Star. — London, England, 1811-05-07 00:00:00

tute en inquiry, and froth the evidence adduced, the • met!, that the legitimate depressiOn of the real er remedY might be provided. The most important change was limited by the expences of the transmis conseleration to a civilized nation was the standard sion of specie; aped that where it was found that the value of coin. All civilited nations considered a depression exceeded that limit, such depression must measure of value as essential to the interest of the' necessarily exist in some circumstance connected with State. If our measure of value was deteriorated o r the c u rr ency of the country. There were two changes lost, then it became the. Legislature to provide a re- of value of which the domestic currency was susceps ele ey, What was the consequence of this deteriora- tible. Debasement, to which metallic currency alone tion ? It was the cause of infinite loss to creditors— was subject ; and excess which more particularly be ii id a great effect upon monied incomes—gave an longed to paper. The returns from the Mint which undue advantage to debtors, and affected materially were inserted in the Bullion Report, afforded full persons holding stations in society, which property of information on this point. It would there be found that description gives—the revenue was injured, and that from 1758 to 1773, during the debasement of taxes ceased to be productive ; for the money paid the coin of the country, a depreciation of it took into the King's Exchequer would not do that which place. —As to an excess of metallic currency,' it was calculated to do. In providing the remedy, that could take place only in countries possessing the first question to be considered was, the causes of mines . ; and there only to a small extent, and for a the evil ; that was ..o be gathered from the evidence short period. Thus it would be found, that in Spain, taken before the Committee, and the causes were re- silver, and in Portugal, gold was a little lower after duceable to two: one of the causes was that bank-notes the importation from the mines, until the superabun had departed from their value, of gold, because gold dance was transmitted to other countries. The evil had risen in value. The other cause was, that the rise remedied itself. But in countries in which paper was of gold was consequent upon the unfavourable state of not convertible into specie, excess admitted of no re-1 the Exchanges. The first argument to be founded medy ; and if the excess were without limit, equally! upon the scarcity of gold was this, that in some coml. indefinite would be the effect on Foreign Exchanges. I tries on the Continent, silver was a commodity ; every Considerable obscurity had been throwreupon this country had its commodity. In Africa, leather subject, by partial statements. He was willing him and salt, particularly the latter, were esteemed in ex- self to admit, that if, on examination, a single instance change for the produce of that soil. In a country could be fairly adduced, in which the cheige in the i where silver is, as it were, the commodity, the price currency had not been communicated to the Foreign , sloes not vary, but is stationary. For instance, if this Exchange, the principles for which he contended country chose gold as the measure of value, the effect must fall to the ground. But then all the circum-1 of scarcity would not be to make it dearer, but other stances of the different cases must be developed. For ' commodities cheaper. It was in evidence before the instance, it appeared that the exchange with Portugal Committee, that the price of standard gold never last year was at par. On explanation, however, it varied more than in 1795 and 1796, when there was was stated by persons acquainted with the facts, that a great scarcity of grain, and when it was sent abroad by the lasv of that country half the debts of it were for the purpose of purchasing that article for the sup- paid in a paper which was at a discount of 26 percent. ply of this country. In the first of the months of Instead therefore of theexchangebetweenGreatßritain 1797, in consequence of the alarm which existed, and Portugal beingatparet wasl3percentenfavour of much of the gold was drawn from circulation exter- the latter. So with Sweden the state of our exchange rdly, but the price of the standard had not raised one was attributable also to the discount on the paper penny on that account. Government sent to Portu- currency of that country. In all countries with which gal for some gold, manufactured there, to provide for we had any thing like a settled ceuree of exchange, the the deficiency, and they purchased a small quantity at same alteration had taken place in the exchanges, as set Bs. per ounce ; but there had aot been a rise from at Paris, Hamb urgh, and Amsterdam. He was not 1718 down to the presenttime, of more at any time than perfectly apprised of the circumstances attending the 6d. per ounce. In addition to which, it did appear exchange with America ; but he understood that in that there was no such rise on the Continent as would May, 1809, the course of exchange was at a discount warrant the rise here. The Mint of both countries of nearly 11 per teat. and that at present it was about formed the relative value ; and in all countries where ten. In the West Indies, the premium on bills, which silver is the commodity, gold would appear to rise, used to be from 15 to 20 per cent. was now only five. , The Hon. Gentleman then referred to the price cur- He was informed that a similar effect had taken place rent of Paris down to the 10th of April, to shew that in the East Indies, and that bills drawn on this country the price of English gold there was not more than at Calcutta, were at an exchange of '22 per cent. against se3 19s. 6d. per ounce ; but at Amsterdam gold us. Let the Committee consider the state of exchange fetched 12 guilders and a fraction ; while a bank note between Hamburgh and the capitals on the Continent. of the same value only produced seven guilders.