THOUGHTS 
 
 ON THE 
 
 ALARMING STATE 
 
 OF 
 
 THE CIRCULATION, 
 
 AND ON THE 
 
 MEANS OF REDRESSING 
 
 THE 
 
 PECUNIARY GRIEVANCES 
 
 IRELAND. 
 
 BY 
 
 THE EARL OF LAUDERDALE. 
 
 EDINBURGH : 
 
 Printed by James Eallantyne, 
 
 FOR A. CONSTABLE AND CO. EDINBURGH, 
 AND LONGMAN, HURST, REES, AND ORME, LONDON. 
 
 1805. 
 
 I

 
 THOUGHTS, &c. 
 
 1 HE restriction imposed by order of Council, 
 and afterwards confirmed by the legislature in 
 the year 1797, on payments in cash by the Bank 
 of England, was a measure originating in the 
 necessity of the times. 
 
 The large remittances to the continent for the 
 purchase of cornj rendered necessary by the 
 scarcity of the preceding years * j the sums sent 
 abroad on account of subsidies, and in payment 
 of loans granted by treaties to foreign powers, 
 which had been sanctioned by parliament f ; as 
 well as the money remitted to discharge the ex- 
 traordinary supply of naval stores J, had brought 
 
 * There was paid to toreign countries for grain impor- 
 ted during the four years preceding 5th January, 1797? 
 L. 8,946,012. See Report of the Committee of the House 
 of Lords on.the Bank, 1797, p. 256. 
 
 t L. 14,988,422 : 9 : 8f , ib. p. 253. See also Account. 
 No 23, annexed to the said Report. 
 
 t L. 6,560,029, ib. p. 256. 
 A 
 
 1140':
 
 the course of exchange with Hamburgh to a rate 
 that prevented the importation of bullion with- 
 out a loss, and rendered the exportation of it a 
 profitable traffic. 
 
 Whilst the Bank was thus precluded from all 
 hope of getting any immediate supply of gold, a 
 sudden run, occasioned by that distrust which 
 has invariably attended a dread of invasion *, so 
 reduced its cash, that the Secret Committee of 
 the House of Commons, after a full investigation, 
 reported, that " the cash and bullion in the Bank, 
 having been considerably reduced between the 
 month of June 1795, and the 21st of February 
 1797, were on that day in so low a state, as to 
 induce the Directors of the Bank to lay before 
 the Chancellor of the Exchequer the precise 
 amount, together with their apprehensions of its 
 being still further reduced, in order that he might 
 take such measures as might be thought most ad- 
 visable for the public interest. 
 
 * The measures, to which the Bank of England was ob- 
 liged to resort in the year 174*5, are well known. In 
 March, 1708, the French fleet appeared in the Frith of 
 Forth, on which occasion, as well as in the year 1715, the 
 Bank of Scotland was obliged to stop payment in conse- 
 quence of the run for specie. See Historical Account of 
 the Progress of the Bank of Scotland, printed 1727.
 
 " It appears to your Committee, that between 
 that day and the 26th of February, the drain on 
 the Bank for cash increased in a still more rapid 
 and alarming proportion ; and that, supposing 
 such drain should continue to operate (and still 
 more so if it should increase) your Committee 
 are of opinion, that there was strong reason to 
 apprehend, that the Bank might, in the course 
 of a few days, not only be prevented from af- 
 fording the usual and necessary supply of cash 
 for the public service, but ultimately be totally 
 disabled from continuing its payments in cash, 
 in the ordinary course of its business ; and that, 
 by a further reduction to any considerable a- 
 mount, the danger to the public would have 
 been greatly increased, and it might have become 
 much more difficult to reinstate the affairs of 
 the Bank, and restore the general circulation of 
 the kingdom ; that there was no reason to sup- 
 pose that the drain would, on the ensuing Mon- 
 day and following days, be in the least diminish- 
 ed, but rather that it would have been considera- 
 bly augmented ; that no means were suggested 
 by the Directors of the Bank for preventing the 
 danger which was apprehended, nor did any
 
 4 
 
 such occur to them at the time, or have since 
 been suggested to this Committee j and it there- 
 fore appears to your Committee, that no mea- 
 sure could then have been taken, which would 
 have prevented such danger, other than the sus- 
 pension of payments in cash, required by the 
 Minute of Council : Your Committee are there- 
 fore of opinion, that on the 26th of February 
 there did exist a necessity for issuing the Minute 
 of Council of that date, though at the time 
 not warranted by law V 
 
 The Committee had previously reported, that 
 " in their opinion it was necessary to provide 
 for the confirmation and continuance, for a time 
 to be limited, of the measures taken in pursu- 
 ance of the Order of Council on the 26th day of 
 February last ; submitting to the wisdom of Par- 
 liament to determine for what limited time it 
 may be necessary that those measures should be 
 continued f." 
 
 It appears, therefore, evident, that this re- 
 straint was imposed on the Bank of England, 
 
 * Third Report of the Secret Committee of the House 
 of Commons, 1797> p. 3. 
 
 t Second Report of the Secret Committee of the House 
 of Commons, 1797.
 
 not as a permanent improvement in the conduct 
 of the circulation of the country, but as a tem- 
 porary remedy against what the nation were 
 taught by parliament, after inquiry, to consider 
 as a momentary evil, resulting from the situation 
 in which the country was placed *. 
 
 This measure, dictated by a sense of its neces- 
 sity, had not been long resorted to in England, 
 before an act of the Irish legislature imposed a 
 similar restraint upon the national Bank of that 
 country. 
 
 In Ireland, however, the restriction was adop- 
 ted without inquiry, and under circumstances 
 which, on the slightest investigation, must have 
 made the measure appear to be peculiarly unne- 
 cessary. 
 
 * In general, where governments have interposed a simi- 
 lar restraint on cash payments by public banks, the term 
 of its duration has always been expressed and limited. The 
 first instance we have on record is that of Philip II. King 
 of Spain, who, in the year 1596, was constrained to give a 
 Facultad Reall, that is, a power or Faculty Royal, or a 
 protection to the banks of Madrid for four years, command- 
 ing that they and all their associates, who had dealt with 
 them in matters of exchange, or in any wise publickly or 
 secretly, should not be compelled to pay any money to 
 their creditors till the year 1 1>00. See Lex Mercatoria, 
 p. 133. printed 1629.
 
 The credit of the Bank of Ireland was unim- 
 peached *. 
 
 There had been no alarming demand for cash, 
 similar to what the Bank of England had expe- 
 rienced f. 
 
 The quantity of bullion sent into Ireland had 
 been, for some years, unusually great J, and the 
 
 * " As to discredit, I never heard the solvency of the Bank 
 of Ireland doubted by any one." Mr Marshall's Evidence, 
 Irish Exchange Committee, p. 117. 
 
 t Report from the Committee on the Exchange with 
 Ireland, p. 7. 
 
 I ACCOUNT of Guineas sent to, and received from, Ire- 
 land, in the under-mentioned Years ; extracted from the 
 Books of the Mail Coach. 
 
 Years. Sent to. Received from. 
 
 1795 . . 633,782 Guineas . . 53,200 
 
 1796 . . 579,000 29,430 
 
 1797 . 733,359 5,600 
 
 1,94:6,14-1 87,230 
 
 See MrBorrowes's Evidence in the Exchange Committee,p.9. 
 
 It appears also, from Appendix, No 2. of the Evidence 
 annexed to the Third Report of the Committee of the House 
 of Commons on the Bank, 1797, that Messrs Puget and 
 Benbridge had sent to Dublin from London the following 
 amount of specie : 
 
 In 1794- . . 364,480 1796 .. 208,115 
 
 1795 . 1,165,172 1797 . 293,015 
 
 See also Appendix (U) and (W) to the Minutes of the 
 Exchange Committee. *
 
 exchange had remained steadily in such a state, 
 as made the importation of specie a proh table 
 concern, and subjected the exporter of it to a 
 certain loss *. 
 
 It seems also ridiculous to pretend, that the 
 connection between England and Ireland formed 
 any justification of the measure ; for, though 
 Scotland is certainly as intimately connected in 
 mercantile relation with England, it was not then 
 thought, nor has it since proved necessary to ex- 
 tend the restriction to the public Banks of that 
 country. 
 
 To believe that the Parliament of Ireland 
 passed, or that the Directors solicited this Act, 
 with a design of altering the whole system of 
 their proceedings, is hardly possible. But it is 
 certain, that, the moment the restriction took 
 place, they appear to have regarded their former 
 conduct as narrow-minded and contemptible ; 
 and that they have ever since boasted of the be- 
 nefits resulting to the country from the large 
 
 * Report from the Exchange Committee, p. 7. See 
 also Mr Marshal's Evidence, who states the balance of 
 debt in the year 1797 to be the mot>t favourable for Ire- 
 land ever known.
 
 s 
 
 and extended scale on which their business has 
 been conducted *. 
 
 The public are at all times sufficiently dis- 
 posed to respect professional authority. There 
 are fortunately, however, bounds to the degree 
 of confidence which mankind can bestow. 
 
 The changes in the state of the circulating me- 
 dium of Ireland, as well as in the course of ex- 
 change between that country and England, since 
 this new system was adopted, proved, in the last 
 session of parliament, sufficient to suspend con- 
 fidence, so far as to give rise to inquiry; and the 
 investigation has brought to light many circum- 
 stances, which, far from quelling, cannot rea- 
 sonably fail to excite alarm. 
 
 It has appeared, 
 
 That, since the restriction of payments in cash 
 in the year 1797, the circulation of the Bank 
 of Ireland has increased from six hundred thou- 
 sand pounds to three millions f: 
 
 That a difference has existed and continues to 
 
 * Minutes of Evidence, p. 137. 
 
 t See Mr Colville's Evidence, Minutes of Evidence, p. 
 96. See also Appendix (Z) to the Minutes of Evidence.
 
 9 
 
 exist, between the value of gold and Bank pa- 
 per*: 
 
 That the nominal exchange between London 
 and Dublin has risen from L. 106 : 7 : 1, the 
 average of three months, ending in December 
 1797, to L. 116 : 3 : 7, the average of three 
 months, ending March 1804 f : 
 
 That gold has disappeared from circulation, 
 except in the northern parts of Ireland ; and 
 that the silver coin has gradually been displaced 
 by small paper notes (technically termed silver 
 notes), or by a base coinage, the best shillings of 
 which may be worth about sixpence, and the six- 
 pence worth about three-pence J. 
 
 The calamitous consequences, which must re- 
 sult from such a state of things, are apparent. 
 The history of all countries subjected to similar 
 
 * See Appendix (L.) to the Minutes of Evidence. See 
 also the Evidence of Mr Thomas Thorpe Frank, p. 128. 
 
 f See Appendix (A. 1.), Exchange Committee. It may 
 be necessary to mention, that the par of exchange between 
 England and Ireland has long been understood to be 8| 
 per cent, or L. 108 : 6 : 8 Irish for L. 100 English. The 
 difference is founded on the state of the copper money, of 
 which 13d. is worth one shilling English. 
 
 t See Minutes of Evidence, p. 77, 83, 93.
 
 10 
 
 misfortunes, as well as the miseries which have 
 already threatened the poor in Ireland, and the 
 loss of revenue, to which the government is 
 obliged to submit, rather than risk any public 
 disturbance *, at once proclaims the evil, and the 
 necessity of a speedy and effectual remedy. 
 
 It is the object, therefore, of the short Obser- 
 vations now submitted to the Public, to explain 
 the causes of the calamity, and to point out the 
 sole remedy applicable to the nature of the case. 
 For the sake of order and precision, the subject 
 will be treated under the following heads : 
 
 I. That the difference existing between the 
 value of gold and the paper of the Bank of Ire- 
 land arises from the depreciation of its paper. 
 
 II. That the increase of Bank paper is the 
 sole cause of its depreciation. 
 
 III. That the reduction of the quantity of 
 Bank paper is the only remedy for the existing 
 evil. 
 
 IV. Of the means of effecting a reduction of 
 the paper of the Bank of Ireland. 
 
 * See Sir Evan Nepean's Letter, 28th March, 1804, 
 Appendix, No. I. See also the Evidence of Mr Frank, 
 P . 77.
 
 11 
 
 I. That the difference existing between the va- 
 lue of gold and the paper of the Bank of Ireland 
 arises from the depreciation of its paper. 
 
 It is universally admitted throughout the evi- 
 dence annexed to the Report of the Committee 
 on the circulating Paper and current Coin of Ire- 
 land, that a difference of value has existed, for a 
 length of time, between gold and notes of the 
 Bank of Ireland to the extent of 8, 10, or some- 
 times 12 per cent. 
 
 This circumstance might perhaps be deemed 
 sufficient of itself to authorize the inference, that 
 the Bank paper of that country is depreciated. 
 For this difference in value must proceed either 
 from a rise in the value of gold, or a diminu- 
 tion in the value of paper ; and though such a 
 diminution in the value of paper money is no 
 novel occurrence, (the history of many countries 
 disclosing to us that imprudent management 
 has produced a much more formidable depre- 
 ciation), no instance of gold rising in value to 
 such an extent can be found in the annals of any 
 country. 
 
 Indeed, its remaining so for a length of time 
 appears impossible, as this rise in value is far
 
 more than sufficient, in defiance of all regula- 
 tion, to secure importation from every nation in 
 Europe. For there is no commodity, the ex- 
 port or the import of which it is so little in the 
 power of the whims and caprices of mankind to 
 regulate ; or whose value universally keeps so 
 even a pace with the quantity sent to the great 
 market of the world. 
 
 Notwithstanding the effect, which these ob- 
 vious considerations must have on the mind of 
 every one who for a moment reflects on the 
 subject, it has been maintained, that the paper 
 of the Bank of Ireland is nowise diminished in 
 value ; and that the apparent depreciation pro- 
 ceeds, in reality, from an augmentation in the 
 value of gold. And these opinions acquire im- 
 portance from their having been delivered by 
 men, whose habits lead the public to presume 
 great knowledge on the subject, and whose er- 
 rors, from the situation in which they are placed, 
 may produce the greatest national calamities *. 
 
 * " Do you know that the Bank of Ireland paper is de- 
 preciated ? I am not aware of it, because I should not 
 say paper was depreciated, unless there was a forced issue 
 of it, and that it was offered at a discount on all occasions, 
 5
 
 The following considerations are, therefore, 
 submitted, as incontrovertibly establishing the 
 depreciation of the paper of the Bank of Ire- 
 land : 
 
 1 . As the value of every thing necessarily de- 
 pends on the proportion between the quantity 
 of it and the demand for it, it seems impossible 
 to conceive how the value of gold should have 
 increased in Ireland, at a time when the general 
 balance of debt between England and Ireland * 
 
 I should rather now say, that gold is increased in value, 
 than the paper is depreciated." Mr Herman's Evidence, 
 Minutes, p. 26. See also Mr Irvine's, p. 58,' and Mr 
 Frank's, who, in p. 141, states it as his opinion, that to 
 whatever amount the paper circulation of Ireland might he 
 brought, it could make no alteration in the exchange, or, 
 of course, in the value of gold. 
 
 See, farther, the Evidence of Mr Colville, pp. 93, 96, 
 100, 110, 111, 141; and of Mr D'Olier, pp. 82, 103, 
 110, 134, 137, 147, 149, Directors of the Bank of Ire- 
 land, deputed to attend the Committee of the House of 
 Commons. This last gentleman, in p. 140 of the Minutes 
 of Evidence, states it as his opinion, that no indiscretion of 
 the Bank of Ireland, in the ordinary way of their business, 
 could produce such an excessive issue of their paper as to 
 generate depreciation. 
 
 * " Do you mean upon the whole of your evidence, t 
 ive it as your decided opinion, that the general balance ot 
 lebt between England and Ireland, including trade, remif-
 
 must, by importation, have caused an increase 
 of its quantity ; and its being universally with- 
 drawn from circulation, except in the district 
 around Belfast, must have occasioned a diminu- 
 tion of demand for it. 
 
 On the other hand, the depreciation of paper 
 appears an obvious and natural consequence of its 
 being increased from six hundred thousand to 
 three millions *. 
 
 2. When a variation is perceptible in the com- 
 parative value of any two commodities, there 
 may exist a doubt, whether it proceeds from an 
 
 tances, and every pecuniary transaction, has been each 
 year since the restriction on specie in favour of Ireland ? I 
 do ver\- clearly, except during the two years of scarcity ; 
 and upon the whole six years taken together, the general 
 balance must have been considerably in favour of Ireland." 
 Evidence of Mr Marshal, Inspector General of Imports and 
 Exports of Ireland, Minutes, p. 124. See also Evidence of 
 Mr Cunningham, p. 57. 
 
 * " Can you tell the amount of notes out in circulation 
 at any late period prior to your coming over ? I believe 
 it had got up to about L. 3,000,000. 
 
 " Do you recollect what the amount was when the re- 
 striction of the issue of specie was prohibited ? Between 
 L. 600,000 and L. 700,000." Evidence of Mr Colville, 
 Director of the Bank, Minutes, p. 96.
 
 15 
 
 increase in the value of the one, or a diminution 
 of the value of the other ; but when any com- 
 modity rises or falls in value in the same pro- 
 portion in comparison of all other things, it 
 admits of no doubt that a variation has taken 
 place in its value ; and that the paper of the 
 Bank of Ireland has diminished in value, in com- 
 parison of all commodities brought to the market 
 in a proportion nearly similar to its diminution 
 in relation to gold, is confirmed by the whole 
 tenor of the evidence annexed to the report of 
 the Committee *. 
 
 * " Has the depreciation any effect upon the price of 
 commodities in Ireland ? I think it has of raising their 
 price." Mr Roach's Evidence, Minutes, p. 88. 
 
 " Has not the issue of these notes necessarily encreased 
 the necessaries of life at home ? They have. I have 
 brothers bankers in Limerick, and also in Cork." Ib. p. 87- 
 
 " The chief trade of the north of Ireland is the linen 
 trade, and till within these few months no weaver would 
 take paper of any sort for his linen, but within these few 
 months they do take it ; but they have two prices for tbjeir 
 linen, a paper price and a gold price. 
 
