THE UNIVERSITY 
 
 OF ILLINOIS 
 
 LIBRARY 
 
 33Z
 
 k
 
 t 
 
 STATE OF THE COUNTBY. 
 
 ESSAY 
 
 ON THE 
 
 CURKENCY QUESTION. 
 
 RE-PRINTED (BY DESIRE) FROM THE LEEDS INTELLIGENCER OF FEB 3, 1831. 
 
 PRINTED BY HERNAMAN AND PERRING, 
 
 AT THE INTELLIGENCER-OFFICE. 
 1831.
 
 ESSAY ON THE CURRENCY. 
 
 It has hitherto been the official languao-e of the members of 
 
 to" 
 
 Government that tlie present distress, which I think few will deny 
 has reached every branch of our national interests, has originated 
 in " causes over which they have no controul."' This pusillanimous 
 declaration being the only solution of the strange problem of our 
 national embarrassments which they are pleased to afford, it becomes 
 a matter of personal interest to every individual member of the 
 commonwealth to review, and vigilantly scrutinise, the political 
 system of their ruling statesmen, and to try whether they cannot 
 detect and develope the germ of mischief from whence these 
 " causes" spring ; and to prove upon the legislature how far, by 
 the exercise of a sounder judgment, they might have been foreseen^ 
 and ought to have been controuled. 
 
 The most influential " cause" in operation to aggravate the 
 distresses of the country I conceive to be, the restriction of the 
 Paper or Credit Circulating Medium, " in order to return (as it is 
 said officially) to a Metalhc Currency." 
 
 Now in the first place / dispute the fact that a metallic circu- 
 lation, as the exclusive representative of the value of labour, to the 
 relative extent now required under our manufacturing system of 
 employment, ever did eonst in this country, or does exist in any 
 country in Europe. 
 
 In the second place / question the utility of such a restriction, 
 even could it be permanently effected. 
 
 In the third place I contend that a cheap and plentiful 
 credit circulation developes the resources and stimulates the pro- 
 ductive industry of the country, and is therefore in itself a more 
 desirable medium of barter than either silver or gold. 
 
 And, lastly, I shall endeavour to shew that much misapprehen- 
 sion prevails in society respecting the character, merits and influence 
 of the small note circulation of country banks. 
 
 In the present state of society and of the law, the whole value 
 of the periodical and weekly labour of the country, (with the sole 
 exception of agricultural and household domestic labour,) requires 
 a metallic representative. The early system of manufacturing was, 
 to make the goods princi})ally at home, and sell them, when 
 wrought, to merchants and tradesmen for Bills of Exchange. This 
 mode of conducting a manufacture was, for instance, the pi^actice 
 of the clothing district. At Sheffield, which is tlie seat of a very 
 ancient branch of British manufacture, namely, Cutlery, the mas- 
 ters, who were called factors, had each a store-room or shop, where
 
 the workmeii they employed were supplied, on credit, with the 
 principal necessaries of life, and the amount was deducted from 
 their wages. With the customs of London I am unacquainted ; 
 but in the country every other branch of manufacture was 
 originally conducted upon a similar system ; either the manufacturer 
 made his goods at home, and sold them to the merchant or trader, 
 or the workman bartered his labour for the necessaries of life. I 
 am not adverting to these early customs with a view to defend 
 the system of paying wages in goods ; but to support my assertion, 
 that in the infancy of our manufactures, a metallic circulation, as a 
 representative of labour, was but partially employed ; and I am 
 credibly informed that manufactures on the Continent are all at this 
 present time conducted upon a similar system. As the manufac- 
 turep of this country extended themselves, the credit system, which 
 confined workmen to the retail shops of their employers, became so 
 oppressive that, with a view to ensure to the workman the full 
 value of his labour, the legislature passed various acts of Parliament 
 rendering the payment of wages in goods illegal. Yet so strong 
 has been the interest, and so prevalent the habit of masters and 
 men to revert to this system of bartering goods for labour, that it 
 has been the subject of leg-islatiqn in no less than seventeen different 
 acts of Parliament, and seemsyto have been effectually superseded 
 by the substitution of ^^ credit notes^'' even under the value of 
 twenty shillings. So the master-manufacturer being restrained by 
 law from paying his workmen in goods, paid them in these small 
 notes, which the retail dealers did not scruple to receive, giving in 
 fact credit for the amount to the master who issued them. This 
 system was at length abused by the " inconvenient restrictions" (see 
 preamble to the act) annexed to some of these promissory notes ; 
 and a bill was brought into Parliament in 177^' by Sir Geo* 
 Saville, restraining the issues of promissory notes " for any sum 
 under the amount of twenty shillings."" Two years after this, a 
 second act of Parliament restricted the issue of a credit circulation 
 under the amount of five pounds. This state of the law respecting' 
 the credit currency continued in operation exactly twenty years — 
 from 1777 to 1797 — when the celebrated Bank Restriction Act was 
 passed, and it is to this period only that the late Lord Liverpool 
 could with strict accuracy have alluded in the debates on the Cur- 
 rency in 1826, when he affirmed, " that in returning to a metallic 
 *' currency. Parliament were trying no new expedient ; they were 
 *' only reverting to what was the state of the Currency previous to 
 " 1797." 
 
