Star. — London, England, 1818-05-02 00:00:00

portion likely to be remitted in -the t a lent a t i o n of the reach contribution, he could may speak from ru mour: he knew nothing on that' subject which could justify him in making it the ground of calculation— ...a/tear, hear, from Mr. Tierney.}—When the House s a w such a state of things, and recollected that at a lomwr period the Directors of the Bank said that a s econd Austrian loan of three or 4,000,0001 would le fatal to the Bank, and induced Mr, Pitt to admit the propriety of their remonstrance, ana nrcommend an attempt to neg•ociate the loan in Bpain--es Mr. TIERNEY—" What else did he say ? and was not the course pursued at the time dictated on the spur of the occasion, and under the pressure of the hasty alarm which prevailed, and without any proper consideration of the financial state of the Country ?"--(Hear, hear.) The CHANCELLOR of the EXCHEQUER re vered, and said, that if a loan not exceeding three br 4,000,0001. caused such serious apprehensions at that period, how great ought to be the caution ob served oa an occasion of this kind, when the loan to be negotiated amounted to 30,000,0001. sterling ? When the authority of Mr. Pitt was quoted, the House would do well to recollect, whether they would adhere to the course laid down by the uni form suppo rt ers of that Statesman 's principles, or at once adopt the maxims of those who uniformly vili fied his whole course of proceedings—(hear, hear, teen the Oppoaiox Brudies.) The Right Honour able Gentleman had certainly been successful in point ireo out rho errors in the preamble of the Bill ; there was certainly a mistake in it—but it was his intem tion to rectify• it in the Committee, as it conveyed an unfounded reflection on the Bank ; for this spe cies of negligence he admitted he was culpable in allowing the preamble of the former Act to be ver bally copied for the new Bill. It was true that Mr. Fitt had referred the affairs of the Bank to a Corn /niece, but he had done so under alarming and un foreseen circumstances, and not in such a case as the present. The proposed question was, to consider what inconvenience weuld be sustained by a resump tion of cash payments? to this he would reply by patUig another question, what inconvenience would arise from prolonging for another year this resump tion?—(A laugh.)—The Committee, if appointed, could take no prospective course; for how could they foresee the events of the ensuing year ? As to the foreign loans, these could only be said to have imme diate operation—their influence was any thing but permanent; they must be closed in less than twelve months, and from the nature of the circumstances to which they applied they were not likely to recur. On the subject of Country Banks, the Right Honour able Gentleman had laid it down as illegal and un constitutional, to question the right of individuals to issue a paper circulation on their own security.— (Mr. Tierney, " I merely questioned the policy.")-- Now he would, on the contrary, contend, that there existed the strongest reason for in9niring into this species of issue, unless it were maintained that a coinage of such a description could be allowed to piss without controul. The Right Hon. Gentleman ha I said, that the effect of the country bank mea sure would be to throw the circulation into the hands et Government. This he would distinctly deny, for it, on the contrary, gave a valid security to the country bank paper, which, for the purposes of immediate cir culation, gave it a preference to the Governmeot pa per, from its being free from the comparatively disad vantageous forms which were necessary in procuring cash for the latter. He would here beg to disclaim that e hich had been so often alluded to, of his having ever entertained any idea of an issue of stock deben tures. He had no such intention, as he thought the public securities were already issued to as great an extent as was either necessary or desirable. He would also deny that the benefit of the rise of price in the feeds had fallen merely into the hands of the large capitalist; how many small stock-holders were there who had equally participated in this benefit?—(hear.) The rise in the price had also diffused a considerable capital throughout the country, and influenced its general trade. As to the general character of the country being at stake, all he would say was this, that while 16,000,0001 of the Unfunded Debt had within a short period been reduced, and the credit of Lngland been for years unimpaired, and her re sources triumphing with this, as it was called, paper issue, there could be little apprehension of her cha racten suffering from her system. She had taken a memorable and active part in the liberation of the Continent—she had subsidized all Europe with this paper treasury, which the Right Hon. Gentleman had se often declared Valueless, and redeemed within the last three years 50,000,000/. of debt—while on the opposite side, she had certainly created another debt, bat which in comparison with her state at the Peace of Amiens, left her with 15,000,0001. less of unfunded debt. This vras a more favourable financial state than could be sliewn by any other country in Europe. America had been loudly talked of, and he would only say that he respected his Transatlantic Brethren, and hoped that the sin cerest and most cordial intercourse would continue to subsist among them and the European States— Rut the sort of relief the people of America got was a reduction of internal taxation, the support of the entry being provided for by their commercial duties, which shelved at once that America had thrown herself entirely on a peace establishment, and relinquished any idea of holding to the Powers of Europe a hostile front. In England 17 millions of ..es were relinquished since tke peace, besides the ..doption of other advantages. It was in vain for the Right Hum Gentleman tos enforce the necessity of payments in this manner. In the partial ar .gements of last year for a cash circulation two rlllions and a half' of the sum coined had almost itn t'i:diately disappeared. It was true that the course of elchanges might be turned by cash payments, but to the extent of the operation of the 30 mil lions loin. In acceding to the p roposition Right Hon. e Gentleman . he saw at one side no of thi t 4 Z t or darj rs, while on the other he saw no possible I ( armee from the prolongation of the Restric t! )11 Act for one year imager —(A lasigh.)