But when the Directors are now to be called upon, in the new situation in which they are placed by the Restriction act, to procure a fund for supporting the whole national currency, either in bullion or in coin, and when it is proposed that they should effect this measure within a given period, by regulating the market price of gold by a limitation of the amount of the issue of bank notes, with whatever distress such limitation may be attended to individuals, or the community at large; they feel it their bounden and imperious duty to state their sentiments thus explicitly, in the first instance to his majesty's ministers, on this subject, that a tacit consent and concurrence at this juncture may not, at some future period, be construed into a previous implied sanction on their part, of a system, which they cannot but consider fraught with very great uncertainty and risk. It is impossible for them to decide beforehand what shall be the course of events for the next two, much less for the next four years; they have no right to hazard a flattering conjecture, for which they have not real grounds, in which they may be disappointed, and for which they may be considered responsible. They cannot venture to advise an unrelenting continuance of pecuniary pressures upon the commercial world, of which it is impossible for them either to foresee or estimate the consequences. The Directors have already submitted to the House of Lords, the expediency of the Bank paying its notes in bullion at the market price of the day, with a view of seeing how far favourable commercial balances may operate in restoring the former order of things, of which they might take advantage: and with a similar view they have proposed, that government should repay the Bank a considerable part of the sums that have been advanced upon exchequer bills. These two measures would allow time for a correct judgment to be formed upon the state of the bullion market, and upon the real result of those changes which the late war may have produced, in all its consequences, of increased public debt, increased taxes, increased prices, and altered relations, as to interest, capital, and commercial dealings with the continent; and how far the alterations thus produced are temporary or permanent; and to what extent, and in what degree, they operate. It was the design of the Directors, in pursuance of the before-mentioned two measures, to take advantage of every circumstance which could enable the Bank to extend its purchases of bullion, as far as a legitimate consideration of the ordinary wants of the nation, for a sufficient currency, could possibly warrant. Beyond this point, they do not consider themselves justified in going, upon any opinion, conjecture, or speculation, merely their own; and when a system is recommended, which seems to take away from the Bank any thing like a discretionary consideration of the necessities and distresses of the commercial world; if the Directors withhold their previous consent, it is not from a want of deference to his majesty's government, or to the opinions of the committees of the two Houses of Parliament, but solely from a serious feeling, that they have no right whatever to invest themselves, of their own accord, with the responsibility of countenancing a measure, in which the whole community is so deeply involved; and possibly to compromise the universal interests of the empire, in all the relations of agriculture, manufacture, commerce, and revenue, by a seeming acquiescence, or declared approbation, on the part of the Directors of the Bank of England. The consideration of these great questions, and of the degree in which all these leading and commanding interests may be affected by the measure proposed, rests with the legislature; and it is for them, after solemn deliberation, and not for the Bank, to determine and decide upon the course to be adopted. Whatever reflections may have from time to time been cast upon the Bank, whatever invidious representations of its conduct may have been made, the cautious conduct it adopted, in so measuring the amount of currency, as to make it adequate to the wants both of the nation and of the government, at the same time keeping it within reasonable bounds, when compared with what existed before the war, as is shown in the Lords' Reports, pages 10, 11, 12, and 13, the recent effort to return to a system of cash payments, which commenced with the fairest prospects (but which was afterwards frustrated by events that could not be foreseen nor controlled by the Bank) are of themselves a sufficient refutation of all the obloquy, which has been so undeservedly heaped upon the establishment. The Directors of the Bank of England, in submitting these considerations to his majesty's ministers, request that they may be allowed to assure them, that it is always their anxious desire, as far as depends upon them, to aid, by every consistent means, the measures of the legislature, for furthering the prosperity of the empire. ROBERT BEST, Sec. BANK OF ENGland-Resumption of The order of the CASH PAYMENTS.] day being read, for taking into consideration the Reports of the Secret Committee on the Resumption of Cash Payments by the Bank of England, The Earl of Harrowby proceeded to regret his inability, arising from severe personal indisposition, to enter at any length into the consideration of the very important question which stood for discussion. Had it been on other occasions he ed, in such manner and on such conditions as shall be provided by parliament, with a view to insure its final termination at the period to be fixed. 2. "That previously to the Resumption of Cash Payments by the Bank, it is expedient that the Bank should be required, at a time to be fixed by parliament, to give in exchange for its notes gold duly assayed and stamped at his majesty's mint (if demanded, to an amount not less than a number of ounces to be limited), valuing the same in such exchange, at a price not exceeding 47. 1s. per ounce. 