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XXII.

1830.

Mr Attwood and Mr Baring, who moved that a gold CHAP. and silver standard should be substituted for the gold one, and that the act for prohibiting the issue of banknotes below £5 in England and Ireland should be repealed. Nothing could be more convincing than the arguments and facts by which these very eminent men supported the motion, or more sophistical than those by which it was resisted; but it was all in vain. The House was resolved not to be convinced the interests of realised wealth had become so powerful in the legislature that those of industry were overpowered; and the debate the last which took place on the subject before the irrevocable change the existing system had brought about was introduced-remains a memorable and instructive monument for all future times of the manner in which the plainest truths can be disregarded when they run adverse to the interests of a powerful section of society, and a course of policy can be persisted in fraught Ann. Reg. with consequences which those who originated it are to 72. be the first to regret.1*

But although Ministers persisted in shutting their eyes

* On the one hand, it was maintained by Mr Attwood and Mr Baring: "It was in the power of the legislature to inflict upon the country such a metallic currency, and in such circumstances as they chose, but it was not in their power to control the effects of such a change. Introduced in 1819, rendered more stringent in 1826 and 1829, it had altered the nature of all contracts, and, for the great profit of capitalists and fundholders, spread ruin through the industrious classes in the country. During former periods there had been, it is true, many instances of some local or temporary distress, but they had been passing only, and the general career of national prosperity had been upon the whole uninterrupted. But when the act of the legislature forced us back to a metallic currency, distress, universal in its extent, and deplorable in its effects, followed upon the change; and such distress had regularly occurred whenever we approached even the ruinous measure of setting up an exclusive gold currency. In 1816 the first effort was made to return to the gold currency; but the difficulty was to find the gold, for it had been taken to the Continent during the war, where it had at one time been purchased for £5, 12s. an ounce. In 1819 an act of Parliament was passed, by which the Bank of England was obliged to retire its notes in gold, valued at £3, 17s. 104d. an ounce. We could not, however, get back the gold without altering and raising the value of the paper money which we gave in exchange for it, which was done by a great and rapid contraction of the currency. The consequence was, that general ruin and unheard-of suffering were experienced by the productive and manu

1

1830, 71,

XXII.

1830.

33.

measures,

and great of Govern

reductions

ment.

to the real cause of the distress, which was producing such a ferment throughout the country, they were fully aware of its existence and vehemence, and were deterFinancial mined to meet it in the only way which was possible, while upholding the monetary system, which was by the most rigid and unsparing economy. Never before had the pruning-hook been applied with so fearless and unsparing a hand to every branch of the public expenditure; and, in truth, so many and powerful were the interests bent upon upholding it, that nothing but the personal weight and determination of the Duke of Wellington could have carried through the reductions. The income realised in the preceding year had fallen £560,000 short of what had been anticipated by the Chancellor of the 1 Ann. Reg. Exchequer in bringing forward the budget of the year before ; but, nothing deterred by that circumstance, the Duke set about a series of reductions in every department

1830, 75,

82.

facturing classes throughout the empire, while the capitalists were proportionally enriched.

"We then, in some degree, retraced our steps. We expanded the currency, and postponed the threatened resumption of cash payments, and the prosperity of 1818 was the consequence. It did not, however, long continue; for the measures adopted in 1819 for changing the standard again brought distress and ruin on the country. Why was the prosperity of the year 1818 less durable than that which preceded it? Simply because the act of 1819 fell upon it and dispersed it.

ence.

"The intense suffering of 1820, 1821, and 1822 at length forced a measure of relief upon the Government, which was effected by the prolongation, in the last of these years, for ten years longer, of the right to issue notes below £5, then on the point of expiring in terms of the act of 1819. What was the consequence? Prosperity again returned, like the sun emerging from behind the clouds, and shedding the light of his radiance and the warmth of his beams on a grateful earth. The prosperity of 1823, 1824, and 1825 was without precedent in this country; but it was as short-lived as it was brilliant. Why was this? Simply because the act of 1819 was long-lived, and curtailed its existThat the act of 1819 had produced these effects, must become evident to any person who looks closely at the history of the country since its date. Four months before that act passed, the Prince-Regent, in a speech from the throne, declared the trade, commerce, and manufactures of the country to be in a most flourishing condition; and in fact in the course of that year the revenue of the country increased £4,700,000. Within six months after the passing of the act of 1819 he was obliged to call Parliament unexpectedly together, in consequence of the disaffection generated by distress in the manufacturing districts. It was relieved, but how? Solely by departing from the principle of a metallic currency, and issuing £4,000,000 by the Bank in the

XXII.

1830.

of the public service, which enabled him not only to face CHAP. it, but to present to the House a surplus of no less than £3,400,000 available to the reduction of taxation, still leaving an excess of income over expenditure of £2,667,000 applicable to the reduction of debt.