— At Vienna the par with Hamburgh was 14.6 guil- Prerious to the year 1797, as might be seen from the ders ; the exchange at present nine hundred guild. Appendix to the Bullion Report, the importation of ers ! To what was this attributable ? To the de wheat, (which, he must contend, had a great effect preciated state of the paper in Vienna. The paper. upon the course of exchange,) was various. From currency of Sweden was also depreciated, and 1771 to 1785, taking the average of 15 years, it was what was the consequence ? That although the at 465. per quarter ; then, taking the average of 12 par with Hamburgh was 48 stivers, the present ex years, from 1786 to 1797, it was at 525. an increase of change was 136 ! In Copenhagen also, in which] 6s. per quarter ; but leaving out the two years of the paper was depreciated, and in which the par dearth, namely, 1795 and 1796, the average would with Hamburgh was 125 rix dollars, the present ex. be 475. 31d. a difference of Is. 2d. in the last ten change was from 750 to 800 ! But in Paris in which years. Since 1797, the price of wheat was on a very there was a metallic currency, and no depreciation, different scale—for the average to this time was 79i. the par with Hamburgh being 181 livres, it appeared,l but leaving out the two years of scarcity, it was at by the last return, that the exchange was 180—four 71s. making the difference of from 465. to 71s. The in that number in favour of Paris. How was it pos rise of gold, therefore, was to be ascribed to the ex- sible, after hearing all these facts, to resist the infer cess of exports, and not to the exchange being against ence, that a main cause of the present situation of our us. It certainly required explanation why this de- exchanges was the state of our currency ? By refcr pression, (unexampled in the history of the country, ring once more to the returns from the Mint it would except when the currency of the realm was debased) appear, that in 1792 and 1793 the exchange with had arisen. In the reign of William, an d in the seven France fell from 22 to 17, to 15, to 12, to 9, to 4., and years war, the exchange fell 25 per cent. and guineas ultimately to nothing. Nobody pretended that this rose to 40s. but since those periods there had not, it was owing to any thing but to the enormous paper was clear, been any instance whatever upon record. currency of France at that period. Seventy years Adverting to the importation of grain in the last year, before, when there was an excessive issue of paper in lie allowed that it was most enormous ; and that, im- France, an issue not so infamous as that to which he portant as was the consideration of the question before had just alluded of assignees, but an issue for the the Committee, the causes of that vast importation de- purpose of executing a wild and visionary scheme— mended a still more serious investigation. To find he meant in the Mississippi year—the exchange of that in a year, which was not one of dearth, above Paris with London fell from 28 to 22, to 15, to 10, and two millions of quarters of grain had been imported, eventually to 7. When a project of a similar nature was was unquestionably a fit subject for Parliamentary set on foot in England in 1720, the price of standard inquiry. Nothing could more effectually shew the gold in bars rose as high :is £4. 2s. 6d. per ounce, depreciation of the relative value of our currency, which was owing to nothing else but the diseased than the fact, that although by the alteration made state of the circulation in London. All these facts in the Corn Laws, in 1793, the price of 545. was fixed tended to prove the accuracy of the conclusions to as that under which no grain should be exported, it which the Bullion Committee had arrived. Was became necessary in 1604 to raise that protecting more direct evidence demanded of the excess of the price to 665. ; and so rapid had been the depreciation paper money ? He would consider this point for a of money, that, if it were intended to carry on the moment : during the restriction on cash payments, the system of protection, it would be now necessary to excess might be occasioned in two ways ; one by the I raise the price to above 705.—The whole question, Bank issuing more paper than could be absorbed in the i as far as the balance of trade was concerned, rested general circulation—the other, a given amount being on the real state of our trade. What that was it was already out, and a change in trade rendering that ' difficult to discover. He was disposed to trust those amount more than sufficient for the general circula who had the means of information in their hands, and tion, by the Bank abstaining from withdrawing a por who declared that the balance and the foreign expen- tion of that already issued. On an examination of diture were against this country. And yet it the the evidence given by the Bank Directors to the Bul- Committee looked at the accounts on the table, they lion Committee, it would appear, that although the would see that the balance of exports over imports restriction on the cash payments would of itself have was much greater than formerly, particularly during created an excess, yet that the Bank increased that the last two years. Tie official value of the imports