MR. WESTERN’S MOTION CONCERNING THE RESUMPTION OF CASH PAYMENTS
12 June 1822
On 11 June Mr. Western moved that a committee be appointed to consider the effect which the resumption of cash payments had had in producing the present agricultural distress. He concluded his speech by recommending a revision of the standard and the adoption of ‘a system which should give to the products of industry of every description the same relative money price, which they commanded during the suspension of cash-payments, and secure a fair and reciprocal remuneration for the general industry of the country.’ Mr. Huskisson moved as an amendment a resolution which had been adopted by parliament in 1696: ‘That this House will not alter the standard of gold or silver, in fineness, weight or denomination.’
The debate was adjourned to the following day when, after other speakers, Mr. Leycester said he would support the motion for a committee, although he must protest against any attack upon Mr. Peel’s bill, which he regarded as ‘a measure founded in wisdom.’ Mr. Haldimand noticed that many charges had been brought against the Bank, and said that ‘all of them appeared to him unfounded, save one;’ which was, ‘that the Bank of England, looking forward to the resumption of cash payments, had accumulated a large quantity of gold in its coffers, and by so doing had, as the hon. member for Portarlington observed, appreciated the currency.’ On the circulation of Bank paper he remarked, ‘that so long as the Bank was ready to pay its notes in gold, the House had no reason to complain whether there were five millions more or less of their notes in circulation.’
Mr. Ricardo said, that he agreed in a great deal of what had fallen from his hon. friend who spoke last, and particularly in his view of the effect of the preparations made by the Bank for the resumption of payments in specie; it was undeniable, that the manner in which the Bank had gone on purchasing gold to provide for a metallic currency, had materially affected the public interests. It was impossible to ascertain what was the amount of the effect of that mistake on the part of the Bank, or to what precise extent their bullion purchases affected the value of gold; but, whatever the extent was, so far exactly had the value of the currency been increased, and the prices of commodities been lowered. His hon. friend had said, that whilst the Bank was obliged to pay its notes in gold, the public had no interest in interfering with the Bank respecting the amount of the paper circulation, for if it were too low, the deficiency would be supplied by the importation of gold, and if it were too high, it would be reduced by the exchange of paper for gold. In this opinion he did not entirely concur, because there might be an interval during which the country might sustain great inconvenience from an undue reduction of the Bank circulation. Let him put a case to elucidate his views on this subject. Suppose the Bank were to reduce the amount of their issues to five millions, what would be the consequence? The foreign exchanges would be turned in our favour, and large quantities of bullion would be imported. This bullion would be ultimately coined into money, and would replace the paper-money which had previously been withdrawn; but, before it was so coined, while all these operations were going on, the currency would be at a very low level, the prices of commodities would fall, and great distress would be suffered.— Something of this kind had, in fact, happened. The Bank entirely mismanaged their concerns in the way in which they had prepared for the resumption of cash payments; nothing was more productive of mischief than their large purchases of gold, at the time to which he alluded. They ought to have borne in mind that, until the year 1823, the bill of his right hon. friend (Mr. Peel), did not make it imperative on the Bank to pay in specie.—Until the arrival of that period, the Bank were only called upon to pay in bullion, and in 1819, when the bill passed, their coffers contained a supply amply sufficient to meet all demands, preparatory to the final operation of the right hon. gentleman’s bill. That bill he had always considered as an experiment, to try whether a bank could not be carried on with advantage to the general interests of the country, upon the principle of not being called upon to pay their notes in coin, but in bullion; and he had not the least doubt that, if the Bank had gone on wisely in their preliminary arrangements—if, in fact, they had done nothing but watch the exchanges and the price of gold, and had regulated their issues accordingly, the years 1819, 1820, 1821 and 1822 would have passed off so well with the working of the bullion part of the plan, that parliament would have continued it for a number of years beyond the time originally stipulated for its operation. Such, he was convinced, would have been the course, had the Bank refrained from making those unnecessary purchases of gold which had led to so many unpleasant consequences. But it was said by his hon. friend (Mr. Haldimand), that the Bank had since 1819 kept up their circulation to the same level as before 1819, and that, therefore, they had not caused the favourable exchange, and the influx of gold. He denied this—he denied that their issues were now as large as in 1819; but allowing, for the sake of argument, that they were so, he should still make it matter of charge against the Bank, that they had not increased their issues, so as to operate on the foreign exchanges, and prevent the large importations of gold. With reference to the conduct of the Bank on that occasion, it had been said on a former evening, by an hon. Bank director, (Mr. Manning), in the way of justification, that they were not left masters of their own proceedings— that the numerous executions for forgery throughout the country, had made the public clamorous for a metallic circulation so as in a measure to compel the Bank to precipitate the substitution of coin for their one and two pound notes; but the Bank lost the benefit of this argument, by the opposition which they made throughout the discussions of the committee and the House in 1819, against every description of metallic payments.