Star. — London, England, 1816-05-02 00:00:00

being prevented from paying their notes, of every de nomination, in gold and silver ? He always thought, if it were a measure *of compulsion, that never was resistance-so weak as that which was opposed to it by the Bank--(Hear, hear, hear )—And he was of °pi , pion, that if they *ere really desirous to renew, as soon as Government would permit them, their pay ments in silver and gold, they had given, under the -resistance which Ministers opposed to their wishes, a lessen of the passive grece of fortitude which never bed been exceeded.—(4 laugh.)—Therefore, from this day forth he should think, whatever professions that body might please to !visite, that they would be very well contented to enjoy all those vast and almost incalculable prOfits svhich grew out of the adoption of this measure.— ( Hear, hear.)—For, from the tram reels created by it, arose a subservience in the Go vernment to the Bank, which rendered Ministers in. cepable of fairly going into the money market. He would not go farther into this subject, because it had already been ably discussed by an Honourable Mem ber (Mr. Grenfell)., whose luminous statement, Monde,' on the most authentic documents, was on record—and chewed such an example of rapacity on the part of a Corporate Body, and of acquiescence on the part of a Government, as stood unrivalled in the financial history of any country in Europe.—.(Hear, hear.)—He believed, that his Right Hon. Friend (the Chancellor of the- Exchequer) had no system of opi.' nions at all on this subject. He had a sort of nntion,l that if cash payments could be resumed, without al tering his plan of finance, it would be as well if things were restored to their old order. But sooner than at tempt this reform, he thought it was better to ride over this year and over the next year, and to make up, by the assistance of the Bank, any defalcations that might arise in the finances of the country, how ever exorbitantly be was to pay for the accommoda tion. He had no doubt, from the renewal of this measure, being for two years, that it was connected with the financial arrangements of his Right Hon. Friend. He said, tbat his plans and the renewal of the restriction were -coincident in'pOint of time, and had no other connection. But any man who re collected what took place at the meeting of the Bank Proprietors, would form a different opinion. Early in the year, when the first bargain was about to be entered into, the Proprietors were told, that Ministers meant to renew the Bank Restriction Act. Why Was this statement made, unless to induce the Proprietors to agree, with a better grace, to the Loan which was demanded of them ? But what other effect had the information which was given on this subject ? When it was afterwards stated that the Bill was intro duced, there was immense and an immediate rise in the price of Bank Stock. It was said that the Bank bad no interest in the renewal of the Restric tions. If that were so, it was strange that the most ' ignorant person in the market should at once perceive that his property would be benefited by it, and that, therefore, it was advisable for him to speculate. He believed, on the occasion to which he alluded, that Bank Stock rose about 18 per cent. Another point ' worthy of notice was, that the restriction was now proposed for two years—whereas, in 1797, the House proceeded, with fear and trembling, from six weeks to six weeks. In 1802, Ministers proceeded with great caution. When the mischievous practice of connecting the measure, with the duration of the war, was adopted, it was enacted, that six months after the ratification of peace it should be given up. Last year, when there was not so flittering a pros pect of pacification with the whole world as they now enjoyed, did his Right Honourable Friend propose ' the measure for two years ? No, he moved for the continuance of the resttictions only till the then en suing sth of July. And now, in the present year, when there wag no likelihood of a renewal of hostili ties, he should be glad to know why, without stating any reason, he called on the /Nue to pass this re strictive measure for tavo years—(Hear, hear.) He could nut understand it, except the term of two years was given as the price of the loan—(Hear, hear.) It might be said, that this was in some degree elm nectcd with the agricultural distres.es of the country. But, suppose this to be tree, why were two years fixed on for the continuance of the' restriction ? Did any person assign a particular limit to this distresss ? Was it not a temporary evil ? Did they not find every day. that it was more and more likely to be merely temporary ? The evil, then, being in its nature of a temporary description—and there was no man who was capable of considering it, who did not admit this—why did not his Right Honourable Friend pro. pose his measure for a period of short duration ? No, he had a very different feeling. The two years re striction had nothing to do with the agricultural dis tress, but was connected with the bargain made by the Baok of England. That he knew would not be avowed—but he asked of every person who was anxious for the security of the finances of the country, who were desirous of preserving their own property, whether, after they had considered the circumstances be had explained, they could imagine that this mea sure had nothing to do with the bargain entered into between Government . and the Bank ? Would they, fairly considering the subject,. vote