abounds therefore, even beyond all other mercantile transactions, in distant prospects and intricate combinations, and far more than any other depends upon freedom of intercourse, and activity of correspondence. It is, therefore, in a peculiar manner liable to derangement from those measures of rigorous
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exclusion, by which the ruler of the continent has attempted to cut off all communication between us and the countries under his control. He has destroyed the modern improvements and refinements of trade; and in a great degree thrown it back to the practices of barbarous ages and uncivilized nations. We now trade with the continent, by means of fortified stations and armed depots, as we formerly did with the savages of Africa and America. Trade may be carried on by mere barter; and may even be lucrative and extensive in that form. And where the power of despotism is exerted to prohibit intercourse, barter is almost the only form" which trade can assume. But remittances by exchange do not form part of such a system of trade. They are the offspring of credit and settled correspondence.
Even under the present difficulties, exchange as well as trade has continued to exist; but, like trade, it has been hazardous, precarious and interrupted; and in consequence exposed to great losses, and productive, when successful, of unusual profit. It seems, indeed, to have been owing only to the high character of the merchants of England for good faith as well as property, that the operations of exchange have gone on at all; but amidst all the fluctuations of the continent, reliance was placed on the ultimate security of the drawer or acceptor resident here. Now it is only necessary to suppose an extraordinary profit to have been charged on bills drawn upon England to account for all those appearances which the Committee rely upon as so decisively proving the depreciation of our currency. Ana can it be said that the supposition of such an increase of profit on bills of exchange is inadmissible, when we consider how much the interruption of correspondence placed the British merchant at the mercy of his correspondent; and find in evidence that the prohibitory decrees have produced such difficulties of communication, as to occasion some articles of trade to sell at a profit of two or three hundred percent?
In times of regular and settled intercourse, indeed, irregularities to a considerable extent may sometimes be observed. The exchange with the south of Europe has often been favourable to Great Britain, while it has been unfavourable with the north—favourable as to America, and unfavourable as to Europe, at the same time;

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and this at periods when no supposition of a derangement in our internal currency could have existed.
It is somewhat singular that the Bullion Committee should rest on such vague and unsatisfactory proof of the excess of our paper currency as could be derived from the state of the exchange, even if no sufficient reasons of such a state could be pointed out, when they had before them the accounts in which that excess, if it existed, must have appeared. And before I proceed to a particular examination of the resolutions proposed by the learned gent. I shall make a few observations on those accounts.
But I must first notice an argument often urged, and which has, I believe, made considerable impression on the public out of doors, if not in this House. Whence, it is said, do those extraordinary profits arise which the Bank appears to have shared among its proprietors of late years, if it has only gone on in its accustomed course of business?
Without any inquiry into the internal management of the Bank, I think a satisfactory answer may be given from such sources of information as are open to every one. It is notorious, that the command of money is attended with much greater advantage in time of war than of peace. Since the Bank Restriction Bill, and for some time previous to it, has been a time of continued war, and in part of this period an unusual scarcity of money prevailed; several instances occurred, in which a profit might be made upon government securities of twelve or fifteen percent and some instances of even greater profit; it being stated by the hon. gent. near me (Mr. H. Thornton), in his evidence before the Committee of the House of Lords, as occasionally rising to 18 percent. Now, can it be supposed that the Bank, by far the greatest dealer in government securities, did not participate in these profits, and in the other advantages which great monied proprietors at that time possessed?
But not only have the times been unusually favourable to an advantageous employment of the great trading capital of the Bank, but that trading capital has been increased, in a remarkable manner. It appears from the second Report of the Committee on Public Expenditure (1808), that the average increase of government balances in the hands of the Bank since 1797. was not less than from seven to
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eight millions. I would desire gentlemen to consider what any private banking company would make of a floating balance to such an extent. Within the last three years an arrangement has, indeed, been made with the Bank, by my right hon. friend the Chancellor of the Exchequer, by which the public have obtained a fair participation in the profits to be derived from that source: but before that arrangement was made, they belonged entirely to the Bank. And though I believe the directors to have been moderate and cautious in all their transactions, they would have been wanting in their duty to their proprietors if they had not made a fair commercial use of their advantageous situation; and let it be recollected, that however large the profits of the Bank may have been, they were a direct and positive accession of national wealth derived from sources injurious to no one, but, on the contrary, eminently useful both to the government and every individual concerned.
The question is not, whether the Bank has made large profits, which it had a fair right to do, and which have been advantageous to the public interests as well as its own, but, whether it has increased the issue of its notes beyond what the public convenience required, with a view to profit, and knowing that it could not be called upon to pay them in specie.
It is certainly true, that since the restriction has been imposed on the Bank, the amount of its notes has been greatly increased; but I beg leave to ask, whether our metallic currency has not diminished in an equal or greater degree? The increase of Bank-notes has been gradual and moderate, and can, in every instance, be accounted for by an adequate and obvious cause.
From the time of the restriction to the year 1800, the increase was small. In 1800 and 1801, the amount of notes was considerably increased, because great quantities of specie were sent out of the kingdom for the purchase of corn; and from that period their amount has been kept up, because the exchange has never become sufficiently favourable to bring back any large proportion of the treasure sent abroad. But from 1802 to 1809, the increase did not exceed 3 or 400,000 l.; and I would ask, whether this shewed any disposition on the part of the Bank Directors, to avail themselves, improperly, of the act of 1804, by which the restrictions bad been continued during the war?

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Since 1809, a further depression of the exchange has taken place, and a greater quantity of coin has gone out of the country, and the consequence has undoubtedly been a considerable addition to the amount of Bank-notes. But will any individual venture to affirm, from his own observation, that this addition has been greater than the public necessity required? An increase took place last summer, when the failure of several country banks occasioned a demand for Bank-notes for the? country circulation. That demand has since lessened, and a corresponding diminution has taken place. But, if the natural and obvious effect of an excessive issue of paper be (as it is contended, and which I by no means deny), to increase the price of every article, I must ask how it happens, that the price of the government floating securities, and of the public funds, has not been increased by the increased issue of Bank paper last summer? In fact, instead of increasing, they have diminished in price, which seems to me to afford a decisive answer to the allegation of excess; and that there is rather a scarcity than a superabundance of the circulating medium seems further proved by the beneficial effects produced by the recent issue of the commercial Exchequerbills.
I now, Sir, come to the particular review of the Resolutions proposed by my learned friend, and it is unnecessary for me to trouble you by discussing them at any considerable length, having already examined the leading principles upon which they depend.
To the first I object, that it is erroneous in fact and law; and I have already stated my reasons for denying that any precise standard of the weight of our current coin exists, or ever has existed, in this country.
If I am right in this opinion, it is clear that not only the first resolution must be rejected, but that the six immediately following, must fall with it, as they depend upon the same assumption of a fixed standard of the current weight of coin, and are wholly nugatory and unmeaning without it.
The eighth is true in point of fact, and is indeed substantially the same with my second proposition; but being introductory to succeeding resolutions, which I think equally unfounded in fact, and dangerous in their consequences, I cannot assent to it in the place and manner now proposed.
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The ninth resolution is also true in fact, and perfectly innocent; but it is of so nugatory and (if I may be pardoned for the expression) so childish a nature, that I cannot think it would become the gravity of parliament to place it on the Journals.
The tenth Resolution I most decidedly object to. It proposes to parliament, to declare that which is not, and never has been, true; and the declaration of which must have the most alarming effects. It either means that Bank-notes have lost their relative value compared with the current coin which they represent—a proposition which I have already shown to be unfounded; or it means that the value of Bank-notes should be measured by the price of bullion; and this is equally untrue. Bank-notes never have been the representatives of any thing but the legal money of the realm, and this they continue to be for every legal and honest purpose, as effectually as ever.
To the eleventh resolution, so far as it respects the Bank of England, I equally object, for reasons which I have already assigned; but upon that part of it, which respects the country banks, I must say a few words.
I admit that great inconveniencies have been occasioned by the mismanagement of country banks, and the excess to which some of them have attempted to extend their circulation of paper. Much individual distress has arisen from the facilities which have been given to rash speculations, and particularly from the temptation which the partners in such banks have had, by depending for support upon the credit of the bank, to engage in commercial adventures far beyond either their skill or capital. Much evil has been the consequence, but it is not an evil of the nature described in the resolution. It is not a depreciation of the notes of the Bank of England, nor a general excess of paper circulation. But it is the attempting to supply the place of a perfectly secure and sound paper circulation by oue which cannot maintain its credit. The consequences have been frequent bankruptcies, and sometimes extensive distress.
I am far from saying, that the system of country banks does not require regulation, or that evils such as these do not call for the interference of parliament. But it is a point of considerable difficulty, and one upon which parliament should interfere with caution.

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The most plausible regulation which occurs to me would be, to prohibit bankers, who issue notes, from engaging in any other commercial concerns; but this regulation has been tried in Ireland, and found so liable to evasion, that it produced no materially beneficial effect. I cannot, therefore, recommend its adoption, and I am not prepared with any other which I could recommend as both safe and effectual. I wish only to call the attention of parliament to the subject generally, as one however in which there is much more to be apprehended from precipitation than delay.
In order to support their general theory of the excess of paper currency, the Bullion Committee choose to assume, that the notes of the country banks bear a fixed proportion to those of the Bank of England, and are increased at the same time: "the foundation (say they) being enlarged, the superstructure admits of a proportionate extension." I should have thought that there were members of the Committee, who would have been convinced from their own experience in business, that this assumption is so far from the truth, that the very contrary is often the fact, and that an increase of the one of these two species of currency is frequently the consequence of a diminution of the other. This was exemplified in the course of last summer, when the failure of several country banks, and a general diminution of country bank paper, occasioned thereby, produced an increased issue of Bank of England notes to the extent of nearly three millions.
On this point, the Committee had not only the experience of their own members to resort to, but had direct evidence before them.
They examined Mr. Stuckey, a respectable gentleman, with whom (not in his capacity of a country banker, but in an official situation which he holds) I am well acquainted; and then, with their usual felicity in contradicting their evidence, report an opinion directly the reverse of his statement.
He is asked, "Is it not your interest as a banker, to check the circulation of Bank of England notes? and with that view do you not remit to London such Bank of England notes as you may receive, beyond the amount which you may think it prupentto keep as a deposit in your coffers?"
He answers, "Unquestionably."
"What is the principle by which you
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regulate the issue of your notes?"—"We always keep assets enough in London, consisting of stock, Exchequer-bills, and other convertible property sufficient to pay the whole of our notes in circulation."
"Supposing that the amount of the notes of the Bank of England were to be materially diminished, is it your opinion that the notes of country banks would take their place?—As a matter of opinion, I should imagine, that in those parts of England where Bank of England note" circulate, if they were to be withdrawn, their places would be immediately filled up by the notes of country banks; and I would illustrate this opinion, by the example of the county of Lancaster, where the notes of the Bank of England are the chief circulation for small payments."
"Is it your opinion that a country bank regulates its issues in proportion to it" deposits of Bank of England notes or specie?"—"We regulate ours by the assets we have in London (as I have before stated) to pay them, without much reference to the quantity of Bank of England notes or specie which we have, although we always keep a quantity of both of the latter in our coffers to pay occasional demands made in the country."
Such is the evidence of Mr. Stuckey. But what is the conclusion drawn by the Committee? No other than this—"That so long as the cash payments of the Bank are suspended, the whole paper of the country bankers is a superstructure raised upon the foundation of the paper of the Bank of England."
I proceed to the twelfth Resolution, and admit, as every one must, the general truth of the fact which it affirms, though I must observe, that the words, "a considerable period of time," are too vague, and ought to be made more definite, if it could be proper to admit the Resolution. But forming a part of a series of propositions, such as we have before us, it is impossible for me to agree to it, and standing alone, it would be nugatory and Unmeaning, and therefore unfit to be placed upon the Journals.
The thirteenth Resolution is really most extraordinary composition. Pressed by the force of undeniable facts, the learned gent. cannot avoid admitting that "the adverse circumstances of our trade, together with the large amount of our military expenditure abroad, may have contributed to render our exchanges with the continent of Europe unfavourable."

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This concession to fact and common sense is indeed made with great caution and evident reluctance; but it amounts very nearly to giving up the question. My thirteenth and fifteenth Propositions are little more than an expansion of this part of the Learned Chairman's Resolution.
Admitting, as he does, the effect upon the exchange, of the circumstances alluded to, by what scale can he measure the precise degree of their operation, or avoid agreeing with me, that they may have produced the whole of the depression we observe? No, says the remaining part of the Resolution;" the extraordinary degree, in which the exchanges have been depressed for so long a period, has been in a great measure occasioned by the depreciation which has taken place in the relative value of the currency of this country, as compared with the money of foreign countries."
Here then is a completely new sense given to the word depreciation. I have already troubled you, Sir (I fear too long), on two kinds of depreciation; a depreciation, compared with legal coin, and a depreciation compared with commodities: these two kinds both take place at home; but now we have one which happens abroad—a depreciation compared with the money of foreign countries. This is never hinted at in the Report, which dwells largely upon one or the other, or both of the two senses which I have mentioned. The Bullion Committee are resolved to have depreciation; give them but depreciation, no matter what it means. But what is the real meaning of a depreciation compared with the money of foreign countries; and has it (I ask with all submission) any meaning at all? No man ever Supposed English Bank-notes were exchangeable for foreign money abroad, or before this Resolution thought of saying they were depreciated because not so exchangeable. The same thing is equally true of English guineas.
It may indeed be said, that when the exchange with Hamburgh, for instance, is at thirty-six, the money of Hamburgh loses when compared with the money of England; and that when the exchange is at thirty, the money of England loses when compared with the money of Hamburgh; and this loss is, I suppose, what the Resolution calls depreciation. If this is the meaning of the phrase, and I can extract no other from it, it amounts to
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nothing more than a different expression for an unfavourable exchange; and for such a definition of exchange I need only refer to the hon. gent. near me (Mr. H. Thornton): "What" said that hon. gent. "do we mean by the rate of the ex changes? We mean the rate at which the circulating medium of this kingdom passes in exchange for the circulating medium of other countries." The true sense of this bugbear Resolution: is then only this, that part of the fall of the ex change is owing to causes, about which we art perfectly agreed, and to which in deed, I, in common with the witnesses, attribute the whole of it; but that in great part it is produced by nothing but the fall of the exchange itself: a mode of reasoning, which I am sure the learned chairman of the Bullion Committee is too good a logician, deliberately to defend, though he may have been inadvertently led into it by the indistinctness of his own expressions.
With regard to the fourteenth Resolution, I should think the ambiguity of it, a sufficient reason for its rejection. It imposes a solemn duty on the Directors of the Bank; but instead of letting them know what that duty is, it leaves them to guess at it as they can. It directs them "to advert to the state of the foreign ex changes, as well as to the price of bullion, with a view to regulate the amount of their issues;" but it does not tell them, whether in any given case (suppose when the exchange falls), they are to diminish or to increase their issues. Now a precise direction was the more necessary, because the governor and deputy governor of the Bank tell you in their evidence, that in their opinion, the issues of the Bank have no effect upon the exchange. And, in deed, I can trace no connexion between them in examining the accounts upon the table. We have seen the course of ex change both rise and fall, when there was an increased issue of bank-notes; we have seen the same circumstances take place when the issue was diminished; therefore, if the exchange is affected, which may be doubtful, by the issue of bank-notes, it is certainly not governed by it. I should, however, equally object to the Resolution, if it were made, as it ought to be, distinct and imperative; because, by taking from the Bank Directors that discretion which they are best able to exercise, we should run the risk of doing great mischief in the pursuit of an object, which experience has

