Star. — London, England, 1811-05-08 00:00:00

.- . . . _ ... . , . ' • • . ~. , , .. . .. . , . . , . . , • ritioit the . ,s 6 4 . _,- a tm o f tome? di. „..e valsie wail Afttnatai the eitienet of . living in rrussta naUtrett *fry *Axil ott6ed the triniets tithe Itapott with itterntnenaing laay excess in the cuereney, When Gentlameo `'ll *r coin. A small devia- augmented AtiVlWAilltilitlg*tkottd.tharthe prin.', bold and reels experiments ' - end . Pith Wing the talitedegisor -of. SP' eaten- in -tale s ft was idle-and b the standartP.Glll,lo to the principle of his Hon. Friend eiples to which he had before referred, *ere so cir- House to die / brink of a pteeipiee. - . .1 _ !So one . futile. Until the Bank restrictions were imposed, Co r n WAS is fatal as a l arge O ne, . Foe his part, he never Worst knew cumscribed and modified by a variety of circum- opposed the motio n On the appointment' of this rrno man kuew„the emount f)f notes issued. It wo o , that No no tes had a standard value. They had a 1 stances, that their practical effect wei extrentely Committee, and those who were appointed had all:with the Directors of the Bank ; and he would.. cu ; va l ue ; a-, cab* liven them by the public ere- 1 doubtful and uncertain.—Before iteould be admitted ,no choice left but to do their, duty, and. make up be obliged to any, of these Geptienrin to inform hinii slit. Thi s , howeveois Honourable Friend denied- i ,that the state of exchange was the great criterion of 1 their opinions from the best view they ' could take of 1 what thesecret wasbylvlsich they could gaugethe public But he should like to know in how Man,' cases his k the increase of cu r re n cy, it .w a s nec es sa r y to inquire ; the evidence beforesthem. It did not, therefore, stern i wants as an, exciseman would .gauge a cask, and °lily . ff r nummt bl e a nd Learned Friend had himself found 1 into the nature and Present situation of exchange. }to hinato be fair to charge any errors la the Report in. issue precisely what was necessary ? fie now entered Bank notes not astailable to all the purposes to which I Exchange- was one of the' last improvements of re- this manner, upon those who had only acted conscien- into an explanation of the sigltifitation appropriated ' Min could, have been applied ? He was desirous al , o I fined commerce. It'depended very much on the east „tiously in the . discharge of their duty. And, indeed, to the word "excess" by the Committee, atileast e .br t ,, know, in which of two senses he was to understand correspondence and copmunication between the va- the expression of an opinion on this important subject himself in agreeing with their Report. lie triokAt, : the alledged depreciation of Bank notes ; whether as ! riots countries of Europe; and on the uniform and was'called for by the attention which it had excited for granted, as it neither h a d b een nor could be eon• cons id ere d comparatively with coin, or by the r - 1 uninterrupted cpur,'Se of trade. T he state of Conti;- out of doors by the public They could not do bet- troverted, that the coin of this or any qther country ora l e x c ess of te currens,yr tie had thought that ; nentil.kornmercit was directly the reverse of all this.; ter than their ancestors had done, who, on a similar had no value but with reference to the gold and silver the Bullion Co mittee would h a ve specified the It Was surrounded by all the impediments of a in. 'state of things;in 1796, had taken these steps s—The it or they contain. ,Ile also,essumed this other pro•. the kind of depreciation which, in their I lons despotism; by proscriptions; I- prohibitions, 'Treasury called on their Secretary,. Mr. Lowndes, r • that the paper cur- - had no valve b u t _ . gr" - T; •••'' 47- latter as le . o pinion, Bank Notes had experiehced. He had Imagined . they would have reported, that althouth Bank Notes were, let all domestic purposes equi valent to cash, • they shared in the reduction of the general Irate of the w hole currency. It was iitpossible to donht that for domestic purposes notes were equiVe4. to o.9in. Every day, every -ice, afronleskovidence of _this fact. - • by and by every 'other mode of - inrerrnptibn dannoy ance. The commerce of the Continent at the present moment, departing from the improvements of civilized life, assimilated to the practice of the barbarous ages. It. was carried on by a kind of barter resembling that by which the savages of Africa and America sapplieds their wants. Was it extraordinary, then, that when EurooP was in - such a situa.'on, the should v? or , 1 • than whom a more able and enlightened man noTrea , sury ever possessed, to enquire into the subject athe coinage and make a repent to them. And when this report was made, what did they do ?, They did not immediately act upon it, but