 " Do you know what the difference is between the paper 
 and the gold price ? It depends upon the price of ex- 
 change ('tween Dublin and London." Mr Beresford's 
 Evidence, Minutes, p. 108.
 
 16 
 
 3. If the paper of the Bank of Ireland was not 
 depreciated, no reason could be stated, why the 
 premium given with Bank of Ireland notes, when 
 exchanged in Dublin for those of the Bank of Eng- 
 land, should have been much the same as when 
 exchanged for specie* ; as Bank of England notes 
 cannot be supposed to have risen in value since 
 the restriction imposed on their payment in cash, 
 the quantity of them being considerably increas- 
 ed f. Besides it has been given in evidence 
 
 " We perceive it also in our domestic transactions : the 
 man who goes to market with a guinea in gold has an ad- 
 vantage, to the extent of the premium, over another going 
 to market with a guinea in paper." Inspector General's 
 Evidence, Minutes, p. 116. 
 
 * " The premium given with Bank of Ireland notes, when 
 exchanged in Dublin for those of the Bank of England, is 
 much the same as for specie." Inspector General's Evidence, 
 Minutes, p. 11 6. 
 
 " Bank of England notes have been generally sold to 
 colliers and others at 1-J- per cent, higher than guineas, 
 because we could not procure Bank of England notes, ex- 
 cept either by remitting guineas or merchants bills. 
 
 " Of late, guineas have been sold one half per cent, higher 
 than Bank of England notes, which I impute to their bear- 
 ing a premium in England." Evidence of Mr Frank, 
 Minutes, p. 129. 
 
 t The Bank Notes in circulation, March 4, 1797- 
 L. 10,416,520, Appendix No, 11. to the Report of the 
 House of Lords, 1797.
 
 17 
 
 that they are actually in a small degree depre- 
 ciated *. 
 
 Further, those who talk of the paper of the 
 Bank of Ireland having maintained its value, 
 and assert that the difference between it and the 
 paper of the Bank of England proceeds from 
 a rise in the value of the latter, ought to consi- 
 der what they mean by rise of value : rising and 
 falling of value can never take place between 
 commodities similar in their nature and quality. 
 
 13ank Notes in circulation, 25 -May, 1804, 
 
 Above L. 5 13,276,110 
 
 Under L. 5 4,644,340 
 
 In all 17,920,450. 
 
 Appendix, No. 13. Minutes of the Irish Exchange Com- 
 mittee. 
 
 * " Have you known guineas purchased in England ? 
 At present I understand 2 per cent, has been given by per- 
 sons for the purpose 01 having gold by them in case of In- 
 vasion." P>idence of Mr Pugct, Director of the Bank of 
 England, Minutes, p. 6. 
 
 " What premium have you known at any time given for 
 ouineas ? 2-y per cent, never knew of higher. 
 
 " Do you conceive that when guineas were obtained in 
 London at a premium of 2* P er cent - tnat tne P a per of the 
 Bank of England was depreciated to that amount ? I think 
 it was." Evidence of Mr Burrowes, Minutes, p. 14. Se 
 also Evidence of Mr Frank, p. 129- 
 B
 
 18 
 
 A pound of sugar can never exchange for a pound 
 and a half of the same goodness ; neither can good 
 Banknotes ever exchange against more than their 
 own value in Bank notes equally good. It ap- 
 pears, therefore, evident, that if Bank of England 
 notes exchange for more than their own value in 
 Bank of Ireland notes, it must proceed from the 
 latter having suffered a diminution of value. 
 
 4. If the value of gold had risen to such an 
 extent as is supposed, the comparative cheapness 
 of all commodities of Irish growth and manufac- 
 ture must have produced a great increase of ex- 
 portation from that country, and occasioned a 
 great diminution of its imports from other coun- 
 tries ; whereas the following statement shews, that 
 the imports of Ireland have, since the variation 
 between the value of gold and Bank notes, greatly 
 increased, in comparison with its exports. 
 
 Annual Average of the Exports and Imports of Ireland for 
 five Years, ending 25 March, 1799, and for live Years, 
 ending 5 January 180 . 
 
 Imports. Exports. 
 
 5 years, ending 25 Mar. 1799- L.4,205,34S I 4,671,816' 
 5 years, ending 5 Jan. 1804- . . . 5,627,482 [ 4,4;>2,472 
 Average yearly increase of Imports 7 L ^400,134 
 
 in 5 years, ending 5 Jan. 1804 . 3 
 Decrease of Exports . . . 239,343 
 
 * Sec Appendix No. 12, Minutes oi the Irish Exchange Committee.
 
 19 
 
 Lastly, The details given in evidence prevent 
 the possibility of supposing, that the difference 
 between the value of gold and Bank notes can 
 be occasioned by a rise in the value of gold, 
 whilst they support and confirm the supposition, 
 that the variation proceeds from a fall in the va- 
 lue of paper. 
 
 Mr Marshall, the inspector-general, informs the 
 Committee, that the variation between the value 
 of gold and Bank notes became first perceptible 
 at a time when the value of gold ought to have 
 diminished, as there was a full current of specie 
 flowing into Ireland ; and the difference increased 
 for several years, though it is impossible to sup- 
 pose the value of gold was increasing, because we 
 learn from him, that specie must have become 
 more and more abundant, as it continued uninter- 
 ruptedly to be remitted in quantities to Dublin. 
 Indeed, from his evidence we are led to conclude, 
 that the difference in value between gold and 
 Bank notes was nowise affected by the scarcity 
 or abundance of specie in Ireland ; for the vari- 
 ation appeared to have been greatest, when gold 
 ought, on general principles, to have fallen in 
 price j and least, when it ought to have risen in
 
 value ; facts all tending to preclude the possibi- 
 lity of attributing the variation to a rise in the 
 price of gold *. 
 
 * " I will here observe, that the Bank of Ireland sus- 
 pended its cash payments on 3d March, 1797, which was 
 just before the commencement of the first year ; exchange 
 in Dublin being then rather under 8 per cent, the balance 
 of debt must have been rather favourable to Ireland : this 
 favourable state of the balance of debt was very highly 
 improved by the remittances from the English Treasury, as 
 also by a very large excess of exports over imports, which 
 yielded the largest balance in our favour ever known, re- 
 duced our exchange to the lo%vest ebb, and caused a greater 
 quantity of specie to be remitted to Ireland than had ever 
 happened at any former period in this year. Nevertheless, 
 when specie was so far from being wanted for the purpose 
 of being sent to London, that a full current of it was flow- 
 ing into Ireland, the depreciation of bank notes commenced, 
 specie continued to be remitted to Dublin for two or three 
 years after the suspension, and returned back to London in 
 large quantities, during the two years in which the balance 
 of debt was unfavourable. From August, 1801, to the pre- 
 sent time, no remittances of consequence have, as far as I 
 can learn, been made to London in specie. Bank notes, 
 however, have never ceased, whether the specie was coming 
 into Ireland or going out of it ; whether the exchange was 
 under par or above par ; whether the balance of debt was 
 favourable or unfavourable, to be depreciated ; and the de- 
 preciation appears to have been higher when the balance 
 of debt was more favourable, and lower when it was less 
 so : and, upon the whole, it is evident, that the deprecia- 
 tion has not been influenced by the balance of debt." Mi- 
 ures of Irish Exchange Committee, p. 123.
 
 21 
 
 On the other hand, we learn, that gold 
 and Bank notes were at par in the year 1797, 
 when the Bank notes in circulation amounted to 
 L. 600.00O; and that, in the year 1804, when 
 there were three millions in circulation *, gold 
 was at a preminm of 9, 9j, and 10 per cent\\ 
 and that this premium had gradually increased 
 in proportion as the number of Bank notes aug- 
 mented ; circumstances which alone seem suf- 
 ficient to prove, that the paper of the Bank of 
 Ireland has been depreciated. 
 
 II. That the increase of Bank paper is the sole 
 cause of its depreciation. 
 
 It might, perhaps, with truth be stated, that 
 an over-issue of paper is the only means by 
 which the notes of a Bank can be depreciated, as 
 long as its credit is unimpeached, and the belief 
 universal of its powers to discharge all demands. 
 On this principle, as the solvency of the Bank 
 of Ireland never was doubted, and as the in- 
 creased dividends, as well as the bonus lately 
 given to its proprietors, are calculated to create 
 
 * Ib. Appendix (Z). f Ib. Appendix (L).
 
 a belief in the prosperity of its concerns, we 
 might be entitled to pronounce, that the existing 
 depreciation of its notes, which seems establish- 
 ed by the foregoing reasoning, must solely arise 
 from the quantity thrown into circulation ; and 
 the knowledge that the amount of its paper has 
 actually been augmented from six hundred thou- 
 sand pounds to three millions, would enforce and 
 confirm that opinion. 
 
 But this position is too important, and has 
 been controverted by the Directors of the Bank 
 with too much eagerness, to permit of its be- 
 ing rested upon such general reasoning, how- 
 ever conclusive, without a more minute consi- 
 deration of the circumstances of the case. 
 
 The constitution of the Bank of Ireland dif- 
 fers materially from that of the Bank of England 
 in one circumstance. The rate of interest, at 
 which the Bank of England may discount, pro- 
 vided it does not exceed the general rule laid 
 down by the law of the country, is unlimited. 
 But the Bank of Ireland is compelled by law to 
 discount at one per cent, below the legal rate of 
 interest in that country. 
 
 This regulation, at the time the Bank was esta-
 
 blished,must undoubtedly have contributed to the 
 ease and accommodation of the mercantile inte- 
 rest, and whilst the notes continued to be paid in 
 cash on demand, there was no danger that the 
 importunity, created by the ardent desire to par- 
 take of the advantage, should induce those in 
 the management of the Bank to extend its cir- 
 culation beyond the bounds dictated by the real 
 demands of the country. For, under these cir- 
 cumstances, an excess % of its notes could only 
 have created a sudden demand for cash ; and we 
 know from the evidence given before the Com* 
 mittee, that the Directors, antecedently to the re- 
 striction, considered it as a duty incumbent upon 
 them to diminish, by every possible means, the 
 amount of their issue when they experienced any 
 diminution of their cash *. 
 
 By the restriction, however, unattended with 
 the repeal of the clause compelling discount be- 
 low the legal interest, the Bank was obviously 
 exposed to all the ardour of solicitation, which 
 must naturally attend the practice of discounting 
 
 * See Minutes of Evidence of the Exchange Commit- 
 tee, p. 101.
 
 at an inferior rate of interest, whilst the check on 
 the extent, to which the indulgence might be 
 carried, was completely annihilated. 
 
 Thus the parliament at once placed the public 
 under strong temptations to press the Direc- 
 tion of the Bank for an extension of circulation 
 beyond the bounds of prudence, and left in the 
 hands of the Directors a power difficult in the 
 extreme, with the best intentions, to wield with 
 discretion, unattended with any check but what 
 was to be found in the wisdom and judgment of 
 men acting in a situation as novel as arduous. 
 
 The complaint of want of money has been 
 prevalent at all times. Men who possess pro- 
 perty inadequate to the schemes in which they 
 embark ; men whose want of skill, address, or 
 opportunity, deprives them of the power of get- 
 ting as much as their ambition desires ; men 
 whose want of frugality has habituated them to 
 spend more than their income, form together a 
 numerous class in every society, constantly en- 
 gaged in charging the difficulties to which their 
 conduct subjects them, to the want of counters 
 in circulation, or, (in the language of the day,) 
 to a deficiency of circulating medium ; a com*
 
 plaint which, Sir Thomas More long ago wisely 
 observed, could never be founded in justice, as the 
 intercourse throughout the world is so establish- 
 ed that commodities will always command the 
 means by which they are circulated. 
 
 In the ordinary course of things, the lenders 
 are interested in resisting the clamour thus creat- 
 ed ; but by the artificial arrangement which the re- 
 striction on the Bank of Ireland produced, the 
 interests of the lender and borrower were ap- 
 parently united to maintain it. 
 
 To the Bank borrowers were taught to look, 
 as the channel through which their wants might 
 be supplied at the cheapest rate ; and govern- 
 ment or individuals, desirous of a loan, were ne- 
 cessarily regarded by the Bank as affording the 
 means of issuing their notes, from the return of 
 which they could apprehend no danger. Thus 
 there appeared no limitation to the issue of notes, 
 but the amount of the good security that could 
 be found. 
 
 It is true, that prior to the restriction, an 
 unfavourable exchange used to form a sort of 
 land-mark, by which the Directors thought it 
 a duty to guide their proceedings in limiting
 
 26 
 
 their issues ; and this might still have been re- 
 sorted to as a ground for regulating their con- 
 duct. 
 
 But though, in Mr Colville's opinion, the Di- 
 rectors of the bank were unfit to conduct its busi- 
 ness, if they did not attend to the limitation of 
 its issue on the symptoms of an unfavourable 
 exchange * ; the encouragement afforded by 
 the legislature to the extension of their circula- 
 tion seems to have obliterated from their minds 
 all former ideas of precaution. 
 
 The limitation of their issues in consequence 
 of an unfavourable exchange now appears to the 
 Directors, " as productive of distresses incalcu- 
 lable to the merchants and traders f." And the 
 increase of their paper is regarded as the means 
 of rectifying the evil ; " inasmuch, that as far as 
 
 * " If the Directors of the bank did not pay a very great 
 attention to such an important consideration as restraining 
 the .total amount of its loans when it experienced a diminu- 
 tion of its cash in consequence of an unfavourable exchange, 
 or of any other circumstance producing a drain of its 
 guineas, they would be very unfit to conduct the business 
 put under their care." Mr Colville's Evidence, Minutes, p. 
 100. See also p. 101. 
 
 t See Mr D'Olier's Evidence, Minutes, p. 137.
 
 ** the circulation of paper has supplied the circu- 
 " lating medium, it enabled the gold -which be- 
 " fore stood in its place to be exported out of the 
 " country, and as far as it went in weight and 
 " measure, so far it was a clear and decided cause 
 "of preventing the exchange from getting to a 
 (t higher pitch than it has hitherto attained. But 
 " to go to a further answer to that part of theques- 
 " tion which relates to the extending or lessening 
 " the loans of the Bank, in this view of the sub- 
 " ject, it must be evident that the more paper is is- 
 " sued by the Bank in consequence of an exten- 
 *' sion of loans, that so far as it extends the notes 
 " of the bank, it further enables a greater drain 
 " of specie to take place, and consequently to 
 " strengthen the cause which keeps down the 
 *' rate of exchange *." 
 
 It is this new doctrine, that demands minute 
 consideration ; for it discloses and avows the er- 
 roneous principles on which the Bank of Ireland 
 has proceeded, and by which the circulating me- 
 dium of that country has been deranged. 
 
 To the Directors it appears, that the rise of 
 .exchange, and the consequent calamities, can 
 
 * Minutes of Evidence, p. 102,
 
 alone proceed from a balance of debt due by 
 Ireland to England. Theory and experience, 
 however, concur in pointing out two grounds 
 materially distinct, on which the exchange may 
 be affected so as to become unfavourable to any 
 country. 
 
 1 . An unfavourable exchange may arise from 
 a necessity of remittance in consequence of a 
 balance of debt. 
 
 2. It may proceed from the circulating me- 
 dium of a country being in a degraded state, oc- 
 casioned by the clipping or adulteration of its 
 coin, or by an over-issue of paper money. Of 
 the former, the exchange between this country 
 and the continent of Europe, before the recoinage 
 in 1772, affords a recent example ; of the latter 
 an example still more recent is to be found in 
 the exchange with France subsequent to the issue 
 of assignats. 
 
 Though an unfavourable exchange may be 
 produced by either of these means, there is little 
 difficulty in discerning at all times from which it 
 proceeds ; for the appearances that characterise, 
 and the circumstances that uniformly accompany 
 an unfavourable exchange, occasioned by a ne-
 
 cessity of remittance, are not only different from, 
 but in some degree directly opposite to those, 
 which attend an unfavourable exchange produ- 
 ced by an overflow of paper. 
 
 So marked is this difference, that it will not 
 require a very minute consideration of the pre- 
 sent state of Ireland to discern, whether it exhi- 
 bits the symptoms of a country suffering under 
 an unfavourable exchange arising from a balance 
 of debt; or whether it conjoins, with an unfavour- 
 able exchange, all those evils that have uniformly 
 attended an over-issue of paper ; and an exami- 
 nation of the subject in this point of view will 
 enable us to judge, to which of these causes we 
 ought to attribute the existing evil ; and of 
 course to decide whether the paper of the Bank 
 of Ireland is at present excessive. 
 
 The sure and invariable features, attending an 
 unfavourable exchange produced by a balance 
 of debt, are not inaccurately stated by one of the 
 Directors of the Bank of Ireland. 
 
 He calls it " a disease which constantly carries 
 along with it a remedy, and that a very sound 
 one when allowed to have its full operation." 
 
 For example, he adds, " as to imports into Ire-
 
 " land, I consider it as a disease (stating an ex- 
 " change at 1O per cent, against Ireland) which 
 "is 1O per cent duty upon the importation of 
 " English broad cloth, by which the consumer 
 " in Ireland pays 22s. per yard for his cloth, that 
 " would otherwise cost him but 20s. But see 
 " how this high exchange acts as a remedy ; it is 
 " an inducement to the English manufacturer to 
 " settle in Ireland, bring over his skill and his 
 " capital, and manufacture broad cloth in Ire- 
 " land for the use of the Irish consumer. On 
 " the other hand, as to exports, it is a disease 
 " to make the Irish consumer pay a higher price 
 " for linen than it would otherwise cost him, but 
 " it is a remedy to Ireland, and a compensation, 
 " that this high exchange enables the Irish linen 
 " to meet its competitors upon more advantage- 
 " ous terms in foreign markets *." 
 
 Of the symptoms here described none are to 
 be discerned in the present situation of Ireland. 
 So far from any increase of exports or diminu- 
 tion of imports, we know that the exportation of 
 
 * Mr Colville's Evidence, Minutes, p. 142.
 
 linen has decreased *, and that the provision 
 trade has fallen off to a very alarming degree f ; 
 whilst the lists of goods imported to Dublin have 
 been daily increasing. 
 
