Martin, J. Montgomery, Sir H. Robinson, G. A. Macdonald, J. Smith, R. North, D. Protheroe, E. Phillips, G. Smyth, J. GOLD COIN BILL.] The report of this Bill being brought up, were disposed of at a premium. Now, this depreciation took place in the interval between the passing of this act in 1811, and their renewal of it in the last session, when it was first extended to Ireland. And could any person attempt to maintain, that this depreciation, which existed before the law was made applicable to Ireland, did not equally exist afterMr. Huskisson stated, that as his opi wards? Certainly, the act could not nions on the subject then before the House produce such an effect. As a proof that were generally known, he would not tire the paper currency was not in that sound their patience by going at great length into state which some gentlemen contended for, the question, in reference to the law of the he instanced the circumstance of the trealand, and the principles of justice. He was sury having last year sent out a quantity disposed to think, that, out of the walls of of Bank-notes to Canada, to pay the army that House, notwithstanding the assertions and establishments in that country. His of his right hon. friend the Chancellor of the right hon. friend, he supposed, thought Exchequer, they would not be able to find that these notes would be held in equal any one person who would agree in the Re- estimation with the public in Canada, as solution which they had just affirmed, any his Resolution set forth they possessed in more than they could, in the ordinary busi- Great Britain. Whether the wrappers in ness of life, procure a guinea; all that de- which they were enveloped, had this cescription of coin having completely disap- lebrated Resolution engraved on them, he peared. If any person could doubt that there could not ascertain; but, when they ar was a depreciation of the paper currency, rived in Canada, what was their fate? he knew no better mode to convince him These Canadians, whose loyalty and alleof the fact, than by drawing his attention giance had been so deservedly praised by to the Bill then on the table. His right the Prince Regent, in his Speech at the hon. friend had argued, that the paper commencement of the session, not being could not be depreciated, if three condi- liable to any penalty for the act, at once tions were acceded to: first, that the coin set their own estimation on the notes, of the realm should pass at a current rate, and disposed of them at a discount of to be fixed by the sovereign authority of about 30 per cent. Now, he would ask, if the state; second, that the paper cur- the notes so transmitted then, were disrency should correspond with the deno-posed of at a discount, could they, on nomination of the coin. These two principles were acted upon in all states. The first constituted the essence of money; the second was its representative. But his right hon. friend found a third condition necessary to prevent the depreciation of this representative, and which they were then labouring to effect by this law. To render the current coin and Bank paper equally valuable, a penalty must be inflicted on those who disposed of the former for more than the price attached to it by the sovereign authority, or who disposed of the latter for less than its nominal value; and then they came to this conclusion, that if the paper money was so depreciated, as that 1,000l. of it would not purchase a quartern loaf; yet if, by a penal law, its denomination was secured, no depreciation whatever could be allowed to exist! He had, however, the admission of the right hon. gentleman himself, that in Ireland the paper currency was depreciated, because the guineas in that country being returned to this country, by the operation of the Bill then before them, be immediately restored to par? He supported the first part of this Bill, but he never was an advocate for the principles on which it was founded. Those principles had been carried to a very great length, by, many individuals, in both Houses of Parliament, who seemed to think that the Bank restriction opened a new field and system of political finance. He could not view it in this light-his reason for entertaining this part of the Bill arose from a very different principle-it arose from a feeling of the necessity of the case, from the very alarming state in which the currency of the country now stood, occasioned by the measure of the Bank restriction being so long continued. The part to which he alluded was that, which to all practical purposes, rendered Bank-notes a legal tender; and perhaps it would have been better, if a direct proposition to legalise such tender had been made. To t 30 281] Gold Coin Bill. the second division of the Bill, which went, who had trusted to the honour and faith to prevent the disposal of the current coin of the public, should be left in so disad of the realm for more than its legal deno-vantageous a situation? Parliament, it was true, might not have interfered, but it mination, or of Bank-notes for less, he was decidedly adverse. The Bill was origi- would have been most unjustifiable, and nally introduced in the other House of would have placed the country in a state parliament, with views very different from of danger. If they had not passed the those on which it had afterwards received first part of this Bill, which protected the the support of his Majesty's ministers- debtor, they must have repealed the law, which were, to rescue the debtors through- which prevented the public creditor from out the country from an undue severity. receiving his dividend in Bank-notes, and The object of the noble earl (Stanhope) Bank-notes only, or, in other words, they who proposed it was to introduce book- must have opened the Bank: it was a entries, which should at once supersede matter of option, and he supported that the necessity of coin or of Bank-notes; course which seemed least likely to create and the ministers adopted so much