—He felt it, C e , • dere. necessary to oppose the motion—(hear.) Lord ALTHORP observed, that the principal ar ;:dale,atwhe.reby the Right Honourable Gendemaa ea o ureu to persuade the House to agree to the a?:.her suspension of cash payments by t h e B an k, ass. the danger of tlea large exportation of gold by' fy • • of the French loans; whereas, it was, ..ccg.vensent to make remittances by any other commodities than gold ; andsthat this was the case in the Austrian loan, had been proved in evidence beford the House. The prinoiple of foreign loans exercising such an influence on our internal concerns was perfectly new; it was throwing the state of the currency of the country altogether on the mercy of foreigners--a principle to be acted on at all times, whatever our own internal condition, whether adverse or prosperous. He thought a Committee was neces sary, to examine if there existed a necessity for a con tinuation of the restriction, and if so, to guard against its recurrence. The measure still contem plated by the Right Honourable Gentleman for the regulation of private banks, paid a regard to capital only, whereas the credit of such concerns was far from depending altogether on their capital. The pru. dence integrity, attention to business of the mana gers, no less deserved to be taken into the account. Gold and silver formed the natural standard to regu late eae value of other commodities, as being least liable to vary in their value ; but the Right Hon. Gentleman had taken the price of Stocks as his stan dard. The Right Hon. Gentleman intended to make it imperative on private Bankers to make a deposit of stock or other securities, while the first principle governing such concerns should be, that their whole capital should be at their own disposal. The Right Hon. Gentleman proposed to take half their capital, and put it into his own coffers. Whether the state of the country required such a violent interference with private affairs, would form a proper subject of inquiry for a Committee. The only objection made by the Right Hon. Gentleman to the Committee was, that he had been unable to come to any clear con clusion himself on such a complicated matter ; but that would have been an argument against the con sideration of any great measure. On a question where such novel principles of commerce had been advanced by the Right Hon. Gentleman, he thought it impossible the House should not agree to the ap pointment of a Committee. Sir H. PARNELL said, it had been already re marked by the. Noble Lord (Althorp) that a great part of the Austrian loan had been remitted in come modities. To confirm this, he would observe, that for two or three years immediately preceding the time when that loan had been contracted for the ex ports amounted to but two or three millions, whereas during the operation of the loan, they rose to ten, a fact stewing that when a country was obliged to make great remittances, exportation would naturally follow. Ireland found it possible to retoit two or three millions annually to her absentees, without either specie or coin. What then could it be in—but exportations of goods, which overthrew the Right Hon. Gentleman s opinion, that remittances from a country were necessarily attended with a disappear= ance of the currency ? The Right Hon. Gentleman had referred to the opinion of the Bank ; but in his apprehension it shewed no arguing on principles, and nothing but an attention to their own interests. The first and principal objection to the plan of the Right Honourable Gentleman was, that by adapting it, we lost the opportunity of commencing a gradual return to cash payments. Another great inconve nience resulting from it would be, that it would cause a great additional issue of paper by the Bank of Eng ' land, and by Country Banks. If this went on, the same thing would happen as had happened already. Gold would rise, the exchange would fall, and the Chancellor of the Exchequer would again come down to the House, and say it was impossible to return to cash payments. It appeared to him that the plan would go on from year to year, and was little likely soon to terminate. It appeared to him, that so long as a loan was necessary to the Chancellor of the Ex chequer, so long there would be no sincere desire on the part of the Government that we should have a resumption of cash payments—(Hear, hear!) He accordingly came to this conclusion—that as loans were rendered necessary by the excess of our expen diture over our income, it was our grand object to bring down the former to the latter. He trusted a more rigid inquiry on that subject would be institu ted than had yet taken place. Till that was done, we should never be able to get out of the difficulties lthat surrounded us, both with regard to , our currency, and of various other descriptions. Mr. C. GRANT said, that there was one great practical question before the House to be decided on its own grounds—namely, whether this was a proper season to resume cash payments? The Right Ho nourable Gentleman had introduced other and im arntant or.es, but whether his views of them had correct or not, it was better to discuss them se parately. The Right Honourable Gentleman had gone so far at to say, that to continue the restriction would be breaking faith with the country—a viola tion of the pledge publicly given: But how could that be said ?