 In reality, since the exchange became unfavour- 
 able, every appearance in the trade of Ireland has 
 been directly opposite to what must have been 
 produced by an unfavourable balance of debt ; 
 for the most distinguishing feature in the mer- 
 cantile annals of that -country, since that period, 
 is the excess of its imports over its exports. 
 
 * An account of Irish Linens exported, from the Union to 
 the 5th Jan. 1804. Delivered to the House of Com- 
 mons. 
 
 
 Years e 
 1802 
 
 nding 5th . 
 1803 
 
 anuary 
 1804 
 
 Linen. 
 Cambricks - - - 
 Plain ..-- 
 Coloured - 
 
 Yards 
 1672 
 37767077 
 14J2853 
 
 Yards 
 111? 
 35491131 
 120879 
 
 Yards 
 71 
 37432365 
 137489 
 
 See also Mr Beresford's 'Evidence, Minutes, p. 108. 
 
 f " As to provisions they have diminished in price in a 
 very alarming degree." Evidence of Mr Barnawell, Mi- 
 nutes, p. 46, See also, p. 87-
 
 It is also to be remarked, that the disease 
 under which the circulation of Ireland has la- 
 boured, instead of carrying along with it a sound 
 remedy, has increased to such a degree, that, if 
 it had proceeded from an unfavourable exchange 
 occasioned by a balance of debt, it must have 
 long ago drained the north of the gold circulating 
 round Belfast, and inundated this country with 
 the manufactures of Ireland, in consequence of 
 the bounty which would have been indirectly 
 given by the exchange on the sale of its commo- 
 dities. For the nominal exchange is now more un- 
 favourable to Ireland, than the real exchange was 
 to Great Britain at the time the remittances were 
 made to Germany, during the last war, on ac- 
 count of loans and subsidies : yet our exports to 
 that country were by that unfavourable exchange 
 raised from L. 1,900,000 to L. 8,OOO,OOO year- 
 ly ; exceeding in amount by L. 2,60O,OOO the 
 whole annually exported, in time of peace, to 
 France, Flanders, Holland and Germany *; whilst 
 we find, that in Ireland, since the exchange be- 
 came unfavourable, the imports have exceeded 
 
 * Report of the Lords Committee of Secrecy on the 
 Bank, 1797, p. 254.
 
 33 
 
 the exports, though antecedently the exports 
 from that country always exceeded the im- 
 ports *. 
 
 It must also be remarked, that an old and in- 
 telligent Director of the Bank of England has 
 stated to the Committee of the House of Com- 
 mons, that he never knew an unfavourable ex- 
 change between any two countries, arising from 
 a balance of debt, considerably to exceed during 
 a year the price at which a pound of bullion 
 could be purchased in the circulating medium 
 of the debtor country, together with the charges 
 of insurance on transporting it from one coun- 
 try to the other f. But, the exchange has been, 
 for a length of time, unfavourable to Ireland to 
 the extent of 10 per cent ; though the ex- 
 pence of transmitting specie from England to 
 Ireland is only 7s. 6d. per cent, carriage and in- 
 rance to Holyhead j freight to Dublin insu- 
 rance included, from 5s. to 7s. ; and the com- 
 
 * See Appendix, No. 12. to the Minutes of the Irish 
 Exchange Committee. 
 
 t Minutes of Evidence Exchange Committee, p. 40. 
 
 e
 
 34- 
 
 mission charged for sending gold is generally I, 
 at most | per cent *. 
 
 Ireland may, therefore, fairly be said to dis- 
 play none of the symptoms of a country, labour- 
 ing under a balance of debt. Indeed the In- 
 spector General of the Customs, whose evidence 
 marks his ability and intelligence, has delivered 
 to the Committee the following statement, which 
 shews (as might be expected under the circum- 
 stances that have been detailed) that the general 
 balance of debt for these last six years has been 
 favourable to Ireland : and that it has been 
 uniformly so, except during the years 1 80O and 
 18O1, when the crops failed in that country. 
 
 Years. 
 
 Balance of Im- 
 ports and Ex- 
 
 Remittances 
 from the British 
 to the Irish Ex- 
 
 Together, being 
 the balance of 
 
 
 jwrts. 
 
 chequer. 
 
 debt. 
 
 1798 
 
 L.1,371,382 
 
 L.1,251,09S 
 
 L.2,622,4SO 
 
 '799 
 
 218,066 
 
 852,046 
 
 1,070,112 
 
 18CO 
 
 2,271,170 
 
 1,919,996 
 
 251,174 
 
 1801 
 
 2.492. *98 
 
 1,202,587 
 
 1,^90.311 
 
 1802 
 
 193,789 
 
 1,605,240 
 
 1,799,029 
 
 1S03 
 
 917,299 
 
 1,401,273 
 
 2,318,572 
 
 The balances underlined are unfavourable f. 
 
 * See Mr Puget's evidence, Minutes of Evidence of Irish 
 Exchange Committee, p. 3. 
 
 v f See Appendix, No. 11, Minutes of Irish Exchange 
 Committee.
 
 35 
 
 Of an unfavourable exchange* produced by 
 an excess of paper, there are three constant and 
 invariable symptoms : 
 
 1. It increases as the circulation of the paper 
 is extended, and is uniformly accompanied with 
 a proportional rise in the value of bullion. 
 
 The strongest examples of exchange rising 
 to a great extent from this cause are to be found 
 in the history of our American colonies. To- 
 wards the middle of the last century, the cur- 
 rent paper was in all of them incredibly depre- 
 ciated : the paper of one colony bearing, how- 
 ever, a very different value from the paper of 
 another, just as more or less of it had been emit- 
 ted. 
 
 About the year 1739, the exchange with 
 Great Britain was in New England 450 per 
 cent ; in New York, Jerseys, and Pensylvania 70 
 to 75 per cent ; in Maryland 1OO per cent ; in 
 North Carolina 900 per cent ; in South Caro- 
 lina 7OO per cent, worse than sterling money. 
 
 These colonies also uniformly exhibited, alongst 
 with the rise in the exchange proceeding from 
 an increase of paper, a proportional augments-
 
 tion in the value of bullion, as appears from the 
 following account of what happened in New 
 England. 
 
 " The repeated large emissions of paper mo- 
 ney are the cause of the frequent rise in the price 
 of silver and exchange, which do as regularly fol- 
 low the same as the tides do the phases or courses 
 of the moon. When no larger sums are emitted 
 for some time than what is cancelled of former 
 emissions, silver in exchange is at a stand ; 
 when less is emitted than cancelled, (which sel- 
 dom happens) silver in exchange do falL 
 
 " This is plain to a kind of demonstration 
 from the history of the paper-money emissions 
 in New England. 
 
 " After silver had rose A. 17O6, to 8s. per oz. 
 by light pieces of eight superseding the heavy 
 pieces, it continued at that rate, while paper 
 emissions did not exceed a due proportion to the 
 current silver : A. 1714, we emitted L.50,OOO 
 upon loan, and A. 1715 in Rhode Island 
 L. 4O,000, besides emissions on distant funds 
 for charges of government : in the autumn A.
 
 1715 silver became 15 per cent, advance above 
 8s. that is, about 9s. 2d. per oz. ; Massachu- 
 sets Bay, A. 1717 emitted L. 1OO,OOO upon 
 loan, and a very long period silver rose to 1 2s. 
 per oz. ; A. 1721, Massachusets Bay emitted 
 L.5O,OOO, and Rhode-Island L.4O,OOO, upon 
 loan ; silver A. 1722 became 14s. per oz. 
 From that time a chargeable Indian war required 
 large emissions, and silver rose to 16s. per oz. ; 
 it continued at this rate till A. 1728, emissions 
 not being larger than cancellings. A. 1 727 Mas- 
 sachusets Bay emitted L.6O,OOO, and A. 1728 
 Rhode Island emitted L.4O,OOO upon loans ; 
 silver became 18s. per oz. ; A. 1731 Rhode- 
 Island emitted L.60,OOO upon loan, (N. B. Be- 
 sides the several loans in the course of this his- 
 tory, all the charges of the four governments 
 were defrayed by paper emissions), and silver 
 became A. 1732, 21s. per oz. ; A. 1733 Mas- 
 sachusets Bay emitted L.76,OOO upon funds of 
 taxes, Rhode-Island L.1O4,OOO upon loan and 
 taxes, Connecticut L.50,OOO upon loan, and 
 A. 1734 silver became 97s. per oz. From 
 A. 1734 to A. 1738 more bills were cancelled
 
 than emitted, exchange fell from 44O to 40O 
 per cent advance. A. 1738 Rhode-Island emit- 
 ted L.I OO,OOO upon loan, silver rose from 27s. 
 to 29s. per oz." * 
 
 2. The banishment of good coin from circu- 
 lation, and the debasement of small money, are 
 circumstances invariably concomitant with an 
 unfavourable exchange, and consequent depre- 
 ciation of paper. For a bad currency must ba- 
 nish all good money put into circulation with it, 
 the good money instantaneously becoming an 
 article of merchandise, which is bought up at a 
 profit equal to the amount of the depreciation 
 the paper has sustained. 
 
 Thus in Sweden, when Baron Goertz, at the 
 end of the reign of Charles XII., forced the go- 
 vernment notes on the market, till they were de- 
 preciated to an extravagant degree, we are told 
 by Voltaire that a piece of brass, called a mint 
 token, and the intrinsic value of which was a half- 
 
 * See Discourse concerning the currencies of the Bri- 
 tish Plantations in America, &c. p. 26.
 
 penny, came to pass for forty sous ; and those 
 who witnessed the progressive issues of assignats 
 in France, must recollect, that the small silver mo- 
 ney gave way to a circulation of base metal, and 
 that all metallic substances were ultimately sup- 
 planted by silver and copper notes, issued in such 
 profusion as to be distinguished by nothingbut the 
 colour of the paper on which they were engraved ; 
 the black, the blue, or the red, alternately vanish- 
 ing from circulation, as roguery or bankruptcy 
 induced those who issued them to abscond. 
 
 In the American colonies the progress was in 
 every respect similar. When paper was issued 
 in such quantities as only to create a small de- 
 preciation, heavy pieces of eight gave way to 
 light ones ; and the good money was only to be 
 had at a premium of ten, fifteen, or twenty per 
 cent. The increase of paper drove even this light 
 money from circulation ; and we are told, that 
 in the province of New England, " when much 
 " paper money took place, shop-notes, that great 
 " and insufferable grievance of tradesmen, were 
 ft in use, the shop-keepers becoming as it were
 
 40 
 
 " bankers between the merchants and tradesmen, 
 " and imposing upon both egregiously." * 
 
 In this country, the end of the seventeenth 
 century affords a memorable example of the 
 effects of an extravagant issue of paper, in ren- 
 dering the exchange unfavourable, and intro- 
 ducing counterfeit and debased coin into circu- 
 lation. 
 
 We learn from Mr Godfrey, one of the Di- 
 rectors, that the Bank of England, soon after 
 it was established, had not only made great 
 advances for the public service, but " had ex- 
 * e tended itself likewise to accommodate all pri- 
 " vate mens occasions ; for they have lent money 
 " on mortgages and real securities at 5 per cent 
 " per annum ; and their very publishing they 
 " would do it, has given a check to the raising 
 " the interest on them from 5 to 6 per cent, per 
 " annum, as was attempted." f 
 
 This ease and facility in accommodating both 
 individuals and the public soon produced a 
 great increase of the bank notes in circulation, 
 
 * See ibid, p. 24. 
 
 t A Short Account of the Bank of England, by Michael 
 Godfrey, Esq. p. 4. Various contemporary writers agree
 
 41 
 
 the consequences of which are described by an 
 author in the year 1697, in the following terms : 
 " This leads me to the consideration of Bank of 
 England Notes that are daily offered in payment 
 instead of money, though many of these very 
 persons that offer them, have at the same time 
 both gold and silver, which they will not bring 
 forth, if they can by any means put off these 
 bills in the room thereof, 
 
 " And it is now become a common (not to 
 say wicked and unjust) practice, especially among 
 retailers, if they have no notes by them, to 
 purchase some with their money sometimes at 
 L.I 7 per cent advantage to pay their debts, that 
 ought, in justice and equity, to be answered in 
 specie, which many times proves a grinding of 
 the face of the poor ; for these notes are given 
 in payment from one to another, until they light 
 
 on this subject. Thus " The Bank has been the sole 
 cause of lowering the interest of money ; which is the 
 only fund that ever lowered it ; and that too in time of 
 war, when usually interest rises; by which the nation, 
 since the Bank was erected, hath saved a great sum of 
 money, having been supplied at much cheaper rates than 
 formerly." See Reasons for encouraging the Bank of Eng- 
 land. &. p. 3.
 
 into an indigent person's hand, who is forced, 
 through his urgent occasions, to sell th^m at 16 
 or 17 per cent. loss. 
 
 " Now the true reason why people are so 
 earnest to put away their notes, and keep up 
 their money, arises from the difference between 
 the value of the one and the other ; and as long 
 as there remains a disparity between them, the 
 one will always be plenty and the other scarce. 
 And if something be not done to prevent this 
 growing evil, the mint may coin, and the coun- 
 try expect a plenty of money thereby, and fall 
 short of it at last !" * 
 
 The fact of Bank notes being at a discount of 
 17 per cent, is confirmed by another writer of 
 the same period. " Are there not daily," says 
 he, " innumerable instances of men that sell 
 their money for Bank notes for a profit of 16 and 
 17 per cent, and refuse to pay their just debts 
 (though long due) in any thing else than those 
 Bank notes they have with so much advantage 
 
 * See A Short Treatise of the Reason and Causes why 
 pur Money and Bullion have been exported, 1697, p. 14.
 
 43 
 
 purchased, although there were no agreement 
 at all to be paid in Bank Notes *," 
 
 It is apparent also, that this discount pro- 
 ceeded solely from the quantity of notes thrown 
 into circulation ; for the same author informs 
 us, that the Bank had at that time obtained a 
 mighty credit ; that it made considerable pro- 
 fits, besides the 8 per cent, interest on the capita! 
 lent to government ; and that the stock was 
 sold for 110 per cent, although 6O per cent 
 had only been paid in upon the subscriptions f. 
 
 The paper of the Bank of England did not 
 remain long in this state, till all good silver gra- 
 dually disappeared from circulation, and base 
 counterfeit money was everywhere current, not 
 
 * See Arguments and Reasons for and against engraft- 
 ing upon the Bank of England with Tallies, &c. p. 7. 
 
 In proof of the discount on Bank notes at this time, 
 many other authorities might be cited. See A Reply to 
 the Defence of the Bank, 1696, p. 13 A Letter to a 
 Friend concerning the Credit of the Nation, by a Member 
 of the Corporation of the Bank of England, 1697, p. 6 
 Postcript to a Discourse of Credit, ed. 1701, p. 5. 
 
 f See arguments and reasons for and against engrafting 
 pn the Bank, p. 15.
 
 44 
 
 worth one half of the lawful coin of the king, 
 dom. At this period the state of the English 
 Money is described in the following terms : 
 
 " 12 mild half crowns 30s. legal (/'. c.} full 
 " weight, true allay, not to be clipt, not cur- 
 " rant. 
 
 "12 Broad half crowns 30s. legal, unclipt, 
 " capable of being clipt, not currant. 
 
 "12 clipt half crowns 30s. not legal, actually 
 " clipt, by weight 15s. currant at 3Os. 
 
 " 1 Guinea currant 3Os. not legal so, but 
 " 20s. so advanced by name to 30s. 
 
 " The faults are easie seen, the lawful silver 
 <c money out of use, the illegal clipt silver going 
 " for double the real value, and the gold legal 
 " at 20s. passing at 30s *. 
 
 It was under these circumstances, that the 
 exchange with the rest of Europe (as it is 
 stated in the passage of the Wealth of Nations, 
 
 * See An Essay for lowering the Gold and raising the 
 .Silver Coin, 1696, p. 10. Also the Mysteries of coun- 
 terfeiting the Coin, and Methods humbly offered for pre- 
 venting the said Abuse, 1696, p. 1. As well as Appendix, 
 No. 2. where a more detailed account is given of the state 
 of the money then in circulation.
 
 45 
 
 t 
 
 quoted by the Committee,) became unfavour- 
 able to Great Britain to the extent of 25 per 
 cent ; for contemporary writers agree *, that, 
 though the exchange was a little affected by 
 the necessity of paying the army abroad, it was 
 not unfavourable to any considerable degree, 
 nor was the price of bullion much advanced, till 
 Bank notes were brought to a discount of 17 
 per cent, the country consequently inundated 
 with counterfeit money, and guineas raised to 
 SOs. 
 
 3. An unfavourable exchange, arising from an 
 overflow of paper, is so far from resembling an 
 unfavourable exchange created by a balance of 
 debt, in carrying along with it a sound remedy, 
 or any remedy at all, that a tendency to augment 
 the evil is its natural and constant attendant, 
 which must become potent in proportion as the 
 paper in circulation is augmented. 
 
 For the want of circulating medium, at first 
 the artful apology for the conduct of those who 
 wish to enlarge the quantity of paper in circula- 
 
 * See Some Remarks on a Report containing an Essay 
 for the amendment of the Silver Coin, p. 5.
 
 46 
 
 f ion, when the issue of paper is pushed to an ex- 
 treme, must ultimately become a real and sub- 
 stantial cause of complaint. 
 
 Perhaps the best and the easiest method of 
 explaining this extraordinary, but inevitable, con- 
 sequence of an extended circulation of paper is 
 by reference to the case of New England, to 
 which allusion has already been made. 
 