—He believed, indeed, that after they had accumulated gold in large quantities, they thought it expedient to substitute it in the form of coin for the one and two pound notes, and also for the reason which they had given; but this consideration did not lead them to limit their issues and to purchase the large quantities of gold; and it was of the effect of such limitation and of those purchases which he complained, and against this charge they had made no defence, nor could they make any. After their remonstrances to the committee, and to the chancellor of the exchequer, on the subject of the ill consequences of restricting their issues, why did they promote the evil which they deprecated—why make those purchases for amply filled coffers—why take a step so inevitably leading to mischief? He could ascribe it to one cause only, namely, that they were ignorant of the principles of currency, and did not know how, at such an important moment, to manage the difficult machine, which was intrusted to them. He was surprised, after what had been said by the hon. member for Shaftesbury (Mr. Leycester), of the character of Mr. Peel’s bill, that he should have come to the conclusion of voting for the appointment of a committee. If the past measures, so far as parliament had acted in this bill, were right, for what purpose was the committee? The declared object of the motion was to alter the standard, and he could not see, how, after the hon. gentleman’s argument in favour of adhering to the present standard, he could vote for a motion tending to such an alteration. It had been said by his hon. friend the member for Newton (Mr. H. Gurney), that they had begun at the wrong end— that they should in the first instance, have called on the private bankers to pay their notes in specie, and afterwards on the Bank of England to pursue the same course. Such a proposition, he thought, would have been absurd. The Bank of England had the power, by regulating its issues, of depreciating or increasing the value of the Bank note just as they pleased—a power which the country banks had not. The Bank of England could depreciate, as was the case in 1812 and 1813, their one pound note to the value of 14s., or they could increase it to the value of two sovereigns by an opposite course, provided the Mint, by coining, did not counteract their operations. It was impossible, therefore, and if even possible, it would be most unjust, to require private banks to call in their notes and to pay in specie, leaving at the same time this great Leviathan, the Bank, to continue its paper issues at will, and not subject to the same metallic convertibility.
In touching upon this subject, he must say that his opinion had been much misunderstood, both within and without the walls of parliament; and if it were not too great a trespass upon the indulgence of House, he should wish to take this opportunity of explaining himself. In doing so he could not do better than refer to an observation which had fallen from the hon. alderman (Heygate) in the course of the debate. He had said, that if gold were the index of the depreciation of the currency, then his (Mr. Ricardo’s) argument founded upon it might be good, and that the sacrifice of 3 or 4 per cent in establishing the ancient standard was small in the estimate of the advantages attending it: but he (the hon. alderman) did not concur in the opinion, that gold was the index of the depreciation of the currency. Now, the whole difficulty in reference to this part of his opinions was, as to the meaning of the word “depreciation:” it was quite evident that the hon. alderman and himself attached a different sense to that word. Suppose the only currency in the country was a metallic one, and that, by clipping, it had lost 10 per cent of its weight; suppose, for instance, that the sovereign only retained 9-10ths of the metal which by law it should contain, and that, in consequence, gold bullion, in such a medium, should rise above its mint price, would not the money of the country be depreciated? He was quite sure the hon. alderman would admit the truth of this inference. It was quite possible however, that, notwithstanding this depreciation, some of those general causes which operate on the value of gold bullion, such as war, or the mines from which gold is annually supplied becoming less productive, that gold might be so enhanced in value, as to make the clipped sovereign comparatively of greater value in the market than it was before the reduction in its weight. Would it not then be true that we should possess a depreciated currency, although it should be increased in value? The great mistake committed on this subject was in confounding the words “depreciation” and “diminution in value.” With reference to the currency, he had said, and he now repeated it, that the price of gold was the index of the depreciation of the currency, not the index of the value of the currency, and it was in this that he had been misunderstood. If, for instance, the standard of the currency remained at the same fixed value, and the coin were depreciated by clipping, or the paper money by the increase of its quantity, five per