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retained the coin in circulation was by contracting their issues. And they said that, however the exchanges might have been affected during the last and preceding year, they had no reason to apprehend the same or any other causes could continue to affect them in such a degree as to preclude the Bank of England, by a constant reference to the exchanges and the price of gold, and, when necessary, by a cautious reduction of their paper currency, from gradually approximating its value to that of gold, and ultimately re-establishing and maintaining it at par. Both Houses agreed in recommending that after the 1st February, 1820, the Bank should be required to deliver gold of standard fineness in quantities of not less than 60 ounces, at £4 1s. per ounce; that after the 1st October, 1820, the rate should be reduced to £3 19s. 6d.; and after the 1st May, 1821, it should be reduced to the Mint price of £3 17s. 10d. per ounce, that this liability to pay in bullion should continue for not less than two, nor more than three years, from 1st May, 1821, when payments in cash should be resumed. They also expressed their opinion that the great destruction of country bank paper of 1816-17, had been partly instrumental in reducing the price of gold, and making the exchanges favourable during that period. That, from the numerous circumstances affecting the value of Bank of England paper-the varying state of commercial credit and confidence-the fluctuations in the amount of country bank paper, and other reasons, no satisfactory conclusion could be drawn from the mere numerical amount of their issues at any given time.

126. The Report was brought before the Lords on the 21st May, 1819, when a petition, signed by about 500 merchants, bankers, and others, was presented against it, on the ground that the extensive contraction of the Bank's issues in so short a time, as would be rendered necessary by it, would cause general embarrassment. The directors of the Bank communicated a very strong representation, containing similar views, to Lord Liverpool, which was also laid before the House. Lord Harrowby, however, that evening, brought in the ministerial resolutions, which were framed in accordance with the Report, and the last of which was-"That it was expedient to repeal all laws prohibiting the melting or exportation of the gold or silver

coin of the realm." Lord Lauderdale moved a series of resolutions in opposition, the principal of which was that the Mint price of gold should be altered to correspond with the market price.

127. The resolutions were moved in the Lords by Lord Liverpool, in a speech of singular clearness and ability. Every word that he uttered told with crushing effect upon the course of the Government in 1810. He was an entire convert to the principles of the Bullion Report, in their fullest extent. He said that the three chief points in question were, whether—1. It was expedient to return to some fixed standard of value. 2. Whether that standard should be the ancient one. 3. By what means it could be done. That the first point was the most important, because it would be found that all the opposition to the measure was simply a disguised hostility to return to cash payments at all. Many considered that there should be no standard of value; but what civilised country had ever acted upon this principle since the world began? In former times the most disgraceful measures had been resorted to, to depreciate the standard, but even that was not so bad as having no standard. No country in the world had ever established a currency without a fixed standard of value; it might be gold, silver, copper, or even iron, but it must be something which had a real value; it could not be paper, which had no real value, but is only a promise of value, and England, the first country for commerce and knowledge of political economy, should not be the first to confer on any body of men, however pure their motives and conduct, the power of making money according to the suggestions of their own interests. Policy, good faith, and common honesty called on them to return to the ancient standard. No doubt some of the public debts were contracted in a depreciated currency, but yet the contract was to pay according to the ancient standard, and they must adhere to that if they meant to act honestly. He ridiculed the idea of the danger or difficulty of doing so. In 1816 gold fell to the Mint price, and, when it was quoted at £3 18s. 6d. in the public lists, it might, in fact, have been bought cheaper, only the Bank determined to be the only purchaser, and gave that price. Since then it had risen to 6 per cent. above the Mint price, but at the time he was speaking it was only 3 per cent. above the standard price. A noble

Earl had doubted whether it was in the Bank's power to bring gold to the Mint price by contracting its issues. The question. was, no doubt, somewhat obscure, but the Report would shew that there was not a single practical man, even among those most hostile to the intended measure, who did not admit that a contraction of the Bank's issues must necessarily have the effect of rendering the exchange favourable to this country, and of lowering the price of bullion. He himself entertained no doubt upon the point. The plan proposed by the resolutions, gave ample time for the Bank to make all necessary preparations without injury to the commercial interests by too sudden a contraction. The subject of the quantity of the circulating medium necessary for commercial transactions was one of the greatest importance; it was one, however, in which it was impossible to fix any nice proportion, and, in his opinion, THE ONLY

CRITERION OF A CIRCULATION BEING SUFFICIENT OR EXCESSIVE WAS TO BE FOUND SOLELY IN ITS VALUE WHEN COMPARED WITH

THE PRECIOUS METALS. The real value of paper could only be ascertained by its convertibility into specie. If that test was adopted it made little difference what the circulating medium was composed of. In Lancashire it chiefly consisted of bills of exchange, which was found to succeed perfectly in that county. If any country or district was possessed of real and substantial wealth, it would soon find a circulating medium for itself. The measures proposed, in his opinion, would lead to no inconvenience; if any could have arisen, they had been incurred already, and if Parliament would steadily adhere to the course recommended, they would see the ancient standard restored without material distress to any one.