for inquiry this night, or give their resistance to a measure, the true object of which was not avowed, and she only reasoa for proposing which, he conceived he had stated ? On what ground did his Right Honourable Friend mean to call on them to accede to these-restrictions? And - how did he mean to deftnd himself from the charge of not having taken any steps to compel the resumption of cash payments ? Those were points on which the House was ignorant, but on which h ought to be informed. Here he wished to correct an error which had been unjustly imputed to him, and to those Gentlemen who coincided with him in opinion. It was said, that'they wished the cash payments to be immediately resumed. They never harboured such a sentiment. They always stated that it could not be done without precautionary measures; but they conceived that no time should be lost in opening the Bank. The Learned Gentlematt then proceeded to chew, that the suspension of cash payments had ope rated most mischievously for the country—and ar• gued, that the agricultural distress had been occa sioned, in a great measure, by the sudden reduction of those factitious prices, which the great eatent of the paper circulation had created. There had been, within a very short time, a greater reduction of the currency of this country than was ever ham known, in any part of arope, except its France, at the time of the‘Miasiatippi scheme, and at the period of the antinats. This 'reduction seemed to him to arise tro th the previous fall in th e value oe syste m fegri of th agricultural produce, us consequence of wh ich the 1 country Banks was destroyed. throughout England to such an extent, that no person couldharesurpt— sed it possible, without creating mach greater u There was also a very great reduction in the paper issued by the Bank of Legl and. It now amounted to between twenty-five and twenty-six millions. Two years ago it was twenty-nine millions—and at one time it was somewhere about thirty-one the mll ß , k millions i but, even if the amount of paper issued b y . of England had remained stationary, the reduction of the issues of the country Banks was sufficient to create an immense evil. Another mischief which i arose Pow the reduction of prices, w.ts, that Minis ters, who had borrowed money in time of war, when it bore a high factitious value, were now obliged to pay the interest when it was restored to its real value. —These appeared to him to be the two great in conveniences that had resulted to the public from the , system of restriction, the continuance of which most, in a greater or less degree, be perpetuated by a recur rence to the measure. His idea, even during the pe riod of war, was, that allowing it to be very difficult to return to the old principle—admitting that it re quired all the care and wisdom of Government—yet if the war were likely to continue long, it would be the most prudent mode of acting . to proceed to cash payments at once. ,He felt that it was false policy and erroneous reasoning to expect any advantage from such a system. Great inconveniences must ne cessarily follow from a continuance in a system that left the country without any known and defined sten dard for the•value of their money. When such a standard did not exist, much inconvenience must be felt in a commercial country, with reference to the exchange, with respect to bargains made for time, whether by the public or private creditor, and in a variety of other cases. All persons who had consi dered this subject, must wish to know what the cir cumstances of the country were that required a con tinuance of this system. He had no intention of for- 1 cing his opinion on others. He.clid not mean to say that cash payments should now be resumed. But he was desirous of learning why cash payments did not nnw take place ? Why the measure was proposed ? How long it was likely to be continued ? " If it were found proper to resume the payment in cash, then they had to inquire what was the most proper means of effecting this object ? These were the points which his motion embraced, and these, he conceived, ought to be well considered before they paused a Bill to con tinue this measure for two years longer. What were the grounds on which the Right Honourable Gentle man meant to proceed ? On what foundation did he bring forward the measure ? Was there a necessity, an expediency, a fitness for persisting in it ? He was anxious that the Right Honourable Gentleman should explain himself more fully than he had done on those points ; and he was also desirous to be made acquaint ted with the view of the question entertained by the Bank, and to hear what were the circumstances under which they would propose a renewal of cash pay ments ? If he referred to their former arguments, he was at a loss to apply them to the present circum stances. Much reliance was placed on the large amount of foreign expenditure—on the extensive im portation of corn—the high price of the precious me tals—and the disadvantageous state of the exchange. But now a different situation of things existed. Our foreign expenditure was reduced—there was no im. portation of corn—gold had fallen almost to the mint price—and the exchange was in our favour. Why, then, in this posture ot affairs, was the measure re. sorted to ? If his Right Honourable Friend supposed that a liberal issue of Bank paper would have the ef fect of keeping up prices, or of raising them, it was • the most monstrous proposition ever entertained by any financier. Such an idea