Star. — London, England, 1828-06-06 00:00:00

rhh. lent, Iltry Seat • ;age e t laving Was as it ia t to be of our Ice the there [ng the Invince d those to re. With though papas Ind, be system Austria rid of a tandieg ,ho had before inita l % 4l. lig part of the duties of the Committee, any inquiry into the debase ment of money by the former Acts of that House. Mr. WARD (London), in rising, congratulated the Right Hon. Gentleman on the tone in which he had brought forward this very important subject. It was not one altogether novel to himself, but he was desirous tonight to collect what might be the sentiments of his Majesty's Government on it. The coinage was the pre rogative & the Crown, and the substitution of bank paper for coin emanated from the authority, and de pended son the will, of the Crown. The argument of the Right Hon. the Chancellor of the Exchequer turned m ainly on the question, What gold was there in circu lation? Looking at it in that light, he had endea voured to obtain some authentic information on this point from the best source. It perhaps was not possi ble, under such circumstances, to obtain exact in formation or precise accounts of the issues of the Bank -It the periods to which he should allude. The Bank of England had of course a right, like any other commer ,:ial body, to transact its own business in its own man ner; therefore no fault could fairly be found with its -Accounts in this instance. The Honourable Member here read extracts from the accounts of the Bank of Eirgland, to show that in the period from January, 1821, to July, 1824, the issues of the Bank of England in gold amounted to 1'7,373,0001. of which 2,550,0001. was is sued in exchange for guineas. During this period the exchanges were continually in favour of this country; and gold in consequence was continued to be imported here. The next period was from August, 1824, to, December, 1824, during which 8,660,0001. was issued in gold, of which five hundred and six thousand pounds was in exchange for guineas. During this period the exchanges were against this country, and gold, of course, was exported. The next period embraced only the intervening time from Oct. 1825, to December, 1825, which was the period of the. panic, pending which 2,000,000/. of gold was exported, leaving a total of 6,000,0004 of gold coin exported, in addition to bar gold, from the coffers of this country. From Jan. 1826, to Jan. 1828,there had been issued 2,273,0001. of this 1,090,0001. had been issued in exchange for gold, making thus a total issue of 28,405,0001 and leaving - a balance of 22,000 000/. as the quantity of gold in circulation in April, 1828. From this calculation, and the conclusion thus arrived at, it would appear that the calculation of the Right Hon. the Chancelloi of the Exchequer was not. much exaggera:ed. Taking, therefore, into consideration the demand for the issues, and the per manenee of the supply, there appeared to him no doubt of the stability and permanence of the present state of things as respected the currency. He would not dive into futurity, nor speak with too much confidence on subjects of that nature; but he was prepared to say, upon his oiensresponsihility, that there was, in his apprehen sion, nn danger of any failure of the supply in the cur rency of this country. Neither was there any reason to apprehend, from the state of the foreign exchanges, any algal whatever—(Heet). If, however, he were asked kehether he would, as they respected our currency, vote for our present laws, he confessed he should feel him self in doubt ;s but as things at present stood, he believed there wits gold enough in the state of our curreficy:foe our present emergencies, provided paper continued as 'heretofore a substitute in part for the precious 'meth& The question whether we should now stop 'Unit 'Wave a reference to three distinct periods —those of 1811 s, 1820, and 1821 ; from which it would appear, that when gold was brought in it was accom panied by 'low prices. This was in contradiction of the opinion of 'some, who thought it Would be productive of high privet. In this, as in Other points of our com mercial relations, there was an eiacts - equilibrium, which it was desirable not to pass or exceed, on maxims of sound policy. With respect to the creation and main tenance of a silver standard, which so many considered desirable, as constituting a double standard, he con fessed He did itit tuciw *hat they meant by a double standard. They Might as well tell him of two different bushels of wheat of differebt dimensions—(A laugh).