though not perhaps so much to its opulence, I had uttered something very wise. Now, thought proper to make. He stated on how, he begged leave to ask, would the that occasion that he thought the philoso- proposed measure operate on the country phers were wrong; but when they came gentlemen? The protection of the interests to the question of a great depreciation, he of the country gentlemen was supposed to was ready to avow that he shrunk back. rest upon their monopoly by the exclusion They now had experience from what had of foreign corn from the home market of since passed. It was impossible to say what consumption. If the country gentlemen the extent of the depreciation was; but he would support a proposition which would would relate a fact illustrative of the point. bring the value of the 17. down to 10s., When he was at Paris the emperor of Russia they would thereby bring their protecting then stood in our present situation with corn duty down from 60s. to 30s. If the respect to his paper currency, or in point of Corn-laws turned on the pivot of 60s., degree, he was in a worse situation. His which he believed they did, the moment paper was depreciated in the ratio of four they depreciated the standard, they would to one. Four Gentlemen were appointed depreciate in precisely the same proportion to meet, and the case was proposed to them. the protecting duty, for people abroad would He was one of the four, and Mr. Gallatin not care for our depreciation; and if 60s. was another. It was their unanimous in England were reduced to the value of opinion that greater injustice would be done only 30s., foreigners would act upon that by endeavouring to return to a standard fact. The country gentlemen might then than by continuing the circulation of the come to Parliament and wish the 60s. to depreciated paper currency, and they re- be made 120s., and then they would have commended that the depreciation should be nothing to fear; but they would have to allowed to stand as it then stood. So far from fight with the hon. members for Wolverthis being a justification of the proposal of hampton and other towns who were not his hon. friend it ought rather to operate as the sort of antagonists whom country a warning to him. What injustice what gentlemen liked to encounter on that submisery, what ruin to individuals ensued the ject. The whole turned on the currency, moment a Government departed from a and their 10l. would, in fact, become 5l. at once. When the Currency-laws were under sound principle of currency. the consideration of the House he had made the same observation; and when the Reform Bill was brought forward he had said the same thing. He had pointed out the fluctuating nature of the value of money, and had said that of all bases the most absurd was that of resting the representation of a country on the value of its cur What a tangled web we weave When first we practise to deceive. It was now merely for Gentlemen to consider whether they had heard enough from the hon. member for Whitehaven, and from his hon. relative, to say if they would trust themselves with such pilots on a sea so stormy. Putting aside the integrity of the measure, he would say to those who ad-reney. Nothing could be more unstatesministered the affairs of a great country, that all tricks in finance, such as tampering with the currency, never could answer any end; and the moment they abandoned principle, they were led into a maze of which But they never could see the conclusion. taking a more narrow view of the subject, he would call the attention of the country gentlemen to the consideration of how it would affect their interests, for he knew that the topic was popular with country gentlemen, and he had received several letters from his constituents recommending that the standard should be lowered. A sort of mystery was supposed by country gentlemen to hang about the question, and many shook their heads, and were heard to say that all the evils of the country were connected with the state of the currency, and in saying this they thought that they man-like than to build the constitution of a country on the fluctuating value of money. Ministers would not do this with respect to tithes. No, they were not allowed to depend on the value of money; they must be made to change with a corn rate; and yet when they were building a constitution, they never thought of this. Those Reformers who thought that 10l. was too small a qualification, and those who thought that 60s. were too low a corn duty, he would advise to consider what would be the effect of acceding to the present Motion. He would now state to what extent he should be inclined to go if a measure had been brought forward by any sober-if any measure had been brought forward of a more sober description, and which would excite no doubt or uncertainty in the country. In such a case he should have been willing to go into a Committee, to see if some regulations of the currency could not be established, so as to give greater facilities to the general business. The positive lowering of the currency to the indefinite extent of the proposal of the hon. Member, was what he for one would demur to. He would now state to what extent he thought the alteration of the present system might be carried. The alteration he should wish to see made, according to his views, if the House granted a Committee, would be with respect to making the notes of the Bank of England a legal tender in the country. He did not know what the noble Lord's intentions were with respect to the alterations to be made in the Bank Charter. The distress of the Bank of England might arise from a call for money, either to carry gold out of the country or to guard against any internal panic. Although a panic might have nothing political in its nature, like that of 1825, it would still be fatal to the credit of the Bank. The drafts, on the other hand, made merely to balance foreign exchanges, the Bank, if it conducted itself well, would always be able to meet. The country felt safe on this subject, and the Bank must very ill conduct its affairs indeed, if one or two millions did not enable it to meet any thing of this sort. The other case was of a more serious nature, and it could not be better exemplified than by a short statement of how it operated in 1825. In that year the distress was general, and the Bank was drained of its gold, not for the purpose of sending it abroad, for it was actually coming in from abroad at that time; but everybody wished to be paid in that metal; and a country banker, a banker of Norwich, told him at that period that he could not sleep quiet at night in his bed, unless he had obtained a sovereign for every one-pound