cent, a fall to that amount and no more, would take place in the price of commodities, as affected by the value of money. If the metal gold (the standard) continued of the same precise value, and it was required to restore the currency thus depreciated five per cent, to par, it would be necessary only to raise its value five per cent, and no greater than that proportionate fall could take place in the price of commodities. In these cases he had supposed gold always to remain at the same fixed value; but had he ever said that there were not many causes which might operate on the value of gold as well as on the value of all other commodities? No, he had not, but just the contrary. No country that used the precious metals as a standard, were exempted from variations in the prices of commodities, occasioned by a variation in the value of their standard. To such variations we had been subject before 1797, and must be subject to again, now that we have reverted to a metallic standard. In the plan which he had proposed, there was nothing which could cause a demand for gold, and therefore he had been justified in anticipating a variation in the price of commodities, from adopting it, of only five per cent, the then difference between the value of gold and of paper. If, indeed, it had been necessary to purchase gold in order to revert to a metallic standard, then he would allow that a greater difference than 5 per cent would take place in prices, but this was wholly unnecessary; because we had adopted a gold standard, were we therefore to be exempted from those variations in the prices of commodities which arose from the cheapness of their production at one period compared with another? Was the discovery of new improvements in machinery, or a superabundant harvest, or any of those general causes which operate to reduce price, to have no effect? Were the injudicious purchases of the Bank to have no effect on the value of gold? Did he deny that in the present state of the world, the occurrences in South America, might have impeded the regular supply of the precious metals to Europe, have enhanced their value and affected the prices of commodities all over the world.
It had been imputed to him that he entertained the extravagant idea, that if a metallic standard was adopted, from that moment commodities were never to vary more than 5 per cent. A proposition so absurd he had never maintained—his opinion on that subject had never changed, and, if not intruding too much on the time of the House, he would quote a passage from a pamphlet he had published in 1816, on the subject of his plan of bullion payments, to show the House what that opinion had then been:—
“When a standard is used, we are subject only to such a variation in the value of money as the standard itself is subject to; but against such variation there is no possible remedy; and late events have proved that, during periods of war, when gold and silver are used for the payment of large armies, distant from home, those variations are much more considerable than has been generally allowed. This admission only proves that gold and silver are not so good a standard as they have been hitherto supposed; that they are themselves subject to greater variations than it is desirable a standard should be subject to. They are, however, the best with which we are acquainted. If any other commodity less variable could be found, it might very properly be adopted as the future standard of our money, provided it had all the other qualities which fitted it for that purpose; but while these metals are the standard, the currency should conform in value to them, and, whenever it does not, and the market price of bullion is above the Mint price, the currency is depreciated.”
Such were the arguments he had always used, and he still adhered to them. He hoped the House would pardon this personal reference to his own opinion: he was very averse from intruding on their patience; but he was as it were put upon his trial—his plan had not been adopted, and yet to it was referred the consequences which were distinct from it; and he was held responsible for the plan that had been adopted, which was not his, but was essentially different from it. Such was the singularity of his situation, and if the House would indulge him by permitting one more reference to his opinions expressed in that House in the year 1819, he should have done with that part of the argument which was strictly personal. What he had said in his speech, during the former discussion of Mr. Peel’s bill (and he quoted it now from the usual channel of information—the Reports), was this, “If the House adopted the proposition of the hon. gentleman (Mr. Ellice), another variation in the value of the currency would take place, which it was his wish to guard against. If that amendment were agreed to, an extraordinary demand would take place for gold, for the purpose of coinage, which would enhance the value of the currency three or four per cent in addition to the first enhancement.” “Till October, 1820, the Bank need make no reduction, and then a slight one; and he had no doubt that, if they were cautious, they might arrive at cash payments without giving out one guinea in gold. The Bank should reduce their issues cautiously, he only feared they would do it too rapidly. If he might give them advice, he should recommend to them not to buy bullion, but even though they had but a few millions, he would boldly sell.” Such were his expressions in 1819. Had his recommendations been adopted? No. Why, then, was he to be held chargeable for results over and above the effect of raising the currency from the actual state of depreciation at which it stood at the time?