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shewn to be unattainable. There are, undoubtedly, reasons, connected with the concerns of the Bank, why the directors should attend to the course of exchange, but they are not such as uniformly to lead either to an increase or diminution of issues. As long as the management of the affairs of the Bank is left in their hands uncontroled, they will apply their judgment to the circumstances of each case, as it may arise, and act under a sense of responsibility to parliament and to the public, as well as to their own corporation. But this resolution would take that responsibility from them, and where would it place it? To whom are the Directors to apply for instructions in a case of doubt? To parliament? Parliament may not be sitting.—To the Treasury? I believe no man who wishes well to public credit, would desire to place the Bank under the control of the Treasury. And who will say that either Parliament or the Treasury can be so well acquainted with the complicated details which enter into the consideration of a question of this kind, as the directors themselves? Perhaps the learned chairman may say, that no such reference can be necessary; that his rule is meant to be invariable, and that in all cases whatever, when the exchange falls, the issues of the Bank should be contracted. To prove his mistake, it is only necessary to read a sentence of his own Bullion Report: "Your Committee are clearly of opinion, that although it ought to be the general policy of the Bank Directors to diminish their paper, in the event of a long continuance of a high price of bullion, and a very unfavourable exchange, yet it is essential to the commercial interests of this country, and to the general fulfilment of those mercantile engagements which a free issue of paper may have occasioned, that the accustomed degree of accommodation to the merchants should not be suddenly and materially reduced; and that if any general and serious difficulty or apprehension on this subject should arise, it may, in the judgment of your Committee, be counteracted without danger, and with advantage to the public, by a liberality in the issue of Bank of England paper proportioned to the urgency of the particular occasion."
I also object to this Resolution as implying a censure on the directors of the Bank, which, in my opinion, their conduct has not deserved, but which, if supposed to be merited, ought to have been
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so distinctly expressed as to be capable of a direct answer.
On the fifteenth Resolution I shall only say, that I am ready, in the fullest manner, to admit the great importance of the legal convertibility of our circulating paper into coin, not because I think it the only security against an excess of paper, but because it is the only adequate remedy for public alarm. It is impossible to foresee to what extent public alarm may go, or what its consequences may be, in a country in which the circulating medium possesses no intrinsic value. For this reason admit the convertibility of paper into coin to be of the greatest importance, although, while no alarm exists, and credit is entire, it seems to me indifferent of which our circulation may consist, as either will equally answer all the purposes of currency.
But though I agree thus far with my learned friend, I disapprove of his Resolution, as directly leading to that last resolution which he has at present (so strangely I think) withdrawn from our consideration. Without that Resolution, it is utterly useless—with it, it would be dangerous and injurious. It is easy to see the evils of our situation, but at present we unfortunately have not the means of applying a remedy. I am sure the plan of the Bullion Committee proposed in these two last Resolutions, would not operate beneficially.
Let us consider the effect of an immediate resumption of cash payments. It would introduce the use of gold in our internal transactions, a circumstance desirable, no doubt; but is the attainment of that object worth the risk which must be encountered? No improvement of the exchange could take place unless our coin were exported, a measure which even the Bullion Committee have not ventured to recommend, however clearly arising out of their principles. But supposing those principles carried to their utmost extent, and the free exportation of our gold coin permitted, who can doubt that the drain of it would be so great as to force us to have recourse, from direct necessity, to a fresh restriction, under circumstances still more unfavourable and alarming than the present? The whole effect of the attempt would be to destroy our credit, and increase our danger.
The Committee themselves have not however, ventured to recommend an immediate resumption of cash payments.

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They propose it after the expiration of two years; and I am particularly desirous to turn the attention of the House to the interval between the determination that the Bank should resume its cash payments, and the actual commencement of those payments. This would be a most important period, and pregnant with the utmost danger. The Bank would be under the necessity of collecting a large quantity of bullion, in order to answer the demands which would of course be made upon it, and that necessity would make the rate of exchange still more unfavourable to us, because the price of bullion would augment every where in proportion to the supposed wants of so great a purchaser; and the effect upon the exchange would, from the peculiar nature of the article, be still greater than would be occasioned by the purchase of other commodities.
The bullion so collected would remain locked up in the Bank without being of the smallest use, during the interval, to any person whatever. It is indeed contended, in the Bullion Report, that the knowledge of the approaching resumption of cash payments would of itself increase the public confidence; but this I deny, because its tendency to produce that effect would be much more than counterbalanced by the other consequences which must result from it, one of which is, that the Bank would be forced, from motives of self-preservation, to circumscribe its issues of paper, in order to lessen the demands which might be made upon it when the period of cash payments arrived, and at the same time to collect, by every possible method, all the gold which could be met with.
Now I wish the House to consider the situation in which the government, the merchant, and indeed every class of men, would be placed, if the issues of Banknotes were greatly diminished, while gold was even scarcer than at present. It would be a situation which cannot be contemplated without the most serious alarm. What other currency can be substituted when both coin and Bank-notes shall have disappeared? It is possible and indeed probable, that the extremity of the evil might produce a remedy, by forcing the notes of country banks into general circulation, as has been pointed out in the evidence of Mr. Stuckey, which I have quoted. In which case the remedy proposed by the Committee for an excess of paper, would end in the mere substitution
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of a paper less secure, and of inferior value.
But what would be the other alternative? I beg to state it in the words of an hon. friend of mine, a leading member of the Bullion Committee (Mr. Henry Thorn ton,) on his examination before the Secret Committee of the House of Lords in 1797.
He was asked, "If any considerable proportion of the Bank advances to government had been repaid in the course of the last two years (suppose to the extent of four or five millions), are you of opinion that a reduction in the quantity of Bank notes to that extent could have been made without occasioning great public distress?"—"I am clearly of opinion, that a reduction of Bank-notes to the extent of 5,000,000 l. less than their hitherto existing amount, would either produce the substitution of some other paper, nearly to the same, or perhaps to a still greater amount; or, assuming no such substitution to take place, that it would produce very general, if not universal failures, in the metropolis."
For this opinion he then gives his reasons, which appear to me perfectly clear and satisfactory. Now I would ask the hon. gentleman—I would ask the House, whether if, in 1797, while our metallic currency was still abundant, the diminution of Bank-notes to the amount of five millions, would have produced a general bankruptcy in London, what the effect of a proportionate diminution would' be now? I would ask them further, whether they are so confident of the success of the plan of the Bullion Committee, so impressed with its benefits, as to think the attempt worth the risk of a general bankruptcy? Of bankruptcies we have had enough, enough to make the heart ache, and great indeed must be my opinion of the advantages of any measure, deep my conviction of its necessity, before I can consent to run any hazard of extending them further.
Having taken this brief review of the Resolutions proposed by my learned friend, I shall shortly touch on those propositions which it is my intention to offer to the consideration of the House, in the event of the rejection of them.
The general object of my Propositions is, to show, by a deduction of historical; facts, that there is nothing in our present situation with respect to foreign exchanges, and the price of bullion, new in its nature; though in degree, from the

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concurrence of a variety of extraordinary circumstances, it may exceed what has formerly taken place. It is not, as I have already said, my wish to pledge the House to a recognition of abstract principles, but to record facts, and from them to draw this only inference, that it would be unwise to endeavour, by an alteration in our internal currency, which is in itself impracticable or highly dangerous, to remedy inconveniences which we have no sufficient reason to believe the state of our internal currency has produced.
In the place of the first seven Resolutions of the learned gentleman, I mean to propose a general Resolution, stating the right of the sovereign to regulate the legal current coin of the kingdom. In opposition to his doctrine of a fixed and invariable standard of current coin, I am prepared to prove the prerogative of the crown to regulate the standard, by a reference to the soundest legal authorities, and the repeated and acknowledged practice of ages. I must, however, guard against a misrepresentation, in which I find the Chancellor of the Exchequer is involved, as well as myself; as if I had intended to recommend, and (which would be much more important) as if he had insinuated an intention of proposing, an alteration in the standard of our money. With respect to the right honourable gentleman, I believe I may venture to affirm, that the idea is utterly unfounded; and with regard to myself, I can assure the House that I should be a most determined adversary to any such proposition.
During the existence of a public debt, the alteration of the standard of money would be an act of bankruptcy, and a direct fraud on the public creditor as well as every private creditor; and if time admitted of going into the discussion, I could prove it to be an act of useless and unprofitable injustice, productive of no advantages whatever to the state.
My second Proposition is intended to correct an error of my learned friend, respecting the nature of the promissory notes issued by the Bank. He has attempted, without the slightest foundation, to establish an opinion, that the value of Bank-notes was to be measured by the price of standard bullion. I propose, in answer to this opinion, to declare, that they are representatives of legal coin, and of nothing else—not more of bullion than of any other commodity. But it is also
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due, in justice to the Bank, to declare, what is perfectly true, that it was for a century always ready strictly to execute its engagements, and has been prevented from continuing to do so, not by any act of its own, but by the interposition of the legislature. For it must be recollected, that the restriction of cash payments was a measure of public policy, not a favour to the Bank. It was originally imposed, and has been since continued, for reasons connected with the safety of the state, and not upon any application of that corporation. And there is nothing in this or any other resolution which I shall propose, which can have the effect of preventing parliament from removing the restriction, whenever it may be compatible with the public safety to do so.
I now come to the third Proposition, on which my learned friend has already thought fit to touch, and on which, as it involves the principal point of difference between the Committee and me, I cannot but expect much discussion whenever it may come formally before the House.
My first object in it is, to come to a clear and distinct understanding of the question with those gentlemen who maintain the depreciation of Bank notes. In the controversy which has taken place, the depreciation of Bank notes has been talked of in such a variety of sense?, that though I am sure the phrase is extremely mischievous, and has done great injury to public credit, because I am certain that it is commonly understood, both at home and abroad, in one sense only, and that the most alarming of any, I do not know but that I may think the real meaning affixed to it by many of those who assert its existence perfectly innocent, and even by possibility, may agree with them.
I have, therefore, so framed the Resolution, that every gentleman may, and ought to vote for it, who does not believe that Bank notes have lost their value in ordinary and legal transactions as compared with the current coin of the realm which they represent. Those who contend for the depreciation of Bank notes in any of the other fanciful senses which I have before had occasion to discuss, ought all to vote with me upon this question. And in that number I cannot but hope to find the members of the Bullion Committee, who have by no means expressed a clear opinion in their Report that Bank notes have lost their relative value with reference to coin. But particularly I look for the support

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of the honourable gentleman who some time ago declined answering my question (Mr. Huskisson), as he has distinctly told the public, that "the experience of our own as well as of all other countries, has placed beyond the reach of controversy, the proposition, that if one part of the currency of a country" (provided such currency be made either directly or virtually a legal tender, according to its denomination, which he contends Bank notes are) "be depreciated, the whole of that currency, whether paper or coin, must be equally depreciated." Now, if guineas be as much depreciated as Bank notes, Bank notes are of as much value as guineas; and that is certainly all which the Proposition affirms. I am so far from making this appeal with any insidious view, that I seriously declare, that I think the concurrence of those gentlemen in this Resolution would be a remedy for that mischief, of which, so contrary to their wishes and intentions, their Report has been the cause.
I have, however, another object in this Proposition. On a question so long and so warmly contested, I think parliament ought not to stop at the mere rejection of a measure proposed to it, but to pronounce a distinct opinion, and that an opinion so pronounced will do much towards setting the question itself at rest. I wish the House to pledge itself to the belief that Bank notes still are, as they have always been, equivalent to legal coin for the internal purposes of the country, the only purposes to which they ever have been applicable.
An opinion so declared will have an effect similar to that of an association to support the credit of the Bank. Many members will recollect the effect produced by the association of the merchants and bankers in 1797. It instantaneously dispelled all doubt and alarm, and restored credit and confidence. I believe the merchants and bankers are now quite as ready to renew such an association Perhaps, indeed, it is not necessary; for their opinions are sufficiently known. It is not on the Royal Exchange that the depreciation of Bank notes is talked of. But this Resolution, uniting the sense of parliament in the same cause, will give weight and strength to their declared opinion.
I have introduced into the Resolution, since it was first drawn up (as has been observed), the words, "in public estimation," with a view of obviating any supposition
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that I meant to affirm that Bank notes had a legal equivalency to coin. I never had any idea of doing so: and it would be peculiarly improper to propose to the House any declaration on this subject at present, when the judges actually have under their consideration a criminal case, in which their decision may turn on this very point.
The following Propositions, down to the fourteenth, contain a comparison of the circumstances at present affecting our relations with foreign countries with those which have existed in former times, and show by historical deduction, that we have no reason to attribute the present depression of the exchange to the state of our paper circulation, because similar depressions have formerly taken place when no paper circulation existed, or no other than what was convertible at pleasure into coin; and that the degree and duration of the present depression may be accounted for by the extraordinary circumstances of our military, political, and commercial situation; and this conclusion is distinctly drawn in the fifteenth Proposition.
The facts contained in these Propositions I believe to be unquestionably true, and I am prepared to prove them whenever it may be proper to do so, by reference to the documents on the table of the House, and other authentic information.
At present I shall only observe, that the analogy of former instances would lead us to ascribe the depression of the exchange principally to the combination of a great military expenditure abroad, with a high price and large importation of grain. When either of these circumstances has occurred, the exchange has usually become unfavourable; when they have been united, it has never failed to do so. These are circumstances wholly unconnected with our internal currency; and circumstances probably unavoidable, and not imputable to any blamable conduct whatever.
In our military expenses, we are paying the price, a heavy and inconvenient price I admit, of a glorious struggle not only for our own independence, but for the liberty and independence of the human race at large, now threatened with universal subjugation. On the principle of supporting such a struggle with our utmost efforts, I have heard no dissentient voice, and, as to all details respecting the means of doing it, it is not now the time to enter upon them.