caused it to be printed at the King's press and eircolated through the coon try, invitiug all men of talent and knowledge in such 'matters to ' ' and give their opinions thereon _ _ position, currency - with reference to the coin it represented. Themeces. , nary consequence of these two propositions was„: that the currency im.Coics and paper could not exceed what svouLl have been the circulation in coin alone,•and if it did exceed. that circulation, the excess`tnust lead to a proportionate depreciation. it was obvious that the ' value of the ,money of any country was-in the inverse a atio of its quantity. The value in cn v.. being .urrency, .inly the quinLity bf coin, it being measured by ti) standard, coulsi• net be.:depreciated But the pipes , superadded to this circulation was at once the proof 'and measure.of the depreciation.it occasioned, as paper had no value but , with refetienee to coin„and coin nta value bus with reference to the standard. Here the Hon. Gentleman.strengthened . the opinion he.main. , tained by 'the, Authority of Lord Liverpool ; the new doctrines which they ( the Bullion Committee) were Chargedwith broaching, were thus.: of the laws estih r-pa alm, of IpordLiverpool, and the doctrines of theAeose,, liesteetnethauthors on political etionomy. at followed from whathr had stated, that the paper r cturengype446. e tenting coin which.was not convertible into coldidalisni• such Tv:amity of gyld as that coin would proeuktkixte deoreciated.--4se of,the witnesses 11+.d statqd d.et4b twenty-shilling, cinte,did not represent that quantity of coin, but of ethet.coonodities ; and this .waa.orte. of the arguments tin which doe Gentlemen (appetite, laid great stress. • Brit after all it resolved itself otter the same:conclusion, for let theratake it so•-•-i.itelliSSest. commodities represented by this note had only isalue in reference to gold or silver, -and thus the mauls- ' were removed but one degree from the note. Much . , perplexity was introduced into this discu,sion, not to,. the Report of the Committee, but by the,coinnaants., on the subject of depreciation made by th , se who es. poused. the -other side. The opinion of the mittee turned on the fact of gold and silver being commodities. The depreciation they meant was,iia. to currency of the country, measured as it were 4r itself, and not by any general cause, such as the in crease of taxation, ascribed as a ground by Gentle- . men on the other side. When he was asked what was the present depreciation, he would say it was will& reference to the legal coin of the realm. If that de. itreciation proceeded from debasement of the coin, he would detect it by reference to the Miat ; and if from paper issues, he would detet it by reference to the- hour's experience, Those who asserted the contrary wervbentid to pro their assertion. It was" 011 known that a tender Or Bank notes Was not a legat t'ender, and that although it exempted from arrest the - person by whom the. tender was made, yet that he was compellable by law to pay in coin. I Had e single;•initante occtrrred in which such a tender had been refused, and Ilay Ment in coin been compelled He had never heard of one. If any had occurred, he should to know the circumstances attending it, because he was persuaded that . those Teircum'stances must be wholly uncortnected with a,d,onsidiration..of the, depreciation of Bank notes. If inch an event hatD recurred, it might have on in caprice or ma lice; but he repeated, that be Was 'yet to learn that any such had taken place; and to him it was fully evident that Bank notes maintained the same public estimation 46 coin. It was most important that the distinction between the two kin& of depre ciation should he carefully made t When; the or dinary paper currency sunk _below the coin it re. presented, then an effect was produced on fc4eign ex changes ; but the depreciation which arose, not from that circumstance,' but from an excess of currency in general, .did not affect the, foreign exchanges,lont byt its effect on the state of trade. The high prices which that excess caused, produced a diminution of exports, and an increase of imports. ' An ultiinate change in the foreign exchanges might thus be occa sioned ; but as long as the increased price of goods did not diminish the demand for them, that in creased price, so far from being injurious, would be advantageous to the exch?hge. In support of this opinion, he would refer to the evidence even before the Bullion Committee by Sir Francis Baring, an in iblviebost memory he entertained a respect, as sitteere:kg that exPresaed yester"rVy eveninic Rightllni.Triend Of his. To Sir Francis nartnae folk , luestion had been proposed i in the _ _ exchange . be unfavourable to this country ?. or would it be ex traordinary if there was no exchange