Having explained these personal allusions, he should now say a little upon the general question, which had not, in his opinion, been very fairly argued. A constant reference had been made to the extreme point of the depreciation in the currency, which they knew occurred in the year 1813; and Mr. Peel’s bill had been argued upon as if it had been passed in that year, and had caused all the variation which it was acknowledged had taken place in the currency from that period to the present time. This was a most unfair way of arguing the question, for to Mr. Peel’s bill could only be imputed the alteration which had taken place in the currency between 1819 and the present period. What was the state of the currency in 1819? It was left entirely under the management and control of a company of merchants—individuals, he was most ready to admit, of the best character, and actuated by the best intentions; but who, nevertheless—and he had declared plainly his apprehensions at the time—did not acknowledge the true principles of the currency, and who, in fact, in his opinion, did not know any thing about it. This company of merchants were, then, invested with the management of the great and important concern on which the welfare of the country, and the stability of its best interests, materially depended. They were the men who had the power of making their one pound note worth 14s. or 17s. or 18s. or 19s., as it had successively been, under their guidance, between the years 1813 and 1819. In the latter year, and for four years previous to it, the system had so operated as to bring the currency within something like 5 per cent of its par value. The time was then favourable for fixing a standard which was likely to save the country from the vacillation of such a system as that which had previously so much affected it. The time had then arrived (in 1819) for fixing a standard, and the only consideration was as to the selection of the particular standard which ought to be adopted. They had two courses of proceeding open to them on that occasion; one was either to regulate the standard by the price of gold at the moment, or to recur to the ancient standard of the country. If, in the year 1819, the value of the currency had stood at 14s. for the pound note, which was the case in the year 1813, he should have thought that upon a balance of all the advantages and disadvantages of the case, it would have been as well to fix the currency at the then value, according to which most of the existing contracts had been made; but when the currency was within 5 per cent of its par value, the only consideration was, whether they should fix the standard at 4l. 2s., the then price of gold, or recur at once to the old standard. Under all the circumstances, he thought they had made the best selection in recurring to the old standard. The real evil was committed in 1797, and the opportunity of mitigating its consequences was lost by the conduct subsequently pursued by the Bank; for even after the first suspension, they might, by proceeding upon right principles in managing their issues, by keeping the value of the currency at or near par, have prevented the depreciation which followed. It might be asked how they could have done so? His reply was, that quantity regulated the value of every thing. This was true of corn, of currency, and of every other commodity, and more, perhaps, of currency, than of any thing else. Whoever, then, possessed the power of regulating the quantity of money, could always govern its value, and make the pound note, as he had said before, worth fourteen shillings or two sovereigns, unless the mint, by opening to coin for the public, counteracted the operation of the Bank issues. By pursuing a wise and prudent course, the Bank might have so regulated its affairs, as to have prevented the currency from sustaining any depreciation from 1797 downwards; they might, in fact, have governed the market-price of bullion, and the foreign exchanges; but, unfortunately, they had not taken the steps necessary for that purpose.
