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with the credit of the country, and how much it therefore must depend upon the management of the bank. The credit of the country was not likely before to be so much affected by that management; for while the bank continued to pay in specie, if the directors chanced to act improperly, the public were able to discover the impropriety of their conduct, in the consequences to which it must have given rise; but now, as there was not the same check of honour upon them as that by which other bankers were bound, the public had no longer the same security, and the whole of the credit of the country was made to depend upon the administration of men whose conduct was under the control of government, and who owed no responsibility to the country. When the public credit was so endangered, it was not surprising that an impatience should be expressed by it.e. righthon. gentleman to get rid of the restriction. At all events he must hope, that a short bill only would then be proposed, and that time would be allowed to examine how far it should be prolonged. It might also be proper to inquire how far the state of exchange should be admitted as a criterion whether the bank should pay in specie or not. Allowing also, that there might be some damger in taking off the restriction altogether, still might not some arrangement be adopted, for paying a small part of the dividends and notes in cash 2 By adopting a gradual system of that kind, i š. ger from a sudden run might be avoided. But it was said, if the bank renew its cash payments, the specie will be sent out of the country. That was very probable; but as long as there was a strong temptation to send guineas abroad, the

o most


most rigorous laws, even when most vigilantly enforced, would

rove inadequate to prevent it. §. could it be expected that the bank directors ji serve the public at their own loss. They would not buy bullion that the public might have money. They would not lose in purchasing it, that others might gain by sending it out of the country. But with regard to the fluctuations in the state of the exchange between this country and others, there was a circumstance which then occurred to his mind, if he rightly recollected it, which tended to show, that the state of the exchange did not always depend on the circumstances which were then supposed almost solely to affect it. In the year 1773 or 1772, when there was a great quantity of bad money in the country, the course of exchange was then also much against us; but he was informed, that when, in the room of this adulterated money, good gold was substituted, the consequence was that the exchange turned almost immediately in our favour. As long as our currency continued bad, the exchange was against us; so was it then, because paper was not much better than bad gold, or it was attended with the same inconveniences. Might it not therefore be expected, that, as in the former case, when our currency was meliorated the course of exchange turned in our favour; so also, if the bank then resumed its cash payments, the same favourable circumstances might attend the change 2 This at least was a matter that well deserved to be inquired into. There were many other points to which an inquiry might be usefully directed, and he should not be sorry to see a motion made for instituting one.

Lord Hawkesbury wished to set both the hon. gentlemen right

(Mr. Tierney and Mr. Fox) who

spoke immediately after his right honourable friend, as to what had been advanced by him respecting the course of exchange. The #." on which his right hon. riend put the question was this, having imposed a restriction that had continued for several years, without any inconvenience having resulted from it, and without any being felt at the present moment, was it not wise to pause before such a restriction were taken off, and till a more favourable opportunity of. fered of doing it away 2 His right honourable friend had by no means said that the restriction ought to be continued solely on account of the exchange; he had only asked, what, his lordship said, he thought it necessary to repeat to the house, that the point might be fully and fairly understood; “Would you take a period of an unfavourable state of exchange as that which was most proper to begin oncemore to revert to the ancient system of paying in cash atthe bank?” No such idea ever entered into the mind of his right honourable friend, as the inference drawn by the hon. gentleman under the gallery (Mr. Tierney), that, at any future period, the payments in cash by the bank should depend on, or be regulated by, the course of exchange. With regard to the appointment of a committee of inquiry, he objected to it, because he was of opinion that it would only create alarm both at home and abroad, when altogether unnecessary. The house now knew, by the paper on the table, to what amount notes had been issued, and whether the bank directors had abused the power with

which they had. been entrusted.


Hislordship afterwards adverted to Mr. Fox's observations respecting the course of exchange at the pe. riod when the coinage was bad, and agreed whth that hon. gentleman, as to the fact of the course of exchange being then supposed to be against this country; but he had the greatest reason to believe, from every information he had been able to collect, that, from the defective state of our coinage, the course of exchange appeared to be against us, when, in fact, it was really the reverse. If the house would look to the course of exchange for three years past, and compare it with that of the last twelve months, it would be clearly seen, that it was owing to the causes stated by his right hon. friend; and he had not the smallest doubt but that, in a short time, it would once more be in our favour.

Sir Francis Baring said, that, in his opinion, the house should not consider the present continuance of the restriction as a circumstance arising out of common causes, but as growing out of unforeseen and irresistible events. There had been

a great convulsion in political af.

fairs, in every quarter of the globe, and that convulsion had operated very great and very important changes. The course of exchange between this country and all others had varied as well as other matters. It would at present admit the importation of silver, but not of gold. Silver had lately fallen ten per cent. Gold had continued at much the same price as before. These circumstances, he repeated, did not arise from common causes, but from the various efforts and exertions of foreign countries to gain advantages over this. The convulsion extended and affected them all in a greater or less de

gree, and prudence ou ht to dictate to us, to wait with patience till the effects of the storm sub

sided. The chancellor of the exchequer, adverting to the suggestion of Mr. Fox respecting the propriety of opening the cash payinents of the bank with some restriction, said, no doubt that honourable gentleman was aware, that in the former bill a power was given to the bank to make partial payments of the dividends in specie, upon giving due notice of such payments to the house of commons.—That hon. gentleman was also of opinioh, that the bank should not be restrained in paying small notes in specie; but did he bear in mind, that, if the small notes were to be paid in specie, then the larger notes would be changed into small ones, and presented for payment in specie? By which means, the whole effect of the restriction would be completely done away: for the one restriction must unavoidably frustrate the other. It had also been observed, that the bank was ready and disposed to pay. Whether that were the case or not. what he proposed was not in compliance with, or in opposition to, any thing the bank might wish for, as he had, on the present occasion, no communication whatever with the bank. All he took their opinion upon, was the state of the course of exchange. Indeed, the bank had expressed no wish or opinion to him. It was then his intertion to insert a clause in the bill which he wished to bring in, leaving a power to alter it during the course of the present session, should circumstances favour its alteration or repeal, or to continue it in force for six weeks after the . meeting of parliament next *: *


He was averse to a committee. He saw no necessity for it. More important occasions had occurred, where no committee was moved for. The charter of the bank had been renewed without any committee having been appointed to inquire into the state of its affairs.

