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 16s. 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." 98. We are accustomed to smile at the famous decree of the Inquisition, which resolved that the motion of the earth was false, and sympathise with Galileo, who, when retiring from their rebuke, said "e pur si muove," "it moves for all that." But the famous resolution that guineas were equal in public estimation to Bank notes, when guineas were currently sold for a £1 note and seven shillings, and the dictum of Lord Stanhope that they were equal because the law declared them to be so, infinitely transcends it in absurdity; and, when we feel inclined to be merry at the expense of the worthy fathers of the Inquisition, we should think of Mr. Vansittart's resolution, and be grave. 99. The Bill was warmly contested in every stage of its progress through the House of Lords, but finally passed the third reading by a majority of 43 to 16. In the House of Commons the debates were equally warm and protracted, but it was finally passed by a majority of 95 to 20. The Act was originally limited to the 24th March, 1812, but it was subsequently continued during the continuance of the Bank Restriction Act. 100. We shall reserve some remarks regarding the effects of the great overtrading of 1809 and 1810, till the chapter in which we shall consider the theory of the Bank respecting the issues of its notes upon mercantile security, 101. Among other arguments alleged against the opening of the Bank, was the injustice of compelling it to buy gold at the increased market price. Now that we are enabled to take a more dispassionate view of the subject than those whose interests were so much involved in it at the time of the debate, we can see that there was no hardship in such a requirement. Every creditor who was paid in these depreciated notes was defrauded of 20 per cent. of his debt, and, considering the enormous gains made by the Bank at the expense of the holders of its notes, justice evidently demanded that the Bank should purchase whatever quantity of gold was sufficient to discharge its obligations, cost what it would. The injury to the holders of its notes, severe as it was, was only temporary, but a very much more serious injury was done to the nation, by adding an enormous amount to the national debt, which was contracted in this depreciated currency. 102. The harvest of 1811 was extremely deficient, and that was the period, too, when the power of Napoleon was at its height, and the continental sources of supply were cut off. Towards the middle of 1811, the price of corn began to rise very rapidly, and continued doing so till August, 1812, when it reached its greatest height during the war. The average of wheat for England and Wales was then 155s., and some Dantzic wheat brought 180s., and, in one or two instances, oats were sold at 84s. The advocates of the rival theories attributed this extraordinary rise to different causes; one party almost entirely to the depreciation of the paper currency, the other party almost entirely to the great scarcity. Mr. Tooke is the most distinguished advocate of the latter view, and, in support of it, brings most forcible arguments from the corresponding rise which took place in France during the same period, where the currency was almost purely metallic. Admitting to the full extent the powerful arguments adduced by Mr. Tooke, which derive additional force from his being a cotemporary of the circumstances he describes, we can yet hardly think he can be correct in so entirely excluding the effect of the depreciation of the paper currency as he does. We have abundance of evidence that before the Gold Coin and Bank Note Bill, there were very generally two prices in the country, a gold price and a paper price after that Bill that was abolished, and there was nothing but a paper price, and gold totally disappeared from circulation; but can we doubt that if any price had been paid in gold, there would have been a very great difference between the two, fully as great as before that Act? If, then, it be granted that such would have been the case if payments had been made in gold, it seems to follow that, when prices were paid solely in paper, they must be considered to have been enhanced by just so much as the difference would have been if any payments had been made in gold. There does not appear to be the least reason to suppose that the scarcity was comparatively greater in 1812 than it was in 1800; in fact, the evidence seems to be entirely the other way, that the scarcity and distress was much greater in the former period, yet in 1812, the average rose to 1558.; in the former it : |