 During this golden period of twenty years, many of our ma- 
 nufactures date their origin, especially the cotton manufacture^ 
 which was a very limited branch of our national industry, so long 
 as the supply of cotton yarn was confined to the wheels of our 
 cottagers ; but the invention of the spinning jenny in 1767 by Mr.
 
 5 
 
 Hargraves being quickly followed by the mechanical improvements 
 of Mr. Arkwright, gave such a powerful impulse to this branch of 
 our manufactures, that it has since surpassed all others in extent 
 and importance. Yet concurrently with this flourishing state of ma- 
 nufacturing industry, a deficiency in the supply of a circulating 
 medium was often severely felt in the country. Credit shops, 
 which the workmen were expected to frequent, small notes although 
 illegal, perquisites, local coinages of copper, silver tokens, and a 
 variety of devices to facilitate the barter of labour for wages were 
 resorted to, until at length the scarcity of gold, and the pressure 
 of the public expenditure in consequence of the war, compelled 
 the Legislature in 1797 ^^ rescind the restrictions they had placed 
 upon a credit circulation, which was soon rendered not only the 
 current circulation of the country, but was no longer convertible at 
 the will of the holder into gold. 
 
 From this period the issuing of promissory notes fell by com- 
 mon consent almost wholly into the hand of Country Bankers, who 
 were generally at their origin, the most opulent tradesmen in the 
 provincial towns; and, notwithstanding the sarcasms cast upon 
 them in the debates of 1826, were decidedly the individuals best 
 qualified, by their local knowledge, to regulate the credit currency 
 of their immediate neighbourhood. From these Banks the notes 
 were procured by the workman's employer instead of issuing them 
 himself, and the interchange of labour for the necessaries of life 
 went on as before, by the owners of property in the town and 
 neighbourhood giving credit to the one individual, the Country 
 Banker, instead of the many who, when the system of credit notes 
 first came into operation, paid their workmen in notes on their own 
 security. All these arrangements to facilitate barter plainly prove 
 that the productive industry of the country has always been " a 
 start"" of the circulating medium — the tendency of legislative enact- 
 ments has in many instances been to restrain, but the temper of the 
 people has always been to free themselves from impediments to 
 employment and labour — the restrictive system of Government has 
 at length prevailed, and the industry of the country now, alas ! 
 wears fetters. It is bound in chains of gold and silver, for the 
 master can employ no lahonrer^ and the labourer can eat no bread, 
 until a piece of gold or of silver to represent that labour and that 
 bread has been procured from South America or elsewhere, and 
 forms part of the metallic circulation of the country. 
 
 The truth is, and the public when they have smarted a little 
 longer under the rod of Dame Experience will find it out, that 
 although a silver and copper currency is a convenient medium for 
 facilitating barter, a gokl currency becomes an inijiediment to the 
 prosperity of this country. It is a costly medium of barter : for if 
 we will have gold to represent all the ordinary traffic between man 
 and man, to obtain it we must first part with something wc possess
 
 6 
 
 which is equivalent in value — in other words, we must purchase it. 
 It is likewise a fluctuating medium ; for it is well known that a 
 trifling advance in the price of bullion, either draws the coin out of 
 the kingdom, or consigns it to the melting pot. Men who have 
 the command of a monied capital are always ready to employ it 
 where they can obtain the highest interest for their loans, so that 
 the circulating medium of the country may this year abound in 
 England, and the next year be transferred to Germany. 
 
 In this view of the subject I have also the support of the opinion 
 of the late Sir Robert Peel, contained in a letter he addressed to 
 the members of both Houses of Parliament in 182() : — " In the 
 *' enlarged scale of business carried on by this country, embracing 
 *' a great variety of pursuits, a reliance on a metallic circulation 
 " alone — ever did and ever will fail us. Gold, though in it itself 
 " massy, often disappears in consequence of war or speculation — 
 " nay the breath of rumour itself is sufficient to disperse it. Our 
 *' domestic concerns are interrupted and confidence lost for want of 
 *' an ample and approved medium of traffic." 
 
