Star.
London, England, 1828-06-04 00:00:00

the consequence? Why, the circulation was contracted,
the price of %%heat fell to 435. and distress prevailed.
And what did the Miuist, rof that time do? Why the
late Marquis of Londonderry very properly said that
it was a currency question, and treated it. as such. In
the first place, he forced the circulation by an issue.of
tour millions.,
of Exchequer bills, and then said the
withdrawal of the small notes cannot be carried into
effect. That threatened measure was put off until 1853,
and expressly from the consideration that in that year the
Bank .of England's Charter would expire, and then the
whole question of the paper currency might properly be,
taken into consideration. And what was the effect of

those measures? Why,the price of wheat rose to 60s. and
prosperitf again appea-ed. The Hon. Baronet then al-
luded to the speech of Mr. Baring, in which he said
that his Honourable Friend had wisely detected the
great fallacy maintained by Mr. Ricardo, and predicted
that the change would increase the value of money at
least 25 per cent. Nor had the Hon. Member for Cal-
lington changed his opinion ; for a short time since lie
maintained that the •alue of money had actually been
increased SO ptr cent.; and in doing so he was borne
out by facts, for he (Sir J. Graham) knew a Gen-
tleman who died in 1812, and left an estate to two

sons. The eldest bought the younger's moiety; but
the younger purchased land lately, and he received
nearly as much rent for his half as his brother did for
the whole estate purchased in 1812. The value of
money increased in the same ratio as the supply was
diminished ; and it was in fact a matter of indifference
to the agriculturist whether the quantity of money was
decreased, or the ports thrown open to the grower of
foreign corn. That was in fact tully felt to be the case
by.those who had taken a part in the discussion on the
+late scale of duties, and the effect of a contracted cur-
rency would be still further seen by a reference to the
remount in circulation at two different periods. During
the eight years between 1810 and 1818, the country
bank notes in circulation amounted to 21,000,00 W. and
the price of corn averaged 925. 4d. per quarter ; while
during the eight years following 1818, the amount of
the country bank notes in circulation was 10,750,0001.
and the price of wheat,-although the ports were her-
metically sealed, was 575. 10d. per quarter. Such.SVar
the fact, and if they were to go on contracting the cir-
culation, he very much feared that still worse conse-
quences would be the result. He was glad to see the
Right Hon. Member for Liverpool in his place, because
he hoped to hear him explain the discrepancy which
appeared between the opinions he gave in 1815 and those
which he had since acted upon. The Hon. Baronet then
quoted from a speech made by Mt. Huskisson in 1815,
and among other passages one to this effect: that with an
establishment requiring between 50 and 60,000,0001.
to support it, it was utterly impossible that the price of
wheat should fall to what it was before the war. The
farmer was then satisfied with a sale which produced him
three rents, whereas now he required at ;east one of
five rents for him to be able.te go on atall. -Such were
the Right Hon. Gentleman's opinions in 181$ ; but the
Right Hon. Gentleman had nevertheless accomplished
an impossibility—for by tampering with the currency,
he had reduced the price of wheat to 435. per quarter,
which undoubtedly was the lowest price it had been at
ever since the Revolution. Most of these incumbrances
upon the land were incurred during the depreciation of
property, and if the system of contracting the circula-
tion were persevered in, the Agriculturist must live
wretchedly, or be content to go on but for a short time
longer, and give up entirely to the monied man. A simi-
lar attempt bad been made to restore the currency in the
reign of Louis XIV. He contended that the effect to the
labouring classes was also most prejudicial—they were
[deprived of many of their comforts. With respect to the
bus then of taxation the effect was most injurious. In
1813,-the heaviest year of the war, the taxation amounted
to 81,000,000/. which, allowing for the alteration that
had taken place in the value of money„ was only equal
tV 5'2,000,0001. The taxes tar the preseit year amounted
to 54,000,0001. and therefore the taxes, in consequence
of the tampering with the currency, *me more bur-
thensome by 2,000,000/. at present than they were in the
worst year of the war. To his own opinion he would not•
of course ask the Hoarse to attach the slightest impor-
tance, but to prove to the House that be was not ad.
vancing any new and unsupported system, but that the
'diminution of the circulating medium was what he had
represented it to be, a very great injury to a communityi '
he would beg leave to quote some very high authorities.
The Hon. Baronet then quoted from Locke, Hume,
and the Hon. Member for Callington, in support of his
proposition. He therefor e contended, that the decrease of
money,. if not ruin, was at least the high road to ruin.
He would then apply himself to the effect which the
suppression of the small notes would have. And 'upon'
that point he was directly supported by the declaration'
of the Right Hen. Secretary for the Home Department.
The other evening that Right Hon. Gentleman, speaking
to the Hon. Baronet the Member frit Kent, had saiti,
that it would increase the value of money. With such
an admission he did not think it necessary to trouble the
House further upon that point. The reasons assigned
for putting an end to the small-note circulation, was,'
first—its tepdency to produce an over-issue. Now
the authority of Mr. Horner, of the Bullion Com-
mittee, of Sir T. Baring, of Adam Smith, in fact,
the very highest authorities, concurred in the prin-
ciple that convertibility into gold was a sufficient
protection against over-issue. The opposite opinion
rested merely on the authority of Government and
on Lord Liverpool's Letter to ,the Bank of England.
The second reason assigned was the effect upon the
value of the currency, and the tendency of a small note
circulation to produce depreciation. Now, in Scotland
no effect of this kind was found to follow from small
notes. When people talked of the calamities of 1825,
and the effects of the panic which then occurred, they
should recollect that in 1793, when there were no small
notes, a similar panic was felt, and produced similar
consequences—(Hete theHonourable Baronet read from
a work of Professor Playfair an account of the circum-
stances which followed from the panic of 1793.)—Tha
evil went on increasing in 1793, until Mr. Pitt, the
Minister of the day, came forward, and ordered an
issue of Ova millions of Exchequer bills. This, though
not more than three millions were demanded, had
the immediate effect of removing the embarrassments
of the time. The evil of 1793 did not arise from an
over issue of paper, because the currency was then
a metallic one; it arose from too cheap a metallic cur-
rency, sent into circulation without the paynient of any
seigniorage. It seemed somewhat contradictory that
the putting down of a small note circulation should
be now proposed as a preventive against future incon-
veniences, while in 1825 that species of circulation was
had recourse to as a remedy for the evils which then
occurred. If the country small note paper was lobe put
an end to country banker: must make preparation for
the event, either by the sale of Stock or of Exchequer
bills—and they must ultimately come to the, Bank of
England for gold.. There were six hundred country
bankers. Suppose each to have a circulation of small
notes to the amount of 8,0001. This amounted to between
font and fire millions. They must) besides, make pre-