of the mischief-but in giving that support, he Bill as would protect the debtors, placed, was not influenced by any approbation of as they were, by the Bank restriction, in a the principles on which the Bill was most awkward situation. They inter- founded; they were contrary to the law fered to the extent of preventing any of the country, and could only be justified creditor from insisting on that "good and by necessity. The second part of the legal payment" of his debt (that was in Bill was no less a violation of the prin law and justice, without current coin) which it was not in the ciples of power of the debtor to make. In origi- being founded on any necessity whatever. nating this demand, the noble lord (King) It had an effect the very reverse of what was intended by those who supported it. had done what he certainly had a right to do; but, then, the matter came to this, Let the House look to the experience of that what he required, every other creditor the last eighteen months. Did this part in the country had an equal right to de- of the Bill effect that which was contemmand; and he had the authority of the plated? Did it occasion guineas to pass noble lord himself for saying, that this current at their current rate? Could any would be a most unjustifiable proceeding. gentleman state an instance of one being In the notice to his tenants, he spoke only passed at the rate established by the of leases executed before the passing of king's proclamation? On the contrary, it the Bank Restriction Act; and therefore had driven all the guineas, crowns, halfallowed that those whose rents were raised, crowns, and even shillings (except those in consequence of the depreciation of which were very much debased) out of circulation. It was clear that it did not paper, by that act, and who were paid through that depreciated medium, ought preclude individuals from disposing of not to be called on for any addition. If their guineas at the highest price they the system had been pursued, the man could procure. The law was evaded every who had deposited 1,000l. in notes, with day; and the only case in which it could his banker in the morning, might be called succeed, was, where persons were seduced on in an hour to pay in cash; and, by this by those who were particularly employed means many persons would be placed for the purpose, and then prosecuted, and Some at the mercy of those who entertained involved in the penalties of the act, malice against them. This was a state in through the cunning of others. which the country could not be left; and convictions of that kind, he believed, had he was surprised that gentlemen should taken place. It was therefore most evi have opposed the whole Bill, as utterly dent, that any man, in spite of this law, unnecessary. On that ground alone, be- might sell his guineas, or crown-pieces, cause he clearly saw the necessity, did he for what he supposed they were worth, approve of the first part of the Bill. But without any fear of detection. there were many public creditors who had millions of guineas had been exported to France and other countries, since the first advanced hundreds of millions for the service of the country, and who, since the Bank introduction of the Bill-not for want of restriction, were placed in the same situa exertions to prevent such exportation, but, tion with every individual in the kingdom, because it was as impossible to execute receiving their dividends in Bank-notes; this law, as that against melting down the and be would ask, was it possible that those coin of the realm. The ancient law of Some the country prohibited most ineffectively, the melting down or exporting the current coin-and now they superadded to these, a law, the direct operation of which was, to give a premium of 25 per cent. to every man disposed to export or melt down the metallic currency. For, if guineas disposed of in France procured a return on England of 25 per cent. more than they would produce here, it must act as a temp tation to those possessing that species of coin, to send them abroad; and, on the other hand, if the guineas were melted down, the owner would realise an equal profit for his bar of gold. If this law did not cause exportation, there was but one other effect that could be produced by it -that of inducing people to hoard their gold. This certainly could not be looked upon as an advantage; it was, on the contrary, a very great evil, and was so denominated by every writer on political economy. At the present moment, it was an evil of more than ordinary magnitude, when the government were endeavouring to procure those supplies of bullion which were necessary for the army in the peninsula, and the want of which had operated not only to the general disadvantage of our forces there, but had occasioned great difficulties to many of the officers employed on that service. Yet, at such a moment, they were enacting a law, which must induce men either to hoard their gold or to send it out of the country. He never heard any ground of necessity alleged for this part of the Bill. Perhaps it was intended to support his right hon. friend's third Resolution; or to prevent two prices in the sale of articles. Now, would there be any great evil, if there were two prices? For his own part, he knew of none. Two prices existed in this country in former times: for instance, in the reign of king William, when, in consequence of the debasement of the silver currency (the measure, at that period, of all the commodities of life) the gold currency was raised to a greater value, in reference to that debasement. Guineas were not then tied down to one price, but rose with the depreciation of silver; and two prices (not in the common acceptation of the word) took place that was, the silver coin having been debased, a guinea would procure a greater quantity of goods than 22 of those in ferior shillings. In the same way, before the passing of this Bill, every thing was measured in Ireland by the standard