 Now our local credit circulation was purely national, it was 
 the representative of wealth and property in the country, and it 
 did not impoverish the public to obtain it. To the Government it 
 was a goose that laid golden eggs, but like the boy in the fable they 
 have killed the goose, and lost their auriferous treasure. How little 
 justice there was in the outcry raised against the value of this credit 
 circulation is best proved by the fact, that although every Country 
 Banker throughout England was called upon simultaneously and 
 suddenly to discharge such obligations, only eight per cent, of the 
 whole number suspended payment, and the majority of these houses 
 were ruined by the failure of their London Bankers, which cut off^" 
 their anticipated resources, and nearly all have since paid twenty 
 shillings in the pound to their creditors, so that the loss the public 
 really did sustain was but to a small amount (i. e. about f per cent.) 
 certainly not worth a moment's consideration. The want of this 
 credit circulation, now that it is withdrawn, being so severely felt 
 by the provincial public, many persons, including Members of the 
 Legislature, have endeavoured to devise expedients to render this 
 credit circulation as secure as gold ; in other words, with profound 
 wisdom they propose that the public should give credit only, under 
 the security of pledges and mortgages. To this security credit 
 circulation I fear that there exists one fatal objection — no one will 
 he found to issue it. The note circulation of a banker comprises a 
 very limited proportion of his credit transactions with the public. 
 *' He is a general borrower as well as a general lender, and stands 
 guarantee as it were between the debtor and creditor interest of the 
 country." Now what sort of credit could a banker obtain with the 
 lending portion of the public, if his private fortune, which now 
 stands guarantee for the whole amount of his debts, was thus
 
 pledged to pay one specific portion of his credit engagements in 
 preference to the rest. Why, the public would justly ask, is the 
 holder of a one pound promissory note to be considered as entitled 
 to a better security than the holder of a five pound note, or a bill of 
 exchange, or than the deposit customers of the bank, who frequently 
 invest their whole fortune in his hands ? It would be giving a right 
 of preference to one class of creditors over all the rest, which no 
 banker could possibly agree to, without forfeiting all rational claim 
 to public confidence. A second objection to this security credit 
 circulation will also be found to originate in the proper jealousy 
 that Country Bankers entertain of the interference of Government 
 itself. Many most respectable bankers are so scrupulously vigilant 
 in this particular, that they even object to keep the banking account 
 of the receivers of taxes, because of the power of Government to 
 issue extents, and take the preference of all other creditors. It is 
 therefore little to be expected that a body of tradesmen, who are 
 conscious how much it is their paramount duty to themselves and to 
 the public to keep their property free from the taint of Government 
 obligations, will, under any conditions, consent to pledge their title 
 deeds and other mortgages ; their bonds, and their funds ; and 
 transfer their securities from their own strong box, into the hands 
 of Government Commissioners. Another class of persons are 
 desirous of throwing the whole of the credit circulation of the 
 country into the hands of the Bank of England. This scheme 
 would meet with few objectors in London and in Lancashire, where 
 these notes so long constituted the current circulation of these 
 districts, but in the rest of the provinces, the security of the Bank 
 is not held in such high repute as to obtain for its circulation the 
 same unlimited degree of confidence. 
 
 It is well known that by the terms of its charter the whole of 
 the original capital of the Bank, amounting to fourteen millions, is 
 permanently lent to Government. The advances to Government 
 upon the dead toeight are full twelve millions, the advances on 
 Exchequer Bills are usually about six millions, but in February 
 1826, amounted to eleven millions ; and Mr. Baring, in the debates 
 of that Session, condemned the conduct of Government, for engros- 
 sing, as he said, the whole real capital and funds of the Bank. As 
 a security for this immense debt, the Bank has an appropriation of 
 the product of the taxes. Now supposing it should happen that the 
 revenue, hitherto supplied by the taxes, should fail ; — and this will 
 assuredly prove no idle surmise unless some measures are speedily 
 taken to render profitable the productive industry of our native 
 population ; — supposing, I say, that a deficiency in the revenue 
 should incapacitate Government to fulfil its pecuniary engagements 
 with the Bank, what becomes of the Bank capital.'* It depends 
 upon the taxes, and upon the taxes only, for like the national 
 creditor, the Bank has no lien upon the property and rea] estates of
 
 8 
 
 the public — the capital of the Bank, therefore, depends upon the 
 productive state of the revenue, and the revenue upon the pros- 
 perity of the country, which can scarcely be said to exist, and this 
 is the whole amount of the undeniable security of the Bank. The 
 Country Bankers are, on the other hand, almost invariably men of 
 landed property, which, by the operation of the bankrupt laws, 
 becomes a real security for the amount of their credit circulation : 
 if they cannot pay their debts in gold, they must pay them in acres ; 
 and that this is a sort of security that accords better with the feelings 
 of the provincial public, than the appropriation of the taxes, is best 
 illustrated by the fact that, with the sole exception of Lancashire, 
 local notes were always preferred in the country to one pound Bank 
 of England notes. The countryman reasoned upon this subject with 
 far sounder judgment than any of our rational legislators, when he 
 carried in his notes during the panic into the Bank at Derby ; 
 receiving in exchange a Bank of England note, he returned it to 
 one of the partners, observing, that he knew nothing about that 
 London Bank, but as the gentlemen in the Bank at Derby had all 
 large estates, he would much rather take the value of his notes in a 
 piece of land. The security offered to the public by the Country 
 Bankers is therefore, I contend, a better security than that of the 
 Bank of England ; and the provincial public, if left to the free 
 exercise of their own judgment, will never discard the former to 
 adopt the latter. 
 
