The Sun.
London, England, 1804-05-29 00:00:00

c,r----.

EXCHANGE WITH I,"ELAND.

EXTRACT

FROM MINUTES OF EVIDENCE

Taken before the Committee appointed to inquire into the
State of I reland, as to its Circulating Paper ; its Specie and
Current Coin; and the Exchange between that part of the
United Kingdom and Great Britain.

The Right Hon. JOHN FOSTER', in the Chair.
• (Continuo/ from our Pater of Saturdgy.)
JEREMIAH HARNIAN, ESQ. EXAMINFD.

Are you awire of the objeft of Mr. B •rrowes's
oilervations and opini,,n given before this COM
mittec 7inderstand orie of them to be the con.
solidaiion of the B mks of the two Countries.

appeehe,,d that such consolidation would
procurer a c.::mmon circulating medium between
England and Ireland in the absence of guineas
As far a 2, I !lave been able to consider it, it does not
appear to me prafticable, nor do I see how the objeft
valid be attained by it.
Srate the difficulties which occur to you of its
praaicability ?—I am not. enough informed of the
plans, or they are not sufficiently digested to meet
the question satisfac}urily ; but one of the difficul-
ties which strikes me,is, bow the Bank of Ireland,
or the Branch of the united Bank there, are to ob-
tain Notes any more titan they can obtain guineas
now.

Could the Bank of Ireland obtain guineas here
if there was no restriEtion ?—Certainly.

I; there no restriAion now on Note's. ?—None.
What is the difficulty of their obtaining Notes ?
I am.not aware how they are to be paid for.
Would not the same difficulty exist with respea
to guineas ?—Yes.
Supposing it pritaicable, do you conceive any use
would attend the measure ?—I do, not, because the
evil which it is intended to correa, would, I should
fear, still remain.

What is the evil ?—The high exchange.
What is your opinion of the cause of the high ex-
change between the two countries ?—it appears to
me to he the same cause which has always operated,
and will continue to operate in the negotiations be-
tween any two countries, when the balance of debt
is against the one of them.
In forming that balance, do you reckon the ba.
lance of trade to form a part of the account ?—Cer-
tairly, a Dart of it.
What other articles do you take in to calculate
the b4;ance ci debt upon ?-o,le very considerable
item is the money rernitte,l fur absentees, and other
sums in the financial operation of the two countries.

D. you ituagie the want of specie contributes to
raise the exchange ?—I believe if there were guineas
here, or in Ireland, zo supply the exchange, the
evil would be eta-retied. In other words, if the.
Banks were opened, the exchange, though it would
be subject- to fluetuations, would fall to about
its proper rate.
What ari• the circumstances which take the ex-.
change of Ireland out of its proper course ?—The
want of a common medium to pay the debt which
Ireland owes.

Do you think any better mode than that now
adopted with respcd to financial concerns can be in.
traduced between the two countries do not
know how to answer that general question.
Do you know that the Bank of Ireland Paper is
depreciated ?—I am not aware of it, because I
should not say paper was depreciated, unless there
was a forced issue of it, and that it was +.ffered at
a discount on all occasions. I should rather not
say that gold is increased in value than the paper is
depreciated.
When 2s. is given in Ireland universally, for the
exchange of a Bank of Ireland guinea Note into
gold, do you not estimate that the Note is depre-
ciated to the amount of 2s. ?—The distindion may
seem nice, but guineas are wanted in Ireland, chiefly
for one purpose, the trade of the North, as I have
understood ; and as the transactions of the North
are carried on by guineas only, I apprehend that is
the cause.

Do you think, if the trade of the North was not
carried on in' guineas, that the price of guineas
would be so high ?—They certainly would not.
Da you think that the exchange would be so un-
favourable to Ireland, if the trade of the North was
not carried on in guineas ?—I think it would not.

Would the circutnstance of the trade of the
North not to be carried on in guineas, make any
difference in the number of the drawers, compared
to that of the remitters from Ireland ?—I think it
would make a difference.

Do you think paper of gold the most natural cir-
culating medium ?-1. should think in all great
transaetions, where there is confidence, paper, with.
out a doubr. -

What difference would the circumstance of the
trade of the North of Ireland, not being carried on
in guineas, produce upon the exchange between
Belfast and England ?—Probably raise it.
If guineas were now no longer to circulate in the
North, from being all exported, or any other
cause, would the rate of eNchange be lowered in
consequence br t weer) Ireland and Great Britain.
generally ?—No, I think not, because the evil
would still remain, which I conceive to be the sur-
plus of debt ; those guineas, if exported, would
'certainly tend to lessen the evil, as far as they would
go.

Do you then think the present rate of exchange
to depend wholly on the balance of payments due to
Great Britain, and not to be afftded by any thing
relating to the circulation of that Country as it-at
present stand, ?—I am inclined to think that the
circumstances alluded to are sufficient to produce
the evil. Ido not say there may not be other cir-
cumstances which may contribute towards it. I al-
lude to the balance of debt which Ireland owes.