note he had in the house. Such was the extent of the panic, that the Bank was completely drained of its specie. The Bank was within an ace of stopping payment, and it had been saved by no virtue of its own, but by means of paying out its half-sovereigns and one-pound notes. Against an operation of this sort no prudence on the part of the Bank could guard. He would defy the Bank to be perfectly secure on this point, let it conduct its affairs however cautiously and with whatever prudence, unless it carried on its transactions in that cramped manner which would be injurious to the circulation of the country. Those who took gold for Bank of England notes, would have slept quietly in their beds if they could have offered bank-notes for gold to those who held their paper. If Bank of England notes, therefore, were made a legal tender, it would greatly relieve the country, and it would leave the Bank of England only exposed to the influence of foreign markets, and the Bank would not then be constantly cramping the circulation of the country. His second object in the Committee would relate to the silver standard. When they had before returned to cash payments he had given his opinion on the subject. The philosophers had said— [Mr. M. Attwood laughed.]-The hon. member for Whitehaven would not suppose that he had called him a philosopher-but the philosophers had said, that his theory was not sound. Now he would maintain that two metals, gold and silver, were liable to fewer variations, and that money, having its foundation in two precious metals, was less liable to vary in relation to commodities than money having its standard fixed in one metal; and the agio between gold and silver, which so much disturbed the imaginations of the philosophers, was nothing of any consequence compared to the inconvenience of confining the Bank to one metal, and which was not the metal of general circulation. This was a subject worthy of the most serious inquiry. Mr. Gallatin was desirous that the same circulation should be common to all countries which were connected by commerce, and no man of enlarged views and practically acquainted with commerce could doubt the soundness of the opinion. At no distant time this point must be submitted to an inquiry. The silver standard was established in Holland, France, and in other parts of the world; and he hardly knew a country where silver was not the practical standard, but where gold was not the tender. Some Gentlemen said that silver would drive out gold; but gold, on the contrary, might drive out silver, and there was no reason why they might not circulate together. This was the case in Holland. In the small kingdom of the Netherlands the gold in circulation amounted to ten millions, whilst the silver was four millions and a half. He believed it was rather cheaper to pay in gold than in silver. In France the premium was about one-tenth or one-eighth per cent for gold, and this had been increased in consequence of the demand in England for gold. This would cease if England were to adopt a silver standard. He knew that the philosophers had been against him on that sub 505 Adjourned {APRIL 23} ject, and, what was worse, he had had all tressed, but it was true that great distress Sir Robert Peel: Although, Sir, I believe that I shall agree with my hon. friend (Mr. Baring) in the practical conclusion to which I shall come, and the vote I shall give on the present question, yet he propounded, in the course of his speech, some doctrines which excite in my mind so much of small notes, you will afford a direct premium to the country banker to discourage, as far as possible, the circulation of coin in his neighbourhood. No one can deny that whilst the small notes maintain their credit, they are a cheaper instrument of circulation, and one not less efficacious than gold; and that it would be a positive pecuniary advantage to the country to get rid of the gold currency altogether, if you could ensure entire and permanent confidence in paper and the fixed value of it, after the exclusion of gold. But I contend that there is no security in an immense mass of paper circulation, professedly convertible doubt and apprehension. that I feel no scruple as to the propriety of immediately following him in the course of debate. I must begin by observing, that as my hon. friend is prepared to maintain the opinions expressed in the concluding part of his speech, it would have been but just and becoming in him to have abstained from those terms of contemptuous severity applied in the commencement of that speech to those with whom the present Motion originated. My hon. friend, although prepared rigidly to adhere to the metallic standard, is yet willing to admit of, nay to advise, an inquiry into three very important alterations in the established monetary sys-into gold-but not resting for its basis upon tem: first, the union of silver with gold as a joint standard of value; secondly, permission to every country banker to offer as a legal tender, Bank of England notes in exchange for his own promissory notes; and thirdly, to sanction the re-issue of 17. and 21. notes. If my hon. friend be really prepared to grant a Committee of Inquiry into the policy of three such important and extensive alterations as these, he surely must foresee that his own course will, in great measure, cause that state of suspense-will raise all those doubts in commercial dealings, which, in the first part of his speech, he urged as a main obstacle and impediment in the way of his assenting to the Motion of the hon. member for Whitehaven. The re-issue of 11. and 21. notes! Why, Sir, I never felt confidence in predicting the result of any political measure, greater than that which I feel in predicting what must be the consequence of permitting the reissue of 11. and 21. notes. That consequence will inevitably be, the disappearance of the gold currency from circulation. I do not rely on mere reasoning for the proof of this, but I refer to the example of every country in which small notes have been allowed to circulate. In Scotland you have 17. and 21. notes; such notes being nominally, and indeed practically, when tendered by the holders, convertible into coin; but it is, nevertheless, true that they have, in point of fact, excluded from circulation the whole of the metallic currency. In Ireland you have also 17. and 21. notes, and the same consequence has followed. In America there are, or at least there were permitted, notes of still smaller value, and the result has been the same not only with respect to gold coin, but to silver also. The currency of the cheaper, has banished that of the more precious, material. So it will be in England. By