 I proceed now to examine the charge so confidently advanced by 
 Government, that the commercial speculations and subsequent panic 
 of 1825 originated in the over circulation of the Country Banks. 
 The whole amount of the local circulation of 1823-4 and 5 did not, 
 according to Secretary Peel, exceed an average of seven millions, 
 and this amount, Mr. Peel admits, included the credit circulation 
 of many manufacturers, who had taken out bankers' licences to 
 enable them to pay their workmen in their own notes, while the 
 circulation of the Bank in February 1825, seven months, observe, 
 before the panic, actually fluctuated more than half that amount, 
 and from the 26th November 1825, to the 24th December 1825, 
 during the period of the panic, the Bank circulation was augmented 
 from seventeen and a half to twenty-five millions, a difference of 
 more than the whole amount of the local small notes, ever issued. 
 It also unfortunately happens that the ruinous commercial specula- 
 tions, which were stated to be the main cause of the subsequent sub- 
 version of public confidence, did not either originate/6r materially 
 extend to the provincial towns, but were confined alnrost exclusively 
 to London and to Liverpool, (the very places where it was the boast 
 of Government that there was no local circulation,) and were 
 occasioned wholly by extended accommodation, and subsequent 
 sudden contraction of the credit issues of the Bank. The exten- 
 sion of the issues of local notes, was, I maintain, required by the
 
 9 
 
 full employment of the people during that period, for they are, as 
 I have before explained, chiefly employed as a medium of barter 
 to represent the value of labour ; and if a check from " over pro- 
 duction^'''' as the new Political Dictionary expresses the full employ- 
 ment of our labouring class, had followed the three years of 
 prosperity, the local circulation would as naturally have contracted 
 itself as any other medium of accommodation that falls into disuse 
 when it is no longer wanted. 
 
 I have now, lastly, to examine the relative pretensions of the 
 Bank of England, and the great body of the Country Bankers, to 
 public confidence, on the score of wealth. The former has, 
 according to the authority of Mr. Baring, as reported in the news- 
 papers, a real capital of fourteen millions, and how it is principally 
 disposed of has before been stated. The Country Bankers, who 
 •were in 1825 (including the manufacturers who were circulators of 
 notes) eight hundred, are now about five hundred different firms ; — 
 and it will, I think, be a minor estimate if I set down their real 
 and personal property at an average of <£'40,000 each firm. Here, 
 then, is a security for their engagements placed by the Bankrupt 
 Laws in the hands of the public, amounting to twenty m'lUions. 
 Now whether local notes to the amount of seven millions were not 
 issued under a more ample security than Bank issues to the amount 
 of seventeen mill'ions, I leave it with the common sense of the 
 pubhc, although versus the authoritative decision of Parliament, 
 to judge. 
 
 If instead of annihilating. Government had gone rationally and 
 steadily to work to correct those faults in the system of Country 
 Banking which have a tendency to endanger the security of the 
 local credit circulation, they would have established a far better 
 claim to the confidence of the public than their past hasty measure 
 entitles them to assume. 
 
 The first protecting measure should have been to prohibit what 
 we call in the country a chain of banks ; that is one firm having 
 banking establishments in different towns. The second restriction 
 should have been to reserve to Government a discretionary power 
 to refuse bankers' licenses to issue notes to any firm of which the 
 partners collectively, or individually, were engaged in any other 
 branch of commerce or manufacture. 
 
 By the first restriction the Legislature would have effectually 
 counteracted the possibility of an extensive over-issue of notes by 
 any improvident speculatian. firm, for the circulation beiug confined 
 to their immediate neighbourhood, and under the vigilant eye of 
 their own customers, the public would soon have checked their 
 issue by a demand for gold. And they would further, by render- 
 ing the issuing of small notes strictly local, have put an end to a 
 custom tliat prevailed amongst firms who were desirous of ])ushing 
 an extensive circulation, namely, that of sending clerks on a market
 
 10 
 
 day to the surrounding towns for the express purpose of discounting 
 bills of exchange with their own notes, by which practice they 
 not only extended their issues to a large amount, but also dissemi- 
 nated their credit circulation throughout a district so remote from 
 the place where it was nominally issued, that the public, under 
 any feeling of distress, were deprived of the convenient exercise of 
 their privilege of carrying their notes into the bank to be exchanged 
 for gold. Another advantage attending the restriction of a firm to 
 one local situation is, that it would have been less liable to create 
 alarm and mischief throughout a district in the event of any local 
 distrust or embarrassment. This is so obvious I hardly need 
 advance any arguments to prove it, for it is well knov/n that a 
 branch establishment of the same firm is never affected without the 
 shock being felt by the whole concern ; and as alarm spreads like 
 contagion, innocent neighbours are often visited by the consequences 
 of circumstances that have occurred far beyond the circle of their 
 own connexions. 
 