of guineas, which were at a premium, while notes were at a discount: of course, a purchaser, with gold, procured more goods than he who tendered a nominal sum in paper. And it could not be denied, that the moment the legislature made Bank-notes, as they had virtually done, a legal tender, the gold and good silver disappeared; and guineas were now, like foreign coins, measured by their intrinsic, not their stipulated value. The hon. gen. tleman then adverted to the Portuguese paper, which he admitted was at a discount; but, as no legislative protection was afforded to it, as was the case here, the me tallic currency of that country had not vanished like ours. And this enabled us to provide, though inadequately, for the wants of our army in the peninsula. For all the reasons he had stated, and because it appeared to him that the second part of the Bill was not founded on any necessity, and only encouraged the exportation of our coin, he thought the House should confine themselves to the provisions of it, by which the public creditor, who was compelled to take Bank-notes, was protected, and by, which relief was also afforded to the great body of debtors throughout the country. Mr. Rose, differing from the hon. gentleman in his view of the second part of the Bill, took that opportunity of stating his opinions. He did not mean to deny the fact of Bank-notes having been transmitted to Canada, but he certainly had no previons knowledge of it: he had never before heard of such a transaction. If, however, the notes had been sent there, he could not conceive how a depreciation of 30 per cent. could have taken place, for, undoubtedly, as they were payable at sight, they must be considered at least as good as bills of exchange. The hon. gentleman did not express a wish that the Bank restriction should be taken off immediately. Now, in this point, he differed from several members of the Bullion Com-mittee. It was proposed that the restriction should cease at the end of two years. One hon. member of that committee, however, was desirous that the period should be extended, from time to time, as circumstances warranted; while another wished that it should peremptorily cease and determine, at the expiration of the first-mentioned period. So that it was apparent, from this difference of opinion, that if the legislature had enacted that the restriction should terminate in gentleman could not possibly conceive that any system could be devised more pregnant with injustice to the public creditor, and with more confusion to the state. If on the one hand it was argued, that the public creditor had a right to ask his dividend in coin, why, by the very same reason, and in consequence of it, the collectors of taxes had a right to insist on being paid in guineas; and who could foretel the end of that double price in the transactions in life, which was at all times so much deprecated, that under king William no less than two Bills were passed to ascertain the precise value of the guinea? The present high price of bullion, which had created so much discussion, could not, in his opinion, be attri buted to any other cause whatever, but to the balance of trade being against us in the present state of the world; for it was evident, that when a country imported more goods than it was allowed to export, the balance must be paid in bullion. But instead of reverting to that plain and obvious cause, this temporary evil had been attributed by some to the excessive issue of Bank-notes, and that idea had been productive of the most mischievous consequences. The right hon. gentleman then adverted to the statements contained in the Appendix to the Report of the Bullion Committee. By the tables contained in that Appendix of the Price of Gold, compared with the issue of Bank-notes, and with the price of coin, it was evident that the amount of the paper circulation had no effect whatever on the price of either of those commodities. The right hon. gentleman did not expect, indeed, that the Bill before the House could have the effect of preventing the exportation of coin, as long as bullion should continue at the present price, but the Bill would prevent the confusion necessarily arising from double prices in all the transactions of life, and in this point of view, it was his most anxious wish that it should pass into law. two years, it would have created a degree, of confusion in the country, from which nothing could have extricated it. For what use would it be to compel the Bank to open, without the means of paying in cash were given to the Company? And where were they to procure the precious metals for that purpose? Some gentlemen had said, that gold could be imported from Africa, and from the American market. But this could not be done, unless there was a surplus balance of trade in our favour, and as often as gold was higher than the Mint price, it was impossible to coin that metal; it was, in fact, totally impracticable. The right hon. gentleman on this head, quoted the authority of Mr. Harris, who had a situation in the Mint, and who was, of course, interested in the increase of coinage. He had stated, many years ago, " That when bullion was above the Mint price, there were but two ways of affording a coinage to the public; the one by debasing the standard; and the other, by purchasing bullion at the advanced price of the market, and converting it into coin with loss. But this would not answer the desired pur. pose; for that coin being below the market value of bullion, would be melted as soon as issued, sold again as bullion at an advanced price, and so on in an endless rotation, until the bullion market found its level again." The right hon. gentleman argued, that such being the case at present, it must strike every one that it was impossible for government to coin; and if no coin was issued, how could the Bank resume its payments in specie? He was as ready as any man to ascribe lord King's conduct, which had rendered the present measure