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trouble the House by making a motion, as in a conversation which he had held with the Chancellor of the Exchequer, it was agreed that a select committee of twenty-one members should be appointed to take the subject into consideration. The Chancellor of the Exchequer, however, besought Mr Calcraft to recollect the large revenue which arose from this Source, and the present state of the finances; to which Mr Calcraft re

plied, that he certainly would not think of doing away with a revenue of a million and a half, without finding a substitute. On the 22d May, Mr Calcraft reported, that the only specific measure which the committee was prepared to recommend during the present session, was the reduction of the duty on rock salt, employed for the purposes of agriculture from 10. to 5%. per ton.

CHAPTER IV.

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 political economy, which occupied the attention of the public during the present session, was the restriction upon the Bank from paying, or more properly speaking, the permission not to pay notes in gold and silver. Ever since the first adoption of this measure in 1797, it had been the subject of frequent and prolonged parliamentary discussion. The striking difference in value between the metallic and paper currency, with the serious and prominent effects thence arising, necessarily drew the attention of all practical statesmen, while the abstruse and complicated circumstances on which it depended, left room for the utmost variety of opinions. By those who considered the restriction as necessary, it was represented that the extensive remittances made to the continent, either for loans, or for the support of armies, produced an extraordinary demand for gold and silver, which is much the most convenient shape in which such remittances could be effected. The value of these metals was thus raised

above what it bore as the coin of the realm. There arose, therefore, a boundless demand upon the Bank for payments in specie, not in consequence of any doubt of its credit, but in order to melt down that specie and obtain the higher price which it brought as bullion. It was impossible for the Bank to supply this indefinite demand without at least entirely ruining itself, since it was obliged to buy gold at the high price and issue it at the low price. On the other hand, the adversaries of the Bank and of ministry contended that the great difference of value between bullion and currency arose from the restriction itself; that the bank paper, become the standard currency of the country, was necessarily depreciated in consequence of not being exchangeable for specie; and that, in order to equalize the value between bullion and currency, nothing was wanting but that the Bank should begin to pay in gold and silver.

It is not now incumbent on us to enter into those abstruse discussions, which would be necessary to form a

judgment on this intricate subject. The former opinion certainly seems much favoured by the fact, that on the conclusion of peace, and the cessation of foreign remittances, the price of gold fell immediately to its ordinary level. Now, however, when the grand cause urged in favour of the restriction had ceased, all parties agreed in considering it desirable that the circulation of the country should be restored as soon as possible to its natural and healthful state. This could never take place till the Bank paid in specie the notes which it issued, which were mere promissory notes, and derived their whole value from the belief of their being convertible into cash. When, however, the demand was made that payments in specie should be resumed, ministers and the Bank urged that some time ought to be allowed to that body to collect a quantity of gold sufficient to meet a crisis, which, after such a long suspension, might be considered as serious and important. On this principle, in 1816, the resumption of cash payments was delayed for two years, and fixed for the 1st of July in the present year. At this period considerable agitation prevailed, especially as rumours began to circulate that a farther delay was contemplated by ministers and the Bank. In these circumstances, the members who took the lead against the system pported by government, determined to press the question, with the view of putting an end to the public perplexity, and of opposing with all their influence the delay, if it was really projected.

The discussion was opened by Mr Grenfell, who had always taken a prominent part in urging the Bank to resume their payments in cash. On the 29th January he put a direct question to the Chancellor of the Exchequer. After the promises and the declarations, so often renewed by the govern

VOL. XI. PART 1.

ment and the Bank, it was natural to suppose, that no doubt or uncertainty would prevail in any quarter, as to the probability of cash payments being actually resumed when that period should arrive. Very considerable doubt did nevertheless exist in the public mind upon this subject, and more especially among the class of society which was frequently described as the moneyed interest. It was desirable that this uncertainty should not continue one moment after his Majesty's ministers had it in their power to remove it. No honourable member, who had a practical knowledge of what was now daily passing in the city, could be ignorant of the very large transactions and speculations of a gambling nature that were entered into, and depended upon the result of this contingency. It was obvious that, in such a course of adventure, those who had the means of making themselves acquainted with the real intentions of his Majesty's ministers, must possess a material advantage over those who were not in the secret. For these different reasons, he hoped he should not be considered as making an extraordinary request on behalf of the public, when he desired to know whether any event had occurred, or was expected to occur, which, in its consequences, would prevent the resumption of cash payments on the 5th of July next. He wished also to inquire about two loans made by the bank to government, one of six millions, at 4 per cent, and another of three millions without interest. Till these were replaced, it was of course impossible for the Bank to commence its payments in specie.

The Chancellor of the Exchequer was enabled to say, that the Bank had made ample preparation for resuming its payments in cash at the time fixed by Parliament, and that he knew of nothing in the internal state of the country, or in its political relations

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with foreign powers, which would render it expedient to continue the restriction; but that there was reason to believe that pecuniary arrangements of foreign powers were going on, of such a nature and extent, as might probably make it necessary for Parliament to continue the restriction, so long as the immediate effects of those arrangements were in operation. As to the loan of six millions from the Bank, at 4 per cent interest, he should, ere long, have to submit a proposition to the House for the payment of that debt; but with respect to the three millions without interest, which, for obvious reasons, was rather to be regarded as a gift than as a loan, he rather thought that neither the House nor the honourable gentleman himself, would be reconciled to any proposition for depriving the public of such an important accommodation.