If any new grounds were adduced

to show the necessity for an inquiry, he was ready to listen to them; but he was aware of none that would not be liable to inconvenience. It might be proper, during the interval of the suspension, to take a wide, comprehensive view of the paper credit of the country; and not permit bad paper to be issued, without any responsibility on the part of those who issued it. Such a revision might or might not be deemed adviseable. e did not pledge himself to any measure of the sort ; yet if it were to take place, it should have no connexion with, or reference to, the present state of the bank; neither should it be then attempted ; but at a period more favourable, and during the intervening time. He had then only to repeat, that it was with reluctance and regret he proposed the present measure; but circumstances imposed it upon him as a duty, and that duty, however painful, he must endeavour to discharge. Mr. Vansittart enumerated a variety of causes that at different times affected the course of exchange, as it regarded this country, and observed, that the difficulty which the Spaniards experienced during the war, in getting home the produce of their mines, was one of the principal reasons why we were in want of bullion. The obstructions then no longer prevented the conveyance

of those treasures into Spain; and

it was natural to expect, that a

great quantity of them would shortly find their way into this country.—After some explanation between Mr. Tierney and Mr. Vamsittart, leave was given to bring in the bill. On the 11th of February, the chancellor of the exchequer moved the order of the day for going into a committee on the bill, upon which the attorney-general rose to move it as an instruction to the committee, that they should have power to alter the bill in one particular. Some difficulties had arisen in the courts of justice upon the clause in the former bill respecting tenders being made in bank-notes, on account of the impossibility of making exact tenders in bank-notes of a debt in which there was a fraction of a pound. The amendment he meant to propose was, that, where a person applied to be discharged upon common bail, he should make an affidavit of his having tendered the amount of the debt. The motion was agreed to. The house having then resolved itself into a committee, the chancellor of the exchequer said, there was in the bill a clause to enable parliament to repeal or alter it during the present session. He then proposed to fill up the blank with regard to its duration with these words, “Six weeks after the commencement of the next session of parliament.” Mr. Banks suggested the propriety of proposing a shorter duration to the bill; and in doing so he begged not to be understood as entertaining an opinion that the bank ought then to resume its cash payments; nor did he mean to say that the right honourable gentleman’s motion might not, upon investigation, be perfectly proper; but the ground of his complaint was, that there had not been suffi- cient cient ground laid before the house to enable them to decide upon the question. There had been but two reasons assigned for the present measure; the one was, that the course of exchange was not in favour of this country; and the other, that there was a great number of small notes in circulation, both of the bank of England and of country banks. With respect to the

course of exchange, he had already

offered some observations to the house. With regard to the quantity of small notes in circulation, he begged to ask, whether that, objection would not always continue until the restriction was taken off? because, until cash was put into circulation, its place must be supplied by paper. — Again, if the government and the bank were to agree together to keep up the restriction longer than was necessary, a fictitious capital might be created to an almost unlimited extent, which would undoubtedly endan{. if not destroy, the public credit.

ith respect to the inquiry he

should wish to have instituted, he

confessed he should not be sorry if it were made upon a very enlarged scale, and embraced not merely the subject in question, but the state of our trade. He was aware that such an inquiry could not be instituted on the present occasion, because there was not sufficient time for it. He therefore should move, that the bill now proposed should continue to the 1st of May, instead of the time which had been sug#. by his right honourable riend. Mr. Prinsep had listened with attention to all that had then fallen from the honourable mover of the amendment, and from those who had opposed the original motion, without hearing any instance stated

of positive loss or inconvenience from the continuance of the restriction—and none had resulted from it after the first shock in 1797. The stoppage of the bank had shown the British merchants in their true character; rallying on the instant at the Mansion-house, and unanimously agreeing to pass bank paper at par, and to pay in no other manner. He then alluded to the distress of the Scotch banks from having allowed cash accounts, and issued their notes on landed security, and contrasted these errors with the good management of the bank of England for many years back. The bank of England had, it was true, lent the greater part of its capital to government, without suffering from it as another great trading company had done. The cases were different; the loans to government in 1797, though considerable, were necessary and justifiable under the circumstances of those calamitous times. That neither loss nor inconvenience had resulted from the restriction he might support by appealing to all the orders of society. Bank-notes would at all times purchase provisions, luxuries, estates, stock in the funds—and bullion for exportation What more could coined bullion produce 2 It seemed to him that the distinctions were frequently overlooked between coin and bullion, the trading and the monied interest; as well as this circumstance, that coin of a country being exported to another country, became mere bullion on its arrival there. The influx of bullion depended on the natural course of trade, which would very soon turn in our favour. He did not allow the vibration of exchange to be the criterion for deciding upon the period for taking off the present

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