Star.
London, England, 1813-07-10 00:00:00

FINANCECURIMECY•

The Earl of LAUDERDALE said his chief ob-
ject in proposihg the Resolutions which he intended
to move, was to keep alive the attention of the House
and the Public to the present state of the Currency
of the Country, upon which subject he had intended
to originate a more detailed discussion in the early
part of the Session, had he not been prevented by
unfortunate events. He should not therefore now
take up much of the time of their Lordships, but
confine himself to a few of the most prominent points
of this highly important subject. Upon former occa-
sions, when our currency had been deteriorated, it
was easy to state the actual value of it as it then
existed, but in the present depreciated state of our
paper currency, there existed not the man that could
undertake to state its value for three months to come.
And however Parliament might have decided that
our paper currency was not depreciated, or however
it migh, be maintained in the two Houses that there
was no depreciation, but that the present state of our
currency arose from a rise in the value of the pri ci.
ous metals, he was satisfied that no man could be
found out of Joors who would assent to that opinion.
It was impossible, indeed, that the precious metals,
froth their nature, could rise in value, and the cause,
therefore, of the present state of our paper currency
must be sought in the true reason, namely, that it
was depreciated in that proportion in which it was
pretended that gold had risen in %relit?, or at the rate
of 35 per cent. The remedy for this evil was the
returning to the ancient standard and the resumption
of cash payments at the Bank. As to the mode of
applying the remedy, however, much difference of
opinion prevailed. The Bullion Committee were of
opinion that cash payments might be resumed in two
years—he saw no reason why it might not be done in
two days. The Act of Parliament directed that cash
payments should be resumed six months after the
conclusion of a definitive treaty of peace. It was,
however, a point not hitherto touched upon, as to
the effect to be produced by retuning, after a long
lapse of time, to the ancient standard, not only upon
contracts as affecting individuals, but in the contracts
to a still greater amount on the part of Government.
Suppose the case of a farmer renting lands at £lOOO
per annum. It was generally understood that a far-
, o'er, if he did nct make three rents of his land had

made a bad bargain ; be must therefore, in this case,
from the produce of his land, make £lOOO per an-
num to pay his rent, £lOOO per antrum for the ex-
pences of keeping up machinery, &c. and £lOOO per
annum as a return for his capital ; or, adding five
per cent. on the whole, £3150. What would be the
effect in case of resumption of cash payments ? j
Taking bank notes at their present depreciated rate,
the farmer only paid, instead of £lOOO, £750 per
annum ; but if he had to pay in coin he must-pay'
at the rate of £1050; which, as the resumption of ,
cash payments must necessarily cause a fall in the '
price of every article, the value of the produce of his
land would be proportionably diminished. Would it
r.ot then have a most injurious effect upon the con-
tracts between individuals, if they were to be called
upon to pay what they never in fact engaged to pay ?
In a still greater degree would this apply to the con-
tracts entered into by Government. In the course of
the present year £50,000,000 had been added to the
Public Debt. The money borrowed was at the rate
of £5. 10s. W. per cent. a higher rate of interest
than had been given for any loan hither to contracted
for during the war. But how did the matter really
stand ? The £lOO in Bank notes had been estimated
by the Bank themselves, in their coinage of tokens,
at £7B. Thus at the highest estimate, Government,
for every A: 00 it had nominally received, had only
received JE7B ; and in the event of returning to the
ancient standard, when they would have to pay
back coin to the whole nominal amount of the Bank
notes received, the public would have to pay for the
money thus borrowed at the rate of 47.55. per cent.—
Were not these important considerations, with a view
to what might be the effect of returning to the an-
cient standard, and to the question, as to what ought
to be done, and done speedily, to get rid of this de- '
preciated state of currency which was every year in-
creasing ? What, however, did the Government do ?
They gave a premium upon the issue of Bank notes
by receiving them for Exchequer Bills, and paying
interest upon the nominal amount. The issue of Ex-
chequer Bills had thus increased from £7,000,000 in
1797, to £4-3,000,000 in the present year, and the
interest from £350,000 in 1797, to one million eight
' hundred thousand pounds in the present year. The
Directors of the Bank, when called upon to state the
value of their notes, asserted, that they were always '
issued upon securities. that in the case of Biils of Ex-
change they had the security of the Merchant, and
with respect to Exchequer Bills, that they had the
security of Government, thus evidently proving that
the Exchequer Bill was a better security than the
' Bank Note. Yet what was the fact number of
pieces of paper, printed by order of the Treasury,
and signed by the proper officers, were exchanged
for a number of places of paper printed 'by order of
the Bank, and signed by their officers, and for this
the public were charged ►nterest to the amount of
5e1,801,000. By this system the Bank Proprietors
had become enriched- by increased dividends and bo.
nuses, until they la:.d pocketed £18,000,000 of the
public money, and the country bankers had increased
from 20Q in 1797 to 8(X) in the preseat year. It we

