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guineas were of the same value as Bank notes, they were at the same time dishonest enough to pay them away to the soldiers at 23s.
88. Sir Francis Burdett stated that, in Jersey, Bank of England notes were at a discount of 3 per cent. as compared to the notes of their own little bank; that it was perfectly notorious that two prices were common throughout the country. He knew it from his own experience; he had been offered wine at far different prices, according as he should pay for it either in Bank notes or in specie.
89. We have now given so much space to this interesting discussion, that we can scarcely afford room to notice any of the other speeches upon the subject. When we read the arguments and evidence, which seem to be so perfectly satisfactory, according to all the usual principles that command assent, we feel some curiosity to know what was the opposing theory set up against them, and it was simply this, that the pound sterling was nothing tangible at all! It was an imaginary vision! a vague idea! an airy nothing! which never had any existence in nature at all, and that, accordingly, everything, money and bullion included, might vary in endless changes round this ideal centre. It had even less substantiality than a whiff of smoke! It was "a sense of value" communicated in some mysterious way from one person to another. Mr. Canning pursued the author of this insensate folly with unsparing ridicule in his speech. He also ably pointed out the consequence of not allowing guineas to circulate at their market value, which had been followed by their total disappearance, whereas dollars, which were beginning to disappear when they were bound down to the value of the depreciated Bank paper, were immediately restored to circulation when they were allowed to pass current at their real value. However, though he fully agreed in all the principles and reasonings of the Bullion Report, he did not think it expedient that the Bank should be called upon to resume cash payments in so short a period as two years.
90. After a debate of four nights the Committee divided on the first of Mr. Horner's resolutions, and it was negatived by a majority of 151 to 75. The fourteen next were negatived without a division, and the last was rejected by a majority of 180 to 45. Among the names of the majority was that of ROBERT PEEL.
91. The Ministry, having defeated the Bullion Committee. by so great a majority, would have done well to let the matter rest. As to the matter of fact agitated between the parties, the depreciation or the non-depreciation of the Bank notes, it would be useless to waste one word more, and in arguing against so palpable a fact, the ministerial party shewed little discretion. They might easily have saved their credit by admitting the fact, but arguing that it was not expedient for the public service that so momentous a change should be made during the war. Not content, however, with procuring the total rejection of Mr. Horner's resolutions, Mr. Vansittart, in the plenitude of his power and party strength, and in the mere wantonness of tyranny, determined to drag the House through the lowest depths of ridicule and absurdity. He moved a series of resolutions which are too long to be inserted here, to the effect that there was no legal weight of bullion in the coins, beyond what the caprice of each Sovereign might dictate; that the Bank notes were merely promises to pay in these coins, and they always had been, and at that moment were held equivalent in public estimation to the legal coin of the realm, and generally accepted as such in all pecuniary transactions to which such coin is lawfully applicable, and that the price of bullion and the state of the foreign exchanges were in no way owing to excessive issues of Bank paper.
92. In introducing his resolutions Mr. Vansittart made a speech of enormous length, repeating his former views, that the state of the domestic currency had no effect upon the foreign exchanges, and, with a flight of unheard-of audacity, he, in defiance of the recorded opinion of Parliament and the unanimous testimony of all contemporary writers, made the extraordinary assertion that in 1696 and 1774 "the fall of the exchange was the cause, and not the consequence of the
depreciation of the currency!" Mr. Canning in vain attempted to persuade the Ministers to rest satisfied with the defeat of the Bullion Committee, and, for the sake of the reputation of the House, not to make them pass a vote which no one outside the House could speak of without laughter. His amendment was rejected by a majority of 82 to 42; and, after some other minor divisions, Mr. Vansittart's resolutions were carried.
93. We have observed that guineas were not sold openly at a premium, because it was generally believed to be a criminal offence to do so, and three men were tried and convicted for so doing. To draw any argument of the equality of the value of the note and coin under such circumstances, was nothing but a contemptible piece of sophistry. But nothing could be more whimsical or absurd than the presumed state of the law on the subject. It was held to be penal to part with a Bank note for less than 20s. in bullion, but it was quite legitimate for a tradesman to make two prices for his goods. In his speech against Mr. Horner's resolutions, Mr. Vansittart had taunted his opponents with the circumstance that this was not done. It is incredible how any one could have made an argument of such an absurdity, when it was so easy to outwit the law. If any one wished to avoid the legal offence of parting with a guinea for more than 28s., what more easy than a collusive sale? Sell a loaf to any man for a £1 note and 5s., and buy it again from him at a guinea, and the interchange between the guinea and the £1 5s. was effected in the most legal manner. But such subtleties were at once put an end to by the Court of Common Pleas unanimously quashing the conviction of De Yonge, and declaring that it was no crime at all to sell guineas at a premium.