portion to pay the large notes in specie, so that at least
7.000,0001. in gold would be required for this operation.
For this arktountthpy must have recourse to the Bank of
England, which would, as a matter of course, be under '
the necessity of contracting its issues. The destrilles of
the country would thus be in the hands of 24 Gentlemen
of the Bank of England: Suppose, then, a bad harvest
to occur, specie must go out of the country to procure
a foreign supply of corn, panic would necessarily
be the consequence, and all the evils of )525 would ,
reappear. These were subjects well worthy of inquiry
before a Committee. Indeed, there were seven or
eight heads of inquiry connected with the subject,
all worthy of the most serious attention. The late
perild of the Session was no reason why the investi-
gation should be refused. They all knew that the
result of investigation, as it regarded Scotland and Ire-
land, was to suspend the operation of a similar me4sure.
In place of the sth.of April next, suppose the measure
should be postponed to the end of next Session; there
would then be time for consideration. He was not ena-

moured of a paper currency, but having had it so long,
it would be just as foolish to throw it away becaur
some inconvenience arose, as for a child to dash a watch
against the ground. because there was an irregularity in
the movement. A paper currency seemed to him one
of the greatest inventions of modern times. When con-
vertible into gold, it was safe, convenient, and cheap.
Having had it so long, it was impossible now to get
rid- of it. He fully concurred with the observation
of the Honourable Member for Westminster OW,:
Francis Burdett) on this subject in 1811 —1! He
who enters here must leave all hopes of return
behind ;" and with Mr. Fox upon the same subject,
that it was impassible, once having had recourse to a
Bank restriction, to devise any remedy unattended with
incorivrenience. He firmly believed that there was no al-
ternative but to adhere to their-paper system. He had
no hesitation in asserting that the cause of the French
Revolution was its debt. The remedy recommended
by Neckar was a paper circulation. This Mirabeau had
opposed, and persisted in his opposition, till the King
was brought to the block, and the N.,bles expelled the •
country. Subsequently, however, Mirabeau himself
turned the screw, lifted the flood gates, and completely
inundated the country with paper, paying all debts in
assignats--CHere the Hon. Member read a passage
from Hume, on the subject of currency and public
credit.)—All he desired was, that the subject should be
iqquired into, for the purpose of ascertaining whether '
improvements might not be made in the present sys-
tem. The Hon. Baronet concluded by moving, (hit a
Select Committee be appointed to inquire into the
currency of notes under 51. and to report their opinion
with reference to the expediency of making any altera-
tion in the law. _

