The Sun.
London, England, 1828-06-06 00:00:00

amount teas '2,650,000 tons. On the sth of Jac. 18tie
the number of seamen was 16-2,000 ; and on the sth of
Jan. 1828, the number was 165,000, being an increase of
3,000. The tonnage of the ships entered outwards in
1826, was 2,633,000 ; in the year ending sth January,
1826, the number was 2,828,000. In the former year,
the number of men on board these ships was 151,000 ; in
the latter it was 170,000. The official value of the im-
ports in 1828, was 1,200,000 greater than the official
value of the imports in 1926. In the exports a similarin-
crease of the official value had taken place. Looking then
at all these general facts, be came to the conclusion that
there had been no falling off in British industry, and there
was no reason for those gloomy anticipations of the Hon.
Member for Callington. He came then to the questions
involved in the motion, or rather in the amendment, of the
Hon. Baronet. Was it desirable, or was it necessary at this
time to lower the standard of value. As he understood the
Hon. Baronet, his speech consisted of two distinct proposi-
tions : the first was, either the landed interest cannot go
on, unless the standard of value is lowered, because it
was not possible to pay in a currency regulated on a me-
tallic standard a debt contracted in a paper currency.
The second proposition of the Hon. Baronet was, that
it was possible to maintain a paper currency, converti-
ble into gold, when there was no gold as the basis of the
currency. The first proposition was to lower the stand-
ard ; the second was not to lower the standard, but to
maintain a paper currency in circulation when there was
no gold, and both these propositions he should contest. If
the things were now in the state they were in 1819, it
might be a question of depreciating the standard of valise;
but after the Act of 1819 had been ten years in existence,
—he might say twelve years in operation, for a return to a
ecund state of currency had taken place in 1817,—the
enestion became a very different one. Whatever opinions
he might have been disposed to entertain in 1819, he
could not, for one moment, suppose, after the present
standard had been so long established, that it was now ad-
visable to have recourse to the Hon. Baronet's proposition
for lowering the standard of value. He had heard com-
plaints against the proceedings of the Committee of 1819 ;
its Report bad been stigmatised with great severity, and he
as the author of it, had been charged with having done
more mischief than any ten Ministers that ever sat in
Parliament. Adopting the slander to the extent that
distress hail been occasioned, and sincerely deploring
that degree of suffering-, he still thought that such
enormous difficulties would have been found in
lowering the standard, that the alternative would,
at last, have been the resumption of a paper system, or
a return to a circulation of gold. We are told (continued
Mr. Peel) that we have a debt of 800 millions contracted
in inconvertible paper, and that therefore it ought not to be
repaid in gold. That is a very easy way to settle the matter ;
but we are to recollect, that whatever were the case with
some of the original lenders, the whole debt was not con-
tracted in inconvertible paper ; comparatively speaking, only
a small portion of the debt was contracted when paper was
inconvertible into gold, and the original creditors of the
State having parted with it, it has, at subsequent periods,
been transferred to hands who have given for it the full
value. What satisfaction would it be to the landholder,
who on the depreciation of land, had converted his property
into stock, to say " You are a public creditor ; but you re-
ceived too much when you obtained 50,0001. for your
land, and we are about to act on a new standard, ac-
cording to which we shall pay you off at a lower rate
than that at which you made the exchange." The
State ought to have taken that into consideration at
the time it created the original obligation ; at that
time the return to cash payments was only suspended,
and it was determined that they should be resumed. From
1815 cash payments were only suspended ; and all par-
ties making contracts were aware that the country was
about to make a great exertion, and the State ought at least
to have said to its creditors—" We reserve to ourselves the
power of repaying you in a currency net nominally the
same in amount, but which shall be regulated by the exist-
ing depreciation." If the State did not reserve to itself
that power, I believe that the departure from national faith
would, in future times, have involved this country in great
difficulties ; and that if the time should ever hereafter ar-
rive when the public necessities might require something
more than the supplies of the year, and the example had
been set of repaying the public creditor in a depreciated cur-
rency, the character of the country would have received a
taint which would have greatly increased the difficulty of
raising money on temporary emergencies. I never dis-
guised front myself the pressure that would be occasioned
by repaying the amount of a debt contracted while money
was depreciated in an improved currency ; and if we re-
fused to restore the original standard, we should find great
difficulty in adopting any other, upon any principal either
just or satisfactory. The general assumption is, that for a
Long period antecedent to 1819, there had been an immense
depreciation of the paper currency : that is not the fact. It
is, I admit, very difficult to determine what be the principle
by which the amount of depreciation shall be ascertained.