 There is also a third reason why this restriction would have 
 been desirable, namely, — for the equitable protectection of local 
 public interests. The imprudence or misconduct of the managing 
 partner of any one branch of these establishments causes the stop- 
 page, and generally the failure of all the other branches. Such 
 was the case in the great failure of Wentworth's Bank, in 1825. 
 The York branch of this firm was solvent, and the Bradford 
 branch also. This was proved on the examination of their respec- 
 tive accounts after the failure; but the Wakefield establishment 
 had been so improvidently conducted, that it stopped payment, 
 and involved the other two branches. The public, therefore, at 
 York, and at Bradford, were injured by the imprudence of a 
 distant branch, with which they had no intercourse or immediate 
 concern. 
 
 I next come to the second salutary restriction, namely, — a dis- 
 cretionary power in granting bankers' licenses. This would have 
 obviated the force of Lord Liverpool's objection, " that any low 
 person, any small tradesman, a cheesemonger, a butcher, or a 
 shoemaker, might open a Country Bank." And I must here beg 
 leave to observe that, with all due respect for the late Lord Liver- 
 pool's general information and good sense, tkst-he never advanced 
 an assertion, though true in theory, more false in fact, for that low 
 and obscure individuals could ever, were they even ambitious to do 
 so, obtain a degree of confidence amongst their neighbours to enable 
 them to open a banking establishment, and circulate credit notes 
 upon their own security, was an assertion so palpably absurd, as to 
 carry its own refutation on the face of it. That it was from among 
 the respectable and opulent class of retail tradesmen that many 
 Country Bankers sprung, is very true, and so have London Bankers 
 likewise ; but to assume for the sake of enforcing an argument, that
 
 11 
 
 the provincial public hacLso little regard for their own interest as ^ 
 to place" confidence^in an y_Jack S traw and Tom Long who chose^N^ 
 to write *' Ba nk'''' o ver his shop door, was not very creditable to the " j 
 candour and~tlie discnmination of the Prime Minister of England. 
 However, as I said before, the restriction of bankers' licenses to 
 persons not engaged in retail trades or commerce, &c. would have 
 effectually removed this objection. Neither could manufacturers 
 have taken out bankers' licences to enable them to pay their workmen 
 in credit notes ; nor would bankers themselves have been under any 
 temptation to increase their circulation for their own individual 
 benefit, or to abstract any part of the Bank capital to carry on 
 separate mercantile concerns. The public would thus have 
 felt confident that the property they possessed was a security for 
 the debts of the Bank only, and not encumbered with a diversity 
 of mercantile obligations. 
 
 The above restrictions would, I contend, have been wisely 
 adopted; and Avovdd have been a manifest improvement of the 
 Country Banking System ; but that the credit circulation of the 
 country has ever been conducted upon principles so wild and 
 visionary as its detractors have, with a hasty and uninformed judg- 
 ment, so confidently asserted, I am fully prepared to refute. With 
 respect to the credit circulation of the Bank. That it originated 
 in the necessities of the State, has been before explained — it is a 
 " Promise to pay,"" in anticipation of the product of the taxes. 
 The local credit circulation, in like manner, originated in the 
 necessities of the provincial public — the productive industry of the 
 country could not have been stimulated and continued in a state of 
 full activity ivithout it — for neither agriculture nor manufactures 
 could have flourished as they did during the war, when the country 
 was drained of its specie, without a cheap and plentiful medium of 
 barter to represent the value of the labour of the people. 
 
 That many Country Bankers by whom this credit circulation 
 was issued have failed, and that individuals have been considerable 
 losers by these disastrous occurrences, is very true ; but upon a 
 gross estimate of profit and loss, and striking a general balance 
 with the public, I very much doubt, problematical as the assertion 
 may appear, whether even in these failing concerns the pubHc have 
 not been the gainers. No bank could have been opened, unless the 
 partners had some reasonable claim to public confidence ; I am 
 therefore entitled to assume in argument, that all Country Banks 
 had originally, at least, one man of real fortune in the firm. How 
 these fortunes may have been lost, without either blame attaching 
 to individuals, or radical faults in the system, it is not difficult to 
 explain. One great source of failure has been the insolvency of 
 their London Bankers. Any one accpiainted with the history of 
 Country Banking can bear testimony how ruinous has been the 
 consequences of these events ; many really solvent Country Firms
 
