The resolution was then put and agreed to.

Mr. Brogden brought up the report of the committee for granting to the duke of Clarence 6,000%.

Lord Castlereagh moved that this order should be discharged.

Mr. Tierney considered that the discharging this order thus without some entry would convey a censure on the duke of Clarence, since to any one who should afterwards read this resolution, and find it

discharged, it would appear that the house had disagreed to the vote of the committee for granting even that sum.

Lord Castlereagh said, the resolution might be read again and agreed to; but no bill need be founded on it. This proceeding would obviate the objection of the right honourable gentleman.

The resolution was, after a few words from Mr. M. A. Taylor, agreed to.

H

OUSE of lords, April 20The earl of Lauderdale rose, in pursuance of his notice, to bring this important and complicated subject under the consideration of their lordships.-The noble earl introduced his motion with a speech of great length, of which our confined limits restrict us to a very brief and general outline. His principal object was, he said, to convince the house of the imperious necessity of instituting a close and most sedulous inquiry into a complicated and extensive subject, in which the vital interests of the coun.

were materially involved, before they concurred in adopting any measure which would tend to embarrass it, and by its by its operation, under the inauspicious circumstances of the country in these respects, render its situation still worse. It seemed the intention of government to

propose certain regulations, with a view to the paper currency, and avowedly with an eventual reference to the resumption of cash payments by the bank; but he contended, that unless the present mint regulations were materially altered, it would be found impracticable for the bank to resume or continue its payments in cash. They were especially called upon to investigate, with reference, were there no other motive, to a pending measure for further continuing the restriction on the bank; they should be satisfied as to the operation and effect of such a proposition, before their lordships afforded it their concurrence. The whole system adopted by government of latter years was a departure from the ancient salutary system under which this country had so long prospered, and had attained its unrivalled height of opulence and commerI 2

cial

cial superiority. The principal cause assigned by ministers for rendering the further restriction upon the bank advisable was, he contended, no adequate reason whatever. Even when the restriction was originally imposed, though there were foreign loans or advances in a course of payment from this country, such a cause was not assigned. The specie sent out of the country for that purpose was held to make no sensible difference, as was proved by the testimony of the bank directors who were then examined. And further, it was held, that if loans were negotiated for all the countries in Europe, it would not exhaust this country of its specie. It was not through cash alone such remittances were furnished, but by commodities also; of which latter description every commercial man sent as great a proportion as he possibly could. It was impossible, he thought, therefore, that any foreign loan now negotiating could furnish an adequate cause for continuing the restriction upon the bank; neither did it even operate upon that corporation as a pecuniary cause; nor were the extents of its private discounts a cause of prevention; but the real cause he considered to be the immense advances made by the bank to government. They were not in a progress of diminishing their advances; and he argued, from a reference to certain statutes, particularly the act of William and Mary, that it was illegal to make more advances than what were founded upon votes of credit. To such an amount had these advances in creased, that they were now, he believed, more than double the

sum they were when the restriction was first laid on. He then adverted to the recent proposition of calling upon country bankers for stock security equal to the issue of their small notes. On this he commented in some detail, and seemed to impugn its tendency, as militating against that principle upon which all bank-notes were received the general credit, or faith in the stability of the concern; and particularly as detracting from the credit of the respective firms as to their larger notes, while it went to favour the credit of the bank of England exclusively. As to the idea of stock debentures, he regarded it so extravagant in itself, as that it could not be seriously countenanced in any degree. Recurring then to the state of the currency, it was a point, his lordship contended, which, perhaps, more than any other, called for a parliamentary investigation. He first dwelt upon the paper branch thereof, and that there were observed now four descriptions of paper currencies in circulation; and or referring to the metallic branch, it was, in its relation to the state of the exchanges, and the current prices of the precious metals, equally worthy of their lordships' attention. In his view of this part of the subject, he must repeat what he had advanced on a former occasion, that silver would be preferable to gold as a standard coin. This he advanced as a general principle; and with reference to the immediate circumstances of the country, the prices of metals, and the rate of the exchanges, the exportation of gold would be more profitable than that of silver. And it was proved,