was countenanced by the French Government in the time of the Regency, and by our own Government about the same period ; but the Government was, in both countries, the dupe of projectors. It his Right Honourable Friend sup. ported such a proposition, he could not plead that he was the dupe of projectors—he would stand in the situation of projector himself. Perhaps it would be i worth while considering, whether the Bank might not immediately commence the old system, by the' cash payment ot its notes, successively, according to their value ? Thug, six months after the first of Ja nuary next, they might pay all notes of the value of al ; six months alter, those of :€2; at the expiration of the following six months, those of £5; and six months afterwards, all notes above that value. The Learned Gentleman then made a few observations on the necessity of introducing a good silver coinage, in stead of the present debased English and the still more debased French coinage, which was in circula lation ; to preserve which, it was absolutely neceshary that a fixed standard of currency should be established, and concluded by moving—" That a Select Com mittee be appointed to inquire into the expediency of the resumption of cash payments by the Bank of England, and to consider the safest and most secure way of effecting the same." 'lhe CHANCELLOR of the EXCHEQUER was desirous that the Honourable Gentleman should have had an opportunity of stating his objections to the further progress of the Bill before the House for continuing the restriction on the cash payments, of the Bank of England, because the House was thereby enabled to form their judgment as to how far those objections were well or ill founded. He begged to recall to the recollection of the Honourable Gentle. man, that in the Report of the Bullion Committee of 1310, it was stated, that, even on the arrival of peace, it would require two years for the Bank to resume it s cash payments. Indeed, nothing could be more clear than that it would be highly dangerous to the i commercial interests of the country to alter its cur rency in a sudden and hasty manner, without due preparation ; and this preparation, he would contend, could not be made in a period less than two years.— He was the more confirmed in this opinion, whet; he called to mind the amount of cash which the Bank was under the necessity of furnishing for the public service during several years past, the extent of which prevented them from realizing that capital which would enable them to resume their payments in species at this moment. He denied that the fall in the prices of agricultural produce was attributable to the dimi nution ot paper currency; because it was an indispu table fact, that that fall had preceded the diminution of the circulation of country bank paper. The fact was, that when the prices of agricultural produce fell, the country bankers became alarmed; they drew in their advances, and hence the circulation tvis les sened. 'the Right Honourable Gentleman then pro ceeded to contend, that the proposed extension of a •paper currency would have the happiest effects upon the credit of the country, by restoring that confidence which had been created by the sudden alarm that had taken place front the supposed intention of the . Bank to withdraw its notes from circulation. The practical question before the House was, whether it was necessary that any inquiry should take place previous to the House determining at what period payments in cash should be resumed ? He contended that no such inquiry was necessary, because ever since the Bullion Committee had sat, information had been laid before the House of every topic connected with this.question. It was in the power of every Gentle man, therefore, to form his judgment without the de lay proposed. The only point which had remained unexamined was as to the amount of cash in the Bank. This it had always been thought proper to avoid ; and he apprehended the House would not now de part from a course which it had heretofore deemed politic to pursue. Mr. J. P. GRANT declared Le never heard a case more ably stated than that of his Learned Friend, or more feebly answered than that of the Right Hon. Gentleman. He fully concurred with his Learned Friend that if the Right Honourable Gentleman's Bill were adopted, the resumption of cash payments would never take place while the people submitted to the Restriction. He certainly thought a very strong ground had been laid for inquiry, and he trusted the House would not reject the motion of his Honourable Friend. Mr. MARRYATT said, the House and the country at present laboured under the grievous disap pointment of finding their expectations deceived, of the resumption of cash payments by the Bank, at the expiration of six months after the signature of a defi nitive Treaty of Peace. With respect to the Bill pro posed by the Right Honourable Gentleman, he had read its provisions with extreme surprize, for he could not see a single ground which rendered such a Bill necessary. What were the points of expediency as applicable to it ? Was the price of bullion as high now as it had been ? Quite the reverse. It was well known that a large quantity of specie had found its way into this country. He, as a merchant, knew the fact; and'it had also happened to him individually, that a considerable quantity of foreign specie had been senfto him, which, from the depsectation of its value, he had sent back to his correspondents, as a less loss was sustained even by the expense of double freightage, than would have been incurredpby selling it here, — The Chancellor of the Exchequer had expressly said, that there was not the slightest connection between the continuance of the restrictions and his dealing with the Bank. He was glad to bear that statement, for if there had been any such connection, he should have no hesitation in saying, that it was one of the most usurious bargains which any Jew broke: ever made with any heedless, spendthrift minor. —(Hear, and a laugh.)