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Still less can any doubt he entertained with respect to the propriety of the importations of grain which have taken place in a season of dearth, in which the price has approached to that of the greatest scarcity. The right hon. vice-president of the Hoard of Trade has explained the reasons which induced the privy council to give encouragement to these importations, and they were reasons of cogent and imperious necessity.
The Council wore not unaware, that, by so doing, they were likely to aggravate the evils of an unfavourable exchange; but the subsistence of the people was, as it ought to be, an object superior to all considerations of commercial convenience,
Great, however, as the effects, upon the exchange, of our military expences combined with the importation of grain must have been, they could neither have been so great not so lasting, had the freedom of commercial intercourse existed as in former times. In this the real novelty of our situation consists. For though I do not carry the doctrine of commercial equivalents so far as the hon. gent. opposite (Mr. Huskisson), I admit that there is a continual tendency in an unfavourable exchange to correct itself by checking importation and encouraging exportation, and that, though for a time it may be overpowered by political emergencies, or by pressing calls for articles of unavoidable necessity; yet, if freedom of trade exists, it will usually prevent any excessive inequality, and in no long time restore the balance.
The fourteenth Proposition is intended to show, that on account of the extension of trade, and the great increase of our public revenue and expenditure since 1797, a more abundant currency is necessary to carry on the business of the country, and that we should have no reason to conclude that our currency was excessive if it should appear considerably to exceed in amount what then existed. This, however, I believe to be so far from the fact, that the diminution of coin is, perhaps, fully equal to the increase of paper circulation.
I am now arrived at the last and most important Propositions, those which respect the removal of the Bank restriction. On the fifteenth Proposition, which declares "that it is highly important, that the restrictions should be removed when ever the political and commercial relations of the country shall render it compatible
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with the public interest," I need say nothing, as the gentlemen against whom I have been arguing, entirely concur in the same opinion, and I believe that a difference on this point scarcely any where exists.
Nor shall I think it necessary to dwell long upon the last Proposition, so much, of the reasoning which I have applied to other points, having a direct reference to this. If I have succeeded in showing the fallacy of those arguments by which it is attempted to prove the excess and depreciation of our currency, I need say no more to establish the inexpediency of taking a step which all admit to be attended with danger, as a remedy to an imaginary evil. I have also, as I think, shown that the removal of the Bank restriction would not have the effect of restoring a favourable course of exchange.
But my great objection to the removal of the restriction at the end of the propos" ed period of two years, is, that unless a change of circumstances, contrary to all probability, should take place in the mean time, the resumption of cash payments at the period proposed, would be wholly impracticable. The very Report of the Bullion Committee states the impracticability of an immediate, or very early, resumption of cash payments. "Your Committee," it says, "are of opinion that if peace were to be immediately ratified, in the present state of our circulation it would be most hazardous to compel the Bank to pay cash in six months, and would be found wholly impracticable." They are, therefore, it further says, "of opinion that even if peace should intervene, two years should be given to the Bank for resuming its payments; but that, even if the war should be prolonged, cash payments should be resumed by the end of that period."
Do the Committee then mean to con tend that there is no difference between war, such a war as the present, and peace? Do they think that peace would give no additional security and facility to the Bank, in preparing for the resumption of cash payments? Are they of opinion that it would afford no advantages to the government in so arranging in its pecuniary concerns, as to be independent of assistance from the Bank—that it would give no stability to commercial credit in general? Will they affirm that their Chairman is entirely mistaken in admitting in his fifteenth Resolution, that the adverse

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circumstances of our trade, together with the large amount of our military expenditure abroad, may have contributed to render our exchanges unfavourable?" or to what miraculous aid do they look for removing these unfavourable circumstances, and making it indifferent whether we have war or peace?
It would really appear that they thought it indifferent, from the mode in which regret is expressed in the Report, "that the suspension of cash payments has been continued so long; and particularly that by the, manner in which the present continuing act is framed, the character should have been given to it of a permanent war measure."
That the suspension has, from necessity, been continued so long, we must all regret. Once, and once only, there appeared a prospect of a change of circumstances which might admit of its removal, and the directors of the Bank, it ought to be remembered, immediately took measures which proved the sincerity of their desir that it might be removed. In the year 1798, and the early part of 1799, the course of exchange was remarkably favourable, and the Bank, in consquence, as a prelude to a general resumption of cash payments, obtained permission, pursuant to a clause in the restriction act, to pay sums under five pounds in cash. Under this permission, large sums, much larger than the public are generally aware of, have actually been paid. The renewal of war on the continent, and still more the failing harvests of 1799 and 1800, destroyed our hopes, and I will venture to say there has never been a moment since, in which the restriction could safely have been removed.
With respect to the present continuing act, I am not ashamed, however it may expose me to the censure of the Bullion Committee, to declare my adherence to the opinions of the Parliament of 1804, and the administration by whom that act was proposed. Of that administration, after such a lapse of time, and so great a change of circumstances, I mean to speak historically only when I say that on the most careful review of their measures, political, military, and financial, I see no reason to think them inferior either in judgment, foresight, or vigour, to any, either of their predecessors or successors.
With respect to this particular measure, I think it an instance of their judgment and foresight. It was certainly meant as
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a permanent war measure—not as an ordinary war measure, but one which the peculiar circumstances of the present war would render necessary during its continuance; subject undoubtedly to the revision of parliament, if, contrary to appearances then existing, the character of the war should so change as to admit of its being dispensed with.
Have then the circumstances of the war so changed since that time, as to show that this opinion was ill-founded? Have they not, on the contrary, from year to year assumed a character still more decidedly confirming it?
It is unnecessary to enter into a detail of particulars where the general result is so clear as to force conviction on the mind; but if there has never since been a moment at which the restriction could safely have been removed—if, on the contrary, circumstances have arisen, which would have imperiously required its imposition, had it not been already in force—if the appearance of our present circumstances be such, as more than ever to enforce its necessity, and to place the possibility of its removal in doubt and distance, shall we impeach the judgment and foresight of those who, foreseeing the general state of things, though not the particular events, provided in time for the emergency?
They knew that the conclusion of peace must make an important difference in our situation. Whether in that event the Bank restriction can safely be removed, after so short a period as six months, it is impossible, as yet, to judge, because we cannot foresee the circumstances under which peace may be concluded. But parliament has wisely fixed the shortest term in any degree probable, because it will be much easier to extend it, if necessary, than to contract it.
Let us, however, consider the additional means of mercantile accommodation which peace will afford. A debt from government to the Bank of no less than seven millions and a half will become payable: the liquidation of the other parts of the unfunded debt, and the general rise of the public funds, will give great facility to individual credit—above all, a sinking fund of twelve millions will then be poured into the money-market without being counteracted by new loans.
Such means of supplying additional capital no country ever possessed.' Some inconveniences may perhaps in process of

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time, even arise from their abundance; but of these it is not now necessary to speak. My object is only to justify the parliament of 1804, in fixing the resumption of cash payments at the period of peace.
That parliament also felt, what I think the Bullion Committee are a little apt to forget, that the Bank restriction is not a thing to be trifled with, nor without public inconvenience to be brought into frequent discussion.
I think the Committee must forget this, because, after all, they propose their measure as an experiment. They speak of the "possible occurrence of political circumstances, which may be thought hereafter to furnish an argument in favour of some prolongation of the proposed period of resuming cash payments, or even in favour of a new law for their temporary restriction after the Bank shall have opened." For this experiment, which they are conseious may fail—which I think rash, and desperate, and wholly impracticable, what do they risk? They risk, as we are told by one of their most distinguished members (Mr. Henry Thornton), a general bankruptcy in London. Such is the danger to individuals. And what will be the consequences to the government? We have heard the Chancellor of the Exchequer complain of the inconvenience occasioned by the delay of this question. Whether he is provided with a system of measures to be proposed to parliament in the event of its acceding to the recommendation of the Bullion Report, I do not know: but I know, that, if he is, they must be measures wholly new and discordant from the financial systems of many years past.
To carry on the operations of the war for the next two years, not only without the accommodations afforded by the Bank, not only under the inconvenience of a forced repayment of the bank-advances, but under the pressure of a circulation so contracted and cramped, as it necessarily must be, is a task which no minister has yet been compelled to attempt, and which, if it can be any way effected, can be accomplished only by a pressure upon the people far greater than they have yet experienced. I suspect that it could not be effected at all, and that if we were not compelled to sue for peace, we should at last be obliged to recall our forces from abroad, and abandon the continental war, just at the
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moment when the concurrent opinion appears to be, that fairer prospects than we have yet known are opening.
This is no vague and declamatory statement, but founded upon experience, as well as reasoning. The full experience of such a situation as ours would be under the system of the Bullion Committee, we have never indeed had; but we have, in two periods referred to by them for other purposes in their Report, felt the effects of a restricted circulation. In 1783 the issues of the Bank of England were considerably reduced; and though peace had then been concluded, the 3 per cent. funds were at 56, navy bills were at from 15 to 20 per cent. discount, and the general depression of property so great, that the resources of the country were by many supposed to be irrecoverably ruined. In 1796 the Bank again reduced its issues, and the effects were similar. The public funds were even lower, falling at that time to 46. I do not contend that the diminution of the issues of the Bank alone produced these effects; but if the other circumstances existing at those two periods be compared with those of our present situation, I am afraid the advantage will be by no means in our favour. In two most important points how great is the difference! In one of those cases the freedom of trade was complete—in the other, it existed to a considerable degree—in both, a plentiful metallic currency continued in circulation. I need not point out our present situation in both those respects. Nor shall I attempt to estimate what the revenue might amount to when every man, who did not wish to pay his taxes, might say, with apparent truth, that he could obtain no money of any kind to discharge them; and those who were willing to pay, might be under a real impossibility of doing so.
I cannot indeed, whatever may be the decision of parliament, pretend to penetrate the darkness of futurity—to foresee whether our arms will be successful or unfortunate—whether the continent will break its fetters, or remain in subjection, whether commerce will recover freedom and activity, or remain palsied by the frown of a despot; but I am anxious that the arm of government should be strengthened rather than crippled, and that we should not give up the chances of success, and the means of availing ourselves of any favourable events which Providence may grant us.

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I think we shall best preserve them by adhering calmly and firmly to the system which I recommend—not on my own authority, but that of parliament, by which it has already been established; and by not suffering ourselves to be hurried into precipitate measures by our impatience of some inconveniencies, galling no doubt, but from which we cannot at present be freed: while the plan proposed by the Committee would, without effecting the object they have in view, do more than either the decrees or the victories of Buonaparté, to execute his designs for our destruction.
Mr. Huskissondeclared, that he could not agree with the principles and opinions maintained with such confidence and urged with such ability in the luminous and comprehensive speech of the right hon. gent. who had just sat down; neither was it possible for him to give a silent vote upon this important subject, even though he had not been so pointedly and personally called upon, as he had been by the right hon. gent. to state his opinion upon it. The manner, in which hat call had been made, appeared to him extremely irregular, and wholly inconsistent with the uniform practice of that House and the established rules and forms of discussion in the course of its proceedings. The right hon. gent. had thought proper, in the middle of his speech, to require of him a brief and summary opinion upon this most grave and intricate subject, in order that he might have in the concluding part of his speech an opportunity to comment upon it at length. No gentleman, he must contend, had a right to expect from him an answer in such a way, even if he had not felt it necessary for him to deliver his opinion upon the subject somewhat more at length. He was aware, in offering himself to the House, that it would be necessary for him to revert to opinions which had been already much discussed, and he could not revert to them without recurring at the same lime to details which he feared would appear dry and uninteresting to the Committee. It was, however, necessary for him to recur to those opinions and arguments, in answer to the speech which had been just delivered, and which, as he thought, struck at the foundation of all financial and commercial principles established in the world. The right hon. gent. had said, that the Bullion Committee had made one of the boldest experiments that was ever tried on public credit,
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and that they had brought the public credit of the country to the very brink of a precipice. Now, as to the part he was to bear in such a charge, he must say, that when the motion was made in that House for the appointment of a Committee to consider of the price of bullion and the rate of exchanges, he was not in the House, nor in town: but when he had been appointed a member of that Committee, it then became his duty to give his utmost attention to the consideration of the subject. When that motion was made in the House for the appointment of the Bullion Committee, there was no sort of opposition made to it; and when the Committee was appointed, it became their duty undoubtedly to investigate the subject with care, and to report to the House their conscientious opinions on the matters referred to them. As to those consequences, then, which were said to have resulted from the publication of that Report, those men were not answerable, who had only conscientiously discharged a duty that was imposed upon them, and had formed the best conclusions which they were enabled to do from the evidence before them. He thought it was hardly fair to say, that their discharge of the duty which the House imposed upon them, and reporting faithfully and fairly their opinion, was making a bold experiment on the public credit, or driving the country to the brink of a precipice.
But, in point of fact, the right hon. gent. was mistaken if he ascribed the agitation of this delicate, but important question to the matter or publication of the Report of the Bullion Committee. The discussion of the subject had originated out of doors long before the Bullion was appointed, and out of doors the discussion would have been continued, even if the attention of that House had never been drawn to the consideration of it. Under these circumstances he must contend, that it was highly desirable the question should be taken up by parliament, and he was perfectly convinced that there could be no subject more proper or more worthy of parliamentary discussion, than the state of the coin and currency of the realm. In former periods, reports upon such subjects had not only been prepared by the direction, but published and circulated by the authority of parliament. In the year 1696, when the coin was debased, the Lords of the Treasury called on Mr. Lowndes, their secretary, for a report