necessary, to the purest motives; but it was not less mischievous on that account. It had been the boast of gentlemen on the other side, that no landlords had followed the noble lord's example, but he felt confident that many would have done it, had not a check been seasonably put to the practice. The right hon. gentleman then adverted to the Mr. Preston maintained, that Banksituation in which, but for a Bill of this notes were not depreciated, but that the nature, the public creditor would be re- price of gold had risen, which had given duced. He would receive his dividend the idea of the supposed depreciation. in Bank-notes, at the rate of 20 shillings, But if Bank-notes had really decreased but when he should go to market with in value, goods, which were purchased these notes, he would soon find that they with them, and especially landed prowere current only for 15 shillings, or per-perty, had risen to a proportionate nohaps less, for the value of Bank-notes would be of course regulated by the fluctuating price of gold. The right hon. minal increase of price. The contrary, however was the fact; and the fair consequence to be deduced from it was, that Bank-notes had not depreciated, however | from the great difference of opinion which the price of bullion might have risen. had been so strenuously urged, he could The Bill before the House went to prevent not justify to himself the vote which he the traffic in guineas, to which this rise in had already given, and should give on the price of the precious metals, and the that subject, without expressing, however rapacity of individuals, had given birth; shortly and imperfectly, the reasons which and no measure could be more proper; for operated on him. The question seemed surely a man who fairly received a to him to be shortly this; whether the guinea at its stated price in the usual deal- system of paper currency adopted of late ings of society, could not be allowed to years by this country was bad; and, even make an unfair profit by it. The hon. if bad, whether it could be suddenly gentleman thought that almost at any rate changed? If it could not be suddenly the legislature should prevent that fluc- changed (and that it could not, he contuating and double price in all transac- ceived, all would admit), then he asserted tions, which would soon put an end to all that this Bill, to remedy or palliate an evil commerce. and leave nothing but jobbing growing out of it, was absolutely necessary in its stead. A fixed standard was abso- as a temporary measure. The evil and conlutely necessary; and he saw no impro- fusion of two prices was incalculable, and priety in taking the Bank notes as such, indeed impracticable by any fixed stanas no depreciation in their value had been dard. But for his part, he most strenuously found in contracts, nor in any of the pur- denied that the system of a paper curposes of our inland trade. rency, such as ours, was bad. It had been characterised on the other side as delusive, dangerous, and hollow; not as wealth, but as the fallacious appearance of wealth. He would assert, that if it was not wealth, it was at least the mother of wealth. To what other source could be attributed the vast and unexampled start which had been made by our population, our commerce, our manufactures, our shipping, our canals, and our buildings since the year 1786? These, at least, were solid wealth and from what other than this calumniated, but creative source, could they spring? It was urged over and over again, that the issue of paper money had been excessive; but it was clear that there could be no excess, if the augmentation did not exceed the augmented riches which it represented. He would boldly, without fear of being confuted, maintain that it had kept within those bounds. The The system, therefore, could not be guilty of the charge of increased prices which had been so violently objected against it. But if there were some evils incident to the system (and he denied that they could be important enough to alter its character of paramount good,) what could now be done? Could a substitute be found for this currency? The mines of South Ame rica had failed of adequate supplies for a metallic currency. Was the increased wealth and commerce of the world to be stagnant? Were all the evils of an impeded and inadequate circulation to lower prices, and dry up at the sources of reproduction? And why? because gentlemen in their theories chose to attribute to the Mr. Protheroe began by stating his approbation of that part of the Bill which protected the tenant as of eminent advantage, when the political theory of a noble lord (King) had led to a harsh experiment, which had been applauded by party spirit. In his opinion the tenantry of the country deserved to have their interests protected with as much legislative care as any class or description of men whatever; they ought to be enabled to confide in the wisdom and benevolence of the law, and not to be left under the precarious security of a landlord's indulgence or caprice. He had listened attentively to the speeches of great authorities, undoubtedly, on all subjects of political economy, and although he rose with diffidence after the right hon. gentleman, who might be considered the Nestor of the House, yet when he heard the Chancellor of the Exchequer state, that unless the present financial system were maintained, the war in the peninsula must be relinquished, he could have no scruple to vote in support of a question on which our national honour and prosperity so materially depended. The Chancellor of the Exchequer rose to correct a misapprehension of the last speaker. He had not asserted that had the report of the Bullion Committee been acted on, the war in the peninsula could not have been maintained, but that it would have been impossible to carry on exertions to the same extent. Sir Egerton Brydges, in a maiden speech, said, that notwithstanding the length to which the debate had been carried, yet |