—how far had a pledge been given? Could it be for a moment supposed that the Legisla ture had bound itself to resume cash payments at a specific time without any reference to circumstances?l It had undoubtedly so far pledged itself, that it was sincerely desirous to resume cash payments the mo-, ment it could safely be done, but no further. Two things might prevent a resumption of cash payments —an inability on the part of the Bank, or, supposing that not to exist, something in the situation of affairs to render it inconvenient and impolitic. To remove the former, Government have done every thing they could, and the Bank were quite ready to pay their notes in specie, whenever the Legislature might deem it pru dent to allow them—but the situation of the country was such, that it was not in the power of Government to recommend, or the Legislature to permit that, while ' the general aspect of things remained as at present.— It was not at all necessary to prove that our present situation was precisely parallel to that of 1797. The question now came on its own merits. To return to a metallic currency now, might most strongly rivet in the minds of the ptople that prejudice which had been long growing up in them. The sudden distress which might possibly flow from it, might more deeply impress on them the belief that they could altoge ther dispense with such a currency. The measure would at any' time be attended with a considerable pressure. How unwise then to choose that time, when the circumstances were most unfavourable, the difficultiek most formidable? The contraction of the paper issue would be attended moreover with the difficulties of the great operations on the Continent. On the occasion of the Austrian loan of only four millions, in the year 1796, Mr. Boyd said it was im possible to be effected without a great fall in the ex change. The question altogether was one least fit for a Committee. -All they could give would be opinions and conjectures onfUct, equally well known to the House as to them, and on which it could just as easily' come to any certain conclusion. He said this from the various contending considerations that must be brought into the cal- , lation—the state of immerce in foreign cm- - e exchanges—and convulsions the consequences of the political . all through the Continent—(hear, hear.) He contended that prices had influenced the currency, and not that the currency had had an influence on prices.— Of the Bullion Committee he must always speak with the greatest respect; but he could not shut his eyes to what had since been forced on him by facts— that they had not attributed sufficient efficacy to the effects of the - great agitations of Europe. If, then, such men as the Members of that Committee had fallen into error, could more be expected from ano ther, however constituted. They indeed had carried their inquiries to a certain stage, but there they stop ped. They brought the readers of their Report to the verge of an intmane barathrunt ; they had, in fact, attempted to define what was in its nature indefina ble; the distinct effects of various, multiform causes operating on a system, at a time when all the esta blishments of the world were in agitation. One cir cumstance (he believed not generally taken into ac count) might materially contribute to raise the price of gold, namely, that Europe was undergoing the same operation now, as England had undergone at the commencement f the last century, that gold was becoming the standard of value in place of silver. Goinginto the Committee, probably without any practical' results, would produce a great agitation in the country, not to be counterbalanced by any slight benefit it might eventually give rise to. Mr. J. P. GRANT said, that the grounds proposed by the Right Hon. Gentleman (the Chancellor of the Exchequer) for continuing the Restriction on Cash Payments, were of two descriptions : some so clear to himself, that he did not think it worth his while to explain them to the House—and others which he professed he was unable to explain to himself. He by no means assented to the position, that, because the case was complicated and difficult, it was there fore unfit for the consideration of a Committee ; on the contrary, its complexity and difficulty was the very reason why it should be referred to one—(hear, hear). He now understood that the operations of other countries were to be converted into a general principle, applicable to the state of our own currency, as regularly exercising a material influence over it. Before the House sanctioned the establishment of such a principle, on the words of the Chancellor of the Exchequer, it were well to have the matter fairly and fully examined, and sifted to the bottom by a Committee. He did not think that the real ground of his measure was that assigned by the Right lion. Gentleman—he thought the foreign loans had nothing to do with the matter. The Right Hon. Gentleman had stated that there was a mistake in the preamble of his Bill, and that it was to be altered. He supposed then, that words to the following effect were meant to be introduced Whereas, the French Govern ment is about to contract a loan, or loans, in which British Merchants will probably take a part—and whereas, it is an established principle that such ope rations materially influence the price of specie," &c. If the Right Honourable Gentleman would thus cor rect his mistake, and he supposed he would, he