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respecting the existing state of the circulation and currency of the country. That report was printed at the King's press, circulated all over the country, and every body was invited to the consideration of it. Ministers at that time thought that it was much better completely to remedy the existing evil, than to accept of the fallacious advantages which were then held forth from the modification and continuance of it. The consequence was, that those principles were fully and effectually refuted, which were now again maintained, but which he hoped to overthrow before he should sit down, and a complete remedy provided for the serious evil of which the country at the time had to complain.
With respect then to the legal coin of the realm, he should now confidently call upon any gentleman who heard him, to deny if he could that the only legal tender in this country was gold and silver of a certain fineness and containing a certain quantity of the precious metals to be ascertained by weight. This was the standard and unfluctuating measure of all other commodities.—if it were admitted that the legal tender was regulated by those two principles, then it followed that the coin of the realm must consist of bullion of a certain fineness, and only perfect as it contained a certain weight. He would ask, if it had not always been a grand object of the legislators and monarchs of former times, to preserve their money undeteriorated in fineness, and not below the standard in weight? When they talked of prices current, it was necessary to know what was meant by the word price. Price meant nothing but the relation the value of commodities bore to the standard. The weight of coin had in all former times, in a great degree, determined the value of money, as well in this as in other countries. If proofs were wanting of this, he would refer the sceptic to a regulation made in the reign of Henry the 3d, determining the proportion a quartern loaf should bear to the weight of certain coins. This furnished one, of many proofs, that the names of coins were given with a reference to their weight in numerous instances. In ancient proclamations, many directions were to be found for regulating the current value of money, according to its weight, and sometimes specifying the allowances which were to be made for the depreciation occasioned by wear and tear. Thus the pound sterling in this country, and the livre in
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France were originally equal to a pound in weight of silver; and our pennyweight was consequently equivalent in weight to one pennyworth of silver. He was astonished that the right hon. gent. should seem to conceive that the shilling was a coin which had no regular standard. Weights had been made and were kept at the mint, which were the standard weight of a shilling as the legal coin of the country. The right hon. gent. appeared to him, not even to be aware of the provisions made on this head in modern acts of parliament. The law of the land was so explicit upon the subject, that he could not repress his astonishment when he heard the right hon. gent. assert that the coin called "a shilling" passed current without any reference to its weight. Could it be possible that the right hon. gent. was ignorant of the existence or enactments of the Act of the 14th of his present Majesty, an Act entitled, "An Act for regulating the weights to be made use of, for determining the value of gold and silver coins," the first provision of which Act set forth what the weight should be for trying "certain pieces of gold coin called guinea" and certain pieces of silver coin called shillings?" It was only with a reference to their weight, that these pieces were to be taken as money. Were they then to be told that a thing called a shilling, but which he could only call a counter—(Hear, hear!), could legally pass current, without any reference to its weight?
Another provision on this subject was made in determining the currency necessary to form a legal tender for a sum exceeding twenty-five pounds. Guineas being the grand medium in which payments were made, it was enacted they should no longer pass current, if by any circumstance they became so deteriorated as not to weigh 5 dwts. 8 grains. The depreciation of coin was an injury done to the public; and on reference being made to the time when our silver currency was debased as much as it was in the time of king William, he was surprised to hear such assertions as had been advanced. If he wished to establish still further what he had urged with respect to the weight of coin, he would call the attention of the Committee to what passed in 1774, when some regulations were made as to the currency of gold coin. The guinea was prohibited from passing as money, if it did not weigh 5 dwts 8 grains. The privy council at that time had it in contemplation

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to allow it to pass current, although it weighed less, on a scale of diminished value according to its weight. Silver coin, he would further observe, was only a legal tender for sums not exceeding 25 l. In payment of any debt above that sum it could only legally be tendered for what ever it might be worth from its weight; and gold, though it might be legally tendered by tale to any amount, was yet liable to pass, not according to the tale, but according to its weight. It had been often said, that all money was merchandize, but it might be more convenient to make all merchandize money. The price of any one thing could only be determined by a reference to some other commodity which by common consent or established law was fixed as a standard. This was a position which he must fully allow and admit, that any commodity might in that way answer the purpose of money and become money. The precious metals, however, had many decided advantages in this respect over any other commodities. He would not admit that they acquired their value entirely from any convention of agreement, but he thought they came into the situation they now stood from possessing intrinsic value. They were money before they were coined. He admitted that they so far partook of the nature of other commodities, that the abundance or scarcity must increase or diminish the value. As to what was called price (if there was no paper currency), it would be merely the comparison of other commodities with gold and silver considered as commodities. When the price of either gold or silver was talked of separately, it would only mean with reference to the other precious metal. It appeared to him, that it was not possible that there could be any real excess in a currency of gold and silver, and that nothing could be more absurd than to state a precise numerical amount of money which would be proper for the circulation of any given country. If the gold and silver was less abundant, a certain quantity of it would go farther in exchange for other commodities; but if it was more abundant, it would require a greater quantity to purchase the same articles. The price of all other commodities would then rise and fall according to the abundance or scarcity of the precious metals. When paper, however, was the currency, and that paper not convertible into gold or silver, then there might, indeed, be an
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excessive issue. Even in that case some persons now contended, that there could be no excess of issues of Bank paper; and their argument was, that the supply did not exceed the demand. It was said, that no man would ask them for money unless he wanted it to make some use of. It was evident, indeed, that the individuals applying for the money wanted it, but it was not evident that it was for the public good that such issues should be made. Before the restriction act was passed, nobody spoke of the quantity of notes issued by the Bank. That was a secret which no person was interested in penetrating, when the paper could at pleasure be exchanged for gold and silver. Since the restriction, however, we heard for the first time of the quantity of money that was necessary to serve this country; and the directors of the Bank appeared to have got a scale by which they can gauge the country with as much precision as an exciseman can take the contents of a cask.
Upon this part of the case his opinions were decided and fixed that, coin was of no value except with reference to the quantity and fineness of the gold and silver it contained, and that paper was of no other value but in reference to the coin it represented. If the currency consisted partly of coin and partly of paper, the excess of paper above what the currency would be if it was coin, must be an excess of currency, and naturally tend to depreciation. It must be obvious that the value of money is in the inverse ratio of its quantity. The value of currency consisting of gold and silver cannot be depreciated. If paper, then, has no other value but in reference to the gold and silver it contains, it follows that the real value of the paper is measured by the gold and silver in the coin which it is said to represent. He then, in confirmation of his opinion, referred to a work which must be considered as something more than an ordinary publication; he meant the letter of lord Liverpool to the King, upon the subject of coins. Independent of the great ability which was manifested in that work, as it was published in consquence of a regular inquiry on the subject, it carried with it the weight of official research, and might be considered in some degree as an official document. His lordship stated "that all commodities take their price and value in reference to the coins, or in other words, to the quantity of gold for which they could be exchanged."

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The value of paper therefore, by this reasoning, must have fallen from the time when it would purchase a larger quantity of gold than it will do at present.—When the right hon. gent. then stated that these notes had a value in public estimation and opinion, different from their value as referred to the price of gold, it was he that broached new doctrines, and such as were totally different from all former opinions on this subject. The Bank note does not bear the same proportion to the gold contained in the coin that it did formerly, and therefore it is depreciated.—If great perplexity and confusion had been produced upon this subject, it was not by the Report of the Bullion Committee, but by the manner in which that Report had been handled. As to the effects of an increased taxation in depreciating the currency, it probably had some effect, but that effect found a natural limit. The expence of working the mines prevented an overabundant supply of specie; and the effect of a scarcity of it was only to increase its value, and consequently to diminish the prices of other commodities. The depreciation which the Committee contemplated was a depreciation of one part of the currency from particular causes, which depreciation was detected by a comparison between the paper money and the Mint standard of gold or silver it represented. If the coin part of our currency did not bear its proper proportion to the Mint standard, as if, for example, a smaller quantity of gold was called a guinea, then the depreciation would be in the coin; but as it is the paper which represents a smaller quantity of gold than a guinea contains, it is the paper which is depreciated.—If our metallic currency were so debased as to cause a depreciation of 25 per cent. at the present period, then this inequality could not exist, and paper would be a fair equivalent for coin. In William's reign the silver coinage was depreciated by debasement 30 per cent. below its standard value, and the notes of the Bank, which were payable in silver, were equally depreciated. He was at a loss to conceive what was meant by the current value of bank notes. What value could the creditor get from the Bank? The law had indeed given them its sanction, and the Exchequer received the notes at par—a circumstance which probably served very materially to sustain them in circulation.
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Whilst upon this part of the subject, he should beg leave to call the attention of the House to the contents of a very admirable Report, made to the lords of the treasury in the year 1776. This Report very truly and correctly stated, "that the regulations of the Mint having established the gold currency of the country at a higher rate, with respect to silver, than the market price of bullion, acted as a premium for the exportation of silver coin. The market price of silver was then 14 oz. and ¾ths, for one ounce of gold, whereas the Mint regulations made it 15 oz. and ½th, for one ounce of gold. The report then very justly stated that this difference between the market price and the Mint regulations, held out a temptation to persons to buy up silver coin with gold for the purpose of exportation, an evil which the report stated to require the interference of the legislature." The remedy was found in the restoration of the relative Mint value of silver as compared with gold to the exact proportion which it bore in the market. The consequence was that the exportation of bullion ceased, and the fall of one farthing in the value of Louis D'ors in Paris, had the effect of bringing that coin in abundancé into this country. Unequal currencies, therefore, he contended, could not exist, as the perfect part would quickly vanish, and the debased currency alone remain. This was clearly proved (if proof were wanted) by what took place in the reign of king William, when the silver, not being secured from deterioration like the gold currency, was depreciated not less than 25 or 30 per cent. The new crown pieces which were issued from time to time, did not remain long in circulation. They were immediately melted and exported: a mixed currency followed, which also disappeared. When there were two currencies, the one from 25 to 30 per cent. depreciated, the other at full value, this must ever be the case. But then it was said, to alter the system would be to encourage fraud and perjury. Why, they all knew that the laws on the subject were of no avail; and he thought the existence of the law at present in force, went to encourage fraud and perjury. (Hear, hear!) The hon. gent. then cited an act of 1774, against clipping the coin of the realm, which spoke of the new coin as being constantly melted down; and added, the practice seemed likely to continue, while pieces of the same denomination were different in value, and those

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under weight were to pass for as much as the others. He would ask if this were not now the case? (Hear, hear.)
It was ridiculous to suppose that laws could prevent the exportation of guineas, when by exporting them there was a profit of 25 per cent. To shew this fact a little more plainly, he would call their attention to a circumstance of the advancing the value, or (as to advance the value was impossible) the making the dollar pass for 5s. 6d. instead of 5s. Its intrinsic value was 4s. 6d., and the advancing its denomination was indirectly raising the denomination of the coin of the realm. If ministers had raised the 7s. piece to 9s. it would have come near the true proportion to the present value of the guinea; and how was it then to be said to be the same aliquot part of a coin, which by the law was worth only 21 s.? It would be said, that no argument from dollars could hold; they were not the coin of the realm. They might not be a legal tender; but was there any man who would hesitate to give notes for dollars? If a foreigner were to ask what was the money of England? he would be told that a pound of silver was coined into sixty-two shillings, and a pound of gold into forty-four guineas and a half. If he were told that the silver were to the gold as 15 and a fraction to one, and that in addition to the grounds which other nations had to secure the value of their money, it need never be taken but by weiget, the foreigner would say it was secured by as perfect a system as could be devised. But if, going a little further, he was told that a foreign piece worth 4s. 6d. passed here for 5s. 6d. he would say, "How can this bear a proper proportion to your shillings?" There was but one answer—Our silver coin is so degraded, that our shillings are not worth more than 9d. each, so they bear a good proportion to the dollar." The foreigner would reply, "But how, then, can your silver bear its proper proportion to your gold?" In answer to this he must be told, "All our gold has been sold, so we make use of a substitute, and that substitute bears a very good proportion to our ninepenny shillings."—If an English merchant had a debt to discharge at Amsterdam, of 500 l. and purchased a bill that enabled him to discharge it in 100 ounces of gold, how was this transaction to be accomplished?—In what manner but by the purchase of guineas?—He would read the Committee a few extracts from a correspondence
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between a person in Paris and a person resident in this country, whose names he was not at liberty to mention. The letters to which he alluded stated that the latter had succeeded in purchasing for his correspondent the several sums of 10,829 and of 5,000 guineas, which he had shipped, and hoped they would go safe to hand, that the charges were ½ per cent. for commission, and another ½ per cent. for guaranteeing the bills, and offering afterwards to provide them to any amount which might be desired.—(Hear, hear!) The balance of trade could not possibly account for this state of things. In the reign of William, about I696, the real value of the guinea, compared to the debased silver currency of that period, was 25 s. or 26 s., but the gold was permitted to pass at its intrinsic worth; and no withstanding the then unfavourableness of the exchanges, the gold never disappeared. Lord Liverpool observed in his publication, that if the gold coin at that period had not been suffered to pass at its sterling value, it would doubtless have been all melted down. It was certainly well worthy of consideration what might have been the condition and financial difficulties of this country, then engaged in exertions not less arduous than those of the present period, and what might have been the fate of the liberties we enjoy, had not this wise proceeding been adopted. He was indeed well apprised of the difficulty which must be felt if the gold and the Bank note were admitted to an equal competition, in any longer supporting the assertion that the paper was not depreciated (hear, hear). He was well aware what would then become of that current value and public estimation by which the advocates of the restriction endeavoured to support their argument; a current value and a public estimation which were in fact derived only from the rigorous prohibitions of penal enactments. Was this then a proper state of the currency of the country; was it one in which it was the duty of parliament to suffer it to remain? The fact was undeniable that guineas were sold in every street. The evidence of a respectable goldsmith proved that he had every day applications relative to the sale and purchase of guineas. Yet still it was maintained by the right hon. gentleman's resolutions that paper was not depreciated in public estimation. If paper was sustained at all in public estimation, it must be by a support growing out of terror, by

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an estimation proceeding at that moment from a consideration of a pending judgment. If this were once settled, public estimation would soon shew what it really was. In every part of the country, there were already two prices. (No, no, from different parts of the House.) Mr. Huskisson stated, that he had undoubted proof of the fact. He had in his pocket a, letter, printed and addressed to Members of Parliament, by a person intimately acquainted with those matters; and that letter stated, that two prices were prevalent in the country, and that the usual premium for guineas was half a crown. But was it not undeniable, that in Ireland, there were clauses in many of the leases for payment in gold; and that guineas were bought at a premium for the rent, and must not the landlord make a difference in those leases and tenants?
He would now repeat, and seriously repeat, the question of the last speaker on a former night, was there any real standard of payment? He did not mean the question ludicrously, but was intitled to an answer, because not one hint of such a thing was given in the pamphlets which undertook to answer the Report. The authors of these pamphlets had hitherto eluded studiously or rather declined this question, nay, so careful were they of committing themselves upon this point, or so anxious not to encumber themselves with the perplexity of such a consideration, that even the word was not mentioned in their publications until it was pressed upon them too repeatedly to be overlooked; and then it was disposed of by an expedient as unsound as any other part of their favourite system. The real question was whether Bank notes or coin were to be considered as the standard? The Committee had a right to an answer upon this point; if gentlemen would have it that Bank notes were the standard, they should say so; they should describe the guinea as the twenty-one fortieth part of a two pound note; and if they did not think so, it was equally incumbent on them to avow the sentiment. For some understanding should be had upon a matter so essential to the discussion and the understanding of the question. In the variety of opinions, or if he might be permitted to retort the expression, of theories resorted to upon this head, there were some theorists who wrapped it up in a sort of mysterious obscurity, who considered the standard as something not corporeal,
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and talked of abstract currency in a manner peculiarly congenial to their clear and lofty conceptions; but while they talked of abstract currency in so suitable a strain, he would ask, Did any one ever hear of abstract payment or of an abstract dinner? Most of those gentlemen on the one side of the abstract standard were in the service of government, and it would be worth their while to consider how they would be satisfied with an abstract payment of their salaries. (Hear, hear! A laugh.) It was absurd to talk of payment in any other manner than by the coin of the country. But the reasoning of those gentlemen was not always so decidedly in favour of their own principles; they were obliged to admit that if the currency was compared with what was called the standard it would appear to be depreciated; and from the consequences of this admission they endeavoured to escape, by saying, that it was a virtual, and not a real depreciation. This distinction was of the same school with the abstract payment. Aware, however, of the inconvenience of proceeding without a standard, they found one, which they thought would answer their purpose; this was the interest of 33 l. 6s. 8d. three percent stock. This new doctrine of the standard amounted simply to this, that whenever an increase should take place in the gold and silver of any country, with reference to other commodities, be the cause of the increase what it would, the Bank should be empowered to issue a quantity of paper, not convertible into cash, for the purpose of preserving the proportion. In order to shew what this standard was, in order to prove that at best it was nothing but an ingenious deception, he would ask one question, and that was, Whether such a definition would not adapt itself to any depreciation of the currency however extreme? If such a principle was to be avowed, the sooner it was done the better; for then every man would know in what situation he stood, and be prepared to expect, that in case a depreciation should occur, that depreciation would be remedied by an issue of another description. Admitting then this principle in its full extent, and preserving the due ratio between the price of gold and silver and the issue of paper currency, he asked if this principle would not apply to the doubling of the denomination of our currency? If the principle was to countervail the increase in the price of the gold and silver by the