were to have a paper currency, *by did not the Go-
vernment at once issue it, and save the public the
enormous charge for interest urin.Exchequer. Bills
He was not advocating the policy of such a system,
but If we must have a paper currency, it was surely
better that it should at once be issued upon the secu-
rity of Government, and thus a saving be made
the public of the large sums paid merely for the ex- ,
change of the paper of GOverament for the paper of
the Bank. It was quite impossible we could go on
upon the present system, the evil arising from the
depreciated state of our paper currency had been in-
creasing from year to year, and must produce still
worse consequences. They had seen the ruinous
effect; of a paper currency in every country where it
had been tried, and it was only by taking timely
measures that they could avert the evil. His Lord-
ship concluded by moving the following Resolutions,
mentioning, that in the next Session he intended to
discuss the subjoct at greater length :

" Resolved, That the charge for Interest on Exchequer Bills,
in the year ending sth of January, 1798, amounted to the sum
of three hundred and seventy-five thousand four hundred and
fifty-six pounds.
" Resolved, That the Interest on Exchequer Bills, in the year
ending sth of January, I i 13, amounted to the sum ime million
eight hundred and thirty-five thousand three hundred and sixry-
nine pounds; and that the estimated charge for Interest on Ex-
chequer Bills, in the year ending sth of January, 1814, is one
million eight hundred and seventy thousand pounds.

" Resolved, That this great, 'and increasing sum, annually
paid for the purpose of obtaining Bank paper in exchange for
Government paper, appears to this House to be an improvident
expenditure of the public money."