With respect to the bill of 1819, he must say, that he never regretted the share which he had taken in that measure.— [Hear, hear.] Remarks had frequently been made upon an opinion which he (Mr. Ricardo) had given of the effect which had been produced on the value of gold, and therefore on the value of money, by the purchases made by the Bank, which he had computed at five per cent, making the whole rise in the value of money ten per cent. He confessed that he had very little ground for forming any correct opinion on this subject. By comparing money with its standard, we had certain means of judging of its depreciation, but he knew of none by which we were able to ascertain with certainty alterations in real or absolute value. His opinion of the standard itself having been raised five per cent in value, by the purchases of the Bank, was principally founded on the effect which he should expect to follow, from a demand from the general stock of the world of from fifteen to twenty millions worth of coined money. If, as he believed, there was in the world twenty times as much gold and silver as England had lately required to establish her standard on its ancient footing, he should say that the effect of that measure could not have exceeded five per cent. The hon. member, who had brought forward this motion had disputed the propriety of the standard recognized by Mr. Peel’s bill, and contended, that the value of corn would have formed a better and more fixed standard. His reason in support of such an opinion was, that the average price of corn, taken for a series of ten years, or for longer periods, furnished a standard less liable to variation than the standard of gold. He did not perfectly comprehend that part of the hon. member’s argument. Either he meant that the country ought to have a fixed metallic standard, regulated by the price of corn each year, as deduced from the average of the ten previous years, or else by an average for ten years, determinable at the expiration of every ten years. Now, in any way in which the average could be taken, according to either plan, there would be a sudden and considerable variation in the value of the currency. To-day, for example, the standard might be fixed with reference to the price of corn, when its average price was 80s. per quarter, and to-morrow, if that were the period for correcting the standard of money by such a regulation, it might be necessary to alter it to 85s. or 90s., thus causing a sudden variation in all money payments from one day to another. [Mr. Western here signified his dissent.] He was extremely sorry to have mistaken the hon. member, and he would not press this part of his argument. He must, however, say, that to take the average price of corn, as the best measure of value, was a most mistaken principle. The hon. member had, indeed, quoted in support of such a measure of value, the concurring authorities of Locke and Adam Smith, who had asserted that the average price of corn, during a period of ten years, was a less variable standard than gold; and in support of the opinion, the prices taken according to such an average were quoted. But the great fallacy in the argument was this—that, to prove that gold was more variable than corn, they were obliged to commence by supposing gold invariable. Unless the medium in which the price of corn is estimated could be asserted to be invariable in its value, how could the corn be said not to have varied in relative value? If they must admit the medium to be variable—and who would deny it?—then what became of the argument? So far from believing corn to be a better measure of value than gold, he believed it to be a much worse one, and more dependent upon a variety of fluctuating causes for its intrinsic value. What was the real fact? In populous countries, they were compelled to grow corn on a worse quality of land than they were obliged to do when there was not the same demand for subsistence. In such countries then, the price must rise to remunerate the grower, or else the commodity must be procured from abroad by the indirect application of a larger capital. There were many causes operating on the value of corn, and therefore making it a variable standard.—Improvements in husbandry; discoveries of the efficacy of new manure; the very improvement of a threshing-machine, had a tendency to lower the price. Again, the different expense of production, according to the capital necessary for cultivation, and the amount of population to be supplied with food, had a tendency to augment the price. So that there were always two causes operating and contending with each other, the one to cheapen and the other to increase the price of the commodity; how, then, could it be said to furnish the least variable standard?—[Hear, hear.] It was a part of Adam Smith’s argument that corn was a steadier criterion, because it generally took the same quantity to furnish one man’s sustenance. That might be; but still the cost of production did not the less vary, and, that must regulate the price. Its power of sustaining life was one thing: its value was another. He fully agreed with the hon. member for Essex, that there were various causes operating, also, on the value of gold, some of which were of a permanent, and others of a temporary nature. The more or less productiveness of the mines were among the permanent causes; the demands for currency, or for plate, in consequence of increased wealth and population, were temporary causes, though probably of some considerable duration. A demand for hats or for cloth would elevate the value of those commodities, but as soon as the requisite quantity of capital was employed in producing the increased quantity required, their value would fall to the former level. The same was true of gold: an increased demand would raise its value, and would ultimately lead to an increased supply, when it would fall to its original level, if the cost of production had not also been increased. No principle was more true than that the cost of production was the regulator of value, and that demand only produced temporary effects. The hon. member (Mr. Western) had entered into elaborate statements of the amount of taxation at different periods, estimated in quarters of wheat, and from this statement he inferred an enormous fall in the value of money. Now, if these calculations, and the mode of applying them, were of any value, they must apply at all times as well as at the present. Let the hon. member, then, extend his calculations a little over former times, and see how his reasonings applied. If reference were made to three particular years which he should name, the hon. gentleman’s calculation would look a little differently to what it did at present. The price of wheat was, in 1796, 72s. per quarter; in 1798 (only two years afterwards) it fell to 50s.; in 1801 it rose as high as 118s.