3. "That at the expiration of a farther period, to be also fixed by parliament, the Bank should be required to give in exchange for its notes, gold so assayed and stamped (if demanded, to an amount not less than a certain number of ounces to be limited), valuing the same in such exchange at the mint price. 4. That at some time between the two periods abovementioned, the Bank should be required to give in exchange for its notes, gold so assayed and stamped, valuing the same at a price between 47. 1s. and the mint price: and that after the price at which gold shall be valued in such exchanges shall have been once lowered, it shall not again be raised. might have requested the indulgence of their lordships to postpone the discussion, but aware as he was of the intense interest excited by this question amongst the public, he felt it incumbent on him to proceed, though he must be under the necessity of only very briefly entering into the consideration of the subject. His lordship proceeded, in a very low tone of voice, which rendered it difficult to hear what he said, to observe, that it was the less necessary for him, had he been able, to go through the details of the subject, as they were so amply supplied by the reports, and the evidence annexed to them. The plan proposed for a return to a metallic circulation was, in his judgment, the best calculated to unite the two classes of opinions which prevailed with regard to this question. Thus, those who advocated the return to cash payments, and who must of course be aware that it was impossible to return to that system on a sudden and without preparation, would see that the express object of the proposed plan was, that return to cash payments which they so much desired, only taking care that the return should be by means of gradual and preparatory steps, in order that no danger might arise from the change. Those, on the other hand, who saw nothing but danger in giving up our present system of paper circulation, and returning to a metallic currency, would see, that by means of the preparatory measures resorted to, with a view to attaining that great object, ample time was afforded, in the interval, in case of any danger arising, to take whatever measures might be deemed necessary to avert the evil. With regard to the petition presented by the noble lord, from petitioners no doubt highly respectable, it appeared to him, that they had entirely misapprehended the object of the plan proposed by the committee, no forced or injurious diminution of the circulating medium being contemplated by the committee, who, on the contrary, had arranged their plan with the express view, by means of its gradual operation, of preventing that forced diminution of the circulating medium, which would undoubtedly be inju. rious. His lordship, after again regretting his inability to enter into the consideration of the subject, concluded by moving the following Resolutions: 1. That it is expedient farther to continue the Restriction upon Cash Pay ments by the Bank for a time to be limit 5. "That after the period shall have arrived at which the Bank shall be required to give gold in exchange for its notes at the mint price, a farther period to be fixed by parliament should be allowed, and a certain notice given, before the Bank shall be required to pay its notes in cash. 6. "That it is expedient that all laws, which prohibit the melting or exportation of the gold or silver coin of the realm, and the exportation of gold or silver bullion made of such coin, should be repealed." The first Resolution being put, The Earl of Lauderdale rose to move, as an amendment, a set of Resolutions, founded on a view of the subject very different from that taken by the noble earl and the majority of the committee. He therefore urged the propriety of time being afforded for the consideration of his propositions, in the same manner as had been observed with regard to those of the noble lord. He wished them to be print ed, and a future day to be fixed for going into the debate, by which means their lordships would have time to consider the subject more maturely. He thought it impossible for the House, in its present state of imperfect information, to come to a satisfactory decision on the great ques-rendered the importation of gold and siltion of the resumption of cash payments. ver bullion highly profitable, as well as He, therefore, moved, that all the words from the preference which it is proved the of the Resolutions proposed by the noble public then manifested to receive Bank earl, after the word "that," be omitted, notes rather than gold coin, we cannot and the following Resolutions submitted doubt that, though in the beginning of in their stead :the year 1817 the Bank had a greater issue of paper than it has at present, it might at that time have resumed payments in coin with perfect safety to that establishment. 1. "That it appears to this House, that during the greater part of the year 1616, and the beginning of the year 1817, the exchanges with foreign countries were generally such as made it advantageous to import both gold and silver bullion into this country; and that the evidence reported by the Committee proves, that at that time large inportations of these metals actually took place. 2. "That since the month of March, 1817, when our silver coin was, by his majesty's proclamation, of date the 1st of that month, established in circulation, the exchanges with foreign countries have been such as to render it impossible to import gold bullion with a profit, and to have made it uniformly advantageous to export that metal, whilst the importation of silver bullion has constantly been attended with a profit; and that the evidence, as reported by the committee, proves beyond a doubt, that gold since that period has been exported to a great amount, whilst silver bullion has been imported from almost every country with which we have dealings. 