MEASURES FOR RESUMPTION OF CASH-PAYMENTS.
On the 2nd of February Mr. Tierney moved for a committee to inquire into the effects of the Bank restriction act. This was met by an amendment from the chancellor of the exchequer, directing an investigation of the state of the Bank of England, with reference to the expediency of its resumption of cash-payments at the appointed period; such information to be reported by the committee as might be disclosed without injury to the public interests. The first report, which was brought up by Mr. Peel on the 5th of April, represented that the Bank, having been induced to pay in specie all notes issued previous to 1817, had been drained of cash to the amount of more than £5,000,000, most of which had gone to the continent, and had been there recoined; and that, to prevent this drain continuing, and to enable the Bank to accumulate a larger store of bullion, with a view to the final resumption of cash-payments, it was expedient to restrain the further payment of notes alluded to in specie. A bill was brought in to this effect, and, the standing orders of the house having been suspended, it was passed through its different stages in the same evening. In the upper house Lord Harrowby moved the suspension of the standing orders, that the bill might pass at one sitting; but Earl Grey and others opposed it at considerable length, contending that, if necessary, it would have been better for ministers to issue an order of council for suspending Bank payments on their own responsibility. The bill, however, was read a third time on the following day and passed; and a similar measure was also carried in both houses for the protection of Ireland. The second report was presented on the 5th of May, when two bills were passed, founded on a plan recommended by the committee for a gradual return to cash-payments. The principal provisions of these bills were, that a definite period should be fixed for the termination of the restriction, while preparatory measures should be taken, with a view to facilitate and ensure, on the arrival of that period, payment of the promissory notes of the Bank of England in legal coin of the realm; that provision ought to be made for the repayment of £10,000,000, being part of the sum due to the Bank on account of advances for the public services; that from the 14th of February, 1820, the Bank shall be liable to deliver on-demand, gold of standard fineness, having been assayed and stamped at the mint, a quantity of not less than sixty ounces being required in exchange for notes at the rate of £4. 1s. per ounce; that from the 1st of October, 1820, the Bank shall be liable to deliver gold at the rate £3. 19s. 6d. per ounce: and from the 1st of May 1821, £3. 17s. 10d.; that the Bank may at any period between the 1st of February and the 1st of October, 1820, undertake to deliver gold as before mentioned, at any rate between tha sums of £4. Is. and £3. 19s. 6d. per ounce, and at any rate between the 1st of October, 1820, and the 1st of May, 1821, at any rate between the sums of £3. 19s. 6d. and £3. 17s. 10-1/2 per ounce, but that such intermediate rate having been once fixed by the Bank, that rate shall not subsequently be increased; that from the 1st of May, 1823, the Bank shall pay its notes, on demand, in the legal coin of the realm; and that it is expedient to repeal the laws prohibiting the melting and the exportation of the coin.
Another select committee was appointed this session, on the motion of Lord Castlereagh, to inquire into the income and expenditure of the country. The receipts for the year ending the 5th of January, 1818, were £51,665,458, while those for the following year were £54,620,000. There were, however, certain arrears of war-duties on malt and property, which reduced the income of 1818 to £49,334,927, while the arrears due to January, 1819, amounted only to £566,639: the expenditure was also less by about £650,000 than was expected, so that the result was a total surplus of £3,518,000, applicable to the reduction of the national debt. If one million were allowed for the interest on the loan, observed Lord Castlereagh, there remained two millions and a half of surplus revenue. Mr. Tierney remarked, that an old debt on the sinking-fund, of £8,300,000, which must be liquidated before the surplus in question could be made available for the expenses of the current year, had been altogether concealed. The various taxes, taken together, exceeded £7,000,000; but this was the extreme of the amount applicable to the army, navy, ordnance, and miscellaneous services; how then, he asked, could it be possible that, with an income of only £7,000,000, and an expenditure of £20,000,000, both ends should be made to meet, and a surplus be left? Would it not be a gross delusion to speak of the sinking-fund as applicable to the public service, while government were obliged to borrow £13,000,000 a year to support it? The chancellor of the exchequer answered, that this statement included certain particulars, which could not be admitted in making a fair comparison. By taking the whole charge of the consolidated-fund and the sinking-fund, it had been shown that our expenditure exceeded our receipts. This must necessarily be the case, since a great portion of the war-taxes had been abolished. Parliament had relieved the country of £15,000,000 of taxes; and thus they prevented the effect which would have been produced in the redemption of the debt by such an annual sum. With respect to any financial plans for the present year, the chancellor stated he should reserve to himself the power of adopting that which the situation of public affairs rendered most expedient.
GEORGE III. 1818—1820