— The preciotis metals, even in a period of peace, had been found of late years -to fluctuate so far, that silver was at one time 4s. lid. per oz. whilst at another it rose to ss. 7d. Gold, too, was at +l. Ss. en ounce, and soon after at Si. 17s. 6d. Whilst this state of flue tuation tobk place, it was clear persons coniersant with the Miner would avail themselves of it, 'and debtors would attempt always to diieliarge their debts in the cheapest manner. At one time there was a greater disposition to produce silver from the mines, at another gold was sought "FIR) greater avidity, and the debtor seas sure to make his payments in that which pre dominated. If - such were unavoidably the case, it were, perhaps , .. not injudicious to ere either 'party the benefit which as it happened arose out of the fluctuation. A law rate of interest displayed that there was a sufficient currency fcir'ilie use of individuals, and for all our national purposes. When the interest on money was found to rise, it would be found also to affect the- principal, so as to increase its value nearly in the same proportion. This principle would be found to operate, whether 'Our circulating Medium were *OOO,OOO, 50.000,000, or 40,000.000, which Mule, fieknefv, believed it advisable should 'be cOnsideribly increased. He was of opinion that sufficient regard . bad IQ been had, in the course of the discUssion on this subject, to the state of the foreign exchanges. If any mistake were 11 . 0 W. committed in the issues of money at this thonle'nt, It might have the effect of turning the fo reign eschinges against this country. We were' on the tive Of a war, perhaps of great extent or continuance. A large military chest would be constantly open, and re quiring to be replenished. A large quantity bad already been &allied-item Various. reknit Ces, for he iervice of other belligerents, 'as *AU: for our operations in the . East. These were considerations of weight and general interest which - shouhl nor be left out in examining the reasons for passing the SU before them, or acceding to the prOPositiOn Untie Elonotriable flaroaet. In that in glory it *as Mine iinpOriant to avoid making any mis take relative to the exchanges, as they must influence the question very materially. What be had said had been theorist (tut xvitb4n "sirlions Wish, imperfectly as fle Materials ore . 4n 'which lie founded his inferences, that the Iliissribou,Tcf be in posseisioa a all the infer mation he could obtain-for it, in order to form its judg *toe trFkro the treetiee• The Hon. Member assured the Htlttie, coneitidieg; that whenever be possessed any chandel of hstorinitien whit% was not generally sr.ceisible, he iboild feel It his duty and a privile4e to obtain for its use such materials is might in his opinion be conducive to their forming a just conclusion on-sub jects of teth natal lisportance—(Hear, hear). Sir H;PilfislgiLiaid, he considered thebank and other paper circulation of the country its active capital. Money most, from 'circumstances, often be locked up, whereas the circulation of paper absorbed the dead stock, and treated a larger production of goods and manufactures of 'all descriptions. The basis of the creation of wealth was to give activity to capital. Ile thought there ought to be U. notes in circulation, but Dot for any one of the reasons adeenced by the other aide the House. The real reason was. the system of Malt which still existed, and rend red it -accessary. If that system was. still continued, be would say that 11. notes ought to be restored. Oar system was an un sound one, and there was,- perhaps, no principle con nected with it more injurious than that which prevented more than six partners in any banking establishment. The effect of this was, to exclude a proper amouot, of capital from being embarked in such conceins; and the consequences might be inferred from the simple -fact th.it since the year 1792 no less than 352 commissions had' been issued against Bankers. He was aware of the existence of a clause in the charter of the Bank of Eng land,which imposed this restriction upon all other banks. But why not enter into some arrangement with the Mink of England to get rid - of the evil ? The charter had now _five years to run, but the arrangement to which he. alluded might be made before the arrival of that period; and if there was no other way of settling it, it ought to be made a matter of purchase, rather than let it re main as it was. The whole mischief arose from legis. lation. If we had no law upon the subject at . all, we should have had a good system of banking. ' The reason why Scotland had a sound system was, that there was no law upon the subject. The consequence was, that none but strong banks could exist there, because the moment a doubful bank arose, the other bankers combined to put it down, an object that was soon. ac complished, where the doubt turned out to. be well founded. In Scotland, such was the advantage of this system of banking, that in the coarse of 103 years only two failures had taken place, and the whole amount of those two failures did not exceed 32,0001. He hoped it would not be supposed by any one that if the present Bill was to pass, the whole question of the currency would be settled. If this country were to rise again into a state of - commercial prosperity, the sanseptecess would. go forward excessive . issues, extensive ;speculations, fluctuations, and eventually those evils whith bad been experienced in the year 1825. . Mr. Secretary PEEL said he cordially concurred, lei one observation made by the Hon. Member for Calling tont namely, that it did not become 'any man to speak with too much confidence on this subject. The ohjetti they had to consider were so numerous—the elernfitts of consideration were so multifarious, that certainly any man must have great confidence in his own power argument, who could make up his mind on