94. After the House had indulged in this wild freak-the very saturnalia of unreason-and given so great an encouragement to the Bank to pursue its wild career, it became evident to any one who understood the subject, that the value of every man's property depended upon the will of the Bank directors. This was fraught with the most alarming consequences to every one who had a fixed annuity, as, while the price of every article of prime necessity kept pace with the depreciation of the currency, any one, like a landlord, having a fixed rent to receive,
was paid in a depreciated paper, while his tenants received the increased nominal prices of their commodities. As matters were continually getting worse, gold having risen to £4 168. per ounce in March, Lord King issued a circular to several of his tenants, reminding them that their contract was to pay a certain quantity of the legal coin of the country, and that the present paper currency was considerably depreciated. He said that, in future, he should require his rents to be paid in the legal gold coin of the realm, but that, as his object was merely to secure the payment of the real intrinsic value of the sum stipulated by the agreement, he should be willing to receive the amount in Portugal gold coin of an equal weight with that of the stipulated number of guineas, or by an amount of Bank notes sufficient to purchase the weight of standard gold requisite to discharge the rent.
95. That such a demand was legal no one pretended to deny; but when this practical sarcasm was passed upon the resolution of the House of Commons, it drove that party wild, and the most unmeasured abuse was heaped upon him for incivism. Not only was this in every way legal, but nothing could have been more equitable. His tenants were receiving the increased market prices for their crops, and only paid him in the same number of depreciated notes. It is quite clear that, if his tenants got an increase in the price of their corn owing to the depreciation, he ought to have received a proportionate increase in his rents. Lord Stanhope brought in a bill, which, after being considerably modified, was ultimately passed, making it a misdemeanour to make any difference in payments between guineas and Bank notes. Lord Stanhope, in bringing in the bill, mentioned several instances which he had been informed of, in which 27s. were demanded for a guinea. Lord Holland also said that a pound note and seven shillings were currently given for guineas. Admirable commentary upon the resolutions carried so triumphantly in the House of Commons only two months before, and then standing on their journals, that in public estimation guineas and Bank notes were equal!
96. Lord Grenville opposed the bill with great earnestness, and his opinion is particularly valuable because he was one of
the Cabinet who originally proposed the Restriction Act. He said he had never seen the Ministers of the country in so disgraceful a position as they were that night. He turned the famous resolutions of the House of Commons into great ridicule, and said that it had been left for Robespierre, the Jacobins, and the present Ministry to raise a cry of incivism against the private actions of individuals. He said that it was one of the most painful days in his and Mr. Pitt's political life, when they felt compelled to come to Parliament to propose the restriction. "By what consideration we were afterwards induced to extend it for successive short periods, it is unnecessary to explain, suffice it to say, that they are considerations which I shall ever deeply regret had any influence upon my mind. I do assure my noble friend (Lord King) that I have long since fully concurred in the arguments which he has urged against the original policy of that restriction." He said that the present course, if persevered in, must end in the same manner as the Mississippi and South Sea Schemes, in total ruin. "My Lords, it has often been my lot to point out the inevitable results of the issue of assignats in France. How little did I then imagine that, in the description I then gave, I was but anticipating what, in the course of twenty years, would be the faithful picture of my own country!"
97. Although we have given so much space to this debate, we cannot refrain from giving a few sentences of Lord Stanhope's reply, as they concentrate in the shortest space the whole of the ministerial arguments and views on the subject
"Earl Stanhope, in explanation, said that there was no such thing in this country as a measure of value founded on a quantity of bullion of standard fineness. The legal coin was the money with the stamp upon it. The stamp was what made it the lawful coin, not to be melted nor transported, and not the weight and fineness. He did not know what mathematicians he had to deal with, but if Bank notes and gold bore a fixed proportional ratio to the pound sterling by law, they were equal to one another, and to prove this he need go no further than the first book of Euclid, where it was laid down as an axiom that things equal to the same are equal to one another."