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Extended Currency means unlimited creation of Paper Money by Individuals.
I will now say a few words upon the remedy proposed by the noble Lord (the Earl of Carnarvon), who has totally misunderstood the argument of the noble Viscount (Goderich). My noble Friend stated that the revenue, in 1815, was 80,000,000 l. sterling, in paper currency; that taxes were first of all repealed to the amount of 18,000,000 l., and afterwards to the amount of 9,000,000 l., making in all 27,000.000 l.; and he says that the revenue now produces, in a sound currency, as great an amount as it produced in a depreciated currency; that is to say, that it produces now a sum, in sound currency, which, in paper currency, would amount to 80,000,000 l. sterling. Those persons who consume the articles which produce the revenue, must be able to purchase them, or the revenue could not exist. The increase of the revenue is a proof, then, that consumption has increased full one-third since the time when the taxes were reduced. It is utterly impossible that a country in which, within a period of fifteen years, the revenue has risen one-third, can be suffering universal and unexampled distress. The noble Lord has thought proper to refer the distress to a deficient circulation, and he recommends a system which he thinks would remedy the evil. Now, I will tell the noble Earl that the largest amount of currency in circulation, at any time during the Bank Restriction Act, was 65,000,000 l. sterling. The Bank of England notes were 20,000,000 l.; country bank paper, 23,000,000 l.; gold, 4,000,000 l.; and, silver, 7,000,000 l. But, in 1830, the amount of Bank of England paper in circulation is 19,900,000 l.; and, of country bank paper, 9,200,000 l.; of gold, 28,000,000 l.; and, of silver. 8,000,000 l.; making a total of 65,000,000 l. It is certain, therefore, that there is more money in circulation now, than there was at any period of the Bank restriction. There can be no want, therefore, of more currency. The noble Earl says he wants an extended currency; but what he, in fact, wants, is not an extended currency, but an unlimited currency. He would give an unlimited power to certain individuals, not to the Crown, to coin as much money as they please. The noble Lord wants to give them the power of lending capital to whomsoever they might think proper thus to indulge. That is what the noble Lord recommends, but that is what, I say, cannot be allowed, without bringing the country again to the brink of ruin, from which it was extricated in the year 1826.
The noble Lord tells you that, heretofore, a farmer, with a good stock, was able to borrow capital to carry on his business; but that now, let his corn-yard be ever so full, he cannot borrow a shilling, because the banker has not the power of giving him one-pound notes. The noble Lord says—the banker gets no interest upon his own capital, and therefore will not lend it. My Lords, the banker who lends his capital to a farmer, or trader, does obtain interest for the use of it, in the shape of discount upon the bill, or other security, which the borrower gives him. The question with him, at present, is one of security, and not of profit. If the banker should lend, under existing circumstances, he must lend his own real capital, and not a fictitious capital in the shape of one pound notes, created for the purpose. He must be certain that the security given to him is good and available, as it ought to be; and if he is not satisfied with the profits arising from the use of his capital, it is because he thinks the risk is so great as not to be covered by the profits. The noble Lord would wish to pledge your Lordships, by your votes this night, to give the country bankers additional profits, by enabling them to coin money, or to create fictitious paper to any extent, and thus to create a fictitious capital.
February 4, 1830.
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Taxes reduced under a Metallic Currency.
In answer to all the declamations we have heard this night respecting the evils resulting from a metallic currency, I beg leave to remind the House of some facts; since the year 1815, and principally since the Bank restriction was taken off, measures have been adopted to relieve the country of taxes to the amount of 27,000,000 l. sterling; and measures have been also adopted which have reduced the charges of the national debt between 3,000,000 l. and 4,000,000 l. a year, that being the interest on nearly 100,000,000 l. sterling. I beg your Lordships will bear this circumstance in mind; and let me tell you, that all the advantages of a so-called equitable adjustment will never equal the advantage already obtained from an adherence to the principles of justice and good faith.
February 4, 1830.
Causes of Manufacturing Distress.