« AnteriorContinuar »
trouble the House by making a mo- plied, that he certainly would not tion, as in a conversation which he think of doing away with a revenue bad held with the Chancellor of the of a million and a half, without findExchequer, it was agreed that a se- ing a substitute. On the 22d May, lect committee of twenty-one mem- Mr Calcraft reported, that the only bers should be appointed to take the specific measure which the committee subject into consideration. The Chan- was prepared to recommend during cellor of the Exchequer, however, be- the present session, was the reduction sought Mr Calcraft to recollect the of the duty on rock salt, employed large revenue which arose from this for the purposes of agriculture from source, and the present state of the 101. to 5l. per ton. finances; to which Mr Calcraft re
THE BANK RESTRICTION.
State of the Bank's Affairs.-Discussion by Mr Grenfell.-Motion by Lord
Lauderdale-by Lord A. Hamilton—by Mr Tierney.-Chancellor of the Exchequer proposes the Continuance of the Bank Restriction.—Committee of Inquiry moved by Lord Lauderdale-by Mr Tierney.—Restriction Bill passed.
The chief subject connected with above what it bore as the coin of the political economy, which occupied the realm. There arose, therefore, a attention of the public during the pre- boundless demand upon the Bank for sent session, was the restriction upon payments in specie, not in consequence the Bank from paying, or more pro- of any doubt of its credit, but in orperly speaking, the permission not to der to melt down that specie and obpay notes in gold and silver. Ever tain the higher price which it brought since the first adoption of this measure as bullion. It was impossible for the in 1797, it had been the subject of fre. Bank to supply this indefinite demand quent and prolonged parliamentary without at least entirely ruining itself, discussion. The striking difference since it was obliged to buy gold at in value between the metallic and pa- the high price and issue it at the low ! per currency, with the serious and price. On the other hand, the adverprominent effects thence arising, neces. saries of the Bank and of ministry consarily drew the attention of all practi- tended that the great difference of va- ! cal statesmen, while the abstruse and lue between bullion and currency arose complicated circumstances on which it from the restriction itself; that the depended, left room for the utmost va- bank paper, become the standard curriety of opinions. By those who con- rency of the country, was necessarily sidered the restriction as necessary, it depreciated in consequence of not being was represented that the extensive re- exchangeable for specie ; and that, in mittances made to the continent, either order to equalize the value between for loans, or for the support of armies, bullion and currency, nothing was produced an extraordinary demand for wanting but that the Bank should begold and silver, which is much the gin to pay in gold and silver. most convenient shape in which such It is not now incumbent on us to remittances could be effected. The enter into those abstruse discussions, value of these metals was thus raised which would be necessary to form a
judgment on this intricate subject. ment and the Bank, it was natural to The former opinion certainly seems suppose, that no doubt or uncertainty much favoured by the fact, that on the would prevail in any quarter, as to the conclusion of peace, and the cessation probability of cash payments being ac. of foreign remittances, the price of tually resumed when that period should gold fell immediately to its ordinary arrive. Very considerable doubt did level. Now, however, when the grand nevertheless exist in the public mind cause urged in favour of the restric- upon this subject, and more especially tion had ceased, all parties agreed in among the class of society which was considering it desirable that the cire frequently described as the moneyed inculation of the country should be re- terest. It was desirable that this un. stored as soon as possible to its natu- certainty should not continue one moral and healthful state. This could ment after his Majesty's ministers had never take place till the Bank paid in it in their power to remove it. No specie the notes which it issued, which honourable member, who had a pracwere mere promissory notes, and de- tical knowledge of what was now daily rived their whole value from the belief passing in the city, could be ignorant of their being convertible into cash of the very large transactions and spen When, however, the demand was made culations of a gambling nature that that payments in specie should be re- were entered into, and depended upon sumed, ministers and the Bank urged the result of this contingency. It was that some time ought to be allowed obvious that, in such a course of adto that body to collect a quantity of venture, those who had the means of gold sufficient to meet a crisis, which, making themselves acquainted with the after such a long suspension, might real intentions of his Majesty's minisbe considered as serious and impor. ters, must possess a material advantant. On this principle, in 1816, the tage over those who were not in the resumption of cash payments was de- secret. For these different reasons, layed for two years, and fixed for the he hoped he should not be considered 1st of July in the present year. At as making an extraordinary request on this period considerable agitation pre- behalf of the public, when he desired vailed, especially as rumours began to to know whether any event had occirculate that a farther delay was con- curred, or was expected to occury templated by ministers and the Bank. which, in its consequences, would preIn ihese circumstances, the members vent the resumption of cash payments who took the lead against the system on the 5th of July next. He wished "pported by government, determined also to inquire about two loans made to press the question, with the view of by the bank to government, one of putting an end to the public perplexi- six millions, at 4 per cent, and another ty, and of opposing with all their in- of three millions without interest. Till fluence the delay, if it was really pro- these were replaced, it was of course jected.
impossible for the Bank to commence The discussion was opened by Mr its payments in specie. Grenfell, who had always taken a pro. The Chancellor of the Exchequer minent part in urging the Bank to re. was enabled to say, that the Bank had sume their payments in cash. On the made ample preparation for resuming 29th January he put a direct question its payments in cash at the time fixed to the Chancellor of the Exchequer. by Parliament, and that he knew of After the promises and the declara- nothing in the internal state of the tions, so often renewed by the govern- country, or in its political relations
VOL. XI. PART 1.
