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was founded. They must revert to the legitimate standard of this country, in respect to its currency. It was not the value of that currency, but the value of the metal by which it was regulated, as paper was regulated by the price of bullion. In the Bullion Report, which, hereafter, he did not doubt, WOULD FORM A STANDARD, CONSTANT AND UNERRING, in the political economy of this country, of whose extraordinary merit he was not aware until lately, this subject was clearly defined. He gave his entire, unlimited, and unqualified approbation to the ministerial resolutions.

130. Such are short outlines of the speeches of Lord Liverpool and Lord Grenville upon this momentous question, which well deserve to be studied at length in the present time, when many of the heresies and fallacies they combated so strongly and convincingly, seem springing up again in the public mind. The resolutions were then put and agreed to without a division.

131. The resolutions in the Commons were introduced by Mr. Peel, on the 24th May, who freely owned that, in consequence of the evidence he had heard, and the discussions upon it, his opinions had undergone a material change. He acknowledged, without shame or remorse, that his opinions were very different now to what they were when he voted against Mr. Horner's resolution in 1811. Having determined to dismiss from his mind all former impressions, and the memory of the vote he had formerly given, and to give the question his unprejudiced and undivided attention, he had now come to the conclusion that Mr. Horner's resolutions represented the true nature and laws of our monetary system. Every sound writer agreed that the true standard of value consisted of a definite quantity of gold bullion, a certain weight of which, with an impression on it denoting it to be of that certain weight and fineness, constituted the only true, intelligible, and adequate standard of value. No doubt the Bank was perfectly solvent, but did it follow from that there could be no over-issue of its paper? If solvency alone was a sufficient proof that there was no excess of circulation, the theory of Mr. Law was just, and the land, as well as the funds, might be safely converted into a circulating medium. There was, in fact, no test of excess or deficiency, but a comparison with the price of gold,

As the Bank had so entirely repudiated the principles of the Bullion Report, they could not be expected to act upon them; it might, therefore, appear necessary to prescribe such a limitation of their issues as would secure the power of the Bank over the foreign exchanges. He himself thought this a very unwise plan because it depended so much on circumstances, whether or not there was an excess of circulation. There were occasions when

what was called a run on the Bank might be arrested in its injurious consequences by an increase of its issues. There were other occasions when such a state of things demanded a curtailment. In the year 1797, when a run was made on the Bank, but when the exchanges were favourable, and the price of gold had not risen, it was proved that an extension of issues might, by restoring confidence, have rendered the original restriction unnecessary. On the other hand, if the run was the effect of unfavourable exchanges and the consequent rise in the price of gold, the alarm must be met by a reduction of the issues. It was, therefore, impossible to prescribe any specific limitation of issues to be brought into operation at any period, however remote. The quantity of circulation which was demanded in a time of confidence, varied so materially from the amount which a period of despondency required, that it was an absolute impossibility to fix any circumscribed amount. He said that the time was come when the connection that existed between the Government and the Bank must be dissolved, and it must revert to its original principle of business. The obstinate opinions of the Directors of the Bank, shewed that they were unfit to be trusted with the management of the pecuniary interests of the British community. The House must resume its powers which it had abdicated too long. There could be no inconvenience in compelling the Bank to pay in specie at the Mint price. They had done so from 1776 to 1797, and the price of gold never rose above £3 17s. 6d. But it was said that it had since risen to

The fact was, we gold, and its price

£5 2s., and that the standard was variable. had since then introduced a substitute for was considered in relation to that substitute. Let not the House be led away by any calculation to mistake the PRICE for the VALUE. When people talked of gold rising in price, were they prepared to shew that it had risen in intrinsic value? Let them not talk of its price in paper, but in any other commodity