3. "That, under these circumstances it does not appear to this House, that there is any satisfactory evidence of an overissue of paper, which is always attended with a rise of the price of both gold and silver bullion above the mint price, and a state of exchange that renders it impossible to import either gold or silver bullion with a profit. 4. "That the exchanges, as well as the price of gold and silver bullion, since the introduction of our silver coinage, under the sanction of the act of the 56th of the king, chap. 68, have uniformly exhibited that state of things which has always been experienced, and must always take place, when the value of silver coin is diminished, whether that diminution is effected by lowering its intrinsic or raising its denominative value. 5. "That, judging from the quantity of bullion which the evidence shows us the Bank possessed for some months before and after the mint regulations were acted upon, and from the state of the exchanges, which before the month of March, 1817, 6. "That although since the new mint regulations have been carried into effect, our gold coin has been banished from circulation, and the exchanges have been nominally unfavourable, when calculated in that metal, in which payments no longer could be obtained; yet the real exchange has been uniformly favourable to us, when calculated in silver coin, the only metallic coin in circulation; that we cannot, therefore, doubt of the truth of what the common rules of arithmetic may inform us, that if the mint regulations had assimilated the mint prices of the two metals to their market prices, the exchange calculated even in gold coin would have been uniformly in our favour, and that we must therefore be of opinion, that the Bank may resume payments in cash, with safety to that establishment, whenever the mint values of those metals are made to correspond with their market values, provided it has recovered from the injury its funds have sustained, by its having reposed too great confidence in the wisdom and prudence of the legislature, who sanctioned the existing mint regulations. 7. "That it appears, therefore, to this House, that an alteration of our mint regulations, such as will approximate the mint values of our silver and gold coin to the market values of these metals, is a necessary preliminary step to the restoration of our currency to a satisfactory state." Earl Grey rose, not to speak on the main question before the Ilouse, but merely on the mode in which it would be proper for their lordships now to proceed. One set of resolutions had been moved by the noble earl opposite, upon which counter resolutions had been moved by his noble friend near him. No time had been afforded to their lordships to consider these resolutions, and most of those who heard him were probably ignorant of the grounds and reasons on which they were founded. For himself he must say, that he required time for deliberation, for for he felt himself in a very unfit state | hensions were entertained of its producing to come to any decision. The resolu- commercial distress; but those apprehentions moved by the noble earl opposite sions were not the consequence of disapproceeded, as he understood, on the probation of the recommendation of the ground that over issues of paper, had report, but of the state of uncertainty occasioned a difference between the mar- which prevailed as to the measures which ket and mint price of gold and that, to might be adopted. The mass of evidence enable the Bank to resume payments in in the appendix of the report, contained cash within the period fixed by the com- all the reasoning on which the plan was mittee, it was necessary that there should founded, as well as the principles on be a contraction of those issues. In this which it was objected to. The present opinion he was disposed to concur. It question was in some measure connected was not therefore from any objection to with that in which the general conduct of the object of the plan recommended the government was involved; and in the by the committee, that he wished for de- situation in which he stood, it was not lay. Whatever opposition might be unreasonable, that he should desire to be made to that measure, for the purpose in possession of the decision of the House of putting off cash payments to an in- as speedily as possible. As to the quesdefinite period, was an opposition on a tion of delay, he would, however, be reprinciple to which he could give no coun- gulated by the general feeling of the tenance. But what he had looked for House. If their lordships thought fit, he was the statement of some reasons to should wish to proceed now. show that it would be in the power of the The Earl of Roslyn pressed on the noble Bank to carry the plan into execution; earl the advantage of postponing the disbut he could find no argument or reason- cussion until Tuesday, as the question ing in the report that led to such a con- would then receive a more careful and saclusion. Their lordships had a right to tisfactory examination; and as the subject expect, that the explanations which were would not be discussed in another place omitted in the report should be given to until Monday, where the practical meathe House before they proceeded to deli-sures must originate, it was evident that berate on the proposed plan. This no time would be lost. must be felt to be the more necessary, when their lordships saw that his noble friend, who had directed so much of his time to the business of the committee, and who had perhaps more knowledge of the subject than any other man in the country, had come to a conclusion directly the opposite of that expressed in the resolutions of the noble earl. His noble friend was of opinion, that the embarrassment in which the country was now placed with respect to the circulating medium, did not arise from over issues on the part of the Bank, but from the state of the coinage. In this state of doubt, in which their lordships were placed by opposite opinions, was it unreasonable to expect, that the resolutions of his noble friend should be printed, and time allowed for their consideration? He would propose Monday, or any other day which might suit the