with foreign powers, which would ren. lor of the Exchequer, had not himself der it expedient to continue the re- any
one distinct idea
upon the subject striction ; but that there was reason This movement in the House of to believe that pecuniary arrangements Commons was immediately followed of foreign powers were going on, of up by Lord Lauderdale in the Upper such a nature and extent, as might House, where he began by moving a probably make it necessary for Parlia- return of the weekly amount of notes ment to continue the restriction, so in circulation during the last three long as the immediate effects of those years. He and Lord King, alluding arrangements were in operation. As to what had passed in another house, to the loan of six millions from the trusted that Parliament would not Bank, at 4 per cent interest, he should, agree to a renewal of the restriction ere long, have to submit a proposition without the most rigorous investigato the House for the payment of that tion. Lord Liverpool made a statedebt ; but with respect to the three ment similar to that made by the millions without interest, which, for Chancellor of the Exchequer in the obvious reasons, was rather to be re- Lower House. The amount was orgarded as a gift than as a loan, he ra- dered, but the Lords on the opposite ther thought that neither the House side expressed their entire dissatisfacnor the honourable gentleman himself, tion with this announced intention of would be reconciled to any proposi- ministers. tion for depriving the public of such On the 4th March, Lord A. Haan important accommodation. milton moved for a copy of the notices
Mr Tierney was extremely perplex- issued by the directors of the Bank, ed by the reply of the right honourable respecting partial payments of their gentleman, which appeared to him ra- notes in specie, and of the amount ther calculated to encourage than to paid in pursuance of these notices. His remove doubt. It would perhaps have Lordship very clearly intimated his been better if the right honourable conviction, that the expectations thus gentleman had declined to give any held out were quite illusory.
The answer, than to have offered one so Chancellor of the Exehequer de preunsatisfactory and indefinite. For ac- cated any interference with the Bank, cording to the right honourable gen- which could only fetter that body, in tleman, so far as he was intelligible, its efforts to attain the object in view ; the object alluded to by his honour- at the same time expressing his full able friend, depended upon the mea- conviction of the honourable and public sures of foreign powers. So, in or- spirited course held by the directors in der to decide upon the question, whe- their dealings with the public. After ther the Bank was likely to resume its some observations from Mr Grenfell, cash payments in July, or whether the the House divided, when the motion restriction was to continue, we must was negatived by 34 against 11. look to the foreign mails : thus the Immediately after the decision of wind, or a change in the moon, might Lord A. Hamilton's motion, Mr Tierserve to throw the country into a state ney moved for the weekly issues of of doubt upon this important ques- notes from the Bank in the month tion. The House and the country ended 3d March. He insisted, that if were still in the dark; and the fact the Bank were sincere in their intenwas, that the right honourable gen- tion to resume cash payments, a retleman holding the office of Chancel- duction in the amount of their outstanding notes was an indispensable the French army retired into Germany preparation. Instead of this, they were and was beaten there, and when a pros. following the very opposite course. pect arose of a successful termination There were on the table of the House of the war, gold fell to 51. an ounce ; the amounts of issues for the eighteen and subsequently, when the allies got months, from July 1816, to December possession of Paris
, to 41. 6s. 6d., and 1817; and, from these it appeared, there was every indication of its speedi. that the issues in the first six months of ly falling to so low a rate as to enable that period amounted to 26,300,000!.; the Bank to resume their payments in in the second to 27,400,0001. ; and in cash. The unfortunate events, howthe last, that was to December 1817, ever, which took place in the spring to 29,000,2561. Thus it was evident, of 1815, and which were too notorious that if the Bank, in place of preparing to render it necessary for him to par: for the resumption of their payments ticularize them, and which again inin cash, at the time specified by law, volved Europe in the calamities of war, had determined to multiply impedi- prevented this pleasing prospect from ments to such a result, they could not being realised. After the return of have more dexterously managed to ef- Buonaparte to France, in March, 1815, fect the latter object than by the con- gold rose from 4l. 6s. 6d. to 51. 7s. an duct they were pursuing. The Chan- ounce. It was obvious that, as long cellor agreed to the production of the as a state of hostility continued, any papers, and to the general principle attempt at a resumption of cash pay. that the Bank ought to diminish its ments would, for the reasons that had issues before the resumption of cash operated in preceding cases, prove payments, but declined entering into wholly futile. From the period, howany consideration of the general ques. ever, at which hostilities ceased, it was tion.
but justice to the Bank to state, that Nothing further passed on the sub- they had adopted every measure of ject till the 9th of April
, when it was precaution which mighi enable them introduced to the full consideration of to resume cash payments with safety. the House, by the Chancellor of the Their collection of specie had been Exchequer moving, that it should re- very rapid and to a large amount ; in. solve itself into a committee on the deed, to an extent beyond what he Bank Restriction Act, and on an act for should have supposed possible in 80 the regulation of country bank notes. short a space of time. Another preThe minister now fully laid open the paratory measure of the Bank was an motives which induced him to propose experiment which was first tried by the continuance of the restriction for them in January 1817. They declaanother year. The committee would red themselves ready to pay in cash a recollect that, prior to the retreat of certain description of their notes, the the French army from Russia, at the whole amount of which was about a close of the year 1812, the price of million. Scarcely any demand, howgold bullion was 5l. 128. an ounce, ever, was made upon them; and the and of silver dollars 6s. 6d. an ounce. price of gold was then such, that the At that time, therefore, any attempt same would probably have been the to restore the metallic currency of the case if they had returned generally to country would have been utterly un. cash payments. A different result availing, as the coin would have been followed when, in October last, it was collected and melted as fast as it issued announced, that the Bank would be from the coffers of the Bank. But when ready to pay cash for their notes of