What are the other circumstances ?—lt is possi-
ble that the alarms of individuals may induce them
to increase that balance by remittances, or to hoard

Supposing any large distria of Great Britain was
to adopt gold as its only circulating medium ; and
supposing, also, Bank of England Notes were to
pass, as they now do, at par, would not a higher
exchange be given at Hamhurgh, or any other ex-
change in Europe, or, in other words, a greater
value for bills payable in specie than for bills pay_
able in Bank of England Notes ?--1 do not think it
would.

Supposing the Bank of England were to supply
its Notes on the Exchange of Dublin at a rate be.
low the present exchange, would not such an opera-
tion be in fart a loan made by the lank of England
to Ireland ?—lt might be called a loan of the dif-
ference.

Would not by this operation a debt accumulate
from Ireland to the Bank of England gradually ?
Beyond a doubt.

If this operation afforded a temporary relief to the
exchange, would it not revert to its former rate
when the Bank required payment of this loan ?
Certainly..
Do you not conceive, that a too great issue of
Bank Paper in Ireland may have been one of the
causes which has contributed to raise the exchange ?
—I am not aware there has been too great an issue
of paper there.
Supposing an extraordinary issue to have taken
place, do you not conceive that it would have a ten-
dency to raise the exchange ?—I should think it
might.
Supposing the balance of debt to have been the
cause of raising the exchange, do you not conceive
that a diminution of the Paper Circulation of Iraind
may have a tendency to counteract the rise in the
exchange so produced ?—lf the opinion that too
great an issue of Bank Paper is one of the causes of
the high rate of Exchange be well tounded, the
other must follow of .

You have said, you do not think that there
could be a depreciation of paper unless there was a
forced issue, and a discount on all occasions ; ex.
plain what you mean by a forced issue..-1 mean an
attempt to issue more than the panic are disposed
or willing to take off.
Suppose, for example, the Bank of Ireland to is-
sue Notes at an interest of 5 per cent. the current
and legal rate of interest being 6 per cent, do yolii
not conceive that demands would be made on the
Bank of Ireland for discounts on the security of safe
bills of exchange, which would be greater than the
Bank of Ireland could grant, without so much en-
larging its paper as to create in it an excess which
might affect the exchange ?—I should think white
the legal rate of interest is 6 per cent.. the Bark of
Ireland would of course be called upon to discount
at s per cent, to the amount of all the good paper
winch could be procured.
Might not mat y bills of exchange also be created
fur the purpose of being discounted at this cheap
rate ?—lt would be a great temptation.

Might there not therefore be a very great excess
in the quantity of Bank Paper, without any issue
which could properly be said to be forced ?—I think
nut, as I consider this operation as forced.
Supposing the legal rate of interest in Ireland to
be 6 per cent. and money nevertheless to be deemed
worth inure than 6 per cent. might there nut be an
-excessive issue of Bank Paper, even though the Bank
should discount at per cent. ?—No doubt that
must depend on the discretion of the Direttors, and
would apply equally in any other country.

Are not then the Bank Direetors in Ireland under
a temptation to issue paper to an excess, supposing
the rate of interest at which they d►scount to be less
than the rate which money is deemed by the Mer-
chants to be worth ?—Yes.

Do you mean to consider an instance cf this kind
as a forced issue ?—To a certain degree ; but that
was not what I meant by a forced issue before.
What do you consider to be the best criterion of
the depreciation of Paper Currency, an alteration of
its value compared with the general property of any
country, or its altera,ion compared with a given
article, viz. guineas ?—I think the first the best
criterion, because guineas may be waited, as in the
present case, fur special purposes.
Supposing the issue of paper nut to be excessive
in amount, or any cause to effect its credit not at-
tachirig to the property of the couffirygenerally, is
there any reason why such_ paper should he depre-
ciated in value ?—I know no well-founded reason.

May not many causes give a temporary and local
value to guineas, particularly when the Bank, the
great medium of supply, is prohibited from issuing
the samel—Many.
If then the value of gold coin may rise,_ under cir-
cumstances not calculated to produce or justify any
diminution of the value of paper, is the _difference
in the apparent value between the gold and the pa-
per any necessary proof of depreciation or loss of
value in the paper either compared with its former
value on the general property of the country I—l do
not consider it 'any._

Supposing the difference in value now prevailing
in Ireland to have arisen principally from an increase
in the price or value of guineas, and not from an
excessive issue of paper, what would be the effect in
the circulation generally of that country, if measures
were taken to produce a diminution in the quantity
of paper now in circulation ?—Taking fur granted
there is no excessive issue, it would only add to the
distress.

Are there not many circumstances at present in
operation satisfaftorily to prove and explain that
guineas do at present, for the purpose of circulation
in that Country, bear an increased price ?—Yes,
there are.

Is there any distinl evidence of a diminution in
the Bank of Ireland Paper, as compared with other
property of the Country, guineas excepted !—Noe
that I have heard of.