—What possible argument then could be urged to prevent the resumption of cash pay rapists ? The consequences of the present Bill would be most grievous to the country. All that distress apd difficulty, that revulsion, he might almost say ' convulsion, which the country had undergone dur ing the last year, would be renewed whenever the Bank should be compelled, as a time must surely come when it would be compelled to resume its pay ntents in cash.—(Hear, Lear.) —The restrictions he ' considered as a great and powerful engine in the hands of Ministers, to alter.and modify the property of the country at their discretion; but such a power they ought rot to possess, and he wished to see the necromancer's wand broken and thrown into the Red Sea.—(Hear, /war.) The only way, in l;is opinion, of compelling the Bank to resume their payments, would be by making it their interest to do so. The Act was originally passed to rescue the Bank from the consequences of its own improvidence, and what had they done since ? The average annual issue of their notes, in the four years preceding the r avin g of that Act, was about £11,000,000. It was now about £27,00X.1,000, producing an annual profit ofgSoo,ooo. He thought it would be a wise course when the Bill went into the Committee, to propose the insertion of a clause for the Bank to pay £50,000 a year, or any given sum, to the public, until they did resume their cash payments; abd he trusted that some such amendment would be adopted. Mr. F. LEWIS said, he wished to add his protest against the dangerous system involved in the principle, of the Bill. He thought a strong and unanswerable case had been made out for inquiry. Lord CASTLEREAGH, concurring with the general wish of the House and country for a speedy return to payments in cash, had no intention at pre sent to travel over the ground which had already been gone over, but be could not help expressing his decided conviction that the measure of restricting was the best ever adopted in this canntry, and had been productive of•all those advantages which had elevated the British Empire to its present pinnacle of gran deur. He considered the dre.td which the lionuur able Member who had just sat down entertained of this measure being a precedent for Administration in all time coming, to be ill-founded. He wished the House to consider that the late war had been no Ordinary one, but had combined a variety of circum stances which rendered it unparalleled in our history, and he trusted it would be always unparalleled.— When Gentlemen talked of a pure standard of value being kept, he would put it to them, bow that purity could have been maintained in any way so well as the cne adopted by Parliament- The'standard of value must have been distorted by the precious metals being drawn out of the cowry, and it.couli only be pre served by setting a high value on these metals at home. When lit considered the various systems sug gested for preserving that purity, he felt none equal to the one adopted by Parliament, without which he believed no Bank could have remained. He deci dedly thought some measures were necessary to pre pare the Bank and the country for the issuing of pay ment in cash, and ehat it was better to'act on a per suasive than a compulsive system. The question was of infinite moment, and was worthy of serious consideration. If compulsion were used without due preparation, the Bank would obviously suffer a very great shock. They required an interval to prepare salutary measures, which he had no doubt the intel ligence of the Bank Directors would suggest, whereas, if compulsive measures were imposed on them, they would only be menaced, and public credit gered. The salutary effects of some - the silver currency had been seen ; and principles were applied to gold, he saw to believe the B.4nk would voluntarily c themselves.. He thought it impossible so respectable a body the motive of filli, pockets by thus paying in paper—(l/1 Ofittorition).—lf Gentlemen on the thought so, he begged to assure them He had this security, that when the gi became sufficiently favourable, should come So infatuated to their interests as to withhold s metallic circulation, individuals would have it in:he t power to carry gold to his Majesty's Mint, and t h ts to secure a metallic circulation. After some reman 4 on the necessity of the Restrictions, the 1761)1e observed, that by an intermediate principle of con, pulsion respecting minor notes some good mi g h t b e done. His object was, in what he proposed, t o !ru b e matters go on smoothly, 15 it was better to tell th e , Bank at once the precise period at which they l e t * called to issue cash, then doce.ve them by a false p e . rind, as much inconvenience had arisen to the prim banks through the country, fr.rn the ignorance the period when cgs): payments would be called fir. Sir J. NEWPORT observed, that the lleble in his usual style of eloquence, peculiar no doi:h t to himself, but at all times unintelligible to th e H cuw, had talked of a an intermediate principle ni coe ..;, sion."