at all ? Could it be necessary fot every man who contemplated the state of the-socrdy-to seek for other cause% to - ettable 'hitn to adbulft`for the Unfavourable state of ex change, sifila . hoWever was not so match against this country as ti ght naturally have been expected under all the circumstances of the case ? Upon the subject of exchange, however, he begged to submit to the Committee, that Gentlemen ought not to be surprised if large profits were made upon exchange which was obviously a secret of commercial speculation; When stigh large profits were made upon every thing else, ' it was natural that a larger profit should betcharged upon exchange, than upon any other artigle.of ,cota, snercial speculation; because it was onA rhicpeis„ perhaps more narrowly watched, and ; ;nore diately under the cohtronl of the . enetity 'than any ) other trtirtsrtion connected with commerce. Bef 'he entered.npon'a short view of the nature and obj 'of the propositions, which he hag circulated among.! the Members of t r llAjipuse„ there ,were torte or two points i.o which he begged leave very shortly to ad vert :—ln the discasion which hachaken place upon this subject, it hadileen urged that the profits of the Bank of late had been very great; and it had been in a manner insinuated, that the .issues of the ,Bank , had been increased in consequence, or rather that the, increased profits of the Bank was the result of the enlarged issue of their notes. He wished to refer them to the opinion delivered in 1797 by 2 member of that House ; that if any very considerable proportion of the Bank paper were to be drawn in, for instance five millions, it would be necesary to have, its plaC2 sup plied by some other substitute of paper. Npw he would ask, if any thing could be 'apprehended in the case of such a reduction without an equivalent, but a general bankruptcy—of bankruptcies there had been aimed: -ugh to make the heaFt ache.- ___:s , investigate. What was the consequence of this proceeding'? , All such principles . those advanced by thu Right Hon. Gentleman to4u lit had been cornpletelt overturned. He now.tanii .thitonsideration of those first Prin ciples to. which he'llad alluded. He held as the first of these, that, the only current legal coin of the realm tvas gold and silver_ of a certain fineness ; and, 2d, that. the quantity was ascertained, by weight, and that weight was the only standard: 'lt followed from' ti : .ese two princiPle3, that rite coin- of the realm. was dete riorated in as much in it 411.shortin - rhat standard weight, and was pgrfgct, a,s it•approximated towards it. As the spiNosan was. a wolfl often used in this . ', discussion, it might be welt'to define what it meant. The standard' meant no more than the quan'tit ' y' of gold and silver coined. At 'an early period in "bur history, the very names of coins denoted this,facr, as they did,also in the Roman and other ancient,States. Their names were the names of weights by which other commddities were purchased. As, for instance, the livie of ' France—the mark—the pound-the shilling—and;the penny t of pennyweight of this cOun , try ; and that the standard was the quantity was fur- ther shevrn by the Act of 17fienry lilt in 1266, which declared the. standard, of wig.at, whenever the loaf of. bread weighed 16 pounds, 16s. And when coins ceas ed'iri some menidre to . tretain. these appelLitions, it , appearld from :many ancient proclamations, that the coin was stiU,ordered to- be of full weight ; or that if' it fell short or thatohat an allowance should be made' for such deficiency in the tale. :Dm, without. going back to' remote periods, was not the Hon. Gentmansi aware When lie stated that thevalueof thu shilling was not ascertained by its weight, but tired under the prero-1 gative of the King ; that by an Act passed so late as! the 14111 of his present Majesty, intituled, g , An Act for weighing gold and silver coin, &cc." it was re iviteci that there should be weights A- guineas and shillings according to the established standard of his ... . _ mittee :•••4 japposing the excess of tht ctrenlition of pap6e toliein a degree such as to increase the price of coMmodlties, wotild that increase of price pro duce any effect upori the foreign exchange, until it arrived to the degree so as to check the exportation of merchandize ?" Sir F. Baring replied :—" An ex cess of paper circulation will, no doubt, affect and raise 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 ne- ' 'escarp consequence of high prices is a rechiction oii 'the demand, it must operate decisively on .the foreign exchanges, unless they are supported,or the fall coun teracteA by an export of bullion, But untiPthe• de mand or exportation is checkel„.4n inelcsa! of . pricil will picoduce a bene4ialeA4,oqtoxeraiiichaiiies." , The