excess by issuing an additional quantity of paper. — of 1811 was £33,100,000; of exports A 45,800,00 0; He wished particularly to call the attention of the leaving an excess of £12,700,000. The details of Committee to the increase of Bank of England this excess w-re still more satisfactory. The exports notes since the investigation by the Bullion Com of cotton manufactures, during the last two years, I mittee. By the Report of the Committee the ave. were nearly double what they had been in the two rage of the notes in circulation in 1809, was stated years preceding. How these statements could be re- to be 19 millions ; the average of the last half year conciled with tine present declarations, lie was yet to of 1809, to be £19,800,000; the average down to know. It might indeed be explained by shewiug the 12th of May, 1810, to be £21,200,000. By the that the military expenditure made the difference, but documents on the table it appeared that the average at present it was wholly unexplained. It was now of the Bank notes in circulation taken for the whole intimated that the balance of trade had been so unfa- of the year 1810, rose to £22,700,000, and that the vourable to this country, as to render the exportation average of the first 17 days of the present year was of bullion absolutely necessary. It might be recol- twenty three millions and a half; being an increase lected, that in leoB and 1809, when this great excess in the number of Bank notes in circulation of above of exports was stated by the Right Hon. Gentleman two millions, since the Bullion Committee made their opposite, he (Mr.H.) expressed his doubtsw ith respect I, report. To him this appeared one of the most wan to the real nature of' it. In the last Session, during i ton and unjustifiable acts that could well be conceive l the discussion of the Lord Commissioners' speech, the ed. He understood that it was to be defended on Right Hon. Gent. opposite conten ded, thataltho' there 4 ,ehe ground that commercial distresses existed in the v.; - ; a great foreign expenditure, yet that the excess ; last year, such as the Bullion Report itself pointed of exports was so considerable , as to leave the balance out as the proper subjects of relief front the Bank. ve , y much in our favour. Ho w was this reconci ea- But whatever might be the nature of those distresses, ble with the present argument ? But if these two; the want of money was certainly not one of them, statements could be reconciled, he contended that they . for money was in abundance. What other defence would not shew the true cause of the present state of of their conduct the Bank could set up, lie knew not. the currency of the country. It had ever been the The doctrine of the Directors of the Bank, as set opinion of the best practical as well 4v thteretkill forth in the minutes of evidence before the Bullion - Mb= } i Committee. *is %allay navel and quite tconsisteht Wdi i large class of flietcllents in the Itsettepoli", "Ale with the principles by which the conduct of the Bank filled with the Same erroneous no:ione, dented that Directors of forniers days was governed. It was a there could he any excess of paper currency. A large doctrine which, if not checked. by Parliamentary in- majority, however, thought otherwise, and that ma terference, must soon bring complete ruin on the jority was composed of all the old capitalists of the Whole of the financial and pecuniary affairs of the city, by whoms through good and through evil times, country. What was the situation in which the Bank the commercial credit of Great Britainhad been mains of England had been placed ? It was not his wish tained. These Gentlemen were decidedly of opinion to impute to them any original blame, or to revive (in opposition to that of the visionary speculatols to the controversies of former days. The existing evil whom he bad before alluded), that the issues of the was sufficient without any such recurrence. In the Bank had been guided by the preceders of old times, origin of the business the B ink were placed in compul- ' and that in the deviation from that precedence was to sory circumstances. They were forced to suspend their be found the cause of the present depreciation of our cash payments. But still, influenced by the true currency. Among these respectable individuals was principles which had influenced their predecessors, the late Sir Francis Baring, who, with all the advan. the Directors were anxious to resume those payments, cages of the most extensive commercial experiences and made such exertions to return to the ancient expressed an opinion consonant to that avowed in the system, that at the end of a few months they declared Bullion Reports So much for the evil. It remained that they were ready to resume them. Parliament, for the House in its wisdom to consider of the remedy. however, waved the resumption at that period ; and He felt that many who agreed with him up to this soon after it was declared that the suspension should point of the discussion, might differ from him in the continue during the war. It was then that the Bank remainder of it. To him it appeared manifest, that felt themselves in a new situation, called upon to dis- the remedy recommended by tie Bullion Committee charge new ditties. They no longer felt the restraint was the only remedy that would be successful. It was which had hitherto moderated their issues of paper. a remedy that ought to be administered with great It had been their long established duty to Ascertain caution, but which he was persuaded, sooner or later the just quantity of 6:enlacing medium necessary to must be administered. At the same time he had no the public wants. When that circulating medium doubt, that if Parliament were to stop short with a consisted chiefly of specie, it regulated itself by its declaration of the evil, such a declaration would lave interchange with foreign countries; but when a mere a powerful effoct on the conduct of the Bank of Eng ine:it circulation was substituted, the Bank were land—but notwithstanding this impression on his then called upon to perform a duty that was mind he felt it his duty, as a Member of Parliament, impracticable. The Directors were evidently and to propose a legislative proceeding on the subject.