 In New England, anno 1713, the total value 
 of the currency amounted to L. 262,500, of 
 which L. 87,50O was in dollars, and L. 176,OOO 
 in public bills. Silver was then in value at 8s. 
 per ounce ; so that, in round numbers, the value 
 of the whole currency was 656,OOO ounces of 
 silver. Anno 1718, the public bills amounted 
 to L. 30O,OOO ; silver, (driven out of circulation 
 by the depreciation of bills), was in value 1 2s. 
 an ounce. The value of the currency was, there- 
 fore, equal to 5OO,OOO ounces of silver. Anno 
 1731, public bills amounted to L. 470,OOO, 
 which, silver being at 20s. an ounce, represent- 
 ed a value in siver of 470,OOO ounces. Anno 
 1739, the paper of New England was extended 
 to L. 630,000, which at 29s. per ounce, the
 
 value to which silver had risen, was equal to 
 434,OOO ounces of silver. 
 
 It is obvious, that during the period here al- 
 luded to, the complaint of want of circulating 
 medium was not without foundation ; for though 
 the nominal value of the paper currency seems to 
 have increased from L. 262,5OO to L.630,OOO *, 
 its real value in ounces of silver, which may be 
 considered as exhibiting its efficient force, dimi- 
 nished from 656,000 ounces to 434,COO. Of 
 its progress the following table will give a more 
 accurate idea. 
 
 Years. 
 
 Nominal value 
 
 Value ot 
 
 Real value 
 
 
 oi circulating 
 
 the ounce 
 
 in ounces 
 
 1713 
 
 L. 262,500 
 
 8s. 
 
 656,000 
 
 1718 
 
 300,000 
 
 12 
 
 500,000 
 
 1731 
 
 470,000 
 
 20 
 
 470,000 
 
 1739 
 
 630,000 * 
 
 2.9 
 
 434,000 
 
 These historical details of the depreciation of 
 paper, occasioned by an extension of circulation, 
 
 * This account of the quantity of paper in circulation 
 seems accurately confirmed by a French writer, who says, 
 " 11 circule dans ce province, (New England) moisde Fevricr 
 1739, 632,000 livres sterling de ces billets de credit." His- 
 toire et Commerce des Colonies Angloises dans 1'Araerique 
 Septentrionale, p. 96 imprimce 1752.
 
 have perhaps been given at greater length, than 
 it may be thought the occasion required. But 
 it appeared more desirable to impose on the 
 public the necessity of concluding, from the 
 experience of former times, that the alarming 
 state of the circulation of Ireland, as well as the 
 unfavourable exchange that country has expe- 
 rienced, was owing to the increase of Bank 
 paper, than to enforce the proposition by rea- 
 soning or argument ; and a review of the facts, 
 which have been stated, seems to authorise a 
 flattering hope of the success of the attempt. 
 
 For the similarity of the conduct of the Bank 
 of England, in the end of the seventeenth cen- 
 tury, to the recent conduct of the Bank of Ire- 
 land, is not more striking, than the resemblance 
 of the calamitous consequences which have been 
 experienced in both instances. 
 
 A depreciation of the value of notes, succeeded 
 by a rise in the value of gold and of all commodi- 
 ties; the banishment from circulation of all good 
 silver coin; and the introduction of base or coun- 
 terfeit small money, are evidently the distin- 
 guishing features of the economical history of
 
 49 
 
 both periods ; and these are accurately the ap- 
 pearances, that have long ago been described as 
 the certain consequences of paper or coin depre- 
 ciated *. " Base money maketh every thing 
 " dear, and overthroweth the course of exchange 
 " between merchants, and causeth much coun- 
 " terfeit money to be made to buy the commo- 
 " dities of the realm, and to destroy the good 
 " monies, like unto the seven lean kine of Pha- 
 " raoh which devoured the seven fat kine in a 
 " short time f." 
 
 It appears also impossible, that any one can 
 read the detail concerning the origin of shop 
 notes in New England, and learn from the re- 
 port, that, since the increase of the paper of the 
 
 * Paper, depreciated by an over issue, must always have 
 the same calamitous effects on the situation of a country as 
 a quantify of coin has, the denomination of which is arbi- 
 trarily raised, or the standard reduced. In both cases the 
 mischief is produced by a quantity of money in circulation, 
 the real value of which is smaller than its nominal, or, in 
 the language of writers on money, the intrinsic value of 
 which K less than its extrinsic. 
 
 I Consuetude vel Lex Mercatoria, by Gerard Malynos. 
 p. 308. printed J6'29.
 
 Bank of Ireland, all the shopkeepers in Cork, 
 and many of the same description in different 
 parts of Ireland, have engaged in issuing notes ; 
 without being impressed with the similarity of the 
 evils and the errors that have afflicted both 
 countries *. 
 
 When we reflect on the state of the paper cur- 
 rency of New England at the time the shop notes 
 were introduced, and contemplate that list of 56 
 male and 6 female issuers of I O U's, who 
 have infested the district of Youghall f, is it 
 possible not to lament, that the Directors of the 
 Bank of Ireland derived so little benefit from 
 the following hint many years ago given to that 
 country by the celebrated and ingenious bishop 
 of Cloyne. 
 
 "201. Query. Whether any nation ever was 
 in greater want of a Bank than Ireland ? 
 
 " 212. Query. Whether we may not easily 
 avoid the inconveniences attending the paper 
 
 * See Appendix (N) to the Report of the Irish Exchange 
 Committee, containing an account from the collectors of the 
 revenue of the number of Banks in their several district?, 
 issuing Bank notes, silver notes, or IO U's. 
 t See Appendix No. III.
 
 money of New England, which were incurred by 
 their issuing too great a quantity of notes * r" 
 
 It is true the paper of the Bank of Ireland has 
 not yet been brought to that state of depreciation, 
 in which an augmentation of its quantity insures 
 a diminution of its real or silver value. But it 
 exhibits symptoms, not equivocal, of the approach 
 of that crisis ; for it is self evident, that if the 
 three millions now in circulation have suffered 
 a depreciation to the extent of 10 per cent in 
 comparison of all other commodities, that sum 
 can possess no more energy in circulating com- 
 modities, than what would fall to the share of 
 L. 2,700,000, of paper at par. 
 
 If further evidence were necessary to prove, that 
 the depreciation of the notes of the Bank of Ire- 
 land proceeds from the quantity of paper it has 
 recently emitted, it is amply to be found in 
 viewing the relative state of the paper currency 
 of the three united kingdoms, and contemplating 
 the effects produced by the conduct of those in 
 the direction of their Banks. 
 
 * Berkeley's Querist, Lond. ed. p. 23-4.
 
 In England we learn from the report of the 
 Irish Exchange Committee, that Bank notes, 
 since the restriction, have been increased from 
 L. 10,416,520 * to L. 1 7,920,450 f. 
 
 In Ireland it appears, that the national Bank 
 paper of that country has been increased, dur- 
 ing the same period, from L. 6OO,OOO. to 
 L. 3,000,000. 
 
 In Scotland Mr Mansfield informs us, that the- 
 paper in circulation is at present nearly the same 
 in quantity as in 1 797 J. 
 
 In England, where the paper appears from these 
 accounts to have been increased about one third, 
 it is stated in the evidence to be at a discount of 
 two per cent . 
 
 In Ireland, where the circulation has been 
 increased to five times the quantity antecedently 
 
 * Appendix No. 11. to the report of the House of Lords, 
 1797- 
 
 t The amount of notes, 25 May 1804, as stated No. 13. 
 Minutes of the Irish Exchange Committee. . 
 
 I See Minutes of Evidence, Irish Exchange Committee, 
 p. 54. 
 
 See the Evidence of a Bank Director, Minutes, p. 6 : 
 See also p. 14.
 
 emitted, paper is at a discount of from 10 to 12 
 per cent. 
 
 In Scotland, where there has been no increased 
 issue, Mr Mansfield states, " that gold bears no 
 premium, and that Bank paper is not in the least 
 depreciated *." 
 
 From Mr Mansfield we also learn, that though 
 there has existed, as usual, a small balance of 
 remittance from Scotland to England, the ex- 
 change has remained steadily at the same rate ; 
 whilst in Ireland, with a balance of remittance, 
 as Mr Marshal states, greatly in favour of that 
 country f, the nominal exchange has become un- 
 favourable to the extent of 10 or 12 per cent. 
 
 III. That the reduction of the quantity of Bank 
 paper in circulation is the sole remedy for the ex- 
 isting evil. 
 
 Having stated the grounds upon which it ap- 
 pears evident that the paper of the Bank of Ireland 
 is depreciated, and having shewn that since the 
 
 *Minutes of Evidence, Irish Exchange Committee, p. 
 52. 
 
 t Ib. p. 124.
 
 J-i- 
 
 depreciation took place, Ireland has exhibited so 
 distinctly every appearance uniformly attendant 
 upon a depreciation of paper occasioned by an 
 excessive issue, as to leave no doubt that the al- 
 arming state of the currency of that country 
 proceeds from the quantity of paper thrown into 
 circulation ; the remedy seems apparent. For 
 common sense so clearly points out that a dimi- 
 nution of any thing is the only remedy for an ex- 
 cess of it, that it is almost superfluous to illustrate 
 the proposition. 
 
 As the experience of the past, however, is at 
 all times the most safe and solid ground on 
 which the legislature of a country can act, the 
 plan already laid down shall be adhered to, in pre- 
 suming to trace out the course that Parliament 
 ought to pursue, and we shall endeavour to 
 shew, not so much from reason and argument, 
 as from the experience of past events, what must 
 be the effect of the remedies already suggested or 
 adopted, and what has proved the sole and cer- 
 tain cure on all similar occasions. 
 
 The schemes for administering relief to Ireland, 
 which were proposed in the course of the examina-
 
 55 
 
 tion that took place before the Exchange Com- 
 mittee of last session, and which have neither 
 been adopted by the legislature, nor acted upon 
 by the Treasury, seem hardly deserving of atten- 
 tion. 
 
 On the extraordinary plan of uniting the 
 Banks of England and Ireland against the incli- 
 nation of both, it is only necessary to say, that, 
 without proving in the smallest degree a remedy 
 for the evil, it must have had the effect of rais- 
 ing, for a time, the value of Irish Bank notes. If, 
 however, the samequantity of paper hadbeenkept 
 in circulation in each country on account of the 
 joint concern of the two Banks, the result must 
 have been, that, whatever was the amount gain- 
 ed in value by the mass of Irish, the mass of Eng- 
 lish notes must have lost to the same extent. 
 
 The depreciation of Irish notes is at present 
 occasioned by an increase from L. 60O,OOO. to 
 L. 3,000,000. ; that is, from an augmentation of 
 paper in the proportion of five to one. 
 
 The small depreciation, which has taken place in 
 English Bank notes, is produced by the increase 
 fromL. 10,416,520. to L. 17,920,450; that is,
 
 from an augmentation in a' proportion of little 
 more than three to two. 
 
 If the two concerns were conjoined, the in- 
 crease of the quantify of notes would be from 
 L. 11,016,520, to L. 20,920,450 ; of course the 
 depreciation over all must be such, as it might 
 naturally be supposed would take place on an 
 augmentation nearly in a proportion of two to 
 one; that is, in a proportion accurately com- 
 pounded of the losses which the paper of each 
 of the Banks antecedently sustained. 
 
 It seems almost needless to take notice of the 
 proposal to make the laws more severe, and suf- 
 ficient for the punishment of offenders, as a sure 
 means of correcting the recent enormous increase 
 of counterfeit coin*. This scheme, however, serves 
 admirably to illustrate, how readily similar cir- 
 cumstances suggest to the minds of men similar 
 devices ; for the same opinion is delivered almost 
 in the same words in a publication in the year 
 1 696, entitled Mysteries of Counterfeiting the 
 
 Mr D'Olier's Evidence, Minutes, p. 83.
 
 Coin of the Nation detected, and Methods offer- 
 ed to Parliament for preventing the Abuse for 
 ever, by Joseph Aicken. 
 
 Mr Aicken indeed ascribes the evil in part 
 to the prevailing taste for the study of chemis- 
 try, and the rage for reading Salmon's Poligra- 
 phicas, Glauber, and the works of Johannes Bap- 
 tista Porta. Mr D'Olier is probably not so 
 great a philosopher, otherwise Fourcroy, Vau- 
 quelin, Chaptal, and the unfortunate Lavoisier 
 might have come in for their share of the blame ; 
 and this view of the subject would have had the 
 advantage of making the calamity originate with 
 the popular source of all evil The French. 
 
 Other remedies have, however, been brought 
 forward which demand more serious considera- 
 tion; though in truth they derive importance, 
 not so much from the benefits they are likely to 
 produce, as from their having been adopted and 
 acted upon by authority. 
 
 The 1st we shall examine is the plan an- 
 nounced by the Irish Treasury, of drawing 
 on London after the 3d of December last, for 
 any sum above ten pounds at the rate of
 
 the natural course of exchange being consider- 
 ably higher *. 
 
 The 2d. is stated in the preamble to the 7 1 st 
 chapter of the 44th of George III. It consists in 
 the issue of a quantity of silver coin from the 
 Bank, being stamped dollars at the value of six 
 shillings each. 
 
 The 3d. is a legislative restraint imposed by 
 c. 91. 44th George III. on the circulation of 
 all notes of less value than twenty shillings, after 
 the 1st. August 1804. 
 
 The scheme announced by the Treasury of 
 Ireland, of drawing on London for all sums above 
 L. 10 at the rate of 1 IT per cent, seems to have 
 two objects in view ; to take into the hands of 
 the Treasury even the retail dealing in exchange, 
 which, by the former practice of not drawing for 
 less than L. 5OO, was left to the jobbers ; and to 
 lower the exchange by granting bills on London 
 under the market rate. 
 
 This attempt to monopolize all dealings in 
 exchange, just after the Committee had reported 
 that the Treasury appeared unfitted, from the na- 
 ture and constitution of their office, for executing 
 
 * Since this was sent to the press the exchange has been 
 brought still lower than 1 1 --, by the same forcible interference.
 
 the business of exchange and brokerage benefi- 
 cially *, can only be accounted for by supposing, 
 that those who have the management of the Irish 
 government believe the suggestion made in 
 various parts of the evidence, that the high ex- 
 change arises from the tricks and contrivance of 
 the exchange dealers. It does not however ap- 
 pear, that any man can reasonably give credit to 
 this opinion ; for it is impossible to suppose any 
 set of men, far less those who are habituated to 
 consider so minutely their profits, to act systema- 
 tically in opposition to their own interest ; and 
 nothing can be more convincing than the evi- 
 dence given by Mr Puget, that a highly unfa- 
 vourable exchange is injurious to the exchange 
 dealer f. 
 
 On the other hand no doubt can be entertain- 
 ed, that the practice the Treasury of Ireland has 
 adopted, of drawing on London at llj. per 
 cent, for all sums which may be required above 
 
 * See Report of the Exchange Committee, p. 12. 
 f " The difference of Exchange between 108 and 118 i^ 
 " 2 percent, per annum against the dealer, in its being L18, 
 " presuming he could turn his money 25 times in a year." 
 See the calculations, in Minutes of Evidence of Irish Ii.v 
 change Committee, p. 24.
 
 OX) 
 
 ten pounds, must have the effect of lowering the 
 exchange. 
 
 If any man, actuated by a fancy that the price 
 of broad-cloth was too high in a town or district 
 of the country, should generously set up a shop 
 to sell at sixteen shillings a yard the cloth 
 which the merchant, charging the usual mercan- 
 tile profit on his capital, could not afford under 
 eighteen shillings; the price of broad-cloth would 
 certainly fall two shillings per yard, and this re- 
 duced price would continue, till the generosity 
 of the new shopkeeper was checked by a con- 
 sciousness of his folly, or a failure of his means. 
 
 In like manner it is obvious, that the exchange 
 betwixt London and Dublin cannot exceed 1 1~ 
 per cent, till Government, perceiving their error, 
 relinquish the measures they are pursuing, or ex- 
 haust the means thoy have in London, of sup- 
 plying the demand ; and these are unfortunately 
 this year very great, as we learn from the report 
 of the Committee, that, by the arrangement of 
 finance, the Irish Treasury has L. 5,OOO,OOO. to 
 draw out of England *. 
 
 * See report of the Irish ExchaDge Committee, p. 17.
 
 61 
 
 Great as this sum is, it never can, so applied, 
 raise the value of Bank of Ireland notes. As 
 long as it lasts, it must apparently diminish one \/ 
 of the effects of their depreciation, in conse- 
 quence of the public undertaking to pay a part 
 of the exchange ; but the moment the fund is 
 exhausted, the natural effect of the depreciation 
 of paper must again display itself on the price 
 of bills of exchange. 
 
 To make this still more apparent, let us sup- 
 pose any public body had possessed a large fund in 
 London capable of answering all demands, and 
 that at the time the paper of New England was 
 by its quantity depreciated to such an extent, 
 that the exchange betwixt that country and 
 Great Britain was at L. 40O for L. 100, they 
 had announced the intention of giving bills on 
 England at the rate of L. 1OO sterling for L. 20O 
 colonial paper. It is apparent that their cus- 
 tomers would have been numerous ; and that the 
 exchange must have instantly appeared 2OO per 
 cent. ' more favourable to New England ; but 
 there can be no one so incredulous as not to 
 believe, that if the quantity o paper, which ori- 
 ginally occasioned the unfavourable exchange,
 
 remained undiminished, the exchange must have 
 reverted to its former rate the moment this gene- 
 rous interference was at an end. 
 
 To the Irish absentee this measure 6'f the trea- 
 sury is indeed a real act of generosity : To him it 
 is giving L. 1 OO in London for L. 1 1 1 . 1 of Irish 
 paper, for which he would otherwise have been 
 obliged to pay L. 116. 10 To the Irish manu- 
 facturer it must be productive of very different 
 consequences. The merchant who has bought 
 articles of manufacture in Ireland, which he has 
 exported to this country, and sold on the sup- 
 position that he is to get L. 116 in paper for 
 every L. 10O in London, can no longer find any 
 customer for his bill, unless he is willing to 
 exhibit, in the sale of it, as great generosity as the 
 Treasury has lately practised. By so doing, 
 however, he must sacrifice 5 per cent, of his pro- 
 fit, or proportionably diminish the price he in 
 future pays for his goods. Thus this happy 
 device is at once a tax on manufacture, and a 
 reward to emigration, and affords the first in- 
 stance of a bounty given by the government of 
 any country to discourage the exportation of its 
 own manufactures.
 