Committee h ' taken no pains to enquire , into the capsea of the . ratidurinithapien lafiatt •arti -44. Cies of trade"" *IMP. l'itOtittiliA fiails'een many . and'aiiiiitte'retfirdsimoll4Alijett ; and the effect ~on - -1 r" h; • • -N.materially _ ,h .ay viou g ._ ..., .._ The /tight Honourable Gentleman then. proceeded to illustrate his own proPo4itions. With regard to the first, whatever might he the prerogative, he thought that without a breach cif public faith, no change could be mide in the currency. -In.lxis second lie proposed to the House that the,.eng4crents of the Bank of England to the public, were to pay their value in the legal coin, and nothing but the lekal coin ; and that the. Bank had always, wide:nit the intervention of the Sovereign authority, been willing to pay their value in the legal coin. An the case of the Bank. restriction in 1797, it was the priuciples of foreign policy alone by 1 which it was clictatO. ; From _ our foreign wars, and 1 the prospect of'invaion, It became exceedingly ,im portant to guardatgainst the danger of alarm. When ever,,uport. Or cessation of hOstiiities, Circumstances shoulil aclfrip of calling upon the Dank, it would then be alloWed. 7 :44 far from any thing in this Resolution I g:oing again#4is principle, it admitted that wherever I , the relations Onhis country niinlerender it expedient, The third Majesty's Mint. -- Could they then be told that the r base coin.now in circulation, called a shilling, but which he called a counter, was the legal coin of the! realm ? He asserted that it was but by its possessing ! t full weight that it could be so considered ; and in confirmation of his statement, read the Act`by which silver is declared not to be a legal tender for any pay. ment above £25. And now wheil the shillings were as base and deteriorated as they wire in King Wil liam's time, to argue that they were good and legal I coin, was most strange and absurd. But to estaLtish his position still more strongly, he begged leave to recap the attention of the Committee to the fact of the gold coin in 1771, which was declared by statute to be no longer a legal tender of payment, if the guinea fell under the weight of five penny-weights, and,eight grains; and at that period it was still fur ther in contemplation to make it legal tender, when it was reduced under that weight, by a scale of dimi nished values, in proportion to the diminution of weight. he alarmed that now. nt to the sondard which measured all other commodities..; Were the coin deteriorated '25 per cent. then the coitV . rsiould be to the standard what the paper was to the coin. In 1636 the silver coin was much deteriorated * , and what was the consequence ? Parliament , (Government proceeded to reform that debasement,: , . =Could any one say but that both the silver cola / I and the paper were now deteriorated. thirty pa:, cent ? The depreciation in the notes arising natut• rally from the depreciation of the currency ? No, • creditor of the Bank of England could obtain in pay. ment any thing but Bank-of-England notes. For this there was no remedy. But by law they were net; strictly a legal tender, though they amounted to it in effect from various causes, and from being taken at par in the receipt of the revemtes. The Honour, able Gentleman then referred to the able report made. in 1717, which clearly stated the cause of the great exportation which then took place in silver to have arisen from the Mint price of that metal nct being in to the Mint price of -11 The Mint price hit mtiitla was, that those prices had. hem. raised by thesicarithy - df sad 1101.4 SiUce that 'period the priceihad certainly trinttnued tn,rise, bur .11 °C" and they had by 1..0 means risen more within the lastiwo years,, ;halt within tits two years immediately preceding. Would any body say,-that, in correspondence with ;he yise ofsbullion, general ar • tides of trade were '2.s:per tent. deater,than'ihei,were two years ago? There were zany Which were 20 per cent. cheaper than they were tweryeirs ago. By, assuming that a genetal depreciation orthe:tuttencY Votdd:immediately affect the exchanges (contrary to the opinion of Sir Francii - Baring audio the fact) the that the resumption should take place. Resolution was proposed to Parliament, to declare .that the Bank of England notes had always been "hitherto accepted and held as coin. It appeared to him consonant to the wisdom of Parliament to declare thCir opinion nn this subject. The following prlposi tion states, that exchanges were in many former in .stances unfavouralile, while there was no excess of pa per currency, and while there was no depreciation, becausethe paper currency' could be cOnvertible into specie. This appeared from the documents on the table. He then went on to di;clare, that rbere were