Mr.LIDDELL seconded the Amendment. He fully
agreed with the general arguments and views of the
Hon. Baronet, to whom might justly be applied the-
commendation—
" Nullum fere scribendi genus non retigit,
Nullum quod tetigit non oilmen."
The subject was of the greatest importance; and although
it had oiten been discussed, there still existed so much
diversity of opinion, and such varieties of views, that
he thought the question ought to be settled by the in-
vestigation of a Committee. The arguments were pretty
nearly balanced; but it was impossible to observe the
state of the country, and the extieniety low rate of profit
at which all articles were brought to market, without
seeing the necessity of settling the present question..
He should object to the measure brought forward by the
Right Hon. Gentleman opposite, because he considered
it a partial measure, introduced upon an eft oneous view
of the subject. He could not in every point agree with
the opinion of the Honourable Baronet ; for if the Right
Honourable Gentleman opposite was determined to
carry the question, lie was cossvieced it would be neces-
sary to pass some law to confine the circulation of
Scotch one pound notes within that part of the king-
dom. Nothing could be more easy than for the present
bankers of Scotland to transfer their establishments-to
the Borders, and the English counties would derive
an equal supply of small paper to that which at'
present circulated in those disci icts. The question
had created, very great apprehensions in the pats
of the country next to Scotland. He had contesn-
plated not. merely the difficetty of withdrawing .the
one-pound notes from circulation, but what the
country was suffering from the apprehension of the _
measure. The Honourable Member who had spoken
on the subject upon presenting a Petition previously to
-the commencement of the debate, had held language
similar to that which had been used by the Honourable
Member for Caliiugton (Mr. Baring). He contended
that low prices and high taxation could not co-exist,
and he called upon the Government, as low prices were
likely to continue, to reduce the taxation in a corres-
ponding degree. ~But unfortunately, the Governnient
had borrowed many hundred millions, arid it had
the interest of this loan to pay to the public creditor.
if the Government were to reduce the fleet and army
to the.standard before the war of 1793, and if the Pen-
sion List were abolished, still would they be under the
necessity of maintaining a high rate of taxation in order
to pay the interest of the debt., He, therefore, hoped to
have the vote of the Hon. Gentleman for the appoint-
ment of a Committee. He (Mr. Liddle) knew the im-
pression which prevailed oil the subject in the northern
county which lie bad the honour to represent. He
placed the firmest confidence in the respectability and
credit of the Bankers at present established in that
county; but it-was a hard case to be deprived of the
services which had hitherto been derived from them,
and he thought that the privileges allowed to the other
side of the border might be extended to the English
district. -It might be proved before the Committee,
that it was perfectly practicable to have a paper cur-
rency, under regulations consistent with the security of
a metallic currency ; and considering the necessity of
examining the subject in all its bearings, he should.
vote for the appointment of the Select Committee.
Mr. SMITH O'BRIEN would support the circulation of one
pound notes, under a system of regulations which would secure the
public against the insolvency of the banks that issue them. The
abolishing of the circulation of one pound notes offered to the
country no security whatever that it did not at the presentmOment
enjoy. The question, however, ought to be thoroughly investigate 4,
and he should vote for the appointment of the Committee. .
Mr. F. LEWIS said, that the speech of the Honourable Baronet
was not only against the motion, hit against the whole of the Bill
of 1819; and it would have been a clearer course at once to have
attacked that BilL Let it be remembered, however, that over ind
over again the House had decided that such Bill should nut be re-
versed—that it ought to be carried into effect—and that io the
carrying into effect of such Bill the House stood pledged. Not
only the faith of Parliament, but the state of things of me. tOrbade
them to think of disturbing the Bill. The Hon. Baronet had told
them of the evil consequences that had resulted from tampering with
the currency, and yet that same Hon. Member, when we had a
settled standard. would send them to a Committee, to inquire,
amongst other matters, the !expediency of altering the standard.—
Could any thing be more fatal than to agitate such a question—
more unwise, more calculated to produce all sorts of schemes?
Nothing could be more fatal. They had travelled thus far. arid
successfully,' in their efforts to restore a metallic currency, and he
trusted that nothing would induce them to swerve from such a
course—(Hear, hear). He trusted that they shoirld.not again see
events like those of 1825; and how were shey.to be eowirdiew
.fully averted as by 'checking that power, the abase of -*bleb

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