"Resolved, That the interest on Exchequer bills, in the year ending 5th of January 1813, amounted to the sum of 1,835,3691.; and that the estimated charge for interest on Exchequer bills, in the year ending 5th of January, 1814, is 1,870,000l.

"Resolved, That this great, and increasing sum, annually paid for the purpose of obtaining Bank paper in exchange for government paper, appears to this House to be an improvident expenditure of the public money."

did the government do? They gave a premium upon the issue of Bank notes by receiving them for Exchequer bills, and paying interest upon the nominal amount. The issue of Exchequer bills had thus increased from 7,000,000 in 1797, to 43,000,000l. in the present year, and the interest from 350,000l. in 1797 to 1,800,000l. in the present year. The directors of the Bank, when called upon to state the value of their notes, asserted, that they were always issued upon securities, that in the case of bills of exchange they had the security of the merchant, and with respect to Exchequer bills, that they had the security of government, thus evidently proving that the Exchequer bill was a better security than the Bank note. Yet what was the fact a number of pieces of paper printed by order of the Treasury, and signed by the proper officers, were exchanged for a number of pieces of paper printed by order of the Bank, and signed by their officers, and for this the public were charged interest to the amount of 1,800,000l. By this system the Bank proprietors had become enriched by increased dividends and bonuses, until they had pocketed 18,000,000l. of the public money, and the country bankers had increased from 200 in 1797 to 800 in the present year. If we were to have a paper currency, why did not the government at once issue it, and save the public the enormous charge for interest upon Exchequer bills? He was not advocating the policy of such a system, but if we must have a paper currency, it was surely better that it should at once be issued upon the security of government, and thus a saving be made to the public of the large sums paid merely for the exchange of the paper of government for the paper of the Bank. It was quite impossible we could go on upon the present system, the evil arising from the depreciated state of our paper currency had been increasing from year to year, and must produce still worse consequences. They had seen the ruinous effects of a paper currency in every country where it had been tried, and it was only by taking timely measures that they could avert the evil. He then moved the following Resolutions, mentioning, that the next session he intended to discuss the subject at greater length "Resolved, That the charge for interest on Exchequer bills, in the year ending 5th of January, 1798, amounted to the sum of 275,4561.

:

The Earl of Liverpool contended, that there was no proof whatever of a depreciation of our paper currency. There never had been in this country a paper price and a gold price, and however some persons might pay a premium for gold for the sake of convenience, there was no indication whatever, in the ordinary transactions of business, of any depreciation of our paper currency. The same thing happened with respect to silver, previous to the Bank suspending payments in cash,' as many must recollect, a premium being frequently given for silver, on account of its scarcity. The noble earl had contended that it was impossible for the precious metals to rise in value, but if he maintained this, he must be prepared to contend that they could not fall in value. Now, it was a fact, well known, that the discovery of the mines in South America, had caused a most material variation in the value of the metals in Europe; and was any one prepared to maintain, that a diminution in the import from South America (owing to the circumstances of that country, arising from the Spanish Revolution)-was any one prepared to contend, that the diminution of that import, for some years past, from 30 or 40,000,000. (at which it had been regularly kept up) to 7 or 8,000,000l. must not also have the effect of causing another material variation in the value of those metals in Europe? There could be no doubt also, that a material effect was produced by the enormous rate of expenditure at which the war was carried on. The policy of continuing that expenditure-which he considered right, but which other noble lords might consider erroneous-was at present out of the question. There could be no doubt, however, that it had a great effect, added to the extraordinary circumstances in which our commerce had been placed. Wherever the balance of payments was against a country, and conse

quently the course of exchange, the circulation must necessarily be affected. This, in time of peace, soon led, by its own operation, to the cure of the evil; but, in the present war, from our necessarily large expenditure, particularly in the peninsula, combined with the difficulties in which our commerce had been placed, a material effect had necessarily been produced. It was to these causes, he was convinced, was to be attributed that state of our currency which the noble lord alleged was owing to the depreciation of our paper, but which there was no data whatever to establish. The noble earl, however, had urged the extraordinary proposition, that a paper currency should be issued by government. Upon this point all experience was against the noble earl, as in every country where that had been tried, it had uniformly produced the most ruinous effects. The great mistake continually made upon the continent was, that such a paper currency having produced those ruinous consequences in every country where it had been tried, it was therefore expected that a paper currency must produce the same consequences here. The great security of our paper currency, and that which constituted the important difference between it and the paper currency of other countries was, that it was issued by an individual banking company, or by individuals for the sake of their own interest. The Bank of England would no doubt be ready to accommodate the public service, but they could refuse to issue their notes, and whenever they acted upon any other ground than their own interest, it would be the first step to their ruin. This formed the great security of our paper currency, and placed it upon a basis different from that of all other countries. He was as anxious as any one to return to a metallic currency, with a subsidiary circulation of paper, and he could foresee no difficulty in returning to the ancient standard in a short period after the conclusion of a definitive treaty of peace, though the period of six months might, under some circumstances, be found too short. With respect to the issue of Exchequer bills, it was not true that the issue of Bank notes was necessarily thereby increased, as it would be found, by inspecting the papers on the table, that the amount of Bank notes had sometimes decreased with an increased issue of Exchequer bills, and had, on the contrary, sometimes increased without any increased