circumstances now. affecting our commercial relations _ . _ , In like manner he a._ ~ except amount of .C.? 5, when it was received as a token, not as coin, silver was not a legal tender, though taken in tala as with reference to its weight. The price of ,Apy commodity could only be ascertained by some re ference'tb another commodity or substance generally ...... . in acquiei&d by mankind ; and whatever commo dity it wag to which this reference was made, that I consequently became money. By this reference any commodity might. beeping ,money and sold, and from their intrinsic qualities, bad become the general stan dard by such reference thrOtighouCthe civilized world. But in this point he could not altogether agree with ~.. -niFinan (Mr. H, r) that -gold and -mom -- ' of proportion - _ g 01,.. _ Arr.. of silver was only at tlie rate of 1 ounce of gold for 15 I.sth ounces of silver, while on the Continent 1 ounce of gold could be obtained for 141. ounces of silver. This shewed that there could not exist in any country two currencies of different values, as that at the highest value only would remain, and that at dui lowest value immediately disappear. But the Report went still ...tither, and evinced, that even if there was but one kind of coin in a country, if any part o} it was debased, the pure part could not remain in the coun try. This was clear by what happened in King time, and the recoinage of silver at that period. The Mint kept coininf and as fast as they issued Comna,t - 'nee hid been led to inter the converse, and to with the Continent, which rendered our sill ton sc dif• the Hon. Geni iorner the their crol _ - were, melted down assert that the .bnfavounsble sate of the exchanges was the resuk of such a F,preciation.' He had been a Member of the Committ in tsos, on the state of Irish.cprrency. When beloved hst a ;flea was ferent from what it WAS op former occasions, that the same effects could not follow. While the Continent was open, he'admitted that there was a continual ten dency in things to correct themselves; that the exports silver were made money by . common consent mankind ; on the contrary, as he had said before, b was from their intrinsic qualities, and they were mo• ney whether coined or uncoined. From. these pre• guiL universally current in that country for more than the paper which professed, td represent it, he then' cer tainly thought thrit the piper was depreciated. But this was not attributable to the excess of the Bask paper. .It was owing to the want of confidence oc casioned, by the remains of former turbulence, and to the qUantity of piper circulating of different kinds: A great increase of currency would not produce an immediate rise of prices. The increase would be nei ther very sudden, very uniform, nor very generA.l. Oi late years, great experiments and wonderful Chan. ges had been made in the cuirency of the continental powers. At one period, 'France was overloaded with a paper currency ; a currency of gold had since been restored to her. Now, according to the ptincipks maintained in the Bullion Report, the prices of all ar ticles in France ought to have been augmented during the-superabundance of paper cutrency, and to have been diminished on the return of metallic currency : but this was by no means the fact. The prices of Most articles continued as high after the return of the metallic •currency as before some articles, un mesti— became chez; - but they were articles and importsiituld bring things ;bout to their regular I ' channel • and that the e4hange could not fall below a cectaindegree,because the profit on importing would gradually tend tosraise it. But these circumstances were now altered. And here it might be observed, that nothing formerly was like the present importa tion of coin. He had finally proposed, that the situ ation of the country was sufficient, without any alto. ration in . our currency, to affect the rate of exchange. Under the present circumstances, could we foresee what events mt!it !lappet' ilutior„ the three years to come ? (Hear, from Ministerial Pet/bikes., Would our military operations be finally triumphant ? , Would dpr trade Sourish ? WOuld our internal state be.cloe dime 1 Would we be in a state of greater prosperity than that in which we were at present ? Those Resolutions We . have already given in a former Paper, to which we refer.] Mr. HUSKISSON said, that nom ithstanding the speech 'o' the Hon. Gentleman who opened this debate (Mr. Hamer), he_could not bring himself to give a silent vote on the-occasion, and the more so Ifrom the manner in which he had ' upon miscs it was deduceable, that as measured, by other articles, their scarcity or abundance must increase or decrease their quality. The « price," a wosti they must often use, the pike of any articie . was nothing