permitting the issue a metallic circulation. You think you can take effectual precautions against panics, commercial or political, by insisting on security from the issuers of paper. There can, in truth, be no effectual security against such panics and their disastrous effects. The best security is the presence of a me tallic currency equally diffused throughout the country. But take what precautions you please to ensure the solvency of country banks-compel them, if you will, to deposit Exchequer-bills or funded property, or to assign land as a security for their issues,-I assert, you do positively nothing by these precautions to control the excessive issue of paper, or to ensure the competency of these banks in the time of pressure and alarm, to fulfil their engagements; which engagements are, expressly to pay a definite weight of gold in exchange for their promissory notes. You consider the banks safe, and the holders of bank-notes secure, provided the notes are issued on the security and deposit of real capital. Why, this reasoning would prove that the whole landed and funded property of the country might be converted into circulating me. dium, and that there would be no danger of excess in the issue, however extravagant, so long as there was a corresponding deposit of property. Now, in my opinion, such a deposit may be the guarantee of the ultimate solvency of a particular bank, in a sound state of the currency, but it is no guarantee whatever that that bank will be able to pay its notes in gold on demand, after gold shall have been banished from circulation. Depend upon it, the time will shortly come when the demand will be made; and if made and refused, what is this but inability to meet engagements, and fulfil positive contracts? I admit, that by the re-issue of small notes, you may give a stimulus, a fictitious stimulus, to trade; all may go on well for several considerations, such, for instance, as whemonths; gold, being no longer indispens- ther silver ever was, practically, the standable for domestic circulation, will flow out ard of value, in this country, after the gold of the country for the purpose of effecting currency was reformed; whether you can foreign payments-the importation of fo- maintain, in the same country, two metals reign articles will, for a time, be promoted, constantly varying in their relative value, the export of the gold will at first counter- as a standard; whether it would be deact the tendency to an unfavourable ex- sirable to maintain them if you could; change, or at least diminish the indications these are considerations which would reof it; and you will, in short, have every quire very serious inquiry, but into which symptom of increasing prosperity; but in I will not now enter. the course of eighteen months or two years, the currency will become excessive, the exchanges will rapidly fall; there will be a demand upon the bank for gold; the bank will take the alarm, will refuse accommodation, and contract its issues:-the demand for gold will extend to all the issuers of paper, then will come the rapid and simultaneous sale of public securities, and the renewal of that panic and all its consequences, of which you had the disastrous experience in the winter of 1825. The bank may remain solvent in one sense, that is, may have means beyond its liabilities; but it will be unable to meet its obligations to impatient creditors, who demand instant payment in gold. What must be the result? Actual failure, or a restriction imposed by authority. With respect to my hon. friend's proposition for a joint gold and silver standard, it has been already submitted to this House, and has been negatived, among other reasons, because its direct tendency, and, indeed, avowed object, was to lower the standard of value. Mr. Baring: One word in explanation. I have always contended, that, on the adoption of a gold and silver standard, it must be so regulated as not to lower the general value of the pound sterling. Sir Robert Peel: Then my hon. friend must take the present market - price of silver, and not the old Mint price, for the standard. The market - price of silver is now, I believe, 4s. 11d. per ounce; the Mint price of silver, when silver was a legal tender, was 5s. 2d. per ounce. If my hon. friend should take the Mint price of silver for the standard of value, he would depreciate the present standard; if he should take the market-price, he will not adhere to the ancient standard. That the same great principles which apply to gold as a standard of value, in respect to its controlling excessive issues, and regulating the value of paper, apply equally to silver, or to a joint standard of gold and silver, I do not deny; but there are many The third suggestion of my hon. friend is, that every country banker shall, hereafter, be allowed to offer Bank of England notes in exchange for his own notes, when presented for payment. But it is impossible to stop there. If a Bank of England note is to be a legal tender, on the part of a country banker, so must it be on the part of every other man in the country. Will my hon. friend say, that his proposition is to be limited to country bankers? That the issuers of paper shall have the special exclusive privilege of discharging their debts in other paper? That a customer who has deposited gold with a country banker, and who asks to have that gold returned, may receive for answer-We have no gold for you, but here is a Bank of England note;" while that same customer shall remain under the obligation of discharging all his own debts and incumbrances in standard gold? But, suppose the customer shall draw a draft upon the country banker for 4l. 10s., or wanting 100 sovereigns, shall draw on successive days twenty drafts for sums below 5l., how are these drafts to be paid, except in gold, unless, indeed, my hon. friend's other plan of issuing 17. notes shall have been already adopted? It is clear that the issue of notes below 51. must be the concomitant of a plan which would make Bank of England paper a legal tender, and would relieve the country banker from the liability to payments in cash. But these are great changes to make in our monetary system; so great and important, indeed, that I must again say, that if a Committee were granted to consider them, there would arise all that agitation and suspense in pecuniary dealings, which my hon. friend is the first to deprecate, and which, as he justly says, would, in the present artificial state of society, and the peculiar condition of the commercial classes, aggravate every evil under which we are now said to be suffering. The House, Sir, will probably expect from me, or at least will not be surprised, |