 It is here also necessary to observe, that the 
 conduct of the Treasury of Ireland, in declaring 
 that they will give bills on London for all sums 
 not smaller than L. 10. at the rate of 114- per 
 cent, places them completely at the mercy of 
 the Bank Directors of that country. 
 
 No one, who has attended to the history of 
 paper currency, and remarked the great de- 
 preciation the same additional sum of paper 
 makes when the augmentation has been greatly 
 extended, in comparison of what it effected before 
 the increase became excessive, can doubt, that 
 if the addition of another million were now made 
 to the paper of the Bank of Ireland, it would in- 
 crease the discount on notes at least 1O per cent. 
 By pursuing this course, therefore, the Bank has 
 it in its power to tax the generosity of the Trea- 
 sury at the rate of 15 per cent, instead of 5, which 
 the latter must at present pay, on the supposi- 
 tion the natural rate of exchange remains at 161. 
 
 The evident inefficacy of this measure might 
 authorise the dismissing it without further com- 
 ment. As it appears, however, to be adopted in 
 consequence of a recommendation from the Irish
 
 64 
 
 Exchange Committee *, and as that recommen- 
 dation clearly proceeds upon a misconception of 
 Mr Mansfield's evidence, it requires in this point 
 of view a little farther observation, the more so, 
 as it has given birth to a misrepresentation of the 
 means, by which the Exchange was rectified, 
 when, in the year 1 762, it became unfavourable 
 to Scotland, in consequence of the two Banks 
 in that country having issued paper to a greater 
 extent than its natural trade required. 
 
 Mr'TVTansfield on his" examination informed 
 the Committee, that the exchange with London, 
 about the time of the peace of Paris, became 
 unfavourable to Scotland to the extent of 5 or 
 6 per cent, a fact abundantly confirmed by the 
 'writers of that day f. 
 
 * See Report, p. 16. 
 
 f " The Exchange betwixt this country and England has 
 jno\v come to so great a height, that, if some expedient is 
 not found out to put a stop to it, the ruin of our country 
 must soon be the consequence." See Considerations on the 
 present scarcity of gold and silver coin in Scotland, 17&2. 
 
 P-l ... 
 
 " Of late the exchange upon remitting money from 
 
 Edinburgh to London has risen to a great height." See
 
 65 
 
 This he ascribes to the issue of paper, which 
 was greater than the natural trade of the coun- 
 try required *. He informs the Committee, that 
 the Bank, to remedy the evil, curtailed their cre- 
 dits very much, cut off the credits of the agents of 
 the country Banks f and likewise encreased their 
 capital ; proceedings calculated to diminish the 
 notes in circulation, which is the sure method of 
 rectifying an exchange, deranged by an over- 
 issue of paper. 
 
 Considerations relating to the Jate order of the two Banks 
 established at Edinburgh, by which they have recalled one 
 fourth of their cash accounts, p. 11. See also letter to J. 
 F. on the conduct of the Banks, 1?6'2 ; Thoughts con- 
 cerning Banks and the paper money of Scotland, printed 
 1763 ; and an Enquiry into the Principles of Political 
 Economy by Sir James Stewart. 
 
 * The currency of Scotland was principally paper in 
 the year 176'2, and- that to a greater extent than the na- 
 tural trade of the country required. Mr Mansfield's evi- 
 dence ; Minutes, p. ol. 
 
 Was the over-issue of paper prior to the unfavourable 
 state of Exchange or subsequent ? Certainly was prior, as 
 it was the cau->e of the system being altered which reme- 
 died the rate of Exchange, and I cert.unly think the over- 
 issue of paper was the cause of the high rate of Exchange. 
 Jbid. p. 53. t Ib. P. 51. 
 
 E
 
 66 
 
 In another part of his evidence he gives an ac- 
 count of a system which the Banks adopted in 
 the year 1770 to fix the rate of exchange *, 
 and to put an end to the inconvenience attend- 
 ing fluctuation. 
 
 In the report, this last proceeding is stated as 
 the sole remedy adopted for rectifying the ex- 
 change f, and no notice is taken of the mea- 
 sure of curtailing the issue of notes, when the 
 evil existed in the year 1762, which Mr Mans- 
 field's good sense taught him to consider as a ne- 
 cessary prelude to the attempts made eight years 
 afterwards to regulate the exchange. 
 
 So much were those entrusted with the ma- 
 nagement of the Bank of Scotland in 1 762, con- 
 vinced, that recalling a great proportion of their 
 notes was the only mode of remedying the then 
 existing evil, that they not only wrote circular let- 
 ters, calling in one-fourth of their cash accounts on 
 the 26th of January 1 762, but, further to effect the 
 object, came, on the 7th of March of the same 
 year, to the resolution of taking in money at 5 
 
 * Minutes of Exchange Committee, p. 20. 
 
 t Report from the Exchange Committee, p. 16.
 
 67 
 
 per cent, on promissory notes at six months, 
 and at 4 per cent, on cash accounts *. And on 
 these measures Dr Smith remarks, " that the 
 Banks, by refusing to give more credit to those 
 to whom they had already given a great deal too 
 much, took the only method by which it was 
 possible to save either their own credit, or the 
 public credit of the country f". 
 
 It would be inconsistent with our present plan 
 to go into further explanation on the money 
 history of Scotland at that period ; for which, 
 however, there are ample materials in the pub- 
 lications that have been quoted : what has been 
 said, is sufficient to shew that the measure recent- 
 ly pursued in Ireland has the merit of originality. 
 
 For Mr Mansfield is too well informed on 
 subjects of this nature, and his judgment is too 
 correct, to admit a suspicion, that he will claim 
 any share of the credit arising from adopting a 
 measure admirably calculated for fixing a fluc- 
 tuating exchange as the best means of correct- 
 
 * This is stated both in the letter to J. F. and in sir 
 James Stewart's work it is here, however, asserted on the 
 authority of one of the Directors. 
 
 t Wealth of Nations, 4to edit. v. i. p. 379-
 
 68 
 
 ing an exchange rendered unfavourable by an 
 over-issue and depreciation of paper. 
 
 Before closing the consideration of this re- 
 medy, it may elucidate the subject to remark, 
 that, in the year 1696, the Bank of England at- 
 tempted to reduce the price of guineas by means 
 similar to those, by which the Treasury of Ire- 
 land is now endeavouring to lower the exchange. 
 
 Mr Godfrey tells us, that, in order to reduce 
 the price of guineas, they were regularly paid a- 
 way at the Bank at a small sum below the mar- 
 ket price *. The rise however in their value, 
 which gradually took place, even at the time of 
 this proceeding, leaves at once an unfavourable 
 and a just comment on the merit of the device. 
 
 The measure, announced in the 7 1st chapter 
 of the 44th of Geo. III. of issuing dollars from 
 the Bank of Ireland, at the rate of 6s. seems 
 also perfectly inefficacious as a remedy, or even 
 as a palliative to the present grievances of Ire- 
 land ; and if there existed funds, and an inclina* 
 tion to carry it to as great an extent as the 
 Treasury of Ireland can push the sale of their 
 bills, it might, in the present situation of that 
 
 * Short Account of the Bank of England, p. 9.
 
 country, eventually prove as ruinous and as 
 expensive. 
 
 Those who suggested this plan seem to 
 have proceeded on an opinion, that as Irish 
 Bank notes, by depreciation, had come to re- 
 present a smaller number of pennyweights of 
 silver bullion, the dollar, to remain in circula- 
 tion, only required to be raised in nominal value ; 
 so that the sum, for which it passed, should bear 
 a similar proportion to the pennyweights of sil- 
 ver it contained. 
 
 This reasoning is so far just, that undoubtedly, 
 as long as Bank paper remained in the same state 
 of depreciation, it could not be used directly as 
 an engine for withdrawing, with a profit, the 
 dollars that were so issued. 
 
 But those with whom the proposal originated, 
 must have forgot, that all the good small silver 
 coin had been long ago banished from circula- 
 tion by the depreciation of notes ; and that there 
 existed no silver adjusted for the purpose of re- 
 presenting the fractional parts of those dollars. 
 
 For had they recollected this circumstance, 
 they must have perceived, that necessity would
 
 70 
 
 keep in circulation that currency of small silver, 
 the value of which, for a length of time, has de- 
 pended on the consciences of the clippers and 
 coiners ; and which, as might be expected from 
 the delicacy likely to be exhibited by the scis- 
 sars of the one, or the melting pot of the other, 
 is reduced to much less than half its nominal 
 value : and that it is impossible, that the dol- 
 lars, if issued in any quantity, should not be 
 gradually withdrawn by this base money. 
 
 The process is apparent. The coiner, as fast 
 as he can obtain, by indirect means, a bank note 
 with the money he has manufactured, exchanges 
 it for dollars; and secures, as profit, a per- 
 centage great in proportion as the value of his 
 counterfeit money is debased. 
 
 This operation has been sufficiently experien- 
 ced in this country, our silver currency, in the 
 depreciated state in which it has long circulated, 
 forming an engine with which our gold may be 
 gradually withdrawn with a profit ; and the proof 
 of its being so withdrawn is, that, with a balance 
 of trade very generally in our favour, nearly 6O 
 millions of gold have been coined in the course of
 
 71 
 
 the present reign * ; though 23 or 24 millions 
 are supposed to be the most that remained at 
 any one moment in circulation. 
 
 Even supposing that the counterfeit money 
 could be banished from Ireland, and that a coin- 
 age of small silver was issued, properly adjusted 
 with respect to value, to represent the fractional 
 parts of the dollars, it is not probable, in the 
 present situation of that country, that either they, 
 or the small silver issued on such a plan, could 
 remain long in circulation ; for every new in- 
 crease of paper, as it must depress the value of 
 the notes, must instantly render them instru- 
 ments for profitably withdrawing the dollars and 
 the silver thus adjusted to circulate along with 
 them. 
 
 Let us suppose, for example, that dollars had 
 been issued, adjusted to the value of Bank pa- 
 per at the time the quantity of notes in circula- 
 tion had only reduced it to a discount of 5 per 
 cent, it must at once appear evident, that the 
 
 * It appears, that gold has been coined, from the com- 
 mencement of the king's reign to the year 1796 inclusive, 
 to the amount of L. 57,274,617. See Account, No. 38, 
 of the Committee of the House of Lords on the Bank of 
 England, 1797.
 
 moment the augmentation in the quantity of pa- 
 per created a discount of 10 per cent., the notes 
 might be used as a means of withdrawing ttase 
 dollars at a profit of 5 per cent. 
 
 Neither is this mere speculation ; for we have 
 seen the process realised in practice. In the 
 first stages of the depreciation of paper in the 
 American colonies, the heavy pieces of eight dis- 
 appeared, because the paper, in that state of de- 
 preciation, was a means of withdrawing them 
 with a profit. Light pieces of eight became cur- 
 rent in their stead, and these in their turn va- 
 nished, whenever paper was so depreciated as to 
 be profitably used in taking them out of circu- 
 lation *. 
 
 An experiment, somewhat similar in prin- 
 ciple, was made at the time the depreciation of 
 the paper of the Bank of England had intro- 
 duced a currency greatly debased in the reign 
 of William III. But we are told, that, " whilst 
 the hammered money, and pieces clipped within 
 the ring, were permitted to pass for the present 
 necessity of trade, nobody was willing to make 
 
 Diicourse on the curreacy of the C^luuies.
 
 73 
 
 payments in new money, which so much exceed- 
 ed the old in its intrinsic worth ; and therefore, 
 the new silver money, as fast as it issued from 
 the mint and the exchequer, was in a great mea- 
 sure stopt in the hands of the first receiver ; for 
 none were disposed to make payments in the 
 new silver coin at the old standard, when they 
 could do it in clipped pieces so much below it. 
 And those who had no payments to make, kept 
 their new money as medals and rarities in their 
 chests *." 
 
 There is indeed no proposition more evident, 
 or more strongly confirmed by experience, than 
 that two sorts of money cannot remain in circu- 
 lation together, unless their real or intrinsic va- 
 lues are properly, and even minutely, adjusted. 
 
 * A short History t tn- !a>t Parlittiiu'i.t. priiiied UH/9, 
 p. 32- This tract, which we will nsjaiii ha\e occasion to 
 quote, was reprinted in Lord Somers's Collection, where it 
 is stated to have been written by Dr Drake. 
 
 The dollars issued by the Bank or' Ireland were at first 
 delivered to individuals in large quantities : but it was soon 
 found, that they bore, in the North, a premium over notes. 
 The Bank has since issued them in chance only ; and their 
 remaining in circulation at all is probably owing to the 
 sraallness of their number, which makes the collecting 
 of them an object of considerable labour and inconsider- 
 able profit.
 
 Gold at our Mint is rated higher in propor- 
 tion to silver, than it was in France *. Gold at 
 our Mint is, in reality, higher rated in propor- 
 tion to silver, than is authorised by the market- 
 price of gold and silver bullion. Silver, on the 
 contrary, in France was higher rated in propor- 
 tion to gold, than the comparative value of gold 
 and silver admitted. In England, therefore, the 
 standard gold coin became an instrument by 
 which the standard silver coin might be with- 
 drawn from circulation with a profit. In France, 
 on the other hand, the standard silver was pro- 
 fitably used in withdrawing the standard gold 
 from circulation f. 
 
 . * In England gold is to silver as 1 to 15.19. In France 
 it was as 1 to l*^/, -^-; it is now in France as 1 to 15.50. 
 This statement of the proportion between gold and sil- 
 ver in France, is taken from the Thoughts upon a new Sil- 
 ver Coinage, printed in 1798. By Gamier in his Notes on 
 Smith, it is stated to have been in France formerly 14 to 
 1 ; and now 15f to 1. 
 
 It is to be observed, that since this new arrangement, 
 silver has been exported from France. A considerable 
 quantity- was brought into this country last summer. 
 
 f See Harris on Money and Coins, part ii. p. 59- Consi- 
 derations on Money and Bullion, 1772, p. 100. and Postel-
 
 Accordingly, every man must have remarked, 
 that, notwithstanding our penal laws, there is in 
 England hardly any standard silver in circula- 
 tion : Bankers are in the habits of giving a pre- 
 mium for the silver currency, such as it is, and 
 counterfeit silver is abundant *, but counterfeit 
 gold coin rare. Whilst in France almost no- 
 thing was to be seen but silver, all large pay- 
 ments were uniformly made in it : to the Banker 
 a small premium was always given for gold ; and 
 every person who has lived in that country, must 
 at once recollect the numerous complaints of 
 counterfeit Louis, and the uniform purity of sil- 
 ver coins. 
 
 That two sorts of money cannot remain in cir- 
 culation, unless their values be regularly adjust- 
 ed, is a proposition which has been long known 
 and acknowledged. When Henry VIII. sent 
 
 thwayte's Dictionary, article com, in which Sir Isaac New- 
 ton's Report, 1717, is given with the Tables, 
 
 * The state of the silver now current in this country is 
 said to be, sixpences on an average worth 2id. ; shillings, 
 Sid. ; half-crowns, 2s. 2d. ; and crowns, perhaps 4s. 8d. 
 See Thoughts on a new Coinage of Silver, by a Banker, 
 p. 99- Printed 1798.
 
 70' 
 
 from Calais to request the Arch-Duchess of Aus- 
 tria, who then held the government of the Low- 
 Countries, to permit his gold and silver to pass 
 current in her dominions, a little above its true 
 value, she dispatched her master of the mint and 
 assaymaster with instructions to declare, that her 
 suffering the English coin to be current at an 
 over-value would carry away all fine gold, not on- 
 ly in ingots, but also pieces of gold made in the 
 Arch-Duke's mint, to convert them into the coin 
 of England, by which means her subjects would 
 be grievously injured *. 
 
 The annihilation of all silver notes, the re- 
 medy which remains to be considered, is enacted 
 by the 91. chap, of 44. of Geo. III. 
 
 The wisdom of this measure, had it been pre- 
 ceded by regulations calculated to raise the va- 
 lue of Bank paper to par, must appear unques- 
 tionable ; for silver notes, even when issued by 
 Banks in the highest degree of credit, have al- 
 ways been found injurious, from the numerous 
 forgeries they have occasioned f ; and when is- 
 
 * Sec The Centre of the Circle of Commerce, p. 73. 
 Printed 1623. 
 
 f See Mr Mansfield's Evidence, Minutes, p. 54. Mr 
 D'OHer's, ib. p. 85.
 
 77 
 
 sued, as in Ireland, by every shopkeeper who can 
 make his mark, they may be truly stated, in the 
 language of the author of the Discourse on the 
 Currency of the Colonies, " to form an insuffer- 
 " able grievance to tradesmen and the lower or- 
 " ders of the people." 
 
 It is the time and the manner, therefore, in 
 which this measure has been adopted, that can 
 alone excite criticism. 
 
 From the examination before the Committee 
 of the House of Commons, we learn, that, with 
 the exception of the North of Ireland, the circu- 
 lation of the country has been of late carried on, 
 almost exclusively, by silver notes *. Their an- 
 nihilation, therefore, before Bank notes, by wise 
 and prudent management, are restored to par, so 
 that the silver formerly in circulation, and now 
 said to be hoarded f, might again circulate with 
 them, must leave a vacuum of circulating me- 
 dium. 
 
 For the dollars, intended to be issued, cannot 
 be looked to as a means of supplying the silver 
 notes, as no issue is proposed of small coin, 
 (to supply the fractional parts,) adjusted in va- 
 
 * Minutes of the Irish Exchange Committee, p. 80. 
 t Ib. p. 87.
 
 78 
 
 lue to circulate along with them. Besides, the 
 Director of the Bank of Ireland, employed to 
 procure them, states, that the quantity intended 
 to be emitted, is infinitely smaller than what 
 would be requisite for the circulation of that 
 country*. 
 