128. Lord Lauderdale made some severe remarks upon the strong speech made by Lord Liverpool in favour of the very doctrines he had been twelve years in controverting. Lord King heartily approved of the resolutions, and especially that the time was fixed by Parliament, when the Bank should resume cash payments, as the public would now have a security beyond the discretion of the Bank directors. The numerical amount of Bank notes could be no guidance for the amount of issues. The only rule which could be given for their regulation was to keep gold at the Mint price. This was the only check on the vicious

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practice which 22 years' usage had accustomed some to consider as the natural state of the currency of the country.

129. Lord Grenville spoke with great earnestness in favour of the resolutions, and his sentiments deserve most particular attention, because he was one of the Cabinet who originally proposed the Restriction Act. He now, however, came forward to repeat, in the most emphatic terms, what he had already avowed, that he considered the restriction as one of the greatest calamities under which this suffering country laboured. He had frequently had occasion to lament and deplore the part which he had himself taken on its original proposition, in prolonging it for the term of the then existing war. Having avowed his error in so doing, as became an honest man, at the commencement of the last war, and having foreseen, but too truly, all the misery that followed, he felt great joy that the country could now look forward with certainty to the repeal of that injudicious and unfortunate measure. There was no difference in principle between the excessive issues of the Bank of England and those of Austria, Prussia, and Russia. He was most anxious to place on record his opinion, that the evils of the restriction had far counterbalanced its good, and that future statesmen might know that the opinion that this measure had saved the country was not unanimous. He hoped it would be recorded of him, as his decided conviction, that in proportion to the danger under which the country laboured, was the impolicy and desperate madness of such a measure as they were now considering how to rescind. Whatever temporary advantages might be furnished to individuals from too liberal issues, those very individuals generally suffered tenfold injury. While the Bank was lending money with one hand, with the other it was shaking the foundation of contracts, affecting all prices, involving the country in distress, and individuals in ruin ten times greater than any benefits they could derive from liberal issues. Increased bankruptcies invariably followed increased issues. The miseries of 1816 were the sure consequences of the extravagant issues of the preceding year; the country bank paper, which was not propped up by law like Bank paper, was fearfully depreciated and had involved the whole kingdom in general desolation. Trade, commerce, agriculture, the classes even most remote from any

connection with the paper system, found themselves suddenly consigned to total and inexplicable ruin. The sight of the misery thus caused would fill them with horror. In commerce, as in war, there could be but one sure basis of management, and that was a currency regulated by a standard of metallic value. Not that metal was necessary as metal, but as possessing value. It was impossible to represent value except by value. For this reason, all civilised countries had adopted a metallic standard. The original names of the divisions of money in all known languages referred to the weight of the metal. It was so among the Hebrews, the Greeks, the Romans, the French, the English. The pound in England, and the livre in France, were originally a pound weight of metal. The weight of the metal had been diminished in each country in the coins at different periods, but each case of such reduction was a fraud upon the people, and it had always been done in times of discontent and turbulence. It was attempted to be done in the days of Edward VI., but the advisers of the measure were compelled to retrace their steps through fear of an insurrection. It was time, therefore, to return to a fixed measure, and to put an end to a system of variable value, when every one's property was at the mercy of a body of individuals. We must have a currency established on public faith-on public laws. The depreciation of the paper currency had been nearly one third, and every one who held it had lost to that amount. There was no disposition now in any class to deny this. The Directors of the Bank of England alone refused to admit the principles of the Bullion Report-so wisely and irrefragably established by that great man, the late Mr. Horner-a report, which could not be read without instruction and admiration, for the depth and soundness of its doctrines, and bitter regret for the premature loss of a statesman who was so well calculated to serve and adorn his country. If the Directors would only now believe in the Bullion Report, there might be some hope of them, but as they did not, they were the last persons who should be left to manage the currency at their own discretion. He did not believe in any calculations as to the quantity of circulating medium necessary. It was now time that the connection between the Government and the Bank of England should be dissolved. It was in direct violation of the principles upon which the Bank

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