 12 
 
 have been obliged by these stoppages to appear in the Gazette 
 themselves, in order to afford time to wind up their affairs, though 
 they have ultimately paid every shilling they owed their creditors. 
 Another source of failure has been the general depreciation in the 
 value of the property of their customers, which subjected the 
 Banker to heavy pecuniary losses. This depreciation has occurred 
 three times, once in 1816, when on the transition from war to peace 
 the average fall of prices was not less than twenty-five per cent, and 
 at least an equivalent number of traders and merchants, to whom 
 they had advanced money, became embarrassed in their circum- 
 stances ; a second similar fall of prices took place in 1819, and 
 although they rose again through 1822 and 1823, yet a third 
 depreciation to an equal amount having again taken place since 1825, 
 and the Bankers having been again subject to the liability of expe- 
 riencing an equivalent loss, no wonder if in some cases the difference 
 should be more than the amount of the Banker''s private fortune ; 
 and that by the ruin of his customers he himself becomes insolvent ; 
 add to this, that all Bankers have not been equally prudent, or 
 exercised the same sound judgment in conducting their affairs; and 
 that some who were both Bankers and Traders suffered by the 
 depreciation of property in both capacities ; and there is little diffi- 
 culty I think in accounting, on rational grounds, for the apparently 
 excessive number of Banking failures. But yet I contend that the 
 public have gained what the Bankers have lost by dividing amongst 
 creditors their original private fortunes. It may be objected that 
 the Bank of England " was subject to none of these embarrassments, 
 and that therefore a circulation of its notes exclusively would have 
 been a greater public benefit than a circulation of local notes." It 
 is true that the Bank has always fulfilled its engagements, and why ? 
 because its credit issues were protected by the Legislature. I fancy 
 it is pretty well understood that unless the Bank Restriction Act 
 had been passed in 1793, either the Bank must have stopped, or 
 Government must have suspended payment. But Mr. Pitt, that 
 mighty and prescient genius, foresaw the coming danger, and 
 applied the remedy ; forsaking the beaten track of custom, he 
 superseded the necessity of a metallic currency^ by cii'culating a 
 credit representative of the productive industry and real property 
 of the country. 
 
 This is traced to its true origin, the legitimate character and 
 nature of our paper circulating medium ; to call it paper money is 
 to use a term which, even in common phraseology, conveys a wrong 
 idea ; it misleads the ignorant, and confounds the wise, or the late 
 Mr. Tierney would never have been guilty of so gross a sophism as 
 to exclaim, when it was mentioned in the House, that a Country 
 Banker, after having his notes frequently returned, had burnt them, 
 " he did not believe that any person would be such a fool as to burn 
 his money,"" as if Mr. Tierney knew no better than to call a dis-
 
 13 
 
 charged " Promise to pay'"' money. Money, our p aBgr-currency 
 never was, but a representative of somethitig equivalent in value. 
 'fKaFequivalent might be gold, might be land, or houses, or mer- 
 chandise, or labour, or any thing else. It is true that one pound 
 sterling was adopted, for public convenience, as a nominal measure 
 of value ; but it was not the real measure of value, because, at the 
 time this credit circulation was issued, the gold coinage of the 
 country was worth more in bullion than the amount of its standard 
 value in coin. To requn-e, therefore, that the national debt and 
 annual taxes, which vcre contracted, and were estimated, under this 
 relatively cheap credit currency, when both labour and property of 
 every description took a higher figure of value, should be repaid 
 and collected in bullion, and in bullion only, is to increase to an 
 enormous amount the pressure of the taxes and of the national 
 debt — it is, in fact, nearly to double them. For I have before 
 stated that the value of property has fallen in three successive periods 
 fifty per cent, since 1815 ; so that, notwithstanding the reduction of 
 twenty millions in the amount of the national expenditure, in conse- 
 quence of the peace, and the lovver rate of interest paid on the five 
 and four per cent, funds, the tendency of the measures of Govern- 
 ment to lower prices, whether it be of labour, land, corn, or merchan- 
 dise, does in fact raise the actual value of the taxes, now paid by the 
 people, above the war amount, when the whole of the productive 
 industry of the country was in a state of full employment. 
 
 I nave now according to the best of my judgment given a cor- 
 rect account of one of the leading " causes''"' of the present embar- 
 rassed state of the country. Until " credit," which is the life and 
 soul of business, is effectually set free from the injudicious restric- 
 tions of the Legislature, times may grow worse, but they cannot 
 become better. Ministers may shift and modify the payment of the 
 taxes on what class, and in whatever manner they please, the sum 
 total to be paid into the Exchequer is the same, and that sum 
 exceeds at this time the whole amount of the annual rental of the 
 kingdom. If they take off the Excise Duties, which seem to press 
 heavily on the poor, and raise the amount on the property of the 
 rich, this modification will afford no general relief to the country ; 
 for in the same proportion that the income of the rich is reduced, 
 will they of necessity be compelled to reduce the amount of their 
 domestic expenditure. They will keep fewer servants, employ 
 fewer workmen, &c. &c. or perhaps go abroad to retrench, and thus 
 not only defraud the public Exchequer of their fair proportion of 
 the taxes, but expend likewise the whole amount of their income 
 on the productions of the labour of foreigners ; so that ultimately 
 the labouring class at home will be the sufferers by the reduction 
 from taxation, or the total loss from absenteeism, of the benefit of 
 the incomes of those that afford them employment. I am (juite 
 aware that our Ministers have gravely proposed to relieve the dis-
 