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issue of paper, the sooner such a principle was generally known, the better. But here he could not help asking, though the price of gold was so encreased, was there such a scarcity of gold? [Hear!] Where were the proofs of this scarcity? He was aware of none; but of this he was confident, that where gold was scarce, other commodities must become cheap. Would gentlemen try it by this test? Was it the fact that other commodities had become cheap? But if they were to entrust this fearful discretion to the Bank, of countervailing the effects of the rise of the price of gold and silver, he thought that then the best criterion of the required standard would be found in taking the average price of corn for a given period jointly with the average value of labour. Here he read a statement of the average prices of wheat, imported for the fourteen years since the Bank restriction in 1797. Throughout this period, the progressive rise in the average price of the wheat at stated periods, proved the gradual depression of our domestic currency.
Here he must be permitted to notice in passing a very extraordinary statement made by a right hon. gent. (Mr. Rose) who spoke before him in the debate—a statement not more singular in its nature, than contradictory to itself and wholly subversive of the object for which it was made. In his endeavour to account for the rise of the value of all articles in this country without reference to a depreciation of the existing currency, that right hon. gent. had adverted to France, and the apparent rise of prices, which had according to his assertion taken place in that country. Upon this point the right hon. gent. had contended that the price of labour was dearer in France than in England during the last year, and thence inferred that gold was cheaper in France, than in this country. Now granting all this to the right hon. gentleman, he would ask him how he could reconcile such a statement with the fact admitted on all hands that there was a profit of twenty per cent. made by the exportation of gold to France?
It was by no means his intention to insinuate, that the power, to which, he had alluded, of enlarging or abridging the circulation of the country, could be vested in men who would use it with more prudence and wisdom than the Bank of England; but in looking at this power as a member of Parliament, he viewed it independent
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of any considerations respecting the persons in whom such power was to be vested; and viewing it in this light it appeared to him as a power that enabled a single corporate body to change, at will, the relative proportion which the real money of the country should bear to all other commodities whatever. He should not stop now to consider the vast consequences that might one time result from the political effects of the exercise of such a power in bad or imprudent hands. It had been said that the active part of the community would suffer by the measure proposed. He certainly would allow that there were inconveniences attached to it; but he thought that inconvenience should at all times be submitted to in deference to strict justice, especially as he agreed with an hon. gent. who spoke on the preceding night, that the very inconvenience had a tendency to correct itself. The contract for the payment of money was a stipulation as to the quantity fixed and invariable, altogether independent of the circumstances of the time at which it is so contracted to be paid. If he had not already wearied the Committee, he could cite to them various ancient precedents of contracts, wherein it was stipulated, that if, owing to any intervention of untoward public events, the obligee could not be paid by money in tale, that he should be paid in so many ounces of silver in standard weight and fineness. It had been said, in allusion to what had been already known of his sentiments, that he wanted to injure credit. No man could be more anxious than he was to see the proper commercial credit of the country established on its proper basis, or the paper currency carried further. When paper was convertible into coin, he thought it the best model of circulation in a country like this.
Here he felt it necessary to observe, that there were two kinds of banks, the one such as those of the continent, merely banks of deposit; the other banks of discount; and the Bank of England when its paper was convertible into coin, combined all the advantages of the deposit and discount banks together. He looked upon it as the most perfect model that had yet been discovered; and thought that as long as it served its proper purpose, it roust be of the greatest possible service to the community at large. But when it came to be restrained in its cash payments, he could not admit there was the same state

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of security or of advantage to the public. With respect to what had fallen from his right hon. friend, respecting the injury likely to result from certain statements in a publication of his (Mr. Huskisson), as his right hon. friend acquitted him of every culpable intention, it would not be necessary for him to enter into any vindication of his motives. But when his right hon. friend spoke of some of the passages as having a tendency to degrade the national character, he thought that his right hon. friend was bound in candour to have pointed out those passages which struck him in so objectionable a point of view. This, however, he (Mr. Huskisson,) would say, however unwilling he was to provoke such a charge, that if such a currency could be made a legal tender, without reference to a fixed standard, it Would amount to a breach of the public faith—it seemed, however, that he had given offence by his comparison in that publication between the Bank of England and the Mississippi scheme; but the principles avowed by Mr. Law were the same as those adopted by the Bank of England. Here he read several passages from Mr. Law's book, laying great stress on that passage, where Mr. Law laid it down as a principle, that "few, if any, borrow money to lay by."
His right hon. friend, in contradiction to an assertion in the Report, had stated on the authority of the Bank of England, that the standard price of gold was 4l. per ounce during 1809 and 1810; but what was the nature of the authority on which this statement resided r It was nothing more than a resolution of the Bank that they would not give more for it, but, though they might not chuse to give more, their determination could not regulate the rnarket price, and therefore could not be said to establish the standard. His right hon. friend had complained that the directors were not in all instances prepared for the questions put to them, and seemed to insinuate as if the Committee had taken them by surprise; but so far from that being the case, he would assert in the most positive manner, that ample time was given for the consideration of every question; and that in cases where the difficulty was in any degree perplexing, they were permitted to take the questions away in writing and answer them at some future time. So far he thought it right to state in justice to the Committee. As to the question itself, he thought it impossible
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that things could continue much longer in their present state. Until, something effectual was done to regulate the coin of the country, the exportation of gold would continue to go on in spite of all the laws by which they would endeavour to confine it to this country. He would give his aid to any minister, for any severity which he might think necessary, to make the law effectual, if he could quote a single opinion to countenance the practicability of the experiment.—(Hear!)—He would wish to ask, what was he to consider the criterion of the depreciation of paper, if it was not the difference between the paper currency and the standard coin? If any person in that House, looking to the state of any other country, had said that this difference was not a proof of depreciation, would not all lift up their hands against the declaration, would they not inquire by what symptom or criterion were they to judge, if the state of exchange and the rate of interest, and the buying up of the coin, were not to be considered indications of a depreciated currency?
Upon this point he should refer to a paper which he held in his hand illustrative of the subject; being the edict of a gracious sovereign upon the urgent pressure brought upon his people by a depreciated currency—an edict wrung from his paternal consideration by dire necessity only: every circumstance connected with which, and its publication proved it to have been resorted to with regret, and that every care and precaution had been taken to render this measure, which was a violation of public faith, as little injurious as possible. The edict he alluded to was that issued by the emperor of Austria, for reducing the public debt of that government to the extent of four fifths. By this edict it was provided, that for every 500 florins due, 100 should be paid to liquidate the debt. The edict, however, was accompanied by a table at the end, which had been prepared, shewing the rates at which the sums due on transactions between individuals should be liquidated; in which rates allowance was made for the depreciation of the currency at the time of the contract. These proportions had been arranged from month to month, so that debts contracted on or before the 1st Jan. 1809, were to be discharged at the rate of 100 for every 103 florins: in February it continued 103; in March, it was 105, and so on till 1811, when it was 100 for 500

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florins. Could any man doubt that this measure, severe as it was, had a tendency to lower prices generally, to raise the exchange, and to equalize the market and Mint prices of bullion?
No man who reflected upon this case, and considered what had taken place in this country, could possibly doubt that the currency was depreciated. Under such circumstances, it was the duty of the House to consider seriously of some remedy. He hoped and trusted the Bank had a very considerable portion of bullion in store. This opinion he entertained not upon idle rumour or conjecture, but upon good grounds. It had been stated before the Committee of the Lords in February 1797, that if the drain from the Bank were to have continued for a month, equal to what it had been during the preceding week, upon the average; or if it continued for a week on the average of the two pre ceding days, the stock of bullion would not have been reduced as low as it had been in 1782. Besides, in October, 1797, the Bank having no doubt made large purchases of bullion during the interval, communicated to Parliament that it was prepared to resume cash payments. He could not be persuaded, then, that the Bank had not at present a considerable stock of bullion. And though the Bank had not regulated its conduct with a view to its profits, it was still obvious, that it enjoyed large profits, and when he looked to those profits, he thought they afforded to the Bank the means of opening its payments again. In the suggestions which he had published on this subject, he had not dealt out any hard measure to the Bank. He was aware, that, by the restriction, the Bank had been enabled to enlarge its issues, whilst the suspension of cash payments rendered it unnecessary for the Bank to keep constantly in its coffers a large deposit of unproducitve capital to meet the demands for specie, which every Bank of discount is compelled to keep always ready. Was it, then, too much to expect that the Bank should provide bullion even at its present price, when considering the large profits it had made, that operation would not place it in a worse situation than it would have been in, if no restriction had taken place. The restriction was intended to protect the Bank from the drain of specie to which it had been exposed in 1797, and to secure the public against all the ill consequences of suspending payments generally,
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if that drain had been suffered to proceed. That was the specific object of the measure, and not any regard for the principles and opinions which had lately been broached upon this subject. When the Bank by means of the restriction had been enabled to make extra profits, it certainly could not be too much to call upon the directors to take the necessary measures to place themselves in a situation to resume at some definite period their payments. The House was therefore bound to adopt some specific remedy, and not content itself with a declaration that it was expedient that cash payments should be resumed as soon as circumstances would permit. The extra profits, should, in his opinion, be applied to the purpose of placing the Bank in a situation to resume cash payments at a certain fixed time; but it would be cruel, and worse than cruel, to expect they should resume them in six months after the ratification of peace, under circumstances more embarrassing and aggravated than those in which they were permitted to withhold them.
If he were in error in the sentiments he had presumed to deliver upon this subject, it was an error which he shared in common with Burleigh and Bacon, with Locke and Newton and Pitt; for he had no difficulty in saying, that if gentlemen would look back to the debates of the year 1789, they would find under all the gloomy apprehensions of that period, that it was admitted by that side and by Mr. Pitt, that if the symptoms which were then described, and which were now realized, should come, the apprehensions, gloomy as they were, must be acknowledged to be well founded. If he were wrong, it was in common with such great authorities. On the other hand, if the right hon. gent. were right, he was right with Mr. Law and Mr. Lowndes; the latter of whom particularly, maintained in every part of his doctrine the principles which were now advanced by those who opposed the Committee. Again he would ask, what was the standard? The authority he had just quoted, said, that the depressed state of the currency was owing to the scarcity, and not to the debasement of the coin. As to the injury done to creditors and existing contracts, by the debasement of coin, it was solved in the favourite way by saying, that the injury was not real, but apparent; and after all, the right hon. gent. was obliged to conclude, that when the prosperity of the

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country was restored, we should return as soon as possible to our old system. But it was said that the wealth of the country tended to this very system; as if the wealth of Great Britain grew out of its currency. The proposition was too ridiculous to be maintained. The wealth of England consisted in the number of her industrious people, in the protection of good laws, and in the blessing of a free constitution. The spirit by which she was animated, was the source of her wealth; and those who judged her by such a criterion, must pronounce her greatly and nobly rich; but if, neglecting those advantages, they proceeded to take measure of her from the state of her currency, they must determine, at least for the present, that the balance was against her.—If his right hon. friend was of opinion, that remedy was necessary at the present moment, he was sure that remedy would be supplied; and whatever it should be, there was so much care and attention required to further it, that he would rather agree to it, if possible, than originate a measure to which those at the head of affairs might be unfavourable. He could not suspect that his right honourable friend (the Chancellor of the Exchequer) would be induced by any narrow consideration to neglect what he thought was right, or to set the facilities of his own government in competition with the permanent interests of the nation.
Mr. Rose, in explanation, observed, that there was as little similarity between the doctrines which the Bank of Scotland inculcated, and those promulged by Mr. Law, of France, as could possibly be; because where one note. had been issued in Scotland, there were one thousand in France. With respect to the market price of gold, as stated by Mr. Goldsmid to be at 4l. 10 s. it was in evidence before the Committee, that, in 1809, according to Mr. Merle's testimony, the price was from 4l. 2s. to 4l.; and in December, 1810, it was at 4l. 2s. 6d. He thought it necessary to state thus much, in vindication of what he had advanced the preceding evening. As to the admission of Mr. Pitt, he should only observe, that the last time he had been at his house, about three months before his death, he had declared, that he could not foresee any circumstances in which cash payments could be safely resumed during the continuance of the war. The hon. gentleman had quoted the authority of lords Burleigh and Bacon,
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and sir Isaac Newton. With lord Burleigh's works upon this subject he was not acquainted. Lord Bacon's works he was well acquainted with, and he could not remember any passage on this subject; and as to sir Isaac Newton he must ob serve, that he could not be prevailed on to write a line on the subject. The statement he had made respecting the price of bullion, he had had from Mr. Merle, who informed him that the highest price in 1810 was 4l. 8s. and that it had been as low as 4l.
Mr. Hornerdenied, that the statement of the price of gold in 1809 was correct, for if the right hon. gentleman adverted to the opinions of all the dealers in gold at that period, he would see that they fixed it at 4l. 10 s. per oz.
Lord Castlereaghrose and said:
Mr. Lushington; I am induced to offer myself to the Committee; in the present stage of the discussion, from a desire that such errors as I may have fallen into, in considering this important and complicated question, may be corrected by those who are yet to follow me in the debate.
However dry the subject may be in its details, I am satisfied it will receive the patient attention of parliament. It is essential to the best interests of the empire, that this question should not only be decided speedily, but that it should be decided upon a consideration, so ample, of all its bearings, that the judgment of the House may have the effect of finally settling the mind of the country upon it; for one cannot well imagine any thing more fatally injurious to the prosperity of a state, whose power in war, and whose advancement in peace so intimately rests upon its public credit, than having a question, such as this, hung up in suspense, to be debated from year to year, to the encouragement of the enemy, and to the dismay of our own people, and of those nations in the world who look up to us for protection.
I lament the embarrassing predicament in which the Committee is placed by the shape this discussion has taken. From the Report itself, as well as from the Resolutions of the honourable mover, we had every reason to presume that, if parliament was called upon to investigate abstract propositions, on a subject so peculiarly delicate, complicated, and abstruse, at least we should have had to discuss them with reference to some precise practical