this ques tion. He admitted that practically there could' be no greater detriment- to the interest of this. country 6=l uncertainty on this question. If in the month of June (this law being to come into *nitration in. April next), they were to retrace their steps, they ought at least to make up their minds to hear it said, the country would never have any confidence again in their consistency. The act of retracing their steps must be justified by necessity or expediency. Ten years since that House agreed that the issue of small bank notes should be stopped; and to be consistent, they ought- to refuse to retrace their steps, unless the neceessity and expediency was such as to tender it impossible to avoid repealing their former proceedings. The Right Hon. , Secretary said, he should prove there was no necessity or expediency which could warrant them in retracting all they had done in 1826. He should apply himself to the argument of the Hon. Baronet, who had urged that it was their duty, if they did not retrace their steps, to go into inquiry. The Hon. Baronet had described the resources of the country to be in a state of ruin, and it was said that England no longer deserved its ancient character; that it was a country on the brink of ruin, and nothing but the adoption Of paper currency could save the nation from sinking. He (Mr. Secretary Peel) knew of nothing in the prospects of the country to justify the melancholy description given by the Hon. Barcner. They ought to be cautious in prophecies respecting the prosperity of the country, in Order to avoid raising false expectations; but there was also another extreme equally to be avoided—they ought not to indulge ill hypocondriacal despondency. The Hon. Baronet never could convince him that the resources of the country were paralized, and that there was no cure for public distress but one pound notes. He was assured on the contrary, that if the country was to be forced to war, the national honour might be sus tained without small notes—(Hear, heir.) —There had been no falling off in the productions of the country, from which they could infer that distress the Hon. Bart. described. Since the Ist of Feb. 1826, not a single coun try bank note had been stamped at the Stamp Office; and if there had been such a diminution of theresources of the country as had been described, the effect must have been discovered. The fact was, the stoppage of small notes since that period had produced no such effect. No such diminution was observable. The Right Honourable Secretary compared the consumption of, articles in 1825 with 1827. Comparing the quantities of strong beer, table beer, tallow candles, wax candles, coals, milk, tea, vinegar and other articles consumed from the sth of April to the end of 1825, and from the sth of April to the end of 1827, it appeared, that on , every article, with the exception of wax candles, there had' been a considerable increase in 1827, the year after the stoppage of stnall notes. How was it possible, then, to infer that there had been a great reduction in the re sources of the country ? Referring also to the quantity of shipping employed in the two years before stated, there appeared to be Considerably more tonnage em ployed in 1827 than in 1525. This being proved by the' ', returns before the House, he could not come to a con-1 elution that there had been a-falling off in the public resources of the country. The Righalon. Secretary then observed, that two questions were raised : they had first to inquire Whether it 'was necessary to raise the standard of value ? The Hon. Baronet's argument, if it meant anything, went to the extent of raising the standard of value. The second question was, whether it was neces sary to have a paper currency convertible to gold ? Those two propositions he intended to contest and op pose. In 1819, Parliament was called upon to decide whether any change should take place in the monetary system. It was decided that they ought to return to a metallic currency. The question at the time to which he alluded turned on the depreciated standard. It was at the present day a tinily different question, and he might ask the Houk Whether, after the experience of cash payments during twelve years, it was necessary to alter the system ? He had heard it said, that the mea sures recommended by the Finance Committee of 1822 bid been the cause of great misery in the country, and 'he admitted that the adoption of their recommendations 'bad occasioned some distress; but if they bad not re turned to a metallic currency the distress would have been greater. It was said that the national debt had been contracted with paper, and that it was impossible to pay it with gold. That statement was not correct. A very small portion of the debt Was incurred *ith pa per,- and it bad always been understood that the country *mild return to cash payments, and keep good faith with the public creditts. if the national creditor was paid in a depreciated' currency, it Would deter others from advancing their money for the public service when it was "necessary. The great question the House had then to ;consider was this, would they consent to unsettle that , system which they had acted upon during ten years? If