proved, by the calculations of individuals the most competent, of Sir Isaac Newton, in his day, that 21 shillings were intrinsically more valuable than one guinea by fourpence! and recently it was calculated, that twenty new shillings were more valuable than the gold sovereign by more than tenpence. He then glanced at the mint regulations, which, he contended, operated imperceptibly; and would tend, if not altered, to incapacitate the bank from resuming cash payments. Ministers, therefore, should have considered, before they gave a pledge as to their resumption at the expiration of a year. After dwelling principally on these points, in a considerable degree of detail, blended with much documentary reference, and insisting, in every view he had taken of the subject, on the necessity of a parliamentary inquiry, the noble earl concluded by moving, That "this house do appoint a committee to inquire into and examine the present state of the metallic and paper currency, and the issues payable to the bank of England, and report the same to the house."

The earl of Liverpool observed, that he never heard a speech in which there were fewer doubts and more dogmatizing. He then proceeded to comment at some length on the statement of lord Lauderdale, in regard to the gold and silver coin, contending that gold had risen by the natural progress of things to be the standard metal of the country, and the measure of all property. He then proceeded to state, that the repeated failure of the country banks showed the necessity of re

gulating the paper circulation of the country. By the law, as it now stood, there was no restriction on the issue of country bank notes of 17. or 21. to any amount, and on any security. When this law expired, in two years after the removal of the restriction on the bank of England, this privilege would cease, and their issues would be confined to notes at or above 57 The question was, therefore, Ought the law to be allowed to expire, or, ought it to be continued? Were we to repeal the act, and allow issues of one and two pound notes on any security at all? Let the house consider the history of the currency of country banks for the last three years, and the calamities that had arisen from bank speculations. Out of 700 country banks that existed in 1814, 200 had now been swept away and had disappeared, to the ruin of individuals and whole districts, and to the general injury of the agricultural and commercial interests. He had always been of opinion, that, although many of the difficulties out of which we were now emerging were to be traced to that convulsion which was caused by the rapid transition from war to peace, they were greatly aggravated by the failure of country banks. This was an evil which would, in his opinion, be aggravated by the removal of the restriction from the bank of England, if no regulation were adopted in consequence of that measure. There might be a run on the country banks, then on the bank of England itself, and the c nsequence might be a general shock to credit all over the nation. He would therefore lay down this as a prinI 3

ciple,

ciple, that if we could not recur to entirely metallic currency, and if it was necessary to allow country banks to supply its place, to ascertain its extent by issues of small notes, these country banks ought to be placed under some regulation for the general security of credit, and with the view of preventing those convulsions that might result from their failure. The noble lord then alluded to Scotland, to which the act was not meant to extend, because, from the wise regulations under which the banking system was carried on there, no change of system was necessary, as not one, or but only one failure had taken place during the late shock given to credit in this part of the island. So far from the deposit of securities for small notes being injurious to the credit of notes of a greater amount, the very deposit of such securities for the former would give the latter additional credit. This opinion would be confirmed, if it were considered that double the nominal amount in stocks must be deposited for the small notes, which, at the usual price of the public funds, would afford to the holders of the five-pound notes a balance for the payment of the latter. But without laying much stress on this argument, he would say that the holders of large notes would not be in a worse situation than they were before small notes were allowed to be issued at all; and as they then took on credit, for their own convenience, large notes in prefe. rence to gold, there was no reason why they should not afterwards, for the same convenience, take them in preference to small notes. He knew there would be difficulties

in carrying it into execution, and in settling the details; but he did not think them insurmountable. It was pretty well known what was the proportion of small notes issued by the bank of England, and the time they continued in circulation without being renewed. The average might be reckoned about 8,000,000/. and the time the notes lasted about two or three years. Upon the whole, the more the measure was examined and discussed, the more it would appear to be wise and eligible. His lordship concluded with opposing the statements of lord Lauderdale in regard to the bank of England, and observed that he considered the condition of France as the great cause of the unfavourable state of the exchanges. In 1816, and during part of 1817, the exchanges were in favour; but when those great transactions began to take place which were necessary for the adjustment of the claims of the different countries of Europe, then, and not till then, the exchanges began to be unfavourable: the question therefore was, whether