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remedy to be applied to the evil which they declared to exist: but we are now desired, at least in the first instance, to consider the speculative branch of the question, distinct from the recommendation of the Committee, that the Bank should be compelled to resume its cash payments at the end of two years; and the honourable chairman (Mr. Horner), in no very equivocal terms, has apprised us, that, although he individually adheres to the propriety of that measure, he is not likely to be supported in that opinion by other members of the Committee, who have concurred in his general theory as to the state of our currency; and from the speeches of two other members of the Committee (Mr. Thornton and Mr. Huskisson), who have spoken in the debate, it does not appear that this remedy is to be pressed by them. What then is the situation that parliament is placed in? The Mouse is called on to decry the system of our currency, to stigmatise the Bank for an erroneous, if not for an abusive administration of its functions, without having any distinct measure of correction suggested for their adoption; for surely the honourable member (Mr. Thornton) cannot suppose that we should have advanced much towards remedying this supposed evil, were we prepared to concur with him in assuming that Bank paper might, by possibility, be issued to excess, when he is not prepared to inculpate the Bank, by declaring their issues to be at present excessive. What guide can it be, in the exercise of their trust, to inform the directors of the Bank that we think their issues of notes ought to be limited, if we cannot inform them by what principle, or to what amount? I am sure, were I a Bank director, I should feel utterly incapable, from any thing which ha" fallen from that honourable member, of judging in what manner I should here after conduct myself, or in what respect I should vary, or depart from, the principles upon which I had hitherto governed my conduct. The only other suggestion, which has been thrown out, is that which fell from the honourable member who spoke last (Mr. Huskisson), namely, that, during the interval of the Suspension Act remaining in force, the Bank should augment its stock of guineas; that is, that we, without knowing what the extent of the treasure in the Bank now is, should require the directors to go into the market with their notes, at the present advanced
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price of gold (for by no other means could they purchase bullion to be coined), in order to add to their stock of guineas. The injurious effects which an increased demand for gold must have, upon the present disordered state of the exchanges, the House will compare with the very limited supply it might be possible for the Bank, at this moment, to procure in the market, even at the exorbitant price at which standard gold now sells.
That the House has always been reluctant unnecessarily to commit itself, to affirm or deny abstract propositions, I need not remind the Committee—that such a course must be peculiarly hazardous, on such a case as the present, is obvious from the complicated nature of the subject; but if the Committee should want any special warning to awaken them to a sense of the danger of such speculative judgments, they will find it in what took place in 1804, in a case similar, in all its leading features, to the present.
It is true no attempt was then made to involve the House itself in the decision of the Committee, which sat upon the exchanges with Ireland; but we cannot forget, that, in their Report, the Committee delivered an unqualified judgment, that the extraordinary rise of the exchange against Ireland, amounting at that time to 118, or about ten per cent. above par, was exclusively produced by an excessive issue of Bank of Ireland paper. And it is the more material to advert to this case on the present occasion, as the Committee, whose Report we are now considering, not only refer to the Report of 1804, as fortifying their judgment upon the general principles they have laid down, but they positively assert, that the same evil actually received a remedy from a reduction of the Bank issues at that period in Ireland. Now, what is the fact?—the Report of the Committee was made in June 1804: the Bank of Ireland notes, outstanding at that time, were about 2,900,000 l.: the exchange had been at the highest in the month of March preceding; from which period it gradually declined, without any reduction in the amount of bank paper, till the first of January 1805, when it was reduced to 8½, or nearly par, the bank-notes in circulation being then 2,90300 l. The exchange continued, throughout the whole of that year, to fluctuate a little above par, never higher than 11. It is true, in the following autumn, the Bank issues were reduced

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about 400,000 l.; but the exchange had recovered itself for months before this reduction (a reduction not very considerable in itself) had taken place: and it is singular to observe, that, during the period the notes of the Bank of Ireland remained at this reduced standard, viz. throughout 1800 and part of 1807, the exchange became somewhat higher against Ireland, whilst it fell to par, and under, in the year 1800, when the Bank issues were again augmented, viz. to about 3,100,000 l. at which scale they have been since continued.
I state this to shew the danger of unnecessarily hazarding a parliamentary judgment on a speculative point. I call it a speculative point, because, although the Committee were peremptory, at the time, in their assertion, both with respect to the evil and the remedy, they did not attempt to recommend the actual adoption of the latter. It was fortunate that nothing was attempted, for the Committee had no sooner committed themselves to the principle, than it was disproved by the fact of the exchange falling to par, the bank-notes outstanding remaining the same, and this at a moment when our foreign exchanges were favourable, when the price of bullion was nearly at the mint price, and when it is impossible to allege that the paper of the Bank of England was depreciated, even in the erroneous sense it is now contended that it is. What were the causes which, in fact, disordered the exchange with Ireland, at that moment, it is not now necessary to occupy the attention of the House, in examining at any length; it is enough, as applicable to the view with which I refer to it, to know that the cause assigned by the Committee was not the true cause. Without entering into a detailed exposition of the opinions I then held in opposition to those which prevailed, I will only shortly observe, that, as a member of that Committee, I was induced to attribute a great proportion of the disparity of value, which prevailed in Ireland between the coin and Irish banknotes, to the efforts which a people, long habituated, almost exclusively, to a gold currency, will make, by a premium on the coin, to obtain and preserve it in circulation after the ordinary channel of supply is cut off. The Suspension Bill of 1797 deprived Ireland of that supply of guineas which was regularly transmitted, principally from the Bank of England, to Dublin, to replace the large quantity withdrawn
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from Ireland, in retail payments for British coals, freights, &c. It was only by degrees, that the habits of the people of Ireland, particularly in the northern counties, could be reconciled to transact their business in notes. As guineas grew scarce, those who had to purchase commodities were obliged to have recourse to a premium, to collect the quantity of guineas they required, till the inconvenience at last became such, to both buyers and sellers, that the use of paper became, in a great measure, general. With the reduced demand for guineas the premium fell, and, in the same proportion nearly, the rate of exchange rose, and this without any apparent connexion with the quantity of bank paper in circulation.
I am desirous now of applying myself to the Report before us, and, in differing with the opinions of so intelligent a Committee, I feel all the deference which is due to their authority. The authority of the honourable member who spoke last, (Mr. Huskisson) is entitled to great respect from his experience on such subjects; but, where it is attempted, by a Report of this nature, to shake a system which has repeatedly received the sanction of the whole legislature, in the successive acts passed for the suspension of cash payments at the Bank, which was originally introduced, and subsequently continued under Mr. Pitt's auspices, I cannot consent blindly to submit myself, either to the judgment of the Committee, or to that of the honorable gentleman. The subject is of too great moment to rest upon any authority, however high; none should preclude its examination, and all I desire is, that it may be decided by the House upon its merits alone.
The preliminary point to be considered, is the principle upon which it is asserted that Bank of England notes are depreciated. It is contended that they contain, on the face of them, an obligation, that their amount shall be paid, on demand, in the standard coin of the realm, such coin being the only lawful money of Great Britain; that such payment is now withheld; that, the quantity of the precious metals, which the holder of a bank-note is entitled to receive, in standard coin, being worth, at the present market price of standard bullion, more than the note itself, the holder is consequently deprived, from the nature of the payment he receives, of a part of his just advantages.
This divides itself into two questions:

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first, whether, if payment were made in gold coin, the person receiving it without a violation of law, could derive this advantage from it; and, secondly, whether his not receiving payment in coin, under the special circumstances which occasioned the Bank Restriction Bill, does not rest, not only on the sanction of positive law, but of a law enacted in perfect consistency with the spirit and obligations of the original contract, under which the valuable consideration was given for the bank-note.
Upon the first question the law is clear. No person can deface or melt down the current coin of the realm, being of standard weight It cannot be converted, therefore, into the shape of standard bullion, to be sold, without a violation of that law, with reference to which the obligation of payment in gold by the Bank must be interpreted to have been contracted. Gold, obtained from coin not of standard weight, may be melted down, but it cannot be sent abroad without fraud or perjury, or both combined. The person receiving the guinea ought, therefore, in strictness of law and good faith, to apply it to purposes of internal circulation only; and, so used, there is no reason to presume that it passes at a value, in Great Britain, superior to a bank-note. If the note commands the same value in commodities, and performs all the same functions, so far as relates to internal circulation, as the coin, there is no just ground to consider the note as depreciated; both the note and the coin were intended for internal circulation, and for internal circulation alone. The contingent but illegal profit derived from diverting the coin from its legitimate purpose, is a species of value, which the bank-paper never was, in equity, or in fact, intended to represent. It is only through the operation of causes destructive of the established system of our standard coinage, that this advantage can attach to coin over bank-paper. To derive such an illicit benefit is an abuse, and, so far as it may operate, at this moment, to occasion a disparity of value between coin and notes, the difference is very incorrectly described under the term of "a depreciation of bank-paper."
Tue honourable member (Mr. Huskisson) has argued that this is a very erroneous system of coinage; that it is idle to think of preventing the standard coin from being melted, or exported; and he has gone into a great deal of general reasoning, to suggest an improved arrangement
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of our coinage; but it is enough, for my purpose, that such is the system at present established by law. Whether the honourable member s plan would be an improvement may admit of question; but sure I am, that we are not now in a situation to undertake a reformation in the system of our coinage.
The second question, viz. the nonconvertibility of the bank-note into cash, upon demand, must certainly be admitted to be an abandonment, for the time, of the standard coin as the medium of our payments; for although the act does not render bank-notes a legal tender for debt, yet it must have been foreseen that, when the Bank, the main source of our circulation, ceased to issue gold, individuals, as well as private bankers, must experience a similar indulgence from their creditors. The legislature did not deem it necessary as a part of the original measure, to protect debtors generally against their creditors, by compelling the latter to accept Bank of England notes in discharge of their demands. They thought they might safely leave the established credit of the bank notes to work its own way in circulation; and the experience of fourteen years has not furnished a single instance of payment in coin being insisted on (I mean in Great Britain), where notes were tendered. Guineas have circulated, notwithstanding,) the Restriction Bill, in considerable abundance, at par with banknotes; and if they have latterly, in a great measure, disappeared, the cause is to be found in the extraordinary crisis of our commerce with the continent, together with the magnitude of our military expenditure abroad; causes which have, in this country, given a new and excessive value to the precious metals.
That the Restriction Bill, if passed under an adequate necessity, does not constitute, or sanction any breach of faith, between the Bank of England and the holders of its notes, is clear, when we advert to the nature of that great corporation. It is not in its constitution, simply a bank of deposit, as the Bank of Amsterdam, where no other value is received than deposits of silver; and for the return of which silver, on demand, to the person holding the note, or receipt of the Bank, there can be no justifiable excuse. The Bank of England is a bank of discount, as well as of deposit. It is notorious, to all holders of their notes, that a large proportion of their funds are, at all times,

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lent out upon credit, although in general returnable at short periods; that their supply of guineas never can be equal to answer all their notes, if suddenly pressed upon them for payment; that the solvency of the Bank of England, indeed of all banks, as far as cash payments are concerned, has always rested upon the presumption, that the demands upon them for gold would be confined within certain limits. This understanding is the foundation of the banking system, and whoever takes a bank-note, must be understood to accept it subject to the contingency that a case may arise, the consequence of public calamity and alarm, which would render it impossible for the Bank to continue to supply a circulating medium to the country, paying, at the same time, its notes in cash. Such was the actual case in 1797, from a combination of causes, principally arising from internal alarm; the drain of gold became excessive, and so rapidly augmenting, that it was apprehended, if a remedy were not immediately applied, the Bank, with resources largely exceeding all demands upon it, would have been exhausted of its specie, and compelled to discontinue its functions. Its outstanding notes coming in to discharge the securities upon which they were issued, would have liquidated all claims upon the Bank; but the Bank could no longer have ventured to re issue them, subject to payment being demandable in gold. The Bank, under such circumstances, must have ceased to act, and, with the Bank of England, all private establishments. The country would thus have been left without any circulating medium, except the coin withdrawn which, always forming but an inconsiderable proportion of our mixed circulation, would, in a great measure, have been hoarded, as a considerable portion actually was under the then existing alarm, and the whole industry and transactions of the community must have been convulsed from the want of an adequate circulating medium.
It is obvious that the law, which makes the standard coin the only legal lender, on the part of the Bank of England, in discharge of their notes, proceeded upon the supposition of a natural state of things. It never could have been intended, under extraordinary circumstances, to enforce impossibilities; and the rights of persons, tinder that law, must be considered as circumscribed within certain practicable
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limits. It cannot be the right of a portion of the community, holding such securities, by being the first to press forward for payment, to take a benefit which cannot be partaken of by others similarly entitled. A modification of the right becomes, therefore, necessary for the purposes of justice, and the interest of the whole. The power of applying that modification must rest with the legislature, and the only question which can arise, at such a moment, is, whether an adequate necessity did exist, to justify a temporary suspension of the money system of the country. If so, parliament is competent, in this, as in all other instances, to provide for the public interest. Parliament did so provide in the year 1797; the necessity was of a description that admitted of no alternative, and it is of the very essence of the contract, on which a circulation such as ours rests, that it should be subject to such a modification.
I trust I have proved, that the passing of the Restriction Bill was no breach of public faith, and that it was called for by the necessity of the case. It has been since continued by successive acts of parliament, the last enacting, that it shall endure till six months after a definitive treaty of peace. I have been the more solicitous to defend the character of this measure against the obloquy to which it has been exposed, considering it to be one of those conservative remedies, to which, in future times of corresponding emergency, recourse must be had, if a similar necessity should recur to preserve public credit from the fatal consequences of ignorant alarm, or fraudulent operations upon our coin. I have no hesitation in admitting, that, like the suspension of the Habeas Corpus Act, Or the exercise of martial law, it is a surrender, for the time, of the sound and legitimate regulations of our ordinary system; the object has been, on these occasions, by such temporary surrender, to preserve the system itself from destruction. It is the more material that the true character and tendency of the Restriction Bill should not be Misconceived, as the circulation of this country, for reasons which I shall now explain, and from causes not with in the province of law to regulate, but growing out of the habits of bur people, and the increased confidence between man and man, is likely to undergo a change, which, although in most respects advantageous, may hereafter render it more vulnerable to injuries of the description from which we now suffer.