--. avowedly unacquainted with the principles of the The only argument which he had heard against the subject. Their doctrine was—that there could be abolition of the restriction, turned on the state of war no excess of issue, with regard to their paper, as long in which the country was placed. Great as was the as it was demanded ;—that the extent of the de- mistake in 1797, in suspending the cash payments of mend ought to be the only limit ; and that the rate the Beek, he thought the mistake, at the commence. of interest made no difference whatever in the consi- ment of the war, of continuing that suspension still deration of the amount to he issued. Let the Com- greeter. It took from the measure the character of mittee read the evidence given by the then Governor a temporary, and gave it that of a permanent pro of the Bank of England, a most respectable indivi- , ceeding. And what difference did the state of war dual, Mr. Whitmore. When that Gentleman was make ? The country was not in a state of war in 'asked, 44 Does not a rise in the value of any species 1797. It was not in the exportation of bullion for of money or currency mean a fall in the prices of corn that the supposed necessity for the restriction commodities ?" He answered, " I did not mean to originated : it originated in internal alarm, in a tern. state that, nor do I mean to state to the Committee porary event which had not recurred. In 179' there any matter of opinion. I would rather wish to leave . had been a failure of country Banks to an immense that to the judgment of the Committee, and lam extent. It was an alarm not peculiar to a state of ready to answer any points of fact." This was per- war. It might occur in peace. If the suspension of fectly candid in Mr. Whitmore : but surely the head cash payments was the remedy, let it be applied ; but of that establishment which v. as to adjust the circa- let it not be permanently applied. Let not the same lation of the country, ought not to have been so unin- medicine be administered indifferently in health and : formed, but ought to have furnished himself with the in sickness. Let the suspension be terminated, not means of giving an opinion ; and to have been aware abruptly, but with caution. By the existing Act it that a rise in the value of any species of money or ' was provided that it should terminate six months after currency meant a fall in the prices of commodities. the conclusion of a definitive treaty of peace. If a By the laws against usury, the Bank of England were peace were made to-morrow, however, that would be restrained from receiving more than five per cent. for I too short a period—for anxious as he was that the re. their discounts. It occurred to the Bullion Commit- ! striction should cease, he was equally anxious that it tee, therefore, that under the recent circumstances °, should cease in a manner the most beneficial to the many persons would be tempted to obtain these dis- . community. On the fullest considemion which he counts. In the course of their inquiries on the subject, ; had been enabled to give to the subject, he was satis they asked Mr.Whitmore, 4 4 if in his opinion the same fled that even during war, and particularly during the security would exist against any excess in the issues ! present war, it was imperative on Parliament to re. of the Bank, if the rate of the discount were reduced i scind this measure. The prospect which this country I from five to four per cent. or even to 3 per cent. ?" I had, was of a long contest. If it should turn out so he 'The reply (a reply in which Mr. Pearse wholly con- ; trusted that it would be a long course of foreign exO cuffed) was, 44 that he conceived the security would ; penditure ; for only by that means in the improving be precisely the same in both cases, if the practice of state of the world could we derive any advantage from the protraction of the struggle. By the present state of the Bank remained the same, of not forcing a note I 1 exchanges,howeverd -4th of the money appropriated to into circulation." He would now advert to the opi . nion of the Bank Directors with respect to the making `, foreign purposes was fruitlessly absorbed. This was a of the restrictions on cash payments a permanent most important consideration, and would become still measure. When Mr. Pearse was asked 44 what in- ! more so, should Great Britain return to her ancient ' task of restoring the balance of Europe, and planting convencies he would see, in his view of the operation of the restrictive system, to its being a permanent the standard round which the nations of Europe should measure, supposing the Bank to regulate its issues in be invited to rally in defence of their independence. the manner he had described i" He replied, 44 that •He trusted that he should not hear it urged, that in from their experience, and in his view of it, he could some points the depreciation was favourable to the see no positive inconvenience likely to result from its public. He hoped that a declaration so contrary to a being a