Suppose I take the test of the Honourable Baronet (Sir J.
Graham)—the difference between the market and the Mint
price of gold. That was the tmt which he selected ; for in
comparing the amount of taxation in 1813 and 1827, he urged
that taxation in 1827 was heavier than in 1813, although
in the first instance the taxation was nominally 81 mil-
lions', and in the last instance only 52 millions. He said,
that a deduction ought to be made from the pressure of
taxation to the extent of 36 per cent. I will therefbre
take his test, and I find that from 1803 to 1810 the mar-
ket price of gold was 4/. per oz., and the depression was
only 21. 13s. 2d. per cent. From 1810 to 1816 there
was a great depression, and it amounted in 1814 to 25 per
cent.; but in 1817 and 1818—two years before the Com-
mittee of 1819—gold was only 41. per oz. All this was
laid upon the Committee of 1819 ; but in consequence of
the terrible revulsions to which the paper system was sub-
ject two years preceding, paper had righted itself by a vio-
lent struggle, and the currency was again practically re-
stored to within 24- per cent. of its original value. In 1819
we decided to revert to the ancient currency, and it is not
fair to lay upon the Committee of 1819, but upon the paper
system itself, a great part of the pressure which has since
resulted from the attempt to restore the standard. But
all this is beside the present question. The ques-
tion now before ns is, whether having acted for
ten years upon the ancient standard, you are now
prepared to unsettle all the various transactions •in
that improved currency, and to apply to the liquidation of
every debt some new standard ? To that I never can
consent; great as the suffering has been, I have doubts
whether any other system could have been safely followed
but that which was adopted ; but of this I am quite certain,
that if you attempt to unsettle the system now, the confu-
sion and uncertainty in all 'Tierney transactions will be such
as to compel you hereafter heartily to repent your rashness.
The Hon. Baronet has disclaimed the charge that this is
one of the eight important subjects to be devolved upon the
Committee, and I shall not farther advert to the point; but
too much was due to the argument itself, and to the
ability with which it was supported, for me to neglect it.
I now approach that which has a more immediate bearing
on the question—whether it is safe to maintain throughout
the whole of the United Kingdoms a paper circula-
tion, with power to issue notes below five pounds with-
out having any gold currency vs the basis of that paper
currency? Notwithstanding all I hive heard, I still
entertain doubts whether the system can be safely adopt-
ed. And here let me tell the Hon. Baronet (Sir H.
Parnell) that hie proposal of an improved mode of bank-
ing is quite distinct from this point. Perhaps it might
be materially improved if the Charter of the Bank of
England did rut stand in the way of that improvement. I
am not prepared to say that an arrangement might be made
with the consent of the Bank previous to its expiration, but
that is a consideration with which I will not now encumber
myself. Sill, with this improvement, I entertain serious
doubtesvhether it would be safe in this country to introduce a
general paper circulation to the exclusion of agold currency.
In this argument, I think it ought to be conceded to me,
that a limited paper circulation below five pounds cannot
co-exist with a gold currency. The experience of all
countries---of Scotland, of Ireland, and of the United
States, shows that notes for tp. and 2s. 6d. exclude silver
currency : in Ireland, the existence of fractional notes for
I.s. and 255. has had the seine tendency, and the same
effect will be produced upon gold, if notes below the value
of hi. are in circulation. The argument of the Honourable
Baronet is, that a paper circulation, if it be convertible
into gold, is sufficient for every purpose, and I will examine
some of the illustrations by which he supported it. First,
he mainly relies on the example of Scotland: he says,
you find there a paper circulation which has excluded
gold, but by which the affairs of that country are
prudently and securely conducted, with few failures, and
panics of rare occurrence." My answer is, that nothing
is more fallacious than to draw inferences from the case
of Scotland. What I believe is, that the security of
Scotland in this respect depends upon the metallic circu-
lation of England—that you maintain the value of the
paper circulation of Scotland by means of the exchange,
and that the.alteration of the system here is the safety of
the Scotch circulation. The Hon. Baronet tells us, that
there is some inconsistency in the Report of 1819, and in
rue as having drawn it, in permitting Scotland to have a
paper circulation ; and that the same advantage ought not
to be refused in England. But the Hon. Baronet upon
this occasion made a quotation which presents an jumper-
fest view of the meaning of the writer, and there is no-
thing against which we ought in argument more scrupu-
lously to guard than inferences from partial quotations,— ,

(Mr. Peel hers repeated the passage from the Repent of
1619, which had been previously read by the Hon. Bart.,
and then proceeded.) The Hon. Baronet omitted to state
that the opinion there mentioned was given as the opinion
of the witnesses from Scotland, and not as the decision of
the Committee ; and the quotation he made is introduced
by the words—" the grounds relied upon by the witnesses
from Scotland are these." My opinion follows, where it
is said that, although it is recommended that the system
of currency in Scotland should not be disturbed, yet the
Committee regretted that they could not themselves express
a clear, decisive, and unqualified opinion on the subject.