 In the present state of things, therefore, one 
 of two consequences, almost equally prejudicial, 
 must attend the annihilation of silver notes : 
 they must be either replaced by counterfeit coin, 
 or a momentary stagnation must take place from 
 a want of small currency. 
 
 If the silver paper is supplied by coin, such 
 as can alone be transferable in circulation, then 
 the act must operate as a bounty given by Par- 
 liament to the dealer in counterfeit coin, at the 
 expence of the issuer of I O U's : And this is 
 the consequence which Government must wish 
 and expect ; for Sir Evan Nepean has stated, that 
 dealers of all descriptions would suffer a greater 
 loss from the stagnation occasioned by stopping 
 at once the currency prevalent in the country, 
 than could be suffered by the continuance of the 
 counterfeit coin in circulation f. 
 
 * Minutes of the Irish Exchange Committee, p. 148 
 f See Appendix No. I.
 
 79 
 
 Such are the three measures, which have been 
 devised for the purpose of palliating, nay, it ap- 
 pears, with the hope of redressing, the grie- 
 vances, under which Ireland now labours with 
 respect to its circulation. 
 
 On what principle they have been resorted to, 
 or how they are to be vindicated, it is difficult to 
 imagine. For it is hardly possible to suppose, in 
 this age, with all the opportunities statesmen have 
 of benefiting from past experience, that the Go- 
 vernment of Ireland can give credit to the max- 
 im, that " it is better to do wrong than to do 
 " nothing ;" the principle which Mr Montague, 
 the Chancellor of the Exchequer, avowed in 
 the year 1696, and on which he defended his 
 conduct in the House of Commons *, when he 
 proposed measures of a similar nature. 
 
 Indeed, even the Committee themselves seem 
 to have entertained doubts of all these reme- 
 dies ; for, after suggesting what occurred in 
 support of them, they remark, " that if 
 
 * See An Account of the Proceedings in the House of 
 Commons, in relation to re-coining the clipt money, and 
 fall in the price of guineas, p. 18. Printed 1696.
 
 80 
 
 " their inquiries have failed in enabling them 
 " to propose any effectual remedy, still a reme- 
 4t dy ought to bs sought for by the wisdom of 
 " the House ;'* and then proceed to encourage 
 others to speculation on the subject, by decla- 
 ring, that they cannot give credit " to a posi- 
 " tion so strange, as that the evils which they 
 " have investigated, are entirely without a re- 
 medy *." 
 
 As a general principle, it may be stated, that 
 grievances never exist in relation to money or 
 trade, which loudly call for legislative interposi- 
 tion, but such as originate from legislative enact- 
 ment. It may perhaps, therefore, with justice 
 be considered as a rule for the conduct of Par- 
 liament in inquiries of this nature, never to 
 look beyond their own recent acts to discover 
 the cause and the cure of any economical ca- 
 lamity that has suddenly aggrieved the country. 
 
 Proceeding on this plan, we are at once led to 
 accuse the restriction act, which takes off the 
 natural check to the over-issue of paper, as the 
 cause of the calamity, and to look to the imposi- 
 
 * Report cf the Lxci.an e CXra.uiuce, p. 20.
 
 81 
 
 tion of some artificial restraint on the quantity of 
 paper, as the only means of redressing the evil to 
 which this parliamentary interference has given 
 birth j and it is fortunate, that the experience 
 of past times, whenever a similar grievance has 
 existed, bears ample testimony to the efficacy of 
 this remedy. 
 
 It has been already observed, that in the pro- 
 vince of New England, even in the most advan- 
 ced stage of the depreciation of its paper, a small 
 diminution of the quantity immediately produ- 
 ced a favourable effect upon the state of ex- 
 change ; insomuch, that in the year 1738, when 
 it had got to the advanced rate of 44O, the can- 
 celling, within the year, of a few more bills than 
 were emitted, reduced it to 400. 
 
 Neither is this the only instance in the history 
 of the paper money of our colonies, from which 
 we derive clear proof, that the diminution of pa- 
 per is the effectual means of rectifying an un- 
 favourable exchange occasioned by an over-issue 
 of paper. 
 
 " The case of Barbadoes must, (says the author 
 of the Discourse on the Currency of the British 
 Colonies,) put this assertion beyond all dispute 
 F
 
 with sober-thinking honest men. In the year* 
 1702, by the persuasion of Mr W. from New 
 England, Barbadoes issued L. 16,OOO of bills 
 of public credit. At first, they passed at a dis- 
 count, but no more being emitted, and the pe- 
 riod of cancelling being short, they rose to par. 
 This encouraged them to make an enormous 
 emission of L. 80,OOO of bills on landed securi- 
 ty, at 4 per cent. Paper immediately fell 4O 
 per cent, below silver. By an order from home, 
 they were soon suppressed, and their currency 
 became silver value as before. That province 
 has ever since kept their currency up to procla- 
 mation value, balance of trade in their favour, 
 exchange to Great Britain being generally un- 
 der 33 per cent, the par *." 
 
 The measures taken by the two Banks in 
 Scotland, in the year 1762, form another and a 
 strong illustration of the efficacy of the reduc- 
 tion of the quantity of paper, as a means of re- 
 dressing an unfavourable exchange produced by 
 a depreciation of paper. 
 
 By the author of a letter to J F , 
 
 * JBiscourse on the Currency 01 Uie Colonies, p. 2S.
 
 published at the time, we are informed, that the 
 exchange had risen much above " its natural 
 " course even in times of extremity ; for it is 
 " certain, that the exchange between Londdh 
 " and Edinburgh ought never to exceed one 
 " per cent, j and in strictness, it does not ex- 
 " ceed one per cent, at this juncture : for three 
 " per cent, is not considered as the difference 
 " between specie in London, and equal specie 
 " in Scotland, but between specie at London 
 " and Scotch Bank Bills." 
 
 Under these circumstances, it must have been 
 impossible for the Banks to continue to pay in 
 gold, on demand, without rapidly exhausting 
 their capital. 
 
 In the case of a scarcity of corn, or any other 
 occurrence which gives rise to a balance of debt, 
 a Bank may easily compute how much cash it 
 is necessary for it to provide for the purpose of 
 foreign remittance; but as a depreciation of paper, 
 if a Bank continues to pay in gold, presents an 
 indefinite opportunity of profiting by its folly, the 
 demands upon it must always be unlimited. 
 
 The means by which advantage might have 
 been taken of the Bank of Scotland, while it was 
 in this situation, are so plain and obvious, that it
 
 is surprising how they escaped the intelligence 
 and ingenuity of Sir James Stewart in treating 
 on the subject. 
 
 1. As exchange was at par betwixt Newcastle 
 and London, all bills from thence might be sent 
 to Edinburgh, where L. 1 03 in Bank notes were 
 regularly given for a London bill of L. 1 00. With 
 these notes gold might be drawn from the Bank, 
 and as the expence of conveying coin from Edin- 
 burgh to Newcastle was. only a half per cent., a 
 profit of two and a half might evidently be se- 
 cured *. 
 
 2. Every individual had it in his power, by 
 establishing a fund in London, to sell drafts for 
 Bank notes at three per cent, premium. These 
 might be immediately exchanged, and as the 
 money could be conveyed to London at the ex- 
 pence of one per cent., a profit of two per cent, 
 resulted from the operation. It is plain too, that 
 as this might be repeated once a week, an oppor- 
 tunity was afforded of making upwards of cent, 
 per cent, per annum on the capital employed. 
 
 * It appears from the Considerations, &c. already quoted, 
 that this trade from Newcastle \vas actually carried on, p. 
 12.
 
 3. English goods might be sold for Bank 
 notes at a reduced price of two per cent without 
 any loss to the merchant, as he was sure to re- 
 pay himself by the gain he could make in the 
 purchase of gold from the Bank *. 
 
 It was the experience of these practices, that 
 probably induced the author of the Letter we 
 have quoted, to approve of the Banks restricting 
 their cash accounts, and opening their books to 
 receive loans, by which they in effect called in 
 their notes without violence, and rapidly brought 
 their paper to par. For he well observes, that a 
 Bank's continuing to circulate paper, and pay in 
 gold, when its notes are at a discount, is an ope* 
 ration similar in effect to cutting off the branch 
 on which one stands f. 
 
 As the case of the Bank of England, at the 
 conclusion of the 1 7th century, bears the most 
 accurate resemblance to the present situation of 
 the Bank of Ireland, so it exhibits, in the 
 strongest point of view, the necessity of dirni- 
 
 * This practice seems, from what Sir James Stewart says, 
 (v. II. p. 400, Dublin ed.) to have been also resorted to. 
 
 t This Letter to J . F has been ascribed to 
 
 Patrick Lord Eli bank.
 
 86 
 
 nishing its paper as the only means of curing 
 the depreciation that has taken pkce, as well as of 
 remedying the concomitant calamities of coun- 
 terfeit coin, and an unfavourable exchange. 
 
 The liberality of the Bank of England, soon 
 after its institution, in aiding the public, and in 
 supplying the wants of individuals, as well as the 
 effects of this conduct in bringing the paper of 
 the Bank to a discount of 17 per cent, have 
 been already stated. Contemporary writers, ig- 
 norant of the inevitable and immediate conse- 
 quence of paper in this state on the coin in circu- 
 lation, expressed then- surprise, that the money 
 of the country should be so suddenly adultera- 
 ted * 
 
 * " And how dishonourable it is to the king and 
 kingdom, that our money should be so suddenly debased to 
 such a shameful degree, foreign states will soon determine/' 
 See The Regulating of Silver Coin made Practical and 
 Easy, &c. Printed 1696, p. 8. 
 
 In the King's speech, November 1690, the state of the 
 coin is first recommended to the consideration of parlia- 
 ment in the following terms : " 1 must likewise take notice 
 of a great difficulty we lie under at this time, by reason of 
 the ill state of the coin ; the redress of which may perhaps 
 prove a further charge to the nation ; but this is a matter
 
 87 
 
 Numerous schemes were suggested in various 
 ingenious publications for the remedy of this 
 evil ; and measures were adopted by parlia- 
 ment, some of which we have already stated : 
 but the exchange with the continent remained 
 unfavourable, counterfeit money was uniformly 
 found in circulation, the new coin disappeared, 
 and Bank paper continued in a state of depre- 
 ciation till the latter end of the year 1696, 
 and beginning of 1697, when " parliament took 
 " into consideration, by what means they might 
 " restore the credit of the Bank of England, 
 " which was then at a low ebb *." 
 
 For this purpose, two measures seem to have 
 been adopted. In the first place, all deficiencies 
 were made good by general funds appropriated 
 to their payment till the 1 st of August, 1 7O6, to 
 the amount of five millions one hundred and 
 
 of such general concern, and of so very great importance, 
 that I have thought fit to leave it entirely to the considera- 
 tion of my parliament." 
 
 * See a Short History of the late parliament by Dr 
 Drake, 1699, p. 49.
 
 88 
 
 sixty thousand four hundred and fifty-nine 
 pounds, and some of the deficiencies were 
 immediately provided for *. In the second 
 place, the parliament agreed to enlarge the com- 
 mon capital stock of the Bank of England, by 
 admitting new subscriptions to be made good in 
 tallies and Bank notes. The proportion was four- 
 fifths of the first, and one-fifth of the lastf. 
 Both were operations, which obviously tended, 
 though in different ways, to the salutary purpose 
 of abridging the Bank notes in circulation. 
 
 This expedient of diminishing the notes, it is 
 said by the historian who has been quoted, " was 
 " projected, with all the prudence imaginable ; 
 " and though many persons who were interested 
 " in it, could not presently apprehend the rea- 
 
 * See a Postcript to a Discourse on Credit, by Dr 
 D'Avenant, p. 5. ed. 1701. 
 
 t See 8. and p. of William III. cap. 20. An act for 
 making good the deficiencies of several funds therein men- 
 tioned, and for enlarging the capital stock of the Bank of 
 England, and for raising the PUBLIC CREDIT. 
 
 See also a Short History of the late Parliament, p. 50. 
 And Remarks on the Bank of England, p. 7. Printed 
 1705.
 
 89 
 
 " sonableness of it, yet the advantages they have 
 " since received, have fully convinced them that 
 " no other way could have been found out to 
 " have retrieved their sinking credit. For the 
 " value of two hundred thousand pounds in Bank 
 " notes being sunk by the new subscriptions, the 
 " rest, as it was reasonable to believe they would, 
 " began presently to rise in worth." 
 
 The credit of the Bank, he adds, " began to 
 " recover apace, till in a short time their notes 
 " were all equal with, and their bills that bore 
 " interest, better than money. By this means, 
 "the face of affairs was in a short time much 
 " changed for the better ; credit began to re- 
 " vive, money to circulate on more moderate 
 " terms. Foreign exchange was less to our disad- 
 " vantage, and soon after at an equality. The 
 " people began to think better of our condition, 
 " and were convinced of the wisdom of our ad- 
 " ministration, and of the care that was taken of 
 " them V 
 
 These are the authorities on which it is sub- 
 
 * Short History of the late Parliament by Dr Drake, 
 p. 5051.
 
 90 
 
 mined to parliament and the public, that in eve- 
 ry case where paper has been depreciated, pal- 
 liatives have been ineffectual ; that all expedients 
 to meliorate the exchange, and restore credit, 
 have constantly proved abortive, unless a part of 
 the paper has been withdrawn from circulation : 
 And it is on these authorities the opinion is with 
 confidence rested, that a diminution of the notes 
 of the Bank of Ireland is the sole remedy which 
 can be resorted to, with hopes of ultimate and 
 permanent success, in the present alarming state 
 of the circulation of that country. 
 
 IV. Of the means of effecting a reduction of the 
 paper of the Bank of Ireland. 
 
 Before proceeding to state shortly the various 
 means by which Banks may be made to limit 
 their issues, and withdraw a part of their paper 
 from circulation, a preliminary measure presents 
 itself, which seems indispensible in the case of 
 the Bank of Ireland. 
 
 For if it be wise and prudent, in the present 
 state of that country, to limit the circulation of 
 it's Bank by measures calculated to withdraw a 
 part of the notes now issued, it must appear in-
 
 91 
 
 decorous, and highly improper, that a legislative 
 encouragement to the extending of its circulation 
 should be allowed to subsist. 
 
 The clause, however, in the Act by which the 
 Bank of Ireland is established, compelling it to 
 discount under the legal rate of interest, must, 
 since the imposition of the restriction, be consi- 
 dered in this point of view ; and its repeal is 
 perhaps a measure of more importance than may 
 at first sight be imagined. 
 
 Under the subsisting regulations, the Bank of 
 Ireland has been in the practice of discounting 
 at the rate of 5 per cent, to private Banks and 
 Bankers, who themselves issue notes ; and these, 
 in their turn, circulated their paper, by dis- 
 counting at 6 per cent., the legal rate of interest 
 in Ireland ; so that the Bank in reality has fiu> 
 nished the means, by which private bankers have 
 carried on, or extended, the circulation of their 
 notes. 
 
 This practice is stated upon private informa- 
 tion. Of its existence, however, there can be 
 no reason to doubt, as it is a necessary conse- 
 quence of what we learn in the evidence printed 
 by the House of Commons.
 
 Mr Roach states, that the facility of borrow- 
 ing or getting discounts is greatly increased by 
 the extended issue of paper *. And Mr Frank 
 informs the Committee, that he has known an 
 individual, in consequence of the extensipn of 
 credit, increase his imports from L. 10,OOO to 
 L. 8O,OOO per annum f. 
 
 To suppose that this facility of extending their 
 transactions, should be confined to those en- 
 gaged in foreign commerce, is impossible. There 
 can be no reason why bankers, and those con- 
 cerned in issuing notes throughout the country, 
 should not with equal facility avail themselves of 
 it. And that this is the case seems implied by 
 the evidence of Mr Beresford and Mr Marshall, 
 who agree in thinking that the diminution of the 
 paper of the Bank of Ireland would tend to re- 
 duce the paper circulated by private bankers {. 
 
 The repeal, therefore, of the clause compel- 
 ling the Bank of Ireland to discount at 5 per cent., 
 pending the restriction imposed by parliament, 
 seems a necessary preliminary to any measure 
 
 * Minutes of the Irish Exchange Committe'e, p. 86. 
 tlb. p. 131. J Ib. p. 109, IIT.
 
 that can be proposed for withdrawing their pa- 
 per from circulation. 
 
 The Committee on the Irish exchange have, in 
 their Report, declared in express terms, " that 
 it is incumbent on the Directors of the Bank of 
 Ireland, and their indispensible duty, to limit 
 their paper at all times of an unfavourable ex- 
 change during the continuance of the restriction, 
 exactly on the same principle as they would 
 and must have done in case the restriction had 
 not existed ; and that all the evils of a high and 
 fluctuating exchange must be imputable to them 
 if they fail to do so *." 
 
 They have neither, however, proposed the 
 repeal of this clause, which forms an induce- 
 ment to the extension of the paper in circula- 
 tion, nor have they suggested any extraordinary 
 measures for its immediate reduction j and it 
 seems impossible that the extended quantity 
 which is now issued can be diminished, with the 
 degree of rapidity expedient for the country, by 
 the ordinary means to which the bank was in the 
 
 * Report of the Irish Exchange Committee, p. 1.9.
 
 habits of resorting, on the occurrence of an unfa- 
 vourable exchange antecedent to the restriction. 
 The extraordinary means to which Banks 
 have heretofore had recourse to reduce an ex- 
 travagant circulation of paper, are, 
 
 1. Calling in the debts due by the govern- 
 ment, for in every country it has been found to 
 be the greatest debtor of the public Bank ; and 
 this is a measure which can give rise to no 
 extended mercantile distress. It was one of 
 the means, in conjunction with others', success- 
 fully resorted to by the Bank of England in the 
 year 1696. 
 
 2. Borrowing money on loan is a method, by 
 which a Bank may call in its notes without the 
 hazard of distressing its creditors *. It was used 
 for this purpose by the banks in Scotland in 1 762; 
 and the Directors of the Bank of England seem to 
 have been at one time so desirous of constantly 
 possessing extraordinary means of calling in 
 their notes, as to agree annually for a loan to the 
 extent of a million (usually called the circulation) 
 payable at any time within the year when called 
 for, on which account 10 per cent, was to be 
 
 * This exprdient is mentioned and rccornmenued by 
 Sir John Barnard.
 
 deposited by the subscribers, to be forfeited on 
 failure of payment, if a call was made *. 
 