 14 
 
 tresses of the working class, by lowering the duty on " soap and 
 candles," which is, to prescribe for a patient who is sinking from 
 debility in a typhus fever a tea spoonful of camphor julep, when 
 his case requires a bottle of brandy. Besides, there is a very wise 
 direction in these matters recorded in the works of a certain 
 authoress of gastronomic fame, " First catch your gudgeons" — 
 " First earn your wages !" To talk of effectual relief from the 
 reduction of a duty which is, like the leather tax, so small a fraction 
 of a man's earnings that five minutes'* well paid industry, ( when 
 
 findustrywas a marketable commodity,) would have coverecf the 
 whole amount, is surely miserable triffmg. It may suit the calibre 
 of some men's understandings to pursue " small deer," but a bold 
 hunter would rouse and chase the lion. 
 
 The solution of the problem of our national difficulties is, I 
 contend, to be sought for here. The working currency of the 
 country is annihilated ; the labour of the people is fettered by a 
 metallic medium; the value of property is reduced one-half; the 
 amount of the national debt remains the same, and instead of keeping 
 up the value of property, and promoting, by every expedient the 
 productive industry of the people, that we might bear our fiscal 
 burthens, and gradually redeem our debt, the great aim and object 
 of our statesmen have been to reduce our prices to the level of our 
 continental neighbours, for no earthly benefit but that we might 
 have inert masses of gold in our coffers, and undersell all the world 
 with our manufactures, whilst all the world is naturally opposed to 
 us, — every state being desirous to employ their native population 
 by manufacturing at home, so that the cheaper we sell, the heavier 
 they tax, — thus our cheap goods, while they impoverish this country, 
 are, indeed, a gold mine for the Exchequers of other states. Mean- 
 while the internal prosperity of our own country retrogrades and 
 languishes ; the superior importance of our native markets for our 
 native labour, is underrated and despised — thus England, whose 
 native energies no difficulties once could paralyse, whose vigorous 
 spirit the world in arms could not subdue, is now insanely destroying 
 herself with the subtle poison of a pernicious and ruinous financial 
 and commercial policy. 
 
 P. S. — It has been remarked to the writer of the foregoing 
 pages, that the plan therein proposed to provide against the 
 recurrence of ruinous panics, in the event of a re-issue of a credit 
 currency, is objectionable. 
 
 If the soundness of the principle which I have endeavoured 
 to establish — namely, that a paper currency is a credit representa- 
 tive, either of property or of productive industry, or of something 
 in short, that is of exchangeable value, be admitted, I see no 
 reasonable objection to Government becoming circulators to a 
 definite amount of small notes, as well as of Exchequer Bills, to 
 represent the anticipated value of the annual taxes. As a check to
 
 15 
 
 the recurrence of panics, I should therefore propose to circulate 
 likewise a new description of paper currency, not convertible at 
 the option of the holders into gold; namely, an Exchequer Currency, 
 issued by the state, being a conversion into a circulating medium of 
 either the whole or a part of the interest of the national debt, or 
 of the current expenses of the Government. And that this currency 
 should be established as a legal tender in all debts due to and from 
 the Crown ; and in all credit engagements throughout the country, 
 under a specified amount (or say of the amount of 20s.) unless an 
 obligation to pay gold coin has been specified in writing. 
 
 I would also suggest, that the gold coin of the realm might no 
 longer be required to circulate at its standard value of 20s. but at 
 its actual value as bullion ; and that silver, which was the ancient 
 standard metallic coinage adopted by this country, as it still is by 
 all the world besides, might be re-established with advantage as 
 the standard of value. So that instead of having a debt of 800 
 millions, which Avas borrowed in a relatively cheap and plentiful 
 credit currency, to repay in a dear and scarce gold currency, we 
 should repay it as we borrowed it, when the worth of the property 
 of the country was estimated, not by the gold standard of the mint, 
 but by a credit representative of its real or exchangeable value, as 
 augmented in its relative amount by the fiscal burthens of the state. 
 
 Under this arrangement the public would have the option of 
 three different securities. The revenue to be paid by themselves — 
 the monetary capital of the Bank of England — or the miscellaneous 
 property and estates of the Country Bankers. 
 
 A List of the various Statutes enacting the Payment of Workmen's Wages in Money. 
 
 1. — 1464, 4th Edward IV. c. 1 — Cloth makers shall pay to carders, spinners, and 
 all such other labourers, in any part of the said trade, lawful money for all their 
 lavrful wages, upon pain of forfeiture to the labourer, of treble the amount of the 
 wages not so paid. 
 