But, said the Right 11on. Gentleman, I am ready to admit
that I am not perfectly satisfied that the circulation of
Scotland has not a tendency to add to our insecurity. I
certainly think that the paper circulation of Scotland
relies on the Bank of England. Though I think the case of
Scotland different from that of England, yet I must say
that I believe uniformity of system would be greatly pre-
ferable to the maintenance of a paper circulation. Let the
Hon. Baronet advert to this fact, that in 1626, we had de-
termined that within three years we would make a vigorous
and decided effort to restore a metallic currency, and it
might be very desirable to restore it by gradual and secure
steps. If we had determined at once to restore a metallic
currency in England and in Scotland which never had a
metallie currency, the effect must have been much more
violent ; and we might have greatly aggravated the distress
of Scotland, had she been called upon to join in the exertion
at the time when England threw 22 millions of gold into
circulation. The time May, nevertheless arrive when uni-
formity may be adopted. The Hon. Baronet (Sir J. Gra-
ham) contends that the Bill of my Right Hon. Friend is
wholly unnecessary, because the Report shows that the
paper circulation of Scotland co-existed with the metallic
circulation of England ; bnt a very few sentences afterwards
the Hoe. Baronet offered his own contradiction of his po-
sition ; because he said that on his own estates in Cumber-
land the rents for 70 years had been paid in Scotch notes.
This, therefore, is a complete proof that the e'notch notes
have for many years circulated across the border; and nnlees
son put a stop to it you will do manifest injustice to the Eng-
lish Banker, by giving a privilege to the Scotch Banker, ot:
which he is deprived. I believe that very recently a Branch
Bank from Scotland has been established at Carlisle, and
it may be a question, whether this is consistent with the
law, as it now stands; but if we permit the Scotch
Banker to issue notes without controul, they will soon fend
their way beyond the border into the interior of the coun-
try. Hence it is evident that, in justice to the English
Banker, we have no alternative hot to prohibit the ionic of
Scotch notes; and if by this Bill you cannot prevent it, I
apprehend we must resort to the other course by introducing
a gold currency into Scotland. But what runty he true and
safe with regard to Scotland, may be neither safe nor true
with regard to the rest of the United Kingdom. Such
are my reasons for thinking that it is impossible to trust to
a paper circulation without a foundation of gold ; paper
may be convertible into gold rominaliy, and while people
have confidence in it, well and. good ; but there will be a
manifest tendency in every banker to do two things—to
issue an much paper, and to deposit as little gold, as he
can—and the whole supply of gold on which we can de-
pend is, that which is retained to meet the demand ; all
beyond that will be so much loss; the whole country will
be saturated with small notes, and bankers will become
dependent upon each other. It will then be impossible to
take an adequate security against an excessive issue of paper
—one failure will create a panic, and that panic, arising
from a comparatively trifling cause, may be destructive to
the whole, for we are to recollect that the small notes will
be in the hands of the mass of the population, upon whom
panic will have the greatest effect, and argument the least
force. If the parties themselves are not to retain gold as
a deposit, the whole mass of the circulation will depend
upon the Bank of England, without the smallest controul on
its part over distant establishments. There seems to me to
be an inevitable tendency to an over issue of paper, without
a constant sentinel keeping watch upon it, and that sen-
tinel is the sovereign in constant circulation. If it be true
of this ccantry it is true of every country. The Honourable
Baronet supported his position by reference to authorities of
the highest rank. I trust that my inquiries upon this sub-
ject have made me familiar with their writings, and if he
really could support his proposition, as to lowering the
standard, and introducing a paper currency, not convert-
ible into gold, by such great authorities as Locke, Hume,
and Adam Smith, I should, of course, be led to attach far
more weight to his arguments. But, if there were three
names I should have quoted for a directly opposite purpose,
they would have been precisely those upon which the Hon.