—(l-kar, hear, and a Laygli.)—His ne t u „ J er. standing the Noble Lord arose probably from the sublimity of style to which the Noble Lord unitennie aspired, but which was unfortunately inacceesihle any individual but the /C , :ble Lord himstlfs—(4 Laugh.) —He wished to know what these aces meant ? de ena t wat able re ady Lo eslrc Lord CASTLEREAGH said, that he meant, 4 any compulsion at all were to be used, it should oily be for small notes. Sir J. NEWPORT proceeded. Now he had th e pleasure for once to understand the Noble Lord; but would it not have been better for him at first to hare spoken in a manner fit to meet the comprehension of all, than to have clothed his meaning in language to tally devoid of common sense (Much Lary.), The Noble Lord thought the Bank Directors would I .not be so indifferent to the interests of the Public. or so -criminal, as to fill their pockets at the el. — pence of the public.—(Hear, hear, hear!)—But did be know that they were sworn to do all they pos. sibly could for the promotion of the interests of their constituents, and must either perjure themselve‘ or act criminally The Noble Lord had said the Bank Restrictions should be taken off as soon as the gold exchange caabled private individuals to compete with the Bank. This was a happy illustration of the prin. ciples on which the Noble Lord acted ; but he (Sir J. Newport) cerraialy thought such a period would be conremporano nrs with the termination of the Noble Lord's piditical existence. (Hear, hear).— " The intermediate principle of compulsion" (to use the Nobie Lord's exquisite phraseology), was neither more nor less than a beginning, on his part, to cite's. late cash payments. Why not tell the House so at once ? (bear.) Why exprov his sentiments in lan guage by any miin of common under. standing ? (Hear.) But the fact was, grant the Noble Lord the two . years he now sought, and there would cover be en end of ‘4 his intermediate principle of compulsion." (A laugh.) This transaction indi cated, in the strongt.st manlier, the too close comics. tion existing hetwren Or: Bank and the'Chaucellor cf the Exchequer for the time It was on this principle the Chancel:or of the Exchequer tor the day trii.d to get ever, by ceery means in his power, the awful aspect of public finance, and endeavoured to turn away the attention of the puNlic tram its alarming nature. He believed, on his conscience, that this would ruin finance, and he protested sc• lemnly against the idea of a measme being tstablis!A in time of peace, which had only been at first For. sr.l fra• six weeks in war, and continued item six v.-mks t^ six weeks. Mr. MANNING was of opinion that two years were necessary, and in fact it was the safest course Parliament could pursue.. It was much b7ttcr or adopt this, as it would prepare the country, d:aiacd as it was, for the reception of cash payments. Tut question was of some importance to the commercial interests of the country, independent 44 the Bank. — There WAS no such oath administered to the Directors as the Honourable Bit - inlet had said, for they WO4 merely called to exercise their best judgment in pr;)- ' rooting the interest tit their constituents, but were Ott sworn. The Honourable Member entered at some length into a variety of instances, to shew that the issuing of notes had not been so productive of mischief as some Members supposed. External causes had interfered in a very great degree to prevent the pos. stbility of their suddenly resuming cash payments. — There was not a Bank Director who did not wish to resume cash payment:—(dear, hrar) ; but at the saina time the Bank %vas thankful for the Bill in pro gress through the House, as it felt that those pay ments could not be-resumed for the period of teo yea,.—(llear,hear).—lf the return of cash payments was left to the.discretion of the Bank, such measures of precaution would be adopted as would insure its being as spc-ecly as circumstances would peftnit., Mr. PONSCNi3Y, in reply to the Honourable Gentleman . who said that his I - lowan:able Friend had misstated the oath of the Dirc,:ti.rs, co:000yd, that it no oath were takc n at all, yi.-t that the Directors were bound by hon:.ur and their duty to tit,. propiie tors to make the best profv.; they could. He had nu doubt that from the moment at which Parliame.it might declare their opinirli of the expediency of re turning to cash payments, the Bank Directors would take the necessary steps that would lead to that re turn ; but he hod also no doubt that until such a de chi ratitas should be made by Parliameat, thiugs ou go on in the way in which they now did. Ile chject tef his Honourable and Leartied Friend's motion was to lix some time at which tie House might declare itcopinion that it would be proper and safe fa the Bank to resume etch payments. If the House re fused to accede to the motion, he (Mr. Ponsonby) and every body else, must think that the measure of restriction was intended to be a measure of perpetuit y. Mr. BARING expressed his sense of the necessity of returning, as soon as it was practible to do so, to cash payments ; and exposed the absurdity of the statement made by the Chancellor of the Exchequer, that the circulation of the paper was safe latcause it was issued voluntarily—the•great Alan of the Bank credit ir cis theitilh N eve r y rea‘ - 601471 1 come (A T bees a' to attLibutt: 6121:e ling their ov i tltar, Ina Wor e opposice he did rot. :re'bredeg gold mb ar ,. the B an i peoe