of a real and fixed value. So far from gold having risen in value, since the last fifty years, it had actually fallen in value, partly from the greater abundance of the metal itself, and partly from the substitutes that were used for it. A very prevalent theory was, that instead of regulating paper by the value of gold-gold should be regulated by the value of paper. This was nothing less than a fraud upon the public creditor. It was vain to think that foreign nations could be imposed upon by such a deception. The only result would be, that after the public creditor had been cheated, the coin would be debased. The only course was, to revert to the ancient standard of the realm, and to beware of arguments, which were not only fraudulent, but would not accomplish their own objects, while they would aggravate present difficulties. Every deviation from the ancient practice would be quoted as a precedent for a more extended departure from that practice. Under future difficulties the conduct of their ancestors would be panegyrised by the advocates of the suspension of cash payments, and conclude because the price of gold had risen still further in its relation to paper, that the principle by analogy ought to be extended. The restoration of the value of our currency had always been a striking political feature in the history of the country, and an object of the most earnest solicitude of our most distinguished statesmen. Three periods were especially memorable for great reforms in the coinage-in the reigns of Edward I., Queen Elizabeth,. and William III. These periods must ever be regarded with pride and satisfaction. They were of much greater difficulty than the present. On Queen Elizabeth's accession, the coin was reduced to of its nominal value. Under Burleigh's advice she resolved to restore the value. Plenty of persons dissuaded her from that idea, alleging the difficulties of the attempt. But Burleigh maintained that those very difficulties should constitute the motives for perseverance, as they must raise and establish the character of the country, and inspire its enemies with respect. The Queen had nobly persevered, and in her monumental inscription, above all her titles to distinction, this one shone preeminent "MONETA IN JUSTUM VALOREM REDUCTA." He then detailed the restoration of the coinage by William III. The arguments against it in those times were identical with those used against it at the present

time. However, fortunately, the firmness of King William and Mr. Montague triumphed over prejudices in theory, misconceptions in reasoning, and the greatest financial and political difficulties. The idea that this country owed its glory and military honours to an inconvertible paper currency was ridiculous; we had abundance of prosperity and military glory before 1797, before we were blessed with an inconvertible paper currency. The true reason of her difference from other States was that she always kept her faith inviolate. It was this that cheered the country under all dangers, and caused her to exult in victory. It was this feeling that carried the country through the dismal voyage she had just accomplished, and now that they had reached the other shore in safety, let them not abandon the great principle which had supported them. Every consideration of policy, good faith, and justice, called upon them to restore the ancient and permanent standard of value. He allowed that he had once entertained views different from those he now held, but he had given his mind candidly to a re-investigation of the whole subject, and he felt himself bound to state honestly, that he was now a convert to the doctrines regarding our currency he had once opposed.

132. The debate that followed was chiefly composed of a strain of congratulation and rejoicing at the course adopted by the Government, and approval of the resolution. Mr. Tierney was averse to compliment Mr. Peel too much, as he was thereby only complimenting the opinions he himself and his friends had been advocating for many years. But, nevertheless, it was a source of sincere pleasure to him to see the maxims he had so long been contending for adopted as true policy by the House, especially as such ample justice had been done to them by Mr. Peel, who now avowed them for the first time. Mr. Ricardo said that, when the directors of the Bank were called individually before the Committee, they fully admitted that the price of gold and the foreign exchanges were affected by the amount of their issues, but, when collected as a court they resolved in direct opposition to such opinions. When they avowed such inconsistent opinions, and after the experience the House had had of their conduct, it would be the highest indiscretion in Parliament not to take the preparations for the resumption of cash payments

out of their hands. Mr. Alderman Heygate was almost left alone, to adhere to the opinions of Parliament in 1811; he maintained that no depreciation of the paper did exist at that time, or ever could exist. However, the current of opinion was so strong and unanimous, that, though some unimportant amendments were brought forward, modifying some details in the resolutions, but not at all denying their general truth, these were all withdrawn, and the resolutions were passed without a dissentient voice. Mr. Canning declared, amidst loud and general cheering, that it was the unanimous determination of Parliament that the country should return as soon as possible to the ancient standard of value, in the establishment of a metallic currency. The bill passed the Commons with little further remark.

133. In the House of Lords the Marquis of Lansdowne rejoiced at the introduction of the Bill, on account of the sound principles of political economy it contained, by recognising a metallic standard as the only safe foundation for the circulating medium. It recognised the great principles, that the price of gold and the foreign exchanges depended upon the state of the currency. He hoped the country never again would hear the wild theories about the currency, which had been so prevalent, which were very properly stigmatised by the bill before them, every enactment of which declared their falsehood. By acting on those ruinous ideas, the country had been burdened with an overwhelming mass of debt and taxation. The Earl of Liverpool said the bill had met with no opposition, and required no defence. The chief provisions of this Act, Statute 1819, c. 49, were—

1. "The Acts then in force for restraining cash payments should be continued till the 1st May, 1823, when they were finally to cease."

2. "That, on and after the 1st February, and before the 1st October, 1820, the Bank of England should be bound, on any person presenting an amount of their notes, not less than of the value or price of 60 ounces, to pay them on demand at the rate of £4 1s. per ounce, in standard gold bullion, stamped and assayed at the Mint."

3. "That between the 1st October, 1820, and the 1st May, 1821, it should pay in a similar manner in gold bullion at the rate of £3 19s. 6d. per ounce."

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