Baronet relied. Far a gentleman arguing in favour of
lowering the standard to refer to such a man as Locke, as
an authority in his favour, I own did, indeed, surprise me.
I was well acquainted with Locke's most beautiful Essay,
in answer to Mr. Lowndes, the Secretary for the Trea-
sury, in which he contended, against every argument
(and Mr. Lowndes did not fail to use them all) for
reducing the standard, and I beg the House to observe
what was the proposal of Mr. Lewndee, and the
reply of Mr. Locke. Mr. Lowndes propoecd that money
should be raised one-fifth, or iu other words, that it should
have one-fifth lee.; silver in it. That, be it observed, is
exactly the present proposal with regard to gold. What
was Locke's answer—the answer of that writer who is now
quoted as an advocate for altering the standard ? " Alter-
ing the standard by raising the value of money will weaken
if not totally destroy, public faith, when all who trusted
the public, and assisted our present necessities, under Acts
of Parliament, the Million Lottery, the Bank Act, and other
loans, will be defrauded of twenty per cent." The quota-
tion made by the Hon. Baronet I well recollect. It was
from a singular paper, directed with great force of argu-
ment against the Usury Laws ; for the Landed Interest at
that time wished to limit the interest of money to four per
cent. Locke never referred to an increase of money such
as the Hon.Baroziet contemplates, and Locke's opinion seems
to be an erroneous one, however highly I may think of his
Essay ; at that time there was a great balance of trade
against this country, and gold was sent out in great quan-
tities, and Locke goes on to state the consequences of dis-
tressing the Landed Interest. But what was Locke's
remedy ? Was it a depression of the currency on an issue of
paper? He never thought of a paper circulation, nor
of depreciating the standard of money. The authority
of Hume is even still less in favour of the lion.
Baronet ; he cannot think more highly than I do of the
philosophic writings of that great man ; his acuteness,
sagacity, and anticipations of the future. seem at times
almost miraculous ; and I apprehend that he deserves at
least as high a reputation for his Essays as for his His-
tory. The Hon. Baronet referred to Hume, to show that
the only wise course for a country is to have a constantly
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 roust cease at some period, and be followed by a
propeetionate depression. Mr. Hume is speaking of the
circulation of specie, and nut of paper money. So far
from thinking with the Hon. Baronet, that it is wise to
increase the circulation of paper, Hume says in one of his
Notes—" We observed in Discourse 111. that money, when
, increasing, give@ 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 that credit, as must
happen upon any violent shock on public affairs." In the
text be tells in--. 'Tis only in our negotiations and trans-
actions with foreigners that a greater stock of money is
advantageous; and as our paper then is absolutely insigni-
ficant, we feel by its means all the ill effects arising from a
great abundance of money, without reaping any of the ad-
vantages." Hume 's argument relates to the effects upon in-
dustry by the increase of the precious metals; but it is quite
different from the position of the Non. Baronet, who quoted
him in favour of an increase of paper circulation. Then,
„ to Dr. Adam Smith, I well recollect the beautiful and
most happily illustrative metaphor applied by him to the
subject : he tells us, that gold and silver may be compared
to roads, which are productive of no profit, but circulate
all the products of industry; the roads not being cultiva-
ted, are sources of positive loses, but they are the means by
which all property is transferred; 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, how-
ever, that he was well aware of the evils of a paper cur-
rency ; for he makes use, in one place,
on—" It of this apposite ex-
pression--" were better, perhaps, that no bank notes
should be issued, in any part of the kingdom, of a smaller
amount than 5/. ;" and he goes on with a train of reason-
ing to show the dangers of a paper currency. In short, it
is utterly impossible to quote Adam Smith as an authority
for an unlimited issue of paper without u basis and founda-
tion of gold.
I have thus shown, I think, that the main
supports of the Hon. Bart.,
as far as regards the opinions
of the illustrious men I have named, fail under him; and if
it were possible for them to go into this Committee with
me, lam sure I should have their votes for resisting the
proposition they are supposed by the Hon. Baronet to ad-
vocate, and would refuse their sanction to the system he
tnaintains. I must say, therefore, that neither on the
score of experience, nor of authority, do I think the Ho-
nourable 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
1826. lentreat the House to consider what we were told