the? did, the confUsion among all the money traasae-j 'curses Would hi sfah'is Mist enervate this Country. Ibt Honourable Baronet had recommended a change in the banking system —that, however, was an independent question. He was not insensible to the. improvements which might be made in banking before the renewal of the-. Bank Charter, but he entertained doubts whether any, change or improvement could lead W theldoption of paper currency to the exclusion of gold. Experience in all countries proved that paper invariably dfovc gold and silver out of circulation. With paper, gold would not remain. The Hon. Baronet relied on the banking system of Scotland. It was said that system was so pure that no panic could occur: . The argument was fallacious. The fact was, the banking system of Eng. land was the support of the Scotch system. The Right, Hon. Secretary read the Report of the Finance Com mittee of 1819, and contended that though the banking of Scotland was eulogised, it was notthe best. A sys , tem of uniformity was most desirable. It had lieenpd mitted that Scotch notes passed the Border, and there was every reason to conclude that they would travel further into England. Would it be fair, under those 'circumstances, to leave the English Banker without protection? If metallic currency was given up for paper, it would be impossible to guard against the excessive issue of small notes, consequently no one could say.shat panics would not ensue. Paper had a constant tendency to excess, unless they kept over it that sentinel, the sove reign.. The Hon. Baronet referred to Hume, to show that the only wise course for a country is to have a con stantly increasing circulation; and, no doubt, if the wit of man could devise a constantly increasing circulation which never could come to a stand, it would, no doubt, much increase the active industry of the country ; but the force of every stimulant must cease at some period, and be followed by a proportionate depression. Mr. Hdme is speaking of the circulation of specie, and not of paper money. So far from thinking with the Honourable Baronet, that it is wise to increase the circulation of paper, Huuse says in one of his notes=" We observed in Discourse 111. that money, when increasing, gives encouragement to "industry during the interval betwixt - the increase of money and rise of prices. A good effect of this nature may follow, too, from paper credit; but it is dangerous to precipitate matters at the risk of losing all by the failing Of lhaveredit, as must happen upon any violent shock on public affairs." In the text he tells us—" 'Tis only in our negotiations and transactions with foreigners that a greater stock of money is advantageous ; and as our paper then is absolutely insignificant, we feel by its means all the 'ill effects arising-from a great abun dance of money, withoot reaping any of the advan tages." Home's argument 'relates to the effects upon industry by the increase of the precious metals; but it is quite different.from the position of the Hon. bat. who quoted him in favour of an increase . oftßaper circulation. 'ien, as to Dr. A. Smith, I well recollect the beautiful and most happily illustrative metaphor applied by him ip the subject: he tells us, that gold and silver may be rompared to roads, which are productive of no profit, but circulate all the products of industry ; the roads not being cultivated, are sources of positive loss, but they are the means by which all property is trans ferred; and with - respect to paper circulation, he says, it is like a *waggon road, if he might use so violent a figure, in the air, which enabled the owner of the soil to cultivate and convert into a source of profit even the otherwise barren roads. It is clear, however, that he was well aware of the evils of a paper currency ; for fie makes use, in one place, of this apposite expression: " It 'were better, perhapi, that no bank notes should be issued in any part of the kingdom of a smaller amount than 51." and he goes on with a train of reasoning to show the dangers of-'a ,pa l per currency. In short, it is utterly impossible:to-quote Adam Smith as an aethority for an unlimited issue of paper, without a foundation and basis of gold. I have thus shown, I think, that the main supports ot4he Hon.. Baronet, as far as regards the opinions of the illustrious Men I have named, fail under 'him; and if it wore possible for them to go into this Committee with me, I' am sure I should have their - votes for resisting the pro position they are supposed by the Honourable •Baront t to advocate, and would lefuse their sanction re the sys tem he maintains. Imust say, therefore, that neither on the score of experience, nor of authority, do I think 'the Hon. Member for Callington (Mr. Baring) nor the Hon. Baronet, have established such a case as ought to induce the House to recede from the position it took in 1828. I entreat the House to consider what we' were told at that period, that if that. Act were passed (and it was passed by a majority, I think, of ten to one, for only eight ultimately divided against it), themischief result ing from it would be immediate—that the country banks would reduce their circulation, and that the evil would not be