mere than the value of every other commodity measured with a reference to gild—as a commo. dity. As for geld, its value could be measured by no other commodity but by the other precious metal --silver. When scarce, these metals were styled dear ;—and when plentiful—cheap ; because other commodities were with reference to them higher or lower, but with regard to one another they ever maintained the same proportion and value. It fol• lowed obviously from this, that nothing could be more absurd than to ascertain the standard by the numerical quantity in circulation. If gold was scarce, a lesser quantity would suffice for the same purposes, and without inconvenience or differeliceto the public. For instance, suppose ten millions of coin, and that one day called for the circulation of one million of it —if that ten millions were reduced by scarcity to five millions, the circulation required fur one day would still bcone-tenth, or only half a million, as the price of with q :ionably, _per, - uf luzury, for which the demand was diminished'by the destruction of the Nubility and higher orders. There was another instance to the same effect in the, kingdom of Prussia, which, previous to its latemis fortunes, was full of metallic currency. He believed that at the period to which he alluded, there was not any paper, or if any, but little in that country. Since the conquest of Prussia, ho*ever, she had been drain edof coin, and a paper currency had of necessity been substittite& Had the prices of the necessaries if life fallen in consequence No ;on the contrary, • , . . - • iwns, they —c, ......._ _ exported, because silver was more valuable on the Continent than it was fixed at in this country with reference to sold. At this moment they had the silver oI and depre ciated2s per cent. and the gold at its full standard, and was it possible but that the latter would be with. drawnfrom the country. Yet Gentlemen talk e d • of the Bullion Committee ring to repeal the laws, or instigate by a ne,v coinage to fraud 1,14 perjury. Why did they not know that the laws were of no• avail to prevent the exportation of coin, and that their very existence was the source of that fraud and t•er. jury ?—When the paper, or either of the metals in coin were deteriorated, it was evident that whatever was pure and standard must disappear. I; was im: possible to prever,t the exportation of guineas, on which there was a profit of 25 per cent. when it could not be prevented when the profit was only I v! per cent. The only remedy was to restore the cßip to the full and standard value. The Honourable Gen tleman then went into an examination of she conduct of the Bank, in raising the price of dollars froni4s. 6d. to ss. 6d. and combated the arguments adduCed of their not being the coin of the realm. If a foreigner Eaid Mr. H.)' were td ask the nature of the coin of ngland, its value and denominations, he would be told that each shilling consisted of the sixty-second .. _ ..ier in win,— __ _ , been called just ..one-tenth, s. , ... tne tari.... by the Right Honourable Qentleman who had i every commodity - reference to gold would 'be i part of a pound troy - Of silver, and that ea c h p oun d sat down. He confessed to the House that he felt decreased one half. It was , therefore , idle to talk of 1 tro y of gold waS`to be divided into multiples, bearing a himself labouring under a great difficulty in having absolute deficiency or excess of currency . There could ! proportion of 44.,guineas and a half to each denomi to recur to principles already so fully andtuminously b e no well thing ; there could be no excess in money. ; nation.: and that to guard against the possibility of stated, and to details on which these p r i nc ipl es were But the same arguments would not apply to the issues ; taking .this coin at a lower rate than was fixed by the sole foundation of the money system, not only in of the Batik. 'lf by an Act of Parliament the half.; law, it was governed by weight, and that only.— this, but in all other countries, he trusted they would guinea should be ordered to pass current for a guinea, 1 Being told this, he mightnext be informed, that extend their indulgence to him while he endeavoured and the paper should become still more deteriorated I foreign currency of 41.6 d: passed for .ss. 6d. a nd if to refute the Right. Honourable Gentleman (Mr. the consequence would be, that the prices of all ar- ihe asked how this was possibltf t after the definition 1 Vansittart), 'Nilo had advanced op4ons which shook tic would be doubled, and all contracts would be Ihe received, he could get no other answer than th a t that system to its vcry.basis. Those . Gentlemen ac- I vititited ;— yet it could not be said that there was 1 our silver currency isos so debaseiliAlS4 tli•propor. t . . • I