permanent measure ; nor did he see any ad - ill the maxims of honour which it had been the pride of Great Britain to cultivate and to maintain, would vantage that would arise from its being continued ; when the political and commercial relations of the ; not be made. He was very far from imputing such country would admit of its removal ; and that ; an idea to the Right Honourable Gentlemen oppn he was further of opinion, that, in addition to ' site. If it were entertained by any one, that indi vi the satisfaction which, a s a B a nk Director, he ! dual must be a short calculator. He must forget that , would derive from the removal of the restriction( when although the country might gain something in the the necessity for it should cease), the feelings of the payment of the interest on the debt already accumu. public would not be satisfied unless it had in expects - ' laced, she must lose more on the receipt of the tion such a change." On a subsequent occasion this loans, to xhich it would be necessary for her to have recourse. Nor did private suffering demand less loudly answer of Mr. Pearse being referred to, he was asked " if it were not for that feeling or expectation on the than public justice, that a corrective should be ap. part of the public, would he be of opinion that it , plied to the existing evil. He would not dwell on would be expedient to continue the same restriction , the grievances to which public creditors, annuitants, as a permanent measure, inasmuch as it would not and others, were exposed by the present state of the only relieve the Bank from the expence of purchasing currency, nor to the injurious effect which it had, land keeping a large supply of Bullion, but effectually i upon all legal contracts and obligations. It was protect them and the public from a repetition of those i enough just tc state the circumstances ; and having i nconveniencies which first led to tine restriction ; and i trespassed so long on the patience of the Committee, that these advantages would be produced without 1 he would detain them no longer than by moving his creating any other inconvenience by which they might first Resolution, viz.:— be counter-balanced ?" To this Mr. Pearse said— " That the only money which can be legally ten. 44 he had already stated in answer to a former ques - dered in Great Britain, for any sum above twelve tion that he was not aware of any positive inconve- , pence in tine whole, is made either of gold or silver, nience resulting from the present operation of the Re - and that the weight, standard, and denomination at striction Bill, or likely to result from its being ren- 1 which any such money is authorised to pass current, dered permanent—except as far as it regarded an ex- is fixed under his Majesty's Prerogative, according to pectation on the part of the public, that it would be law." removed—but that circumstance was in his opinion Mr. ROSE began by acknowledging the know essential, and could not be kept nut of view in any : ledge of the subject displayed by the Hon. and learned consideration of the subject. Whether it would be opener of the discussion, and the great eloquence with adviseable to secure the public against a liability of ; which he had treated it. Still he differed from him the recurrence of the inconveniences that led to the' as to matters of fact. He felt not- the least hesite- Restriction Bill, by sacrificing their feelings on this I tion in affirming that there had been no depreciation point, and absolutely removing all expectation of its , of Bank notes occasioned by excessive issues of being only a temporary measure, appeared to him to I them. It proposed to resume the payments in be entirely a political question, on which he did not specie ; but the thing was impracticable at this time, conceive himself qualified to give an opinion — but he ; nor would there be a guinea more in circulation might venture to observe, that public credit and pub- I were the measure resorted to. 'Certainly it was lic opinion always went hand in hand, and that the extremely desirable, that the circulating medium one was invariably influenced by the other." Unques- should at all times be the precious metals, rather tionably this statement of Mr. Pearse's fell short of al than paper ; yet where such precious metals were complete declaration of his opinion, that the restric- I wanting, it was idle to talk of paper currency as tion on cash payments should be a permanent mca- I valueless and injurious. The Hon. and Learned sure ; but it was evident that the - possibility of its , Gentleman had justly praised the Bank of England, being made a permanent measure, had passed through i as to its great public utility, without thinking, that that,gentleman's mind; and when to this circumstance . if his proposed Resolutions were adopted, the coun was adde 1 the consideration of the Directors, that try would soon cease to be benefited by that excel. there could be no excess in the issue of paper, as lent establishment, which would be disabled from long as there was a demand for it, and the active ' rendering those services it had hitherto done.-- part which they had taken in the discussion of the I (Hear, liar, hear. )—Without agitating this or that subject out of doors, enough would appear to warrant specious theory, he could not admit that Bank notes the most decided inference that the present state of were depreciated ; they %vete legally equivalent, and the circulation of the country was attributable to the equivalent to the obtaining of every article of life, excessive issue of sank notes. I seemed that there wept, indecd, the purchase of gold aad silver.... ,0111