—[Hear!]. This was the enormous fluctuation of only three years. Here, then, the House had the experience of so short a period as three years, and of the variations of price in that time. The hon. gentleman, in his argument, had assumed, that the price of wheat was to be permanent as it now stood. He (Mr Ricardo) thought it was by no means likely to be permanent; he anticipated that it would rise; and, indeed, if the present was not a remunerating price, it was impossible that it should not rise; for in no case would production go on, for any considerable length of time, without remunerating prices. The alteration in the price of the quarter of wheat, then, in three years, was as the difference between 50s. and 118s. But, in 1803, the price fell again to 56s. In 1810 it attained 106s. and in 1814 was reduced to 73s. The variations, in short, were infinite and constant—[Hear!]. Then, with regard to the price of flour, he had ascertained, that in the year 1801, in the month of July, the Victualling office at Deptford paid 124s. for the sack of flour. In December of the same year they paid only 72s. In December, 1802, they paid for the same commodity and quantity, 52s.; in December, 1804, 89s.; and in subsequent years the price per sack was successively from 99s. to 50s., in short, as uncertain as possible. All these details tended to show that the price of corn was perpetually fluctuating and varying; and it would only be wonderful if such were not the case. The hon. gentleman had said, that he hoped no member of that House would, with a contrary conviction on his mind, refuse, from motives of mistaken pride or prejudice, to acknowledge any former error into which he might have fallen in the consideration of these subjects. He (Mr. R.) could assure the hon. gentleman, that so far as he himself might be supposed to be concerned, he would not allow any foolish pride of the sort to operate with him. The hon. gentleman had remarked, at some length, on the evidence which had been furnished to that House by Mr. Tooke, with respect to the effect of an abundance of commodities lowering prices. Those prices were said to have fallen considerably more than ten per cent; but Mr. Tooke expressly said, that of the commodities he mentioned, there was not one, for the depreciated value of which, when it exceeded ten per cent, he could not well account. The quantity of all articles of consumption which had been brought into our markets, during the time of which that gentleman spoke, exceeded the quantity furnished in any former period; and there were some of the imported articles, the prices of which had continued to fall ever since, as sugars and cotton. But surely this could not be matter of surprise, when the House looked at the augmented quantity. The hon. gentleman had dwelt much on the injury which he conceived the country had sustained in consequence of loans that had been contracted for, at periods when the prices of the public funds were low, and which were now to be redeemed when the prices were high; and to make the disadvantages still more apparent, the calculation of the hon. gentleman was made in quarters of wheat at the corn prices of those times. The hon. gentleman said, “in order to pay that stock at the present value of money, I require such an additional number of quarters of corn.” Any body who heard the hon. gentleman’s speech would naturally have supposed that the rise in the price of the funds was necessarily connected with the increased value of the currency. But this could not be so; if the value of the currency had any thing to do with it, the contrary effect would take place. But the alteration in the value of the currency had nothing to do with this question; if the dividends were paid in a more valuable medium, so was the price of stock estimated in the same valuable medium; and if the dividend were paid in the less valuable medium, so also was the price estimated in the like medium. During the American war, the three per cent consols were as low as 53; and afterwards they rose to 97. At that time there had been no tampering with the currency. What, therefore, could the value of the currency have to do with the price of the funds? If a man wanted money upon mortgage now he could raise it at four per cent; whereas, during the continuance of the late war, he not only gave seven or eight per cent, but was obliged to procure the money, after all, in a round-about manner. The whole of the argument might be reduced to the statement of a single fact, which was this—they who invested sums of money in the funds at this day would get a low interest in return; those who had invested during the war had obtained a large interest.—With respect to an argument which had been advanced by the hon. member for Shrews-bury (Mr. Bennet) he could not concur in it. It was contended by his hon. friend, that the whole loss on the recoinage of money in king William’s reign, when it was restored from a depreciated to a sound state, was about two millions and a half; and he estimated the inconvenience and loss to individuals at that sum. But his hon. friend forgot that contracts in all countries existed in a much larger proportion than money, and consequently the loss must have been much greater than his hon. friend had estimated. The contracts might, in fact, be twenty or fifty times the amount of money, and therefore the interests of particular parties would have been affected accordingly. It was quite clear, that any alteration effected in the value of currency must of necessity, now as well as at all other times, affect one party or the other to such contracts; but this was an effect perfectly natural and inevitable.