The Earl of LIVEkPOOL contended, that there
was no proof whatever of a depreciation of our paper
currency. There never had been in this country a
paper price and a bold price, and however some per-
sons might pay a premium foil gold for the sake of
convenience, there was no indication whatever, in the
ordinary transactions of business, of any depreciation
of our paper currency. The same thing happened
with respect to silver, previous to the_ Bank suspend.
ing payments in cash, as many must recollect, a pre-
mium being frequently given for silver, on account
of its scarcity. The Noble Earl had contended that
it was impossible for the precious metals to rise in
value, but if be maintained this, he must be prepared
to contend that they could not fall in value. Now, it
vas a fact, well known, that the discovery of the
mines in South America had caused a most material
variation in the value of the metals in Europe; and
was any one prepared to maintain, that a diminution
in the import frcni South America (owing to the
circumstances of that country, arising from the Spa-
nish Revolution)—was any one prepated to contend
that the diminution of that import, for some years
past, from flO or 5€10,000,000 (at which it had been
tegulariy kept up) to 7 orreB,ooo,ooo, must not also
have the effect of causing another material variation
in the value of those metals in Europe ? There could
be no doubt also that a matetial effect was produced
by the enormous rate of expenditure at which the
war was carried on. The policy of continuinz that
expenditure—which he considered right, but which
other Noble Lords might consider erroneous—was at
present out of the question. There could be no doubt
however, that it had a great effect, added to the ex-
traordinary circumstances in which our commerce
had been placed. Wherever the balance of payments
was against a country, and consequently the course
of exchange, the circulation must necessarily be af-
fected. This, in time of Peace, soon led, by its own
operation, to the cure of the evil ; but, in the present
War, from our necessarily large expenditure, parti-
cularly in the Peninsula, combined w.th the didicul.
ties in which our commerce had been placed, a ma-
terial effect had necessarily been produced. It was
to these causes, he was convinced, was to be attri-
buted that state of our currency which the Noble
Lord alledged was owing to the depreciation of our
paper, but which there was no data whatever to esta-
blish. The Noble Earl, however, hatl urged the
extraordinary proposition, that a paper currency
should be issued by Government. Upon this point
all experience was against the Noble Earl, as in
every country where that had been tried, it had
uniformly produced the most ruinous effects...
The great mistake continually made upon the Conti.
nent was, that such a paper currency having produ-
ced those ruinous consequences in every country
where it had been tried, it was therefore expected that
a paper currency must produce the same conse-
quences here. The great security of our paper cur-
rency and that which constituted the important dif-
ference between it and the paper currency of other
countries, was, that it was issued by an individual
Banking Company, or by individuals, for the sake
of their own interest. The Bank of England would,
no doubt, be ready to accommodate the public ser-
vice ; but they could refuse to issue their notes, and
whenever they acted upon any other ground than
their own interest, it would be the first step to their
ruin. This formed the great security of our paper
currency, and placed it upon a basis different from
that of all other countries. He was as anxious as
any one to return to a metallic currency, with a sub-
sidiary circulation of paper; and he coulil foresee no
difficulty in returning to ti.e ancient standard in a
short period after the conclusion of a definitive treaty
of peace, though the period of six months might, un-
der some circumstances, be found too short. With
respect to the issue of Exchequer Bills, it was not
true that the issue of Bank Notes was necessarily
thereby increased, as it would be found, by inspect-
ing the papers upon the table, that the amount of
Bank Notes had sometimes decreased with an increa-
sed issue of Exchequer Bills, and had, on the con-
trary, sometimes increased without any increased
issue of Exchequer Bills. The fact also was, with
regard to Exchequer Bills, that they bore a pre-
mium of a quarter per cent. which rendered the
interest upon them not more than five per cent.—a
clear proof that the market was not overloaded. He
though! it unnecessary to enter more at length into
the subject, as it was to be more fully discussed at a
future period • but of this he was thoroughly cos-
vinced, that the only wise system of paper currency
was that which at present subsisted in this country.
—His Lordship concluded by moving the previous
question. -
Lord HOLLAND, without pretending to much
knowledge ot this subject, could not help observing
the inconsistency of some of the Noble Lord's obser-
vations with the facts, and with each other. He had
always understood that the exportation of the metals
from America had been much greater ot late years
than before. The Continental Sygan was, as to

this purpose, at an end. The Baltic and the Per.iri.
sula were open. Granting that the produce of the
mines was less than in former years, the effect must
have been felt in other parts of Europe as well as
here. If the supply was diminished, the metals would
•be scarce, and the prices of commodities must fall;
but the very reverse was the fact. At no period tee
had this country more exclusively the means of sue-
plying itself with precious metals. As to the ea-
penses of the war, he could not conceive, unless pt.
per was depreciated, (and it was tle argument of the
Noble Lord that it was not,) how these expenses
could be more easily applied in paper than in gold.
The only way in which lie could conceive it to be
more easy to pay in paper than in gold, was, by
cheating the public czeditur. This at least was nc
very honourable way of providing for the expenses of
the, war. He remembered to have herd it said 14
one whom in his early life he had called his frierA,
' (he would not name him) in 1792, that they (tla_
ruling party of France) would. In ;ng an army tato
the field by means of assign.ifs. In answer to some
questions put by hint,the person to whom he alluded
observed, that the ascignets would gradually depre-
ciate ; and he made nse of an English expression, not
a very elegant one, g‘ the devil take the hiOdmost
the last in a n would be ruined; but the assignats
would in the mean time enable them to defend the
country. The Noble Lord appeared—nOt with the
same view of the subject, but—in effect performing
a similar operation with his er.
Lord ROSS said, that the advantage of the paper
was, that it was completely station .ry. It had rot
fallen, but gold had risen ; and the public creditor,
on the resumption of casai payments, would get mere
han his due.