34.

mitted on

ther, and

The taxes remitted in consequence of these great reductions were very considerable, insomuch that even the Taxes reWhig opposition admitted that this year of general dis- beer, leatress and diminished national income was distinguished cider. by a greater reduction of taxation than had taken place in any year since the peace. The taxes selected for remission were the beer-duty, estimated at £3,000,000; that on leather, £350,000; and that on cider, £25,000 : in all, £3,400,000,-to commence on the 10th of next October. To meet these great reductions, the duty on English spirits was raised from 7s. to 8s. a gallon, and on Scotch and Irish from 2s. 10d. to 3s., which would

shape of loans to the distressed manufacturers. When the banks, by the act of 1822, were allowed to continue small notes in their issues, prosperity returned, insomuch that, on opening the session of 1825, the King told the Parliament the country had never been so prosperous. At the close of that year, the country was in a woeful state of distress, occasioned by the contraction of the currency by £3,500,000 between March and December, in consequence of the drain of gold which had set in from South America, and the crisis was only 1 Parl. Deb. surmounted by the sudden issue of £6,000,000 additional notes in the last of xxiii. 487, these months. In a word, whenever the currency is plentiful, we are in a state 524; Ann. of prosperity and contentment; the moment it is restricted, we fall into a 11, 12. state of misery, and are on the verge of revolution."1

Reg. 1830,

ment.

On the other hand, it was contended by Mr Harris and Mr Huskisson: "That the project of having a double standard would land the country in Answer of utter confusion. The plan proposed was to have the relative value of gold and the Governsilver fixed as it was in 1798, whereas it was well known that the relative value was different from what it had been at that period. That difference was now 5 per cent. Every debtor therefore, if the double standard were adopted, would hasten to pay it in the silver standard, and so the creditor would lose 5 per cent on his debt. Would not the whole country present a scene of confusion and ruin if the House of Commons were to enact that every man who did not instantly recover payment of his debt would lose 5 per cent upon it? Silver never was, in practice, the standard of the country. In practice, independent of the law, silver had never been in a state to be used as a legal tender. Latterly the law had enacted that it should not be a legal standard beyond £25. By weight, indeed, it was a legal tender to any amount, but practically it had become so depreciated that there was no such thing as a 2 Ann. Reg. standard by weight." Mr Attwood's resolutions were negatived without a 1830, 73, 74. division.2

XXII.

1830.

CHAP. yield an increase of £330,000 a-year; and a more efficient resource was provided in the reduction of the interest of the 4 per cents to 3, which it was calculated would afford a relief to the extent of £750,000. Looking to the probable increase of the revenue in other departments, 1 Parl. Deb. by the effect of the reductions proposed in this year, it was calculated that the probable amount of the real surplus applicable to the reduction of debt would be £2,400,000 a-year.1

xxiii. 124,

137; Ann.

Reg. 1830, 80, 81.

35.

faction at

and its en

to relieve

the general distress.

i. 545.

Even

This budget, as is always the case in the outset with Great satis- one which proposes a great reduction of taxation, was the Budget, extremely popular, and won for Ministers, for a brief tire failure season, golden opinions from all classes of men. the most decided of the Liberals gave the Duke credit for unsparing economy, and confessed "that this session had given the most important financial relief to the nation of any since the since the peace; and the acknowledgment of this Martineau, by the liberal members was full and gracious."2 Yet did the reductions, from which so much was expected, entirely fail to give any sensible relief to the nation, or alleviate, in any degree, the general distress which prevailed in consequence of the ruinous fall of prices. On the contrary, in the face of the reduction in expenditure and taxation, which had elicited such unbounded applause from the liberal leaders and press, the distress went on accumulating, until in this very year it induced a change in the Ministry, and in less than two years an entire revolution in the constitution!-a striking proof of the fallacy of the remedial measures, on which the Opposition at that period were so strongly set. It is not surprising it was so, for the proposed reductions only relieved the nation to the extent of three or four millions; whereas the monetary laws, by cutting at least 50 per cent from the remuneration of all branches of industry, commercial and agricultural, had reduced the incomes of the industrious classes to the extent of a hundred and fifty millions yearly.

These reductions, however, such as they were, revealed CHAP.

XXII.

the perilous nature of the descent on which the nation 1830.

36.

speech on

donment of

had embarked, and the evident approaching ABANDONMENT OF THE SINKING FUND, so long and justly regarded as the Mr Baring's palladium of the nation, its sheet-anchor alike in prosper- the aban ous and adverse fortune. This melancholy topic did not the Sinking escape the notice of Mr Baring, who, amidst the chorus. of Liberal flattery and approbation at the proposed reductions, had the courage to express the following just and manly sentiments: "Mr Pitt, at the time when he proposed the Sinking Fund in 1786, said, 'To you do the public turn their eye, justly expecting that, from the trust you hold, you will make the most strenuous efforts in order to afford them the long-wished-for prospect of being relieved from an endless accumulation of taxes, under the burden of which they are ready to sink. Upon the debate of this day do they place all their hopes of a full return of prosperity and security, which will give confidence and vigour to those exertions in trade and commerce upon which the flourishing state of this country. so much depends. To behold the country emerging from a most unfortunate war, which added such an accumulation to sums before immense, that it was the belief of the surrounding nations, and of many among ourselves, that our powers must fail us, and that we should sink under our difficulties; to behold this nation, instead of despairing at its alarming condition, looking its situation boldly in the face, and establishing, upon a permanent plan, the means of relieving itself from all its encumbrances, must give such an idea of our resources, and of our spirit of exertion, as will astonish the nations around us, and enable us to regain that pre-eminence to which, on many accounts, we were so justly entitled.'1 These were the 1 Parl. Hist. words of Mr Pitt, which were re-echoed by Mr Fox, who, struck with the necessity of giving increased stability to the principle of security on which the public creditor relied, stifled, on this occasion, the eager spirit of party

xxv. 1296.

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