was entirely mistaken; and if he could shew that the Right Honourable Gentleman was. mistaken, he would have shewed a ground for the appointment of a Committee. He would admit, that the Bank was now unable to resume its payments, 'but this was another reason to accede to the Committee. Not one of the alleged reasons for the continuation of the re striction, whether the foreign operations, or the state of our coin, or any other, but was a fit subject of consideration for it. Gentlemen wished to have it thought that the Austrian loan was the cause of the suspension of cash payments in the year 1797. But on this he would observe—lit, That that loan had nothing whatever to do with the price of . bullion ; 2d, That the late Mr. Pitt had said, the Bank were wrong in their opinion ; 3d, That the Prussian loan in 1795, produced no such effect as they apprehen ded. The evidence given by Mr. Boyd, the agent for managing and remitting the Austrian loan, proved that the whole of the money remitted passed through his hands—that a very great proportion of it consisted of bills of exchange and toreign bullion—that the cash remittances were principallyl,o43,ooo Spanish dollars, and 150,000 French louis-d'ors, of which the greatest part was purchased at the Bank of England.— That of the loan in 1796, the principal was also re mitted in bills of exchange. and none in coin or bul lion: • The House would find, on referring to his evi dence, that during the greater part of the time while these operations were going on, no man could have remitted gold to lfamburgh without loss—that gold could have been imported with profit. Yet we were told that foreign loans caused the suspension of cash payments, lest all our specie should be drained away to the Continent. The lion. Member quoted. Mr. Locke, to sheer that gold and silver should• be consi dered in reference to the causes of their rise or depres sion in value, like any other commodities ;—that a scarcity would produce an increase in price, and a glut a fall. The fact was, that the restriction had not arisen from any foreign transactions, but the advances to the Government. The correspondence between the Bank and the Government, at the time they were getting into difficulties, was full of applications, en treaties, and remonstrances on the part of the Bank for the repayment of their advances—(hear, hear.) — The result of this correspondence was, that the dan ger, such as it was, arose altogether from an excess of issues on the part of the Bank, in their desire to accommodate the Government ; and that the remedy, according to the evidence of Mr. Giles before the Lords Committees, was to be found in the repayment to the Bank of these advances. What then, he asked, was the difference between the state of affairs in 1797, and the present moment, that could induce the House to refuse a Committee of Inquiry now, when it was considered so essentially necessary at the for mer period? An Hon. Gentleman (Mr. C. Grant) had stated one reason for the increased price of gold, nirnely, that it had become the standard of value all over the Continent. The force of this argument he could not pretend to understand, but he could easily conceivehow the price of gold might be af fected in this country, by the circumstance of there being in circulation at the same moment a gold coinage at its full value, and, a silver coinage much below its actual riitse, the result of which was dis cernible in the disproporgbn between the prices of gold and silver-in the market. Gold had now risen to 41. 2s. while silver had risen to ss. .sd. But wi.de gold was estimated at the Mint at Si. I7s. tO6 he could see no reason why persons would pay in•gold, when they might make several payments in giver at a cheaper rate. While these circumstances operated, he could entertain no hopes of hating the Bank re sume its cash payments, it being. in fact, as impos sible for the Bank to maintain the gold circulatiod of the country, as to build a reservoir with a hole in it. Every sovereign coined would vanish as speedily as did the sum of 2,500,0001. lately issued to the coun try. This, however, was no reason for continuing the restriction on cash payments without a previous inquiry; and, indeed, from the specimens of financial perspicuity and decision lately evinced by the Chan cellor of the Exchequer, he did not feel himself very ready to pin his faith upon the -Right Honourable Gentleman's asserions. Mr. HUSKISSON rose amidst cries of "Question r which rendered the commencing words of the Right Hon. Gentleman. somewhat inaudible. Proceeding, he referred to the Report of the Bullion Committee. which, whatever reproach and ridicule might attach to the assertion, he conld not avoid considering as an able, luminous, and satisfactory exposition of the interesting subject of which it treated. It bad been" prepared by a Gentleman (Mr. Horner) whose en larged mind was well calculated to investigate any subject with precision, but which had been applied to this question with peculiar success. He could not 'conclude this brief observation of that distinguished individual, witltotit expressing his regret that he were not then present to assist their deliberations with the force of his reasoning, and the accuracy of his judg ment—( Loud cheering). The Right Ilon. Gentleman then adverted to the state of the question immediately before them, and observed, that he had that night went down to the House, in the full conviction that no dissent could have been expressed to the princi ple that an increase of a paper currency must have the effect of increasing the prices of all commodi ties, including, of course, gold and silver, and bills of exchange ; for the real definition of a bill of ex change was " an assi "nment b to one country, of so much of the bullion of another, as was represented by that bill:* The reverse had, however, been asserted.