Mr Tierney was extremely perplexed by the reply of the right honourable gentleman, which appeared to him rather calculated to encourage than to remove doubt. It would perhaps have been better if the right honourable gentleman had declined to give any answer, than to have offered one so unsatisfactory and indefinite. For according to the right honourable gentleman, so far as he was intelligible, the object alluded to by his honourable friend, depended upon the measures of foreign powers. So, in order to decide upon the question, whether the Bank was likely to resume its cash payments in July, or whether the restriction was to continue, we must look to the foreign mails: thus the wind, or a change in the moon, might serve to throw the country into a state of doubt upon this important question. The House and the country were still in the dark; and the fact was, that the right honourable gentleman holding the office of Chancel

lor of the Exchequer, had not himself any one distinct idea upon the subject.

This movement in the House of Commons was immediately followed up by Lord Lauderdale in the Upper House, where he began by moving a return of the weekly amount of notes in circulation during the last three years. He and Lord King, alluding to what had passed in another house, trusted that Parliament would not agree to a renewal of the restriction without the most rigorous investigation. Lord Liverpool made a statement similar to that made by the Chancellor of the Exchequer in the Lower House. The amount was ordered, but the Lords on the opposite side expressed their entire dissatisfaction with this announced intention of ministers.

On the 4th March, Lord A. Hamilton moved for a copy of the notices issued by the directors of the Bank, respecting partial payments of their notes in specie, and of the amount paid in pursuance of these notices. His Lordship very clearly intimated his conviction, that the expectations thus held out were quite illusory. The Chancellor of the Exehequer deprecated any interference with the Bank, which could only fetter that body, in its efforts to attain the object in view; at the same time expressing his full conviction of the honourable and public spirited course held by the directors in their dealings with the public. After some observations from Mr Grenfell, the House divided, when the motion was negatived by 34 against 11.

Immediately after the decision of Lord A. Hamilton's motion, Mr Tierney moved for the weekly issues of notes from the Bank in the month ended 3d March. He insisted, that if the Bank were sincere in their intention to resume cash payments, a reduction in the amount of their out

standing notes was an indispensable preparation. Instead of this, they were following the very opposite course. There were on the table of the House the amounts of issues for the eighteen months, from July 1816, to December 1817; and, from these it appeared, that the issues in the first six months of that period amounted to 26,300,000l.; in the second to 27,400,000l.; and in the last, that was to December 1817, to 29,000,2561. Thus it was evident, that if the Bank, in place of preparing for the resumption of their payments in cash, at the time specified by law, had determined to multiply impediments to such a result, they could not have more dexterously managed to effect the latter object than by the conduct they were pursuing. The Chancellor agreed to the production of the papers, and to the general principle that the Bank ought to diminish its issues before the resumption of cash payments, but declined entering into any consideration of the general question.

Nothing further passed on the subject till the 9th of April, when it was introduced to the full consideration of the House, by the Chancellor of the Exchequer moving, that it should resolve itself into a committee on the Bank Restriction Act, and on an act for the regulation of country bank notes. The minister now fully laid open the motives which induced him to propose the continuance of the restriction for another year. The committee would recollect that, prior to the retreat of the French army from Russia, at the close of the year 1812, the price of gold bullion was 5l. 12s. an ounce, and of silver dollars 6s. 6d. an ounce. At that time, therefore, any attempt to restore the metallic currency of the country would have been utterly unavailing, as the coin would have been collected and melted as fast as it issued from the coffers of the Bank. But when

the French army retired into Germany and was beaten there, and when a prospect arose of a successful termination of the war, gold fell to 57. an ounce ; and subsequently, when the allies got possession of Paris, to 4l. 6s. 6d., and there was every indication of its speedily falling to so low a rate as to enable the Bank to resume their payments in cash. The unfortunate events, however, which took place in the spring of 1815, and which were too notorious to render it necessary for him to par ticularize them, and which again involved Europe in the calamities of war, prevented this pleasing prospect from being realised. After the return of Buonaparte to France, in March, 1815, gold rose from 4l. 6s. 6d. to 51. 7s. an ounce. It was obvious that, as long as a state of hostility continued, any attempt at a resumption of cash pay. ments would, for the reasons that had operated in preceding cases, prove wholly futile. From the period, however, at which hostilities ceased, it was but justice to the Bank to state, that they had adopted every measure of precaution which might enable them to resume cash payments with safety. Their collection of specie had been very rapid and to a large amount; indeed, to an extent beyond what he should have supposed possible in so short space of time. Another preparatory measure of the Bank was an experiment which was first tried by them in January 1817. They declared themselves ready to pay in cash a certain description of their notes, the whole amount of which was about a million. Scarcely any demand, however, was made upon them; and the price of gold was then such, that the same would probably have been the case if they had returned generally to cash payments. A different result followed when, in October last, it was announced, that the Bank would be ready to pay cash for their notes of

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