Earl STANHOPE said lie would qno:e a great
authotity, to which, if al! who I:eard him did not
bow, the Noble Earl (I.audetdale) at least wculd.
He meant a laboured book, piloted by the Noble
Earl himself. This Light the Noble Lord hid said,
that it was impossible gold should ever rise in value;
but the Noble Author, in p. 28 of his book on the
Depreciation of the Paper Currency of Great Britain
said, 64 the moment gold begins to be exported, the
value of that which remains must increase. To-day,
however, the Noble Earl told them that gold never
rose in value. The Noble Earl then proceeded to
account for the high price of gold, by the balance or
payments being against us, and the other causes sta-
ted by another Noble Earl (Liverpool). He con-
cluded by reprobating the abuses of country bank.
ing, against which be thought the attack of the No.
ble Earl (Lauderdale) ought properly to have been
directed.

The Earls of LAUDIADADB and Ross severally elt‘
plained.

After some further discussion between Lord Hot.
LAND, Lord LIVERPOOL, and Lord LAUDERDALE, lIOD
previous cinestion was put, and carried.
Adjourned till to-morrow (this day). •
HOUSE OF COMMONS.

There being only 38 Members present at four o'cicick, tits
SPIAKILa adjourned the House till ro•morrow.

BAST-INDIA 110 USE.

Yesterday a General Court was held, for the fur-
ther consideration of the Bill pending in Parlianenr.
The Chairman (Mr. R. nfouNrcas) gave an cxposi.
tion of such proceedings as had occurred since the last
meeting of the Court.
Mr. RANDLE JacKsoy then desired to know the na-
ture of the communications which had taken pl..ce ia
the int,wval, between Government and t to Directors.

The Chairman replied, that the Court had n it been
put in possession of a correct copy of the clauses, acd
were unwilling to submit a garbled statement.
A Proprietor then proposed an adjournment, upon
the principle, that it would be premature to enter into
further discussion, until an authenticated copy was
laid before the Court.

The Chairman stated, that it was expected the Re•
port of the Bill would be made that evening in the
House of Commons ; and that a conference was to be
held in the course of the day between the Ministers of
the Crown and the liirectors.

• Mr. LOWNDZS opposed the adjournment ; and called
upon the Court to express some decided opinion upon
the Bill, before they separated.
Mr. R. JACKSON strongly censured the rapid man-
ner in which Ministers were carrying the Bill through
Parliament; and remarked, that if they continued co
act wit the same high hand they had hitherto done,.
the Proprietors could not acquire an adequate know-
ledge of the character of the Bill. la their last meet.
ing, the Court had declared, that the Bin, in its pre-
sent shape, would ultimately lead to the bankruptcy
of the Company. He theretore trusted, if ms modi-
fication, favourable to their interests, should be intro.
duced, that the Court of Directors might be em..
powered to reject it ; the trade of India would be,
otherwise, exposed to the mercy of adventurers ; and
he strongly deprecated the powers to be vested an the
Board of Controul, for granting licenses to trade iu
the Eastern Seas. By the abuie that must result
from such power, he predicted the loss of the l'ea
Trade to the Company. He was, nevertheless, will.
ing to agree to any proposition which would scLuie the
company short of destruction. The reasonableness of
their being guaranteed against loss was admit.ed
by every one, with the exception of M s.—
Let their capital of 412,000,000, and their interest
of 10 per cent. be guaranteed, and Government should
have a counter-guarantee to the extent of their assess.
It Ministers, however, from a sentiment of mock-dig-
nity, should persevere in their present tine of condua,
he would, in that case move, that the Company should
not accept the Charter in its intended iorin, but con-
tent themselves w itl►the commercial privi,eges gi :mud
to them in the 10th W. 111.

Mr. 13osasiaLer thought, thlt the ecriduct of Mi-
nisters, in giving the Company only the right of pe-
remptory refusal or eccrptanct, could not b.. justi&J.
They ought, at certain stages of the Bid, to have con-
sulted the teelings and interests of that great bud).
and substituted conformable inodificauone. But ix
considered the motion betore the Court premature,
and must, upon that ground, oppose U.
Mr. KINNAIKD SMIII4 observed, that no notice 114!
been taken in toe Bill of tae Captains and o;i.er 1.1;•
ricers in tile maritime set vice of the Compa..y. f•it
hoped some provision would be made to that rftec.
particularly As SO much care esda U.K. II 0' secure L
interests of persons employed in the iand-servi.e. He.
concluded by recommeachog the subject to the