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When I speak of our circulation in a sound state, I mean a circulation, composed of Bank-paper and coin, in such proportions as will enable any man to convert, at his pleasure, his notes into coin. I do not consider a circulation, purely metallic, or wholly of notes, as falling within this description; the former is only the device of barbarous ages, and wholly incompatible with the extended wants of a commercial country such as this; and the latter is defective, however well administered, when not convertible into coin, in being exposed, from ignorance, misstatement, and public alarm, to distrust and discredit. When I admit that a mixed circulation, such as was established by law previous to the Bank Restriction Bill, is the only sound and natural state of our currency, yet the Committee will perceive, even when the circulation exists in this its most perfect state, that it must depend on the habits of the country, and not on institutions of positive law, in what proportion the precious metals shall remain in use. If coin is little in demand—if all bargains are made in paper—if the people prefer paper as more convenient, except for the smaller payments, as more rapid in its circulation, and of more easy application to all purposes of sale and purchase—if guineas are little sought after, where the credit of the particular paper in use is not suspected, and, when it is, if the holders of such suspected paper are only desirous of converting it into other paper of more undoubted character,—it is plain the quantity of coin circulating within the country, compared with the paper, will be proportionably small. The various banking establishments will frame the scale of their cash balances upon the accustomed demand for guineas; less coin will exist in the hands of private individuals; and, although the Bank of England may, upon principles of provident caution, not allow their stock of guineas to be diminished, yet the collective coin of the whole system will be less; and in the same proportion will it be exposed to be affected, either by those causes, which may suddenly revive an internal demand for coin, or by those external influences which, by drawing away the precious metals, first in the shape of bullion, and, secondly, of coin illicitly exported, must have a tendency to disturb a system, where the coin is not in such abundance as to bear any very considerable reduction.
That such may be our situation, if the country flourishes and credit improves,
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may be inferred from observing the distinct character which the habits of the people had given to the currency, in different parts of the empire, previous to any restriction on the Bank. In Ireland, where, for various reasons, credit between man and man was less firmly established, the great mass of payments, and nearly all bargains, were made in coin. In England, dealings were generally in paper, and coin only used to effect the smaller payments; but with no observable preference, in those who bought or sold, in favour of coin. In Scotland, on the other hand, the circulation was almost exclusively paper; not only was there no predilection, in the mass of the community, for guineas, but so evidently the reverse, that you would almost suppose some notion of depreciation attached itself to the coin, in that part of the united kingdom. And here the learned mover will permit me to remark, that it is somewhat whimsical the press of Scotland should have been the loudest in sounding the alarm on this subject; that those who had passed their lives almost without seeing or wishing for coin, should, just at the moment when its scarcity had become inevitable, be seized for the first time with the desire to convert their paper into gold. Surely this feeling is a little perverse, if it does not originate in contemplation of those illicit profits which can now be made from melting and exporting our coin. But to return to the question.
Since the Restriction Bill took place, a great change has been wrought in the habits of the Irish people with respect to their currency; they have become, in a great measure, habituated to the use of a paper medium; they find the superior convenience of it in many respects, and, I am confident never will return (even when coin can be procured in whatever quantity they choose to purchase it) to the same exclusive use of coin which formerly prevailed. Observing, then, what has passed, what is passing, and adverting to the tendency which all nations have to retrench the expence of using the precious metals in circulation, in proportion as confidence and credit give facility to a paper currency, I think myself warranted to infer, that the habits of the people of this empire will have an insensible tendency to retrench, to a considerable degree, the use of coin; and that the progress of our system may be to assimilate itself, in a considerable degree, to what

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has been so long the practice of Scotland.
The Committee will, I hope, keep in mind, that, in referring to the practice of Scotland, I am not calling in question the principle of cash payments on demand, as being the indispensible basis of our money system in ordinary times. I shall hereafter examine the comparative advantages of the temporary departure from this system, which has been forced upon us by the injustice and violence of the enemy,—all I wish now to mark, is, with how small a use of coin the transactions of a country may be conducted: this Scotland has proved, and it is deserving of notice, that, in the last seventy years, there has not been a single instance of a Bank in Scotland proving insolvent. The Ayr Bank, it is true, suspended its payments, but ultimately paid all demands upon it; and it is not only remarkable that Scotland has been peculiarly exempt from Bank failures, but that, from causes which I shall hereafter advert to, connected with the localised nature of its currency, it has suffered less from individual bankruptcies, than any other part of the empire; especially during the crisis of 1793, the effects of which were so severely felt in England.
We should be aware, then, that what happened in 1797, may happen again; we should remember what has been the lot of the country under the Restriction Bill, and not throw unmerited odium on a system which has carried the empire through such mighty difficulties. We should never forget, that this measure, by supplying the country with a circulating medium of undoubted credit, proportioned to its wants, has, for the first time, solved the problem of reconciling national prosperity with a state of war. In former contests, the country invariably declined in its commerce, in its revenue, and even in its industry. In this war, whilst our exertions, both by land and sea, have in extent surpassed all former efforts, the country has risen in manufactures, internal improvement, revenue and commerce, with a velocity which has never been experienced in a period of profound peace. In the American war, its inevitable termination might be calculated from the decline of our resources; in this war, we feel that our resources are augmenting, and that there is no necessary limit to our exertions in point of time, so long as the injustice of the enemy shall leave us no other rational choice but perseverance in the contest. What is
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this owing to? principally to the Bank being enabled to do its duty by the country, without trembling for its own safety. Instead of ruinously. I mean as far as concerns the interests of the public, at every moment of temporary pressure or alarm, contracting its issues to protect the establishment itself from being drained of its gold, they are enabled to support public credit with a steady hand; the productive labour of the country, which is its true and only wealth, is not only kept up, but enabled to extend itself; the taxes are collected with facility; the loans are raised on moderate terms, and the whole machine proceeds without betraying a symptom of decline.
It may be said, if such are the advantages of the system, you must surely mean to render it permanent, at least, as a war measure. My answer is, that I do not hold any such opinion. And why? Because I do not believe, in ordinary cases of war, and when commerce has its accustomed freedom, that it is necessary to do so. I am, on the contrary, ready to admit, that the adoption of such a measure can only be justified by an adequate necessity. In the present instance, what is the fact? that the ruler of France has determined, at the price even of inflicting commercial ruin upon those over whom he rules, to exclude your trade from the continent. If he does not succeed effectually in doing so, if much still finds its way, his system has had the effect, comparatively at least, of turning the balance of intercourse against us, and thus influencing the exchange. His decrees are less effectual, to prevent the produce of the continent from finding its way to us, than in excluding our produce from the continental markets. Hence an obvious cause of an unfavourable exchange. In ordinary times, the immediate effect of such an unfavourable exchange would be, by a reduction of price to the foreign consumer, resulting from the advantage of the exchange, to force out a greater proportion of our manufactures: the quantity of bills would be thereby augmented; and the precious metals would, in but a comparatively small amount, be sent abroad. So long as goods could be applied to settle the account, the price of bullion would not rise materially above its natural price. But now goods cannot be sent as in ordinary times. It is not price which limits the quantity of our exports; it is the risk and difficulty of introducing

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them into the continent, where they sell at an advance of more than 100 per cent. What then must be the result? either that our imports must be reduced, or the precious metals be sent out as that export which can most easily find its way to the continent. Is it not obvious that this must drain the country of its bullion; that, in proportion as the stock in hand (a very inadequate resource, even including the fraudulent aid of our coin) diminishes, the price must increase—and to what extent? I can assign no other limits than the premium a rich and powerful country will pay rather than be denied the means of luxurious enjoyment, or the means of assailing the enemy, and of defending itself. If, as a nation, we are content to pay 25 percent, rather than be deprived of the wines and brandies of the continent, or be restricted in the quantity of naval stores we require for both our public and private demands; or abandon the cause of our allies, and our own on the field; is it difficult to understand why the price of bullion rises, without referring it to a fall in the value of Bank notes? And, if the rise is such as the exchange now indicates, is it not certain that the coin will be melted and exported?
The result seems to be, that, although in ordinary times—time even of war, your gold coin, protected by laws, the efficacy of which is now wholly incompetent to struggle against the existing temptations, may maintain itself in circulation, and the banking system of the country proceed in its accustomed course, subject only to those slighter checks, which never can justify recourse being had to a bill prohibiting the Bank from issuing coin; yet that, in other times, and especially such as we live in, we have no option, but to counteract the system of the enemy by one of corresponding energy. If you do not, the Bank must either shut up, or contract its issues to such an extent as to give an artificial value to the paper currency, from its scarcity, equivalent to the advance of price on gold. This may check the gold from going out of the kingdom, but at what sacrifice? at the risk of that convulsion to which, lowering suddenly, the value of all property within the country, to an equal amount, must necessarily lead. The Committee have laid it down that the Bank ought to be guided in the amount of their issues by the state of the exchanges and the price of gold: this must mean that they are to counteract
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the influence of the exchange by this means, and to keep our currency, as it is said, upon a level in value with the currency of the states of the continent. If this is to be done, the quantity of circulating medium is not to depend on the internal wants of the country; it is not to be kept up to its accustomed amount, with such additions, from time to time, as the augmented extent of our transactions may require: but it is to be regulated with reference to our external intercourse, and to exchanges influenced by the power of the enemy. If such a principle were acquiesced in, I apprehend the controul of our circulating medium would at once be surrendered to the enemy. Could you hold out a more powerful motive, to the ruler of France, to multiply his restrictive efforts against our trade, than to suffer him to suppose that he possessed a decisive influence over our internal currency, as well as over the whole property of the country?
To what an extent of mischief must it not lead, so long as foreign exchanges, and, with them, the price of the precious metals are conversed by the violence of the enemy, should the scale of value with in the country be made to undergo similar variations: yet such must be the case, if the exchanges and the price of gold are to determine the amount of Bank issues. The value of property would become so uncertain, that no man could judge one day what he would he worth the next. The quantity of circulating medium must be so enormously and so rapidly reduced, as to throw every thing into confusion; yet such must have been the result, if the Bank Restriction Bill had not passed.
But why should we throw away the benefits proposed and experienced under that Bill, by voluntarily inflicting on ourselves the mischiefs it was intended to obviate? That Bill was passed to protect the country against the evils of having its circulating medium deranged by the demand for guineas resulting from internal alarm. It is continued to protect us against a demand for gold for exportation, in its extent equally incompatible with our being enabled either to procure or preserve a metallic currency. I am ready to admit that our present system produces a temporary abandonment of he accustomed standard. In ordinary times, the gold coin is the standard, by which the value of Bank paper, and of all other commodities, is

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measured. It is chosen as our standard, because, whilst commerce is free, it is more uniform than any other. It is now, for a time, relinquished, because it has become the least uniform. If gold, in coin, cannot be preserved, by force of law, from being melted in ordinary times, when bullion, in its nature equivalent to a bill of exchange, has advanced 20 per cent. how can coin remain in circulation? So far as guineas, since 1797, have made any part of our circulation, they have in Great Britain been at par with Bank notes. I mention this as a conclusive proof that Bank notes have not been depreciated; protesting, however, against the converse conclusion that even a disparity of value between the coin and Bank paper, such as we have witnessed in Ireland, necessarily establishes, for reasons already alluded to, the fact of depreciation. But, when the Restriction Bill passed, the principle of coin and paper being universally convertible ceased. The consequence has been to preserve for better times, in the coffers of the Bank, the gold coin, which would otherwise have been hoarded or exported; and the effect bas been, to enable the Bank to regulate its issues of notes by the wants of the country, instead of being guided by considerations of mere banking security.
But it is said, out of this has grown a great evil, which would not have happened, if the Bank had not been released from the ordinary control of cash payments: their issues have been excessive and their paper is now depreciated. With respect to the first point, it appears to me, that too much reliance has been placed by the Committee, in their Report, on the infallible nature of this criterion, namely, payments in cash on demand, for regulating the due amount of Bank issues. We are ail agreed, that, in ordinary times, this must be the regulating principle, and that, whatever may be its defects or inconveniences, they must be submitted to; but do not let us overlook their existence, or desire gratuitously to expose ourselves unnecessarily to their operation. My persuasion is, that: in prosperous times, that is, when no run upon the Bank is apprehended, this regulating principle is of little help to the Bank in guiding their judgment with respect to the quantity of paper it may be fit for them to issue; whilst, in times of difficulty, it leaves them no option but to restrict, for their own security, their issues, often to an extent they know must be prejudicial
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to the public interest. When they are under no alarm for their stock of guineas, what other restraint are they subject to, than that prudential reserve which now influences their judgment, in regulating their issues?
The supposition that their issues are at present excessive, rests upon no proof: upon the best estimate which can be made of the total amount of circulating medium now in existence (including private banker's notes), it does not appear to exceed what existed previous to 1797, in a greater degree than is required by the immense increase of our trade, revenue, and manufactures, the advancement of agriculture, and every other branch of internal improvement; the whole conducted under the accumulated expence of increased taxes and advanced prices of labour. The country possesses considerable security against excessive issues, from the rapidity with which any excess is known to return upon the Bank; and this return cannot be better proved than by what may be observed to happen after the dividends are issued, when the additional quantity of notes thrown into circulation, generally amounting to several millions sterling, reduces itself in the course of a few days, and, at the end of a week, or ten days, the bank-notes outstanding are insensibly restored in their former level.
But it is said, although bank notes may not be depreciated, the quantity issued is such as to occasion a progressive advance in the price of all commodities, injurious to the interest of the consumer, and ultimately to that of the manufacturer, by its tendency to check export. This idea is formed upon a very mistaken view of the question. I do not mean to contend that the facility of procuring discounts does not encourage speculation, and what is called overtrading; or that, where such facilities are given, the number of failures will not be augmented; but then it should be remembered red, whilst some evil is produced by such speculations, much advantage results. What is it but this adventurous spirit of commercial enterprise which enables our merchants to contend against the decrees of the enemy, and to find out, in the midst of war, new channels for our superabundant produce? This evil will restrain itself. The sagacity of the lender will keep the borrower within bounds, and, in the progress of time, though individuals may suffer, the nation will be benefited.