 3. Increasing' the capital of the Bank. This 
 manner of calling in their notes was practised 
 with benefit both by the Banks in Scotland and 
 the Bank of England, under circumstances si- 
 milar to those of the Bank of Ireland. 
 
 If it be asked, which of these measures ought to 
 be preferred as the easiest and speediest means of 
 reducing the circulation, and restoring the credit 
 of the Bank of Ireland, the reasonable answer 
 appears to be, any or all ; and that it is indifferent 
 which of them be selected, as the reduction of 
 the paper, not the means by which it is reduced, 
 is the only thing essential to restore credit. 
 
 * This practice is stated on the authority of The Univer- 
 sal Merchant, a work quoted by Dr Smith, (Wealth of 
 Nations, V. I. p. 26l, qto. ed.) who styles the author, Mr 
 Meggins, a judicious and experienced merchant, on whom 
 reliance may be placed. The loan is by Mr Meggins said to 
 have been made up by subscriptions of L. 1000 each : For 
 the 10 per cent, paid in, 6'.^ per cent, interest was allowed ; 
 and for all future calls 4 per cent, was to be paid. The 
 subscription of L. 100 paid in was generally disposed of at 
 a premium of '2\ per cent. See Universal Merchant, con- 
 taining the Rationale of Commerce in Theory and Prac- 
 tice, p. 30. printed 1753.
 
 To what extent the paper of the Bank of Ire- 
 land ought, by these means, to be reduced, is a 
 question, the solution of which may be attended 
 with some degree of difficulty. Sir William 
 Petty has perhaps gone too far in saying, that 
 the quantity of money sufficient for any state may 
 even be guessed at * ; but certainly there is no 
 ground on which this problem can, under any 
 circumstances, be accurately decided. The Di- 
 rectors of the Bank have already represented the 
 wealth and trade of Ireland to be increased, and 
 to require, on that account, a greater quantity 
 of circulating medium f. In this assertion they 
 
 * Sir W. Petty's Quantulumcunque concerning Money, 
 Question 25. 
 
 f The proposition that an increase of wealth requires a 
 proportional augmentation of money, in the shape of coin or 
 bank notes, seems to be considered by the Directors as indu- 
 bitable. In the following passage, however, the converse of 
 it is maintained by Quesney, one of the ablest writers on po- 
 litical economy. " On doit meme prt-sumer que le pecule 
 d'une nation pauvre doit etre a proportion plus considerable 
 qne celui d'une nation riche: car il ne leur en reste a 1'une 
 et a 1'autre que la somme dont elles ont besoin pour leur 
 vent, et pourleurs achats. Or chez les nations pauvres on 
 a beaucoup plus besoin de 1'entreraise dc 1'argeiit dans le 
 commerce; il faut y payer tout comptant, parceque Ton ne 
 peut s'y fier a la pmmesse de presque persoune." Septi- 
 vme observation sur le Tableau oeconoraique.
 
 97 
 
 must be joined by all those who have extended 
 their transactions, in consequence of the recent 
 facility of obtaining credit ; and the moment a 
 proposal is made to diminish the paper in circu- 
 lation, the prejudices and interests of both must 
 naturally lead them to concur in proclaiming 
 the ruin of the country to be the sure conse- 
 quence of the measure. 
 
 Those, however, who are capable of calmly 
 considering this subject, ought always to recol- 
 lect, that if the proposed reduction of Bank notes 
 succeeds, (as it uniformly has done,) in bringing 
 the paper which remains in circulation to par, the 
 gold and silver that is hoarded must again come 
 into play ; and this is no mean resource, as there 
 must even at present be a great deal of coin in 
 Ireland. 
 
 For experience tells us, that though an over- 
 flow of paper has always caused the standard 
 coin to be withdrawn from circulation, it has 
 rarely^banished it from the country where it was 
 intended to circulate. 
 
 During the existence of Mr Law's Royal Bank 
 in France, the coin, it is well known, completely 
 disappeared; but the moment the arret of the 1st 
 May 1720 burst the bubble, a sufficiency of coin
 
 must have appeared for the conduct of all busi- 
 ness ; for Sir James Stewart tells us, that the fol- 
 lowing day a man might have starved with a 
 hundred millions of paper in his pocket *. 
 
 The coin of France again vanished during the 
 late revolution ; but the assignats were no soon- 
 er annihilated, than it returned to circulation, 
 and that apparently unimpaired in quantity, as 
 till within the last two years no new or additional 
 coinage was thought of. 
 
 D'Avenant also informs us, that, to the as- 
 tonishment of all mankind, notwithstanding the 
 general opinion that all our coin had been ex- 
 ported, there turned out to be L. 3,40O,OOO of 
 money hoarded in England in the reign of King 
 William f. 
 
 The peculiar situation of Ireland cooperates 
 with these historical facts, to make us believe, 
 that the coin existing in that country, antece- 
 dent to the restriction, must rather be increased 
 than impaired. 
 
 Men may be always presumed to act, in rela- 
 
 * Vol. 2d. Irish edition, p. 52. 
 
 f VVhitworth's edition of D'Avenant's Works, vol. j. 
 p. 264-.
 
 99 
 
 tion to money, as their interest dictates ; and the 
 state of the exchange between England and Ire- 
 land for bills payable in gold, shews, that, since 
 the restriction, there has been but a very short 
 period when gold could be carried out of Ireland 
 with profit. Indeed the general balance of re- 
 mittance, during the last six years, has been so 
 much in favour of Ireland, as to secure a profit 
 on the importation of gold into that country, and 
 to render the exportation of it, without a loss 
 of 2 or 2| per cent, impossible*. 
 
 Setting aside, however, all idea of the aid 
 likely to be derived from the coin returning into 
 circulation, there is one principle, on which the 
 paper issued by the Bank of Ireland may be li- 
 mited, that cannot be objected to, even by the 
 advocates of an extended circulation in Ireland. 
 
 Though the trade of that country has been 
 stated to have increased, nobody has presumed 
 to insinuate, that, since the restriction of the 
 Bank, it has proportionally extended itself to a 
 greater degree than the trade of England. It fol- 
 
 * See Appendix M. to the Minutes of the Irish Ex- 
 change Committee, containing a Statement of the Rate of 
 Exchange between England and Belfast, where gold alone 
 circulates.
 
 100 
 
 lows, therefore, that the paper of the Bank of 
 Ireland might be reduced from L. 3,OOO,OOO, the 
 sum now in circulation, to L. 1 ,OOO,000 ; as, after 
 such diminution, there would still be an increase 
 of its circulation, nearly proportional to what 
 has taken place in the circulation of the Bank 
 of England since that time *. 
 
 The reduction of L. 2,OOO,OOO, which on this 
 principle would become necessary, might per- 
 haps be most readily effected by compelling Go- 
 vernment to pay in Bank notes what may be due 
 by them f. The capital of the Bank may then 
 be increased to the extent of one half of the 
 sum that remains to be recalled ; and the other 
 half may be provided for by opening a loan. 
 For example, if it should appear that Govern- 
 ment owes the Bank L. 60O,OOO ; notes to that 
 
 * This is stated in round numbers. The issue of the 
 Bank of Ireland, preceding the restriction, was to the ex- 
 tent of L. 600,000 ; the issue of the Bank of England was 
 then L. 10,416,520, it is now L. 17,920,450 ; it follows, 
 therefore, that the accurate proportional increase would 
 be L. 1,032.232. 
 
 f Though Mr Colville states in his Evidence, that the 
 Bank has been liberal in accommodating Government, the 
 sum f its advances does not appear in any part of the 
 Proceedings of the Committee.
 
 101 
 
 extent may be recalled by enforcing payment 
 of that sum. L. 7OO,OOO of the remaining 
 L. 1,400,000 may be withdrawn, by the capital 
 of the Bank being increased to that extent ; and 
 the other L, 7OO,OCO may be taken out of circu- 
 lation by a loan. 
 
 The terms of the loan might easily be made 
 such as to insure its being filled up. It might 
 hold forth the obligation of repayment within 
 three years, or sooner, at the option of the 
 Bank, either in gold or in notes of the Bank of 
 England, if the restriction is not at that time 
 done away, with legal interest at the rate of 6 
 per cent, per annum. 
 
 By these means the contributor would have 
 an interest of 6 per cent. ; and as Irish Bank 
 notes are in reality at a discount of 1O per cent, 
 he would also have a premium to that extent ; 
 whilst the Bank Directors, who say that their 
 notes are not at a discount, could only complain of 
 being obliged to borrow at legal interest ; where- 
 as, if the means of restoring credit were even to 
 require much greater sacrifices on the part of 
 the Bank, the Proprietors could not with justice 
 remonstrate, considering the profits they have 
 shared by the bonus and augmented dividends.,
 
 102 
 
 that have been paid to them, as well as by the enor- 
 mous rise in the price of stock*, and the calamities 
 which the increase of their gains has produced. 
 
 All these measures, however, would avail no- 
 thing, unless means are adopted by the Legis- 
 lature, to prevent the Bank of Ireland from 
 emitting paper as fast as it is recalled. 
 
 This, perhaps, maybe best effected by imposing 
 a legislative restriction on the Bank of Ireland, 
 to limit their issues during every three months, 
 in such a manner, that the whole notes in cir- 
 culation shoulcl at no one time exceed a sum bear- 
 ing the same proportion to L. 6OO,O'/O f, that the 
 sum issued by the Bank of England, during the 
 three preceding months, bore to L, 10,416,520 J. 
 
 This is suggested as a preferable means for 
 regulating the issues of the Bank of Ireland, to 
 any that during the war can be inferred from 
 the state of the exchange with London ; as that 
 must be always at an artificial rate, as long as ex- 
 tensive loans are negociated in this country, and 
 annually remitted to Ireland. 
 
 * Appendix, No. IV. 
 
 t Total issue of the Bank of Ireland antecedent to the 
 restriction. 
 
 I Ditto of the Bank of England.
 
 103 
 
 It is suggested too on the presumption, and 
 with full confidence, that the Directors of the 
 Bank of England will conduct themselves with 
 prudence in the limitation of their issues. To 
 the Bank of England it is not intended to im- 
 pute any blame. Under circumstances similar 
 to those in which the Directors were placed by 
 the restriction, experience could alone disclose 
 the extent to which their circulation ought to 
 be carried. 
 
 When we consider that gold, by the restric- 
 tion, was banished from circulation ; and recol- 
 lect, that in the year 1 772, when the light mo- 
 ney was recalled, it was demonstrated, that there 
 existed in this country upwards of 20,OOO,OOO 
 in gold, they seem justified a priori in thinking, 
 that they might with safety extend their circula- 
 tion from L. 10,416,520 to L. 1 7,920,450. 
 
 Experience, however, has shewn, that they 
 have gone too far. It has appeared in evidence, 
 that their paper is at a discount of nearly 2 per 
 cent. * : and the Secretary of State, in his re- 
 cent circular letter to the Lords Lieutenant, has 
 
 * Minutes of the Exchange Committee, p. 6 and 14.
 
 104 
 
 announced the existence of an alarming increase 
 of base silver coin throughout the country * ; 
 the sure, the uniform, and the invariable, atten- 
 dant of paper money, brought into a state of de- 
 preciation by an over issue. 
 
 On Lord Hawkesbury's letter there is no oc- 
 casion for comment. We will leave it to the con- 
 sideration of Mr Canning, who (if he is not too 
 much occupied in sounding the praises of Mr 
 Pitt's new friend, Mr Addington,) may, if he 
 judges right, found upon it, in the present session 
 of parliament, a criticism on his Lordship's ca- 
 pacity to execute the office of Secretary of State 
 for the Home Department, similar to that he 
 pronounced during the last session, on his ca- 
 pacity for executing the dudes of the Foreign 
 Department f. 
 
 * See Appendix, No. V. containing Circular Letter from 
 the Secretary of State's Office to the Lords Lieutenant, 
 dated Whitehall, December 1SG4-. 
 
 t The clauses of the 15. and \6. Geo. II. c. 28. which 
 the Secretary of State wishes the Lords Lieutenant to en- 
 force, are inserted in the Appendix, No. V. On consi- 
 dering them it will clearly appear, that every man who 
 makes any payment in silver, must subject himself to the 
 penalties they inflict. The value of our current silver has
 
 105 
 
 The Secretary of State's letter is here alluded 
 to, solely for the purpose of remarking, that, 
 conjoined with the evidence given before the 
 Committee, it must produce a conviction, that 
 the Bank of England has extended its paper be- 
 yond the bounds of discretion. It is probable, 
 however, that it may still be reduced, as much 
 as is necessary, by the usual means of limiting 
 discounts and loans, which they are accustom- 
 ed to practise. 
 
 After the warning they have got, the Direc- 
 tors of the Bank of England must be convinced, 
 from experience, that they cannot, with irn- 
 
 been stated, Note, p. 75. During the present reign, there 
 has been only L. 63,419 of silver coined down to the year 
 1797, a small quantity of which only has been issued, and 
 the little that has been in circulation, immediately disap- 
 peared : for, as Dr Smith observes, (Wealth of Nations, 
 quarto ed. p. 52. vol. i.) there was a profit in melting it 
 down, in order first to sell the bullion for gold coin, and 
 afterwards to exchange this gold coin for silver coin, to 
 be melted down in the same manner. The consequence is, 
 that there is no silver coin in circulation, but such as must 
 subject the person who pays it to the penalty of the law. 
 
 If the account given in the Newspapers be true, the So- 
 licitor of the Mint, since the publication of the Secretary 
 of State's letter, seems to have assumed a power, by which 
 he may seize and retain all the silver no\v circulating iii the 
 kingdom. See Appendix, No. V.
 
 106 
 
 punity, refrain from taking steps to diminish 
 their circulation. They have the fate of Ireland 
 before them, and the interference of Parliament, 
 if they persevere in increasing their paper, must 
 become necessary. 
 
 Indeed it is impossible, on general principles, 
 to approve of the conduct of Parliament in ori- 
 ginally passing the act restraining the Bank 
 from making payments in cash, unaccompanied 
 with a clause limiting its issues. 
 
 By so doing, the Bank of Ireland have prac- 
 tically explained that Parliament delegated the 
 power of taxation, to men who had an opportu- 
 nity of profiting by the extent of the tax they 
 imposed. 
 
 For the Directors, by exerting with vigour the 
 power with which they have been thus invested, 
 have made its effects apparent. By increasing 
 their issues, they have brought Bank Notes to a 
 discount of 10 per cent. ; which has had the imme- 
 diate effect of imposing a tax to that amount on 
 all salaries and fixed payments throughout that 
 country ; whilst by this means, besides giving 
 extended discounts and other accommodations to 
 all their friends, they have raised their divi-
 
 107 
 
 dends from six and one half, to seven and a 
 half per cent. they have given to the proprie- 
 tors a bonus of five per cent., and increased the 
 price of Bank stock from ninety to one hundred 
 and forty *. 
 
 Many people have thought that taxation is a 
 pursuit, in which Parliament has not been inac- 
 tive. But there are few who will not agree in 
 thinking, that if the Ministers had been the Di- 
 rectors, and the House of Commons the proprie- 
 tors, of a company who were to have gained by 
 every tax they imposed, we should have expe- 
 rienced such a superior degree of activity, as 
 must long ago have exhausted the resources of 
 this country. 
 
 * $ec Appendix, NO. IV.
 
 APPENDIX. 
 
 No. I. 
 
 Extract from the Minutes of the Exchange Commit- 
 tee, p. 79- 
 
 DUBLIN, March 28. 1804. 
 
 AT a Meeting of the Right Honourable the Lord Mayor 
 and Board of Aldermen, to take into consideration the 
 present state of the silver coin, they resolved, That the 
 Lord Mayor and the superintendant Magistrate, (Alderman 
 Alexander) be requested to wait on the Right Honourable 
 Sir Evan Nepean, Bart, and communicate with him re- 
 specting the same, and then adjouined until this day; 
 and, having again met, pursuant to said adjournment, the 
 Lord Mayor communicated to the Meeting the following 
 letter which he had received from Sir Evan Nepean, and 
 which they lay before their fellow-citizens : 
 
 Dublin-Castle, March 28. 1804. 
 
 MY LORD, 
 
 The fullest consideration has been given to your Lord- 
 ship's representation, of the inconvenience occasioned to 
 the inhabitants of the city of Dublin, by the badness of the 
 silver coin, and the difficulty attending the purchase of all 
 articles of small value.
 
 110 
 
 Your Lordship may be assured, that it is the anxioir? 
 wish of Government, to afford every possible degree of ac- 
 commodation to the inhabitants that the circumstances will 
 admit of; and, with that view, measures will be taken fov 
 procuring dollars and other coin to supply the circulation; 
 but, from a variety of considerations, it must be obvious 
 to your Lordship, that any measure of that nature cannot 
 be carried into execution for a considerable time to come. 
 In the meanwhile, it appears expedient, that the impossibi- 
 lity of procuring an immediate supply, and the necessity for 
 some circulating medium, until such supply can be procu- 
 red, should be generally understood ; as an opinion, that 
 the silver medium now in circulation, would be immediate- 
 ly cried down, has probably, in a great measure, occasion- 
 ed the refusal to receive in payment this coin. 
 
 It must be obvious, that greater loss must be suffered by 
 dealers of all descriptions, from the stagnation which would 
 be occasioned by stopping at once the currency of this 
 coin, without any other medium to supply its place, than 
 could be suffered by a continuance of the practice which 
 has so long prevailed, and that the labouring people and 
 the poor must suffer severely. I have the honour to be, 
 my Lord, your Lordship's most obedient, humble servant, 
 
 EVAN NEPEAN. 
 To the Right Hon. the I,ord Mayor, S^c. 
 