deferred to 1829. Then, let me ask, after we have undergone that suffering which was inevitable from the attempt to restore a metallic circulation—after having since 1822 issued from the Bank 28 millions of gold, of which it is calculated 22 millions remain, with eight millions of silver-*—after having reduced the circu lation of country bank notes to'two millions and a half, is it wise to retrace our steps, and by the commence ment of this new inqssiry,lmply a doubt as to the sound ness of our policy ? If we do retrace our steps, de net let suppose that the injury will be confined to' two millions and a half of batik boles; you will never have an opportunity of considering the question under the same adiantages as at present, and no confidence will hereafter be placed in your decisions, if you now attempt to unsettle a question which has been so long concluded. The Right Honourable Gentleman proteeded to observe that the country was now within sight of the goal which, in 1826, it Was so anxious to reach—a little firmness, and another spring, would enable us to reach it ; and he believed that it could be attained, in the Present state of the kingdom, without any material addition to the ex isting pressure. Having agreed to reduce the circula tion of the smaller paper currency, they were bound to provide that it should take place at the stated period next year. He maintained that they were-bound to do this, without entering upon the eight points of inquiry proposed by one Hon. Baronet and - the s even points of inquiry proposed by another H on.i Baronet: The• House might depend upon it that the commercial and trading interests of the country would, instead of being injured, be benefitted by this system, andlhat the general settle ment of the - currency would be such _al to insure the confidence and security of 'the publit—(,Hear, hear). Sir .7. GRAHAM, in explanation," said be feared he had not expressed himself with sufficient cleameu in speaking upon the Scotch banking system. He must however observe, that th ey bad before th em high authority with respect to the icotch banking system, and that authority the Right Hon. Gentleman had been unable to controvert. Mr. ATTWOOp . obspived, that he paid no regard to the details of Ate' INN Honourable Gentleman respecting tallow anitiltsx and starch. • He (Mr. A.) had said nothing ,Of these matters; he bad 'talked of the distress, of the farmers, the misery of the labourers, and of gao)s, burdeUed with criminals. The Right Hapurable Gentleman should have shown that the farmers were ea#, the., hibintrers contented, and the gaols empty.' This-tioutitry . was not only unable to support the - non* of a war, but even its present bardeas.atere too heavy. With respect to the ap= prehensions of the Right Honourable Gentleman (the Member for Liverpool) who spoke of the panic and the terrors likely to be created by revising the Acts of the Legislature, those apprehensions had no foundation but. in the fancy of the Right Hon., Gentleman. The same predictions had been uttered respecting another. question, in \ which however the Noble Duke at the head of the Government had not been * amid to grant a Come. mittee of the.other House. He was happy to perceive that the Noble Duke was'not likely to be moved by these apprehensions so much as' at the consequences of preci pirate legislation. There was a Committee now sitting to t inquire into the doubtful state of our finances ; and yet, strange to say, that Committee had not power to inquire into the manner in which the taxes -of the country had been enhanced by the change which the House had made in the value of the currency,. A Committee, acting upon an error so capital was not, in his opinion, likely to prbcluce much benefit to the finances. A depreciation of meuey had existed al► many former periods of history: The depreciation of it. which took place in 1797, was the act of Mr. Pitt. The alternative was presented to him, of abandoning either the war in which the country was engaged, or the standard. He considered the war 'to be necessary . for the preservation of the country, and so preferred; abandoning the standard to abandoning the war. ,A - n. Honourable Member hail said that that depreciation was the work of the worst Governinent that. had ever disgraced this country—but did the Hon. Member recollect, that by the very same means by which Pitt carried on the- revolutionary war, Washington and Franklin carried on the...war for American' indepen- deuce ? Washington and Franklin sanctioned' a depre. ciation of the standard for that great purpose ;lad he did not suppose that the Honourable Member'*ould venture to call those illustrious mat' great tzysants. There had been no depreciation in our standard-froth the time of Queen Elizabeth dawn to the time of Mr. Pitt; but before that time they , had been frequent,. as was evident from the fact that the pound of siller, which originally was twenty shillings of silver, was coined is Queen Elizabeth's time into 625.6 d. That.d'epiecia• tion was not the work of tyrants, but of thegreatest and wisest Princess in our 'history—they Sanctioned it, not for the purposes of fried, but for the purpose of preventing fraud—they had recourse to it, not for