issue of Exchequer bills. The fact also was, with regard to Exchequer bills, that they bore a premium of a quarter per cent. which rendered the interest upon them not more than five per cent. a clear proof that the market was not over-loaded. He thought it unnecessary to enter more at length into the subject, as it was to be more fully discussed at a future period; but of this he was thoroughly convinced, that the only wise system of paper cur rency was that which at present subsisted in this country. His lordship concluded by moving the previous question.

Lord Holland said, he was little conversant with the subject now under discussion; but he was not so entirely ignorant respecting it as not to think he perceived many inconsistencies in the argu ments adduced by the noble earl who spoke last. An excessive issue of paper accounted for all the phenomena at once about which they were contending, whereas the noble earl, to account for them, was obliged to have recourse to a great variety of circumstances, some of which were inconsistent with facts, and others were inconsistent with themselves. He first said the high price of gold was owing to a deficiency in the quantity of precious metals imported from South America; but when did the circumstance first arise in this country? In the year 1807. Now, the importation of precious metals from South America was never more abundant than during that year. When the subject was first discussed in the House the noble lord assigned the importation of grain and the continental system as reasons. the continental system was now com. pletely at an end; and with respect to corn he understood that we were at this moment an exporting rather than an importing country. The noble earl next accounted for the phenomena by the expence of the war in the peninsula, and the reduced quantity of precious metals imported. Granting the fact of the diminished importation, the circumstance would operate, not' in this country only, but in Europe in general. This country was never more exclusively in the possession of the means of bringing the precious metals from South America; and France was never more dependent on this country, in that respect, than at present. How happened it, then, that in other countries phenomena of a directly contrary nature were observable? For if, throughout Europe, prices had risen in,

But

stead of fallen, it was a proof there was no deficiency of the precious metals. The war in the peninsula was certainly a great source of expenditure; but he did not intirely comprehend the noble earl on this subject; for he saw no advantage that the payment in paper would give in carrying on the war, if paper was equal to gold. The argument, if it meant any thing, meant this: that we were now come to a state of things when it was necessary to cheat the public creditor; that the creditor was paid the interest of his debt in paper nominally of the value of a pound, but in reality much less. He had heard precisely the same arguments used in favour of assignats. A person asked a friend of his in France, whom he would not name, but whom any man might be proud to name as a friend, what good would be produced by the assignats? This friend said they would answer the purpose of carrying on the war. When he himself asked how they would do this? he was answered, the assignats would bring armies into the field, and a navy on the ocean: they would soon decrease in value, but still they would serve their purpose, and making use of rather a vulgar English expression, he said it would then be, the devil take the hindmost. He could not really see how paper could assist us in the war, except for purposes of delusion. They were not to consider the nominal, but the actual expence. They must have dollars to pay the army with in Spain, and whether more or less paper was paid for these dollars, was precisely the same thing, except for the interests of this country. With respect to the abstract principles of the noble earl, of the propriety of keeping the Bank independent of government, they were applicable to other business. He really could not see what advantage at present this country could derive from the great expence to which it was put, by converting one species of paper into another.

- The Earl of Ross considered the paper currency of great use in these times of the country, as it tended to equalize the price of the currency. If it were admitted that gold could be lowered in its price on account of the abundance, it was no longer a standard, and such was the fluctuation in price, that he could not consider it to be a standard. He attributed its rise to the same causes mentioned by the noble Secretary of State.