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But the effect of a full circulation upon prices at home I conceive to be the reverse of what is supposed. I admit that the first effect of a reduction of the circulating medium would be to lower prices, the value of the circulating medium itself being enhanced in proportion to its scarcity; but it would soon operate in a corresponding degree to check reproduction; and, although the produce on hand would sell cheaper, less being produced, the prices must speedily rise again, the demand continuing the same, from the scarcity of the articles. Whereas, an abundant circulation, encouraging reproduction, the competition between the sellers infallibly lowers the price, and the consumer obtains what he requires on the lowest terms for which the commodity can be profitably produced. For these reasons, I cannot admit that prices are injuriously influenced by a redundant circulation, resting on principles such as those which govern the issues of the Bank of England; and I think I may venture to assume, from the diligence of the Committee, that, if they could have traced any advance of price in the leading articles of consumption, which could be fairly shewn to connect itself with the alleged excess of notes, they would have annexed, to their Report, tables of the prices current during the period which has elapsed since the Restriction Bill took place. So far from prices having advanced in the two or three last years, since exchanges became unfavourable, and bank-notes are assumed to be depreciated, I believe the fact to be the reverse; that the rise has been gradual for a series of years past, in degree not more than commensurate with the growth of taxes: and that, in the three last years, when the excess of notes has been most complained of, there has been rather a decline than an advance in the prices current.
The most important question, however, remains to be discussed—namely, whether there is any sound principle, on which it can be alledged that Bank-notes are depreciated. It is much to be lamented that such an assertion should have been hazarded, or such a term as depreciation applied, in a parliamentary document, to the established currency of the country. I need not impress upon the minds of those to whom I address myself, what an effect it must produce in Europe, if such a conclusion should receive the countenance of the House of Commons: I trust the Committee will feel it incumbent upon them to
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pronounce a decisive judgment to the contrary. But it is impossible not to look with some alarm to the injurious effects upon our public credit abroad, which such a suggestion, from a Committee of this House, is calculated to produce. May not the foreigner interpret the word "depreciation" in the sense he has always understood it, as referable to his own depreciated paper currency, viz. that it requires so much more of this paper to purchase any given article of life? May he not infer, that our Bank-paper is following the same course which the French assignats, and other forced paper currencies, have run, and that our resources may soon be similarly exhausted? Can we hope that the limited meaning which the Committee alone intend to annex to the word "depreciation" will be adverted to, and that a more extended sense will not be given to it? The Committee, I apprehend, mean to say, that, when the Bank-paper is not convertible at the will of the holder into coin, and when the quantity of gold contained in the coin might, if sold in the market, produce more than its value in banknotes, as regulated by its Mint price, this constitutes depreciation, notwithstanding Bank-notes may continue to command the same amount of produce, or labour, within the country as before: and they further describe the difference between the market price of standard gold in notes and its mint price, as the precise measure of the depreciation thus imputed to Bank-paper.
If the Committee choose arbitrarily to annex such a meaning to the word depreciation, when so explained and understood, it is impossible to oppose any other reasoning to the proposition, than to deny such to be the ordinary or fair acceptation of the term. I consider Bank-notes as intended, in common with the coin of the realm, to constitute our domestic circulating medium, and each to bear a certain fixed ratio of value to the other, and to all the other commodities of the country; the latter, subject however, to the variation of a market price, perpetually fluctuating, and to the progressive advance of price which increase of taxes and other circumstances affecting the charge of reproduction may necessarily occasion. I use the term domestic circulating medium, because the policy of our laws never intended that either our coin or our Bank-paper should constitute any part of our foreign currency, or means of exchange with foreign states: that operation the law

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has assigned to commodities, and to bullion, with the agency of bills of exchange.
I apprehend it is no answer to this reasoning, to say such a law is nugatory in itself, and that the coin will be exported in defiance of law: the principle is not the less true, nor can it be pronounced impracticable in its application, except in the convulsed state in which trade now is, when bullion has acquired a supernatural agency, and consequently a supernatural value.
As both coin and paper are intended to act as mere domestic instruments of circulation, any influence which diverts either from that purpose, has a direct tendency to derange the machine of circulation, by altering its proportional amount to the business it has to transact. What has been the effect of the Restriction Bill, and the fraudulent export of our coin r To reduce the machine of circulation to the extent of the guineas withdrawn, suppose to the amount of 20 millions. What must have been the effect of such a quantity withdrawn and not replaced by paper? That the remainder of the circulating medium, supposing it 20 millions more, must have doubled in value, and all commodities fallen one half, to the entire subversion of all existing contracts, the convulsion of public credit, and the probable interruption of national industry.
What then became necessary? Why that the place of the coin withdrawn should be supplied by paper, and to such an extent as to preserve, not to alter the relative proportion previously subsisting between the circulating medium and the circulating property of the country. If the proportion is preserved, the value of the paper must remain unchanged as a medium of internal purchase; and such I believe to be the case: my conviction is, that, subject to variations in prices, arising from other causes (which would have equally operated had paper and gold been interchangeable), Bank-paper has preserved its full standard of value with all other commodities, bullion excepted. It may be said, how can you prove that proposition, when paper is not convertible into coin on demand? My answer is—can you prove the reverse? It is a matter of opinion, and I refer to the current prices, fairly examined, in support of my opinions.
But it is said the paper is the mere representative of the precious metals, and is depreciated when not convertible into them: but is it seriously meant to be contended
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that gold may not be augmented in value 20, 30, 50, or 100 per cent. from special causes such as are now in operation? and, if so, on whom is the loss to fall on supplying coin at such a price? Can it be imagined that the Bank is bound both to find gold and to keep up its circulation of notes, when such is the demand for the precious metals to be employed in war, and in purchases abroad? The Bank, if permitted to discontinue its issues, to leave the commercial world without discounts, and to bring ruin on all private, commercial, and banking establishments, might, without delay, I have no doubt, pay off all its outstanding notes in gold. I have no doubt also, notwithstanding the present disturbed state of the world, that by contracting their issues to 3 or 4 millions of notes, the Bank might continue uninterruptedly to pay in cash; the unnatural value thus given to the circulating medium, from its scarcity, counterbalancing the extraordinary demand for gold to send abroad; but the effect must be, that the nation, for all practical purposes, would be left without an adequate circulating medium; the Bank would suffer in a comparatively small degree; but the nation must be ruined.
To assert, then, that notes have fallen in value, because they have not risen with the precious metals, or that they have fallen, compared with the currency of other countries, because they are not convertible at this moment, without loss, into them, docs appear to me to be a most inaccurate state of the question, founded on a total misrepresentation of the first principles of our paper currency. As a corollary from which error, the Committee have deduced the principle, that the exchange between any two countries never can exceed the expence of transporting the precious metals from one to the other; a fact disproved in daily practice, and proceeding upon the strange assumption, that the quantity of bullion to be procured within any country is unlimited. It is true, a person who possesses a pound of gold in one country, may command a pound of gold in any other, at the utmost, for the cost of transporting his own gold there: but the person who has no gold of his own, must, in addition to the expence of transport, first buy the pound of gold at whatever price the quantity in the market, compared with the demand, may impose; and then the expence to him of the exchange will be the increased price of the

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gold added to the expence of transport. In truth, the fallacy is not less evident in the former case, as the expense, to the person who possesses the gold, is what the gold is actually worth if sold, and which he sacrifices when he sends it abroad.
It appears then altogether unfounded, to assert that Bank notes are depreciated; and, if I were obliged, between two propositions, both of which I disapprove, to vote for one, I should infinitely prefer passing an act to require the Bank to resume its cash payments at the end of two years, rather than gratuitously, and without proof of the fact or any real remedy in view, vote that the notes of the Bank of England are depreciated. The effect of the former vote I might repeal before it came into operation; the consequences of the latter I could never recall. What could induce the Committee so to express themselves, is to me matter of surprise and astonishment.; they have done so in direct contradiction to the evidence of every witness they examined, even of sir F. Baring and the continental merchant, the witnesses on whom they principally rely, who expressly testify against them on this material point. Sir F Baring, an authority entitled to the highest respect, declares in terms, "that he does not consider Banknotes to be depreciated;" and the Continental Merchant says "that Bank notes may not represent what is expressed upon the face of them, but something in fact equally real, though not applicable to equalize the balance of trade;" and he further goes on to describe, what he thus chooses to call depreciation, "as originating not in the excessive issues of the Bank, but in the enemy's measures, and its not having recovered, to the paper not being exchangeable for cash." Certainly, so long as cash could be procured upon demand and exported, the exchange and price of gold could never rise; but where is the gold to come from, to equalize this account when our extraordinary expenditure in the two last years, for corn, foreign freights, and government expences alone, exclusive of our ordinary imports, is estimated at from 20 to 25 millions sterling, leaving a balance upon the whole of our payments, commercial and political, of from 8 to 12 millions a year against us?
With such a balance against us, how is it possible to add to our stock of gold? with what description of value are we to purchase it abroad, or how retain it in circulation if we had it? If the Committee
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were prepared to recommend; that our army should be withdrawn from the Peninsula, and our foreign expenditure be cut down, I can understand that they might hope, through a total change of system, and an abandonment of our allies; to bring the exchanges round, and, through a favourable exchange, to bring back the precious, metals: but, to persist in exertion against the enemy, and to break down: the existing system of our currency, does appear to me to be utterly impracticable. I before adverted to the advantages Scotland had derived from a local currency undisturbed in its circulation, by being diverted to the liquidation of external demands. The same result is now observable in the currency of the whole empire: we feel the inconveniences of an adverse exchange in our foreign intercourse and expenditure; but it does not affect our internal prosperity in the slightest degree. The enemy may embarrass us in the disposal of our superfluous produce; in Our external expenditure, and supplies from the continent; but he cannot produce the smallest impression on our internal system. How small, comparatively, is the external question, and how absurd would it be for us to suffer our immense transactions at home to be deranged, by attempting to conform them to all the violent fluctuations which the enemy's lawless power can give to the continental exchanges, and, through them, to the price of bulhon. We have happily, through the integrity and wealth of our Bank, and a state of credit between man and man unexmpled in any other state, succeeded in realizing a system which the enemy cannot snake, and which if preserved, is likely, under Providence to carry us safely through all our difficulties Let us recollect the successive efforts which have been made by the enemy to shake this mighty empire,—first, by arms and invasion; subsequently; through jacobinical principles and rebellion; latterly, through the extinction of commerce. All these have failed, and yielded to his last hope of shaking your safety through the destruction of your established currency—the instrument of your prosperity and the source of all your power. It is well known when the Report we are now considering reached Paris, at the close of last session, the ruler of France was upon the point of abandoning his anti-commercial decrees; he had convinced himself, that what had annoyed Great Britain, had ruined France and her vassal states.

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The view presented by the Report of the state of our currency, the declaration of its depreciation, the indispensible necessity of returning to cash payments, the exaggerated picture of the mischiefs inflicted on this country by its bank-paper not being convertible into cash, and all these effects declared to have resulted directly from the decrees in question, decided the ruler of France, not only to persevere in his commercial warfare, but with aggravated severity. Hence the burning supplement, the seizure of Holland, &c. It was obvious to him that, if we were obliged to retrace our steps, our exertions abroad must be contracted; the prospect was encouraging, and was worth the attempt. It rests with the parliament of Great Britain to make him feel that this new attempt is as abortive as all his former. The experience of the last three years has shewn him the exports of the British empire increased one fourth, in contempt of all his decrees; and, although he has succeeded in adding heavily to the costs of our European imports, as well as to our losses from confiscations, and, as far as relates to the continent, in turning the balance of payments largely against us, yet have we succeeded, in the face of his prohibitions, in exporting, even to the continent of Europe, nearly three times as much in actual value, as we did in time of profound peace, when all the continental ports were open to us, and when we had a commercial treaty with France herself.
What a proof is this of the importance of an internal system of circulation, in its nature placed beyond the reach of his power, steadily supporting the industry of the country, its true and only wealth, accommodating itself to the rising exertions of a laborious population, and resting on the credit of a Bank, the solidity of whose resources has never yet been called in question. Let us determine to cherish this system, which keeps the enemy's power at a distance, till the world is once more restored to a settled order of things.
The whole case of the Committee is built upon an assumption that we live in ordinary times, and that we may conduct ourselves upon accustomed principles. They reason as if every thing was to find its level at a moment when the licentious subversion of all hose ancient principles, which have governed the conduct of nations, even when at war, compels us, in self-defence, to assume an attitude of defiance correspondent to the novel efforts
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employed for our destruction. It is the strength, as well as the pride of this nation that a long established system of public credit, the voluntary growth of industry protected by a free constitution and established laws, enables us to conduct our transactions, without the perpetual intervention of our standard coin. In its absence the accredited paper of our banks preserves its established relation to the general property of the country, which it continues to circulate, with an uniformity of value which could not belong to it, if tied down to bullion as the standard, and obliged to conform to all the present convulsive fluctuations in its price. Out of the necessity of abandoning for a time the convertibility of paper into cash, has grown an increased facility of conducting your expenditure abroad, in proportion to the quantity of the precious metals exported; and we have found that, when the means of sending bullion hence have been exhausted, wherever our arms have been carried, foreign gold has been supplied upon credits here, the amount of which was either returned to those countries in British commodities, or invested in our funds: thus supplying fresh resources from the capital of the foreigner for conducting the war.
The Committee, I trust, will do me the justice to remember, that I have throughout admitted a recurrence to cash payments as early as circumstances will permit, to be essential to public credit, that I have justified the existing system upon the plea alone of an over-ruling necessity, that I have not considered such a necessity as belonging to ordinary times of war, but as arising out of the new principles on which the present war has been conducted by the enemy. When the necessity ceases, I trust the system now in operation will cease with it; and I am sanguine in my belief that, with industry and commerce so flourishing, the return of our former habits, the drain of war being at an end, will not be a work of difficulty, and need not be a work of time. But, in the interval, as it has been our policy, in conducting the war, to annoy the enemy abroad, rather than await his attack on our own shores, so let us preserve that system of currency which enables us to confine his violence to the continent, and to deny to him the power of interfering with, or shaking this most vital branch of a system, under which we flourish as a nation and through the fruits of which we

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contend on behalf of the world as well as ourselves.
Mr. Hornerdenied that be had retroceded, or that the Committee had altered their opinion; and maintained, that instead of bringing forward abstract propositions, he had laid before the (louse practical measures for them to adopt,
Lord Castlereaghreplied, that the propositions were indefinite in their nature, and therefore unfair towards the Bank of England.
Mr. Morrisrose principally for the purpose of answering a challenge from his right hon. friend, "who had commenced the discussion that night. His hon. friend had said, that he was' not aware of any case in which the tender of bank-notes had been refused, and the payment of coin enforced by law.—Such a case had however occurred in 1801, on one of the circuits in the court of common pleas; and it was the unanimous opinion of all the judges, that a creditor was fully entitled to have the payment of his debts made in the legal coin of the realm; and that it was entirely in his option to reject notes altogether. This was a consideration materially affecting the liberty of the subject. If an individual, after ineffectually tendering bank-notes, was prosecuted for debt and arrested in consequence, what step must he take? He must either buy gold bullion, at the present extravagant price and send it to the Mint to be coined, or he must pay the debt in silver bullion, for which he must give 6s. per ounce, although in the payment of the debt it would be reckoned only at 5s. 2d. He allowed that the feelings of individuals would, generally speaking, restrain them from resorting to such, an extreme measure towards their creditors; but such was the law; and it ought to be recollected that law was framed, not for those who cherished benevolent and honourable feeling, but for the purpose of restraining the bad passions of those who were of an Opposite character. The only alternative Which parliament, had, was, evidently to made notes a legal tender; but this would be a measure attended with consequences of such an equivocal nature, that no one had ventured to mention, it in the. House without accompanying his notice with a great many qualifying observations. Adverting to the case of De Yonge, who was tried for trafficking in guineas, he entered into an examination of the act on which that prosecution was instituted;
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and expressed his doubt as to the transaction being within the meaning of the act, a doubt which was confirmed by the proceedings which had taken place subsequently to the trial.
The cry of Adjourn! adjourn! becoming very general, at two o'clock on Wednesday morning the chairman reported progress and obtained leave to sit again.