the purpose of raising prices, but for the purpose of preveniing prices from falling—they endeavoured to obtain an adjustment of prices—and such ought to have been the object of the law of 1819, which ought neither to have appreciated nor to have demos ciated the currency. Though he said thus much re specting the depreciation of the currency; he begged that he might nut be considered as its advocate; all. ha wished to do was to set it right after it had once. been set wrong. To revert, however, to the Act of 186, the question was, whether, after abolishing the emendation of English 11. notes in England, you would petnait the circulation of Scotch notes of the same value'? Now, the Act of 1826 was adopted on the avowed prin. ciple that it was to apply equally to all pairs, of the ,United Empire; and after it was adopted, the Chan cellor of the Exchequer of that dal went so far as to say, that he would 'bringin a Bill for the sup. , piession of small 'notes in'Scotland.' The House had now discovered, that as fir as Scntland was coaderned, the ideas whiCh it had formerly entertained whiz' erro neous. It, followed the process which' it essilly4ll, lowed on questions of this nature: - it first tondeltitted the circulation of small notes, Ilrenit appointed.a..e4m mittee to inquire into the subject, :Ind ihen it toured itself : entirely in the wrong. Was not that a reaum, he wriuld ask, why the House should now institute furtfaesirin .quiry? Ought they, on authority which they hattpre riously found erroneous, to proceed to suppress thezcir culation ofsm4ll notes in. England? He thought that they , ought not, and he was convinced that this measure secs dictated more by a desire on the part of Ministers to pre-. serve their own personal consistency at all events,'thart !by a due regard to the interests of the country. He was sorry•ta say chat it appeared to him that Ministeri scat. (Fred about their arbitrary edicts on this subject; uterly , careless whether they crushed or protected the people. 'The Honourable Member.proceeded at great length to compare the system of English and Scorch' bunking. He contended that England was as much indebted for its prosper ity to the banking system as Scotland was ) and argued that paper had never. been mere converti. ble intogold in• Scotland tharpit had been in England. He concluded by stating that he gave his strenuoug support to the amendment which 41114 . - §een moted by the Honourable Baronet. Sir F. BURDETT, said, that at so late .an hour of the night it would be an unwarrantable trespa.st upon their patience, were he to. take any other eotiim Brad that of expressing a few general 'sentiments and pro- • positions, which struck him as directly connected with this-subject. Indeed;te might-content himself with a general declaration in favour of the principles and a- • guments so ably explained and expounded by his Huh. Friends (Sir J. Graham and Mr. Attwood), without ven t tuting upon any discussion of details, however impor. tent undoubtedly they were, if time and season admitted of their perfect elucidation. If the views of lrie Hon. Friends had been attended to as they ought, the less necessity there would be for him to urge the pro priety of prefacing the consummation of the business before them with just and adequate inquiry—and that was all which was asked—before Parliament stood com mitted upon the result—(Hear). It was peculiarly in felicitous for the Right Hon. Gentleman (Mr. Peel) to take the tort of stand Which he had made, when he knew his name was connected with a measure regarding an unwholesome tampering with the currency, which was capable of producing much mischief, suffering, and misery ; tempered, it was true, with the corrective, that on the treshold of its completion (once or twice ap proached) it was found impossible to execute its pro ' visions, and Ministers were compeller) to arrest its course just at the moment when its mischievous consequences must have been directly realized. No reply had been attempted to be given to the pregnant facts and cogent reasoning of his Honourable Friend (Sit; James Graham). The errors of even such men . "as Locke and Swift, upon these abstruse subjects, even the! acuteness of Hume, had been detected and eXtiosed ; and the Right Honourable Gentleman (Mr. Peel) had misconstrued the sentiments of these great names in the judgment which he had pronounced upon them. His reasoning upon Mr. Locke's argument with Mr. Lowndes was entirely misapplied, because there the con troversy was upon the.injustice of paying off e at a lower ratoof money, a debt contracted at a higher;. while the present condition of the country was the payMent in a , metallic currency of a debt contractedia a depreciated one. It was this ,4 paying up" to the legal standard which made the whole difference in the argument... It was this ill•judged system of coping with. unequal things which pressed upon all ranks of the community, absorbing resources that ought to be sparictoereserved, and mingling concerns of separate Alitieefiralueste the great prejudice of. the community. The Right Hoo. (Jentleman opposite had, indeed, faintly shadowed out thesetbings, but who so ,inconsistent as i hiniself in the "•••-• 4 7T - ""i