To recur to the question before the House, he must say, that the motion of the hon. member for Essex was calculated to awaken and renew the agitation, which he had hoped would, ere this, have subsided. It was calculated to do much mischief—[Hear!]. If there were any chance of the hon. gentleman’s motion obtaining the support of the House, its success must be attended with the effect which, on the preceding evening, his right hon. friend (Mr. Huskisson) had ably pointed out. Every person would be eager to get rid of money which was to be rendered liable to an excessive and immediate depreciation. Every one would be anxious to withdraw it, as it were, from a currency of which he must anticipate the fate; he would be directly embarking it in gold, ships, goods, property of any kind that he might deem more likely to retain a steady value than money itself. He (Mr. R.) believed that the measure of 1819 was chiefly pernicious to the country, on account of the unfounded alarms which it created in some men’s minds, and the vague fears that other people felt lest something should occur, the nature of which they could not themselves define. That alarm was now got over; those fears were subsiding; and he conceived, that as the depreciation in the value of our currency, which a few years ago was experienced, could not possibly return upon us in future, if we persevered in the measures we had taken, it would be the most unwise thing in the world to interfere with an act, the disturbance of which would unsettle the great principle we had established. He did flatter himself, that after the suffering which the country had undergone, in consequence of the Bank Suspension bill, a measure of a similar character would never again be resorted to. His hon. friend (Mr. Bennet) had stated, that the depreciation in the value of the currency was in 1813 about 42 per cent. He thought his hon. friend had much overstated the amount of the depreciation. The highest price to which gold had ever risen, and that only for a short time, was 5l. 10s. per ounce. Even then the Bank-note was depreciated only 29 per cent, because 5l. 10s. in Bank-notes could purchase the same quantity of goods as the gold in 3l. 17s. 10½d. of coin. If, then, 5l. 10s. in Bank-notes was worth 3l. 17s. 10½d. in gold, 100l. was worth 71l., and one pound about fourteen shillings, which is a depreciation of 29 per cent, and not 42 per cent, as stated by his hon. friend. Another way of stating this proposition might make it appear that money had risen 42 per cent; for if 14s. of the money of 1813 were now worth 20s., 100l. was now worth 142l.; but as he had already observed, nothing was more difficult than to ascertain the variations in the value of money—to do so with any accuracy, we should have an invariable measure of value; but such a measure we never had, nor ever could have. In the present case, gold might have fallen in value, at the same time that paper-money had been rising; and therefore, when they met, and were at par with each other, the rise in paper-money might not have been equal to the whole of the former difference. To speak with precision, therefore, of the value of money at any particular period, was what no man could do; but when we spoke of depreciation, there was always a standard by which that might be estimated. Another argument of his hon. friend greatly surprised him: he objected to the amendment of his right hon. friend (Mr. Huskisson), because it did not give him sufficient security that the standard would not be at some future time altered. He appeared to fear that recourse might, on some supposed emergency, again be had to the measure of 1797. In short, his hon. friend was for adhering to the standard fixed by Mr. Peel’s bill; and yet, in the same breath, added, as it appeared to him (Mr. R.) most inconsistently, that he would vote for the motion of the hon. member for Essex, which professedly went to alter that standard.
After several other speeches, the House, at three in the morning, divided: for Mr. Western’s motion, 30; against it, 194. Mr. Huskisson’s amendment was then agreed to.