-- He here read some extracts from a book lately pub lished, which, to his mind, was written on extremely erroneous principles. The principal argument ad vanced in support of the Bank Restriction was, that, if the Bank were compelled to,resume cash payments, the issues must be so very much contracted as to be attended with consequences -very injurious to the country, and that the same confusion must be ex pected from it as had been witnessed in 1815 and 1816. 'This, indeed, was the only argument that could be urged in favonr of the measure-z--(heer.)-- The issues of the Bank had, however, in his mind, a very considerable-influence upon the rate of foreign exchanges. These must become unfavourable to a country possessing only a paper currency, not trans ferable at will into cash, should it increase beyond a fair proportion, with the currencies of other countries. In 1816, when the currency of the country was con siderably diminished, the foreign exchanges were forced to an unnatural state in favour of Great Bri taint and in his mind that was a-favourable time at which the Bank of England might have resumed cash payments—(Hecir, hear, hear, front the Opposition.) if prepared in other respects. He was also of opi nion, that had the Bank then resumed cash payments, the amount of gold already issued, and which.has so suddenly disappeared, would have been sufficient to have enabled the Bank to maintain the.eash circula tion of the country—(hear, Near, froth the Opposition.) The state of affairs was, however, widely different at the present period ; and he would ask the House if they were prepared tocompel the tosumption of cash payments at the moment when the Gevernment of 1 France were about to negocinte a loan Of 30 millions sterling, and when the Goiferoment of Prussia had 'just concluded one in this .evirntry,- of which.* very large proportion had been transmitted in specie? It had been asked, what difference existed between a loan to a foreign Government, and the effects of the usual desire displayed by many persons of seeking a larger interest for their money in foreign countries ? 'To his mind there was a great difference, becaust it appeared from experience, and from the very necessity of contracting the loans in this country, that the fo- reign Governments had not succeeded in induting persons, in this country tb transfer their capital into the foreign funds, and that without this supply of British capital, those Governments were wholly inca pable of performing any great financial operation.— It had been stated that Mr. Boyd had given in evi dence befora,the Committee, that he had transmitted bat a very inconsiderable part of the Austrian loan in specie ; and it was thence argued that a foreign loan was not calculated to produce any great effect upon the price of bullion. But of the actual amount transmitted in money in any one loan it would be difficult to speak with accuracy. It was not correct that loans were generally transmitted in merchandise. The fact seas, they were more usually transmitted in bills of exchange—(/icar, hear, from the Opposition) which lie was ready to admit might have been pur chased by merchandize—(Hear, hear)—but should the result of this commercial operation leave against the country a balance, it must be eventually paid in eold and silver. He hen adverted to the unfavour able effect produced on the foreign exchanges, even by the Austrian loan in 1797, when the issues of the Bank of England had been very much contracted: The distress which occurred at that period had been attributed by Mr. Henr7 Thornton, in his evidence before the Lords Committees, to the great diminu tifm of the paper issues. of the Bank ; and even Mr. Giles, whose. authority had been so triumphantly stated on the oppcsite side, had given his opinion, that were it not for the restriction the Bank would stilffurther contract the circulation. With respect to the immediate resumption of cash payments, the measure seemed to him incompatible with the exist ing state of affairs, nor did he think that the House could in any degree interfere with the internal regu lations of the Bank fur attaining that object.-- He feared that in any attempt they could make, they were placed very much in the hands of the Bank of England_( Loud cries of Hear, hear.) He meant that the House could du nothing more than declare the time for resuming cash payments, but must leave the means with the Bank itself. He thought that all I.itr. a ierney, - 1 Now he would, or existed the stronJ species of issue, coinage of such ; pass without conti ha I said, that the sure would be to ot Government. it, on the contrary, bank paper, whir culation, gave it per, from its bein rantageous form cash for the lute that nhich had b ever entertained tures. He had r public securities extent as was eitl also deny that th leads had faller capitalist; how who had equally The rise in the p capital through( general trade. J country being al that while 16,00 within a short pe ot England been sources triumphi issue, there coule niter. suffering I memorable and • Continent—she • paper treasury, ▪ had so often dec • the last three ye the opposite sidt debt, bat whicl the Peace of Ai of unfunded de a financial state country in Eur( t. of, and he va. a Transatlantic cereft and moi to subsist amoi But the sort of a reduction of °' 7suntry being duties, which thrown herself relinquished an Europe a hosti ' were reli • •loption of oth Right Hon. G re rail( payments t• _gements of illiOnS ar.e. a ), i2diately &sal! rix of exchanges ni Itx • v•cthi:•g to the 0 H ers loan. In Right Hon. 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