 On Saturday last, (March 31.) the following notice was 
 distributed and published throughout the different markets 
 and principal streets by beat of drum : 
 
 At a Meeting of the Right Honourable the Lord Mayor 
 and Board of Aldermen, held at the Mansion-House this 
 morning, to take into consideration the present state of 
 the silver coin, they requested the Lord Mayor, Recorder,
 
 Ill 
 
 and Superintcndant Magistrate, should wait on the Right 
 Honourable Sir Evan Nepean, Bart, to present to him the 
 distresses of the Artificers and Manufacturers, since the 
 silver coin was refused in payment, when Sir Evan Ne- 
 pean was pleased to hand to them the following note for 
 public communication : " That there is no intention at 
 " present, of ordering the discontinuance of the receipt of 
 " the best of the silver now in circulation at the public 
 " offices, as usual." Resolved, therefore, that we recom- 
 mend it to our fellow-citizens, to take in payment the best 
 of the silver coin, now in circulation, as usual. 
 
 In the letter, what do you suppose is meant by the best 
 of the silver ? I suppose, Sir Evan Nepean means, that 
 silver which I have described to be worth 9s. for a guinea's 
 change. Minutes of the Irish Exchange Committee, p. 
 JSO.
 
 112 
 
 No. II. 
 
 Extract from an Essay for Regulating the Coin, p. 8. 
 Printed 1696. 
 
 " I have gone to several goldsmiths in London, and have 
 got them to take out of their counters, a bag of one hun- 
 dred pounds (as came to hand) which, upon trial, I haw 
 found at one place to weigh 
 
 Oz. dw. gr. 
 
 A bag of L. 100 230 13 6 
 
 Another place L. 100 weighed .... 222 015 
 
 Another place 198 1? O 
 
 Another place 190 
 
 Another place . . . .* 182 3 
 
 Another place 174 11 20 
 
 11)8 5 17 
 
 The six hundred pounds weighing in all, one thousand 
 one hundred and ninety eisiht ounces, five penny- weights, 
 and seventeen grains ; and is no more than what three 
 hundred and ten pounds in milled money will weigh. 
 
 I am informed the money paid into the Exchequer, doth 
 weigh from fifteen (and seldom the L. 100 reacheth) to 
 twenty pounds weight; so that the very best brought in 
 there, d jth not weigh two-thirds of what it ought to do, 
 and the money paid into the Exchequer is supposed a great 
 part of it to come from the country. 
 
 But as it is believed, that the money in the country is
 
 Ill 
 
 generally not the one half so bad as it is in and near Lon- 
 don, I have procured an account to be sent me from the fol- 
 lowing cities, from- whence, I am informed, that one hun- 
 dred pounds doth weigh on trial of two bags in each place, 
 to be, viz. 
 
 Oz. dw. gr. 
 
 In the city of Bristol, one bag of L. 100 weigh- 
 ed 240 
 
 Another weighed 227 15 
 
 In the city of Cambridge, a bag of L. 100 weigh- 
 ed 203 5 10 
 
 Another weighed 211 19 
 
 In the city of Exon, a bag of L. 100 weighed .180 7 
 
 Another weighed 192 3 
 
 In the city of Oxford, L. 100 in half crowns 
 
 weighed . . 216 10 
 
 One hundred in shillings . . . , 198 15 
 
 Oz. 1669 1 20 
 
 The eight hundred pounds weighing sixteen hundred and 
 sixty-nine ounces, one penny-weight and twenty grains ; 
 and is not more than four hundred thirty one pounds 
 fifteen shillings of milled money will weigh, and but a very 
 small difference between the weight of the money in Lon 
 dori and the country." 
 
 H
 
 112 
 
 No. III. 
 
 A List of Bankers and persons issuing Small Notes in 
 the district of Youghall, 1804. Extracted from the 
 Appendix to the Minutes of the Irish Exchange 
 Committee. 
 
 Names. 
 
 Occupations. 
 
 Geo. and Rd. Giles 
 
 Samuel Allen . . 
 Samuel Johnston 
 James Johnston . 
 Shyri Lidley 
 Robert Christian , 
 Patt O'Neil 
 Edm. Walsh . . . 
 Thap. Graves . . 
 Thomas Jones. . , 
 Thomas Bateman 
 John Roch . . . . , 
 Joseph Bateman . 
 John Howell . 
 
 Thomas Brown . 
 John Tanner . . 
 Mary Walsh . . . 
 Patt Barry 
 Nichol Marks . . 
 Thomas Gimblet 
 Mat. Herman 
 Thomas Harlow 
 WilliamPearce.. 
 
 Mich, Walsh 
 
 William Kenna 
 Eliz. Lims. 
 Richard Stanciish 
 
 Registered Bankers ibsue Silver 
 
 Notes and Post Bills 
 Merchant small J. 0. 
 Shopkeeper 
 Stationer 
 Grocer 
 Ditto 
 
 Hardware shop 
 Baker 
 
 Corrifactor and miller 
 Grocer 
 Shopkeeper 
 Grocer 
 Ditto 
 Chandler Issuing the Notes of his 
 
 late brother 
 Grocer 
 
 Cabinet maker 
 Baker 
 Grocer 
 
 Shoemaker and spirit retailer 
 Shopkeeper and grocer 
 Grocer and retailer of spirits 
 Linen-draper 
 Wool-comber 
 Grocer and spirit retailer 
 Grocer 
 Ditto 
 Apothecary
 
 113 
 
 Names. 
 
 Occupations. 
 
 
 Chandler and grocer 
 Grocer and spirit retailer 
 Grocer 
 Ditto 
 Spirit retailer 
 Ditto 
 Ditto 
 Ditto 
 Linen-draper 
 Baker 
 Miller 
 Clerk to cornfactor 
 Strong water retailer 
 Cloth manufacturer 
 Malster 
 Brewer 
 Corn merchant 
 Tobacco manufacturer 
 Shopkeeper 
 Grocer 
 Shopkeeper 
 Ditto 
 Ditto 
 Baker 
 Innkeeper 
 Ditto 
 Wool-comb e 
 Ditto 
 Shopkeeper 
 Miller 
 Tanner 
 Coin merchant^ These men issue 
 Ditto J notes at nine hil- 
 Ditto t ,mgs, six shil- 
 Ditto V'iivjs, and three 
 Ditto ( shillings and 9jd 
 Ditto \ Some stamp- 
 
 Shunkppnpr ~ p.<\. 
 
 Robert Lindsay 
 Edm Wall 
 
 
 
 
 
 
 William Fenton .... 
 D Connelly 
 
 
 
 Joseph Mullany .... 
 Marcus Lynch, Esq.* 
 Sam. McCale, Esq. . 
 Edm. Copinger, Esq. 
 Stephen Copinger, Esq 
 
 Henry Wigmore 
 
 Margaret Adams 
 
 
 William Hannon .... 
 Richard Burrows .... 
 John Cunningham 
 
 
 TI r 
 
 
 Richard Nugent 
 William Galway ... 
 Edmond Barrow 
 
 Thomas Buckley ... 
 
 Laurence Foulks ...
 
 Names. 
 
 Occupations. 
 
 Michael Landers 
 
 Corntactor 
 
 Dennis Connelly 
 Laurence Dennahy 
 Laurence J. Dennahy 
 
 Ditto 
 Spirit dealer 
 Ditto and cornfactor 
 
 N. B. Except the seven persons circumflexed, and Messrs Giles, 
 all the rest issue I. 0. U's, from 6s. down to 3-J. 
 1. Issuing Bank Notes and Post Bills. 
 7. Issuing Silver Notes of 9s. 6. and 9s. 3$d. each. 
 62. Issuing I. O. U's. 
 
 70. Total.
 
 115 
 
 No. IV. 
 
 Statement of the Prices and Fluctuations of the Stock of the 
 Bank of Ireland, in each Month, from the commencement 
 of the year 1798, to the end of the year 1804. 
 
 1798 
 
 
 
 January 
 
 90 
 
 dividend 6| per cent. 
 
 February 
 
 90 
 
 
 March 
 
 90 
 
 
 April 
 
 90--9290 
 
 
 May 
 
 9092 
 
 
 June 
 
 92 
 
 
 July 
 
 9293 
 
 
 August 
 
 105 
 
 
 Septeni. 
 
 107106 
 
 
 October 
 
 106105 
 
 
 November 
 
 112115 
 
 
 Decem. 
 
 115 
 
 
 1799 
 
 
 
 January 
 
 115114 
 
 
 February 
 March 
 
 113 105 
 106$ 105 
 
 
 April 
 
 105106 
 
 
 May 
 
 111 117 
 
 
 June 
 
 116 122 
 
 
 July 
 
 124126 
 
 
 August 
 
 131 132 
 
 
 Scptem. 
 
 130 
 
 
 October 
 
 130125 
 
 
 November 
 
 127 
 
 
 Decem. 
 
 127 

 
 1800 
 
 
 
 January 
 
 131 
 
 
 February 
 
 131130 
 
 
 March 
 
 130 
 
 
 April 
 
 130 133 
 
 
 May 
 
 132---13l 
 
 
 June 
 
 1301136 
 
 Dividend increased to 7 per cent. 
 
 Jiy 
 
 138 
 
 
 August 
 
 1391391 
 
 
 Septem. 
 
 139^140 
 
 
 October 
 
 140 139 
 
 
 November 
 
 139138* 
 
 
 December 
 
 138 
 
 
 1801 
 
 
 
 January 
 
 137136 
 
 
 February 
 
 128 132 
 
 
 March 
 
 1321325 
 
 
 April 
 
 136 142 
 
 
 May 
 
 141- 141^ 
 
 
 June 
 
 14l| 141 
 
 
 July 
 
 143 144 
 
 
 August 
 
 143145 
 
 
 Septem. 
 
 146 
 
 
 October 
 
 I6ll66 
 
 
 November 
 
 166 
 
 
 December 
 
 
 Divid. increased to 7| per cent. 
 
 1802 
 
 
 
 January 
 
 179180 
 
 
 February 
 
 17917 8 
 
 
 JNLirch 
 
 178 1764-178 
 
 
 April 
 May 
 
 1/8 ISC 
 181-186-184 
 
 
 June 
 
 180| 
 
 
 July 
 
 181 
 
 
 August 
 
 180 
 
 
 oeptern. 
 
 1791177* 
 
 
 October 
 
 178 l/? 
 
 
 Novembe 
 
 178 
 
 
 Decembe 
 
 175 f 

 
 117 
 
 1803 
 
 
 
 January 
 
 177178 
 
 
 February 
 
 178177 
 
 
 March 
 
 177--170 
 
 
 April 
 May 
 
 170173 
 
 
 June 
 
 156 
 
 
 July 
 
 155149 
 
 
 August 
 
 147145 
 
 
 Septem. 
 
 145 
 
 
 October 
 
 142 
 
 
 ^November 
 December 
 
 1401372 
 
 Bonus of 5 per cent, paid with 
 
 
 
 the Christmas dividend. 
 
 1804 
 
 
 
 January 
 
 142147 
 
 
 February 
 
 146 145 
 
 
 March 
 
 144i 143 
 
 
 April 
 
 144142 
 
 
 May 
 
 142 143 
 
 
 June 
 
 142 143 
 
 
 July 
 
 142 141 
 
 
 August 
 
 142 141| 
 
 
 
 Septem. 
 
 141 140 
 
 
 October 
 
 140 
 
 
 November 
 
 140 
 
 
 December 
 
 140 

 
 118 
 
 NO. V. 
 
 [CIRCULAR.] Whitehall, December 6. 1804. 
 
 MY LORD, 
 
 I beg leave to represent to your Lordship, that much 
 mischief is likely to arise from the frauds, committed by 
 issuing, of counterfeit silver coin, chiefly brought from Ire- 
 land, and frequently stamped, the better to deceive the pub- 
 lic; and from an erroneous opinion having prevailed, that 
 because it was once circulated in Ireland, (though since 
 suppressed there,) it is now not unlawful to circulate it 
 here. 
 
 In order, therefore, to stop the progress of this evil, and 
 to give efficacy to the laws for the punishment of persons 
 uttering counterfeit coin, knowing it to be so, particularly 
 the act of the 15 and l6 Geo. II. cap. 28, I am induced 
 to request, that your Lordship will earnestly recommend to 
 the Magistrates, in their several districts in the county of 
 , to give notice to the public, that large quan- 
 tities of such -base coin are in circulation^ ; that such circu- 
 lation is an offence against the laws ; and to recommend it 
 to traders and others, to secure the parties tendering such 
 money, and also the counterfeit money tendered, so as to 
 identify it ; stating, at the same time, in such notice, that, 
 on the application to a Magistrate, (in case the facts can 
 be sufficiently proved), the offenders will be prosecuted by 
 the Solicitor to his Majesty's Mint, at the public expence, 
 ami in that case, a reasonable compensation will be made
 
 119 
 
 for the loss of time, and trouble of the witnesses in such 
 prosecution. 
 
 To facilitate this mode of proceeding, and the better to 
 enable the Magistrates to carry it into effect, I beg leave 
 to add, that in any particular cases brought before them, 
 wherein they may be desirous of obtaining further informa- 
 tion, they will receive it, upon communicating the circum- 
 stances of such a case to John Vernon, Esq. of Lincoln's 
 Inn, the Solicitor to his Majesty's Mint. 
 
 I think it proper to add upon this occasion, that in the 
 case of any quantity of counterfeit coin being found in the 
 possession of any person, it will be expedient to seize such 
 coin, and to make immediate communication thereof to 
 the Solicitor of the Mint, who has express orders to attend 
 to such communication ; and in the mean time, it will be 
 proper to commit the person for further examination. I 
 have the honour to be, my lord, your lordship's most obe- 
 dient, humble servant. 
 
 (Signed) HAWKESBURY. 
 
 Clauses Extracted from c. 28. ofl5tA Geo. II. 
 
 " II. And whereas the uttering of false money, knowing 
 it to be false, is a crime frequently committed all over the 
 kingdom, and the offenders therein are not deterred, by 
 reason that it is only a misdemeanour, and the punishment 
 very often but small, though there be great reason to be- 
 lieve, that the common utterers of such false money are 
 either themselves the coiners, or in confederacy with the 
 coiners thereof:" For preventing whereof, be it hereby 
 further enacted, by the authority aforesaid, that if any per- 
 son whatsoever, shall, after the said 29th day of September, 
 utter, or tender in payment, any false or counterfeit mo-
 
 120 
 
 Bey, knowing the same to be false or counterfeit, r to any 
 person or persons, and shall be thereof convicted, such pen- 
 son, so offending, shall suffer six months imprisonment, 
 and find sureties for his or her good behaviour for six 
 months more, to be computed from the end of the said first 
 six months ; and if the same person shall afterwards be con- 
 victed a second time of the like offence, of uttering or ten- 
 dering in payment any false or counterfeit money, know- 
 ing the same to be so, such, person shall, for such second of- 
 fence, suffer two years imprisonment, and find sureties for 
 lais or her good behaviour for two years more, to be com- 
 puted from the end of the said first two years ; and if the 
 same person shall afterwards offend a third time, in utter- 
 ing or tendering in payment any false or counterfeit mo- 
 ;v, knowing the same to be so, and shall be convicted of 
 such third offence, he or she shall be, and is hereby ad- 
 judged to be guilty of felony without benefit of clergy. 
 
 III. And it is hereby further enacted by authority afore- 
 said, That if any person whatsoever, shall, after the said 29th 
 day of September, utter or tender in payment, any false 
 or counterfeit money, knowing the same to be false or 
 counterfeit, to any person or persons, and shall either 
 the same day, or within tl.e space of ten days then next, 
 titter or tender in payment any more or other false of coun- 
 feit money, knowing the same to be false or counterfeit, to 
 the same person or persons, or to any other person or per- 
 sons, or shall at the time of such uttering or tendering have 
 about him or her, in his or her custody, one or more piece 
 er pieces of counterfeit money, besides what. was so utter- 
 ed or tendered, then such person so uttering or tendering 
 the same, shall be deemed and taken to be a common ut- 
 terer of false money, and being thereof convicted, shall 
 -Mjfler a year's imprisonment, and shall find sureties for his
 
 121 
 
 r her good behaviour for two years more, to be computed 
 from the end of the said year ; and if any person having 
 been once so convicted as a common utterer of false mo- 
 ney, shall afterwards again utter or tender in payment any 
 false or counterfeit money, to- any person or persons, know- 
 ing the same to be false or counterfeit, then such person 
 being thereof convicted, shall for such second offence be 
 and is hereby adjudged to be guilty of felony without be- 
 nefit of clergy. 
 
 Extract from the Courier, December 25. ISO*. 
 POLICE. 
 
 Mansion-House. Yesterday Richard Taylor, who was 
 apprehended some days ago at the White Bear Inn, Basing- 
 hall-street, and who had undergone different examinations 
 before the Lord Mayor, charged with having in his posses- 
 sion forty-six pound weight of counterfeit halfpence, tied 
 up in parcels, was again examined. The officer who ap- 
 prehended him said, they had information against him, as 
 having just come from Ireland with bad silver, to circulate. 
 The only answer Taylor gave, was, that he was a dealer, 
 ar.d had taken the counterfeits in trade. Yesterday an 
 attorney attended for him, and argued, that as no charge 
 of felony could rest against the prisoner, for having such a 
 quantity of halfpence in his custody, he should be imme- 
 diately liberated, and his property restored ; otherwise be 
 had instructions to bring an action for its recovery. His 
 Lordship finding the man was not taken in the act of sel- 
 ling the counterfeit halfpence for circulation, discharged
 
 122 
 
 him ; but the Solicitor of the Mint, who attended, said, he 
 could not give up either the silver or the copper, Govern- 
 ment having information, that many persons had made a 
 traffic in buying and selling counterfeit money, to the great 
 injury of the public ; and that he would defend any action 
 which might be brought for its recovery. 
 
 THE END. 
 
 ERRATA 
 
 Page 33. line 18. For inrance read insurance 
 36. 10. For in read and. 
 36. 12. For in read and. 
 46. 22. For siver read silver. 
 
 Edinburgh : Printed by 
 Jauies Ballantvne.