Earl Stanhope said, when he came into

the House he did expect his noble friend, the mover of the Resolutions, would have treated this subject in a totally different manner. He thought his noble friend would have struck at the root of the evil to which he had called their attention. But he had done no such thing, and he had made observations, not so extraordinary, because they were different from his (earl Stanhope's) opinions, but because they were in opposition to his noble friend's own published opinions. It was sometimes practised in that House that peers on opposite sides, particularly when they had no proxies, paired off-he could now pair off his noble friend most appropriately; he could pair him off with himself. He had compared his noble friend's observations to-day with his observations on another occasion, and be found them to be directly opposite. There was a printed book by the earl of Lauderdale on the depreciated currency of Great Britain, and he would just compare what had been now stated by his noble friend with what was stated by the noble author. His noble friend had this day said, that gold could not rise in value, this was his expression. Now, said earl Stanhope, let us consult the noble author. In page 28 he tells us, if gold be exported from a country it necessarily increases that which remains. [Here the earl of Lauderdale intimated there was no contradiction.] Will my noble friend have it understood that he has not said, gold may rise in value? What is the meaning of increase?' Increase what? No, no, I have got the noble earl, with all his shrewd ness, up in a corner, and still he tries by ingenuity to slip away from me.-Earl Stanhope next proceeded to notice that the state of the times had led to the high price of gold. Their lordships were to consider how much was diffused through the war abroad, and how much exported from this country in subsidies. He did not concur in his noble friend's (lord Holland) construction of what was said by the noble Secretary of State, he did not imply that any cheating was in contemplation, nor did any danger exist of such a consequence, as that of the devil taking the hindmost. France ruined her finances by assignats, but that was issuing them without the common regulations of prudence. Many people at that day cried out " Assignats! assignats!--we will have assig nats, and nothing but assignats!" They acted most foolishly, for they had great

resources; for, in consequence of the confiscation of the property of the crown, the church, the emigrants, and of those who were beheaded, they had a third of the landed property of all France in their own hands. He considered the restriction of cash payments as necessary, and concurred on that subject, with the opinion of the noble lords opposite. But he was astonished at his noble friend, in not recurring to the root of the evil. He would have government come forward boldly and manfully, and propose a method of controul over the increase of country banks, which were the most mischievous of all mischievous things. He knew an instance of a bank in the north, where a friend of his deposited 500l. and the bank failed, and he lost his money. When the facts were inquired into, it was found that they failed for 52,000l. and yet it was well known they were not worth more than 3,000l. This was certainly a system of swindling. He knew also an instance of a bank in the south, and they issued notes payable at a bank in London, which did not exist, and when an acquaintance of his took back a 51. note, the answer was, no effects. It was thus that persons were swindled, and then they were told, no ef fects. He had heard of another instance, a pettyfogging attorney in a country town, that could not find money for his pettyfogging business, could find money enough to set up as a banker. He need not tell their lordships what became of this bank. Indeed, they often tossed up like the two fellows, neither of whom could keep a servant, who tossed up which of them should be groom, for the purpose of swindling; so, in these country banks, they often tossed up who should be the banker, and who should be the swindler, to issue these notes upon the public. It would be judicious to lay a tax upon bankers, not for the increase of the revenue, but to keep improper persons from engaging in that business. He was, however, convinced, that several among the country bankers were most respectable men, and had contributed to produce many local advantages.

The Earl of Lauderdale replied. The whole of the arguments of the noble lord opposite, had been bandied about by the French legislators in the times of the assignats. The noble lord on the cross bench (Ross) had stated their doctrine much more fairly than was usually done: and, in one sense, the paper was stationary; for a slip

| of paper being originally worth nothing, would, no doubt, continue so. In regard to the remark of the noble lord opposite, respecting an observation of his, that the metals could not rise much, his argument had been misunderstood. What he had said was, that the metals could not rise much in any particular country above their value in other countries, and so he said still.

Lord Holland wished to enquire of the noble Secretary of State, in what year the importation of the precious metals to Europe was the least? He believed the exportation from South America, so late as the year 1808, was more than the amount of the three years preceding.

The Earl of Liverpool observed, that the importation to Spain and Portugal in former years, had been about 34 millions of dollars, but in each of the three last years it had been no more than from three to five millions. The account of former years would be found in the Appendix to the Report of the Bullion Committee, and he would willingly communicate to the noble lord, the account which he had received of the last three or four years, and which he believed to be very accurate.

The Lord Chancellor then put the question on the earl of Liverpool's motion, which was agreed to without a division.

HOUSE OF COMMONS.

Monday, July 12.

EAST INDIA COMPANY'S CHARTER BILL.] Mr. Lushington brought up the report of this Bill. On the question that it be now received,

Mr. Whitshed Keene presented himself to the House, and stated, that though at the present period of the session, and in the present stage of the Bill, he had but little hopes that any thing that fell from him could impede its further progress, he felt it his duty to enter his solemn protest against the measure, as fraught with the most ruinous consequences to both countries. No advantage would arise from it to the trade of this country, as the natives had succeeded in fabricating most of our manufactures, and in the province of Bengal there was a native capital of 16 millions in the funds of government, which would effectually annihilate all competition on the part of private trade. The only way to prevent which would be to prohi bit the natives from engaging in commercial pursuits, On the subject of convert.