convenience of the noble lord. The Earl of Liverpool rose, and commenced by observing, that the proposition of the noble lord ought, if there was any new matter or new suggestion for their consideration, to operate as an irresistible call upon their lordships to put off the question. But when every one was aware that the subject matter of the resolutions had been sifted from time to time as minutely and laboriously as any matter that ever was discussed, when the evidence on the table was known to contain every thing that could be said on both sides of the question, when the noble lord had embodied in his counter-resolutions opinions, which he was known to hold, and which he had frequently explained and defended, when they were even made the subject of correspondence in the public prints, he conceived that to delay the discussion of so important a question, would be attended with the greatest inconvenience, without affording in return any adequate advantage. He could state, from his own knowledge, that there were many among those, who doubted the propriety of the plan, most anxious that the discussion should be brought on as soon as possible. Omitting, therefore, those points, (2 R) which related either personally to himself, or particularly to the official situation in which he stood, he should proceed to state the grounds on which he supported his opinions, and to give that full explanation to which the House and the country were entitled. In doing so, as he had already stated, he should keep the general question clear of other topics,in order that it might be discussed upon the ground of general principle, and without reference to individuals, or the retrospection of what they had done. The question was in its nature so complicated and extensive, and in some of its views so abstract, that it was a formidable undertaking for any man to explain it, under all its aspects in the face of their lordships and of the public. He would endeavour to strip it as much as possible of abstract theories, with which it had no practical connexion, and to state on practicable grounds the principle on which he conceived the question to rest, and on which the committee had grounded their recommendation, There were three great questions to be considered in the discussion of this subject. First whether it was expedient to return to some fixed standard of value; secondly whether it was expedient and practicable to return to the ancient standard; and thirdly, by what means it was to be done. With regard to the first, he had always contended that the measure of the Bank restriction, from whatever cause it originally proceeded, had enabled this country to weather that dreadful storm in which she was tossed so long, and to get through those difficulties, which, without its assistance, she could never have surmounted. But, while he contended for this, he had never concealed from himself, from their lordships, or from the public, that it was a measure which could not be acted on as a general and permanent part of the system of this country. If he was asked whether it was a principle that might be adopted in all wars, he would say, that no former war bore analogy to the last. If they could show him a time when the whole continent of Europe was directed by one man or one government, not merely to the conquest, but to the ruin, and through the ruin, to the conquest of this country; if they could show him any case that had existed, or point out from any probable course of circumstances, that any such was likely to exist, the question might admit of some dispute, from the production or the anticipation of analogous instances. But if they felt, as he did, that the circumstances were extraordinary and unprecedented, and unlikely, at any future time, to find a parallel in history, they must allow, that the principle need not necessarily be extended to other wars. If ever there was a case, with respect to which it could be said that exceptio probat regulam, it was this. The very circumstances of our situation furnished in itself the strongest presumption that it never could be looked to as a permanent rule. Whatever exertions the country might be called upon to make under those circumstances, they were now past, and the time had come at length, when it was proper to consider what policy ought to be adopted under a total change of affairs. Parliament had already, by providing for the discontinuance of the system after the first six months of peace, pronounced its opinion on the subject. It had also pronounced its opinion since the peace, particularly in the preamble to the act of 1816, where it was declared to be a duty to the country that they should return, as soon as it could be done with safety, to the ancient system. The first question was, whether it was expedient that they should return to some fixed standard of value. This was the important point; for in his belief the great mass of opposition to the measure would be found to consist, not in the question whether they should return to cash payments sooner or later, but (under whatever disguise it might be stated), whether they should return to cash payments at all. It was an opinion entertained by many, that there should be no standard of value. The first question that suggested itself on looking at such an opinion was, whether this system had ever been acted upon by any civilized country, from the beginning of the world. Besides, he would ask how it must operate? They knew the disgraceful measures resorted to, even in this country, in former times, to depreciate the standard of value; but even that alternative, bad as it was, presented advantages not to be found in the rejection of a standard altogether. It was a change, an alteration, a debasement, of the standard ; but still it established something fixed, in the room of something that was also fixed. Nobody of men, he believed, was ever entrusted with so much power as the Bank of England, or had less abused the power entrusted to them: but would parliament consent to commit to their hands |