 2 — 1565, 8th Elizabeth, c. 7 The Draper's Guild at Shrewsbury, required to 
 
 pay the shearmen, cottoners, or frizers, of Welsh cloth, in ready and present money, 
 for all their said work ; and shall not deliver any ware or any other thing whatsoever, 
 in satisfaction of their said work, or any part thereof. 
 
 3. — 1572, 14th Elizabeth, c 12 — A repeal of the privileges of the Guild, and 
 a confirmation of the enactment respecting the payment of wages. 
 
 4. — 1702, 1st Anne, c. 18 To prevent the oppression of workmen employed 
 
 in the woollen, linen, fustian, cotton, and iron manufacture, all payments of wages 
 to be in the lauful coin of the realm, and not by any cloth, victuals, or commodities in 
 lieu thereof, under a penalty of double the amount of the wages. 
 
 6 — 171 1, loth Anne, c. 16 — The manufacturers of mixt or medley broad 
 cloth, to pay their workmen in money, and shall not in lieu of payment, impose or 
 deliver to them any sort of goods or wares for such work. Penalty 20s. 
 
 6 — 1714, 1st George I. c. 15. — The foregoing clause of Anne re-enacted with 
 the augmented forfeiture of 4O5.
 
 16 
 
 7 — 1725, 12tli George I. c. 34 — If any clothier, &c. &c. or any person concenied 
 in employing workmen in the woollen manufacture, shall pay their wages, either 
 in goods, or by way of truck, or in any other manner, than in money, contrary to the 
 true intent and meaning of this act, the offender to pay a penalty of £10. 
 
 8 — 1726, 13th George I. c. 23 — The foregoing clause re-enacted, and extended 
 to the manufacture of leather, with the additional provision of (except and at 
 their request and by their consent only). 
 
 9 — 1736, 9th George II. c. 23. — Restricts the payment of workmen in spirituous 
 liquors, as part of their wages. 
 
 10 — 1749, 22d George II. c. 27 — The former prohibitions against paying wages 
 either in goods, or by way of truck, or in any other manner than money, re-enacted ; 
 and extended to the manufacture of hats, silk, mohair, fur, hemp, flax, linen, cotton, 
 fustian, iron, or leather, or any mixt materials. Penalty £10. 
 
 1 1 — 1756, 29th George II. c. 33 — For the regulation and better payment of the 
 wages of persons employed in the woollen manufactures, prohibits payment either 
 in goods, truck, bill, or note, or in any other manner, than in money, augmenting 
 the penalty to £20. 
 
 12 — 1757, 30th George II. c. 12 — Permits work in the woollen manufactory to 
 be done by contract, but restricts the payment of the wages to money, and to be 
 paid two days after the delivery of the work, under a penalty of 40s. 
 
 13. — 1779, 19th George III. c. 49 Enacts that all persons who shall employ 
 
 any manufacturers of thread lace, or who shall purchase lace of them, shall pay 
 them in money only, and not with goods, notwithstanding any usage or custom to 
 the contrary, under a penalty of £10. 
 
 14 — I8I7, 57th George III. c. 115 — Prohibits the paj^ment of wages in goods, 
 or by way of truck, or otherwise than in the lawful coin of this realm, to workmen 
 employed in articles made of steel, plated articles, and cutlery. Penalty £10. 
 
 15 I8I7, 57th George III. c. 122.-.The same provisions extended to labourers 
 
 in collieries. 
 
 1 — 1818, 58th George III. c. 151 The whole of the provisions of the fore- 
 going acts consolidated, with permission to masters to pay such workmen, as shall 
 be willing to receive the same, m Bank of England or Country Bankers' Notes. 
 
 17 1820 1st George IV. c. 98 Prohibits masters from making any stipula- 
 tion or agreement either directly or indirectly, as to the place or manner of laying 
 out the wages paid to their workmen. Penalty £10 to £20. 
 
 18 1775, 15th George III. c. 00 — Preamble of the Act for restraining the 
 
 negociation of Promissory Notes under 20s. — "Whereas various Notes, Buls of 
 Exchange, and Drafts for Money, for very small sums, have for some time past 
 been circulated or negociated in lieu of cash within that part of Great Britain called 
 England, to the great prejudice of trade and public credit ; and many such bills and 
 drafts being payable under certain terms and restrictions, which the poorer sort of 
 manufacturers, artificers, labourers, and others, cannot comply with, otherwise 
 than by being subject to great extortion and abuse" 
 
 18 1777, 17th George III. c. 30 — Part of the Preamble to the Act for further 
 
 restraining the negociation of Promissory Notes under the amount of £5 — " And 
 whereas the said act (see above) hath been attended with very salutary effects, and 
 in case the provisions therein contained were extended to a further sum, the good 
 purpose of the said act would be further advanced," &c. &c." 
 
 HKRKAMAN AND FERRING, PRINTERS, 20, COMMERCIAL-STREET, LEEDS.
 
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